S-1

As filed with the Securities and Exchange Commission on March 16, 2012

Registration No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

under

The Securities Act of 1933

Exponential Interactive, Inc.

(Exact name of registrant as specified in its charter)

Delaware	7370	94-3370688
(State or other jurisdiction of incorporation or organization)	(Primary standard industrial code number)	(I.R.S. employer identification no.)

2200 Powell Street, Suite 600

Emeryville, California 94608

(510) 250-5500

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

Dilip DaSilva

Chairman and Chief Executive Officer

Exponential Interactive, Inc.

2200 Powell Street, Suite 600

Emeryville, California 94608

(510) 250-5500

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

Copies to:

Daniel J. Winnike, Esq. Fenwick & West LLP 801 California Street Mountain View, California 94041 (650) 988-8500 Martin A. Wellington, Esq. Davis Polk & Wardwell LLP 1600 El Camino Real Menlo Park, California 94025 (650) 752-2000

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 of 1933, 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 of 1933, 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 of 1933, 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 of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨		Accelerated filer                  ¨
Non-accelerated filer   þ	(Do not check if a smaller reporting company)	Smaller reporting company ¨

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, par value $0.00001 per share	$75,000,000.00	$8,595.00

(1) Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933.

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 that 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 said Section 8(a), may determine.

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

Subject to Completion

Preliminary Prospectus dated March 16, 2012

PRELIMINARY PROSPECTUS

            Shares

Common Stock

This is the initial public offering of Exponential Interactive, Inc. We are selling         shares of our common stock and the selling stockholders named in this prospectus are selling         shares. We will not receive any proceeds from the sale of the shares by the selling stockholders. We and some of the selling stockholders have granted the underwriters an option to purchase up to             additional shares of common stock to cover over-allotments, if any.

We intend to apply to have our shares listed on the             under the symbol “EXPN.” We expect the initial public offering price to be between $         and $         per share of common stock.

Investing in our common stock involves risks. Please read “Risk Factors” beginning on page 10 of this preliminary prospectus before you make an investment in our common stock.

	Per Share	Total
Public offering price	$	$
Underwriting discount	$	$
Proceeds to us (before expenses) from this offering to the public	$	$
Proceeds to the selling stockholders (before expenses) from this offering to the public	$	$

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 the shares to purchasers on or about                     , 2012.

Citigroup BofA Merrill Lynch

RBC Capital Markets ThinkEquity LLC

The date of this prospectus is                     , 2012

We are responsible for the information contained in this prospectus and in any free-writing prospectus we prepare or authorize. We have not authorized anyone to provide you with different information, and we take no responsibility for any other information others may give you. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than its date.

TABLE OF CONTENTS

	Page
Prospectus Summary		1
Risk Factors		10
Forward-Looking Statements		27
Use of Proceeds		28
Dividend Policy		28
Capitalization		29
Dilution		31
Selected Consolidated Financial Data		33
Unaudited Pro Forma Combined Consolidated Financial Information		36
Management’s Discussion and Analysis of Financial Condition and Results of Operations		40
Business		64
Management		73
Executive Compensation		78
Certain Relationships and Related Party Transactions		92
Principal and Selling Stockholders		94
Description of Capital Stock		96
Shares Eligible for Future Sale		99
Material U.S. Federal Income Tax Consequences to Non-U.S. Holders		101
Underwriting		105
Legal Matters		111
Experts		111
Where You Can Find More Information		111
Index to Consolidated Financial Statements		F-1

i

PROSPECTUS SUMMARY

This summary highlights information contained in greater detail elsewhere in this prospectus. This summary is not complete and does not contain all of the information you should consider in making your investment decision. You should read the entire prospectus carefully before making an investment in our common stock. You should carefully consider, among other things, our consolidated financial statements and the related notes and the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

Our Mission

Our mission is to partner with brand advertisers across the globe to help them unlock the power of digital media to build awareness, affinity and loyalty among consumers.

Overview

We are a leading global provider of advertising intelligence and digital media solutions to brand advertisers. We have developed an end-to-end solution that enables brand advertisers to learn about their optimal consumer audience, reach and engage that audience with emotive advertising and analyze and refine their marketing campaigns. The foundation of our solution is our proprietary e^XAdvertising Intelligence Platform, which processes massive amounts of anonymous consumer data to provide the intelligence and actionable insights brand advertisers need to efficiently reach their existing and prospective customers.

In 2010, global advertising spend was $449 billion, of which digital media advertising spend was $64 billion, or only 14%, according to ZenithOptimedia. Advances in technology, increases in network bandwidth and the growing proliferation of connected devices have changed the ways in which people connect, interact, work and live. As consumers shift to digital media and as virtually all types of media transition to digital formats, we expect brand advertisers to increasingly focus on digital media advertising.

As a partner to nearly 1,900 advertisers in 2011, we offer a highly integrated solution that includes multiple formats of high impact advertisements across display, video and mobile platforms. Our solution allows brand advertisers to connect with their target audiences at-scale through highly customizable experiences across a wide variety of formats and devices. We combine this with an efficient operational infrastructure that supports our sales footprint across 25 countries.

Our e^X Advertising Intelligence Platform enables brand advertisers to understand the detailed attributes of consumers who engage with their brands and to then apply those insights to reach audiences with similar attributes. We process approximately two billion daily user events, primarily associated with consumer activities across our digital content providers’ web pages. Our platform’s semantic technology contextualizes the most frequently visited pages, continuously updating a database that maps over 300 million unique web pages to associated concepts in our 50,000 attribute taxonomy. When a consumer visits a particular web page analyzed by our platform, we register that the consumer is interested in the attributes associated with that web page. As a result, each of our 50,000 attributes represents an audience segment with similar interests, enabling us to offer highly relevant audiences to brand advertisers.

We apply our advanced analytics capabilities to a massive global audience through our relationships with digital media content providers. Through these relationships, we gained access to a monthly average of 450 million unique visitors worldwide in 2011, as reported by comScore, providing us broad consumer reach as well as the ability to continuously update and deepen the insights of our e^X Advertising Intelligence Platform. We leverage these capabilities to service our brand advertisers, matching relevant and engaging advertising to precise and relevant audiences.

1

We generate revenues by delivering marketing campaigns for advertisers through our three primary global brands: Tribal Fusion, Firefly Video and AdoTube. In 2011, our revenues were $169.1 million, an increase of 35% over $125.3 million of revenues in 2010. We have been profitable on an annual basis since 2002 and, to date, have grown our business without third-party equity capital, reflecting our focus on results and our founder-led corporate culture of independence.

Our Solution

Our end-to-end solution enables brand advertisers to learn about their optimal audience, reach and engage that audience through emotive advertising and analyze and refine their marketing campaigns. Our solution empowers brand advertisers with insights about their audiences and incorporates those insights into effective and efficient marketing campaigns to achieve the brand advertisers’ desired outcomes.

Our solution is comprised of three key focus areas:

• Brand intelligence. We provide brand advertisers with insights into (i) which audiences interact with their brands digitally, (ii) what are the most significant attributes that describe those audiences and (iii) which specific audiences they reach through their digital media campaigns. Our granular segmentation provides deep and actionable insights into a brand’s optimal audience, often identifying segments that may not have been previously targeted.

• Consumer targeting. We enable brand advertisers to reach their prospective customers by using our rich targeting capabilities and massive audience to precisely and efficiently connect with the audiences that are most relevant to their brands.

• User engagement. Our extensive portfolio of engaging formats enables the deployment of digital marketing messages, including TV advertisements, across multiple devices, platforms and media. We are able to dynamically customize the creative messages of marketing campaigns to maximize their relevancy and increase engagement with prospective customers across the devices where consumers spend their time.

The e^X Advertising Intelligence Platform

Technology and data have been the key drivers of our business. Over the past 10 years we have developed our core technology and infrastructure, focusing on integrating our solution and leveraging our extensive data. The foundation of our technology is our e^X Advertising Intelligence Platform. Starting with the analysis of consumer interactions with a brand’s websites, we are able to understand the detailed attributes that best describe the consumers who interact and transact with that brand. We leverage these insights across a wide range of digital media devices and platforms to reach other consumers with similar attributes.

Our technology includes the following key elements:

• Advertiser-centric taxonomy. Our advertiser-centric hierarchical taxonomy is comprised of over 50,000 unique attributes that help us categorize consumers into audiences. Designed specifically for brand advertisers, it includes attributes that are focused on purchase intent and relevant interests across a wide range of business verticals.

• Contextualization technology. Our contextualization technology enables us to extract significant intelligence from over two billion daily user events, primarily associated with consumer activities across our digital content providers’ web pages. We map each of our 50,000 attributes to an associated semantic concept in English, Spanish, German and French. Having so defined the attributes, our contextualization engine analyzes the most frequently visited web pages, performing both syntactic and

2

semantic processing of the textual content to determine the meaning of, and assign specific attributes to, over 300 million unique web pages. When a consumer visits a particular web page analyzed by our platform, we register that the consumer is interested in the attributes associated with that web page. As a result, each of the 50,000 attributes represents an audience segment with similar interests, enabling us to offer highly relevant audiences to brand advertisers.

• High-performance ad-serving platform. Our high-performance ad server technology features advanced targeting, real-time campaign management tools and advanced optimization algorithms. Our ad-serving platform has been designed to be highly integrated and scalable.

• Actionable insights. The immense scale and depth of our data enables us to analyze user behavior patterns, calculate the value of individual user attributes to a brand advertiser and identify those that are statistically the most relevant to that brand. Using these insights, we are able to target audience models that most closely represent a brand advertiser’s current consumers.

Our Strengths

We believe that the following attributes and capabilities provide us with competitive advantages:

• Integrated solution. Our data is tightly integrated into all of the components of our solution, powering all elements of the marketing process including brand intelligence, prospective customer targeting, optimization and the dynamic customization of advertisements. Our end-to-end solution enables brand advertisers to meet their objectives across various formats and devices, such as display, video and mobile.

• Technology driven actionable insights. Our technology processes billions of user events each month, providing the intelligence behind our solution for brand advertisers. The immense scale of our data and our advanced analytics technology enable us to transform raw data into actionable insights that our brand advertisers are able to leverage throughout their marketing campaigns.

• Global footprint and scale. Our global reach, consumer data, operational infrastructure and management experience enable us to fulfill the needs of brand advertisers across the globe. We offer our solution to brand advertisers in 25 countries and are positioned to take advantage of the global growth in digital media advertising. To support our global footprint, our contextualization technology is capable of mapping web pages in English, Spanish, German and French.

• Blue chip brand advertisers. We have cultivated relationships with a blue chip customer base. In 2011, we delivered marketing campaigns on behalf of 88 of Advertising Age’s 100 Largest Global Marketers. Additionally, 85.4% of our 2011 revenues were generated from customers that we had served in the prior year. We believe this is driven by our superior results and continued product innovation.

• Proven track record. Our founder-led management team has a track record of growing our business through 10 years of consecutive profitability without any third-party equity capital.

3

Growth Strategy

Our growth strategy is driven by our focus on helping brand advertisers connect with their prospective customers. We believe that we are in the early stages of a very large, secular shift in our industry as virtually all types of media transition to digital formats, which is creating a significant opportunity for our business. To capitalize on that opportunity, we plan to pursue the following priorities:

• Expand across mobile devices and other platforms. We intend to leverage the capabilities of our e^X  Advertising Intelligence Platform to expand across the full landscape of digital devices and platforms, including smartphones, tablets, eBooks and connected TVs as well as social media.

• Continue our global expansion. We believe there is significant international demand for our solution, as digital devices are transforming consumer behavior across the world. We intend to expand our footprint by increasing penetration in the 25 countries in which we currently operate and by establishing a presence in additional countries.

• Increase awareness and adoption of our solution. As digital advertising shifts towards brand-centric campaigns, brand advertisers will increasingly seek an integrated digital solution that meets their objectives. We believe our solution addresses that need and we intend to grow the market’s awareness and adoption of our platform’s capabilities.

• Continue to evolve our solution. We will continue to enhance our e^X Advertising Intelligence Platform while developing new advertising capabilities and formats that grow and maximize the value we deliver to our brand advertisers.

• Expand our audience and data. We intend to continue to expand our global audience reach and data by growing our relationships and footprint with digital media content providers across devices and platforms.

• Pursue strategic acquisitions. We plan to evaluate and execute on opportunities to acquire complementary businesses and technologies that represent a strategic fit and are consistent with our overall growth strategy.

Risks Associated with Our Business

Our business is subject to numerous risks and uncertainties, including those highlighted in the section titled “Risk Factors” immediately following this prospectus summary. Some of these risks are:

• the market for digital brand advertising is at an early stage of development, and if it does not develop or develops more slowly than we expect, our business will be harmed;

• if we are unable to retain existing advertisers, expand our business with existing advertisers or attract new advertisers, our revenues could decline;

• we are highly dependent on advertising agencies as intermediaries, and this may adversely affect our ability to attract and retain business;

• the market in which we participate is intensely competitive, and we may not be able to compete successfully;

• we must deliver successful marketing campaigns or we will not grow or retain our current advertiser base;

• regulatory, legislative or self-regulatory developments regarding Internet privacy matters could adversely affect our ability to conduct our business; and

• our business model depends upon advertising inventory that we do not own or otherwise control.

4

Corporate History and Information

We were incorporated in Delaware in June 2000. Our principal executive offices are located at 2200 Powell Street, Suite 600, Emeryville, CA 94608 and our telephone number is (510) 250-5500. Our website address is www.exponential.com. The information on, or that can be accessed through, our website is not incorporated by reference into this prospectus and should not be considered to be a part of this prospectus. In September 2011, we acquired our AdoTube business through the acquisition of New Wave Media Inc. (d/b/a AdoTube), which we refer to in this prospectus as “AdoTube.”

Unless otherwise indicated, the terms “Exponential,” “we,” “us,” “the company” and “our” refer to Exponential Interactive, Inc., a Delaware corporation, together with its consolidated subsidiaries.

Exponential Interactive^®, Tribal Fusion^®, Techbargains.com^®, AdoTube^® and Full Tango^® are our primary registered trademarks in the United States, and Firefly Video™ is among our unregistered trademarks. Other trademarks appearing in this prospectus are the property of their respective holders.

5

The Offering

Common stock offered by us              shares

Common stock offered by the selling stockholders              shares

Common stock to be outstanding after this offering              shares

Over-allotment option of common stock offered by us and the selling stockholders              shares

Use of proceeds We expect to use the net proceeds of this offering for working capital and other general corporate purposes. We may also use a portion of the net proceeds to acquire or invest in complementary businesses, products, services, technologies or assets. See “Use of Proceeds.”

Proposed symbol EXPN

The number of shares of common stock to be outstanding after this offering is based on 53,309,844 shares of common stock outstanding as of December 31, 2011, and excludes:

• 14,259,048 shares issuable upon the exercise of stock options outstanding as of December 31, 2011 with a weighted average exercise price of $1.47 per share;

• 1,230,262 shares reserved for issuance under our 2010 Equity Incentive Plan (which share reserve was increased by 4.0 million shares in March 2012);

•              shares to be reserved for issuance under our 2012 Equity Incentive Plan and our 2012 Employee Stock Purchase Plan, each of which will become effective on the first day that our common stock is publicly traded and which will contain provisions to automatically increase the number of shares reserved for issuance each year, as more fully described in “Executive Compensation – Employee Benefit Plans” beginning on page 85;

• up to 534,287 shares that may be issued as contingent deferred consideration from our acquisition of AdoTube.

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

• outstanding shares include 750,000 shares of unvested restricted stock, which will become fully vested upon the completion of this offering;

• a    -for-    reverse split of our capital stock, to be effective prior to the completion of this offering;

• the filing of our amended and restated certificate of incorporation, which will occur immediately upon the completion of the offering; and

• no exercise by the underwriters of their option to purchase up to an additional              shares of our common stock in this offering.

6

Summary Consolidated Financial Data

The following tables summarize our consolidated financial data. You should read the following summary consolidated financial data in conjunction with the sections titled “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements, related notes and other financial information included elsewhere in this prospectus. We derived the summary consolidated statements of income data for 2009, 2010 and 2011 and the consolidated balance sheet information at December 31, 2011 from our audited consolidated financial statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results to be expected in the future.

	Years Ended December 31,
	2009			2010			2011
	(In thousands, except share and per share data)
Revenues	$	92,560		$	125,268		$	169,082
Cost of revenues (1) (2)		55,436			71,988			95,848
Gross profit		37,124			53,280			73,234
Operating expenses (1) (2):
Sales and marketing		20,060			28,688			42,179
Product development		3,434			4,680			5,304
General and administrative		5,482			7,615			10,360
Amortization of intangible assets		1,073			1,045			1,189
Total operating expenses		30,049			42,028			59,032
Operating income		7,075			11,252			14,202
Other income (expense), net		(1,441	)		(1,396	)		(2,055	)
Income before provision for income taxes		5,634			9,856			12,147
Provision for income taxes		2,623			4,485			5,263
Net income	$	3,011		$	5,371		$	6,884
Net income attributable to common stockholders (3):
Basic	$	2,953		$	5,279		$	6,787
Diluted	$	2,953		$	5,280		$	6,789
Net income per share attributable to common stockholders (3):
Basic	$	0.06		$	0.10		$	0.13
Diluted	$	0.06		$	0.10		$	0.13
Weighted-average shares used in computing net income per share attributable to common stockholders (3):
Basic		51,190,410			51,682,476			52,510,727
Diluted		51,885,242			52,159,078			53,802,990
Other Financial Information:
Adjusted EBITDA	$	12,779		$	18,037		$	22,039

	As of December 31, 2011
	Actual		Pro Forma, As Adjusted (4)
	(In thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	14,263	$
Working capital		36,054
Total assets		121,670
Total indebtedness		16,531
Total stockholders’ equity		57,813

7

(1) Results include stock-based compensation as follows:

	Years Ended December 31,
	2009		2010		2011
	(In thousands)
Cost of revenues	$	34	$	36	$	34
Sales and marketing		860		1,442		1,287
Product development		368		726		418
General and administrative		377		624		635
Total stock-based compensation	$	1,639	$	2,828	$	2,374

(2) Results include amortization of intangible assets as follows:

	Years Ended December 31,
	2009		2010		2011
	(In thousands)
Cost of revenues	$	1,549	$	1,549	$	2,124
Operating expenses		1,073		1,045		1,189
Total amortization of intangible assets	$	2,622	$	2,594	$	3,313

(3) See Notes 1 and 11 to our audited consolidated financial statements appearing elsewhere in this prospectus for an explanation of the calculations of our basic and diluted net income per share attributable to common stockholders.

(4) Reflects (a) the vesting of 750,000 shares of restricted stock upon completion of this offering and (b) the receipt of $         in net proceeds from the sale of shares of common stock by us in this offering at an assumed initial public offering price of $         per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. A $1.00 increase (decrease) in the assumed initial public offering price of $         per share would increase (decrease) our pro forma, as adjusted cash and cash equivalents, working capital, total assets and total stockholders’ equity by $         million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions payable by us.

Adjusted EBITDA

To provide investors with additional information regarding our financial results, we have disclosed in the table above and within this prospectus Adjusted EBITDA, a non-GAAP financial measure. We have provided below a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure.

We have included Adjusted EBITDA in this prospectus because it is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions for the allocation of capital. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows:

• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

• Adjusted EBITDA does not include other income and expense, which includes significant interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness and foreign exchange gains and losses;

8

• Adjusted EBITDA does not reflect income tax payments that may represent a reduction in cash available to us;

• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements or contractual commitments for such replacements or for new capital expenditure requirements;

• Adjusted EBITDA does not include the potentially dilutive impact of stock-based compensation; and

• Other companies, including companies in our industry, may calculate Adjusted EBITDA differently or not at all, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income and our financial results presented in accordance with GAAP. The following table presents a reconciliation of net income to Adjusted EBITDA for each of the periods indicated:

	Years Ended December 31,
	2009		2010		2011
	(In thousands)
Reconciliation of Adjusted EBITDA:
Net income	$	3,011	$	5,371	$	6,884
Other (income) expense, net		1,441		1,396		2,055
Provision for income taxes		2,623		4,485		5,263
Depreciation and amortization of property and equipment		1,443		1,363		2,150
Amortization of intangible assets		2,622		2,594		3,313
Stock-based compensation		1,639		2,828		2,374
Adjusted EBITDA	$	12,779	$	18,037	$	22,039

9

RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this prospectus, including the consolidated financial statements and the related notes appearing at the end of this prospectus, before deciding to invest in shares of our common stock. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, also may become important factors that impair us. If any of the following risks actually occurs, our business, financial condition, results of operations and future prospects could be materially and adversely affected. In that event, the market price of our common stock could decline, and you could lose part or even all of your investment.

Risks Related to Our Business and Industry

The market for digital brand advertising is at an early stage of development, and if it does not develop or develops more slowly than we expect, our business will be harmed.

Our products and services are designed to enable brand advertisers to effectively and efficiently connect with their target audience across a wide variety of digital devices and formats. While digital advertising has grown substantially over the past decade, most of this advertising has been focused on driving online purchasing or other direct response consumer behavior. By contrast, brand advertising is designed to build awareness, affinity, loyalty and goodwill towards a brand. Advertisers continue to spend more of their brand advertising budgets on “offline” advertising – such as TV, radio and print, than on digital advertising. Our future growth will substantially depend on brand advertisers increasing their spend on digital marketing channels, and we cannot be certain that they will do so. If brand advertisers do not perceive meaningful benefits from digital advertising, then the market may fail to develop or develop more slowly than we expect, either of which would adversely affect our business, financial condition and operating results.

If we are unable to retain existing advertisers, expand our business with existing advertisers or attract new advertisers our revenues could decline.

Our ability to continue to grow our revenues will depend in large part on expanding our business with existing advertisers and attracting new advertisers. The number of our current advertisers may not expand materially beyond our existing base. Further, even for our largest advertisers, the amount they spend with us is typically only a small fraction of their overall advertising budget. These advertisers may view their spend with us as experimental and may either reduce or terminate their spend with us if they perceive a superior alternative for digital brand advertising.

Advertisers do not enter into long-term obligations with us requiring them to use our solution and their contracts with us are cancelable upon short or no notice and without penalty. We cannot be sure that our advertisers will continue to use our services or that we will be able to replace advertisers that do not renew their campaigns with new ones generating comparable revenues.

If our existing advertisers do not continue to use our solution for their marketing campaigns, or if we are unable to attract and expand the amount of business we do with new advertisers, our sales will decrease and our business, financial condition and operating results will be adversely affected.

We are highly dependent on advertising agencies as intermediaries, and this may adversely affect our ability to attract and retain business.

Most of our sales come from delivering marketing campaigns to advertising agencies that purchase our solution on behalf of their clients. For 2011, 82.0% of our revenues came from sales to advertising agencies.

10

Advertising agencies are instrumental in assisting brands in planning and purchasing advertising, and each advertising agency will allocate advertising spend from brands across numerous channels. We do not have exclusive relationships with advertising agencies and we depend on agencies to work with us as they embark on marketing campaigns for brands. If we have an unsuccessful engagement with an advertising agency on a particular marketing campaign, we risk losing the ability to do work not only for the advertiser for whom the campaign was run, but also for other brands represented by that agency. With advertising agencies acting as intermediaries for multiple brands, our customer base is more concentrated than might be reflected by the number of advertisers for whom we conduct marketing campaigns.

Our sales could be adversely impacted by industry changes relating to the use of advertising agencies. For example, if advertisers seek to bring their marketing campaigns in-house rather than using an advertising agency, we would need to develop relationships with the advertisers directly, which we might not be able to do and which could increase our sales and marketing expense. Moreover, as a result of dealing primarily with advertising agencies, we have less of a direct relationship with advertisers than would be the case if advertisers dealt with us directly. This may drive advertisers to attribute the value we provide to the advertising agency rather than to us, further limiting our ability to develop long term relationships directly with advertisers. Advertisers may move from one advertising agency to another, and, accordingly, even if we have a positive relationship with an advertising agency, we may lose the underlying business when an advertiser switches to a new agency. The presence of advertising agencies as intermediaries between us and the advertisers thus creates a challenge to building our own brand awareness and affinity with the advertisers that are the ultimate source of our revenues.

In addition, advertising agencies that are our customers also offer or may offer some of the components of our solution, including selling digital advertising inventory through their own trading desks. As such, these advertising agencies are, or may become, our competitors. If they further develop their capabilities they may be more likely to offer their own solutions to advertisers and our ability to compete effectively could be significantly compromised and our business, financial condition and operating results could be adversely affected.

The market in which we participate is intensely competitive, and we may not be able to compete successfully.

The market for digital marketing and advertising solutions is highly competitive and rapidly changing. With the introduction of new technologies and the influx of new entrants to the market, we expect competition to persist and intensify in the future, which could harm our ability to increase sales and maintain our profitability.

In the traditional media space our primary competitors for advertising spend are large media firms, mainly TV and radio broadcasters and aggregators, as well as print media publishers and outdoor advertising companies. Many of these competitors have significant consumer reach, well developed client relationships, much larger financial resources and longer operating histories than we have.

Across the digital media landscape, we compete for advertising spend with multiple market participants, including entities with significant market presence such as Google, Facebook and Yahoo!, as well as various online advertising networks. Some advertising agencies, including some agencies that buy our solution on behalf of advertisers, also offer media inventory or services that compete directly with our solution. In addition to competing with these various firms for advertising spend, we also compete with some of them to place advertisements on digital media content providers’ properties. Further, many digital media content providers, in particular those with a significant consumer following, sell advertising on their websites and applications directly to advertisers, and these include some of the digital media content providers with whom we place advertisements.

Some of our larger competitors, such as Google, Apple, Microsoft and Facebook, may have the power to significantly change the very nature of the digital advertising marketplace to their advantage, and these changes could materially disadvantage us. For example, Google, Microsoft and Apple have substantial resources and have a significant share of widely adopted industry platforms such as web browsers and mobile operating systems.

11

These companies could leverage their position to make changes to their platforms that could be disadvantageous to our competitive position.

New technologies and methods of buying advertising present a dynamic competitive challenge, as market participants offer multiple new products and services, such as analytics, automated media buying and exchanges, aimed at capturing advertising spend. In addition to existing competitors and intermediaries, we may also face competition from new companies entering our market, which may include large established companies, such as IBM, which recently acquired Coremetrics, and Adobe Systems, which recently acquired Omniture and Efficient Frontier, each of which currently offers, or may in the future offer, online marketing applications, web analytics and marketing automation solutions.

We may face competition from companies we do not yet know about. If existing or new companies develop, market or resell competitive high-value marketing products or services, acquire one of our existing competitors or form a strategic alliance with one of our competitors, our ability to compete effectively could be significantly compromised and our operating results could be harmed.

Our current and potential competitors may have significantly more financial, technical, marketing and other resources than we have, be able to devote greater resources to the development, promotion, sale and support of their products and services, have more extensive advertiser bases and broader relationships than we have, and may have longer operating histories and greater name recognition than we have. As a result, these competitors may be better able to respond quickly to new technologies, develop deeper customer relationships or offer services at lower prices. Any of these developments would make it more difficult for us to sell our services and could result in increased pricing pressure, reduced profit margins, increased sales and marketing expenses or the loss of market share.

We must deliver successful marketing campaigns or we will not grow or retain our current advertiser base.

It is critical that we deliver successful marketing campaigns on behalf of our advertisers. Factors that may adversely affect our ability to deliver successful marketing campaigns include the following:

• inability to accurately process data and extract meaningful insights;

• faulty algorithms that fail to properly process data or result in inaccurate or ineffective consumer targeting;

• failure to create or deliver marketing campaigns that engage consumers;

• the delivery of advertising impressions next to inappropriate content for the advertiser;

• technical or infrastructure problems resulting in marketing campaigns not functioning or displaying properly; and

• misuse of tracking tools, click-fraud or other malevolent behavior.

If we are not successful in delivering marketing campaigns for advertisers our ability to retain and expand business with existing advertisers could be harmed and our business, financial condition and operating results could be adversely affected.

Regulatory, legislative or self-regulatory developments regarding Internet privacy matters could adversely affect our ability to conduct our business.

Consumer and industry groups have expressed concerns about online data collection and use by advertisers, which has resulted in the release of various industry self-regulatory codes of conduct and best practice guidelines that are binding for member companies and that govern, among other things, the ways in which companies can collect, use and disclose user information, how companies must give notice of these practices and what choices companies must provide to consumers regarding these practices.

12

U.S. regulatory agencies have also placed an increased focus on online privacy matters and, in particular, on online advertising activities that utilize cookies and other online tools for tracking purposes. Such regulatory agencies have released, or are expected to release, detailed reports pertaining to the collection and use of consumers’ information for online advertising and other purposes. For example, on December 1, 2010, the Federal Trade Commission issued a staff report emphasizing the importance of the principles of consumer notice and choice, and recommending the adoption of methods of simplified choice, including the implementation of a “Do Not Track” mechanism — likely a persistent setting on consumers’ Internet browsers – to enable consumers to choose whether to allow the tracking of their online search and browsing activities.

U.S. and foreign governments have enacted, considered or are considering legislation or regulations that could significantly restrict industry participants’ ability to collect, augment, analyze, use and share anonymous data, such as by regulating the level of consumer notice and consent required before a company can employ cookies or other electronic tools to track consumers online. A number of existing bills are pending in the U.S. Congress that contain provisions that would regulate how companies can use cookies and other tracking technologies to collect and use information about consumers. Several pending bills also contain provisions that would specifically regulate the collection and use of information, particularly geolocation information, from mobile devices.

The European Union and some EU member states have already implemented legislation and regulations requiring advertisers to obtain specific types of notice and consent from consumers before using cookies or other technologies to track consumer online behavior and deliver targeted advertisements. In particular, to comply with these requirements, the use of cookies or other similar technologies may require the user’s affirmative, opt-in consent.

Changes in global privacy regulations and self-regulatory regimes may adversely affect the demand for our solutions or otherwise harm our business, results of operations and financial condition. For instance, privacy regulations could require digital media content providers to take additional measures to facilitate consumer privacy preferences, in which case we will be reliant upon them to do so. In addition, digital media content providers could become subject to regulatory restrictions that would require them to limit or cease altogether the collection and/or use of data by third parties such as ourselves. For example, one potential form of restriction on the use of cookies would allow the website that the consumer has elected to visit, a first-party website, to continue to place cookies on the user’s browser without explicit consent, but would require the user’s explicit consent for a third party to place its cookies on the user’s browser. We are a third party in this context, and therefore currently depend on the ability to place our cookies on browsers of users that visit the websites of our digital media content providers, and if we were restricted from doing so, our ability to gather the data on which we rely would be impaired. Further, we could be placed at a competitive disadvantage to large competitors such as Google, Facebook, Microsoft and Yahoo! who have heavily trafficked first-party properties that would continue to have greater ability to collect visitor data.

Finally, we may be subject to foreign laws regulating online advertising even in jurisdictions where we do not have any physical presence to the extent a digital media content provider has advertising inventory that we manage or to the extent that we collect and use data from consumers in those jurisdictions. Such laws may vary widely around the world, making it more costly for us to comply with them. Failure to comply may harm our business and our operating results could be adversely affected.

Changes in consumer sentiment regarding privacy matters could adversely affect our ability to conduct our business.

Consumers may become increasingly resistant to the collection, use and sharing of information used to deliver targeted advertising, and take steps to prevent such collection and use of information. For example, consumer complaints and/or lawsuits regarding online advertising in general and our practices specifically could adversely impact our business.

13

Consumers can currently opt out of the placement or use of most cookies for online advertising purposes by either deleting or disabling cookies on their browsers, visiting websites that allow consumers to place an opt-out cookie on their browsers, which prevents the collection of certain data about the consumers’ online activity, or by downloading browser plug-ins and other tools that can be set to: (i) identify cookies and other tracking technologies used on websites; (ii) prevent websites from placing third-party cookies and other tracking technologies on the user’s browser; or (iii) block the delivery of online advertisements on websites and applications.

Changes in device and software features could make it easier for Internet users to prevent the placement of cookies. In particular, the default settings of consumer devices and software may be set to prevent the placement of cookies unless the user actively elects to allow them. For example, Apple’s Safari browser currently does not accept cookies as a default, and users must activate a browser setting to enable cookies to be set. On February 22, 2012, the Digital Advertising Alliance announced that its members will work to add browser-based header signals to the set of tools by which consumers can express their preferences not to be tracked online.

If consumer sentiment regarding privacy issues or the development and deployment of new browser solutions results in a material increase in the number of users who choose to opt out or are otherwise using browsers where they need to, and fail to, configure the browser to accept cookies, our ability to conduct our business would be adversely affected, as would our operating results and financial condition.

In addition to this change in consumer preferences, if brand advertisers perceive significant negative consumer reaction to targeted online advertising, they may determine that such advertising has the potential to negatively impact their brand. In that case, advertisers may limit or stop the use of our services, and our operating results and financial condition would be adversely affected.

Our business model depends upon advertising inventory that we do not own or otherwise control.

The majority of our revenues come from arrangements where we are paid by advertisers to place advertisements on digital media content provider websites and applications that we do not own. As such, we do not own or control the inventory of advertising upon which our business depends. Digital media content providers have a variety of channels in which to sell their advertising inventory. If these content providers sell their inventory through advertising exchanges, or if our competitors offer higher prices for their inventory, this may affect our ability to obtain inventory on a cost-effective basis and our business, financial condition and operating results will be adversely affected.

Many digital media content providers sell a portion of their advertising inventory directly to advertisers, and digital media content providers may seek to do so increasingly in the future. If that were to occur, we may have fewer opportunities to sell our solution to advertisers, which would harm our ability to grow our business and our financial condition and operating results would be adversely affected.

We are highly dependent on our Chief Executive Officer.

Our future success depends in significant part on the continued service of our Dilip DaSilva, Chief Executive Officer, President and Chairman. Mr. DaSilva is critical to the overall management of our company as well as the development of our technology and strategic direction. Mr. DaSilva is an at-will employee and there are no vesting restrictions on any of the common stock that he owns. The loss of Mr. DaSilva could adversely affect our business, financial condition and operating results.

Defects or errors in our solution could harm our reputation, result in significant costs to us and impair our ability to deliver our marketing campaigns.

The applications underlying our solution are inherently complex and may contain material defects or errors which can adversely affect the execution of a marketing campaign and cause harm to our reputation. Errors in our

14

systems could cause the delivery of marketing campaigns in an incomplete or inaccurate manner. This risk is compounded by the complexity of our solution and the large amounts of data we collect and manage. If we were to experience any such errors or defects, our reputation could be harmed and we could lose customers.

Digital media content providers that utilize our ad-serving technology could be adversely affected by our failure to deliver advertisements.

In some cases, digital media content providers rely on our ad server to deliver advertisements to their websites or mobile applications. Because of this additional level of integration, the failure of our ad server could cause the digital media content provider website to fail to display properly. Therefore, if we experience interruptions in the availability of, or impaired functionality of, our advertising server, our reputation among digital media content providers could be harmed and they may cease to partner with us for the delivery of advertisements. Any of these consequences could adversely affect our operating results and financial condition.

Interruptions or delays in service from third-party data center hosting facilities and other third parties could impair the delivery of our service and harm our business.

We currently serve our customers from third-party data center hosting facilities located in Northern California and Virginia. All of our data gathering and analytics are conducted on, and the advertisements we deliver are processed through, servers in these facilities. We also rely on bandwidth providers, ISPs and mobile networks to deliver advertisements. Any damage to, or failure of, the systems of our third-party providers could result in interruptions to our service. If for any reason our arrangement with one or more of our data centers is terminated, we could experience additional expense in arranging for new facilities and support. In addition, the failure of our data centers to meet our capacity requirements could result in interruptions in the availability or functionality of our services or impede our ability to scale our operation.

Despite precautions taken at our third-party data centers, the occurrence of a natural disaster, an act of terrorism, vandalism or sabotage, a decision to close the facilities without adequate notice, or other unanticipated problems at these facilities could result in lengthy interruptions in the availability of our services. While we have disaster recovery arrangements in place, they have not been tested under actual disasters or similar events. If any such event were to occur our business, operating results and financial condition could be adversely affected.

In periods of economic uncertainty, advertisers may delay or reduce their spending, which could materially harm our business.

General worldwide economic conditions have experienced significant instability in recent years. These conditions make it extremely difficult for our advertisers and us to accurately forecast and plan future business activities, and could cause our advertisers to reduce or delay their advertising spend.

We cannot predict the timing, strength or duration of any economic slowdown or recovery. In downturns our revenues can be adversely affected as advertisers may curtail spending on advertising in general and for new platforms such as ours specifically. Any macroeconomic deterioration in the future could materially and adversely affect our revenues and operating results. In addition, even if the overall economy improves, we cannot assure you that the market for online advertising and marketing services will experience growth or that we will experience growth.

Furthermore, during challenging economic times our customers may face issues in gaining timely access to liquidity, which could result in an impairment of their ability to make timely payments to us. For example, we carry credit risk on the revenue share that we provide to digital media content providers, as we generally pay digital media content providers within a shorter period of time than advertisers pay us. If payments are not made to us on a timely basis, or at all, we may be required to increase our allowance for doubtful accounts and our financial results would be harmed.

15

The growth of the mobile advertising market is uncertain and we may not be successful in producing brand advertising solutions for mobile platforms.

Web usage and the consumption of digital content are increasingly shifting to mobile platforms such as smartphones, tablets and eBooks, as well as other connected devices. Industry-wide solutions to effectively monetize advertising inventory on these platforms are at an early stage of development and the future demand and growth prospects for advertising on these mobile platforms is uncertain. Compelling formats on mobile remain elusive and subject to rapid evolution.

The growth of our business depends in part on our ability to deliver compelling solutions to brand advertisers on these new mobile marketing channels. Our success on mobile platforms will be dependent on interoperability with popular mobile operating systems that we do not control, such as Android, iOS and Windows Mobile, and any changes in such systems that degrade our services’ functionality or give preferential treatment to competitive services could adversely affect usage of our services through mobile devices. Additionally, to deliver high quality mobile offerings, it is important that our services interoperate with a range of other mobile technologies, systems, networks and standards that we do not control. For example, access to the device identifier is an important factor in delivering targeted advertisements to consumers. Regulatory or legislative restrictions regarding the collection and use of information through mobile technologies, actions by platform developers to block access to device identifiers or actions by application developers to block access to device identifiers might all affect our ability to obtain the device identifier information. We may not be successful in developing relationships with key participants in the mobile industry or in developing products that operate effectively with these technologies, systems, networks or standards.

If we fail to deliver effective solutions to advertisers for mobile platforms and other emerging platforms, our ability to monetize these growth opportunities will be constrained, and our business, financial condition and operating results would be adversely affected.

We are subject to international business uncertainties.

Revenues from advertisers outside the United States comprised 33.1% of our revenues in 2011 and we expect this portion to increase in the future. Currently, we have a sales presence in 25 countries. In addition, we have substantial operations in India, Ukraine and the United Kingdom. We intend to expand our operations in these 25 countries as well as establish a presence in additional countries to grow our international sales. Operating in foreign countries requires significant resources and management attention, and we have limited experience entering new geographic markets. Moreover, advertisers typically spend less in the aggregate and on average per campaign in developing countries than they do in more developed countries. We cannot assure you that our international efforts will be successful. International sales and operations may be subject to risks such as:

• competition with local advertising firms or foreign firms entering the same markets;

• difficulties in staffing and managing foreign operations;

• burdens of complying with a wide variety of laws and regulations;

• adverse tax effects and foreign exchange controls making it difficult to repatriate earnings and cash;

• political and economic instability;

• terrorist activities and natural disasters;

• generally longer receivable collection periods than in the United States;

• trade restrictions;

• differing employment practices and laws and labor disruptions;

• preference for local vendors;

16

• technology compatibility;

• the imposition of government controls;

• lesser degrees of intellectual property protection;

• a legal system subject to undue influence or corruption; and

• a business culture in which illegal sales practices may be prevalent.

In addition, the United States has in the past proposed, and is currently evaluating, changes to the corporate tax structure that would include taxation of offshore earnings of U.S. businesses. If this were to occur our effective tax rates would likely increase. We are subject to U.S. and foreign legislation, such as the Foreign Corrupt Practices Act and the UK Bribery Act, and we have operations in certain countries that are considered to be high risk areas for corruption. While we maintain high standards of ethical conduct, our policies, training and monitoring of compliance with applicable anti-corruption laws are at a very early stage of development. If any of our employees or agents were to violate these laws in the conduct of our business, we could be subject to substantial penalties and our reputation could be impaired.

We cannot assure you that these factors will not have an adverse effect on revenues from advertisers located outside the United States and, consequently, on our business and operating results.

We experience quarterly fluctuations in our operating results due to a number of factors which make our future results difficult to predict and could cause our operating results to fall below expectations or our guidance.

Our quarterly operating results fluctuate due to a variety of factors, many of which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful. You should not rely on our past results as indicative of our future performance. If our revenues or operating results fall below the expectations of investors or securities analysts, or below any guidance we may provide to the market, the price of our common stock could decline substantially.

Our business is also subject to seasonal fluctuations. Specifically, our revenues are traditionally strongest in the fourth quarter of each year due to increases in holiday advertising. Conversely, our first quarter revenues are typically lower than the preceding fourth quarter as advertising spend decreases.

Since the majority of our non-advertising expenses are personnel-related and include salaries, stock-based compensation, benefits and incentive-based compensation plan expenses, we have not experienced significant seasonal fluctuations in the timing of our expenses from period to period. In addition, following this offering we plan to increase our investment in sales and marketing and product development substantially as we seek to leverage our solution to capitalize on what we see as a growing global opportunity. We also expect that our general and administrative expenses will increase both to support our growing operations and due to increased costs of operating as a public company. For the foregoing reasons or other reasons we may not anticipate, historical patterns should not be considered indicative of our future sales activity or performance.

Some of our services have different financial characteristics than others, so that a fluctuation in the mix of services we provide could cause a fluctuation in our operating results. For example, our Techbargains.com revenues have higher gross margin and lower operating expense than some of our other services.

Factors that may affect our quarterly operating results include the following:

• demand for our technology and related services and the size, scope and timing of marketing campaigns;

• advertiser renewal rates, and the pricing and volume levels at which agreements are renewed;

• market acceptance of our current and future products and services;

17

• budgeting cycles of our advertisers;

• changes in the competitive dynamics of our industry, including consolidation among competitors or customers;

• the response of consumers to our advertisements and to online marketing in general;

• our ability to control costs, including our operating expenses;

• network outages, errors in our solution or security breaches and any associated expenses and collateral effects;

• foreign currency exchange rate fluctuations, as some of our foreign sales and costs are denominated in their local currencies;

• changes in the mix of services we sell each period, from lower to higher margin solutions, or vice versa;

• failure to successfully manage any acquisitions; and

• general economic and political conditions in our domestic and international markets.

As a result, we have a limited ability to forecast the amount and mix of future revenues and expenses, our operating results may from time to time fall below our estimates or the expectations of public market analysts and investors.

We are subject to currency exchange risk in connection with our international business operations.

Cash inflows and outflows in our international operations are typically denominated in the currencies other than the U.S. dollar, which is our functional currency for financial reporting purposes. For 2009, 2010 and 2011, 15.3%, 25.1% and 33.1% of our sales were denominated in such foreign currencies. Our reliance on foreign currencies subjects our financial results to fluctuations in currency exchange rates and changes in the proportion of our revenues and expenses attributable to each of our foreign locations. We recognized a foreign exchange loss of $1.3 million in 2011. In addition, we expect our exposure to fluctuations in foreign exchange rates to increase as we expand our business in existing and new international markets. We do not currently engage in any hedging activities relating to foreign currency. Foreign currency exchange rate fluctuations could adversely impact our profitability.

Failure to effectively expand our sales and marketing operations and activities could harm our ability to increase our advertiser base and achieve broader market acceptance of our solutions.

Increasing our advertiser base and achieving broader market acceptance of our services will depend to a significant extent on our ability to expand our sales and marketing operations and activities. We expect to be substantially dependent on our direct sales force to obtain new advertisers. We plan to continue to expand our direct sales force both domestically and internationally. We believe that there is significant competition for direct sales personnel with the sales skills and technical knowledge that we require. Our ability to achieve significant growth in revenues in the future will depend, in large part, on our success in recruiting, training and retaining sufficient numbers of direct sales personnel. New hires require significant training and time before they achieve full productivity. Newly hired sales personnel may not become productive as quickly as we would like, or at all, thus representing increased operating costs and lost opportunities which in turn would adversely affect our business, financial condition and operating results.

Our inability to acquire or to successfully integrate other businesses, products or technologies could adversely affect our business.

We may seek to acquire additional businesses, products or technologies. However, we have limited experience in acquiring and integrating businesses, products and technologies. Moreover, our integration of

18

AdoTube, which we acquired in September 2011, has not yet been completed and we do not know if we will be able to successfully integrate AdoTube into our existing business. If we identify an appropriate acquisition candidate, we may not be successful in negotiating the terms of the acquisition, financing the acquisition, or effectively integrating the acquired business, product or technology into our existing business and operations. Our due diligence may fail to identify all of the problems, liabilities or other shortcomings or challenges of an acquired business, product or technology, including issues related to intellectual property, product quality or product architecture, regulatory compliance practices, revenue recognition or other accounting practices or employee or customer issues.

Additionally, in connection with any acquisitions we are able to complete, we may not achieve the synergies or other benefits we expected to achieve and we may incur write-downs, impairment charges or unforeseen liabilities which could negatively affect our operating results or financial position or could otherwise harm our business. We have capitalized significant amounts of intangible assets and goodwill from acquisitions completed to date and could be required to write down these assets or other similar assets obtained in future acquisitions. If we finance acquisitions by issuing convertible debt or equity securities, our existing stockholders may be diluted, which could affect the market price of our stock. Furthermore, contemplating or completing an acquisition and integrating an acquired business, product or technology could significantly divert management and employee time and resources and could adversely affect our business, financial condition and operating results.

We have experienced rapid growth in recent periods. If we fail to manage our growth effectively, our financial performance may suffer.

We have expanded our overall business, advertiser base, employee headcount and operations in recent periods. We increased our total number of full-time employees and contractors from 214 as of December 31, 2009 to 639 as of December 31, 2011. We have also established operations in other countries. In September 2011, we completed the acquisition of AdoTube which has an operations center in Ukraine, where we previously had no presence. Our expansion has placed, and our expected future growth will continue to place, a significant strain on our managerial, operational, product development, sales and marketing, administrative, financial and other resources. More systems, processes and local management are needed to allow us to grow successfully. If we are unable to manage our growth successfully, our business, financial conditions and operating results could be adversely affected.

We depend on key personnel to operate our business, and if we are unable to retain, attract and integrate qualified personnel, our ability to develop and successfully grow our business could be harmed.

In addition to the continued services of Mr. DaSilva, we believe that our future success is highly dependent on the contributions of our executive officers, as well as our ability to attract and retain highly skilled and experienced sales, technical and other personnel in the United States and abroad. All of our employees, including our executive officers, are free to terminate their employment relationship with us at any time, and their knowledge of our business, platform and industry may be difficult to replace. In addition, we believe that our executives have developed highly successful and effective working relationships. If one or more of these individuals leave, we may not be able to fully integrate new executives or replicate the current dynamic and working relationships that have developed among our executive officers and other key personnel, and our operations could suffer. Qualified individuals are in high demand, particularly in the digital media industry, and we may incur significant costs to attract them. Many of the companies with which we compete for experienced personnel also have greater resources than us. Competition for qualified personnel is particularly intense in the San Francisco Bay Area, where our headquarters are located.

If we are unable to attract and retain our executive officers and key employees, we may not be able to achieve our strategic objectives, and our business, financial condition and operating results could be adversely affected.

19

If our security measures are breached, our platform may be perceived as not being secure and advertisers may curtail or stop using our services.

We manage the delivery of marketing campaigns through a web-based platform. If our security measures are breached as a result of actions of our employees or a third party, this could result in: (i) unauthorized access to consumer information, including web users’ personally identifiable information we possess in limited amounts via our Techbargains.com website; (ii) viruses, worms, spyware, or other malware being served from our platform (e.g., “malvertising”); (iii) a denial of service or other limitation on our ability to serve advertisements; or (iv) unauthorized access to our system and manipulation of existing marketing campaigns. If this occurs, our reputation could be damaged, our business may suffer and we could incur significant liability. Because techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known until launched against us, we may be unable to anticipate these attacks or to implement adequate preventative measures. If an actual or perceived breach of our security occurs, the market perception of the effectiveness of our security measures could be harmed, we could lose potential sales and customers and our business, financial condition and operating results could be adversely affected.

We may not maintain profitability in the future.

Although we have historically been profitable, we expect to make significant future investments related to the development and expansion of our business. If we fail to achieve sufficient revenue growth to offset these increased expenses, we may be unable to maintain profitability. In addition, a lack of operating efficiency or poor decisions relating to the ongoing management of our business may adversely affect our profitability. You should not consider our revenue growth in recent periods as indicative of our future performance. In future periods, our revenues could decline or grow more slowly than we expect. We also may incur significant losses in the future for a number of reasons, including other risks described in this prospectus, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors.

We will seek to develop greater awareness of our brands among advertisers, but may not be successful in doing so, in which event our growth could be impaired.

Our primary global brands are Tribal Fusion, Firefly Video and AdoTube. We believe that developing and maintaining awareness and integrity of our brands in a cost-effective manner is important to achieving widespread acceptance of our existing and future offerings and an important element in attracting new advertisers. Successful promotion of our brands will depend on the effectiveness of our marketing efforts. We bring different aspects of our overall solution to market under a variety of brands and some of our current or future offerings may overlap, contributing to brand confusion. As a result, we may have to make additional investments in marketing to educate the market on what our various products and services provide. Such brand promotion activities may not yield increased revenues, and even if they do, the increased revenues may not offset the expenses we incur in promoting our brands. If we fail to promote and maintain our brands successfully or to maintain loyalty among our advertisers, or if we incur substantial expenses in an unsuccessful attempt to promote and maintain our brands, we may fail to attract new advertisers or to retain our existing advertisers and our business, financial condition and operating results may be adversely affected.

Federal, state and foreign governments may propose and implement new taxes and new laws, including sales taxes, which may negatively affect our business.

As Internet commerce and globalization continue to evolve, increasing regulation by federal, state or foreign governments becomes more likely. Our business could be negatively impacted by the application of existing laws and regulations or the enactment of new laws applicable to digital marketing. The cost to comply with such laws or regulations could be significant, and we may be unable to pass along those costs to our customers in the form of increased fees.

20

In addition, federal, state and foreign governmental or regulatory agencies may decide to impose taxes on services provided over the Internet. Such taxes could discourage the use of the Internet as a means of commercial marketing, which would adversely affect the viability of our offerings. For example, if California imposes a sales tax on revenues generated by websites owned by companies based in California, then companies may reduce the amount of products and services offered through Techbargains.com and our referral revenues could decline.

The requirements of being a public company may strain our resources and divert management’s attention. 

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (Exchange Act), the Sarbanes-Oxley Act, the Dodd-Frank Act, the stock market listing requirements of              and other applicable securities rules and regulations. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming, or costly and increase demand on our systems and resources. In connection with the preparation of our financial statements for inclusion in this prospectus, we and our independent registered public accounting firm determined that we have a significant deficiency in our financial statement close process related to our ability to support the timely reporting of our financial results as required under the Exchange Act. To remediate this significant deficiency, we will need to examine and improve our processes and related internal control over financial reporting, which will require us to add experienced personnel with requisite skills to our finance department. If we are unable to remediate the significant deficiency, we may not be able to comply with our reporting obligations.

We may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs.

In the future, we may require additional capital to respond to business opportunities, challenges, acquisitions or unforeseen circumstances and may determine to engage in equity or debt financings or enter into credit facilities for other reasons. We may not be able to timely secure additional debt or equity financing on favorable terms, or at all. If we raise additional funds through the issuance of equity or convertible debt or other equity-linked securities, our existing stockholders could suffer significant dilution. Any debt financing obtained by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We currently have a $20 million credit facility, against which we had $13.4 million in borrowings outstanding as of December 31, 2011. Under this facility, we are required to comply with certain financial and non-financial covenants. Amounts outstanding under the credit facility may become immediately due and payable if certain events of default, including non-compliance with the required covenants occur. There can be no assurances that we will be able to maintain the credit facility, which has been an important source of capital to support our growth in the past.

If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited.

If we are unable to protect our proprietary information or other intellectual property, the value of our platform and offerings in general could be adversely affected.

We rely largely on trade secret law to protect our proprietary information and technology. To date, we have filed two patent applications in the United States. We generally seek to protect our proprietary information by confidentiality, non-disclosure and assignment of invention agreements with our employees, contractors and parties with which we do business. However, we may not be successful in executing these agreements with every party who has access to our confidential information or contributes to the development of our intellectual property. Those agreements that we do execute may be breached, and we may not have adequate remedies for any such breach. Breaches of the security of our website, databases or other resources could expose us to a risk of

21

loss or unauthorized disclosure of web user information, cookies or other proprietary information. We cannot be certain that the steps we have taken will prevent unauthorized use or reverse engineering of our technology or information. Moreover, our trade secrets may be disclosed to or otherwise become known or be independently developed by competitors and in these situations we would have no right to stop their use of our information. To the extent that our employees, contractors, or other third parties with whom we do business use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. If, for any of the above reasons, our intellectual property is disclosed or misappropriated, it would harm our ability to protect our rights and may have an adverse effect on our business.

We have registered certain of our trademarks in certain jurisdictions worldwide. However, even in those jurisdictions competitors may adopt similar trademarks to ours, register domain names that mimic ours or purchase keywords that are confusingly similar to our brand names as terms in Internet search engine advertising programs, which could impede our ability to build our brand identity and lead to confusion among potential customers of our services. We believe that other companies have copied some of our trademarks for use in the marketplace. We have sent demand letters in these instances, but there can be no assurance that we will prevail should such letters be ineffective. We are also aware that a third party has registered, and another third party has applied to register, the trademark “Firefly” in the United States for similar classes of services as our application for our own “Firefly Video” logotype. If we are not successful in arguing that there is no likelihood of confusion between our mark and the marks of these third parties, or in proving that we have prior rights in our mark, our application may be denied. Whether or not our application is denied, third parties may claim that our trademarks infringe their rights. As a result, we could be forced to pay significant settlement costs or cease the use of these trademarks and associated elements of our brand in the United States or other jurisdictions.

Further, the laws of certain countries do not protect proprietary rights to the same extent as the laws of the United States and, therefore, in certain jurisdictions, we may be unable to protect our proprietary technology adequately against unauthorized third party copying, infringement or use, which could adversely affect our competitive position. To protect or enforce our intellectual property rights, we may initiate litigation against third parties. Litigation may be necessary to protect our trade secrets or know-how, or determine the enforceability, scope and validity of the proprietary rights of others. Any lawsuits that we initiate could be expensive, take significant time and divert management’s attention from other business concerns. Additionally, we may provoke third parties to assert claims against us. These claims could invalidate or narrow the scope of our own intellectual property. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially valuable. The occurrence of any of these events may adversely affect our business, financial condition and operating results.

Our business may suffer if it is alleged or determined that our technology or another aspect of our business infringes the intellectual property rights of others.

Our industry is characterized by the existence of a large number of patents and by litigation based on allegations of infringement or other violations of intellectual property rights. Moreover, in recent years, individuals and groups have purchased patents and other intellectual property assets for the purpose of making claims of infringement to extract settlements from companies like ours. From time to time, third parties have claimed and may continue to claim that we are infringing upon their intellectual property rights. Our lack of patents may make it difficult for us to deter any such third parties through counterclaims. In addition, we may be contractually obligated to indemnify our customers in the event of infringement of a third party’s intellectual property rights. Responding to such claims, regardless of their merit, can be time consuming, costly to defend in litigation, divert management’s attention and resources, damage our reputation and brand and cause us to incur significant expenses. Even if we are indemnified against such costs, the indemnifying party may be unable to uphold its contractual obligations and determining the scope of these obligations could require additional litigation. Further, claims of intellectual property infringement might require us to redesign our technology, rebrand our services, enter into costly settlement or license agreements or pay costly damage awards, or face a temporary or permanent injunction prohibiting us from marketing or selling our services. If we cannot or do not

22

license the infringed intellectual property on reasonable terms or at all, or substitute similar intellectual property from another source, our revenues and operating results could be adversely impacted. Additionally, our advertisers may not purchase our offerings if they are concerned that they may infringe third-party intellectual property rights. The occurrence of any of these events may have an adverse effect on our business, financial condition and operating results.

We use open source software in our platform that may subject our technology to general release or require us to re-engineer our solutions, which may cause harm to our business.

We use open source software in connection with our services. From time to time, companies that incorporate open source software into their products have faced claims challenging the ownership of open source software and/or compliance with open source license terms. Therefore, we could be subject to suits by parties claiming ownership of what we believe to be open source software or noncompliance with open source licensing terms. Some open source software licenses require users who distribute or make available open source software as part of their software to publicly disclose all or part of the source code to such software and/or make available any derivative works of the open source code on unfavorable terms or at no cost. While we monitor our use of open source software and try to ensure that none is used in a manner that would require us to disclose the source code or that would otherwise breach the terms of an open source agreement, such use could nevertheless occur and we may be required to release our proprietary source code, pay damages for breach of contract, re-engineer our applications, discontinue sales in the event re-engineering cannot be accomplished on a timely basis or take other remedial action that may divert resources away from our development efforts, any of which could adversely affect our business, financial condition or operating results.

Catastrophic events or political instability could disrupt and cause harm to our business.

Our headquarters and one of our data centers are located in California, an area susceptible to earthquakes. A major earthquake or other natural disaster, fire, act of terrorism or other catastrophic event in California or elsewhere that results in the destruction or disruption of any of our critical business operations or information technology systems could severely affect our ability to conduct normal business operations and, as a result, our future operating results could be harmed.

We have significant operations in India, Ukraine, the United Kingdom and the United States. Political instability or catastrophic events in any of those countries could adversely affect our business in the future, our financial condition and operating results.

Risks Related to this Ownership of Our Common Stock and this Offering

There has been no prior market for our common stock, our stock price may be volatile or may decline regardless of our operating performance, an active public trading market may not develop or be sustained following this offering, and you may not be able to resell your shares at or above the initial public offering price.

There has been no public market for our common stock prior to this offering. The initial public offering price for our common stock will be determined through negotiations between the underwriters and us and may vary from the market price of our common stock following this offering. If you purchase shares of our common stock in this offering, you may not be able to resell those shares at or above the initial public offering price. An active or liquid market in our common stock may not develop upon the closing of this offering or, if it does develop, it may not be sustainable. The trading prices of the securities of technology companies have been highly volatile. The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

• actual or anticipated fluctuations in our revenue and other operating results;

• the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;

23

• failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

• announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures or capital commitments;

• changes in operating performance and stock market valuations of online marketing or other technology companies, or those in our industry in particular;

• lawsuits threatened or filed against us; and

• other events or factors, including those resulting from war, incidents of terrorism or responses to these events.

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many technology companies. Stock prices of many technology companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business and adversely affect our business.

Sales of substantial amounts of our common stock in the public markets, or the perception that they might occur, could reduce the price that our common stock might otherwise attain and may dilute your voting power and your ownership interest in us.

After the completion of the offering, we will have             outstanding shares of common stock (             shares of common stock if the underwriters exercise in full their option to purchase additional shares). This number is comprised of all the shares of our common stock that we are selling in this offering, which may be resold immediately in the public market. Subject to certain exceptions, we, all of our directors and officers and          of our stockholders and option holders have agreed not to offer, sell or agree to sell, directly or indirectly, any shares of common stock without the permission of the underwriters for a period of 180 days from the date of this prospectus, subject to extension in some circumstances. When this period expires, we and our locked-up security holders will be able to sell our shares in the public market. Sales of a substantial number of such shares upon expiration, or early release, of the lock-up (or the perception that such sales may occur) could cause our share price to fall.

The market price of the shares of our common stock could decline as a result of sales of a substantial number of our shares in the public market or the perception in the market that the holders of a large number of shares intend to sell their shares.

Our Chief Executive Officer will continue to have substantial control over us after this offering and could delay or prevent a change in corporate control.

After this offering, Dilip DaSilva, our Chairman, Chief Executive Officer and President, will beneficially own, in the aggregate,     % of our outstanding common stock. As a result, he will have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets. In addition, our Chief Executive Officer will have substantial influence over the management and affairs of our company. Accordingly, this concentration of ownership might harm the market price of our common stock by:

• delaying, deferring or preventing a change in control of the company;

• impeding a merger, consolidation, takeover or other business combination involving us; or

• discouraging a potential acquiror from making a tender offer or otherwise attempting to obtain control of the company.

24

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds that we receive from this offering, including applications for working capital, possible acquisitions and other general corporate purposes, and we may spend or invest these proceeds in a way with which our stockholders disagree. The failure by our management to apply these funds effectively could harm our business and financial condition. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value. These investments may not yield a favorable return to our investors.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. We currently do not have and may never obtain research coverage by securities analysts, and industry analysts that currently cover us may cease to do so. If no securities analysts commence coverage of our company, or if industry analysts cease coverage of our company, the trading price for our stock would be negatively impacted. In the event we obtain securities analyst coverage, if one or more of the analysts who cover us downgrade our stock or publish inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.

We do not intend to pay dividends for the foreseeable future.

We have never declared or paid cash dividends on our capital stock. We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future. As a result, you may only receive a return on your investment in our common stock if the market price of our common stock increases. Our credit agreement for our revolving line of credit contains a prohibition on the payment of cash dividends on our capital stock.

If you purchase shares of our common stock in this offering, you will experience substantial and immediate dilution.

If you purchase shares of our common stock in this offering, you will experience substantial and immediate dilution in the net tangible book value per share after giving effect to this offering of $         as of December 31, 2011, based on an assumed initial public offering price of $         per share, which is the midpoint of the range set forth on the cover page of this prospectus, because the price that you pay will be substantially greater than the net tangible book value per share of the common stock that you acquire. This dilution is due in large part to the fact that our earlier stockholders paid substantially less than the initial public offering price when they purchased their shares of our capital stock. You will experience additional dilution upon exercise of options to purchase common stock under our equity incentive plans or under equity awards granted outside our equity incentive plan, if we issue restricted stock to our employees under our equity incentive plans or if we otherwise issue additional shares of our common stock. For more information, see “Dilution.”

25

Delaware law and provisions in our restated certificate of incorporation and bylaws that will be in effect at the closing of this offering could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of our common stock.

Following the closing of this offering, our status as a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change of control would be beneficial to our existing stockholders. In addition, our restated certificate of incorporation and bylaws that will be in effect at the closing of this offering will contain provisions that may make the acquisition of our company more difficult without the approval of our board of directors, including the following:

• our board of directors will be classified into three classes of directors with staggered three-year terms;

• only our Chairman of the board, our Chief Executive Officer, our President or a majority of our board of directors will be authorized to call a special meeting of stockholders;

• our stockholders will only be able to take action at a meeting of stockholders and not by written consent;

• vacancies on our board of directors will be able to be filled only by our board of directors and not by stockholders;

• directors may be removed from office only for cause;

• our restated certificate of incorporation will authorize undesignated preferred stock, the terms of which may be established, and shares of which may be issued, without stockholder approval; and

• advance notice procedures will apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.

For information regarding these and other provisions, see “Description of Capital Stock.”

26

FORWARD-LOOKING STATEMENTS

In addition to historical information, this prospectus contains forward-looking statements. We may, in some cases, use words, such as “project,” “believe,” “anticipate,” “plan,” “expect,” “estimate,” “intend,” “continue,” “should,” “would,” “could,” “potentially,” “will” or “may,” or other similar words and expressions that convey uncertainty about future events or outcomes to identify these forward-looking statements. Forward-looking statements in this prospectus include statements about:

• our ability to grow our business in the future;

• our ability to execute our growth strategy;

• the effects of increased competition in our industry;

• our ability to deliver successful advertising campaigns in the future;

• the effect of regulatory developments regarding Internet privacy matters;

• the effect of changes in consumer sentiment regarding privacy matters;

• our ability to produce successful brand advertising solutions for mobile platforms;

• the impact of seasonality on our business;

• changes in our relationships with advertisers and agencies;

• our ability to successfully enter new markets and manage our international expansion;

• the effect of our Chief Executive Officer’s control over our management and business strategy;

• the attraction and retention of qualified employees and key personnel.

The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements. These risks, uncertainties and factors include those we discuss in this prospectus under the caption “Risk Factors.” You should read these risk factors and the other cautionary statements made in this prospectus as being applicable to all related forward-looking statements wherever they appear in this prospectus.

The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

This prospectus also contains estimates and other statistical data that we obtained from industry publications, surveys, forecasts and reports. 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. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. Although we have not independently verified the accuracy or completeness of the data contained in these industry publications and reports, based on our industry experience we believe that the publications are reliable and the conclusions contained in the publications and reports are reasonable.

27

USE OF PROCEEDS

We estimate that the net proceeds from the sale of shares of our common stock that we are selling in this offering will be approximately $         million, based on an assumed initial public offering price of $         per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters’ over-allotment option to purchase additional shares from us is exercised in full, we estimate that we will receive additional net proceeds of $         million. We will not receive any proceeds from the sale of shares of common stock by the selling stockholders.

A $1.00 increase or decrease in the assumed initial public offering price of $         would increase or decrease the net proceeds we received from the offering by approximately $         million, assuming the number of shares offered by us remains the same and after deducting the estimated underwriting discounts and commissions and payable by us.

The principal purposes of this offering are to obtain additional capital, to create a public market for our common stock and to facilitate our future access to the public equity markets. We expect to use the net proceeds that we receive from this offering for working capital and other general corporate purposes. We may also use a portion of the net proceeds that we receive from this offering for investments in or acquisitions of complementary businesses, products, services, technologies or other assets. We have not entered into any agreements or commitments with respect to any investments or acquisitions at this time.

We cannot specify with certainty the particular uses for the net proceeds to be received by us from this offering. Accordingly, our management team will have broad discretion in using these net proceeds. Pending the use of proceeds from this offering, we plan to invest the net proceeds in short-term, interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government.

DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our board of directors and will be dependent on a number of factors, including our earnings, capital requirements and overall financial conditions. Our credit agreement for our revolving line of credit contains a prohibition on the payment of cash dividends on our capital stock.

28

CAPITALIZATION

The following table sets forth our consolidated cash and cash equivalents and capitalization as of December 31, 2011, on:

• an actual basis; and

• on a pro forma, as adjusted basis to give effect to (a) the vesting of 750,000 shares of restricted stock upon completion of this offering and (b) the receipt of the net proceeds from the sale of              shares of common stock offered by us in this offering, at an assumed initial public offering price of $             per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions payable by us and estimated offering expenses payable by us.

The information below is illustrative only, and our capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of the offering determined at the pricing of this offering. You should read this table in conjunction with “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

	As of December 31, 2011
	Actual			Pro Forma, As Adjusted
	(In thousands)
Cash and cash equivalents	$	14,263		$
Total indebtedness		16,531
Stockholders’ equity:
Common stock, $0.00001, per share: 100,000,000 shares authorized, 52,717,006 shares issued and 52,559,844 shares outstanding actual;              shares authorized,              shares issued and              outstanding as adjusted		1
Additional paid-in capital		17,470
Treasury stock		(367	)
Retained earnings		41,134
Accumulated other comprehensive loss		(425	)
Total stockholders’ equity		57,813
Total capitalization	$	57,813		$

A $1.00 increase (decrease) in the assumed initial public offering price of $         per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase (decrease) our pro forma, as adjusted cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $         million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions payable by us.

The number of shares of common stock issued and outstanding actual and pro forma, as adjusted in the table above excludes the following shares:

• 14,259,048 shares of common stock issuable upon the exercise of stock options outstanding as of December 31, 2011 with a weighted average exercise price of $1.47 per share;

• 1,230,262 shares reserved for issuance under our 2010 Equity Incentive Plan (which share reserve was increased by 4.0 million shares in March 2012);

29

•              shares to be reserved for issuance under our 2012 Equity Incentive Plan and our 2012 Employee Stock Purchase Plan, each of which will become effective on the first day that our common stock is publicly traded and contains provisions that will automatically increase its share reserve each year, as more fully described in “Executive Compensation — Employee Benefit Plans;”

• up to 534,287 shares that may be issued as contingent deferred consideration from our acquisition of AdoTube; and

• on an actual basis, 750,000 shares of unvested restricted stock, which will become fully vested upon the completion of this offering.

30

DILUTION

If you invest in our common stock in this offering, your interest will be diluted immediately to the extent of the difference between the initial public offering price per share of our common stock and the as adjusted net tangible book value per share of our common stock immediately after this offering. Our net tangible book value as of December 31, 2011, was $19.9 million, or $0.38 per share of common stock. Net tangible book value per share represents the amount of our total tangible assets less our total liabilities, divided by the number of shares of common stock outstanding as of December 31, 2011.

After giving effect to the sale by us of          shares of common stock in this offering at an assumed initial public offering price of $         per share, which is the midpoint of the range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our as adjusted net tangible book value as of December 31, 2011 would have been approximately $         million, or approximately $          per share. This amount represents an immediate increase in net tangible book value of $         per share to our existing stockholders and an immediate dilution in net tangible book value of approximately $         per share to new investors purchasing shares of common stock in this offering.

The following table illustrates this dilution:

Assumed initial public offering price per share			$
Net tangible book value per share as of December 31, 2011	$	0.38
Increase in net tangible book value per share attributable to new investors
As adjusted net tangible book value per share after giving effect to this offering
Dilution per share to investors in this offering			$

A $1.00 increase (decrease) in the assumed initial public offering price of $         per share, which is the midpoint of the estimated price range set forth on the cover page of this prospectus, would increase (decrease) our as adjusted net tangible book value per share to new investors by approximately $         and would increase (decrease) dilution per share to new investors by approximately $        , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. In addition, to the extent any outstanding options or warrants are exercised, you will experience further dilution.

The following table presents on an as adjusted basis as of December 31, 2011 the differences between the existing stockholders and the new investors purchasing shares of our common stock in this offering with respect to the number of shares purchased from us, the total consideration paid or to be paid to us, which includes net proceeds received from the issuance of common, cash received from the exercise of stock options and the average price per share paid or to be paid to us at an assumed offering price of $         per share, which is the midpoint of the price range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

	Shares Purchased				Total Consideration				Average Price per Share
	Number	Percent			Amount	Percent
Existing stockholders			.	%	$		.	%	$
New investors
Total			100.0	%	$		100.0	%

31

A $1.00 increase (decrease) in the assumed initial public offering price of $         per share would increase (decrease) the total consideration paid by new investors by $         million and increase (decrease) the percent of total consideration paid by new investors by     %, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Assuming the underwriters’ option to purchase additional shares is exercised in full, sales by us in this offering will reduce the percentage of shares held by existing stockholders to     % and will increase the number of shares held by our new investors to             , or     %.

Sales by the selling stockholders in this offering will reduce the number of shares held by existing stockholders to             or approximately     % of the total shares of our common stock outstanding after this offering if the over-allotment option is exercised in full. The number of shares to be purchased by new investors will be increased to              shares or approximately     % of the total shares of common stock outstanding after this offering, if the over-allotment option is exercised.

The number of shares of our common stock to be outstanding after this offering is based upon the number of shares of our common stock outstanding as of December 31, 2011 and excludes:

• 14,259,048 shares of common stock issuable upon exercise of stock options outstanding as of December 31, 2011 with a weighted average exercise price of $1.47 per share;

• 1,230,262 shares reserved for issuance under our 2010 Equity Incentive Plan (which share reserve was increased by 4.0 million shares in March 2012);

•              shares to be reserved for issuance under our 2012 Equity Incentive Plan and our 2012 Employee Stock Purchase Plan, each of which will become effective on the first day that our common stock is publicly traded and contains provisions that will automatically increase its share reserve each year, as more fully described in “Executive Compensation — Employee Benefit Plans;” and

• up to 534,287 shares that may be issued as contingent deferred consideration from our acquisition of AdoTube.

To the extent that any outstanding options are exercised, new investors will experience further dilution.

32

SELECTED CONSOLIDATED FINANCIAL DATA

The following tables summarize our selected consolidated financial data. You should read the following selected consolidated financial data in conjunction with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements, related notes and other financial information included elsewhere in this prospectus. We derived the selected consolidated statements of income data for 2009, 2010 and 2011 and the consolidated balance sheet data as of December 31, 2010 and 2011 from our audited consolidated financial statements included elsewhere in this prospectus. We derived the selected consolidated statements of income data for 2007 and 2008 and the consolidated balance sheet data as of December 31, 2007, 2008 and 2009 from our audited consolidated financial statements not included in this prospectus. Our historical results are not necessarily indicative of the results to be expected in the future.

	Years Ended December 31,
	2007			2008			2009			2010			2011
	(In thousands, except share and per share data)
Consolidated Statements of Operations Data:
Revenues	$	107,410		$	116,422		$	92,560		$	125,268		$	169,082
Cost of revenues (1) (2)		66,216			71,930			55,436			71,988			95,848
Gross profit		41,194			44,492			37,124			53,280			73,234
Operating expenses (1) (2):
Sales and marketing		20,815			17,323			20,060			28,688			42,179
Product development		3,401			4,324			3,434			4,680			5,304
General and administrative		6,328			7,497			5,482			7,615			10,360
Amortization of intangible assets		805			1,137			1,073			1,045			1,189
Total operating expenses		31,349			30,281			30,049			42,028			59,032
Operating income		9,845			14,211			7,075			11,252			14,202
Other income (expense), net		(1,699	)		(2,225	)		(1,441	)		(1,396	)		(2,055	)
Income before provision for income taxes		8,146			11,986			5,634			9,856			12,147
Provision for income taxes		4,486			4,922			2,623			4,485			5,263
Net income	$	3,660		$	7,064		$	3,011		$	5,371		$	6,884
Net income attributable to common stockholders (3):
Basic	$	3,587		$	6,904		$	2,953		$	5,279		$	6,787
Diluted	$	3,591		$	6,909		$	2,953		$	5,280		$	6,789
Net income per share attributable to common stockholders (3):
Basic	$	0.07		$	0.14		$	0.06		$	0.10		$	0.13
Diluted	$	0.07		$	0.13		$	0.06		$	0.10		$	0.13
Weighted-average shares used in computing net income per share attributable to common stockholders (3):
Basic		50,106,383			50,876,295			51,190,410			51,682,476			52,510,727
Diluted		53,258,795			52,699,440			51,885,242			52,159,078			53,802,990
Other Financial Information:
Adjusted EBITDA	$	15,267		$	20,546		$	12,779		$	18,037		$	22,039

	As of December 31,
	2007		2008		2009		2010		2011
	(In thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	14,395	$	25,656	$	10,713	$	8,505	$	14,263
Working capital		18,213		21,068		19,993		24,723		36,054
Total assets		76,991		78,752		60,791		75,984		121,670
Total indebtedness		33,926		27,595		5,462		1,516		16,531
Total stockholders’ equity		26,777		35,606		40,136		48,880		57,813

33

⁽¹⁾ Results above include stock-based compensation as follows:

	Years Ended December 31,
	2007		2008		2009		2010		2011
	(In thousands)
Cost of revenues	$	32	$	39	$	34	$	36	$	34
Sales and marketing		1,184		1,045		860		1,442		1,287
Product development		501		485		368		726		418
General and administrative		626		559		377		624		635
Total stock-based compensation	$	2,343	$	2,128	$	1,639	$	2,828	$	2,374

⁽²⁾ Results above include amortization of intangible assets as follows:

	Years Ended December 31,
	2007		2008		2009		2010		2011
	(In thousands)
Amortization of intangible assets:
Cost of revenues	$	1,097	$	1,547	$	1,549	$	1,549	$	2,124
Operating expenses		805		1,137		1,073		1,045		1,189
Total amortization of intangible assets	$	1,902	$	2,684	$	2,622	$	2,594	$	3,313

⁽³⁾ See Note 1 and 11 to our audited consolidated financial statements appearing elsewhere in this prospectus for an explanation of the calculations of our basic and diluted net income per share attributable to common stockholders.

Adjusted EBITDA

We have included Adjusted EBITDA in this prospectus because it is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions for the allocation of capital. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows:

• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

• Adjusted EBITDA does not include other income and expense, which includes significant interest expense or the cash requirements necessary to service interest or principal payments on our indebtedness and foreign exchange gains and losses;

• Adjusted EBITDA does not reflect income tax payments that may represent a reduction in cash available to us;

• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements or contractual commitments for such replacements or for new capital expenditure requirements;

• Adjusted EBITDA does not include the potentially dilutive impact of stock-based compensation; and

34

• other companies, including companies in our industry, may calculate Adjusted EBITDA differently or not at all, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income and our financial results presented in accordance with GAAP. The following table presents a reconciliation of net income to Adjusted EBITDA for each of the periods indicated:

	Years Ended December 31,
	2007		2008		2009		2010		2011
	(In thousands)
Reconciliation of Adjusted EBITDA:
Net income	$	3,660	$	7,064	$	3,011	$	5,371	$	6,884
Other (income) expense, net		1,699		2,225		1,441		1,396		2,055
Provision for income taxes		4,486		4,922		2,623		4,485		5,263
Depreciation and amortization of property and equipment		1,177		1,523		1,443		1,363		2,150
Amortization of intangible assets		1,902		2,684		2,622		2,594		3,313
Stock-based compensation		2,343		2,128		1,639		2,828		2,374
Adjusted EBITDA	$	15,267	$	20,546	$	12,779	$	18,037	$	22,039

35

UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL INFORMATION

In September 2011, we acquired all of the issued and outstanding shares of AdoTube, for total purchase consideration of $19.6 million. The purchase consideration consists of $13.7 million in cash and $6.5 million in guaranteed deferred payments (with an acquisition date fair value of $6.0 million.)

The following unaudited pro forma combined consolidated statement of income for 2011 illustrates the effect of our acquisition of AdoTube as if the acquisition had occurred on January 1, 2011. The unaudited pro forma combined consolidated statement of income for 2011 combines the unaudited consolidated statement of income of AdoTube for the period from January 1, 2011 to September 13, 2011, the date of acquisition, and our consolidated statement of income for 2011. An unaudited pro forma combined consolidated balance sheet as of December 31, 2011 is not presented as AdoTube’s balance sheet, including acquisition-related adjustments, has already been included in our consolidated balance sheet as of December 31, 2011 included elsewhere in this prospectus.

The unaudited pro forma combined consolidated financial information included herein has been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited pro forma combined consolidated statement of income has been adjusted to give effect to pro forma events that are (1) directly attributable to the acquisition, (2) expected to have a continuing impact on our combined results and (3) factually supportable. The unaudited pro forma combined consolidated statement of income does not include the effects of any potential cost savings or other synergies that could result from the acquisition. The detailed assumptions used to prepare the unaudited pro forma combined consolidated financial information are contained in the notes hereto and such assumptions should be reviewed in their entirety.

The unaudited pro forma combined consolidated statement of income has been prepared for illustrative purposes only and does not purport to reflect the results the consolidated company may achieve in future periods or the historical results that would have been obtained had we acquired AdoTube on January 1, 2011.

The unaudited pro forma combined consolidated statement of income, including the notes hereto, should be read in conjunction with AdoTube’s consolidated financial statements for 2010 and for the six months ended June 30, 2010 and 2011 and our consolidated financial statements for 2011 included elsewhere in this prospectus.

36

EXPONENTIAL INTERACTIVE, INC.

Unaudited Pro Forma Combined Consolidated Statement of Income

For the Year Ended December 31, 2011

	Historical						Pro Forma Adjustments			Combined Consolidated Pro Forma For 2011
	Exponential Interactive, Inc. Consolidated For 2011			AdoTube For the  Period From January 1, 2011 To September 13, 2011
	(In thousands, except share and per share data)
Revenues	$	169,082		$	9,066		$	—		$	178,148
Cost of revenues		95,848			5,234			1,398	(a)		102,480
Gross profit		73,234			3,832			(1,398	)		75,668
Operating expenses:
Sales and marketing		42,179			3,138			—			45,317
Product development		5,304			1,140			—			6,444
General and administrative		10,360			1,385			(503	)(b)		11,242
Amortization of intangible assets		1,189			—			352	(a)		1,541
Total operating expenses		59,032			5,663			(151	)		64,544
Operating income (loss)		14,202			(1,831	)		(1,247	)		11,124
Other income (expense), net:
Interest expense		(512	)		(88	)		(323	)(c,d,e)		(923	)
Interest and other income (expense), net		(1,543	)		(25	)		(11	)(c)		(1,579	)
Total other income (expense), net		(2,055	)		(113	)		(334	)		(2,502	)
Income (loss) before provision for income taxes		12,147			(1,944	)		(1,581	)		8,622
Provision for income taxes		5,263			76			(1,390	)(f)		3,949
Net income (loss)	$	6,884		$	(2,020	)	$	(191	)	$	4,673
Net income attributable to common stockholders:
Basic	$	6,787								$	4,608
Diluted	$	6,789								$	4,609
Net income per share attributable to common stockholders:
Basic	$	0.13								$	0.09
Diluted	$	0.13								$	0.09
Weighted-average shares used in computing net income per share attributable to common stockholders:
Basic		52,510,727									52,510,727
Diluted		53,802,990									53,802,990

The accompanying notes are an integral part of this statement.

The pro forma adjustments are explained in Note 3.

37

EXPONENTIAL INTERACTIVE, INC.

Notes to Pro Forma Combined Consolidated Statement of Income

For the Year Ended December 31, 2011

1. Basis of Presentation

The acquisition of AdoTube is accounted for using the acquisition method of accounting for business combinations. The excess purchase consideration over the fair values of assets acquired and liabilities assumed was recorded as goodwill.

Under the acquisition method, acquisition-related transaction costs (e.g. advisory, legal, valuation and other professional fees) are not included as consideration transferred but are accounted for as expenses in the periods in which the costs are incurred. These costs are not presented in the unaudited pro forma combined consolidated statement of income because they will not have a continuing impact on the combined results.

2. AdoTube Acquisition

A summary of the purchase consideration is as follows (in thousands):

Cash	$	13,676
Fair value of guaranteed deferred payments		5,968
Total purchase consideration	$	19,644

We are required to make guaranteed deferred payments of $4.1 million and $2.4 million in January 2013 and 2014 to the former owners of AdoTube. At the acquisition date, we determined that the discounted fair value of these guaranteed deferred payments was $6.0 million. We will recognize accretion on these liabilities in our consolidated statements of income until these deferred guaranteed payments are paid in January 2013 and 2014.

The following table summarizes the fair values of assets acquired and liabilities assumed, which is preliminary pending finalization of our purchase accounting (in thousands):

Cash and cash equivalents	$	911
Accounts receivable, net		3,288
Other current assets		100
Property and equipment, net		81
Noncurrent assets		161
Intangible assets:
Developed technology		5,640
Customer relationships		3,380
Trademarks		420
Non-compete agreements		980
Goodwill		11,429
Accounts payable and accrued liabilities		(3,904	)
Deferred tax liability		(2,842	)
Total	$	19,644

The valuation of the intangible assets acquired was determined using currently available information and reasonable and supportable assumptions. We are amortizing these acquired intangible assets over their estimated useful lives of up to five years on a straight-line basis. Goodwill arising from the acquisition is attributable to synergies achieved through combining the technology acquired from AdoTube with our existing video online advertising technology, as well as us acquiring an assembled workforce. Goodwill is presumed to have an indefinite life and is not subject to amortization.

38

EXPONENTIAL INTERACTIVE, INC.

Notes to Pro Forma Combined Consolidated Statement of Income

For the Year Ended December 31, 2011

We may also be required to pay contingent deferred consideration to the former owners of AdoTube if certain gross revenue and EBITDA targets for the stand-alone AdoTube business are achieved for 2012 and 2013. Payments are also contingent on the ongoing employment of the two principal former owners of AdoTube, unless these former owners are terminated without cause or resign for good reason. The contingent payment amount with respect to 2012 is $2.8 million and 267,143 shares of our common stock, which would be payable in January 2013. The contingent payment amount with respect to 2013 is $2.8 million and 267,144 shares of our common stock, which would be payable in January 2014. We have not recorded a liability for the contingent deferred consideration in connection with the acquisition as it is considered compensatory in nature. Accordingly, we will recognize compensation expense over the requisite service period in 2012 and 2013 when we can estimate the level of payout probable of being achieved. The contingent deferred consideration is not presented in the unaudited pro forma combined consolidated statement of income because the amounts are not yet known.

3. Pro Forma Adjustments

The unaudited pro forma combined consolidated statement of income reflects the following pro forma adjustments:

(a) Intangible Asset Amortization — This adjustment reflects the additional amortization that would have been recognized on the acquired intangible assets that are subject to amortization had the acquisition been consummated on January 1, 2011.

(b) Transaction Costs — This adjustment eliminates acquisition-related transaction costs of $503,000 that were incurred by us for the year ended December 31, 2011. These costs were eliminated as they will not have a continuing impact on our combined consolidated results of operations.

(c) Revolving Line of Credit Interest Expense — This adjustment reflects the $176,000 in additional interest expense and $11,000 in additional commitment fees we would have recognized related to the $13.4 million we borrowed to finance the acquisition had the acquisition been consummated on January 1, 2011. The pro forma adjustment for interest expense is based on the acquisition date variable interest rate of 1.97% on our revolving line of credit. A 1/8^th percent change in the variable rate would have changed our interest expense by $17,000 for the year ended December 31, 2011.

(d) Accretion on Guaranteed Deferred Payments — This adjustment reflects the $209,000 in additional accretion we would have recognized on the guaranteed deferred payments had the acquisition been consummated on January 1, 2011. The discounted fair value of the guaranteed deferred payments on the acquisition date was $6.0 million. The pro forma adjustment for accretion expense is based on the acquisition date discount rate of 4.75% on our guaranteed deferred payments.

(e) Convertible Promissory Note Interest Expense — This adjustment eliminates $62,000 in interest expense recognized by AdoTube on their convertible promissory note from January 1, 2011 to September 13, 2011. The interest expense was eliminated as immediately prior to the transaction the convertible promissory note converted into shares of AdoTube that we acquired in the acquisition.

(f) Income Taxes — This adjustment records a benefit from income taxes relating to the pro forma adjustments. The pro forma adjustment for income taxes was determined based upon our marginal effective tax rate.

39

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our “Selected Consolidated Financial Data” and our consolidated financial statements, related notes and other financial information included elsewhere in this prospectus. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements below. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed elsewhere in this prospectus, particularly in the section titled “Risk Factors”.

Overview

We are a leading global provider of advertising intelligence and digital media solutions to brand advertisers. We have developed an end-to-end solution that enables brand advertisers to learn about their optimal consumer audience, reach and engage that audience with emotive advertising and analyze and refine their marketing campaigns. The foundation of our solution is our e^X Advertising Intelligence Platform, which processes massive amounts of anonymous consumer data to provide the intelligence and actionable insights brand advertisers need to efficiently reach their existing and prospective customers.

As a partner to nearly 1,900 advertisers in 2011, we offer a highly integrated solution that includes many formats of high impact advertisements across display, video and mobile advertising. Our solution allows brand advertisers to connect with their target audiences at-scale through highly customizable experiences across a wide variety of formats and devices. We combine this with an efficient operational infrastructure that supports our sales footprint across 25 countries.

Key highlights of our history are as follows:

• We were founded in 1998, launched as Tribal Fusion in 2001 and have been profitable on an annual basis since 2002.

• From 2001 to 2005, we continued to develop and invest in our technology while primarily focusing on expanding our business domestically.

• In 2005, we began to expand our business operations internationally, with commercial activity in the United Kingdom and Canada and operations established in India.

• In 2006, we changed our name to Exponential Interactive, Inc. and launched our proprietary contextualization technology.

• In 2007, we acquired Techbargains.com, a website focused on special consumer offers, primarily for technology products.

• In 2007, we introduced advanced rich media products including dynamic advertisements.

• In 2009, we expanded our sales operations into the Asia Pacific market including Singapore and Australia.

• In 2010, we launched our engagement video products with the introduction of our Firefly Video brand.

• In 2011, we added in-stream video products and established operations in Ukraine through the acquisition of AdoTube.

• In 2011, we started rolling out our e^X Advertising Intelligence Platform to advertisers.

We derive our revenues primarily from the delivery of digital display and video advertising, and we generally share a percentage of the revenues we collect with our digital media content providers when we place advertisements on their properties. For 2011, 66.9% of our revenues were generated from advertisers located in

40

the United States and 33.1% from international advertisers. We derive revenues from a broad base of advertisers, with 85.4% of 2011 revenues derived from recurring advertisers. We regard recurring advertisers in a given year as those from whom we also earned revenues in the prior year. We have historically offered a product that was focused on the for-profit education vertical. In early 2012, we decided to stop offering that product and are instead seeking to migrate related advertisers to our current offerings. In 2011, the revenues attributable to this product represented 5.0% of our total revenues. If we are unable to successfully migrate the for-profit education advertisers to our current offerings, our operating results and financial results could be adversely affected.

Our financial objective is to create sustainable revenue and earnings growth over the long-term. To achieve this objective, we will continue to develop our e^X Advertising Intelligence Platform and engagement products to serve brand advertisers. As the world becomes increasingly digital and interconnected, we will continue to invest in global expansion and leverage the capabilities of our e^X Advertising Intelligence Platform to expand across the full landscape of digital devices and platforms, including smartphones, media tablets, eBooks, connected TVs and social media. We plan to continue to expand our audience reach and data capabilities by growing our relationships with digital media content providers across existing and new platforms and devices. As a result of these investments to support long-term growth, we expect our operating expenses to increase substantially and, accordingly, our operating margins to be lower than 2011 levels through at least the end of 2013.

In 2009, our revenues were adversely impacted by global macroeconomic conditions. However, we maintained profitability primarily as a result of our business model, which typically involves our paying digital media content providers a percentage of revenues, as well as our cost control initiatives. Since 2009, our revenues have grown at a compound annual growth rate, or CAGR, of 35.2% to $169.1 million in 2011, our Adjusted EBITDA has grown at a CAGR of 31.3% to $22.0 million in 2011 and our net income has grown at a CAGR of 51.2% to $6.9 million in 2011.

Basis of Presentation

Revenues

We generate revenues primarily from the sale of display and video advertising delivered across a variety of third-party owned digital media content provider properties. Advertisers generally pay us based on the number of advertising impressions delivered or user engagements or actions under short-term contracts for marketing campaigns that generally range between 30 and 90 days. Revenues from agreements based on impressions are recognized as the impressions are delivered. Revenues from agreements based on user engagements or actions are recognized when a user engagement or action occurs. We also enter into arrangements in which we receive referral revenue from advertisers on our wholly-owned website, Techbargains.com. We recognize referral revenue as earned. Techbargains.com revenue represented less than 8% of our revenues in each of the last three years.

We classify revenues by the physical location of the advertiser. Most of our revenues are generated in the United States; however, a significant and growing portion of our revenues is generated internationally as noted in the following table:

	Years Ended December 31,
	2009			2010			2011
United States		84.7	%		74.9	%		66.9	%
International		15.3	%		25.1	%		33.1	%
Total revenues		100.0	%		100.0	%		100.0	%

Cost of Revenues

Cost of revenues consists primarily of amounts due to third-party digital media content providers for the placement of advertisements on their properties. Cost of revenues also includes personnel costs, depreciation and

41

amortization on our ad-serving hardware and software, third-party data acquisition costs and ad verification and ad-serving fees related to our revenue-generating e^X Advertising Intelligence Platform. Additionally, cost of revenues includes amortization of intangible assets acquired by us and used in our revenue-generating efforts. We are obligated to make payments to digital media content providers for the period in which advertising impressions are delivered or during which user engagements or actions have occurred, which correspond to the period in which the revenues are recognized. We generally pay digital media content providers a percentage of revenues, although we sometimes purchase inventory on a fixed price basis. Amortization expense included within cost of revenues related to our September 2011 acquisition of AdoTube will increase in 2012 as we include a full year of expense in our financial results.

Because we own Techbargains.com, we do not pay for advertising inventory on this website. As such, we benefit from substantially higher gross margins on our Techbargains.com revenues than from our other advertising revenues. Consequently, fluctuations in Techbargains.com revenues may result in significant fluctuations in gross margin, even if they are not significant to the change in total revenues. Further, if other advertising revenues continue to grow faster than revenues from Techbargains.com, our overall gross margin will be adversely affected.

Operating Expenses

Our operating expenses consist of sales and marketing expenses, product development expenses, general and administrative expenses and amortization of intangible assets. The largest component of our operating expenses is personnel costs. Personnel costs consist of wages, benefits, bonuses and, with respect to sales and marketing expenses, sales commissions. Personnel costs also include stock-based compensation. We expect personnel costs to continue to increase in absolute dollars as we continue to hire new employees and grow our business. The operating expenses associated with our Techbargains.com business are significantly lower than those associated with our other advertising revenues. Therefore, fluctuations in Techbargains.com revenues could result in significant fluctuations in operating margins.

Sales and Marketing

Sales and marketing is the largest category of our total operating expenses. These expenses primarily consist of personnel costs, sales commissions, travel and entertainment costs, marketing and advertising costs and facilities costs. We plan to continue to invest in sales and marketing efforts, including a plan to increase the number of our sales personnel to add new advertisers and increase penetration within our existing advertiser base. In addition, as we continue to expand our solution across new devices and platforms, we intend to grow our marketing and promotional expenditures.

Product Development

Product development expenses primarily relate to the development and enhancement of our e^X Advertising Intelligence Platform. These expenses consist of personnel, information technology, consulting and facility-related costs. Product development expenses also include amortization of capitalized internal software development costs. We expect our product development expenses to increase as we develop new advertising solutions.

General and Administrative

General and administrative expenses consist primarily of personnel costs, professional fees, facility-related costs, depreciation and amortization and acquisition costs. General and administrative personnel costs include our executive, finance, order entry, human resources, information technology and legal functions. Our professional fees consist primarily of accounting, tax, legal, recruiting and information technology and other consulting costs. We expect our general and administrative expenses to increase to support our growth and as we assume the reporting requirements and compliance obligations of a public company.

42

Amortization of Intangible Assets

We incur amortization on our intangible assets related to the acquisitions of Techbargains.com and AdoTube. We expect amortization expense to increase in 2012 as we include a full year of expense related to the AdoTube acquisition in our financial results.

Provision for Income Taxes

Provision for income taxes consists of federal and state income taxes in the United States, income taxes in certain foreign jurisdictions and deferred income taxes reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and includes our uncertain tax positions.

Acquisitions

We have undertaken strategic acquisitions to broaden our product offerings and grow our business. In September 2011, we acquired AdoTube for an upfront cash payment of $13.7 million and guaranteed deferred cash payments of $4.1 million and $2.4 million due in January 2013 and 2014, respectively. At the acquisition date, we determined that the discounted fair value of this guaranteed deferred consideration was $6.0 million. In 2011, we recognized interest expense of $0.1 million for accretion related to the guaranteed deferred cash payments. As of December 31, 2011, we have recorded $6.1 million in other liabilities in our consolidated balance sheet relating to these guaranteed deferred cash payments.

We may also be required to pay contingent deferred consideration to the former owners of AdoTube if certain gross revenue and EBITDA targets for the stand-alone AdoTube business are achieved for 2012 and 2013. Payments are also contingent on the ongoing employment of the two principal former owners of AdoTube, unless these former owners are terminated without cause or resign for good reason. The contingent payment amount with respect to 2012 is $2.8 million and 267,143 shares of our common stock, which would be payable in 2013. The contingent payment amount with respect to 2013 is $2.8 million and 267,144 shares of our common stock, which would be payable in 2014. These payments will be recognized as compensation expense in 2012 and 2013 over the requisite service period and when we can estimate the level of payout probable of being achieved.

In April 2007, we acquired certain assets of Techbargains.com for $30.0 million in cash.

The intangible assets acquired in these transactions are being amortized to cost of revenues and operating expenses over their estimated useful lives, resulting in total amortization of intangible assets of $2.6 million in 2009 and 2010 and $3.3 million in 2011. We will continue to recognize amortization of intangible assets related to these acquisitions in future periods. Also, as a result of these acquisitions, we have recorded goodwill of $25.6 million as of December 31, 2011; if some or all of the value of this goodwill becomes impaired in the future, we would be required to record the diminution in value as an expense in our consolidated statements of income.

43

Results of Operations

Years Ended December 31, 2009, 2010 and 2011

The following table presents our statements of income for the periods indicated:

	Years Ended December 31,
	2009			2010			2011
	(In thousands)
Revenues	$	92,560		$	125,268		$	169,082
Cost of revenues		55,436			71,988			95,848
Gross profit		37,124			53,280			73,234
Operating expenses:
Sales and marketing		20,060			28,688			42,179
Product development		3,434			4,680			5,304
General and administrative		5,482			7,615			10,360
Amortization of intangible assets		1,073			1,045			1,189
Total operating expenses		30,049			42,028			59,032
Operating income		7,075			11,252			14,202
Other income (expense), net		(1,441	)		(1,396	)		(2,055	)
Income before provision for income taxes		5,634			9,856			12,147
Provision for income taxes		2,623			4,485			5,263
Net income	$	3,011		$	5,371		$	6,884

The following table sets forth the results of operations for the specified periods as a percentage of our revenues for those periods:

	Years Ended December 31,
	2009			2010			2011
Revenues		100.0	%		100.0	%		100.0	%
Cost of revenues		59.9			57.5			56.7
Gross profit		40.1			42.5			43.3
Operating expenses:
Sales and marketing		21.7			22.9			25.0
Product development		3.7			3.7			3.1
General and administrative		5.9			6.1			6.1
Amortization of intangible assets		1.2			0.8			0.7
Total operating expenses		32.5			33.5			34.9
Operating income		7.6			9.0			8.4
Other income (expense), net		(1.5	)		(1.1	)		(1.2	)
Income before provision for income taxes		6.1			7.9			7.2
Provision for income taxes		2.8			3.6			3.1
Net income		3.3	%		4.3	%		4.1	%

44

Revenues

	Years Ended December 31,						2009 to  2010 % Change			2010 to 2011 % Change
	2009		2010		2011
	(In thousands)
Revenues	$	92,560	$	125,268	$	169,082		35.3	%		35.0	%

2010 Compared to 2011. Our revenues increased by $43.8 million, or 35.0%, to $169.1 million in 2011 from $125.3 million in 2010. This increase was primarily attributable to an increase in our display products of $26.5 million, or 22.1%, and in our video products of $17.3 million, or 338.5%, due to growth in revenue attributed to our Firefly Video product and the acquisition of AdoTube. Our domestic revenues grew $19.2 million, or 20.5% from 2010, due in part to the inclusion of AdoTube’s video revenues. Our international revenues grew $24.6 million, or 78.2% from 2010, driven by our increased international sales force and marketing presence. Our 2011 revenues from recurring advertisers were $144.3 million or 85.4% of total 2011 revenues.

2009 Compared to 2010. Our revenues increased by $32.7 million, or 35.3% to $125.3 million in 2010 from $92.6 million in 2009. The increase was primarily attributable to an increase in our display products by $27.6 million, or 29.8%, and to a lesser extent, revenues related to our Firefly Video product, which was launched in 2010. Our domestic revenues grew $15.4 million, or 19.7% from 2009 and our international revenues grew $17.3 million, or 122.0% from 2009, driven by our increased international sales force and marketing presence. Our 2010 revenues from recurring advertisers were $102.8 million or 82.1% of total 2010 revenues.

Gross Profit

	Years Ended December 31,									2009 to 2010 % Change			2010 to 2011 % Change
	2009			2010			2011
	(In thousands)
Gross profit	$	37,124		$	53,280		$	73,234			43.5	%		37.5	%
Gross margin		40.1	%		42.5	%		43.3	%

2010 Compared to 2011. The improvement in gross margin was primarily attributable to product mix changes in 2011 from 2010. Firefly Video, which generated a higher gross margin than most of our other brands, was included for a full year in 2011. Over time, we expect gross margin associated with our Firefly Video product to be generally consistent with our other products. Additionally, third-party data acquisition costs and ad verification and ad-serving fees related to our revenue-generating e^X Advertising Intelligence Platform declined as a percentage of revenues in 2011.

2009 Compared to 2010. The improvement in gross margin was primarily due to product mix changes, specifically the impact of the introduction of the Firefly Video product which had total revenues of $5.1 million in 2010, and to a lesser extent a lower percentage of revenues from lower margin products.

Sales and Marketing

	Years Ended December 31,						2009 to 2010 % Change			2010 to 2011 % Change
	2009		2010		2011
	(In thousands)
Sales and marketing	$	20,060	$	28,688	$	42,179		43.0	%		47.0	%

2010 Compared to 2011. Sales and marketing expenses increased by $13.5 million, or 47.0%, to $42.2 million in 2011 from $28.7 million in 2010. The change was primarily attributable to an $11.8 million increase in personnel costs, which includes a $9.3 million increase in payroll costs, a $1.6 million increase in

45

travel and entertainment-related costs and a $0.9 million increase in contractor personnel costs, partially offset by a $0.2 million reduction in stock-based compensation. The increase in payroll costs was attributable to increased sales and marketing headcount to support our sales efforts, as we entered 11 new countries and increased our penetration in our existing international markets. Payroll expense for AdoTube in 2011 was $0.9 million. The change in sales and marketing expenses was also attributable, to a lesser extent, to a $1.7 million increase in facility and IT costs and a $0.7 million increase in marketing costs, offset by a $0.5 million decrease in bad debt expense.

2009 Compared to 2010. Sales and marketing expenses increased by $8.6 million, or 43.0%, to $28.7 million in 2010 from $20.1 million in 2009. The change was primarily attributable to a $7.2 million increase in personnel costs, which included a $5.7 million increase in payroll costs, a $1.0 million increase in travel and entertainment-related costs and a $0.6 million increase in stock-based compensation. This increase in payroll cost was attributable to increased sales and marketing head count, as we entered 6 new countries and increased our penetration in our existing international markets. The change was also attributable to a $0.5 million increase in bad debt expenses related primarily to a bankruptcy filing of a large UK- based advertising agency and a $0.9 million increase in facility and IT costs.

Product Development

	Years Ended December 31,						2009 to 2010 % Change			2010 to 2011 % Change
	2009		2010		2011
	(In thousands)
Product development	$	3,434	$	4,680	$	5,304		36.3	%		13.3	%

2010 Compared to 2011. Product development expenses increased by $0.6 million, or 13.3%, to $5.3 million in 2011 from $4.7 million in 2010. The change was primarily attributable to a $0.3 million increase in personnel costs, including a $0.7 million increase in payroll costs partially offset by a $0.3 million decrease in stock-based compensation, and a $0.4 million increase in facility and IT costs. The change in payroll costs was attributable to increased product development headcount as a result of our acquisition of AdoTube. Aside from the acquisition of AdoTube in 2011, we maintained our investment in product development consistent with prior year levels.

2009 Compared to 2010. Product development expenses increased by $1.2 million, or 36.3%, to $4.7 million in 2010 from $3.4 million in 2009. The change was primarily attributable to a $1.0 million increase in personnel costs including a $0.5 million increase in payroll costs combined with a $0.4 million increase in stock-based compensation and a $0.2 million increase in facility and IT costs. The increase in personnel costs was related to a substantial increase in our product development activities that began in 2009 and for which we recorded a full year of expense in 2010.

General and Administrative

	Years Ended December 31,						2009 to 2010 % Change			2010 to 2011 % Change
	2009		2010		2011
	(In thousands)
General and administrative	$	5,482	$	7,615	$	10,360		38.9	%		36.0	%

2010 Compared to 2011. General and administrative expenses increased by $2.7 million, or 36.0%, to $10.4 million in 2011 from $7.6 million in 2010. The change was primarily attributable to a $1.2 million increase in personnel costs, a $0.6 million increase in professional services fees, $0.5 million in transaction costs we incurred in connection with our acquisition of AdoTube and a $0.4 million increase in facility and IT costs. The increase in personnel costs was attributable to a $1.0 million increase in payroll costs due to increased general and administrative headcount to support domestic and international growth and to prepare for public company

46

requirements, and to a lesser extent, our acquisition of AdoTube which resulted in incremental payroll costs of $0.3 million in 2011.

2009 Compared to 2010. General and administrative expenses increased by $2.1 million, or 38.9%, to $7.6 million in 2010 from $5.5 million in 2009. The change was primarily attributable to a $1.4 million increase in personnel costs, with a $0.7 million increase in payroll costs due to increased general and administrative headcount to support domestic and international growth, a $0.2 million increase in stock-based compensation and a $0.2 million increase in contractor personnel costs. The change was also attributable to a $0.4 million increase in professional service fees related to our international expansion and a $0.4 million increase in facility and IT costs.

Amortization of Intangible Assets

	Years Ended December 31,						2009 to 2010 % Change			2010 to 2011 % Change
	2009		2010		2011
	(In thousands)
Amortization of intangible assets	$	1,073	$	1,045	$	1,189		(2.6	)%		13.8	%

2010 Compared to 2011. Amortization of intangible assets increased by $0.1 million in 2011 from 2010 due to our acquisition of AdoTube in September 2011. Amortization of intangible assets will increase in 2012 resulting from a full year of amortization of the intangible assets acquired from AdoTube.

2009 Compared to 2010. Amortization of intangible assets decreased by $28,000 in 2010 from 2009. The change resulted from our non-compete covenants associated with our acquisition of Techbargains.com in April 2007 becoming fully amortized during 2010.

Other Income (Expense), net

	Years Ended December 31,									2009 to 2010 % Change			2010 to 2011 % Change
	2009			2010			2011
	(In thousands)
Other income (expense), net	$	(1,441	)	$	(1,396	)	$	(2,055	)		(3.1	)%		47.2	%

2010 Compared to 2011. Other income (expense), net changed by $0.7 million or 47.2% from 2010. The U.S. dollar (our functional currency) strengthened significantly against several of our foreign currencies during 2011, resulting in an increase of $0.8 million in foreign currency exchange losses in 2011 compared to 2010.

2009 Compared to 2010. Other income (expense), net was flat from 2009 to 2010.

Provision for Income Taxes

	Years Ended December 31,									2009 to 2010 % Change			2010 to 2011 % Change
	2009			2010			2011
	(In thousands)
Provision for income taxes	$	2,623		$	4,485		$	5,263			71.0	%		17.3	%
Effective tax rate		46.6	%		45.5	%		43.3	%

2010 Compared to 2011. In 2011, our provision for income taxes increased by $0.8 million or 17% from 2010. The increase in our provision for income taxes was principally attributable to the $2.3 million or 23.2% increase in pre-tax income in 2011 from 2010 partially offset by lower state tax expense resulting from the 2011 adoption of a change in tax law for California.

47

2009 Compared to 2010. In 2010, our provision for income taxes increased by $1.9 million or 71% from 2009. This increase was principally attributable to the $4.2 million, or 75%, increase in pre-tax income in 2010 from 2009, partially offset by the lower statutory rates as a result of our international expansion, which resulted in a decrease of 1.1% in our effective tax rate.

Quarterly Results of Operations

The following tables set forth our unaudited quarterly consolidated statements of income data for each of the last eight quarters in the period ended December 31, 2011 in absolute dollars and as percentage of revenues. In our opinion, the unaudited quarterly consolidated statements of income data below has been prepared on the same basis as the audited consolidated financial statements included elsewhere in this prospectus, and reflects all adjustments, which consist only of normal recurring adjustments, necessary for a fair presentation of this data. The results of historical periods are not necessarily indicative of the results of operations of any future period. You should read this data together with our consolidated financial statements and related notes included elsewhere in this prospectus.

		December 31,			December 31,			December 31,			December 31,			December 31,		December 31,			December 31,			December 31,
	Three Months Ended,
	March 31, 2010			June 30, 2010			September 30, 2010			December 31, 2010			March 31, 2011		June 30, 2011			September 30, 2011			December 31, 2011
	(In thousands)
Revenues	$	24,653		$	27,359		$	31,998		$	41,258		$	33,748	$	40,832		$	41,277		$	53,225
Cost of revenues		14,484			16,235			18,581			22,688			19,928		22,846			23,367			29,707
Gross profit		10,169			11,124			13,417			18,570			13,820		17,986			17,910			23,518
Operating expenses:
Sales and marketing		5,323			6,682			7,556			9,127			9,100		10,060			10,439			12,580
Product development		978			1,045			1,362			1,295			1,022		1,146			1,247			1,889
General and administrative		1,712			1,766			1,971			2,166			1,955		2,126			2,785			3,494
Amortization of intangible assets		262			261			261			261			261		261			282			385
Total operating expenses		8,275			9,754			11,150			12,849			12,338		13,593			14,753			18,348
Operating income		1,894			1,370			2,267			5,721			1,482		4,393			3,157			5,170
Other income (expense), net		(357	)		(502	)		(333	)		(204	)		306		(264	)		(1,250	)		(847	)
Income before provision for income taxes		1,537			868			1,934			5,517			1,788		4,129			1,907			4,323
Provision for income taxes		655			370			1,017			2,443			726		1,676			793			2,068
Net income	$	882		$	498		$	917		$	3,074		$	1,062	$	2,453		$	1,114		$	2,255
Other Financial Information :
Adjusted EBITDA	$	3,174		$	2,634		$	4,758		$	7,471		$	3,025	$	6,230		$	5,020		$	7,764

48

		December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	Three Months Ended,
	March 31, 2010			June 30, 2010			September 30, 2010			December 31, 2010			March 31, 2011			June 30, 2011			September 30, 2011			December 31, 2011
Revenues		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0			100.0	%
Cost of revenues		58.8			59.3			58.1			55.0			59.0			56.0			56.6			55.8
Gross profit		41.2			40.7			41.9			45.0			41.0			44.0			43.4			44.2
Operating expenses:
Sales and marketing		21.5			24.4			23.5			22.2			27.0			24.6			25.4			23.7
Product development		4.0			3.8			4.3			3.1			3.0			2.8			3.0			3.5
General and administrative		6.9			6.5			6.2			5.2			5.8			5.2			6.7			6.6
Amortization of intangible assets		1.1			1.0			0.8			0.6			0.8			0.6			0.7			0.7
Total operating expenses		33.5			35.7			34.8			31.1			36.6			33.2			35.8			34.5
Operating income		7.7			5.0			7.1			13.9			4.4			10.8			7.6			9.7
Other income (expense), net		(1.5	)		(1.8	)		(1.1	)		(0.5	)		0.9			(0.7	)		(3.0	)		(1.6	)
Income before provision for income taxes		6.2			3.2			6.0			13.4			5.3			10.1			4.6			8.1
Provision for income taxes		2.6			1.4			3.1			5.9			2.2			4.1			1.9			3.9
Net income		3.6	%		1.8	%		2.9	%		7.5	%		3.1	%		6.0	%		2.7	%		4.2	%
Other Financial Information:
Adjusted EBITDA		12.9	%		9.6	%		14.9	%		18.1	%		9.0	%		15.3	%		12.2	%		14.6	%

The following table sets forth a reconciliation of net income to Adjusted EBITDA for each of the eight quarters ended December 31, 2011. Please see “Selected Consolidated Financial Data — Adjusted EBITDA” for more information.

		December 31,		December 31,		December 31,		December 31,		December 31,			December 31,		December 31,		December 31,
	Three Months Ended,
	March 31, 2010		June 30, 2010		September 30, 2010		December 31, 2010		March 31, 2011			June 30, 2011		September 30, 2011		December 31, 2011
	(In thousands)
Reconciliation of Adjusted EBITDA:
Net income	$	882	$	498	$	917	$	3,074	$	1,062		$	2,453	$	1,114	$	2,255
Other (income) expense, net		357		502		333		204		(306	)		264		1,250		847
Provision for income taxes		655		370		1,017		2,443		726			1,676		793		2,068
Depreciation and amortization of property and equipment		316		269		397		381		426			543		537		644
Amortization of intangible assets		650		648		648		648		648			648		751		1,266
Stock-based compensation		314		347		1,446		721		469			646		575		684
Adjusted EBITDA	$	3,174	$	2,634	$	4,758	$	7,471	$	3,025		$	6,230	$	5,020	$	7,764

Our operating results fluctuate from quarter to quarter as a result of a variety of factors, including seasonality. Advertising spending is traditionally seasonally strong in the fourth quarter. In addition, expenditures by advertisers tend to be cyclical and discretionary in nature, reflecting overall economic conditions, the economic prospects of specific advertisers or industries, changes in brand advertising strategy, budgeting constraints and buying patterns and a variety of other factors, many of which are outside of our control. As a result of these and other factors, the results of any prior quarterly or annual periods should not be relied upon as indications of our future operating performance.

Our financial performance and results reflect the aforementioned seasonality. Revenues, cost of revenues and sales and marketing expenses all increase significantly in the fourth quarter relative to the third quarter and

49

then are lower during the first quarter of the following year due to the seasonally reduced spending by brand advertisers. Our cost of revenues is largely driven by our revenues and therefore has grown consistently with our revenue growth. Our operating expenses reflect our growth initiatives as we increase headcount and expand into new markets and geographies to generate additional revenues.

In addition, our results of operations during 2010 and 2011 reflect the following:

• The introduction of Firefly Video in May 2010 favorably affected revenues and gross margin in subsequent periods, in particular in the fourth quarter of 2010 and the second quarter of 2011. Over time, we expect gross margin associated with our Firefly Video product to be generally consistent with our other advertising brands.

• Our revenues in the fourth quarter of 2011 reflected a $5.7 million contribution from our AdoTube acquisition, and product development expenses increased in the fourth quarter of 2011 as we incurred a full quarter of increased salary and related costs for additional product development personnel from the acquisition.

• Our general and administrative expenses increased during the third quarter of 2011 due to our acquisition of AdoTube, for which we incurred $0.5 million of acquisition-related costs. In addition, general and administrative expenses were higher in the fourth quarter of 2011 due to increased headcount in preparation for our initial public offering and a full quarter of increased salary and related costs for additional general and administrative personnel from our AdoTube acquisition.

Liquidity and Capital Resources

Since inception, we have financed our operations primarily through cash flows generated from operations, and, to a lesser extent, borrowings on our credit facilities. Our principal sources of liquidity as of December 31, 2011, are our cash and cash equivalents and our revolving line of credit. As of December 31, 2011, we had $14.3 million of cash and cash equivalents, $5.6 million of which is currently held outside of the United States and would be subject to U.S. income tax upon repatriation. As of December 31, 2011, we had $13.4 million outstanding on our revolving line of credit and $6.6 million available for future borrowings and were in compliance with the covenants under this facility.

We believe that our cash flows generated from operations and current cash and cash equivalents, and amounts available under our credit facility, will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for the next twelve months. From time to time, we may explore additional financing sources to develop or enhance our technology platform, to fund expansion, to respond to competitive pressures, to acquire or to invest in complementary products, businesses or technologies, or to lower our cost of capital, which could include equity, equity-linked securities and debt financing. We cannot assure you that any additional financing will be available to us on acceptable terms, if at all. If we raise additional funds through the issuance of equity or convertible debt or other equity-linked securities, our existing stockholders could suffer significant dilution, and if we raise additional funds through the issuance of debt securities or other borrowings, these securities or borrowings would have rights senior to those of our common stock and could contain covenants that could restrict our operations.

50

Cash Flows

The following table summarizes our cash flows for the periods indicated from our consolidated financial statements included elsewhere in this prospectus:

	Years Ended December 31,
	2009			2010			2011
	(In thousands)
Net cash provided by operating activities	$	7,169		$	4,302		$	9,178
Net cash used in investing activities		(273	)		(1,352	)		(15,353	)
Net cash (used in) provided by financing activities		(21,849	)		(5,179	)		12,372

Operating Activities

We have generated positive cash flows from operations for each of 2009, 2010 and 2011. Our net cash provided by operating activities primarily results from our net income adjusted for non-cash expenses offset by changes in working capital components driven by the growth of our business, and is influenced by the timing of cash receipts from our advertisers and cash payments to third-party digital media content providers for the acquisition of advertising impressions. Our primary source of cash flow from operating activities is cash receipts from advertisers. Our primary uses of cash from operating activities are amounts due to third-party digital media content providers and to a lesser extent, for employee-related expenditures. Due to our contractual terms and the nature of the advertising business, we generally pay our digital media content providers in advance of receiving payments from our advertisers. This is especially true internationally as payment terms are typically longer than in the United States. Therefore, as our business has expanded, our working capital requirements have grown significantly as our receivables have grown faster than our payables. We expect this trend to continue to the extent we grow the business and continue to expand internationally.

In 2011, cash provided by operating activities was $9.2 million. The cash flow from operating activities reflected net income of $6.9 million and aggregate non-cash charges of $9.2 million partially offset by a net change of $6.9 million in our net operating assets and liabilities. Non-cash charges primarily included $3.3 million of amortization of intangible assets, $2.4 million in stock-based compensation and $2.2 million of depreciation and amortization for property and equipment. The net change in our operating assets and liabilities was primarily a result of a $9.8 million increase in accounts receivable due to growth in revenues, a $4.1 million increase in prepaid expenses and other current assets due to the timing of tax refunds, partially offset by a $3.7 million corresponding increase in accrued expenses and accrued liabilities due to the growth in our business.

In 2010, cash provided by operating activities was $4.3 million. The cash flow from operating activities reflected net income of $5.4 million and aggregate non-cash charges of $6.5 million, partially offset by a net change of $7.5 million in our net operating assets and liabilities. Non-cash charges primarily included $2.8 million in stock-based compensation, $2.6 million for amortization of intangible assets and $1.4 million for depreciation and amortization of property and equipment, partially offset by a decrease in deferred income taxes of $0.7 million. The net change in our operating assets and liabilities was primarily a result of an $18.0 million increase in accounts receivable partially offset by a $9.2 million increase in accrued expenses. The increase in accounts receivable is attributable to revenue growth, especially in the fourth quarter of fiscal 2010, combined with timing of payments from our international advertisers. The increase in accrued expenses is due to increased cost of sales associated with increased revenues and timing of payments due to our growth.

In 2009, cash provided by operating activities was $7.2 million. The cash flow from operating activities reflected net income of $3.0 million and aggregate non-cash charges of $5.2 million, partially offset by a net change of $1.0 million in our net operating assets and liabilities. Non-cash charges primarily included $2.6 million for amortization of intangible assets, $1.6 million in stock-based compensation and $1.4 million for depreciation and amortization of property and equipment, partially offset by a gain of $0.5 million on the remeasurement of our interest rate swap agreement to fair value. The net change in our operating assets and

51

liabilities was primarily a result of a $2.2 million increase in accounts receivable partially offset by a $1.7 million decrease in prepaid expenses and other current assets. The increase in accounts receivable was the result of timing of payments from advertisers, which we believe was due to the global macroeconomic conditions. The decrease in prepaid expenses and other current assets was primarily attributable to a decrease in income tax receivables from overpayments made in 2008, which were refunded in 2009.

Investing Activities

In 2011, cash used in investing activities was $15.4 million, consisting of $12.8 million for the acquisition of AdoTube, net of cash acquired, $2.1 million in capital expenditures related to purchases of computer hardware and software, and $0.5 million in capitalization of software development costs.

In 2010 and 2009, cash used in investing activities was $1.4 million and $0.3 million, respectively, primarily for capital expenditures. Our capital expenditures consisted primarily of purchases of computer hardware to support our growth and to upgrade our infrastructure.

Financing Activities

In 2011, cash provided by financing activities was $12.4 million, consisting of $13.4 million in proceeds from our revolving line of credit to finance the acquisition of AdoTube and $0.1 million in proceeds from the issuance of common stock from our equity incentive plan, partially offset by $1.1 million in repayments on our capital lease obligations.

In 2010, cash used in financing activities was $5.2 million, reflecting $5.0 million in repayments on our revolving line of credit, and $0.7 million in repayments on our capital lease obligations, partially offset by $0.5 million in proceeds we received from the issuance of common stock from our equity incentive plans.

In 2009, cash used in financing activities was $21.8 million, reflecting the $21.3 million in repayments on the term portion of our credit facility and $0.6 million in repayments on our capital lease obligations.

2011 Amended Credit Facility

In May 2011, we amended our 2007 Credit Agreement to provide for a $20.0 million revolving line of credit. In connection with our acquisition of AdoTube in September 2011, we borrowed $13.4 million of the $20.0 million available under the revolving line of credit, which amount remained outstanding as of December 31, 2011.

The interest rate on outstanding borrowings on the revolving line of credit varies and resets periodically depending upon our consolidated leverage ratio and the current LIBOR and prime rates. Our interest rate as of December 31, 2011 was 2.02% per annum. Interest payments are due monthly. We are also required to pay commitment fees of 0.25% on the unused portion of the revolving credit line. Commitment fees are due quarterly. Our revolving line of credit matures on May 6, 2014 and is secured by all of our assets.

We are required to comply with certain financial and non-financial covenants pursuant to the terms of our revolving line of credit and as of December 31, 2011, we were in compliance with these covenants.

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles or GAAP, and include our accounts and the accounts of our wholly-owned subsidiaries. The preparation of these consolidated financial statements requires our management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and

52

liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the applicable periods. We base our estimates, assumptions and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances. Different assumptions and judgments would change the estimates used in the preparation of our consolidated financial statements, which, in turn, could change the results from those reported. We evaluate our estimates, assumptions and judgments on an ongoing basis.

The critical accounting estimates, assumptions and judgments that we believe have the most significant impact on our consolidated financial statements are described below.

Revenue Recognition

We recognize revenues when four basic criteria are met: (1) persuasive evidence exists of an arrangement with the advertiser reflecting the terms and conditions under which the services or products will be provided; (2) services have been provided or delivery has occurred; (3) the fee is fixed or determinable; and (4) collection is reasonably assured. We consider a signed agreement, a binding insertion order, a third-party commission statement or other similar documentation to be persuasive evidence of an arrangement. Collectability is assessed based on a number of factors, including the creditworthiness of an advertiser and transaction history.

We generate revenues primarily from the sale of display and video advertising delivered across a variety of third-party owned digital media content provider properties for marketing campaigns that generally range between 30 and 90 days. Revenues from agreements based on impressions are recognized as the impressions are delivered. Revenues from agreements based on user engagements or actions are recognized when a user engagement or action occurs. We also enter into arrangements in which we receive referral revenue from advertisers on our wholly-owned website, Techbargains.com. We recognize referral revenue as earned.

We recognize revenues as a principal based upon a variety of factors, including acting as the primary obligor in the arrangement, performing a significant portion of the services, setting the pricing and retaining the credit risk. Accordingly, in the period advertising services are delivered, revenues are recognized on a gross basis and the corresponding third-party digital media content provider expenses are recognized and recorded as a component of cost of revenues.

Goodwill and Intangible Assets

We record goodwill when the purchase consideration paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired. The valuation of the net tangible and intangible assets acquired requires management to make significant estimates in determining the fair values of assets and liabilities acquired. These estimates are based on information obtained from management of the acquired companies and historical experience. These estimates can include, but are not limited to, the cash flows that an asset is expected to generate in the future, and the cost savings expected to be derived from acquiring an asset. These estimates are inherently uncertain and unpredictable, and if different estimates were used the purchase price for the acquisition could be allocated to the acquired assets and liabilities differently from the allocation that we have made. In addition, unanticipated events and circumstances may occur which affect the accuracy or validity of such estimates, and if such events occur we may be required to record a charge against the value ascribed to an acquired asset or an increase in the amounts recorded for assumed liabilities.

We perform our annual review of goodwill during the fourth quarter of each year, or more frequently if indicators of potential impairment exist, to determine if the carrying value of the recorded goodwill is impaired. Goodwill is not amortized. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in advertiser demand or business climate that could affect the value of goodwill or cause a significant decrease in expected cash flows.

53

In conducting our impairment test, we must first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. If, after assessing the qualitative factors, we determine that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, we must then perform a two-step impairment test, whereby in the first step, we compare the estimated fair value of the reporting unit with the reporting unit’s carrying amount, including goodwill. If the carrying amount exceeds its fair value, we perform the second step of the goodwill impairment test to determine the amount of impairment, if any. The second step, measuring the impairment loss, compares the implied fair value of the goodwill with the carrying value of that goodwill. Any excess of the goodwill carrying value over the respective implied fair value is recognized as an impairment loss.

Based on our assessment during the fourth quarter of 2011, we concluded that we have one reporting unit and there were no qualitative factors that would indicate that it was more-likely-than-not that the fair value of our reporting unit is less than its carrying amount. We also observed that as of December 31, 2010 and 2011, the fair value of our reporting unit significantly exceeded the reporting unit’s carrying value, including goodwill, as determined by the contemporaneous valuations approved by our board of directors. No impairment of goodwill was identified for 2009, 2010 and 2011.

Impairment of Long-Lived Assets

We assess the impairment of long-lived assets, such as property and equipment and intangible assets subject to depreciation and amortization, whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Among the factors and circumstances we consider in determining recoverability are: (i) a significant decrease in the market price of a long-lived asset; (ii) a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition; (iii) a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset, including an adverse action or assessment by a regulator; (iv) an accumulation of costs significantly in excess of the amount originally expected for the acquisition and (v) current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. We have observed no indicators of impairment and we did not record any impairment losses during 2009, 2010 or 2011.

Stock-Based Compensation

We recognize compensation expense related to stock option and restricted stock grants made to employees based on the estimated fair value of the stock-based awards on the date of grant, net of estimated forfeitures. We determine the grant date fair value of the awards using the Black-Scholes option-pricing model and the related stock-based compensation is recognized on a straight-line basis, over the period in which an employee is required to provide service in exchange for the stock-based award.

54

The estimated grant date fair value of all our stock-based awards was calculated based on the assumptions given in the table below:

	Years Ended December 31,
	2009	2010	2011
Expected term (in years)	5.5	5.7	5.7 - 5.8
Risk-free interest rate	2.5%	1.4% - 2.4%	1.0% - 2.4%
Expected volatility	59.9%	59.5% - 65.4%	64.1% - 65.0%
Dividend rate	0%	0%	0%
Forfeiture rate	23.6%	22.7% - 24.4%	22.9% - 24.9%

In determining the fair value of the stock-based awards, we use the Black-Scholes option-pricing model, which requires the use of highly subjective and complex assumptions that determine the fair value of stock-based awards. These assumptions are as follows:

• Expected term — The expected term is based upon employee historical exercise and post-vesting employment termination behavior which also takes into account the contractual life of the award.

• Risk-free interest rate — The risk-free interest rate is based on the interest yield in effect at the date of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the option’s expected term.

• Expected volatility — Since we do not have a trading history of our common stock, the expected volatility was derived from the historic volatilities of multiple peer companies within our industry that we considered to be comparable to our business over a period equivalent to the expected term of the stock option grants.

• Dividend rate — The expected dividend rate was assumed to be zero as we have never paid dividends and have no current plans to do so.

In addition to the assumptions used in the Black-Scholes option-pricing model, we must also estimate a forfeiture rate to calculate the stock-based compensation for our awards. Our forfeiture rate is based on an analysis of our actual and expected forfeitures. We will continue to evaluate the appropriateness of the forfeiture rate based on actual and expected forfeiture experience, analysis of employee turnover and other factors. Quarterly changes in the estimated forfeiture rate can have a significant impact on our stock-based compensation as the cumulative effect of adjusting the rate is recognized in the period in which we change the forfeiture estimate.

We will continue to use judgment in evaluating the expected term, expected volatility and forfeiture rate related to our stock-based compensation calculations on a prospective basis. As we continue to accumulate additional data related to our common stock, we may make refinements to the estimates of our expected term, expected volatility and forfeiture rate that could materially impact our future stock-based compensation.

55

Significant Factors, Assumptions and Methodologies Used in Determining Fair Value of Our Common Stock

We are also required to estimate the fair value of the common stock underlying our stock-based awards when performing the fair value calculations with the Black-Scholes option-pricing model. Our board of directors, with input from management, estimates the fair value of the common stock underlying our stock-based awards on each grant date. Prior to March 2012, our board of directors consisted of our Chief Executive Officer who has significant experience in the technology and Internet advertising industries. Subsequent to March 2012, our board of directors is comprised of a majority of non-employee directors with significant experience in the Internet and Internet advertising industries. Thus, we believe that our board of directors has the relevant experience and expertise to determine a fair value for our common stock on each respective grant date. Given the absence of a public trading market for our common stock, and in accordance with the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, our board of directors exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of our common stock including:

• valuations performed by an unrelated third-party specialist;

• our actual operating and financial performance;

• current business and macroeconomic conditions and projections;

• our stage of development;

• the history of the company and the introduction of new products and services;

• the likelihood of achieving a liquidity event, such as an initial public offering or a sale of the company, given prevailing market conditions and the nature and history of our business;

• the market value of a comparable group of privately held companies that are in a state of development similar to ours, based upon recent transactions;

• adjustments necessary to recognize a lack of marketability for our common stock as a private company; and

• industry information, such as market size and growth.

In valuing our common stock, we engaged a valuation specialist to perform a valuation of our common stock on a minority, non-marketable interest basis. The valuation determined the aggregate enterprise value of our company by taking an equally weighted combination of the value indications under the two valuation approaches, an income approach and a market approach.

The income approach estimates the aggregate enterprise value of our company based on the present value of future estimated cash flows. Cash flows are estimated for future periods based on projected revenue and costs. These future cash flows are discounted to their present values using an appropriate discount rate. The discounted projected cash flows and a terminal value are summed together to arrive at an indicated aggregate enterprise value under the income approach. In applying the income approach, we derived the discount rate from an analysis of the weighted-average cost of capital of our comparable industry peer companies as of each valuation date and adjusted it to reflect the risks inherent in our business cash flows. We derived the terminal multiple from an exit multiple analysis of our comparable industry peer companies’ calculated enterprise values divided by their calculated EBITDA amounts as of each valuation date.

The market approach estimates the aggregate enterprise value of our company by applying market multiples of our comparable industry peer companies based on key metrics inferred from their enterprise values. In applying the market approach, we utilized the revenue and EBITDA multiples of our comparable industry peer companies to derive the aggregate enterprise value of our company. We derived those revenue and EBITDA multiples by obtaining the stock price and market capitalization, and the current and future revenue and EBITDA estimates of each of our comparable industry peer companies. We then adjusted those multiples based on our

56

assessment of the strengths and weaknesses of our company relative to those comparable industry peer companies. We believed that using revenue and EBITDA multiples to estimate our aggregate enterprise value was appropriate given our focus on growing our business and because our comparable industry peer companies were in various stages of growth and investment.

When considering which companies to include in our comparable industry peer companies, we focused on domestic and foreign publicly traded companies in the Internet or Internet advertising industries in which we operate. The selection of our comparable industry peer companies requires us to make judgments regarding the comparability of these companies to us. We considered a number of factors, including business description, business size, business model, revenue model and historical operating results. We then analyzed the business and financial profiles of the selected companies for relative similarity to us, and, based on this assessment, we selected our comparable industry peer companies.

The selection of our comparable industry peer companies has changed over time based upon our continuing evaluation of whether we believe the selected companies remained comparable to us. Specifically, the composition of our comparable industry peer companies in our December 31, 2010 contemporaneous valuation differed from our March 31, 2011 and June 30, 2011 valuations as we replaced one of the comparable industry peer companies with two companies that were more representative. For our December 2, 2011 contemporaneous valuation, we removed one of the comparable industry peer companies as it was no longer publically traded. For our February 24, 2012 contemporaneous valuation, we added two newly public traded companies after their volatility had normalized. We believed that the comparable industry peers selected are a representative group for purposes of performing our contemporaneous and retrospective valuations. The same comparable industry peer companies were also used in determining our various other estimates and assumptions, including our expected volatility and discount rates. The same comparable industry peer companies were used in determining our various other estimates and assumptions, including our expected volatility and discount rates.

For each valuation, we prepared financial projections to be used in both the income and market approaches. The financial projections took into account our historical financial operating results, our business experiences and our future expectations. We factored the risk associated with achieving our forecast into selecting appropriate multiples and discount rates. There is inherent uncertainty in these estimates, as the assumptions we used were highly subjective and subject to change as a result of new operating data and economic and other conditions that impact our business.

We calculated a weighted aggregate enterprise value of the company determined under the income and market approaches and applied adjustments to it such as for our then-current cash and debt balances to arrive at our aggregate equity value. We then allocated the fair value of our aggregate equity value to our outstanding common shares at the valuation date, on a fully diluted-basis, assuming all of our stock options were exercised. Finally, we applied a discount for lack of marketability, or DLOM, to determine the fair value of our common stock.

57

Information regarding stock-based awards, including options and restricted stock units (RSUs) granted subsequent to January 1, 2011, is summarized as follows:

Grant Date	Shares Underlying RSUs		Shares Underlying Options		Grant Date Fair Value (RSUs)/ Exercise Price (Options)		Fair Value Per Share of Common Stock		Aggregate Grant Date Fair Value (1)
April 1, 2011		—		1,423,700	$	1.34	$	1.69	$	1,536,500
April 5, 2011		—		726,000		1.34		1.69		784,100
May 31, 2011		—		576,000		1.34		1.69		613,500
December 19, 2011		—		2,344,000		2.10		2.10		2,843,600
December 20, 2011		—		370,000		2.10		2.10		449,700
December 30, 2011		—		425,000		2.10		2.10		515,500
March 2, 2012		—		2,655,000		2.75		2.75		4,208,500
March 7, 2012		120,000		450,000		2.75		2.75		714,200
		120,000		8,969,700					$	11,665,600

(1) We determined the aggregate grant date fair value for the options using the Black-Scholes option-pricing model.

The intrinsic value of all options outstanding as of December 31, 2011 was $         million, based on an assumed initial public offering price of $        per share, which is the midpoint of the estimated offering price range set forth of the cover page of this prospectus.

No single event caused the valuation of our common stock to increase from December 31, 2010 through March 7, 2012. Rather, a combination of the factors described below in each period led to the changes in the fair value of the underlying common stock.

December 31, 2010 Contemporaneous Valuation.

As of December 31, 2010, the fair value of our common stock was determined to be $1.34 per share. In estimating the value as of December 31, 2010, the key assumptions included a 21.0% discount rate, a 6.0x terminal multiple and market multiples using last twelve month (LTM) and current year revenue and EBITDA amounts based on current market conditions. In addition, this analysis used a 35.0% DLOM, based on an assumed time to marketability of 4.0 years.

Based on the December 31, 2010 contemporaneous valuation and other factors, we used $1.34 per share for the exercise price of the options that we granted on April 1, April 5 and May 31, 2011. On the date of the option grants, we determined that there had been no significant changes to the business and other relevant factors between December 31, 2010 and the grant dates which we concluded would indicate a change in the fair value of the underlying common stock.

In connection with the preparation of our December 31, 2011 consolidated financial statements and the initial filing of our registration statement on Form S-1, we reassessed the fair value of the underlying common stock used to calculate the related stock-based compensation for financial reporting purposes. Based on this reassessment, we noted that the fair value of our common stock increased $0.42 per share between our December 31, 2010 and June 30, 2011 contemporaneous valuation dates, which we concluded indicated that there was an increase in the fair value of the underlying common stock for the April and May 2011 option grants. As such, we felt it was appropriate to obtain a retrospective valuation as of March 31, 2011 to determine the fair value of our common stock as of March 31, 2011. The March 31, 2011 retrospective valuation estimated the fair value of our common stock at $1.69 per share. Based on this valuation and other factors, we determined the fair

58

value of the underlying common stock should be $1.69 per share for the April 1, April 5 and May 31, 2011 grants, rather than the $1.34 per share as previously determined. We also assessed the fair value of all of our other 2011 and 2012 stock option and restricted stock grants. However, based on the size and timing of the grants and their proximity to the most recent contemporaneous valuation, we did not believe it was necessary to change the underlying fair value of the common stock.

March 31, 2011 Retrospective Valuation

As of March 31, 2011, the fair value of our common stock was determined to be $1.69 per share based upon the retrospective valuation. In estimating the value as of March 31, 2011 the key assumptions included a 19.0% discount rate, a 6.0x terminal multiple and market multiples using LTM and current year revenue and EBITDA amounts based on current market conditions. In addition, this analysis used a 30.0% DLOM, based on an assumed time to marketability of 3.25 years.

The increase in the fair value of our common stock from the December 31, 2010 contemporaneous valuation was primarily attributable to the 5% decrease in our DLOM due to a decrease in our assumed time to marketability combined with an increase in our discounted cash flows resulting from using our projected 2012 revenue and EBITDA amounts which projected significant growth in our business.

As noted above, for our April 1, April 5 and May 31, 2011 grants, we reassessed the fair value of the underlying common stock to be $1.69 per share based on this valuation and other factors.

June 30, 2011 Contemporaneous Valuation

As of June 30, 2011, the fair value of our common stock was determined to be $1.76 per share. In estimating the value as of June 30, 2011 the key assumptions included an 18.0% discount rate, a 6.0x terminal multiple and market multiples using LTM and current year revenue and EBITDA amounts based on current market conditions. In addition, this analysis used a 30.0% DLOM, based on an assumed time to marketability of 3.0 years.

The increase in the fair value of our common stock from the March 31, 2011 retrospective valuation was primarily attributable to our strong second quarter operating results due to a 21.0% increase in our quarterly revenues from March 31, 2011 to June 30, 2011 combined with an increase in the valuations of our comparable industry peer companies. We did not grant any options during the period between the June 30, 2011 valuation and the date of our subsequent contemporaneous valuation as of December 2, 2011.

December 2, 2011 Contemporaneous Valuation

As of December 2, 2011, the fair value of our common stock was determined to be $2.10 per share. In estimating the value as of December 2, 2011 the key assumptions included an 18.0% discount rate, a 6.0x terminal multiple and market multiples using LTM and current year revenue and EBITDA amounts based on current market conditions. In addition, this analysis used a 20.0% DLOM, based on an assumed time to marketability of 1.9 years.

Our discounted cash flow projections used under the income approach and our revenue and EBITDA amounts used were revised from our June 30, 2011 contemporaneous valuation to include AdoTube’s historical and projected results, which we acquired in September 2011, and, to a lesser extent, to reflect our strong third quarter operating results.

As a result of including AdoTube in our discounted cash flows, our aggregate enterprise value determined under the income approach increased 43.5% from our June 30, 2011 contemporaneous valuation. As a result of including AdoTube in our representative levels and lowering our market multiples as a result of turbulent market conditions in the third quarter of 2011, our aggregate enterprise value determined under the market approach increased 1.3% from our June 30, 2011 contemporaneous valuation.

59

The increase in the fair value of our common stock from the June 30, 2011 contemporaneous valuation was attributable to the aforementioned acquisition of AdoTube, combined with the decrease in our DLOM due to our movement towards an IPO.

Based on this valuation and other factors, we used $2.10 per share for the exercise price of the options that we granted on December 19, 20 and 30, 2011. We determined that there had been no significant changes to the business between December 2, 2011 and the grant dates that would indicate an increase in the fair value of the underlying common stock.

February 24, 2012 Contemporaneous Valuation

As of February 24, 2012, the fair value of our common stock was determined to be $2.75 per share. In estimating the value as of February 24, 2012, the key assumptions included a 17.5% discount rate, a 6.5x terminal multiple and market multiples using LTM and current year revenue and EBITDA amounts based on current market conditions. In addition, this analysis used a 10.0% DLOM, based on an assumed time to marketability of 1.0 years.

Our aggregate enterprise value determined under the income approach increased 25.4% from our December 2, 2011 contemporaneous valuation. This was attributable to a new final year of projection being used to calculate our terminal value as a result of the commencement of a new fiscal year combined with a 0.5 increase in our terminal exit multiple.

Our aggregate enterprise value determined under the market approach increased 10.5% from our December 2, 2011 contemporaneous valuation due to an increase in our market multiples resulting from stronger market conditions during December 2011 and early 2012.

The increase in the fair value of our common stock from the December 2, 2011 contemporaneous valuation was the result of the combined effects of our significant quarterly sales growth, a significant increase in the valuations of our comparable industry peer companies used in our valuations and our continued progress towards an IPO. From the quarter ended September 30, 2011 to the quarter ended December 31, 2011, our quarterly revenues increased by 28.9%. From December 2, 2011 to February 24, 2012, the median enterprise value of our comparable industry peer companies increased by 25.3% due to strong market conditions. In the December 2, 2011 contemporaneous valuation, we assumed a time to marketability of 1.9 years. For our February 24, 2012 contemporaneous valuation, we assumed a time to marketability of 1.0 years due to our progress towards an IPO, including expanded discussions with investment bankers in January 2012 and our organizational meeting for this offering held in February 2012. Based on volatility in the capital markets generally and in the market for initial public offerings, in particular, as well as uncertainty regarding our ability to execute this offering, we concluded that a time to marketability of 1.0 year was appropriate.

Based on this valuation and other factors, we used $2.75 per share for the exercise price of the options and fair value of the restricted stock units that we granted on March 2 and March 7, 2012. We determined that there had been no significant changes to the business between February 24, 2012 and the grant dates that would indicate an increase in the fair value of the underlying common stock. We have not granted any options subsequent to March 7, 2012.

60

Our compensation expense related to stock-based awards is as follows:

	Years Ended December 31,
	2009		2010		2011
	(In thousands)
Cost of revenues	$	34	$	36	$	34
Sales and marketing		860		1,442		1,287
Product development		368		726		418
General and administrative		377		624		635
Total stock-based compensation	$	1,639	$	2,828	$	2,374

As of December 31, 2011, we had stock-based compensation of $6.0 million related to unvested stock options and restricted stock granted to employees but not yet recognized, net of estimated forfeitures. As of December 31, 2011, this cost will be amortized to expense over a weighted-average remaining period of 3.15 years and will be adjusted for subsequent changes in estimated forfeitures. In future periods, we expect our stock-based compensation to increase as a result of our existing unrecognized stock-based compensation to be recognized as these awards vest and as we issue additional stock-based awards to attract and retain employees.

Income Taxes

We account for income taxes using an asset and liability approach to record deferred taxes. Our deferred income tax assets represent temporary differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities that will result in deductible amounts in future years. The measurement of current and deferred tax assets and liabilities is based on provisions of enacted tax laws; the effects of future changes in tax laws or rates are not anticipated. Based on estimates, the carrying value of our net deferred tax assets assumes that it is more likely than not that we will be able to generate sufficient future taxable income in the respective tax jurisdictions. Our judgments regarding future profitability may change due to future market conditions, changes in U.S. or international tax laws and other factors. We account for uncertain tax positions by recognizing a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. We recognize interest and penalties, if any, related to unrecognized tax benefits in the income tax provision in our consolidated statements of income.

Contractual Obligations

Our contractual commitments will have an impact on our future liquidity. The following table summarizes our contractual obligations, which represent material expected or contractually committed future obligations, with terms in excess of one year. We believe that we will be able to fund these obligations through cash generated from operations and from our existing cash balances.

	Payments Due by Period
	Total		Less than 1 Year		1 to 3 Years		3 to 5 Years		More Than 5 Years
	(In thousands)
As of December 31, 2011:
Operating lease obligations (1)	$	12,964	$	2,660	$	4,562	$	3,211	$	2,531
Capital lease obligations (2)		3,403		1,756		1,647		—		—
Revolving line of credit (3)		13,400		—		13,400		—		—
Deferred purchase consideration (4)(5)		6,483		—		6,483		—		—
Total (6)	$	36,250	$	4,416	$	26,092	$	3,211	$	2,531

61

(1) Operating lease agreements represent our obligations to make payments under non-cancelable operating lease agreements with terms in excess of one year.

(2) Capital lease obligations represent our future minimum lease payments, including interest, under non-cancelable capital lease agreements.

(3) In conjunction with our acquisition of AdoTube in September 2011, we drew down $13.4 million on our revolving line of credit on our 2011 Amended Credit Facility. The entire balance outstanding on our revolving line of credit note is due in May 2014.

(4) In conjunction with our acquisition of AdoTube in September 2011, we are required to make guaranteed deferred cash payments of $4.1 million and $2.4 million in January 2013 and January 2014 to the former owners of AdoTube. As of December 31, 2011, we have recorded $6.1 million in other liabilities in the consolidated balance sheet relating to these guaranteed deferred cash payments.

(5) We may also be required to pay contingent deferred consideration to the former owners of AdoTube if certain gross revenue and EBITDA targets for the stand-alone AdoTube business are achieved for 2012 and 2013. Payments are also contingent on the ongoing employment of the two principal former owners of AdoTube, unless these former owners are terminated without cause or resign for good reason. The contingent payment amount with respect to 2012 is $2.8 million and 267,143 shares of our common stock, which would be payable in 2013. The contingent payment amount with respect to 2013 is $2.8 million and 267,144 shares of our common stock, which would be payable in 2014. These payments have been excluded from the above table as they are contingent on further services being provided and therefore do not represent commitments as of December 31, 2011. As of December 31, 2011, we have not recognized a liability in our consolidated balance sheet for this contingent deferred consideration.

(6) We are unable to reliably estimate the timing of future payments related to uncertain tax positions; therefore, we have excluded $0.5 million from the preceding table related to uncertain tax positions, including accrued interest and penalties. However, income taxes payable on our consolidated balance sheet includes these uncertain tax positions.

Off-Balance Sheet Arrangements

As of December 31, 2011, we have not entered into any off-balance sheet arrangements, and do not have any holdings in any variable interest entities.

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in foreign currency exchange rates and interest rates. As of December 31, 2011, we do not hold or issue financial instruments for trading purposes.

Foreign Currency Risk

Most of our sales are denominated in U.S. dollars, and therefore our revenues are not currently subject to significant foreign currency risk. Our operating expenses are denominated in the currencies of the countries in which our operations are located, which are primarily in North America, Europe and the Asia Pacific region, and may be subject to fluctuations due to changes in foreign currency exchange rates. Our consolidated results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates. To date, we have not used derivative financial instruments to mitigate our exposure to foreign currency risks. The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have had a material impact on our consolidated financial statements.

Interest Rate Sensitivity

Our exposure to market risk for changes in interest rates relates primarily to our cash and cash equivalents and our outstanding debt obligations. Our cash and cash equivalents are held in cash deposits, money market funds and overnight investments with maturities of less than 90 days from the date of purchase. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of the interest rates in the United States. However, because of the short-term nature of the instruments in our portfolio, a sudden change in market interest rates would not be expected to have a material impact on our consolidated financial statements.

62

We have long-term debt of $13.4 million as of December 31, 2011 consisting of our outstanding obligations on a revolving line of credit. Our exposure to interest rates relates to the change in the amounts of interest we must pay on our borrowings, which bears a variable rate of interest. As of December 31, 2011 our interest rate is 2.02% per annum. The effect of a hypothetical 100 basis points change in our interest rate would not have had a material impact on our consolidated financial statements.

Recently Issued and Adopted Accounting Standards

In January 2010, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update or ASU No. 2010-06, Improving Disclosures about Fair Value Measurements (Topic 820) — Fair Value Measurements and Disclosures, to add additional disclosures about the different classes of assets and liabilities measured at fair value, the valuation techniques and inputs used, and the activity in Level III fair value measurements. We adopted ASU 2010-06 on January 1, 2011 and the adoption did not have a material impact on our consolidated financial statements.

In December 2010, the FASB issued ASU No. 2010-29, Disclosure of Supplementary Pro Forma Information for Business Combinations (Topic 805) — Business Combinations, to improve consistency in how the pro forma disclosures are calculated. Additionally, ASU 2010-29 enhances the disclosure requirements and requires description of the nature and amount of any material, nonrecurring pro forma adjustments directly attributable to a business combination. We adopted ASU 2010-29 on January 1, 2011 and the adoption did not have a material impact on our consolidated financial statements.

In May 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220 — Presentation of Comprehensive Income, that changed the requirement for presenting “Comprehensive Income” in the consolidated financial statements. The update requires an entity to present the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. We early adopted ASU 2011-05 on December 31, 2011 and the adoption did not have a material impact on our consolidated financial statements.

In September 2011, the FASB issued ASU No. 2011-08, Goodwill and Other (Topic 350) — Testing Goodwill for Impairment, to reduce the cost and complexity of the annual goodwill impairment test by providing entities an option to perform a qualitative assessment to determine whether further impairment testing is necessary. ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. We early adopted ASU 2011-08 on October 1, 2011, and the adoption did not have a material impact on our consolidated financial statements.

63

BUSINESS

Our Mission

Our mission is to partner with brand advertisers across the globe to help them unlock the power of digital media to build awareness, affinity and loyalty among consumers.

Overview

We are a leading global provider of advertising intelligence and digital media solutions to brand advertisers. We have developed an end-to-end solution that enables brand advertisers to learn about their optimal consumer audience, reach and engage that audience with emotive advertising and analyze and refine their marketing campaigns. The foundation of our solution is our proprietary e^XAdvertising Intelligence Platform, which processes massive amounts of anonymous consumer data to provide the intelligence and actionable insights brand advertisers need to efficiently reach their existing and prospective customers.

In 2010, global advertising spend was $449 billion, of which digital media advertising spend was $64 billion, or only 14%, according to ZenithOptimedia. Advances in technology, increases in network bandwidth and the growing proliferation of connected devices have changed the ways in which people connect, interact, work and live. As consumers shift to digital media and as virtually all types of media transition to digital formats, we expect brand advertisers to increasingly focus on digital media advertising.

As a partner to nearly 1,900 advertisers in 2011, we offer a highly integrated solution that includes multiple formats of high impact advertisements across display, video and mobile platforms. Our solution allows brand advertisers to connect with their target audiences at scale through highly customizable experiences across a wide variety of formats and devices. We combine this with an efficient operational infrastructure that supports our sales footprint across 25 countries.

Our e^X Advertising Intelligence Platform enables brand advertisers to understand the detailed attributes of consumers who engage with their brands and to then apply those insights to reach audiences with similar attributes. We process approximately two billion daily user events, primarily associated with consumer activities across our digital content providers’ web pages. Our platform’s semantic technology contextualizes the most frequently visited pages, continuously updating a database that maps over 300 million unique web pages to associated concepts in our 50,000 attribute taxonomy. When a consumer visits a particular web page analyzed by our platform, we register that the consumer is interested in the attributes associated with that web page. As a result, each of our 50,000 attributes represents an audience segment with similar interests, enabling us to offer highly relevant audiences to brand advertisers.

We apply our advanced analytics capabilities to a massive global audience through our relationships with digital media content providers. Through these relationships, we gained access to a monthly average of 450 million unique visitors worldwide in 2011, as reported by comScore, providing us broad consumer reach as well as the ability to continuously update and deepen the insights of our e^X Advertising Intelligence Platform. We leverage these capabilities to service our brand advertisers, matching relevant and engaging advertising to precise and relevant audiences.

We generate revenues by delivering marketing campaigns for advertisers through our three primary global brands: Tribal Fusion, Firefly Video and AdoTube. In 2011, our revenues were $169.1 million, an increase of 35% over $125.3 million of revenues in 2010. We have been profitable on an annual basis since 2002 and, to date, have grown our business without third-party equity capital, reflecting our focus on results and our founder-led corporate culture of independence.

64

Industry Background

A Digitally Interconnected Society

Advances in technology, increases in network bandwidth and the growing proliferation of connected devices are rapidly changing society. Each new generation of digital media devices and solutions drives further change to everyday activities, impacting the way people connect, interact, work and live. This digital transformation is profoundly impacting the way people want to be informed and entertained. As more media is produced, delivered and consumed digitally, the monolithic broadcast model is being transformed into a personalized and interactive experience. Today, information and entertainment is accessible across multiple digital media devices such as computers, smartphones, tablets, eBooks and connected TVs. Over time, virtually all types of media are expected to complete the transition to digital formats. This transformation is empowering consumers to interact and engage with content like never before, generating a comprehensive and rich data footprint of their preferences and activities. Analysis of this data enables companies to offer consumers highly relevant and personalized experiences — showing users the news stories they are most likely to care about, the movies they are most likely to enjoy and special offers on products or services they may wish to buy.

The Digital Evolution of Brand Advertising

As consumers shift their preferences towards digital media channels, we believe that brand advertisers will increasingly seek to connect with their prospective customers across the multiple digital media devices and platforms where those consumers spend their time. However, the objectives for brand advertisers remain unchanged from the past: (i) gain insights into which types of audiences are likely to become their customers, (ii) find and reach those prospective customers, and (iii) connect with those prospective customers through emotionally engaging marketing campaigns.

In a digital environment, the data footprint of consumer preferences and activities can provide brand advertisers with a richer understanding of who they need to reach, through what devices and platforms they can most effectively reach them and what marketing campaigns are most likely to resonate with them. Furthermore, the two-way nature of the digital experience now allows for advertising that is interactive and customized to the interests of individual consumers, and thus able to substantially strengthen the impression a brand can leave on consumers. As a result, the digital revolution provides brand advertisers with the ability to more precisely understand and reach the prospective customers that matter most to them.

Our Market Opportunity

In 2010, global advertising spend was $449 billion, of which digital media advertising spend was $64 billion, or only 14%, according to ZenithOptimedia. Advances in technology, increases in network bandwidth and the growing proliferation of connected devices have changed the ways in which people connect, interact, work and live. As consumers shift to digital media and as virtually all types of media transition to digital formats, we expect brand advertisers to increasingly focus on digital media advertising.

To date, the majority of digital media advertising spend in the United States has been direct response or search-based, according to eMarketer, with brand advertising spend on digital media lagging significantly. During 2010 the median Internet advertising spend among the top U.S. 100 advertisers was only 5.6% of their overall advertising budget, according to data compiled by Advertising Age. We believe that this disparity has been driven by the perception among brand advertisers that digital media was limited in its ability to reach a large high-value audience and to deliver an emotionally impactful message on par with TV-based advertising. However, a confluence of advances in technology and network bandwidth is now enabling brand advertisers to deliver engaging marketing campaigns, at scale, across multiple devices and platforms. Furthermore, the shift in consumer behavior patterns towards digital media is increasing the need for brand advertisers to find solutions that will enable them to effectively and efficiently connect and engage with consumers across all forms of digital media. This need, which we expect to grow as virtually all types of media transition to digital formats, creates the

65

opportunity for technology companies that can leverage the rich data footprint generated by a digitally interconnected society to help brands effectively connect and engage with their prospective customers.

Our Solution

Our end-to-end solution enables brand advertisers to learn about their optimal audience, reach and engage that audience through emotive advertising and analyze and refine their marketing campaigns. Our solution empowers brand advertisers with insights about their audiences and incorporates those insights into effective and efficient marketing campaigns to achieve the brand advertisers’ desired outcomes.

Our solution is comprised of three key focus areas:

• Brand intelligence. We provide brand advertisers with insights into (i) which audiences interact with their brands digitally, (ii) what are the most significant attributes that describe those audiences and (iii) which specific audiences they reach through their digital media campaigns. Our granular segmentation provides deep and actionable insights into a brand’s optimal audience, often identifying segments that may not have been previously targeted.

• Consumer targeting. We enable brand advertisers to reach their prospective customers by using our rich targeting capabilities and massive audience to precisely and efficiently connect with the audiences that are most relevant to their brands.

• User engagement. Our extensive portfolio of engaging formats enables the deployment of digital marketing messages, including TV advertisements, across multiple devices, platforms and media. We are able to dynamically customize the creative messages of marketing campaigns to maximize their relevancy and increase engagement with prospective customers across the devices where consumers spend their time.

The e^X Advertising Intelligence Platform

Technology and data have been the key drivers of our business. Over the past 10 years we have developed our core technology and infrastructure, focusing on integrating our solution and leveraging our extensive data. The foundation of our technology is our e^X Advertising Intelligence Platform. Starting with the analysis of consumer interactions with a brand’s websites, we are able to understand the detailed attributes that best describe those consumers who interact and transact with that brand. We leverage these insights across a wide range of digital media devices and platforms to reach other consumers with similar attributes.

66

Our technology includes the following key elements:

• Advertiser-centric taxonomy. Our advertiser-centric hierarchical taxonomy is comprised of over 50,000 unique attributes. Designed specifically for brand advertisers, it includes attributes that are focused on purchase intent and relevant interests for brands across a wide range of business verticals.

The following screenshots from our e^X Advertising Intelligence Platform show extracts of our taxonomy from the travel, technology and automotive verticals. For example, a brand advertiser looking to learn about their optimal audience can discover both broad audience segments, such as consumers looking to travel to Europe, and more specific segments such as consumers who are looking to travel to Cork, Ireland. To effectively analyze consumer activities, detailed attributes have been specifically designed for each vertical. For example, within the travel vertical, attributes cover consumers looking for flights, hotels and rental cars, among other activities.

• Contextualization technology. Our contextualization technology enables us to extract significant intelligence from over two billion daily user events, primarily associated with consumer activities across our digital content providers’ web pages. We map each of our 50,000 attributes to an associated semantic concept in English, Spanish, German and French. Having so defined the attributes, our contextualization engine analyzes the most frequently visited web pages, performing both syntactic and semantic processing of the textual content to determine the meaning of, and assign specific attributes to, over 300 million unique web pages. When a consumer visits a particular web page analyzed by our platform, we register that the consumer is interested in the attributes associated with that web page. As a result, each of the 50,000 attributes represents an audience segment with similar interests, enabling us to offer highly relevant audiences to brand advertisers.

• High-performance ad-serving platform. Our high-performance ad server technology features advanced targeting, real-time campaign management tools and advanced optimization algorithms. Our ad-serving platform has been designed to be highly integrated and scalable.

67

• Actionable insights. The immense scale and depth of our data enables us to analyze user behavior patterns, calculate the value of individual user attributes to a brand advertiser and identify those that are statistically the most relevant to that brand. Using these insights, we are able to target audience models that most closely represent a brand advertiser’s current consumers.

Our Strengths

Over the last decade we have built solutions to help brand advertisers connect more effectively with their current and prospective customers. As we continue to partner with brand advertisers, we believe that the following attributes and capabilities provide us with competitive advantages:

• Integrated solution. Our data is tightly integrated into all of the components of our solution, powering all elements of the marketing process including brand intelligence, prospective customer targeting, optimization and the dynamic customization of advertisements. Our end-to-end solution enables brand advertisers to meet their objectives across various formats and devices, such as display, video and mobile.

• Technology driven actionable insights. Our technology processes billions of user events each month, providing the intelligence behind our solution for brand advertisers. The immense scale of our data and our advanced analytics technology enable us to transform raw data into actionable insights that our brand advertisers are able to leverage throughout their marketing campaigns.

• Global footprint and scale. Our global reach, consumer data, operational infrastructure and management experience enable us to fulfill the needs of brand advertisers across the globe. We offer our solution to brand advertisers in 25 countries and are positioned to take advantage of the global growth in digital media advertising. To support our global footprint, our contextualization technology is capable of mapping web pages in English, Spanish, German and French.

• Blue chip brand advertisers. We have cultivated relationships with a blue chip customer base. In 2011, we delivered marketing campaigns on behalf of 88 of Advertising Age’s 100 Largest Global Marketers. Additionally, 85.4% of our 2011 revenues were generated from customers that we had served in the prior year. We believe this is driven by our superior results and continued product innovation.

• Proven track record. Our founder-led management team has a track record of growing our business through 10 years of consecutive profitability without any third-party equity capital.

Growth Strategy

Our growth strategy is driven by our focus on helping brand advertisers connect with their prospective customers. We believe that we are in the early stages of a very large, secular shift in our industry, as virtually all types of media transition to digital formats, which is creating a significant opportunity for our business. To capitalize on that change, we plan to pursue the following priorities:

• Expand across mobile devices and other platforms. We intend to leverage the capabilities of our e^X  Advertising Intelligence Platform to expand across the full landscape of digital devices and platforms, including smartphones, tablets, eBooks and connected TVs as well as social media.

• Continue our global expansion. We believe there is significant international demand for our solution, as digital devices are transforming consumer behavior across the world. We intend to expand our footprint by increasing penetration in the 25 countries in which we currently operate, as well as establishing a presence in additional countries.

• Increase awareness and adoption of our solution. As digital advertising shifts towards brand-centric campaigns, brand advertisers will increasingly seek an integrated digital solution that meets their

68

objectives. We believe our solution addresses that need and we intend to grow the market’s awareness and adoption of our platform’s capabilities.

• Continue to evolve our solution. We will continue to enhance our e^X Advertising Intelligence Platform while developing new advertising capabilities and formats that grow and maximize the value we deliver to our brand advertisers.

• Expand our audience and data. We intend to continue to expand our global audience reach and data by growing our relationships and footprint with digital media content providers across devices and platforms.

• Pursue strategic acquisitions. We plan to evaluate and execute on opportunities to acquire complementary businesses and technologies that represent a strategic fit and are consistent with our overall growth strategy.

Sales and Marketing

Our direct sales force cultivates relationships both with advertising agencies and brands. We tailor our sales force to the specific markets and geographies in which we operate. We rely on our sales and marketing organization to promote and sell the unique insights and customized solutions that we develop based on our brand advertisers’ specific needs.

Globally, we go to market with distinct advertiser facing brands, which enable us to compete as a best-of-breed solution within specific product areas, while leveraging the overall capabilities and insights of our e^XAdvertising Intelligence Platform. Our three primary global brands consist of:

• Tribal Fusion — A digital advertising provider focused on the delivery of display and rich-media advertising solutions to brand advertisers, which, as reported by comScore, had a monthly average of 450 million unique visitors worldwide in 2011;

• Firefly Video — A digital advertising provider of engagement video solutions, delivered to relevant brand audiences as full screen experiences that initiate from display advertising units; and

• AdoTube — An in-stream online video advertising provider that offers customized and interactive video advertising that enables brand advertisers to efficiently leverage their existing TV advertisements.

In addition, we sell direct response display advertising through our Full Tango brand. Further, we own Techbargains.com, a website focused on special consumer offers, primarily for technology products. Techbargains.com provides us with an additional property on which to deploy and test our advertising platform and related technology.

Digital Media Content Providers

We have relationships with over 2,000 digital media content providers, including website publishers and mobile application developers. We seek to align our interest with our digital media content providers by, generally, sharing a portion of the revenues we generate from placing advertisements on their properties. In addition, we have direct relationships with most of our digital media content providers, enabling us to offer highly engaging, customized advertising. We believe that the combination of the revenue sharing model, our direct relationships and our platform’s ability to deliver optimal audiences allows us to offer our brand advertisers more effective marketing campaigns.

Competition

We operate in a dynamic and competitive market, influenced by trends in both the overall advertising market as well as the digital advertising industry.

69

In the traditional media space, our primary competitors for brand advertising spend are large media firms — mainly TV broadcasters and aggregators as well as radio broadcasters and print media publishers. Many of these competitors have significant consumer reach, developed client relationships, much larger financial resources and longer operating histories than we have.

Across the digital media landscape, we compete for brand advertising spend with multiple market participants, including entities with significant market presence such as Google, Facebook and Yahoo!, as well as various online advertising networks. Some advertising agencies, including some agencies that buy our solution on behalf of advertisers, also offer media inventory or services that compete directly with our solution. In addition to competing with these various firms for advertising spend, we also compete with some of them for the right to place advertisements on digital media content providers’ properties. Further, many digital media content providers, in particular those with a significant consumer following, sell advertising on their websites and applications directly to advertisers, and these include some of the digital media content providers with whom we place advertisements.

We believe the principal competitive factors in our industry include the following:

• Relationships with leading brand advertisers;

• Audience reach;

• Proven and scalable technology platform;

• Range of customized solutions and formats;

• Value to brand advertisers; and

• Customer service.

We believe that we compete favorably with respect to all of these factors and that we are well positioned as a digital brand advertising platform.

Privacy

Much of the acceptance and widespread use of the Internet across the globe is attributable to the ability of users to access valuable content free of charge. The digital media content providers that bear the cost of creating and maintaining this content do so largely by selling advertisements on their properties, similar to the business model of TV and radio broadcasters. Increasingly, advertisers are recognizing the potential to reach a large and highly relevant audience through digital advertising. The value to them of this advertising is directly proportional to the ability to reach and deliver advertisements to relevant and targeted audiences.

Internet users’ online activity can generate comprehensive information regarding their interests and activities that is valuable to advertisers seeking to direct brand messages to an optimal audience. Advertisers are willing to make a greater investment in digital advertising and pay a higher rate for the efficiency this targeting provides. Therefore businesses such as ours enable digital media content providers to realize higher rates for their advertising inventory.

The use of targeted advertising on the Internet has come under scrutiny by certain consumer and industry groups and regulatory agencies focusing on online privacy, and specifically on the use of cookies and other online tools for tracking purposes. In addition, U.S. and foreign governments are considering new laws that could significantly restrict online advertisers’ ability to collect, augment, analyze, use and share anonymous data, such as regulating the level of consumer notice and consent required before a company can employ cookies or other electronic tools to track consumers online. The European Union and some EU member states have already implemented legislation and regulations requiring advertisers to provide specific types of notice and obtain consent from consumers before using cookies or other technologies to track consumer online behavior and

70

deliver targeted advertisements. In order to comply with these requirements, the use of cookies or other similar technologies may require the user’s affirmative, opt-in consent. In addition, if consumer sentiment regarding online privacy matters changes significantly, large numbers of consumers may take actions to limit the ability of digital advertisers to collect, use and share information to deliver targeted advertising. Further, changes in devices and software could be introduced that make it easier for consumers to prevent the use of cookies.

We believe that the continued availability of a free and content-rich Internet is dependent on balancing the needs of users, content providers and advertisers. If laws are passed requiring opt-in consent to track users, or if significantly more consumers opt-out of tracking than have done so to date, advertisers will realize lower returns from their online campaigns as there would be large user segments for which they have no information. As a result, content providers would likely face lower ability to monetize the content they provide and would need to consider alternatives to support their websites, including charging users for the right to view content that is currently provided free of charge. These changes could also result in substantial disruption to the manner in which we conduct our business.

Intellectual Property

Our success and ability to compete is dependent in part on our ability to develop and maintain the proprietary aspects of our technology and to operate without infringing upon the proprietary rights of others. To accomplish this, we protect the inventions that are the subject of our patent applications and our other intellectual property under trade secret, trademark and copyright law and customary contractual protections.

We have begun to seek patent protection for certain of our technologies and as of March 15, 2012, had two U.S. patent applications on file. In addition, we are also pursuing the registration of our domain names and trademarks. As of March 15, 2012, we had 16 registered trademarks in the United States and five registered trademarks in foreign jurisdictions.

Among other practices, we enter into confidentiality and invention assignment agreements with our employees and contractors, and confidentiality agreements with parties with whom we conduct business, to limit access to, and disclosure and use of, our proprietary information.

Research and Development

Our research and development efforts are primarily focused on building upon the benefits our e^X Advertising Intelligence Platform provides to brand advertisers. We are continuing to expand our advertising intelligence capabilities to more devices and platforms. We will continue to increase our capability to process and analyze increased volumes of data. As we work closely with brand advertisers to best understand the effectiveness of their marketing campaigns, we plan to develop more sophisticated methods of attribution.

As of December 31, 2011, we had a total of 117 employees and contractors involved in product development functions. For the years ended December 31, 2009, 2010 and 2011, our total product development expenses were $3,434, $4,680 and $5,304, respectively.

Employees

As of December 31, 2011 we had 639 employees and contractors, of which 208 were in the United States and 235 were in India. None of our employees are represented by labor unions. We believe that relations with our employees are good.

71

Legal Proceedings

We may, from time to time, be party to litigation and subject to claims incident to the ordinary course of business. As our growth continues, we may become party to an increasing number of litigation matters and claims. The outcome of litigation and claims cannot be predicted with certainty, and the resolution of these matters could materially affect our future results of operations, cash flows or financial position.

Facilities & Technology Infrastructure

We lease a 19,779 square-foot facility for our corporate headquarters in Emeryville, California. We also lease sales offices, support and research and development facilities and data centers in other locations in North America and overseas, including, among others, a facility in Noida, India and a facility in Kiev, Ukraine.

Our technology infrastructure is located in three distinct colocations in San Francisco, California, Ashburn, Virginia and Santa Clara, California. These facilities support production, development and disaster recovery.

72

MANAGEMENT

Executive Officers and Directors

The following table provides information regarding our executive officers and directors as of March 15, 2012:

Name	Age		Position(s)
Executive Officers:
Dilip DaSilva		47	Chairman of the Board, President and Chief Executive Officer
Marvin Tseu		63	Chief Operating Officer
John R. Rettig		46	Chief Financial Officer
Alexander Saldanha		47	Chief Technology Officer
Kesa Tsuda		53	Chief People Officer
Directors:
Steven Cakebread (1)(2)		60	Director
John Farrell (1)(3)		54	Director
Robert Goldberg (2)(3)		51	Director
Dennis Wolf (1)		59	Director

(1) Member of the audit committee.

(2) Member of the compensation committee.

(3) Member of the governance and nominating committee.

Executive Officers

Dilip DaSilva is our founder and has served as our President and Chief Executive Officer and sole director since our incorporation in June 2000. Mr. DaSilva was appointed to our board of directors in June 2000 and was appointed as Chairman of our board of directors in March 2012. Mr. DaSilva holds a B.S. in Bio-Engineering and an M.S. in Computer Science from Brown University. As our Chief Executive Officer, founder and controlling stockholder, Mr. DaSilva has developed an intimate knowledge of our business and operations, and we believe Mr. DaSilva provides a valuable perspective as Chairman of our board of directors. Further, we believe that Mr. DaSilva should serve as a member of our board of directors due to his leadership of our company since its inception.

Marvin Tseu has served as our Chief Operating Officer since July 2009. Prior to that, Mr. Tseu was an advisor and consultant to us from October 2008 to July 2009. From May 2006 to November 2007, Mr. Tseu served as Chief Executive Officer and Director of Axesstel, Inc., a leader in the design and development of fixed wireless voice and broadband data products. From October 2002 to March 2006, Mr. Tseu served as the Chief Executive Officer and a founder of Active Reasoning, Inc., an early stage private company that produces resource management software to help enterprises manage their IT operations. Since 1999, Mr. Tseu has served as Chairman of the Board of Plantronics, Inc., a publicly traded company focused on digital headsets for the enterprise and consumer. Mr. Tseu served as a member of the senior management team at Plantronics from 1984 to 1996. In addition, Mr. Tseu previously held various positions at Plantronics, including Vice President of Sales and Marketing and President of Clarity, one of Plantronics’ subsidiaries. In 1999, Mr. Tseu founded SiteSmith, Inc., a co-location managed services company, which was acquired by Metromedia Fiber Network, Inc. in 2001. Mr. Tseu previously served as Executive Vice President of Marketing and Sales and as a member of the Board of Directors of CIDCO, Inc., a publicly traded telecommunications product company. Mr. Tseu holds a B.A. in Economics from Stanford University.

John R. Rettig has served as our Chief Financial Officer since May 2005. From May 2003 to May 2005, Mr. Rettig served as Vice President of Finance at Reflect.com, an online prestige beauty brand owned by Procter & Gamble. From July 2001 to April 2003, Mr. Rettig served as Vice President of Finance and Controller

73

at Achieva.com/Kaplan, Inc., an e-learning company owned by the Washington Post. In addition, Mr. Rettig served as Chief Financial Officer of E-Global Network., Inc., a software infrastructure company, and as a Senior Director of Finance at Excite@Home, Inc., an Internet search company, where he was Controller of the Media Division from January 1999 to November 2000. Mr. Rettig holds a B.S. in Economics and Business Administration from St. Mary’s College of California.

Alexander Saldanha has served as our Chief Technology Officer since September 2006. Prior to that, Mr. Saldanha was our Senior Architect from December 2005 to August 2006. Prior to joining us, Mr. Saldanha co-founded Softface, a procurement consulting company, where he worked form 1998 to 2004, including as Chief Executive Officer and then Chief Technology Officer. From 1993 to 1998, Mr. Saldanha was with Cadence Design Systems, Inc., a semiconductor design company, where he co-founded Cadence Berkeley Labs and later served on the Senior Leadership Council and was a member of the Technology Steering Group. Mr. Saldanha holds a B. Tech. in Computer Science from the Indian Institute of Technology at Madras, India, an M.S. in Computer Science from the University of California at Berkeley and a Ph.D in Computer Science from the University of California at Berkeley.

Kesa Tsuda has served as our Chief People Officer since July 2011. Prior to joining us, Ms. Tsuda was Senior Vice President, Global Human Resources for Sony Pictures Entertainment, a television and film company, from January 2007 until January 2010. From July 2001 to January 2007, Ms. Tsuda served as Vice President of Human Resources with Idealab, an incubator for technology startup companies. Ms. Tsuda also served as Vice President of Human Resources for Aspen Marketing, a marketing company, Launch Media, a mobile marketing company, and Universal Pictures, a movie studio. In addition, Ms. Tsuda has held business operations and financial planning leadership roles with Comcast and NBC. Ms. Tsuda holds a B.A. in Economics from University of California at Los Angeles.

Directors

Steven Cakebread has served as a member of our board of directors since March 2012. Mr. Cakebread has served as Chief Financial Officer of Pandora Media, Inc., an Internet radio company, since March 2010. He served as Senior Vice President, Chief Financial Officer and Chief Administrative Officer at Xactly Corporation, a provider of on-demand sales performance management software, from February 2009 to August 2009 where he was responsible for financial operations, legal, information technology, facilities and human resources. From February 2008 to January 2009, Mr. Cakebread served as the President and Chief Strategy Officer of Salesforce.com, a customer relationship management service provider, and as Executive Vice President and Chief Financial Officer of Salesforce.com from May 2002 to February 2008. In his various positions at Salesforce.com, Mr. Cakebread was responsible for managing the company’s global financial staff and initiatives and evaluating its software service deliverability. From April 1997 to April 2002, Mr. Cakebread served as Senior Vice President and Chief Financial Officer at Autodesk, a software company. From April 1992 to April 1997, he was Vice President of Finance for Silicon Graphics World Trade, a subsidiary of a high-performance computing and data management company. Mr. Cakebread currently serves on the boards of directors of eHealth, SolarWinds and ServiceSource. Mr. Cakebread holds a B.S. in Accounting from the University of California at Berkeley and an M.B.A. from Indiana University. We believe that Mr. Cakebread should serve as a member of our board of directors due to the perspective and experience he brings from serving in senior executive positions with publicly traded companies.

John Farrell has served as a member of our board of directors since March 2012. Mr. Farrell served as a member of the board of directors of Huntsworth Plc, a global public relations and integrated healthcare communications group, since August 2009. From 2003 to August 2009, Mr. Farrell served as President and Chief Executive Officer of Publicis Group, a global communications group. From 1994 to 2003, Mr. Farrell served as President and Chief Executive Officer of D’Arcy, Masius, Benton & Bowles Worldwide, Inc., an international advertising agency. Before that, Mr. Farrell served in various positions at International Marketing and

74

Promotions Group Limited, including President and Chief Executive Officer. Mr. Farrell holds a B.A. from Nottingham Trent University in the United Kingdom. We believe that Mr. Farrell should serve as a member of our board of directors due to his extensive experience in global communications and advertising firms.

Robert Goldberg has served as a member of our board of directors since March 2012. Mr. Goldberg currently serves as the Managing Director of Crossroads Ventures, an early stage venture capital firm that he founded. In addition, Mr. Goldberg is a Venture Partner at YL Ventures, a venture capital firm focusing on Internet software startup companies, a position that he has held since August 2006. Mr. Goldberg has also served as a Venture Partner at Raptor Ventures since November 2011. Mr. Goldberg served as Senior Vice President of Zynga, Inc., an Internet gaming company, from January 2009 to September 2011. Mr. Goldberg holds a B.S. in Engineering and Applied Science from Columbia University. We believe that Mr. Goldberg should serve as a member of our board of directors due to his extensive experience with senior management and corporate investment and strategy with media, e-commerce and enterprise software companies.

Dennis Wolf has served as a member of our board of directors since March 2012. Mr. Wolf has served as Chief Financial Officer and Executive Vice President of Fusion-io, a computer memory and storage company, since October 2010, as Chief Financial Officer and Senior Vice President from March 2010 to October 2010, and as Chief Financial Officer from November 2009 to March 2010. From January 2009 to April 2009, Mr. Wolf served as Interim Chief Executive Officer and Chief Financial Officer of Finjan Software, Inc., a provider of web security solutions. From March 2005 to June 2008, Mr. Wolf served as Executive Vice President and Chief Financial Officer of MySQL AB, an open source database software company. Prior to MySQL, Mr. Wolf held financial management positions for public high technology companies, including Apple Computer, Inc., Centigram Communications, Inc., Credence Systems Corporation, Omnicell, Inc., Redback Networks Inc. and Sun Microsystems, Inc. Mr. Wolf currently serves as a director of Codexis Inc., and is the Chair of the Audit Committee. In addition, Mr, Wolf has been a director and chair of the audit committee for other publicly and privately held companies including Quantum Corporation, BigBand Networks, Inc., Registry Magic, Inc., Avanex Corporation, Komag, Inc. and Vitria Technology, Inc. He holds a B.A. in Religion from the University of Colorado and an M.B.A. from the University of Denver. We believe that Mr. Wolf should serve as a member of our board of directors due to his extensive experience in senior financial management positions with technology companies.

Our executive officers are elected by, and serve at the discretion of, our board of directors. There are no familial relationships among our directors and officers.

Board Independence and Composition

Our board of directors has undertaken a review of the independence of each director. Based on information provided by each director concerning his background, employment and affiliations, our board of directors has determined that Messrs. Cakebread, Farrell, Goldberg and Wolf do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the applicable rules and regulations of the SEC and the listing requirements and rules of             . In making these determinations, our board of directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director.

In accordance with our amended and restated articles of incorporation and our amended and restated bylaws that will become effective in connection with the completion of this offering, our board of directors will be divided into three classes with staggered three-year terms as follows:

• the Class I directors will be Mr.             , and Mr.              and their terms will expire at our first annual meeting of stockholders held after this offering;

• the Class II directors will be Mr.             and Mr.              and their terms will expire at our second annual meeting of stockholders held after this offering; and

75

• the Class III director will be Mr.             and his term will expire at our third annual meeting of stockholders held after this offering.

At each annual meeting of our stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the total number of directors. The authorized number of directors may be changed by resolution of our board of directors.

In addition, we intend to restate our bylaws upon the completion of this offering to provide that only the board of directors may fill vacancies on the board of directors until the next annual meeting of stockholders.

This classification of the board of directors and the provisions described above may have the effect of delaying or preventing changes in our control or management. See “Description of Capital Stock — Anti-Takeover Provisions — Restated Certificate of Incorporation and Restated Bylaw Provisions.”

Board Committees

Our board of directors has established an audit committee, a compensation committee and a governance and nominating committee. The composition and responsibilities of each of the committees of our board of directors are described below. Members will serve on these committees until their resignation or until as otherwise determined by our board of directors.

Audit Committee

Our audit committee consists of Mr. Cakebread, Mr. Farrell and Mr. Wolf, with Mr. Wolf serving as Chair. Our audit committee oversees our corporate accounting and financial reporting process and internal accounting and financial controls and audits of the financial statements. Our audit committee also: evaluates the independent auditor’s qualifications, independence and performance; engages and provides for the compensation of the independent auditor; establishes the policies and procedures for the retention of the independent auditor to perform any proposed and permissible non-audit services; reviews our annual audited and quarterly unaudited financial statements; reviews our critical accounting policies, our disclosure controls and procedures and internal controls over financial reporting; and discusses with management and the independent auditor the results of the annual audit and the reviews of our quarterly unaudited financial statements. Our board of directors has determined that each of our audit committee members meets the requirements for independence and financial literacy under the applicable rules and regulations of the SEC and             . Our board of directors has determined that Mr.              is an audit committee financial expert as defined under the applicable rules and regulations of the SEC. The audit committee operates under a written charter that satisfies the applicable rules of the SEC and the listing requirements and rules of             .

Compensation Committee

Our compensation committee consists of Mr. Cakebread and Mr. Goldberg, with Mr. Goldberg serving as Chair. Our compensation committee reviews our overall compensation philosophy and related policies relating to the compensation and benefits of our officers and employees, including reviewing and approving goals and objectives relevant to compensation of our Chief Executive Officer and other executive officers, evaluating the performance of these officers in light of those goals and objectives, setting compensation of these officers based on such evaluations and otherwise overseeing our compensation plans, policies and programs for our executive officers. The compensation committee administers our employee equity plans. Our board of directors has determined that each member of our compensation committee meets the requirements for independence under the applicable rules and regulations of              and Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). The compensation committee operates under a written charter that satisfies the applicable listing requirements and rules of             .

76

Governance and Nominating Committee

Our governance and nominating committee consists of Mr. Farrell and Mr. Goldberg, with Mr. Goldberg serving as Chair. The governance and nominating committee is responsible for overseeing evaluations of our board of directors and its committees and making recommendations regarding candidates to serve on our board of directors and the size and composition of our board of directors. In addition, the governance and nominating committee is responsible for overseeing our codes of conduct and reporting and making recommendations concerning governance matters. The governance and nominating committee operates under a written charter to be effective prior to the closing of this offering that satisfies the applicable listing requirements and rules of             .

Code of Business Ethics and Conduct

In connection with this offering, our board of directors will adopt a code of business conduct and ethics that will apply to all of our employees and officers and a code of conduct that will apply to our non-employee directors. Following the closing of this offering, the full text of these codes will be posted on the investor relations section of our website. We intend to disclose future amendments to certain provisions of these codes, or waivers of these provisions, on our website and/or in public filings.

Compensation Committee Interlocks and Insider Participation

None of the members of our compensation committee is currently, or has been at any time, an officer or employee of ours. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board of directors or compensation committee.

Director Compensation

In 2011 our board of directors consisted of a single director, Mr. DaSilva. Mr. DaSilva did not receive additional compensation for serving as a director. Upon their election to the board of directors in March 2012, each of our newly elected directors received an award of stock options and restricted stock units under our 2010 Equity Incentive Plan. Following the completion of this offering, we intend to compensate our non-employee directors with a combination of cash and equity.

77

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

General

This compensation discussion and analysis, which should be read together with the compensation tables set forth below, provides information regarding our executive compensation program for our named executive officers: Dilip DaSilva, our Chairman, President and Chief Executive Officer; Marvin Tseu, our Chief Operating Officer; John R. Rettig, our Chief Financial Officer; Alexander Saldanha, our Chief Technology Officer; and Kesa Tsuda, our Chief People Officer.

To date our executive compensation program has been administered by our board of directors, which has until recently consisted only of Mr. DaSilva, our controlling stockholder. Our executive compensation program is designed to enable us to attract and retain individuals with the skills and experience necessary for us to achieve our corporate objectives and to motivate executive performance that increases stockholder value by aligning compensation with our performance.

Our Compensation Philosophy

We operate in a highly competitive business environment, which is characterized by frequent technological advances, rapidly changing market requirements and the emergence of new market entrants. To succeed in this environment, we must continually develop and refine new and existing products and services, and demonstrate an ability to quickly identify and capitalize on new business opportunities. We recognize that our success is in large part dependent on our ability to attract and retain talented employees. Therefore, we maintain, and intend to modify as necessary, an executive compensation and benefits program designed to attract, retain and incentivize a talented, qualified and committed team of executive officers that share our vision and desire to achieve our goals.

We endeavor to create and maintain compensation programs based on performance and to align the interests of our executive officers and stockholders. The principles and objectives of our compensation and benefits program for our executive officers are to provide compensation opportunities that:

• Attract and retain qualified executives. Our business is competitive and our headquarters are in the San Francisco Bay Area, where there is significant competition for executive talent. In light of these factors, a key objective of our compensation is to allow us to attract and retain qualified executives. We believe that our success in retaining key executives to date reflects some measure of success of our compensation program in this regard. We also expect that we may wish to, or may be required to, add new individuals to our executive team from time to time, as was the case with our relatively recent appointment of our Chief People Officer. For us to be appropriately positioned to attract new talent as needed, we must be prepared to, and be perceived as an employer that is willing to, offer competitive compensation.

• Motivate executive officers to achieve our business goals. We seek to motivate our executive officers to help us achieve profitable growth. We provide discretionary cash bonus payments that are tied to success against personal and corporate goals that Mr. DaSilva reviews with each executive.

• Provide direct incentives for the enhancement of long-term stockholder value. We seek to further align the interests of our executives and our stockholders by providing long-term incentives to increase stockholder value. These incentives have been primarily in the form of stock options with an initial exercise price equal to the fair market value of our common stock. As such, our executives will realize value from these options, which vest over a prescribed period, only if the value of our company increases.

78

Compensation-Setting Process.

Mr. DaSilva has served as our sole director from our inception until March 2012, at which point he became Chairman of our board of directors. For 2011 and prior years, Mr. DaSilva was responsible for overseeing our executive compensation program, as well as determining and approving the ongoing compensation arrangements with our named executive officers.

Initial compensation. The initial compensation arrangements with our officers, including the named executive officers, were negotiated with each individual executive by Mr. DaSilva. He also determined his own initial compensation arrangement and the annual changes to his compensation. Generally, the focus of these arrangements has been to attract skilled individuals to help us meet our business objectives. At the same time, we have sought to be prudent in establishing initial compensation levels so as not to pay more than is required to attract executives nor to burden ourselves with an unduly expensive management compensation structure.

Compensation review. As our sole director, Mr. DaSilva reviewed the compensation levels for our executive officers. Specifically, he determined the base salary increases, if any, and the amount of cash bonus for which each executive is eligible. Any changes in salary or bonus reflected compensation levels that Mr. DaSilva determined to be commensurate with an executive officer’s individual performance, as well as our company’s performance. Any such changes also reflected Mr. DaSilva’s consideration of the compensation that would optimize our ability to retain each executive. Mr. DaSilva has also made final determinations regarding any equity compensation to be awarded to our executive officers.

We have added employees of various levels of seniority to support our growth. In the process of doing so, we gained knowledge of pay practices in the market, and this knowledge has assisted us in framing the level of compensation that we have extended to our executives.

In 2012, we expanded our board of directors and established a compensation committee of the Board of Directors consisting entirely of independent directors. The compensation committee has responsibility for administering our executive compensation programs in the future and for administering our equity incentive plans. We expect that Mr. DaSilva will take an active role in providing recommendations to the compensation committee regarding executive compensation, other than his own compensation, given his knowledge of past compensation decisions and the rationale for such decisions and because, as our Chief Executive Officer, he has key insights as to the performance of our executives.

At this time all of our executives are continuing to be paid at the base salary rate that they were receiving at the end of 2011. Mr. DaSilva established target cash bonuses for 2012 that are the same as the target bonuses for 2011. We expect that our compensation committee will address executive compensation for 2012 in the first half of the year.

Role of compensation consultant. We have typically not retained compensation consultants or advisors. We have recently engaged a compensation consultant, Compensia, to assist the board of directors in evaluating our levels and types of executive compensation and to recommend changes for 2012. Among other objectives, Compensia was engaged to assist in identifying a group of peer companies for purposes of assessing market levels of compensation, to gather and analyze compensation data from those peer companies, and to advise on structuring our compensation programs for 2012. The compensation committee is responsible for managing Compensia’s activities.

Elements of Compensation

Our executive officers’ compensation currently has two primary elements of: (i) cash compensation in the form of salary and annual bonus and (ii) equity awards in the form of stock option grants. In addition, we provide our executive officers with benefits that are available generally to all salaried employees.

79

Our goal is to provide salaries that are sufficient to retain our executive team while balancing our desire to conserve our cash for investments to grow our business. We believe that a substantial portion of the cash compensation that our executives are eligible to receive should be tied to corporate and individual performance. Our long-term equity-based incentive awards are designed to motivate our executives to increase stockholder value over a longer term and to provide a retention incentive over the vesting period of the award. We view the cash compensation as distinct from the equity component, and believe that each must be regarded as competitive by our executives to help us to achieve our compensation objectives.

Base Salary. Mr. DaSilva has determined the base salaries of our executives based on the compensation philosophy and compensation-setting process discussed above.

We did not adjust salaries for Mr. DaSilva, Mr. Tseu or Mr. Rettig in 2011 from 2010 because we felt their respective salaries were sufficient to retain them. Mr. Saldanha’s salary was increased by 20% during 2011 in recognition of his significant contribution to our product development strategy. Ms. Tsuda’s salary was established in the process of our recruiting her to join us in 2011. We did not benchmark salaries of our executives to specific market levels for 2011 or engage in a market review process. The differences in base salaries among the named executive officers for 2011 are not significant, which reflects our expectation that each member of the senior management team will be a major contributor to the success of the business.

Cash Bonuses. Our cash bonus program for executives for 2011, as was the case for 2010, was discretionary. In the early part of the year, Mr. DaSilva discussed his expectations for each executive (except for himself) with the respective executive, and informally set a fixed amount of potential bonus for that executive. Mr. DaSilva made a quarterly determination for each executive’s performance and, if consistent with expectations, approved payment of the applicable bonus. The potential bonus for each of our named executive officers was the same in 2011 as in 2010. Mr. DaSilva determined that each of our named executive officers earned his or her cash bonus for 2011. As our sole director, Mr. DaSilva established, and approved the payout of, his own cash bonuses in 2010 and 2011. The higher bonus for Mr. DaSilva relative to the other executives was due to his role as the head of our company with the highest level of responsibility.

Equity-Based Compensation. We have granted equity awards to executive officers and other key personnel to incentivize them to increase the value of our stock. Accordingly, we believe these awards align the interests of our executives with those of our stockholders. In addition, our stock option awards to executives have vesting periods that we believe serve a meaningful role in executive retention. We have not in the past taken account of the amount of previous gains from equity awards in setting current period awards, nor have we established equity ownership guidelines or requirements.

During 2011, we made the equity award grants to named executive officers as set forth in the “Grants of Plan-Based Awards” table that appears below. In making the stock option awards in 2011, Mr. DaSilva sought to generally equalize the number of outstanding stock options held by our named executive officers, other than Ms. Tsuda, who joined us in 2011.

As a private company that did not grant equity awards to executives on a regular basis, we did not adopt a policy around the timing of our equity awards. After we become a public company, we anticipate adopting a policy for making annual awards to executives, and making other equity awards throughout the year to new hires and upon promotions or similar events.

Employment Agreements and Change of Control Arrangements

Each of our named executive officers, except for our Chief Executive Officer, has received stock options in the past. Certain of these options provide for accelerated vesting of outstanding, unvested equity awards in the event of an involuntary termination of employment in connection with, or within 12 months following, the

80

consummation of a corporate transaction. In addition, Mr. Rettig’s employment agreement with us provides that he will receive six months of severance pay in the event that his employment is terminated for a reason other than cause.

We determined that these agreements appropriately balanced our needs to offer a competitive level of change in control protection to our executives and to induce our executives to remain in our employ through the potentially disruptive conditions that may exist around the time of a change of control, while not unduly rewarding executives for a termination of their employment. Because our equity change of control terms are “double trigger” provisions, our executives are not entitled to the equity acceleration by the mere occurrence of the change of control, unless the surviving entity of the transaction refuses to assume or replace the outstanding options. We believe they offer an incentive for the executive to remain in the employ of our company if such continuation is required by our partner in a change of control transaction.

For further detailed financial information concerning the severance and change in control arrangements with our named executive officers, please see the information contained in the section entitled “Potential Payments On Termination and Termination Following Change in Control.”

Other Benefits

Our executive officers are eligible to participate in all of our employee benefit plans on the same basis as our other employees, such as medical, dental, vision, group life, disability and accidental death and dismemberment insurance and our 401(k) plan, subject to applicable law. We also provide paid time off and paid holidays to all of our employees, including our executive officers, which we intend to be comparable to those provided at our peer companies.

Accounting Treatment

We account for equity compensation paid to our employees under ASC Topic 718 which requires us to estimate and record an expense over the service period of the award. Cash compensation is recorded as an expense at the time the obligation is accrued. We structure the cash compensation element of our incentive compensation so that it is taxable to our executives at the time it becomes available to them. We currently intend that all cash compensation paid will be tax deductible by us. However, with respect to equity compensation awards, while any gain recognized by employees from nonqualified options granted at fair market value should be deductible, to the extent that an option constitutes an incentive stock option, gain recognized by the optionee will not be deductible if there is no disqualifying disposition by the optionee. If we grant restricted stock or restricted stock unit awards that are not subject to performance vesting, they may not be fully deductible by us at the time the award is otherwise taxable to employees.

Tax Deductibility of Executive Compensation

Section 162(m) of the Code provides that compensation in excess of $1 million paid to the chief executive officer or to any of the other four most highly compensated executive officers of a company will not be deductible for federal income tax purposes unless such compensation is paid pursuant to one of the enumerated exceptions set forth in Section 162(m). Our primary objective in designing and administering compensation policies is to support and encourage the achievement of our long-term strategic goals and to enhance stockholder value. When consistent with this compensation philosophy, we also intend to attempt to structure compensation programs such that compensation paid thereunder will be tax deductible by us, but the compensation committee will have authority to grant non-deductible compensation. In general, stock options granted under our stock option plans are intended to qualify under, and comply with, the “performance based compensation” exemption provided under Section 162(m), thus excluding from the Section 162(m) compensation limitation any income recognized by executives pursuant to such stock options. The compensation committee intends to review periodically the potential impacts of Section 162(m) in structuring and administering our compensation programs.

81

In addition, our compensation committee intends to take into account whether components of our executive compensation program may be subject to the penalty tax associated with Section 409A of the Code, and aims to structure the elements of executive compensation to be compliant with or exempt from Section 409A to avoid such potential adverse tax consequences.

2011 Summary Compensation Table

The following table provides information regarding compensation of our named executive officers for 2011.

Name and Principal Position	Year		Salary ($)		Bonus ($)		Option Awards ($) (1)		All Other Compensation ($) (2)		Total ($)
Dilip DaSilva
Chief Executive Officer		2011		300,000		100,000		—		13,519		413,519
John R. Rettig
Chief Financial Officer		2011		300,000		50,000		338,000		13,998		701,998
Marvin Tseu
Chief Operating Officer		2011		300,000		50,000		169,000		1,419		520,419
Alexander Saldanha
Chief Technology Officer		2011		275,000		50,000		—		13,998		338,998
Kesa Tsuda (3)
Chief People Officer		2011		119,391		27,500		840,000		5,460		992,351

(1) Amounts reflect the grant date fair value of the option awards granted to our named executive officers during this fiscal year as computed in accordance with FASB ASC Topic 718. The assumptions used in calculating the grant date fair value of the option awards reported in this column are set forth in Note 10, “Stock-Based Compensation,” to the notes to our financial statements included in this prospectus. Note that the amounts reported in this column reflect the accounting cost for these stock options and do not correspond to the actual economic value that may be realized upon exercise by our named executive officers.

(2) Amounts referenced in this column include medical, dental, vision, life/accidental death and dismemberment and short-term disability insurance premiums paid by us on behalf of each named executive officer during 2011. All of these benefits are provided to the named executive officers on the same terms as provided to all of our regular full-time employees based in the United States.

(3) Ms. Tsuda became our Chief People Officer in July 2011. Ms. Tsuda’s salary was pro-rated to reflect her partial year service.

Grants of Plan-Based Awards Table

The following table provides information regarding stock option awards made to our named executive officers during 2011.

Name	Grant Date		Number of Securities Underlying Options (#)			Exercise Price of Option Awards ($/Sh)		Grant Date Fair Value of Option Awards (1) $
Dilip DaSilva		—		—			—		—
John R. Rettig		4/5/2011		200,000	(2)		1.34		338,000
Marvin Tseu		4/5/2011		100,000	(2)		1.34		169,000
Alexander Saldanha		—		—			—		—
Kesa Tsuda		12/19/2011		400,000	(3)		2.10		840,000

(1) Amounts reflect the grant date fair value of the option awards granted to our named executive officers during this fiscal year as computed in accordance with FASB ASC Topic 718. The assumptions used in calculating the grant date fair value of the option awards reported in this column are set forth in Note 10, “Stock-Based Compensation,” to the notes to our financial statements included in this prospectus. Note that the amounts reported in this column reflect the accounting cost for these stock options and do not correspond to the actual economic value that may be realized upon exercise by our named executive officers.

(2) 1/48th of the total number of options granted vest monthly over the four years following the vesting commencement date of January 1, 2011. Vesting is contingent on the optionee’s continued service with us.

(3) 25% of the total number of options granted vest on the 12 month anniversary of the vesting commencement date of July 1, 2011, and 1/48th of the total number of shares vest monthly thereafter. Vesting is contingent on the optionee’s continued service with us.

82

Outstanding Equity Awards at Year-End

The following table provides information regarding each unexercised stock option held by each of our named executive officers as of December 31, 2011.

Name	Grant Date		Option awards
			Number of Securities Underlying Unexercised Options Exercisable (#)		Number of Securities Underlying Unexercised Options Unexercisable (#)			Option Exercise Price ($)		Option Expiration Date
Dilip DaSilva		—		—		—			—		—
John Rettig		6/24/2010		239,583		260,417	(1)		1.27		6/23/2020
		10/8/2010		281,250		18,750	(2)		1.31		3/12/2018
		4/5/2011		45,833		154,167	(3)		1.34		4/4/2021
Marvin Tseu		12/11/2009		100,000		—			1.21		12/10/2019
		12/11/2009		483,333		316,667	(4)		1.21		12/10/2019
		4/5/2011		22,916		77,084	(3)		1.34		4/4/2021
Alexander Saldanha		9/29/2006		34,375		—			0.75		9/29/2016
		12/19/2008		125,000		—			0.56		12/1/2015
		6/24/2010		239,583		260,417	(1)		1.27		6/23/2020
		10/8/2010		75,000		—			1.31		3/30/2017
		10/8/2010		234,375		15,625	(2)		1.31		3/12/2018
Kesa Tsuda		12/19/2011		—		400,000	(5)		2.10		12/18/2021

(1) 1/48th of the total number of options granted vest monthly over the four years following the vesting commencement date of January 1, 2010. Vesting is contingent on the optionee’s continued service with us.

(2) 1/48th of the total number of options granted vest monthly over the four years following the vesting commencement date of March 1, 2008. Vesting is contingent on the optionee’s continued service with us.

(3) 1/48th of the total number of options granted vest monthly over the four years following the vesting commencement date of January 1, 2011. Vesting is contingent on the optionee’s continued service with us.

(4) 1/48th of the total number of options granted vest monthly over the four years following the vesting commencement date of July 1, 2009. Vesting is contingent on the optionee’s continued service with us.

(5) 25% of the total number of options granted vest on the 12 month anniversary of the vesting commencement date of July 1, 2011, and 1/48th of the total number of shares vest monthly thereafter. Vesting is contingent on the optionee’s continued service with us.

Potential Payments on Termination and Termination Following Change in Control

Each of our named executive officers, except for our Chief Executive Officer, has received stock options in the past. Certain of these options provide for an acceleration of outstanding, unvested options in the event of an involuntary termination of employment within 12 months following the consummation of a corporate transaction. A “corporate transaction” is defined as a stockholder-approved transaction that involves: (i) a merger or consolidation in which we are not the surviving entity; (ii) the sale, transfer or other disposition of all or substantially all of our assets of the Company; or (iii) any reverse merger in which we are the surviving entity but in which securities possessing more than fifty percent (50%) of the total combined voting power of our outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger. An “involuntary termination” is defined as the termination of the executive’s employment (i) by us (or a successor) other than for death, disability or cause; or (ii) by the executive within 12 months following a corporate transaction resulting from: (a) a material reduction in the executive’s job responsibilities; (b) relocation of the executive’s then-current work site to a location more than 50 miles away; or (c) a reduction in the executive’s then-current base salary by at least 20%. Unvested options held by our named executive officers would vest in full if not assumed by the surviving entity in connection with a corporate transaction.

83

In addition, Mr. Rettig’s employment agreement with us provides that he will receive six months of severance pay in the event that we terminate his employment for a reason other than cause.

The following is a description of the stock option arrangements for each of our named executive officers: Certain of Mr. Tseu’s and Mr. Rettig’s stock options are subject to full acceleration of the unvested portion in the event of an involuntary termination of employment in connection with, or within 12 months of, the consummation of a corporate transaction. Other stock options held by Mr. Tseu and Mr. Rettig are subject to 12 months of acceleration in the event of an involuntary termination of employment in connection with, or within 12 months of, the consummation of a corporate transaction. Certain of Mr. Saldanha’s stock options are not subject to any change of control provisions. Of the remainder, some are subject to full acceleration of the unvested portion in the event of an involuntary termination of employment in connection with, or within 12 months of, the consummation of a corporate transaction, and others are subject to 12 months of acceleration in the event of an involuntary termination of employment in connection with, or within 12 months of, the consummation of a corporate transaction. Ms Tsuda’s stock options are subject to 12 months of acceleration in the event of an involuntary termination of employment in connection with, or within 12 months of, the consummation of a corporate transaction.

84

The following table summarizes the base salary, as applicable, and the value of the acceleration of unvested stock options that each named executive officer would have been entitled to receive assuming a qualifying termination in connection with or following a corporate transaction as of December 31, 2011. Acceleration values are based on the difference between the assumed initial public offering price of $             per share which is the midpoint of the estimated public offering price range set forth on the cover page of this prospectus minus the exercise price.

Name	Termination or Change in Control Event	Salary Continuation $		Full Acceleration of Options Not Assumed in a Corporate Transaction $		Equity Acceleration Following Termination of Employment $
Dilip DaSilva	Involuntary Termination		—		—		—
	Change in Control and Involuntary Termination		—		—		—
	Change in Control and Employment Continues		—		—		—
John Rettig	Involuntary Termination		150,000
	Change in Control and Involuntary Termination		150,000
	Change in Control and Employment Continues		—
Marvin Tseu	Involuntary Termination		—
	Change in Control and Involuntary Termination		—
	Change in Control and Employment Continues		—
Alexander Saldanha	Involuntary Termination		—
	Change in Control and Involuntary Termination		—
	Change in Control and Employment Continues		—
Kesa Tsuda	Involuntary Termination		—
	Change in Control and Involuntary Termination		—
	Change in Control and Employment Continues		—

Employee Benefit Plans

2000 Equity Incentive Plan

Our board of directors adopted our 2000 Equity Incentive Plan, or our 2000 Plan, in June 2000, and our stockholders approved the plan in August 2000. The 2000 Plan has been amended from time to time. As of December 31, 2011, options to purchase 4,080,560 shares of our common stock were outstanding under our 2000 Plan. The 2000 Plan provided for the grant of incentive stock options that qualify for favorable tax treatment to their recipients under Section 422 of the Code, nonqualified stock options, restricted stock and stock bonuses. The 2000 Plan terminated in June 2010, and no additional options or equity awards may be granted under the 2000 Plan. However, all stock options outstanding on the termination of the 2000 Plan will continue to be governed by the terms and conditions of the 2000 Plan. Options granted under the 2000 Plan are subject to terms substantially similar to those described below with respect to options granted under the 2010 Equity Incentive Plan.

85

2010 Equity Incentive Plan

Our board of directors adopted, and our stockholders approved our 2010 Equity Incentive Plan, or the 2010 Plan, in June 2010. The 2010 Plan provides for the grant of incentive stock options that qualify for favorable tax treatment to their recipients under Section 422 of the Code, nonqualified stock options, restricted stock, restricted stock units and stock bonuses. Incentive stock options may be granted only to our employees and those of any of our subsidiaries. Other types of awards may be granted to our employees, directors, officers, consultants, certain independent contractors and advisors and those of any of our subsidiaries. The exercise price of incentive stock options must be at least equal to the fair market value of our common stock on the date of grant, and the exercise price of nonqualified stock options will be determined by the plan administrator. The exercise price of incentive stock options granted to 10% stockholders must be at least equal to 110% of the fair market value of our common stock on the date of grant. The maximum permitted term of options granted under our 2010 Plan is ten years, except that incentive stock options granted to 10% holders will have a maximum term of five years. The purchase price for restricted stock will be determined by the plan administrator. Restricted stock units may be settled in cash or stock and no purchase price applies. Stock bonuses may be awarded in consideration of services provided and may be subject to performance vesting. In the event of a change in control, the 2010 Plan provides that all options that are not assumed by the successor entity or substituted for comparable options of the successor entity shall vest in full prior to that change in control unless assumed or replaced with a cash incentive program and all unexercised options expire on the consummation of the change in control.

As of December 31, 2011, we had reserved 12,000,000 shares of our common stock for issuance under the 2010 Plan. As of December 31, 2011, options to purchase 10,178,488 of these shares remained outstanding, we had sold 591,250 shares of restricted stock pursuant to restricted stock purchase agreements under the 2010 Plan and 1,230,262 of these shares remained available for future grant. The options outstanding as of December 31, 2011 had a weighted average exercise price of $1.47. We expect that our 2012 Equity Incentive Plan will be effective upon the date of this prospectus. As a result, we will not grant any additional options under the 2010 Plan following that date and the 2010 Plan will terminate. However, any outstanding options or other awards granted under the 2010 Plan will remain outstanding, subject to the terms of our 2010 Plan and stock option agreements, until the options are exercised or until they terminate or expire by their terms.

2012 Equity Incentive Plan

We expect that prior to the closing of this offering our board of directors will adopt and our stockholders will approve our 2012 Equity Incentive Plan, or our 2012 Plan. We do not expect to utilize our 2012 Plan until after the closing of this offering, at which point no further grants will be made under our 2010 Plan. No awards have been granted and no shares of our common stock have been issued under our 2012 plan. Our 2012 Plan will provide for the grant of incentive stock options within the meaning of Section 422 of the Code to our employees and our parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of stock compensation to our employees, including officers, consultants and directors. Our 2012 Plan will also provide for the grant of performance cash awards to our employees, consultants and directors.

Authorized Shares. The maximum number of shares of our common stock that may be issued under our 2012 Plan is             shares. The number of shares of our common stock reserved for issuance under our 2012 Plan will automatically increase on January 1 of each year, for a period of ten years, from January 1, 2013 continuing through January 1, 2022, by the lesser of         % of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our board of directors.

Shares issued under our 2012 Plan may be authorized but unissued or reacquired shares of our common stock. Shares subject to stock awards granted under our 2012 Plan that expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, will become available for future grant under

86

our 2012 Plan. Additionally, shares issued pursuant to stock awards under our 2012 Plan that we repurchase or that are forfeited, as well as shares reacquired by us as consideration for the exercise or purchase price of a stock award or to satisfy tax withholding obligations related to a stock award, will become available for future grant under our 2012 Plan.

Administration. Our board of directors, or a duly authorized committee thereof, has the authority to administer our 2012 Plan. We expect that our board of directors will delegate its authority to administer our 2012 Plan to our compensation committee under the terms of the compensation committee’s charter. Our board of directors may also delegate to one or more of our officers the authority to (i) designate employees other than officers to receive stock options or other stock rights and (ii) determine the number of shares of our common stock to be subject to such stock awards. Subject to the terms of our 2012 Plan, the administrator has the authority to determine the terms of awards, including recipients, the exercise price or strike price of stock awards, if any, the number of shares subject to each stock award, the fair market value of a share of our common stock at the date of grant, the vesting schedule applicable to the awards, together with any vesting acceleration, the form of consideration, if any, payable upon exercise or settlement of the stock award and the terms and conditions of the award agreements for use under our 2012 Plan.

The administrator has the power to modify outstanding awards under our 2012 Plan. Subject to the terms of our 2012 Plan, the administrator has the authority to reprice any outstanding option or stock appreciation right, cancel and re-grant any outstanding option or stock appreciation right in exchange for new stock awards, cash or other consideration, or take any other action that is treated as a repricing under generally accepted accounting principles, with the consent of any adversely affected participant.

Terms of Awards. No more than                  shares may be issued under the 2012 Plan as incentive stock options. The exercise price of stock options must be at least equal to the fair market value of our common stock on the date of grant. The exercise price of incentive stock options granted to 10% stockholders must be at least equal to 110% of that value.

The administrator may provide for options to be exercised only as they vest or to be immediately exercisable with any shares issued on exercise being subject to our right of repurchase at the exercise price, that lapses as the shares vest. In general, options will vest over a four-year period. The maximum term of options granted under our 2012 Plan will be ten years, except that incentive stock options granted to 10% stockholders will have a maximum term of five years.

A restricted stock award is an offer by us to sell shares of our common stock subject to restrictions. The price (if any) of a restricted stock award will be determined by the compensation committee. Unless otherwise determined by the compensation committee at the time of award, vesting will cease on the date the participant no longer provides services to us and unvested shares will be forfeited to us.

Stock appreciation rights provide for payment in cash or shares of our common stock to the holder based upon the difference between the fair market value of our common stock on the date of exercise and the stated exercise price up to a maximum amount of cash or number of shares. Stock appreciation rights may vest based on time or achievement of performance conditions.

Restricted stock units represent the right to receive shares of our common stock at a specified date in the future, subject to forfeiture of that right because of termination of employment or failure to achieve certain performance conditions. If a restricted stock unit has not been forfeited, then on the date specified in the restricted stock unit agreement, we will deliver to the holder of the restricted stock unit whole shares of our common stock (which may be subject to additional restrictions), cash or a combination of our common stock and cash.

Performance shares are performance awards that cover a number of shares of our common stock that may be settled upon achievement of the pre-established performance conditions in cash or by issuance of the underlying

87

shares. These awards are subject to forfeiture prior to settlement because of termination of employment or failure to achieve the performance conditions.

Stock bonuses may be granted as additional compensation for service and/or performance, and therefore not be issued in exchange for cash.

Awards granted under our 2012 Plan may not be transferred in any manner other than by will or by the laws of descent and distribution or as determined by our compensation committee.

Section 162(m) Limits. No participant may be granted stock awards covering more than             shares of our common stock under our 2012 Plan during any calendar year pursuant to stock options, stock appreciation rights and other stock awards whose value is determined by reference to an increase over an exercise price or strike price of at least 100% of the fair market value of our common stock on the date of grant. Additionally, no participant may be granted in a calendar year a performance stock award covering more than             shares of our common stock or a performance cash award having a maximum value in excess of $        under our 2012 Plan. Such limitations are designed to help assure that any deductions to which we would otherwise be entitled with respect to such awards will not be subject to the $1 million limitation on the income tax deductibility of compensation paid per covered executive officer imposed by Section 162(m) of the Code.

Performance Awards. Our 2012 Plan permits the grant of performance-based stock and cash awards that may qualify as performance-based compensation that is not subject to the $1 million limitation on the income tax deductibility of compensation paid per covered executive officer imposed by Section 162(m) of the Code. To help assure that the compensation attributable to performance-based awards will so qualify, our compensation committee can structure such awards so that the stock or cash will be issued or paid pursuant to such award only following the achievement of specified pre-established performance goals during a designated performance period.

Corporate Transactions. Our 2012 Plan provides that in the event of a specified corporate transaction, including without limitation a consolidation, merger, or similar transaction involving our company, the sale, lease or other disposition of all or substantially all of the assets of our company or the consolidated assets of our company and our subsidiaries, or a sale or disposition of at least 50% of the shares of outstanding capital stock of our company, the administrator will determine how to treat each outstanding stock award. The administrator may:

• arrange for the assumption, continuation or substitution of a stock award by a successor corporation;

• arrange for the assignment of any reacquisition or repurchase rights held by us to a successor corporation;

• accelerate the vesting of the stock award and provide for its termination prior to the effective time of the corporate transaction;

• arrange for the lapse, in whole or in part, of any reacquisition or repurchase right held by us; or

• cancel the stock award prior to the transaction in exchange for a cash payment, which may be reduced by the exercise price payable in connection with the stock award.

The administrator is not obligated to treat all stock awards or portions of stock awards, even those that are of the same type, in the same manner. The administrator may take different actions with respect to the vested and unvested portions of a stock award.

Change in Control. The administrator may provide, in an individual award agreement or in any other written agreement between a participant and us that the stock award will be subject to additional acceleration of

88

vesting and exercisability in the event of a change in control. In the absence of such a provision, no such acceleration of the stock award will occur.

Plan Amendment or Termination. Our board has the authority to amend, suspend, or terminate our 2012 plan, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. No incentive stock options may be granted after the tenth anniversary of the date our board of directors adopted our 2012 Plan.

2012 Employee Stock Purchase Plan

We expect that our board will adopt and our stockholders will approve prior to the closing of this offering, our 2012 Employee Stock Purchase Plan, or our 2012 ESPP. We do not expect to grant purchase rights under our 2012 ESPP until after the closing of this offering.

The maximum number of shares of our common stock that may be issued under our 2012 ESPP is             shares. Additionally, the number of shares of our common stock reserved for issuance under our 2012 ESPP will automatically increase on January 1 of each year, beginning on January 1 of the year after the closing of this offering and ending on and including January 1, 2022, by the lesser of (i)     % of the total number of shares of our common stock outstanding on December 31 of the preceding calendar year, (ii)             shares of or (iii) such lesser number of shares of common stock as determined by our board of directors. Shares subject to purchase rights granted under our 2012 ESPP that terminate without having been exercised in full will become available for future issuance our 2012 ESPP.

Our board of directors, or a duly authorized committee thereof, will administer our 2012 ESPP. We expect that our board of directors will delegate its authority to administer our 2012 ESPP to our compensation committee under the terms of the compensation committee’s charter.

Employees, including executive officers, of ours or any of our designated affiliates may have to satisfy one or more of the following service requirements before participating in our 2012 ESPP, as determined by the administrator: (i) customary employment with us or one of our affiliates for more than 20 hours per week and more than five months per calendar years or (ii) continuous employment with us or one of our affiliates for a minimum period of time, not to exceed two years, prior to the first date of an offering. An employee may not be granted rights to purchase stock under our 2012 ESPP if such employee (i) immediately after the grant would own stock possessing 5% or more of the total combined voting power or value of all classes of our common stock, or (ii) holds rights to purchase stock under our 2012 ESPP that would accrue at a rate that exceeds $25,000 worth of our stock for each calendar year that the rights remain outstanding.

Our 2012 ESPP is intended to qualify as an employee stock purchase plan under Section 423 of the Code. The administrator may specify offerings with a duration of not more than 27 months, and may specify one or more shorter purchase periods within each offering. Each offering will have one or more purchase dates on which shares of our common stock will be purchased for the employees who are participating in the offering. The administrator, in its discretion, will determine the terms of offerings under our 2012 ESPP.

Our 2012 ESPP permits participants to purchase shares of our common stock through payroll deductions up to 15% of their earnings. Unless otherwise determined by the administrator, the purchase price of the shares will be 85% of the lower of the fair market value of our common stock on the first day of an offering or on the date of purchase. Participants may end their participation at any time during an offering and will be paid their accrued contributions that have not yet been used to purchase shares. Participation ends automatically upon termination of employment with us.

A participant may not transfer purchase rights under our 2012 ESPP other than by will, the laws of descent and distribution or as otherwise provided under our 2012 ESPP.

89

In the event of a specified corporate transaction, such as our merger or change in control, a successor corporation may assume, continue or substitute each outstanding purchase right. If the successor corporation does not assume, continue or substitute for the outstanding purchase rights, the offering in progress will be shortened and a new exercise date will be set. The participants’ purchase rights will be exercised on the new exercise date and such purchase rights will terminate immediately thereafter.

Our board of directors has the authority to amend, suspend or terminate our 2012 ESPP, at any time and for any reason. Our 2012 ESPP will remain in effect until terminated by our board of directors in accordance with the terms of the 2012 ESPP or until the date that is 20 years from the date our 2012 ESPP was adopted by our board of directors.

401(k) Plan

We maintain a tax-qualified 401(k) retirement plan for all employees who satisfy certain eligibility requirements, including requirements relating to age and length of service. Under our 401(k) plan, employees may elect to defer up to 100% of their eligible compensation subject to applicable annual limits set pursuant to the Code. We do not match any contributions made by our employees. We intend for the 401(k) plan to qualify, depending on the employee’s election, under Code Section 401 so that contributions by employees to the 401(k) plan, and income earned on those contributions, are not taxable to employees until withdrawn from the 401(k) plan, or under Code Section 402A so that contributions by employees to the 401(k) plan are taxable as income, but qualifying withdrawals and income earned on those contributions are not taxable to employees.

Limitation of Liability and Indemnification of Directors and Officers

Our amended and restated certificate of incorporation and amended and restated bylaws, each to be effective upon the completion of this offering, will provide that we will indemnify our directors and officers, and may indemnify our employees and other agents, to the fullest extent permitted by the Delaware General Corporation Law, which prohibits our amended and restated certificate of incorporation from limiting the liability of our directors for the following:

• any breach of the director’s duty of loyalty to us or to our stockholders;

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

• unlawful payment of dividends or unlawful stock repurchases or redemptions; and

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

If Delaware law is amended to authorize corporate action further eliminating or limiting the personal liability of a director, then the liability of our directors will be eliminated or limited to the fullest extent permitted by Delaware law, as so amended. Our amended and restated certificate of incorporation does not eliminate a director’s duty of care and, in appropriate circumstances, equitable remedies, such as injunctive or other forms of non-monetary relief, remain available under Delaware law. This provision also does not affect a director’s responsibilities under any other laws, such as the federal securities laws or other state or federal laws. Under our amended and restated bylaws, we will also be empowered to purchase insurance on behalf of any person whom we are required or permitted to indemnify.

In addition to the indemnification required in our amended and restated certificate of incorporation and amended and restated bylaws, we have entered or plan to enter into indemnification agreements with each of our current directors and executive officers. These agreements provide for the indemnification of our directors and executive officers for certain expenses and liabilities incurred in connection with any action, suit, proceeding or alternative dispute resolution mechanism, or hearing, inquiry or investigation that may lead to the foregoing, to which they are a party, or are threatened to be made a party, by reason of the fact that they are or were a director,

90

officer, employee, agent or fiduciary of our company, or any of our subsidiaries, by reason of any action or inaction by them while serving as an officer, director, agent or fiduciary, or by reason of the fact that they were serving at our request as a director, officer, employee, agent or fiduciary of another entity. In the case of an action or proceeding by or in the right of our company or any of our subsidiaries, no indemnification will be provided for any claim where a court determines that the indemnified party is prohibited from receiving indemnification. We believe that these bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain directors’ and officers’ liability insurance.

The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might benefit us and our stockholders. A stockholder’s investment may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the “Securities Act”) may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have 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. There is no pending litigation or proceeding naming any of our directors or officers as to which indemnification is being sought, nor are we aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer.

91

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

In addition to the compensation arrangements, including employment, termination of employment and change-in-control arrangements and indemnification arrangements discussed above under “Executive Compensation” the following is a description of each transaction since January 1, 2009 and each currently proposed transaction in which:

• we have been or are to be a participant;

• the amount involved exceeds $120,000; and

• any of our directors, executive officers or holders of more than 5% of our capital stock, or any immediate family member of or person sharing the household with any of these individuals, had or will have a direct or indirect material interest.

Loan to Dilip DaSilva

On December 10, 2008, we issued a 2.97% Non-Recourse Secured Promissory Note to Dilip DaSilva, our Chief Executive Officer and director, in the amount of $250,000 due December 10, 2012. The aggregate amount of principal and interest outstanding on this loan at December 31, 2011 was $273,000. This note remained outstanding until it was repaid in full on February 17, 2012, including accrued interest.

Housatonic Partners Tender Offer

In August and September 2010, Housatonic Equity Investors IV, L.P. and Housatonic Equity Affiliates IV, L.P. (“Housatonic”) purchased a total of 5,050,866 shares of our common stock at a purchase price of $1.20 per share pursuant to a tender offer made to then-current employees and former employees. Mr. Rettig, directly and through trusts of which he is a trustee for certain family members, sold an aggregate of 375,000 shares of our common stock to Housatonic pursuant to this offer. In connection with this tender offer, on August 24, 2010, we entered into a letter agreement with Housatonic, pursuant to which we are obligated to provide Housatonic with certain financial information on an annual and quarterly basis. Our obligations pursuant to the letter agreement will terminate upon the closing of this offering.

Executive Compensation and Employment Arrangements and Stock Option Grants

Please see “Executive Compensation — Employment Agreements and Change of Control Arrangements” for information on compensation arrangements with our executive officers. Certain stock option grants to our directors and executive officers are described in this prospectus under the captions “Management — Director Compensation” and “Executive Compensation.”

Indemnification of Directors and Officers

Please see “Executive Compensation — Limitation of Liability and Indemnification of Directors and Officers” for information on our indemnification arrangements with our directors and executive officers.

Stock Option Repricing

In August 2010, our board of directors approved an offer to amend certain stock options granted under our 2000 Plan to then-current employees who were previously granted options with exercise prices above $1.31 per share. As a result, we repriced downward unexercised shares for optionees who accepted the offer to reprice at the per share fair market value of our common stock of $1.31 as of the date of the amendment. Pursuant to this amendment, Mr. Rettig’s 300,000 stock options granted on March 13, 2008 and Mr. Saldanha’s 75,000 options granted on March 31, 2007 and 250,000 options granted on March 13, 2008 were repriced.

92

Review, Approval or Ratification of Transactions with Related Parties

We intend to adopt a policy stating that any transaction with a related party that must be reported under applicable rules of the SEC (other than compensation-related matters) must be reviewed and approved or ratified by the governance and nominating committee, unless the related party is, or is associated with, a member of such committee, in which event such transaction must be reviewed and approved by the audit committee.

93

PRINCIPAL AND SELLING STOCKHOLDERS

The following table presents information as to the beneficial ownership of our common stock as of December 31, 2011 by:

• each stockholder known by us to be the beneficial owner of more than 5% of our common stock;

• each of our directors;

• each of our named executive officers;

• all of our directors and executive officers as a group; and

• each selling stockholder.

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and thus represents voting or investment power with respect to our securities. Unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable. Shares of our common stock subject to options that are currently exercisable or exercisable within 60 days of December 31, 2011 are deemed to be outstanding and to be beneficially owned by the person holding the options or shares of restricted stock for the purpose of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

Percentage ownership of our common stock before this offering is based on 53,309,844 shares of our common stock outstanding on December 31, 2011. Percentage ownership of our common stock after the offering also assumes our sale of              shares in this offering. Unless otherwise indicated, the address of each of the individuals and entities named below is c/o Exponential Interactive, Inc., 2200 Powell Street, Suite 600, Emeryville, CA 94608.

Name and Address of Beneficial Owner	Shares Beneficially Owned Prior to the Offering					Number of Shares Offered	Shares Beneficially Owned After the Offering		Number of Shares to be Sold if Underwriters’ Option is Exercised in Full	Shares Beneficially Owned After the Offering if Underwriters’ Option is Exercised in Full
	Shares		Percentage				Shares	Percentage		Shares	Percentage
Five percent security holders:
Housatonic Partners (1)		5,050,866		9.47	%
The DaSilva Family Trust (2)		2,721,940		5.11	%
Directors and named executive officers:
Dilip DaSilva		39,928,000		74.90	%
John R. Rettig (3)		833,332		1.55	%
Marvin Tseu (4)		643,749		1.19	%
Alexander Saldanha (5)		755,207		1.40	%
Kesa Tsuda		—		*
Steven Cakebread		—		*
John Farrell		—		*
Robert Goldberg		—		*
Dennis Wolf		—		*
All executive officers and directors as a group (9 persons) (6)		42,160,288		76.24	%
Other selling stockholders (7)

 * Represents beneficial ownership of less than 1% of our outstanding shares of common stock.

(1) Represents 222,584 shares held by Housatonic Equity Affiliates IV, L.P. and 4,828,282 shares held by Housatonic Equity Investors IV, L.P. Housatonic Equity Partners IV, LLC, a Delaware limited liability company, is the General Partner of Housatonic Equity

94

Affiliates IV, L.P. and Housatonic Equity Investors IV, L.P. No individual person or entity has the unilateral ability to cause or block the voting or disposition of any Housatonic-associated entity described in this footnote. The address of Housatonic Equity Affiliates IV, L.P. and Housatonic Equity Investors IV, L.P. is 44 Montgomery Street, Suite 4010, San Francisco, California 94104.

(2) Consists of 2,721,940 shares of common stock held of record by Rui A. DaSilva and Marjorie DaSilva, Trustees of the DaSilva Family Trust, a revocable trust, dated August 6, 2004. Rui A. DaSilva and Marjorie DaSilva are the parents of Dilip DaSilva, our Chief Executive Officer. Dilip DaSilva has no voting or investment power over the shares held in the DaSilva Family Trust.

(3) Represents 225,000 shares held by Mr. Rettig and 608,332 shares subject to options held by Mr. Rettig that are exercisable within 60 days of December 31, 2011.

(4) Represents 643,749 shares subject to options held by Mr. Tseu that are exercisable within 60 days of December 31, 2011.

(5) Represents 15,625 shares held by Mr. Saldanha and 739,582 shares subject to options held by Mr. Saldanha that are exercisable within 60 days of December 31, 2011.

(6) Represents 40,168,625 shares held by our directors and officers as a group, and 1,991,663 shares subject to options that are exercisable within 60 days of December 31, 2011 that are held by our directors and officers as a group.

(7) Represents              shares held by              selling stockholders, no one of whom owns more than 1% of our outstanding shares of common stock or is selling more than             shares.

95

DESCRIPTION OF CAPITAL STOCK

Upon the completion of this offering, our authorized capital stock will consist of              shares of common stock, $0.00001 par value per share, and              shares of undesignated preferred stock, $0.00001 par value per share. The following description summarizes the most important terms of our capital stock. Because it is only a summary, it does not contain all the information that may be important to you. For a complete description, you should refer to our restated certificate of incorporation and restated bylaws that will be in effect upon the closing of this offering, which will be included as exhibits to the registration statement of which this prospectus forms a part, and to the provisions of applicable Delaware law.

Common Stock

As of December 31, 2011, there were 53,309,844 shares of our common stock outstanding, including 750,000 shares of unvested restricted stock, held by 75 stockholders of record, and no shares of preferred stock outstanding. After this offering, there will be              shares of our common stock outstanding, or              shares if the underwriters exercise in full their option to purchase additional shares of common stock in this offering.

Dividend Rights

Subject to preferences that may apply to shares of preferred stock outstanding at the time, the holders of outstanding shares of our common stock are entitled to receive dividends out of funds legally available at the times and in the amounts that our board of directors may determine.

Voting Rights

Each holder of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Cumulative voting for the election of directors is not provided for in our restated certificate of incorporation that will be in effect upon the closing of this offering, which means that the holders of a majority of our voting shares can elect all of the directors then standing for election.

No Preemptive or Similar Rights

Our common stock is not entitled to preemptive rights and is not subject to conversion or redemption.

Right to Receive Liquidation Distributions

Upon our liquidation, dissolution or winding-up, the assets legally available for distribution to our stockholders would be distributable ratably among the holders of our common stock and any participating preferred stock outstanding at that time after payment of liquidation preferences, if any, on any outstanding shares of preferred stock and payment of other claims of creditors.

Fully Paid and Nonassessable

All outstanding shares of our common stock are, and the shares of our common stock to be issued pursuant to this offering will be, fully paid and non-assessable.

Preferred Stock

Following this offering, our board of directors will be authorized, subject to limitations prescribed by Delaware law, to issue preferred stock in one or more series, to establish from time to time the number of shares to be included in each series, to fix the designation, powers, preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions, in each case without further action by our stockholders.

96

Our board of directors can also increase or decrease the number of shares of any series of preferred stock, but not below the number of shares of that series then outstanding, unless approved by the affirmative vote of the holders of a majority of our capital stock entitled to vote, or such other vote as may be required by the certificate of designation establishing the series. 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 the common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in our control and might adversely affect the market price of our common stock and the voting and other rights of the holders of our common stock. We have no current plan to issue any shares of our preferred stock.

Other Rights to Purchase Securities

Under the Agreement and Plan of Merger that we entered into to complete the AdoTube acquisition, we are required to issue up to 534,287 shares of our common stock, contingent on the continued employment of the two former stockholders of AdoTube through December 31, 2013 and AdoTube achieving specified revenue and EBITDA targets in 2012 and 2013.

Anti-Takeover Provisions

The provisions of Delaware law, our restated certificate of incorporation and our restated bylaws that will be in effect upon the closing of this offering may have the effect of delaying, deferring or discouraging another person from acquiring control of our company.

Delaware Law

We are subject to Section 203 of the Delaware General Corporation Law, which prohibits a Delaware corporation from engaging in any “business combination” with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:

• before such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

• upon closing of the transaction that 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 began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) 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 after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.

Generally, a business combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An “interested stockholder” is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own 15% or more of a corporation’s outstanding voting stock.

97

Restated Certificate of Incorporation and Restated Bylaw Provisions

We anticipate that our restated certificate of incorporation and our restated bylaws that will be in effect upon the closing of this offering will include a number of provisions that may have the effect of deterring hostile takeovers or delaying or preventing changes in control of our management team, including the following:

• Board of directors vacancies. Our restated certificate of incorporation and restated bylaws that will be in effect upon the closing of this offering will authorize only our board of directors to fill vacant directorships. In addition, the number of directors constituting our board of directors may be set only by resolution adopted by a majority vote of our entire board of directors. These provisions prevent a stockholder from increasing the size of our board of directors and gaining control of our board of directors by filling the resulting vacancies with its own nominees.

• Classified board. Our restated certificate of incorporation and restated bylaws will provide that our board is classified into three classes of directors. The existence of a classified board could delay a successful tender offeror from obtaining majority control of our board of directors, and the prospect of that delay might deter a potential offeror.

• Stockholder action; special meeting of stockholders. We anticipate that our restated certificate of incorporation that will be in effect upon the closing of this offering will provide that our stockholders may not take action by written consent, but may only take action at annual or special meetings of our stockholders. Stockholders will not be permitted to cumulate their votes for the election of directors. Our restated bylaws that will be in effect upon the closing of this offering will further provide that special meetings of our stockholders may be called only by a majority of our board of directors, the chairman of our board of directors, our chief executive officer or our president.

• Advance notice requirements for stockholder proposals and director nominations. Our restated bylaws that will be in effect upon the closing of this offering will provide advance notice procedures for stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders. Our restated bylaws that will be in effect upon the closing of this offering also will specify certain requirements regarding the form and content of a stockholder’s notice. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.

• Issuance of undesignated preferred stock. After the filing of our restated certificate of incorporation, our board of directors will have the authority, without further action by the stockholders, to issue up to 5,000,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by our board of directors. The existence of authorized but unissued shares of preferred stock enables our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise.

Listing

We intend to apply for listing of our common stock on                      under the symbol “EXPN.”

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is     .

98

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, including shares issued upon exercise of outstanding options, in the public market after this offering could adversely affect market prices prevailing from time to time and could impair our ability to raise capital through the sale of our equity securities.

Upon the completion of this offering, based on the number of shares outstanding as of December 31, 2011, we will have             shares of common stock outstanding, assuming no exercise of the underwriters’ over-allotment option. Of these outstanding shares, all of 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 under the Securities Act, may only be sold in compliance with the limitations described below.

The remaining outstanding shares of our common stock will be deemed restricted securities as defined under Rule 144. Restricted securities 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 rules are summarized below. In addition,                      of our security holders have entered into lock-up agreements with the underwriters under which they agreed, subject to specific exceptions, not to sell any of their stock for at least 180 days following the date of this prospectus. Subject to the provisions of Rule 144 or Rule 701, based on an assumed offering date of                     , 2012, shares will be available for sale in the public market as follows:

• beginning on the date of this prospectus, the             shares sold in this offering will be immediately available for sale in the public market; and

• beginning 90 days after the date of this prospectus,                      additional shares will become eligible for sale in the public market and freely tradeable under Rule 144.

• beginning 180 days after the date of this prospectus,             additional shares will become eligible for sale in the public market, of which             shares will be freely tradable under Rule 144 and,             shares will be held by affiliates and subject to the volume and other restrictions of Rule 144, as described below, and the remaining             shares will be held by non-affiliates and subject to the public information requirements of Rule 144.

Lock-Up Agreements

We, all of our directors and officers and holders of             % of our common stock are subject to lock-up agreements that, subject to certain exceptions, prohibit us from offering for sale, selling, contracting to sell, granting any option for the sale of, transferring or otherwise disposing of any shares of our common stock options to acquire shares of our common stock or any security or instrument related to this common stock or option for a period of at least 180 days following the date of this prospectus without the prior written consent of Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated.

The 180-day restricted period described above is subject to extension such that if either (i) during the last 17 days of the 180-day period referred to above, we issue an earnings release or material news, or a material event relating to us occurs or (ii) prior to the expiration of such lock-up period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day period, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

Rule 144

In general, under Rule 144 as currently in effect, once we have been subject to public company reporting requirements for at least 90 days, a person who is not deemed to have been one of our affiliates for purposes of

99

the Securities Act at any time during the 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least six months, including the holding period of any prior owner other than our affiliates, is entitled to sell those shares without complying with the manner of sale, volume limitation or notice provisions of Rule 144, subject to compliance with the public information requirements of Rule 144. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than our affiliates, then that person is entitled to sell those shares without complying with any of the requirements of Rule 144.

In general, under Rule 144, as currently in effect, our affiliates who have beneficially owned restricted shares of our common stock for at least six months are entitled to sell those shares upon expiration of the lock-up agreements described above, within any three-month period beginning 90 days after the date of this prospectus, a number of shares that does not exceed the greater of:

• 1% of the number of shares of common stock then outstanding, which will equal approximately              shares immediately after this offering; or

• the average weekly trading volume of our common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to that sale.

Sales under Rule 144 by our affiliates are also subject to certain manner of sale notice and current public information requirements.

Rule 701

Rule 701 generally allows a stockholder who purchased shares of our common stock pursuant to a written compensatory plan or contract and who is not deemed to have been an affiliate of our company during the immediately preceding 90 days to sell these shares in reliance upon Rule 144, but without being required to comply with the public information, holding period, volume limitation or notice provisions of Rule 144. Rule 701 also permits affiliates of our company to sell their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144. All holders of Rule 701 shares, however, are required to wait until 90 days after the date of this prospectus before selling those shares pursuant to Rule 701.

Stock Options

We intend to file a registration statement on Form S-8 under the Securities Act covering all of the shares of our common stock subject to options outstanding or reserved for issuance under our stock plans. We expect to file this registration statement as soon as practicable after this offering. In addition, we intend to file a registration statement on Form S-8 or such other form as may be required under the Securities Act for the resale of shares of our common stock issued upon the exercise of options that were not granted under Rule 701. We expect to file this registration statement as soon as permitted under the Securities Act. However, the shares registered on Form S-8 will be subject to volume limitations applicable to affiliates under Rule 144 and vesting restrictions and will not be eligible for resale until expiration of the lock up agreements to which they are subject.

100

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS

The following is a summary of the material U.S. federal income tax and estate tax consequences of the ownership and disposition of our common stock to non-U.S. holders (as defined below), but does not purport to be a complete analysis of all the potential tax considerations relating thereto. This summary is based upon the provisions of the Internal Revenue Code, Treasury regulations promulgated thereunder, administrative rulings and judicial decisions, all as of the date hereof. These authorities may be changed at any time, possibly retroactively, so as to result in U.S. federal income or estate tax consequences different from those set forth below.

This summary does not address the tax considerations arising under the laws of any non-U.S., state or local jurisdiction or under U.S. federal gift and, except to the limited extent below, estate tax laws. In addition, this discussion does not address tax considerations applicable to a non-U.S. holder’s particular circumstances or to non-U.S. holders that may be subject to special tax rules, including, without limitation:

• banks, insurance companies or other financial institutions;

• partnerships or arrangements treated as partnerships or other pass-through entities for U.S. federal tax purposes (or investors in such entities);

• certain former citizens or long-term residents of the United States;

• a “controlled foreign corporation” or “passive foreign investment company”;

• a corporation that accumulates earnings to avoid U.S. federal income tax;

• persons subject to the alternative minimum tax;

• tax-exempt organizations or tax-qualified retirement plans;

• dealers in securities or currencies;

• traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;

• persons who hold our common stock as a position in a hedging transaction, “straddle,” “conversion transaction” or other risk reduction transaction;

• persons who acquired our common stock as compensation for services;

• persons who do not hold our common stock as a capital asset within the meaning of Section 1221 of the Internal Revenue Code (generally, for investment purposes); or

• persons deemed to sell our common stock under the constructive sale provisions of the Internal Revenue Code.

In addition, if a partnership or entity classified as a partnership for U.S. federal income tax purposes holds our common stock, the tax treatment of a partner generally will depend on the status of the partner and upon the activities of the partnership. Accordingly, partnerships that hold our common stock, and partners in such partnerships, should consult their tax advisors.

You are urged to consult your tax advisor with respect to the application of the U.S. federal income tax laws to your particular situation, as well as any tax consequences of the purchase, ownership and disposition of our common stock arising under the U.S. federal estate or gift tax rules or under the laws of any state, local, non-U.S. or other taxing jurisdiction or under any applicable tax treaty.

101

Non-U.S. Holder Defined

For purposes of this discussion, you are a non-U.S. holder if you are any holder that is neither a partnership nor any of the following:

• an individual citizen or resident of the United States;

• a corporation or other entity taxable as a corporation for U.S. federal income tax purposes created or organized in the United States or under the laws of the United States or any state thereof or the District of Columbia;

• an estate whose income is subject to U.S. federal income tax regardless of its source; or

• a trust (x) whose administration is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (y) which has a valid election to be treated as a U.S. person.

An individual other than a U.S. citizen may be a resident of the United States by virtue of being present in the United States for at least 31 days in the current calendar year and for an aggregate of at least 183 days during a three-year period ending in the current calendar year. For these purposes, all the days present in the current year, one-third of the days present in the immediately preceding year and one-sixth of the days present in the second preceding year are counted. Non-citizen U.S. residents are subject to U.S. federal income tax as if they were U.S. citizens. Such an individual is urged to consult his or her own tax advisor regarding the U.S. federal income and estate tax consequences of ownership and disposition of our common stock.

Distributions

We have not made any distributions on our common stock, and we do not plan to make any distributions for the foreseeable future. However, if we do make distributions on our common stock, those payments will constitute dividends for U.S. tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent those distributions exceed both our current and our accumulated earnings and profits, they will constitute a non-taxable return of capital and will first reduce your basis in our common stock, but not below zero, and then will be treated as gain from the sale of stock taxed in the same manner as described in the section titled “Material U.S. Federal Income Tax Consequences to Non-U.S. Holders — Gain on Disposition of Common Stock.”

Subject to the discussion below regarding recent legislative withholding updates, any dividend paid to you generally will be subject to U.S. withholding tax either at a rate of 30% of the gross amount of the dividend or such lower rate as may be specified by an applicable income tax treaty between the U.S. and your country of residence. To receive a reduced treaty rate, you must provide us or our paying agent with an IRS Form W-8BEN or suitable substitute properly certifying qualification for the reduced rate. You should consult your tax advisors regarding your entitlement to benefits under a relevant income tax treaty. If you hold the stock through a financial institution or other agent acting on your behalf, you will be required to provide appropriate documentation to the agent. Your agent will then be required to provide certification to us or our paying agent, either directly or through other intermediaries. For payments made to a partnership or other pass-through entity, the certification requirements generally apply to the partners or other owners rather than to the partnership or other entity, and the partnership or other entity must provide the partners’ or other owners’ documentation to us or our paying agent.

Dividends received by you that are effectively connected with your conduct of a U.S. trade or business (and, if required by an applicable income tax treaty between the United States and your country of residence, attributable to a permanent establishment maintained by you in the United States or, in the case of an individual under certain treaties, a fixed base maintained by you in the United States) are exempt from such withholding tax. To obtain this exemption, you must provide us with an IRS Form W-8ECI or suitable substitute properly certifying such exemption. Such effectively connected dividends, although not subject to withholding tax, are taxed at the same graduated rates applicable to U.S. persons, net of certain deductions and credits. In

102

addition to the graduated tax described above, if you are a corporate non-U.S. holder, dividends you receive that are effectively connected with your conduct of a U.S. trade or business may also be subject to a branch profits tax at a rate of 30% or such lower rate as may be specified by an applicable income tax treaty between the U.S. and your country of residence. You should consult your tax advisor regarding your entitlement to benefits under a relevant income tax treaty.

If you are eligible for a reduced rate of withholding tax pursuant to a tax treaty, you may be able to obtain a refund or credit of any excess amounts currently withheld if you timely file an appropriate claim for refund with the IRS. Special certification and other requirements apply to certain non-U.S. holders that are entities rather than individuals.

Gain on Disposition of Common Stock

Subject to the discussions below regarding backup withholding and legislation affecting taxation of our common stock held by or through foreign entities, you generally will not be required to pay U.S. federal income tax on any gain realized upon the sale or other disposition of our common stock unless:

• the gain is effectively connected with your conduct of a U.S. trade or business (and, if required by an applicable income tax treaty between the United States and your country of residence, the gain is attributable to a permanent establishment maintained by you in the United States or, in the case of an individual under certain treaties, a fixed base maintained by you in the United States);

• you are an individual who is present in the United States for a period or periods aggregating 183 days or more during the calendar year in which the sale or disposition occurs and certain other conditions are met; or

• our common stock constitutes a U.S. real property interest by reason of our status as a “U.S. real property holding corporation” for U.S. federal income tax purposes, or a USRPHC, at any time within the shorter of the five-year period preceding the disposition or your holding period for our common stock

In general, we would be a USRPHC if interests in United States real estate comprised at least half of our assets. We believe that we are not currently and will not become a USRPHC. However, because the determination of whether we are a USRPHC depends on the fair market value of our U.S. real property relative to the fair market value of our other business assets, there can be no assurance that we will not become a USRPHC in the future. Even if we become a USRPHC, however, as long as our common stock is regularly traded on an established securities market, such common stock will be treated as a U.S. real property interest only if you actually or constructively hold more than 5% of such regularly traded common stock at any time during the period described above.

If you are a non-U.S. holder described in the first bullet above, you will generally be required to pay tax on the net gain derived from the sale (net of certain deductions or credits) under regular graduated U.S. federal income tax rates, and corporate non-U.S. holders described in the first bullet above may also be subject to branch profits tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty.

If you are an individual non-U.S. holder described in the second bullet above, you will be required to pay a flat 30% tax or such reduced rate as may be specified by an applicable income tax treaty on the amount by which your U.S.-source gains from the sale or exchange of capital assets exceed your U.S.-source losses from the sale or exchange of capital assets for the year. You should consult any applicable income tax or other treaties between the United States and your country of residence that may provide for different rules.

Federal Estate Tax

The estates of nonresident alien individuals generally are subject to U.S. federal estate tax on property with a U.S. situs. Because we are a U.S. corporation, our common stock is considered property with a U.S. situs, and thus any such common stock held (or treated as such) by an individual non-U.S. holder at the time of death will

103

be included in such holder’s gross estate for U.S. federal estate tax purposes, unless an applicable estate tax treaty between the United States and such holder’s country of residence provides otherwise, and therefore may be subject to U.S. federal estate tax.

Backup Withholding and Information Reporting

Generally, we must report annually to the IRS the amount of dividends paid to you, your name and address and the amount of tax withheld, if any, regardless of whether withholding is reduced or eliminated by an applicable tax treaty. A similar report will be sent to you. Pursuant to applicable income tax treaties or other agreements, the IRS may make these reports available to tax authorities in your country of residence.

Payments of dividends or of proceeds on the disposition of stock made to you may be subject to additional information reporting and backup withholding at a current rate of 28% unless you establish an exemption, for example by properly certifying your non-U.S. status on a Form W-8BEN or other applicable form. Notwithstanding the foregoing, backup withholding and information reporting may apply if either we or our paying agent has actual knowledge, or reason to know, that you are a U.S. person. Additional rules relating to information reporting requirements and backup withholding with respect to the payment of proceeds from the disposition of shares of our common stock will apply as follows:

• if the proceeds are paid to or through the U.S. office of a broker (U.S. or non-U.S.), they generally will be subject to backup withholding and information reporting, unless you certify that you are not a U.S. person under penalties of perjury (usually on an IRS Form W-8BEN) or otherwise establish an exemption;

• if the proceeds are paid to or through a non-U.S. office of a broker that is not a “U.S. person,” they will generally not be subject to backup withholding or information reporting; or

• if the proceeds are paid to or through a non-U.S. office of a broker that is (1) a U.S. person, (2) a non-U.S. person 50% or more of whose gross income from certain periods is effectively connected with a U.S. trade or business or (3) a foreign partnership if at any time during its tax year (a) one or more of its partners are U.S. persons who, in the aggregate, hold more than 50% of the income or capital interests of the partnership or (b) the foreign partnership is engaged in a U.S. trade or business, they generally will be subject to information reporting (but not backup withholding), unless you certify that you are not a U.S. person under penalties of perjury (usually on an IRS Form W-8BEN) or otherwise establish an exemption.

Backup withholding is not an additional tax; rather, the U.S. income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund or credit may generally be obtained from the IRS, provided that the required information is furnished to the IRS in a timely manner.

Legislation Affecting Taxation of Our Common Stock Held by or through Foreign Entities

Legislation enacted in 2010, the Foreign Account Tax Compliance Act (FATCA), which will be phased in beginning on January 1, 2014, generally will impose a U.S. federal withholding tax of 30% on dividends and the gross proceeds of a disposition of our common stock paid to certain foreign financial institutions (as specially defined for purposes of these rules), and other non-U.S. entities that fail to comply with information reporting requirements in respect of their direct and indirect U.S. owners and/or U.S. account holders. Under certain circumstances, a non-U.S. holder might be eligible for refunds or credits of such taxes. Prospective investors are encouraged to consult with their own tax advisors regarding the possible implications of this legislation on their investment in our common stock.

Each prospective investor should consult the prospective investor’s own tax advisor regarding the particular U.S. federal, state and local and non-U.S. tax consequences of purchasing, holding and disposing of our common stock, including the consequences of any proposed change in applicable laws.

104

UNDERWRITING

Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting as joint book-running managers of the offering and as representatives (the “Representatives”) of the underwriters named below. Subject to the terms and conditions stated in the underwriting agreement dated the date of this prospectus, each underwriter named below has severally agreed to purchase, and we and the selling stockholders have agreed to sell to that underwriter, the number of shares set forth opposite the underwriter’s name.

Underwriter	Number of Shares
Citigroup Global Markets Inc.
Merrill Lynch, Pierce, Fenner & Smith                         Incorporated
RBC Capital Markets, LLC
ThinkEquity LLC
Total

The underwriting agreement provides that the obligations of the underwriters to purchase the shares included in this offering are subject to approval of legal matters by counsel and to other conditions. The underwriters are obligated to purchase all the shares (other than those covered by the over-allotment option described below) if they purchase any of the shares.

Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount from the initial public offering price not to exceed $         per share. If all the shares are not sold at the initial offering price, the underwriters may change the offering price and the other selling terms. The Representatives have advised us and the selling stockholders that the underwriters do not intend to make sales to discretionary accounts.

If the underwriters sell more shares than the total number set forth in the table above, we and some of the selling stockholders have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to          additional shares at the public offering price less the underwriting discount. The underwriters may exercise the option solely for the purpose of covering over-allotments, if any, in connection with this offering. To the extent the option is exercised, each underwriter must purchase a number of additional shares approximately proportionate to that underwriter’s initial purchase commitment. Any shares issued or sold under the option will be issued and sold on the same terms and conditions as the other shares that are the subject of this offering.

We, our officers and directors and holders of         % of our common stock have agreed that, for a period of 180 days from the date of this prospectus, we and they will not, without the prior written consent of the Representatives, dispose of or hedge any shares or any securities convertible into or exchangeable for our common stock. The Representatives in their sole discretion may release any of the securities subject to these lock-up agreements at any time, which, in the case of officers and directors, shall be with notice. Notwithstanding the foregoing, if (i) during the last 17 days of the 180-day restricted period, we issue an earnings release or material news or a material event relating to our company occurs; or (ii) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day restricted period, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

Prior to this offering, there has been no public market for our shares. Consequently, the initial public offering price for the shares was determined by negotiations among us, the selling stockholders and the

105

Representatives. Among the factors considered in determining the initial public offering price were our results of operations, our current financial condition, our future prospects, our markets, the economic conditions in and future prospects for the industry in which we compete, our management and currently prevailing general conditions in the equity securities markets, including current market valuations of publicly traded companies considered comparable to our company. We cannot assure you, however, that the price at which the shares will sell in the public market after this offering will not be lower than the initial public offering price or that an active trading market in our shares will develop and continue after this offering.

We intend to apply to have our shares listed on the          under the symbol “EXPN.”

The following table shows the underwriting discounts and commissions that we and the selling stockholders are to pay to the underwriters in connection with this offering. These amounts are shown assuming both no exercise and full exercise of the underwriters’ over-allotment option.

	Paid by Us		Paid by Selling Stockholders
	No Exercise	Full Exercise	No Exercise	Full Exercise
Per share	$	$	$	$
Total	$	$	$	$

We and the selling stockholders estimate that our respective portions of the total expenses of this offering will be $         and $        .

In connection with the offering, the underwriters may purchase and sell shares in the open market. Purchases and sales in the open market may include short sales, purchases to cover short positions, which may include purchases pursuant to the over-allotment option, and stabilizing purchases.

• Short sales involve secondary market sales by the underwriters of a greater number of shares than they are required to purchase in the offering.

• “Covered” short sales are sales of shares in an amount up to the number of shares represented by the underwriters’ over-allotment option.

• “Naked” short sales are sales of shares in an amount in excess of the number of shares represented by the underwriters’ over-allotment option.

• Covering transactions involve purchases of shares either pursuant to the underwriters’ over-allotment option or in the open market after the distribution has been completed to cover short positions.

• To close a naked short position, the underwriters must purchase shares in the open market after the distribution has been completed. 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 the offering.

• To close a covered short position, the underwriters must purchase shares in the open market after the distribution has been completed or must exercise the over-allotment option. In determining the source of shares to close 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.

• Stabilizing transactions involve bids to purchase shares so long as the stabilizing bids do not exceed a specified maximum.

Purchases to cover short positions and stabilizing purchases, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of the shares. They may also cause the price of the shares to be higher than the price that would otherwise exist in the open market in the absence of these transactions. The underwriters may conduct these transactions on the                     , in the over-the-counter market or otherwise. If the underwriters commence any of these transactions, they may discontinue them at any time.

106

Conflicts of Interest

The underwriters are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. The underwriters and their respective affiliates have in the past, and may, from time to time, in the future, engage in transactions with and perform services for us in the ordinary course of their business for which they may receive customary fees and reimbursement of expenses.

In the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve our securities and instruments.

We and the selling stockholders have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make because of any of those liabilities.

Notice to Prospective Investors in the European Economic Area

In relation to each member state of the European Economic Area that has implemented the Prospectus Directive (each, a relevant member state), with effect from and including the date on which the Prospectus Directive is implemented in that relevant member state (the relevant implementation date), an offer of shares described in this prospectus may not be made to the public in that relevant member state other than:

• to any legal entity which is a qualified investor as defined in the Prospectus Directive;

• to fewer than 100 or, if the relevant member state has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by us for any such offer; or

• in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of shares shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive.

For purposes of this provision, the expression an “offer of securities to the public” in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe for the shares, as the expression may be varied in that member state by any measure implementing the Prospectus Directive in that member state, and the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the relevant member state) and includes any relevant implementing measure in the relevant member state. The expression 2010 PD Amending Directive means Directive 2010/73/EU.

The sellers of the shares have not authorized and do not authorize the making of any offer of shares through any financial intermediary on their behalf, other than offers made by the underwriters with a view to the final placement of the shares as contemplated in this prospectus. Accordingly, no purchaser of the shares, other than the underwriters, is authorized to make any further offer of the shares on behalf of the sellers or the underwriters.

Notice to Prospective Investors in the United Kingdom

This prospectus is only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) investment

107

professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (each such person being referred to as a “relevant person”). This prospectus and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this document or any of its contents.

Notice to Prospective Investors in France

Neither this prospectus nor any other offering material relating to the shares described in this prospectus has been submitted to the clearance procedures of the Autorité des Marchés Financiers or of the competent authority of another member state of the European Economic Area and notified to the Autorité des Marchés Financiers. The shares have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus nor any other offering material relating to the shares has been or will be:

• released, issued, distributed or caused to be released, issued or distributed to the public in France; or

• used in connection with any offer for subscription or sale of the shares to the public in France.

Such offers, sales and distributions will be made in France only:

• to qualified investors (investisseurs qualifiés) and/or to a restricted circle of investors (cercle restreint d’investisseurs), in each case investing for their own account, all as defined in, and in accordance with articles L.411-2, D.411-1, D.411-2, D.734-1, D.744-1, D.754-1 and D.764-1 of the French Code monétaire et financier;

• to investment services providers authorized to engage in portfolio management on behalf of third parties; or

• in a transaction that, in accordance with article L.411-2-II-1°-or-2°-or 3° of the French Code monétaire et financier and article 211-2 of the General Regulations (Règlement Général) of the Autorité des Marchés Financiers, does not constitute a public offer (appel public à l’épargne).

The shares may be resold directly or indirectly, only in compliance with articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of the French Code monétaire et financier.

Notice to Prospective Investors in Switzerland

The shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering or marketing material relating to the offering, the Company, or the shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA (“FINMA”), and the offer of shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“CISA”). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of shares.

108

Notice to Prospective Investors in Hong Kong

The shares may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong) and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

Notice to Prospective Investors in Japan

The shares offered in this prospectus have not been registered under the Securities and Exchange Law of Japan. The shares have not been offered or sold and will not be offered or sold, directly or indirectly, in Japan or to or for the account of any resident of Japan, except (i) pursuant to an exemption from the registration requirements of the Securities and Exchange Law and (ii) in compliance with any other applicable requirements of Japanese law.

Notice to Prospective Investors in Singapore

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA.

Where the shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

• a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

• a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,

shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the shares pursuant to an offer made under Section 275 of the SFA except:

• to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA;

109

• where no consideration is or will be given for the transfer; or

• where the transfer is by operation of law.

Notice to Prospective Investors in Australia

No prospectus or other disclosure document (as defined in the Corporations Act 2001 (Cth) of Australia (“Corporations Act”)) in relation to the common shares has been or will be lodged with the Australian Securities & Investments Commission (“ASIC”). This document has not been lodged with ASIC and is only directed to certain categories of exempt persons. Accordingly, if you receive this document in Australia:

(a) you confirm and warrant that you are either:

(i) a “sophisticated investor” under section 708(8)(a) or (b) of the Corporations Act;

(ii) a “sophisticated investor” under section 708(8)(c) or (d) of the Corporations Act and that you have provided an accountant’s certificate to us which complies with the requirements of section 708(8)(c)(i) or (ii) of the Corporations Act and related regulations before the offer has been made;

(iii) a person associated with the company under section 708(12) of the Corporations Act; or

(iv) a “professional investor” within the meaning of section 708(11)(a) or (b) of the Corporations Act, and to the extent that you are unable to confirm or warrant that you are an exempt sophisticated investor, associated person or professional investor under the Corporations Act any offer made to you under this document is void and incapable of acceptance; and

(b) you warrant and agree that you will not offer any of the common shares for resale in Australia within 12 months of that common shares being issued unless any such resale offer is exempt from the requirement to issue a disclosure document under section 708 of the Corporations Act.

Notice to Prospective Investors in Chile

The shares are not registered in the Securities Registry (Registro de Valores) or subject to the control of the Chilean Securities and Exchange Commission (Superintendencia de Valores y Seguros de Chile). This prospectus and other offering materials relating to the offer of the shares do not constitute a public offer of, or an invitation to subscribe for or purchase, the shares in the Republic of Chile, other than to individually identified purchasers pursuant to a private offering within the meaning of Article 4 of the Chilean Securities Market Act (Ley de Mercado de Valores) (an offer that is not “addressed to the public at large or to a certain sector or specific group of the public”).

Notice to Prospective Investors in the Dubai International Financial Centre

This prospectus supplement relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (“DFSA”). This prospectus supplement is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus supplement nor taken steps to verify the information set forth herein and has no responsibility for the prospectus supplement. The shares to which this prospectus supplement relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares offered should conduct their own due diligence on the shares. If you do not understand the contents of this prospectus supplement you should consult an authorized financial advisor.

110

LEGAL MATTERS

Fenwick & West LLP, Mountain View, California will pass upon the validity of the issuance of the shares of common stock offered by this prospectus. Davis Polk  & Wardwell LLP, Menlo Park, California, is acting as counsel to the underwriters.

EXPERTS

Ernst & Young LLP, independent registered public accounting firm, has audited our consolidated financial statements at December 31, 2010 and 2011, and for each of the three years in the period ended December 31, 2011, as set forth in their report. We have included our financial statements in the prospectus and elsewhere in the registration statement in reliance on Ernst & Young LLP’s report, given on their authority as experts in accounting and auditing.

BDO USA, LLP, an independent registered public accounting firm, has audited the consolidated financial statements of New Wave Media Inc. at December 31, 2010, and for the year ended December 31, 2010, as set forth in their report. We have included the New Wave Media Inc. financial statements in the prospectus in reliance on BDO USA, LLP’s report, given on their authority as experts in accounting and auditing.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to our common stock. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement, some items of which are contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to us and our common stock, we refer you to the registration statement, including the exhibits and the consolidated financial statements and notes filed as a part of the registration statement. Statements contained in this prospectus concerning the contents of any contract or any other document are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. The exhibits to the registration statement should be reviewed for the complete contents of these contracts and documents. A copy of the registration statement, and any other materials we file with the SEC, including the exhibits and the financial statements and notes filed as a part of the registration statement, may be inspected without charge at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, and copies of all or any part of the registration statement may be obtained from the SEC upon the payment of fees prescribed by it. You may call the SEC at 1-800-SEC-0330 for more information on the operation of the public reference facilities. The SEC maintains a website at http://www.sec.gov that contains reports, proxy and information statements and other information regarding companies that file electronically with it.

As a result of this offering, we will become subject to the information and reporting requirements of the Exchange Act and, in accordance with this law, will file periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other information will be available for inspection and copying at the SEC’s public reference facilities and the website of the SEC referred to above.

111

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Consolidated Financial Statements of Exponential Interactive, Inc.
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets		F-3
Consolidated Statements of Income		F-4
Consolidated Statements of Comprehensive Income		F-5
Consolidated Statements of Stockholders’ Equity		F-6
Consolidated Statements of Cash Flows		F-7
Notes to Consolidated Financial Statements		F-8
Consolidated Financial Statements of New Wave Media Inc.
Report of Independent Registered Public Accounting Firm		F-36
Consolidated Balance Sheets		F-37
Consolidated Statements of Operations		F-38
Consolidated Statements of Stockholders’ Equity (Deficit)		F-39
Consolidated Statements of Cash Flows		F-40
Notes to Consolidated Financial Statements		F-41

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Exponential Interactive, Inc.

We have audited the accompanying consolidated balance sheets of Exponential Interactive, Inc. as of December 31, 2010 and 2011, and the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2011. 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 the standards of the Public Company Accounting Oversight Board (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. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Exponential Interactive, Inc. at December 31, 2010 and 2011, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2011, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

San Francisco, California

March 16, 2012

F-2

EXPONENTIAL INTERACTIVE, INC.

Consolidated Balance Sheets

(In thousands, except share and per share data)

	As of December 31,
	2010			2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	8,505		$	14,263
Accounts receivable, net of allowance for doubtful accounts of $350 and $288 as of December 31, 2010 and 2011		40,189			53,330
Prepaid expenses and other current assets		1,297			5,466
Deferred tax assets		878			1,743
Total current assets		50,869			74,802
Property and equipment, net		3,120			6,355
Intangible assets, net		5,185			12,295
Goodwill		14,178			25,607
Deferred tax assets		1,618			—
Other assets		1,014			2,611
TOTAL ASSETS	$	75,984		$	121,670
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	$	4,960		$	9,822
Accrued digital media content provider payments		15,356			16,907
Accrued compensation and related expenditures		2,896			3,900
Capital lease obligations		654			1,576
Other current liabilities		2,280			6,543
Total current liabilities		26,146			38,748
Long-term debt		—			13,400
Capital lease obligations		862			1,555
Deferred tax liabilities		—			3,399
Other liabilities		96			6,755
TOTAL LIABILITIES		27,104			63,857
Commitments and Contingencies (Note 8)
STOCKHOLDERS’ EQUITY:
Common stock, $0.00001 par value — 100,000,000 shares authorized; 52,661,256 and 52,717,006 shares issued as of December 31, 2010 and 2011; 52,504,094 and 52,559,844 shares outstanding as of December 31, 2010 and 2011		1			1
Additional paid-in capital		15,009			17,470
Treasury stock		(367	)		(367	)
Retained earnings		34,250			41,134
Accumulated other comprehensive loss		(13	)		(425	)
TOTAL STOCKHOLDERS’ EQUITY		48,880			57,813
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	75,984		$	121,670

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

F-3

EXPONENTIAL INTERACTIVE, INC.

Consolidated Statements of Income

(In thousands, except share and per share data)

	Years Ended December 31,
	2009			2010			2011
Revenues	$	92,560		$	125,268		$	169,082
Cost of revenues		55,436			71,988			95,848
Gross profit		37,124			53,280			73,234
Operating expenses:
Sales and marketing		20,060			28,688			42,179
Product development		3,434			4,680			5,304
General and administrative		5,482			7,615			10,360
Amortization of intangible assets		1,073			1,045			1,189
Total operating expenses		30,049			42,028			59,032
Operating income		7,075			11,252			14,202
Other income (expense), net:
Interest expense		(852	)		(448	)		(512	)
Interest and other income (expense), net		(589	)		(948	)		(1,543	)
Total other income (expense), net		(1,441	)		(1,396	)		(2,055	)
Income before provision for income taxes		5,634			9,856			12,147
Provision for income taxes		2,623			4,485			5,263
Net income	$	3,011		$	5,371		$	6,884
Net income attributable to common stockholders:
Basic	$	2,953		$	5,279		$	6,787
Diluted	$	2,953		$	5,280		$	6,789
Net income per share attributable to common stockholders:
Basic	$	0.06		$	0.10		$	0.13
Diluted	$	0.06		$	0.10		$	0.13
Weighted-average shares used in computing net income per share attributable to common stockholders:
Basic		51,190,410			51,682,476			52,510,727
Diluted		51,885,242			52,159,078			53,802,990

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

F-4

EXPONENTIAL INTERACTIVE, INC.

Consolidated Statements of Comprehensive Income

(In thousands)

	Years Ended December 31,
	2009		2010		2011
Net income	$	3,011	$	5,371	$	6,884
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		40		66		(412	)
Other comprehensive income (loss)		40		66		(412	)
Comprehensive income	$	3,051	$	5,437	$	6,472

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

F-5

EXPONENTIAL INTERACTIVE, INC.

Consolidated Statements of Stockholders’ Equity

(In thousands, except share data)

	Common Stock				Additional Paid-in Capital			Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
	Shares		Amount
Balance as of December 31, 2008		51,117,555	$	1	$	10,223		$	(367	)	$	25,868	$	(119	)	$	35,606
Net income		—		—		—			—			3,011		—			3,011
Other comprehensive income, net of tax		—		—		—			—			—		40			40
Issuance of common stock		21,354		—		12			—			—		—			12
Vesting of restricted stock related to awards early exercised		66,664		—		5			—			—		—			5
Tax deficiency from equity incentive plans		—		—		(74	)		—			—		—			(74	)
Stock-based compensation		—		—		1,536			—			—		—			1,536
Balance as of December 31, 2009		51,205,573		1		11,702			(367	)		28,879		(79	)		40,136
Net income		—		—		—			—			5,371		—			5,371
Other comprehensive income, net of tax		—		—		—			—			—		66			66
Issuance of common stock		1,048,521		—		485			—			—		—			485
Vesting of restricted stock related to awards early exercised		250,000		—		1			—			—		—			1
Stock-based compensation		—		—		2,821			—			—		—			2,821
Balance as of December 31, 2010		52,504,094		1		15,009			(367	)		34,250		(13	)		48,880
Net income		—		—		—			—			6,884		—			6,884
Other comprehensive income (loss), net of tax		—		—		—			—			—		(412	)		(412	)
Issuance of common stock		55,750		—		50			—			—		—			50
Stock-based compensation		—		—		2,411			—			—		—			2,411
Balance as of December 31, 2011		52,559,844	$	1	$	17,470		$	(367	)	$	41,134	$	(425	)	$	57,813

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

F-6

EXPONENTIAL INTERACTIVE, INC.

Consolidated Statements of Cash Flows

(In thousands)

	Years Ended December 31,
	2009			2010			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,011		$	5,371		$	6,884
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment		1,443			1,363			2,150
Amortization of intangible assets		2,622			2,594			3,313
Amortization of debt issuance costs		223			223			63
Stock-based compensation		1,639			2,828			2,374
Fair value remeasurement on interest rate swap agreement		(498	)		—			—
Provision for doubtful accounts		(94	)		140			(62	)
Deferred income taxes		(70	)		(692	)		1,352
Tax deficiency from equity incentive plans		(74	)		—			—
Changes in operating assets and liabilities, net of effect of acquisition:
Accounts receivable		(2,193	)		(18,034	)		(9,802	)
Prepaid expenses and other current assets		1,737			221			(4,092	)
Accounts payable and accrued liabilities		(32	)		1,932			2,334
Accrued digital media content provider payments		(364	)		6,214			1,551
Accrued compensation and related expenditures		277			1,010			(148	)
Other current liabilities		(573	)		1,593			4,194
Other assets and liabilities		115			(461	)		(933	)
Net cash provided by operating activities		7,169			4,302			9,178
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(273	)		(1,352	)		(2,050	)
Capitalization of software development costs		—			—			(538	)
Acquisition of business, net of cash acquired		—			—			(12,765	)
Net cash used in investing activities		(273	)		(1,352	)		(15,353	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of principal on capital lease obligations		(611	)		(664	)		(1,078	)
Borrowings on revolving credit facility		3,500			—			13,400
Repayment of revolving credit facility		—			(5,000	)		—
Repayment of term loan		(21,250	)		—			—
Repayment of note payable		(3,500	)		—			—
Proceeds from issuance of common stock		12			485			50
Net cash (used in) provided by financing activities		(21,849	)		(5,179	)		12,372
Effect of exchange rate changes on cash and cash equivalents		10			21			(439	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(14,943	)		(2,208	)		5,758
CASH AND CASH EQUIVALENTS — Beginning of year		25,656			10,713			8,505
CASH AND CASH EQUIVALENTS — End of year	$	10,713		$	8,505		$	14,263
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	$	1,146		$	225		$	264
Cash paid for income taxes, net of refunds	$	1,171		$	4,861		$	5,944
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Guaranteed deferred payments related to acquisition	$	—		$	—		$	5,968
Assets acquired under capital lease	$	225		$	1,708		$	2,693

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

F-7

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements

Years Ended December 31, 2009, 2010 and 2011

1. Organization and Summary of Significant Accounting Policies

Organization

Exponential Interactive, Inc. is a Delaware corporation. We are headquartered in Emeryville, California and have subsidiaries located throughout the world, including in the United Kingdom, Spain, Australia and India. We are a leading global provider of advertising intelligence and digital media solutions to brand advertisers. We have developed an end-to-end solution that enables brand advertisers to learn about their optimal consumer audience, reach and engage that audience with emotive advertising and then analyze and refine their marketing campaigns.

We operate on a global basis primarily under the Tribal Fusion brand name. In April 2006, we began operations of our wholly-owned Indian subsidiary, Tribal Fusion R&D Pvt Ltd, primarily as an operations center. In 2009, we incorporated new wholly-owned subsidiaries in the United Kingdom, Australia and India. In 2010 and 2011, we incorporated new wholly-owned subsidiaries in Singapore, Spain, France, Germany and Switzerland. These subsidiaries focus mainly on sales and marketing activities.

In September 2011, we acquired New Wave Media Inc., a company doing business as AdoTube. As a result of the acquisition, AdoTube became our wholly-owned subsidiary. AdoTube has a wholly-owned subsidiary in Ukraine, New Wave Media Ukraine, Inc., which performs research and development efforts. AdoTube’s results are included prospectively in the accompanying consolidated financial statements after the acquisition date.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles. The accompanying consolidated financial statements include the accounts of Exponential Interactive, Inc. and our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Subsequent Events

We evaluated subsequent events through March 16, 2012, the date our consolidated financial statements were issued.

Use of Estimates

The preparation of the accompanying consolidated financial statements in conformity with GAAP requires us to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Those management estimates include, but are not limited to, revenue recognition, allowance for doubtful accounts, deferred income taxes, stock-based compensation, goodwill and intangible assets and contingent liabilities. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the consolidated financial statements.

Concentration of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. We maintain our cash and cash equivalents and restricted

F-8

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

cash with various domestic and foreign financial institutions of high credit quality. We perform periodic evaluations of the relative credit standing of all of the aforementioned institutions. From time to time, our cash balances with domestic financial institutions may exceed Federal Deposit Insurance Corporation insurance limits.

Our accounts receivable are derived from advertising contracts with a large number of customers primarily located in the markets in which we have a physical presence. We perform ongoing credit evaluations of our customers to assess the probability of accounts receivable collection based on a number of factors, including past transaction experience with the customer, evaluation of their credit history and review of the invoicing terms of the contract. We generally do not require collateral. We maintain reserves for potential credit losses on customer accounts when deemed necessary. Actual credit losses to date have been within management’s expectations.

Interest Rate Swap Agreement

Through October 2009, we utilized an interest rate swap agreement to mitigate our exposure to variable interest rates on our long-term debt. We did not designate the interest rate swap agreement under cash flow or fair value hedge accounting. The interest rate swap agreement was recorded at fair value in other liabilities in our consolidated balance sheets and remeasured at the end of each reporting period until it matured. For the year ended December 31, 2009, we recognized a remeasurement gain of $0.5 million in interest expense in the accompanying consolidated statements of income.

Fair Value of Financial Instruments

Our financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued expenses and long-term debt. Cash equivalents and restricted cash are stated at amortized cost, which approximated fair value as of the balance sheet dates, due to the short period of time to maturity. Accounts receivable, accounts payable and accrued expenses are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment. Long-term debt is stated at the carrying value as the stated interest rate approximates market rates currently available to us. As of December 31, 2010 and 2011, we have not elected the fair value option for any financial assets and liabilities for which such an election would have been permitted.

Assets and liabilities recorded at fair value on a recurring basis in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:

Level I — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level II — Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and

F-9

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

Level III — Unobservable inputs that are supported by little or no market data for the related assets or liabilities.

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Our financial instruments consist of Level I assets. Level I assets include highly liquid money market funds and overnight investments that are included in cash and cash equivalents and a time deposit that is included in restricted cash.

Cash and Cash Equivalents

We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of cash on hand, money market accounts and overnight investments. Interest is accrued as earned.

Restricted Cash

Restricted cash represents a security deposit for a facility lease and consists of a time deposit with a domestic financial institution. Restricted cash is included in other assets in the accompanying consolidated balance sheets.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at the invoiced amount, net of any allowance for doubtful accounts, and do not bear interest. We maintain an allowance for doubtful accounts to reserve for potentially uncollectible accounts, which is recorded based upon a detailed review of all outstanding invoices, including the number of days that receivables are outstanding, historical and expected loss patterns and an evaluation of the potential risk associated with delinquent accounts.

Concentration of Revenues and Accounts Receivable

Significant customers are those which represent more than 10% of our total revenues or gross accounts receivable balance at each balance sheet date. For the years ended December 31, 2009, 2010 and 2011, we did not have any customers that accounted for 10% or more of our total revenues. In addition, as of December 31, 2010 and 2011, we did not have any customers that accounted for 10% or more of our total accounts receivable.

Property and Equipment, net

Property and equipment, net including leasehold improvements, are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from two to five years.

Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful lives of the respective assets or the property lease terms, which range up to five years. Upon the retirement or disposition of property and equipment, the related costs and accumulated depreciation is removed and any related gain or loss is recorded in the consolidated statements of income. We capitalize expenditures for replacements and betterments and expense amounts for maintenance and repairs as they are incurred.

F-10

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

Intangible Assets

Intangible assets consist of identifiable intangible assets, including distributor relationships, trade name, trademarks, developed technology, customer relationships and non-compete agreements, resulting from our acquisitions. Intangible assets are recorded at fair value, net of accumulated amortization. Intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from two to six years. Amortization expense is included as a component of cost of revenues and operating expenses in the accompanying consolidated statements of income.

Goodwill

Goodwill represents the excess of the purchase price of an acquired entity over the fair value of the net tangible and intangible assets acquired. Goodwill is not amortized.

Impairment of Goodwill

We perform our annual impairment test of goodwill during the fourth quarter of each fiscal year or whenever events or circumstances change that would indicate that goodwill might be impaired. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of goodwill or cause a significant decrease in expected cash flows.

We have determined that we have only one reporting unit. In conducting our impairment test, we must first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. If, after assessing the qualitative factors, we determine that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, we must then perform a two-step impairment test, whereby in the first step, we compare the estimated fair value of the reporting unit with the reporting unit’s carrying amount, including goodwill. If the carrying amount exceeds its fair value, we perform the second step of the goodwill impairment test to determine the amount of impairment, if any. The second step, measuring the impairment loss, compares the implied fair value of the goodwill with the carrying value of that goodwill. Any excess of the goodwill carrying value over the implied fair value is recognized as an impairment loss. No impairment of goodwill was identified for the years ended December 31, 2009, 2010 and 2011.

Impairment of Long-Lived Assets

The carrying amounts of our long-lived assets, including property and equipment and intangible assets subject to depreciation and amortization, are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. We have observed no indicators of impairment for the years ended December 31, 2009, 2010 and 2011.

Revenue Recognition

We recognize revenues when four basic criteria are met: (1) persuasive evidence exists of an arrangement with the customer reflecting the terms and conditions under which the services or products will be provided;

F-11

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

(2) services have been provided or delivery has occurred; (3) the fee is fixed or determinable; and (4) collection is reasonably assured. We consider a signed agreement, a binding insertion order, a third-party commission statement or other similar documentation to be persuasive evidence of an arrangement. Collectability is assessed based on a number of factors, including the creditworthiness of a customer and transaction history.

We generate revenues primarily from the sale of display and video advertising delivered across a variety of third-party owned digital media content provider properties for marketing campaigns that generally range between 30 and 90 days. Revenues from agreements based on impressions are recognized as the impressions are delivered. Revenues from agreements based on user engagements or actions are recognized when a user engagement or action occurs. We also enter into arrangements in which we receive referral revenue from advertisers on our wholly-owned website, Techbargains.com. We recognize referral revenue as earned.

We recognize revenues as a principal based upon a variety of factors, including acting as the primary obligor in the arrangement, performing a significant portion of the services, setting the pricing and retaining the credit risk. Accordingly, in the period advertising services are delivered, revenues are recognized on a gross basis and the corresponding third-party digital media content provider expenses are recognized and recorded as a component of cost of revenues.

Revenue Recognition for Multiple-Element Arrangements

We enter into arrangements with customers to deliver marketing campaigns that include multiple media advertisements within the same time period or within close proximity of one another. Because we had not yet established the fair value for each deliverable and our agreements contain mid-campaign cancellation clauses, revenues prior to January 1, 2011 were recognized as the lower of revenues calculated on a time-based straight-line basis over the term of the contract or revenues earned on the delivered media advertisement and priced as specified on the applicable insertion order.

Effective January 1, 2011, we adopted new authoritative guidance on multiple element arrangements using the prospective method for all arrangements entered into or materially modified from the date of adoption. Under this new guidance, we allocate arrangement consideration in multiple-deliverable revenue arrangements at the inception of an arrangement to all deliverables, based on the relative selling price method in accordance with the selling price hierarchy, which includes: (1) vendor-specific objective evidence (VSOE) if available; (2) third-party evidence (TPE) if VSOE is not available; and (3) best estimate of selling price (BESP) if neither VSOE nor TPE is available. BESP is generally used to allocate the selling price to deliverables in our multiple element arrangements as we have not historically been able to establish selling prices based on VSOE or TPE. The adoption of this recent authoritative guidance did not have a material impact on our consolidated financial statements.

Cost of Revenues

Cost of revenues consists primarily of amounts due to third-party digital media content providers for the placement of advertising on their properties. Cost of revenues also includes personnel costs, depreciation and amortization on our ad-serving hardware and software, third-party data acquisition costs and ad verification and ad-serving fees related to our revenue-generating e^X Advertising Intelligence Platform. Additionally, cost of revenues includes amortization of intangible assets acquired by us and used in our revenue-generating efforts. We are obligated to make payments to digital media content providers for the period in which advertising impressions are delivered or during which user engagements or actions have occurred, which correspond to the period in which the revenues are recognized.

F-12

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

Advertising Costs

Advertising costs are expensed to sales and marketing expenses as incurred in the accompanying consolidated statements of income. Advertising costs were $0.2 million for each of the years ended December 31, 2009, 2010 and 2011.

Product Development Expenses

We incur product development expenses primarily relating to the development and enhancement of our e^X Advertising Intelligence Platform. These expenses consist of personnel, information technology, consulting and facility-related costs. Product development expenses also include amortization of capitalized internal software development costs.

Software Development Costs

We capitalize the costs to develop software for our ad-serving technology and other internal uses when preliminary development efforts are successfully completed, management has authorized and committed project funding and it is probable that the project will be completed and the software will be used as intended. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed. Costs incurred for upgrades and enhancements that are considered probable of resulting in additional functionality are capitalized. Any capitalized costs would be amortized to expense on a straight-line basis over their expected lives. We capitalized $0.6 million in software development costs, including stock-based compensation, for the year ended December 31, 2011. Once placed into service, we amortize these costs over a period of three years. Prior to 2011, costs incurred during the application development stage were insignificant and were expensed as incurred.

Deferred Offering Costs

Deferred offering costs, consisting of legal, accounting and filing fees related to the initial public offering are capitalized. The deferred offering costs will be offset against proceeds from the initial public offering upon the effectiveness of the offering. In the event the offering is terminated, all capitalized deferred offering costs will be expensed. As of December 31, 2011, we have capitalized $1.6 million of deferred offering costs which are included in other assets in the accompanying consolidated balance sheets. No amounts were deferred as of December 31, 2010.

Stock-Based Compensation

Compensation expense related to stock option and restricted stock grants made to employees are calculated based on the fair value of all of our stock-based awards on the date of grant, net of estimated forfeitures. We determine the grant date fair value of our awards using the Black-Scholes option-pricing model and the related stock-based compensation is recognized on a straight-line basis, over the period in which an employee is required to provide service in exchange for the stock-based award, which is generally four years.

For stock-based awards issued to non-employees, including consultants, we record expense related to stock options based on the fair value of the options calculated using the Black-Scholes option-pricing model over the service performance period. The fair value of options granted to non-employees is remeasured over the vesting period and recognized as an expense over the period the services are rendered.

F-13

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

We recognize a benefit from stock-based compensation in additional paid-in capital if an incremental tax benefit is realized after all other tax attributes currently available to us have been utilized. In addition, we account for the indirect effects of stock-based compensation on other tax attributes, such as the research tax credit, through the statements of income.

Income Taxes

We account for income taxes using an asset and liability approach to record deferred taxes. Our deferred income tax assets represent temporary differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities that will result in deductible amounts in future years. The measurement of current and deferred tax assets and liabilities is based on provisions of enacted tax laws; the effects of future changes in tax laws are not anticipated. Based on estimates, the carrying value of our net deferred tax assets assumes that it is more likely than not that we will be able to generate sufficient future taxable income in the respective tax jurisdictions. Our judgments regarding future profitability may change due to future market conditions, changes in U.S. or international tax laws and other factors.

We account for uncertain tax positions by reporting a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. We recognize interest and penalties, if any, related to unrecognized tax benefits in the income tax provision in the accompanying consolidated statements of income.

Employee 401(k) Plan

We have a qualified contributory savings plan under Section 401(k) of the Code covering substantially all of our U.S. employees. Our 401(k) plan is designed to provide tax-deferred retirement benefits in accordance with the provisions of Section 401(k) of the Code. Eligible employees may defer up to 100% of their eligible compensation up to the annual maximum as determined by the Internal Revenue Service. Our contributions to the plan are discretionary. For the years ended December 31, 2009, 2010 and 2011 we did not make any contributions to the plan.

Foreign Currency

Our foreign subsidiaries primarily use the local currency as their functional currency. The assets and liabilities of the subsidiaries are, therefore, translated into U.S. dollars at exchange rates in effect at each balance sheet date. Revenues and expense accounts are translated at weighted-average monthly exchange rates during the period. Translation adjustments are accumulated as a separate component of accumulated other comprehensive income (loss) within stockholders’ equity. During the years ended December 31, 2009, 2010 and 2011, our cumulative foreign currency translation adjustments constituted our sole component of accumulated other comprehensive income (loss). Foreign currency transaction gains and losses resulting from or expected to result from transactions denominated in a currency other than the functional currency are recognized in other income (expense), net in the accompanying consolidated statements of income.

Segment Information

Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by our Chief Operating Decision Maker (CODM) in deciding how to allocate resources and assessing performance. Our CODM is our Chief Executive Officer.

F-14

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

We operate in one operating segment. Our CODM manages our operations on a consolidated basis for purposes of allocating resources. The CODM reviews financial information presented on a consolidated basis, accompanied by information about revenue by product line and geographic region for purposes of allocating resources and evaluating financial performance.

Net Income per Share of Common Stock

Basic net income per share attributable to common stockholders is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income per share attributable to common stockholders is computed by dividing diluted net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period, including potential dilutive common shares assuming the dilutive effect of outstanding stock options. Undistributed earnings are re-allocated to reflect the potential impact of dilutive securities, including stock options, in computing diluted net income attributable to common stockholders.

We compute net income per share attributable to common stockholders using the two-class method required for participating securities. We consider unvested restricted shares to be participating securities. All participating securities are excluded from the calculation of basic and diluted weighted-average common shares outstanding. In accordance with the two-class method, earnings allocated to unvested restricted shares, which include participation rights in undistributed earnings, are subtracted from net income to determine net income attributable to common stockholders.

Recently Issued and Adopted Accounting Standards

In January 2010, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update or ASU No. 2010-06, Improving Disclosures about Fair Value Measurements (Topic 820) — Fair Value Measurements and Disclosures, to add additional disclosures about the different classes of assets and liabilities measured at fair value, the valuation techniques and inputs used and the activity in Level III fair value measurements. We adopted ASU 2010-06 on January 1, 2011 and the adoption did not have a material impact on our consolidated financial statements.

In December 2010, the FASB issued ASU No. 2010-29, Disclosure of Supplementary Pro Forma Information for Business Combinations (Topic 805) — Business Combinations, to improve consistency in how the pro forma disclosures are calculated. Additionally, ASU 2010-29 enhances the disclosure requirements and requires description of the nature and amount of any material, nonrecurring pro forma adjustments directly attributable to a business combination. We adopted ASU 2010-29 on January 1, 2011 and the adoption did not have a material impact on our consolidated financial statements.

In May 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220) — Presentation of Comprehensive Income, that changed the requirement for presenting “Comprehensive Income” in the consolidated financial statements. The update requires an entity to present the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. We early adopted ASU 2011-05 on December 31, 2011 and the adoption did not have a material impact on our consolidated financial statements.

In September 2011, the FASB issued ASU No. 2011-08, Goodwill and Other (Topic 350) — Testing Goodwill for Impairment, to reduce the cost and complexity of the annual goodwill impairment test by providing

F-15

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

entities an option to perform a qualitative assessment to determine whether further impairment testing is necessary. ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The more-likely-than-not threshold is defined as having a likelihood of more than 50%. We early adopted ASU 2011-08 on October 1, 2011, and the adoption did not have a material impact on our consolidated financial statements.

2. Fair Value Measurement

We measure and report our cash equivalents and restricted cash at fair value. The following table sets forth the fair value of our financial assets by level within the fair value hierarchy:

	As of December 31, 2010
	Level I		Level II		Level III		Total
	(In thousands)
Financial Assets:
Money market accounts	$	1,300	$	—	$	—	$	1,300
Overnight investments		5,924		—		—		5,924
Time deposit		131		—		—		131
Total financial assets	$	7,355	$	—	$	—	$	7,355

	As of December 31, 2011
	Level I		Level II		Level III		Total
	(In thousands)
Financial Assets:
Money market accounts	$	1,301	$	—	$	—	$	1,301
Overnight investments		8,743		—		—		8,743
Time deposit		132		—		—		132
Total financial assets	$	10,176	$	—	$	—	$	10,176

Gross unrealized gains or losses for cash equivalents for the years ended December 31, 2009, 2010 and 2011 were not material.

3. Consolidated Balance Sheet Components

Cash and Cash Equivalents

Cash and cash equivalents consist of the following:

	As of December 31,
	2010		2011
	(In thousands)
Cash	$	1,281	$	4,219
Money market accounts		1,300		1,301
Overnight investments		5,924		8,743
Total cash and cash equivalents	$	8,505	$	14,263

F-16

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

Allowance for Doubtful Accounts

The allowance for doubtful accounts consists of the following activity:

	Years Ended December 31,
	2009			2010			2011
	(In thousands)
Allowance for doubtful accounts, beginning balance	$	304		$	210		$	350
Charged to costs and expenses		256			739			256
Recoveries		(129	)		(69	)		(116	)
Deductions (write-offs)		(221	)		(530	)		(202	)
Allowance for doubtful accounts, ending balance	$	210		$	350		$	288

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

	As of December 31,
	2010		2011
	(In thousands)
Tax receivables	$	864	$	3,941
Prepaid expenses		234		758
Related party note receivable		—		273
Other current assets		199		494
Total prepaid and other current assets	$	1,297	$	5,466

Property and Equipment, Net

Property and equipment, net consist of the following:

	As of December 31,
	2010			2011
	(In thousands)
Computer and equipment	$	6,735		$	7,838
Software		657			3,415
Furniture and fixtures		631			672
Leasehold improvements		383			363
Automobiles		34			34
Construction in progress		—			148
Total property and equipment, gross		8,440			12,470
Less: accumulated depreciation and amortization		(5,320	)		(6,115	)
Total property and equipment, net	$	3,120		$	6,355

Depreciation and amortization expense on our property and equipment, including amortization of capitalized software development costs, for the years ended December 31, 2009, 2010 and 2011 was $1.4 million, $1.4 million and $2.2 million.

F-17

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

As of December 31, 2010 and 2011, total property and equipment financed under capital leases was $3.1 million and $5.6 million, net of accumulated amortization of $1.5 million and $2.4 million. For the years ended December 31, 2009, 2010 and 2011 amortization expense related to total property and equipment under capital leases was $0.6 million, $0.6 million and $1.1 million.

Other Assets

Other assets consist of the following:

	As of December 31,
	2010		2011
	(In thousands)
Deferred offering costs	$	—	$	1,620
Deposits for facility leases		554		749
Restricted cash		131		132
Debt issuance costs, net		63		—
Related party note receivable		266		—
Other assets		—		110
Total other assets	$	1,014	$	2,611

Other Current Liabilities

Other current liabilities consist of the following:

	As of December 31,
	2010		2011
	(In thousands)
Accrued expenses	$	1,182	$	4,790
Income taxes payable		172		979
Customer deposits		192		195
Other current liabilities		734		579
Total other current liabilities	$	2,280	$	6,543

Other Liabilities

Other liabilities consist of the following:

	As of December 31,
	2010		2011
	(In thousands)
Guaranteed deferred payments	$	—	$	6,054
Income taxes payable		—		430
Deferred rent		96		271
Total other liabilities	$	96	$	6,755

F-18

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

4. Other Income (Expense), Net

Other income (expense), net consists of the following:

	Years Ended December 31,
	2009			2010			2011
	(In thousands)
Interest expense:
Interest expense	$	(1,127	)	$	(225	)	$	(363	)
Accretion of interest on guaranteed deferred payments		—			—			(86	)
Amortization of debt issuance costs		(223	)		(223	)		(63	)
Fair value remeasurement on interest rate swap agreement		498			—			—
Total		(852	)		(448	)		(512	)
Interest and other income (expense):
Foreign currency transaction gains (losses), net		(333	)		(496	)		(1,257	)
Interest income		70			39			35
Other, net		(326	)		(491	)		(321	)
Total		(589	)		(948	)		(1,543	)
Total other income (expense), net	$	(1,441	)	$	(1,396	)	$	(2,055	)

5. AdoTube Acquisition

In September 2011, we entered into an Agreement and Plan of Merger to acquire all outstanding shares of New Wave Media, Inc. (doing business as AdoTube), which provides in-stream online video advertising solutions. The acquisition allows us to expand our presence in the video advertising market and strengthen our position as a global video advertising provider.

We accounted for the AdoTube acquisition using the acquisition method of accounting for business combinations. A summary of the total purchase consideration is as follows (in thousands):

Cash	$	13,676
Fair value of guaranteed deferred payments		5,968
Total purchase consideration	$	19,644

Under the terms of the merger agreement, we are required to make guaranteed deferred cash payments of $4.1 million and $2.4 million in January 2013 and 2014 to the former owners of AdoTube. At the acquisition date, we determined that the discounted fair value of this guaranteed deferred consideration was $6.0 million. As of December 31, 2011, we have recorded $6.1 million in other liabilities in the consolidated balance sheet relating to these guaranteed deferred cash payments. For the year ended December 31, 2011, we have recognized $0.1 million in interest expense in the accompanying consolidated statements of income for accretion related to the guaranteed deferred cash payments.

F-19

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

We may also be required to pay contingent deferred consideration to the former owners of AdoTube if certain gross revenue and EBITDA targets for the stand-alone AdoTube business are achieved for 2012 and 2013. Payments are also contingent on the ongoing employment of the two principal former owners of AdoTube, unless these former owners are terminated without cause or resign for good reason. The contingent payment amount with respect to 2012 is $2.8 million and 267,143 shares of our common stock, which would be payable in January 2013. The contingent payment amount with respect to 2013 is $2.8 million and 267,144 shares of our common stock, which would be payable in January 2014. We have not recorded a liability for the contingent deferred consideration as it is considered compensatory in nature. Accordingly, we will recognize compensation expense over the requisite service period in 2012 and 2013 when we can estimate the level of payout probable of being achieved.

The excess purchase consideration over the fair values of assets acquired and liabilities assumed was recorded as goodwill. Goodwill is attributable to synergies achieved through combining the technology acquired from AdoTube with our existing video online advertising technology, as well as us acquiring an assembled workforce. The valuation of the intangible assets acquired was determined using currently available information and reasonable and supportable assumptions. The fair value of the developed technology was determined using an income approach. The fair value of the customer relationships was determined using a variation of the income approach known as the excess earnings method. The fair value of the trademarks was determined using a variation of the income approach known as the relief-from-royalty method. The fair value of the non-compete agreements was determined using a variation of the income approach known as the with-and-without method. For the assembled workforce, we used the cost approach.

The following table summarizes the fair values of assets acquired and liabilities assumed (in thousands), which is preliminary pending finalization of our purchase accounting:

Cash and cash equivalents	$	911
Accounts receivable, net		3,288
Other current assets		100
Property and equipment, net		81
Noncurrent assets		161
Intangible assets:
Developed technology		5,640
Customer relationships		3,380
Trade name		420
Non-compete agreements		980
Goodwill		11,429
Accounts payable and accrued liabilities		(3,904	)
Deferred tax liability		(2,842	)
Total	$	19,644

We are amortizing the acquired intangible assets over their estimated useful lives of up to five years. Amortization of developed technology and customer relationships are included within cost of revenues in the accompanying consolidated statements of income. Amortization of trademarks and non-compete agreements are included within operating expenses in the accompanying consolidated statements of income. For the year ended December 31, 2011, amortization expense for the acquired intangible assets amounted to $0.7 million.

F-20

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

For tax purposes, the acquired intangible assets are not amortized. Accordingly, a deferred tax liability of $2.8 million was recorded on the acquisition date for the difference between book and cost basis related to the acquired intangible assets. We incurred acquisition-related transaction costs of $0.5 million for the year ended December 31, 2011, which were included in general and administrative expenses in the accompanying consolidated statements of income.

Unaudited Pro Forma Information

Supplemental information on a pro forma basis is presented below for the years ended December 31, 2010 and 2011:

	Years Ended December 31,
	2010		2011
	(Unaudited)
	(In thousands)
Pro forma revenues	$	135,598	$	178,148
Pro forma income from operations		7,859		11,124
Pro forma net income		2,640		4,673

The unaudited pro forma financial information combines our results of operations and AdoTube’s results of operations as if the acquisition of AdoTube had occurred as of January 1, 2010. The pro forma results include the business combination accounting effects resulting from the acquisition such as the amortization charges from acquired intangible assets. The pro forma information presented does not purport to present what the actual results would have been had the acquisition actually occurred on January 1, 2010, nor is the information intended to project results for any future period.

From the acquisition date through December 31, 2011, we recognized revenues and net loss for AdoTube of $6.3 million and $0.6 million in the accompanying consolidated statements of income.

6. Goodwill and Intangible Assets

The changes in the carrying value of goodwill as of December 31, 2010 and 2011 are as follows:

	As of December 31,
	2010		2011
	(In thousands)
Goodwill, opening balance	$	14,178	$	14,178
AdoTube acquisition		—		11,429
Goodwill, ending balance	$	14,178	$	25,607

F-21

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

The gross carrying amount and accumulated amortization of our intangible assets are as follows:

As of December 31, 2010	Amortization Period		Gross Carrying Value		Accumulated Amortization			Net Book Value		Weighted-Average Remaining Amortization Period
	(In thousands except period data)
Distributor relationships		5.7 years	$	8,840	$	(5,743	)	$	3,097		2.0 years
Trade name		5.7 years		5,960		(3,872	)		2,088		2.0 years
Non-compete covenants		2.0 years		180		(180	)		—		—
Domain names		3.0 years		7		(7	)		—		—
Total			$	14,987	$	(9,802	)	$	5,185		2.0 years

As of December 31, 2011	Amortization Period		Gross Carrying Value		Accumulated Amortization			Net Book Value		Weighted-Average Remaining Amortization Period
	(In thousands except period data)
Distributor relationships		5.7 years	$	8,840	$	(7,292	)	$	1,548		1.0 years
Trade name		4.0 and 5.7 years		6,380		(4,947	)		1,433		1.7 years
Developed technology		5.0 years		5,640		(328	)		5,312		4.7 years
Customer relationships		4.0 years		3,380		(246	)		3,134		3.7 years
Non-compete covenants		2.0 and 2.5 years		1,160		(295	)		865		2.2 years
Marketing intangibles		5.0 years		16		(13	)		3		0.9 years
Domain names		3.0 years		7		(7	)		—		—
Total			$	25,423	$	(13,128	)	$	12,295		3.5 years

In April 2007, we acquired certain assets of Techbargains.com LLC. As a result of this acquisition, we recorded certain distributor relationships, non-compete covenants and the trade name as intangible assets. Distributor relationships represent the underlying relationship and contractual arrangements with techbargains.com affiliate partners, generally OEMs or reseller websites selling high-tech products. The amortization of the distributor relationships is included in our cost of revenues. The trade name asset reflects the value associated with the techbargains.com website. Intangible assets related to the acquisition of certain assets of Techbargains.com are deductible for tax purposes.

We recognized amortization expense on our intangible assets in the accompanying consolidated statements of income as follows:

	Years Ended December 31,
	2009		2010		2011
	(In thousands)
Cost of revenues	$	1,549	$	1,549	$	2,124
Operating expenses		1,073		1,045		1,189
Total intangible asset amortization expense	$	2,622	$	2,594	$	3,313

F-22

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

As of December 31, 2011, estimated total amortization expense related to our identifiable acquisition-related intangible assets in future periods is as follows:

Years Ending December 31,	Estimated Amortization Expense
	(In thousands)
2012	$	5,065
2013		2,470
2014		2,160
2015		1,801
2016		799
Total	$	12,295

7. Long-Term Debt

2007 Credit Facility

In connection with the Techbargains.com acquisition, in April 2007 we entered into a $40.0 million credit facility with a domestic financial institution. Upon closing of the acquisition, we borrowed $30.0 million in variable-rate, long-term debt under the facility and $10.0 million remained available under the facility as a revolving line of credit. The term loan was payable in various installments with the final payment due in April 2011. In November 2009, we paid off the remaining $12.5 million balance outstanding on the term loan.

In April 2008 and 2009, we borrowed $1.5 million and $3.5 million of the $10.0 million available under the revolving line of credit. The interest rate was equivalent to the rate charged on our $30.0 million term loan and interest was due monthly. Borrowings on the revolving line of credit were due in April 2011. In November 2010, we paid off the $5.0 million that was outstanding on the revolving line of credit.

2011 Amended Credit Facility

In May 2011, we amended our 2007 credit agreement to provide for a $20.0 million revolving line of credit. The interest rate on outstanding borrowings varies and resets periodically depending upon our consolidated leverage ratio and the current LIBOR and prime rates. Our interest rate as of December 31, 2011 was 2.02% per annum. Interest payments are due monthly. We are also required to pay commitment fees of 0.25% on the unused portion of the revolving line of credit. Commitment fees are due quarterly. Our revolving line of credit matures in May 2014. The revolving credit line is secured by our assets.

In connection with our acquisition of AdoTube in September 2011, we borrowed $13.4 million of the $20.0 million available under the revolving line of credit, which remained outstanding as of December 31, 2011.

We are required to comply with certain financial and non-financial covenants, including a minimum trailing twelve-month Adjusted EBITDA (defined as earnings before interest income, income taxes, depreciation, amortization, stock-based compensation and certain other non-cash or non-recurring income or expenses) of $10.0 million, a total leverage ratio (defined as the ratio of total indebtedness to trailing twelve-month Adjusted EBITDA) not greater than 1.0 and unrestricted liquidity (defined as cash and 70% of net accounts receivable) to total indebtedness ratio greater than 1.0. As of December 31, 2011, we were in compliance with the 2011 Amended Credit Facility covenants.

F-23

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

8. Commitments and Contingencies

Lease Commitments

We have an equipment financing arrangement with a financial institution whereby the financial institution purchases and leases to us, equipment (primarily computer and network-related) for use in our business. Amounts financed under the leases are accounted for as capital leases. The arrangement provides for up to $6.5 million in financing.

We also have entered into operating leases for our domestic and international locations and various sales offices worldwide. These agreements require us to pay certain operating expenses, such as taxes, repairs and insurance and contain renewal and escalation clauses. We recognize rent expense under these agreements on a straight-line basis. Future minimum lease payments under non-cancelable operating leases with initial or remaining lease terms in excess of one year, and the future minimum capital lease payments as of December 31, 2011, are as follows:

	Years Ending December 31,
	Capital Leases			Operating Leases
	(In thousands)
2012	$	1,756		$	2,660
2013		1,345			2,534
2014		302			2,028
2015		—			1,771
2016		—			1,440
Thereafter		—			2,531
	$	3,403		$	12,964
Less: amount representing interest		(272	)
Present value of future minimum payments		3,131
Less: current portion of capital lease obligations		(1,576	)
Long-term portion of capital lease obligations	$	1,555

For the years ended December 31, 2009, 2010 and 2011, rent expense was $1.4 million, $1.9 million and $2.8 million.

Legal

From time to time, we may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. In addition, we may receive letters alleging infringement of patent or other intellectual property rights. We are not currently a party to any material legal proceedings, nor are we aware of any pending or threatened litigation that, in our opinion, would have a material adverse effect on our business, operating results, cash flows or financial condition should such litigation be resolved unfavorably.

Indemnification Agreements

In the ordinary course of business, we may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners and other parties with respect to certain matters, including, but not

F-24

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

limited to, losses arising out of breach of such agreements, services to be provided by us or from intellectual property infringement claims made by third parties. In addition, we have entered or plan to enter into indemnification agreements with our directors and certain of our officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers or employees.

While the outcome of these matters cannot be predicted with certainty, we do not believe that the outcome of any claims under indemnification arrangements or any legal matters will have a material adverse effect on our financial position, results of operations or cash flows. Accordingly, we have not recorded a liability related to these indemnifications as of December 31, 2010 and 2011.

9. Common Stock

Common Stock Reserved for Issuance

We have shares of common stock reserved for future issuance as follows:

	As of December 31, 2011
Shares reserved for future issuance under our equity incentive plans		1,230,262
Outstanding stock options		14,259,048
		15,489,310

Treasury Stock

We have a right to repurchase outstanding shares of our common stock upon a proposed transfer to third parties. We account for treasury stock under the cost method and have recorded a total of $0.4 million in treasury stock as of December 31, 2011 based on the fair value of the shares on the respective dates of repurchases. For the years ended December 31, 2009, 2010 and 2011, we did not repurchase any additional shares.

10. Stock-Based Compensation

We recognize stock-based compensation for our employees and non-employees in connection with our 2000 Equity Incentive Plan, 2010 Equity Incentive Plan and restricted stock granted outside of our equity incentive plans in our accompanying consolidated statements of income as follows:

	Years Ended December 31,
	2009		2010		2011
	(In thousands)
Cost of revenues	$	34	$	36	$	34
Sales and marketing		860		1,442		1,287
Product development		368		726		418
General and administrative		377		624		635
Total stock-based compensation	$	1,639	$	2,828	$	2,374

F-25

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

For the years ended December 31, 2009, 2010 and 2011, the income tax benefit we realized related to stock-based compensation in the provision for income taxes in the accompanying consolidated statements of income was $0.3 million, $0.8 million and $0.1 million.

For the years ended December 31, 2009, 2010 and 2011, we recorded an insignificant amount of stock-based compensation related to stock option grants made to non-employees.

We capitalized $40,000 of stock-based compensation relating to software development costs, and amortized $3,000 during the year ended December 31, 2011.

Equity Incentive Plans

In August 2000, we adopted the 2000 Plan. The 2000 Plan is administered by our board of directors or designated person(s). Under the 2000 Plan, the plan administrator is allowed to determine various terms and conditions of our option and restricted stock grants, including option expiration dates (generally ten years from the date of grant), vesting terms (generally over a four-year period, with 25% vesting at the end of the first year and the balance vesting ratably on a monthly basis over the remaining period) and payment terms.

The 2000 Plan provides for stock option grants at an exercise price as determined by the plan administrator, but in the case of incentive stock options, not less than 100% of the fair market value of the common stock subject to the option on the date of grant and 110% for owners of 10% or more of our common stock. The 2000 Plan also provides for restricted stock awards. The purchase price of restricted stock under these awards is determined by the plan administrator.

In June 2010, we adopted the 2010 Plan. In connection with the adoption, we transferred 8.0 million shares authorized and available for grant under the 2000 Plan into the 2010 Plan. We will no longer grant any options under the 2000 Plan. Outstanding options issued under the 2000 Plan remain outstanding, and may be exercised in accordance with their terms but may not be reissued if they are cancelled. The 2010 Plan is substantially similar to the 2000 Plan.

F-26

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

The following table summarizes option and restricted stock activity under the 2000 and 2010 Plans and related information:

	Shares Available for Grant			Outstanding
				Number of Shares			Weighted- Average Exercise  Price/ Grant Date Fair Value		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
									(In years)		(In thousands)
Outstanding — December 31, 2008		7,212,537			6,627,971		$	1.81
Additional shares authorized		—			—
Grants		(1,871,000	)		1,871,000			1.21
Cancellations/forfeitures		1,919,004			(1,919,004	)		2.12
Expired		200,000			(200,000	)		0.30
Exercises		—			(21,354	)		0.56
Repurchases		18,751			—
Outstanding — December 31, 2009		7,479,292			6,358,613			1.60		7.81		963
Additional shares authorized		—			—
Grants		(6,919,875	)		6,919,875			1.21
Cancellations/forfeitures under 2000 Plan		714,708			(1,449,969	)		1.70
Cancellations/forfeitures under 2010 Plan		230,000			(230,000	)		1.27
Expired		300,000			(300,000	)		0.48
Exercises		—			(1,048,521	)		0.46
Outstanding — December 31, 2010		1,804,125			10,249,998			1.28		8.76		499
Additional shares authorized		4,000,000			—
Grants		(5,864,700	)		5,864,700			1.75
Cancellations/forfeitures under 2000 Plan		—			(509,063	)		1.29
Cancellations/forfeitures under 2010 Plan		1,290,837			(1,290,837	)		1.36
Exercises		—			(55,750	)		0.90
Outstanding — December 31, 2011		1,230,262			14,259,048			1.47		8.46		9,040
Vested and expected to vest — December 31, 2011					10,678,125			1.44		8.21		7,068
Exercisable — December 31, 2011					5,744,532			1.28		7.29		4,708

F-27

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

The following table summarizes additional information regarding outstanding and exercisable options under the 2000 and 2010 Plans as of December 31, 2011:

	Options Outstanding						Options Exercisable
Exercise Prices	Number of Stock Options Outstanding		Weighted-Average Remaining Contractual Life		Weighted-Average Exercise Price per Share		Shares Subject to Stock Options		Weighted-Average Exercise  Price Per Share
			(In Years)						(In Years)
$0.56		190,000		3.83	$	0.56		190,000	$	0.56
$0.75		213,480		4.72		0.75		213,480		0.75
$1.21		1,307,915		7.95		1.21		832,550		1.21
$1.27		1,530,270		8.46		1.27		743,009		1.27
$1.31		5,227,247		7.78		1.31		3,215,515		1.31
$1.34		2,451,136		9.29		1.34		258,878		1.34
$1.97		250,000		5.49		1.97		250,000		1.97
$2.10		3,064,000		9.98		2.10		18,705		2.10
$2.59		25,000		6.17		2.59		22,395		2.59
		14,259,048		8.46	$	1.47		5,744,532	$	1.28

Determining the Fair Value of Stock Options

The estimated grant date fair value of all our stock-based awards was calculated based on the assumptions discussed below.

	Years Ended December 31,
	2009	2010	2011
Expected term (in years)	5.5	5.7	5.7 - 5.8
Risk-free interest rate	2.5%	1.4% - 2.4%	1.0% - 2.4%
Expected volatility	59.9%	59.5% - 65.4%	64.1% - 65.0%
Dividend rate	0%	0%	0%
Forfeiture rate	23.6%	22.7% - 24.4%	22.9% - 24.9%

The fair value of each grant of our stock-based awards was determined by our board of directors using the Black-Scholes option-pricing model and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment to determine.

Fair value of common stock — The fair value of the shares of common stock underlying our stock options has historically been determined by our board of directors, with input from management. Prior to March 2012, our board of directors consisted of our Chief Executive Officer. Subsequent to March 2012, our board of directors is comprised of majority non-employee directors. Because there has been no public market for our common stock, our board of directors has determined the fair value of the common stock at the time of grant of the option by considering a number of objective and subjective factors, including valuations performed by an unrelated third-party specialist, valuations of comparable companies, operating and financial performance, the lack of liquidity of capital stock and general and industry specific economic outlook. The fair value of the underlying common stock will be determined by our board of directors until such time as our common stock is listed on an established stock exchange or national market system. As of December 31, 2010 and 2011, our board of directors determined the fair value of our common stock to be $1.34 and $2.10 per share.

F-28

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

Expected term — The expected term is based upon employee historical exercise and post-vesting employment termination behavior which also takes into account the contractual life of the award.

Risk-free interest rate — The risk-free interest rate is based on the interest yield in effect at the date of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the option’s expected term.

Expected volatility — Since we do not have a trading history of our common stock, the expected volatility was derived from the historical stock volatilities of several unrelated public companies within our industry that we consider to be comparable to our business over a period equivalent to the expected term of the stock option grants.

Dividend rate — The expected dividend rate was assumed to be zero as we have never paid dividends and have no current plans to do so.

Forfeiture rate — We estimate our forfeiture rate based on an analysis of our actual and expected forfeitures. We will continue to evaluate the adequacy of the forfeiture rate based on actual and expected forfeiture experience, analysis of employee turnover behavior and other factors. The impact from any forfeiture rate adjustment would be recognized in full in the period of adjustment, and if the actual number of future forfeitures differs from our estimates, we might be required to record adjustments to stock-based compensation in future periods.

The weighted-average grant date fair value of our stock options granted for the years ended December 31, 2009, 2010 and 2011 were $0.67, $0.76 and $1.15 per share. The aggregate fair value of our stock options which vested for the years ended December 31, 2009, 2010 and 2011 were $1.4 million, $1.5 million and $1.7 million.

The aggregate intrinsic value of our stock options exercised under the 2000 Plan and the 2010 Plan for the years ended December 31, 2009, 2010 and 2011 was $16,000, $0.9 million and $0.1 million. The aggregate intrinsic value was calculated as the difference between the per-share exercise prices of the underlying stock option awards and the estimated fair value of our common stock for each share subject to an option multiplied by the number of shares subject to options at the date of exercise.

As of December 31, 2011 we have employee stock-based compensation of $6.0 million related to unvested stock options and restricted stock granted to employees but not yet recognized, net of estimated forfeitures. As of December 31, 2011 this cost will be amortized to expense over a weighted-average remaining period of 3.15 years and will be adjusted for subsequent changes in estimated forfeitures. Future option grants will increase the amount of compensation expense to be recognized in these periods.

Stock Option Repricing

In August 2010, we offered to reprice various outstanding stock options with an exercise price in excess of $1.31 per share to a new exercise price of $1.31 per share. Effective as of the closing of the offering period on October 8, 2010, we repriced 2.0 million shares at a new exercise price of $1.31 per share. All other features and characteristics of the existing options were unchanged. The repricing is considered a modification of outstanding stock options. Accordingly, we calculated the fair value of the repriced options immediately prior to the modification and then immediately after. For the years ended December 31, 2010 and 2011 we recorded $0.3 million and $0.1 million in stock-based compensation related to the repriced options, which is the incremental value per share for all of the vested options.

F-29

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

Stock Purchases

In August 2010, certain employees purchased 591,000 shares of our common stock from us for cash at prices ranging from $0.01 to $0.48 per share, when the deemed fair value of our common stock was $1.31 per share. We recorded $0.6 million in stock-based compensation for the year ended December 31, 2010 in connection with these restricted stock purchases.

Restricted Stock

During 2007, we sold 1.0 million shares of restricted stock to an employee outside of our 2000 Plan. During the year ended December 31, 2010, we accelerated the vesting of 250,000 shares and recorded $0.3 million in stock-based compensation. The remaining 750,000 shares are unvested as of December 31, 2011 and will vest upon the completion of an initial public offering. These shares are not presented as issued or outstanding in the accompanying consolidated balance sheets and statements of stockholder’s equity as they are unvested.

F-30

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

11. Net Income per Share of Common Stock

The following table sets forth the computation of our basic and diluted net income per share of common stock attributable to common stockholders:

	Years Ended December 31,
	2009			2010			2011
	(In thousands, except share and per share data)
Numerator:
Basic:
Net income	$	3,011		$	5,371		$	6,884
Less undistributed earnings attributable to participating securities		(58	)		(92	)		(97	)
Net income attributable to common stockholders, basic	$	2,953		$	5,279		$	6,787
Diluted:
Net income attributable to common stockholders, basic	$	2,953		$	5,279		$	6,787
Add undistributed earnings re-allocated to common stockholders		—			1			2
Net income attributable to common stockholders, diluted	$	2,953		$	5,280		$	6,789
Denominator:
Basic:
Weighted-average shares used in computing net income per share attributable to common stockholders, basic		51,190,410			51,682,476			52,510,727
Diluted:
Weighted-average shares used in computing net income per share attributable to common stockholders, basic		51,190,410			51,682,476			52,510,727
Add dilutive effect of equity incentive plans		694,832			476,602			1,292,263
Weighted-average shares used in computing net income per share attributable to common stockholders, diluted		51,885,242			52,159,078			53,802,990
Net income per share attributable to common stockholders:
Basic	$	0.06		$	0.10		$	0.13
Diluted	$	0.06		$	0.10		$	0.13
Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive		4,384,866			5,873,334			5,276,378

F-31

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

12. Income Taxes

The geographical breakdown of our income before the provision for income taxes is as follows:

	Years Ended December 31,
	2009		2010		2011
	(In thousands)
Domestic	$	3,856	$	7,788	$	8,330
Foreign		1,778		2,068		3,817
Income before provision for income taxes	$	5,634	$	9,856	$	12,147

The components of the provision for income taxes are as follows:

	Years Ended December 31,
	2009			2010			2011
	(In thousands)
Current:
Federal	$	2,066		$	3,775		$	3,019
State		660			959			82
Foreign		32			443			810
Total current		2,758			5,177			3,911
Deferred:
Federal		(74	)		(964	)		1,256
State		(36	)		253			73
Foreign		(25	)		19			23
Total deferred		(135	)		(692	)		1,352
Total provision for income taxes	$	2,623		$	4,485		$	5,263

The reconciliation of the federal statutory income tax provision to our effective income tax provision is as follows:

	Years Ended December 31,
	2009			2010			2011
	(In thousands)
U.S. federal taxes at statutory tax rate	$	1,972		$	3,450		$	4,251
State taxes, net of federal benefit		335			776			185
Foreign tax rate differential		(151	)		(209	)		(121	)
Stock-based compensation		419			245			670
Other		48			223			278
Provision for income taxes	$	2,623		$	4,485		$	5,263

F-32

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

The following table presents the breakdown between current and non-current deferred tax assets and liabilities:

	As of December 31,
	2010			2011
	(In thousands)
Deferred tax assets, current	$	901		$	1,743
Deferred tax assets, non-current		1,618			—
Deferred tax liabilities, current		(23	)		—
Deferred tax liabilities, non-current		—			(3,399	)
Total net deferred tax assets (liabilities)	$	2,496		$	(1,656	)

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below:

	As of December 31,
	2010		2011
	(In thousands)
Deferred tax assets:
Stock-based compensation	$	828	$	913
Net operating losses		—		615
Accruals and reserves		609		292
Foreign currency translation adjustments		—		42
Tangible and intangible assets		866		—
Other		193		331
Net deferred tax assets		2,496		2,193
Deferred tax liabilities:
Tangible and intangible assets		—		(3,849	)
Net deferred tax assets (liabilities)	$	2,496	$	(1,656	)

Net operating loss and tax credit carryforwards as of December 31, 2011 are as follows:

	Amount		Expiration Year
	(In thousands)
Net operating losses, federal	$	1,731		2031
Net operating losses, state		4,842		2023 - 2031

For the year ended December 31, 2010, we recorded a state tax expense of approximately $0.3 million to reflect a write-down of deferred tax assets to the expected future benefit due to a change in California law during 2010.

As of December 31, 2010 and 2011, we are permanently reinvesting approximately $1.6 million and $2.1 million of earnings from our subsidiary in India.

Uncertain Tax Positions

We recognize accrued interest and penalties related to unrecognized tax benefits in our income tax provision. We recognized an insignificant amount of accrued interest and penalties for the year ended

F-33

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

December 31, 2009, and recognized $0.1 million and $0.1 million of accrued interest and penalties for the years ended December 31, 2010 and 2011. As of December 31, 2010 and 2011, we have recorded $0.1 million and $0.1 million of accrued interest and penalties in the accompanying consolidated balance sheets.

The following is a reconciliation of the beginning and ending amount of our total gross unrecognized tax benefit liabilities:

	Years Ended December 31,
	2009		2010		2011
	(In thousands)
Gross unrecognized tax benefit — beginning balance	$	94	$	94	$	94
Increases related to tax positions from prior years		—		—		13
Increases related to tax positions taken during current year		—		—		228
Gross unrecognixed tax benefit — ending balance	$	94	$	94	$	335

Our gross unrecognized tax benefits, if recognized, would have an impact on our effective tax rate as of December 31, 2010 and 2011. While it is often difficult to predict the final outcome of any particular uncertain tax position, we do not believe that the amount of unrecognized tax benefits will change significantly in the next twelve months.

We file income tax returns in the U.S. federal, various U.S. state and foreign tax jurisdictions. We are subject to U.S. federal income tax examination for the 2009 through 2011 tax years. Additionally, we are subject to various state income tax examinations for the 2007 through 2011 tax years. During the third quarter of 2011, we settled the Internal Revenue Service’s audit of our 2008 tax return. The results of this examination did not have a material impact on our consolidated financial statements. We are currently under a New York state examination for the 2006 through 2008 tax years. We do not expect the outcome of this audit to have a material impact on our consolidated financial statements.

13. Geographical Information

The following table represents total revenues based on where our advertisers are physically located:

	Years Ended December 31,
	2009		2010		2011
	(In thousands)
United States	$	78,400	$	93,838	$	113,063
International		14,160		31,430		56,019
Total revenues	$	92,560	$	125,268	$	169,082

Revenues earned in the United Kingdom comprised $6.9 million, $13.6 million and $19.7 million for the years ended December 31, 2009, 2010 and 2011. No other country outside of the United States comprised 10% or greater of our total revenues for the years ended December 31, 2009, 2010 and 2011.

F-34

EXPONENTIAL INTERACTIVE, INC.

Notes to Consolidated Financial Statements (Continued)

Years Ended December 31, 2009, 2010 and 2011

Our property and equipment, net by location are summarized as follows:

	As of December 31,
	2010		2011
	(In thousands)
United States	$	2,496	$	5,609
International, excluding United Kingdom		185		217
United Kingdom		439		529
Total property and equipment, net	$	3,120	$	6,355

14. Related Party Note Receivable

In December 2008, we loaned $250,000 to our CEO and President. The loan is non-recourse and is secured by 110,113 shares of our common stock pledged under a Security Agreement. The loan was scheduled to mature on December 10, 2012. The interest rate on the loan is 2.97% per annum. Interest payments compound annually and are due upon maturity. As of December 31, 2011, we have classified the note receivable, including principal and accrued interest, in prepaid expenses and other current assets in the accompanying consolidated balance sheet. For the years ended December 31, 2009, 2010 and 2011, we recognized interest income on the note receivable of $7,000, $8,000 and $8,000 in other income (expense), net in the accompanying consolidated statements of income. In February 2012, our CEO repaid the principal and accrued interest on the loan in the amount of $275,000.

15. Subsequent Events

On March 2, 2012, we granted stock options to purchase 2,655,000 shares of common stock with an exercise price of $2.75 per share and increased the number of shares reserved for issuance in connection with our 2010 Plan from 12.0 million to 16.0 million.

On March 7, 2012, we granted stock options to purchase 450,000 shares of common stock with an exercise price of $2.75 per share in connection with our 2010 Plan and we granted restricted stock units to purchase 120,000 shares of common stock with a grant date fair value of $2.75 per share.

F-35

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

New Wave Media Inc.

New York, New York

We have audited the accompanying consolidated balance sheet of New Wave Media Inc. as of December 31, 2010 and the related consolidated statement of operations, stockholders’ equity (deficit), and cash flows for the year then ended. These consolidated 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 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of New Wave Media Inc. at December 31, 2010, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ BDO USA, LLP

New York, New York

March 15, 2012

F-36

NEW WAVE MEDIA INC.

Consolidated Balance Sheets

(In thousands, except share and per share data)

	As of December 31, 2010			As of June 30, 2011
				(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	312		$	1,061
Accounts receivable		4,344			3,584
Related party notes receivable		90			290
Prepaid expenses and other current assets		15			54
Total current assets		4,761			4,989
Property and equipment, net		27			78
Other assets		43			151
TOTAL ASSETS	$	4,831		$	5,218
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	$	3,532		$	3,329
Accrued compensation and related expenditures		553			509
Deferred compensation		818			793
Related party borrowings		170			10
Total current liabilities		5,073			4,641
Long-term convertible note payable		—			1,645
Other liabilities		106			132
TOTAL LIABILITIES		5,179			6,418
STOCKHOLDERS’ EQUITY (DEFICIT):
Commitments and contingencies (Note 6)
Convertible preferred stock, $0.000001 par value per share at June 30, 2011; no shares and 9,911,173 shares authorized at December 31, 2010 and June 30, 2011; no shares issued and outstanding at December 31, 2010 and June 30, 2011).		—			—
Common stock, no par value and $0.000001 par value per share at December 31, 2010 and June 30, 2011; 150,000,000 shares authorized at December 31, 2010 and June 30, 2011; 83,473,200 shares and 83,972,535 shares issued and outstanding at December 31, 2010 and June 30, 2011		—			—
Additional paid-in capital		5,672			6,054
Accumulated deficit		(6,020	)		(7,254	)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		(348	)		(1,200	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	4,831		$	5,218

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

F-37

NEW WAVE MEDIA INC.

Consolidated Statements of Operations

(In thousands)

	Year Ended December 31,			Six Months Ended June 30,
	2010			2010			2011
				(Unaudited)
Revenues	$	10,330		$	4,502		$	6,139
Cost of revenues		5,656			2,440			2,898
Gross profit		4,674			2,062			3,241
Operating expenses:
Sales and marketing		2,649			982			2,529
Product development		1,141			311			961
General and administrative		1,303			576			865
Total operating expenses		5,093			1,869			4,355
Operating income (loss)		(419	)		193			(1,114	)
Other income (expense), net:
Interest expense		(64	)		(25	)		(65	)
Interest and other income (expense), net		30			57			(16	)
Total other income (expense), net		(34	)		32			(81	)
Income (loss) before provision for income taxes		(453	)		225			(1,195	)
Income tax provision		(63	)		(28	)		(39	)
Net income (loss)	$	(516	)	$	197		$	(1,234	)

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

F-38

NEW WAVE MEDIA INC.

Consolidated Statements of Stockholders’ Equity (Deficit)

(In thousands, except share data)

	Common Stock					Additional Paid-In Capital			Stockholder’s Receivable			Accumulated Deficit			Total Stockholder’s Equity (Deficit)
	Shares			Amount
Balance as of December 31, 2009		78,184,882		$	—	$	4,681		$	(2	)	$	(5,504	)	$	(825	)
Conversion of convertible note into common stock		1,227,673			—		100			—			—			100
Issuance of common stock		3,263,028			—		353			—			—			353
Issuance of common stock for deferred compensation		797,617			—		58			—			—			58
Stock-based compensation		—			—		480			—			—			480
Collection of stockholder’s receivable		—			—		—			2			—			2
Net loss		—			—		—			—			(516	)		(516	)
Balance as of December 31, 2010		83,473,200		$	—	$	5,672		$	—		$	(6,020	)	$	(348	)
Repurchase of common stock (unaudited)		(138,354	)		—		(21	)		—			—			(21	)
Issuance of common stock (unaudited)		499,335			—		95			—			—			95
Issuance of common stock for deferred compensation (unaudited)		138,354			—		27			—			—			27
Beneficial conversion feature related to convertible note payable (unaudited)		—			—		167			—			—			167
Stock-based compensation (unaudited)		—			—		114			—			—			114
Net loss (unaudited)		—			—		—			—			(1,234	)		(1,234	)
Balance as of June 30, 2011 (unaudited)		83,972,535		$	—	$	6,054		$	—		$	(7,254	)	$	(1,200	)

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

F-39

NEW WAVE MEDIA INC.

Consolidated Statements of Cash Flows

(In thousands)

	Year Ended December 31,			Six Months Ended June 30,
	2010			2010			2011
				(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(516	)	$	197		$	(1,234	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property and equipment		6			3			8
Stock-based compensation		480			95			114
Gain on early extinguishment of debt		(75	)		(75	)		—
Amortization of beneficial conversion feature related to convertible note payable		—			—			12
Changes in operating assets and liabilities:
Accounts receivable		(2,527	)		(1,517	)		760
Prepaid expenses and other current assets and other assets		(48	)		(36	)		(147	)
Accounts payable and accrued liabilities		2,295			907			(203	)
Accrued compensation and related expenditures		452			234			(44	)
Deferred compensation		195			156			2
Other liabilities		56			24			26
Net cash provided by (used in) operating activities		318			(12	)		(706	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(16	)		(4	)		(59	)
Net cash used in investing activities		(16	)		(4	)		(59	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from related party notes receivable		—			—			(200	)
Proceeds from borrowings		300			300			1,800
Proceeds from related party borrowings		100			100			—
Principal payments on borrowings		(725	)		(725	)		—
Principal payments on related party borrowings		(55	)		—			(160	)
Collection of stockholder’s receivable		2			—			—
Proceeds from issuance of common stock		353			353			95
Repurchases of common stock upon employee termination		—			—			(21	)
Net cash (used in) provided by financing activities		(25	)		28			1,514
NET INCREASE IN CASH AND CASH EQUIVALENTS		277			12			749
CASH AND CASH EQUIVALENTS — Beginning of period		35			35			312
CASH AND CASH EQUIVALENTS — End of period	$	312		$	47		$	1,061
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	$	13		$	13		$	17
Cash paid for taxes		—			—			—
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Conversion of convertible note payable into common stock	$	100		$	100		$	—
Issuance of common stock for deferred compensation	$	58		$	25		$	27
Beneficial conversion feature related to convertible note payable	$	—		$	—		$	167

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

F-40

NEW WAVE MEDIA INC.

Notes to Consolidated Financial Statements

Year Ended December 31, 2010 and the

Six Months Ended June 30, 2010 and 2011 (Unaudited)

1. Organization

New Wave Media Inc., doing business as AdoTube, was incorporated in Delaware in February 2007. We provide a complete in-stream online video advertising solution that enables each party of the online advertising industry (agencies, advertisers and publishers) to have easy and efficient access to in-stream ads. Our complete platform, which includes the AdoTube Ad Network, Publisher Management Tool (PUMA), Network Partner Console for third party networks, and Creative Services, helps each part of the industry to deliver high quality, in-stream advertising solutions through an optimized platform.

Our principal operations are at our headquarters in New York, New York and in Kiev, Ukraine. In March 2011, we incorporated a wholly-owned subsidiary in Ukraine to support our operations. We operate in one segment.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and include all adjustments necessary for the fair presentation of our consolidated financial position, results of operations and cash flows for the periods presented. The accompanying consolidated financial statements include the accounts of New Wave Media Inc. and our wholly-owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.

Unaudited Interim Financial Information

The accompanying interim consolidated balance sheet as of June 30, 2011, the interim consolidated statements of operations and cash flows for the six months ended June 30, 2010 and 2011 and the interim consolidated statements of stockholders’ equity (deficit) for the six months ended June 30, 2011 are unaudited. The unaudited interim consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements, and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the consolidated balance sheet as of June 30, 2011 and the consolidated statements of operations and cash flows for the six months ended June 30, 2010 and 2011 and stockholders’ equity (deficit) for the six months ended June 30, 2011. The consolidated financial data disclosed in these notes to the consolidated financial statements related to the six months ended June 30, 2010 and 2011 are also unaudited. The consolidated results of operations and cash flows for the six months ended June 30, 2011 are not necessarily indicative of the results to be expected for the entire year ending December 30, 2011 or for any other future annual or interim period.

Subsequent Events

We assess the appropriate accounting for and disclosures of events that occur after the balance sheet date but before the accompanying consolidated financial statements are issued. For the consolidated financial statements as of December 31, 2010 and the year then ended, we evaluated subsequent events through March 15, 2012, the date our consolidated financial statements were issued.

F-41

NEW WAVE MEDIA INC.

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 2010 and the

Six Months Ended June 30, 2010 and 2011 (Unaudited)

Use of Estimates

The preparation of the accompanying consolidated financial statements in conformity with GAAP requires us to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Those management estimates include, but are not limited to, revenue recognition, allowance for doubtful accounts, stock-based compensation and contingent liabilities. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the consolidated financial statements.

Stock Split

On November 9, 2010, our board of directors approved a 1-for-10,000 stock split of our common stock, which had no par value at the time. We also increased the number of shares we are authorized to issue to 150,000,000. The stock split affected all of our common stock and options to purchase common stock outstanding immediately prior to the effective date of the stock split. Common stock, additional paid-in capital, accumulated deficit and share and per share data for prior periods have been retroactively restated to reflect the stock split as if it had occurred at the beginning of the earliest period presented.

Concentration of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash, cash equivalents and trade accounts receivable. Cash and cash equivalents are deposited with major financial institutions in the United States and Ukraine. From time to time, our cash balances with domestic financial institutions may exceed Federal Deposit Insurance Corporation limits. Management believes that the financial institutions that hold our deposits are financially creditworthy and, accordingly, minimal credit risk exists with respect to those investments. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal interest rate risk.

Our accounts receivable are derived from advertising contracts with clients located principally in the United States. We perform ongoing credit evaluations of our customers to assess the probability of accounts receivable collection based on a number of factors, including past transaction experience with the customer, evaluation of their credit history and review of the invoicing terms of the contract, and maintain allowances for potential credit losses on client accounts when deemed necessary. We generally do not require collateral. We maintain reserves for potential credit losses on customer accounts when deemed necessary. To date, such losses have been within management’s expectations.

Fair Value of Financial Instruments

Our financial instruments consist of accounts receivable, accounts payable, accrued expenses and our long-term convertible note payable. Accounts receivable, accounts payable and accrued expenses are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment. The carrying amount of our long-term convertible note payable approximates its fair value and is based upon our best estimate of interest rates that would be available to us for similar debt obligations as of December 31, 2010 and June 30, 2011.

F-42

NEW WAVE MEDIA INC.

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 2010 and the

Six Months Ended June 30, 2010 and 2011 (Unaudited)

Assets and liabilities recorded at fair value on a recurring basis in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer to a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:

Level I — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level II — Inputs other than quoted prices included within Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data of substantially the full term of the related assets or liabilities; and

Level III — Unobservable inputs that are supported by little or no market data for the related assets or liabilities.

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. There are no financial assets or liabilities measured on a recurring basis.

Cash and Cash Equivalents

We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of December 31, 2010 and June 30, 2011, cash and cash equivalents consist of cash on hand. Interest is accrued as earned.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest. As of December 31, 2010 and June 30, 2011, we have not recorded an allowance for doubtful accounts.

Concentration of Revenues and Accounts Receivable

Significant customers are those which represent more than 10% of our total revenues or gross accounts receivable balance at each balance sheet date.

F-43

NEW WAVE MEDIA INC.

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 2010 and the

Six Months Ended June 30, 2010 and 2011 (Unaudited)

Significant customers as of December 31, 2010 and June 30, 2011 and for the year ended December 31, 2010 and the six months ended June 30, 2010 and 2011, were as follows:

	Percentage of Accounts Receivable
	As of December 31, 2010			As of June 30, 2011
				(Unaudited)
Customer A		21	%		*
Customer C		*			15	%

* Less than 10%

	Percentage of Revenues
	Year  Ended December 31, 2010			Six Months Ended June 30,
				2010			2011
				(Unaudited)
Customer A		40	%		58	%		*
Customer B		*			*			16	%
Customer C		*			*			10	%
Customer D		*			*			10	%
Customer E		*			*			10	%

* Less than 10%

Deposits

Deposits are funds required by landlords to guarantee our contractual obligations under several leases of office space. As of December 31, 2010 and June 30, 2011, deposits totaled $43,000 and $151,000 and are included within other assets on the accompanying consolidated balance sheets.

Property and Equipment, net

Property and equipment, net, including leasehold improvements, are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from three to five years.

Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful lives of the respective assets or the property lease terms, which range up to five years. Upon the retirement or disposition of property and equipment, the related costs and accumulated depreciation are removed from the consolidated balance sheet and any related gain or loss is recorded in the consolidated statement of operations. We capitalize expenditures for replacements and betterments, and expenses amounts for maintenance and repairs as they are incurred.

Software Development Costs

We capitalize the costs to develop software for our advertising serving technology and other internal uses when preliminary development efforts are successfully completed, management has authorized and committed

F-44

NEW WAVE MEDIA INC.

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 2010 and the

Six Months Ended June 30, 2010 and 2011 (Unaudited)

project funding and it is probable that the project will be completed and the software will be used as intended. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed. Costs incurred for upgrades and enhancements that are considered probable of resulting in additional functionality are capitalized. Any capitalized costs would be amortized to expense on a straight-line basis over their expected lives. As of December 31, 2010 and June 30, 2011, we had not capitalized any costs related to internal-use software or our advertising serving technology.

Impairment of Long-Lived Assets

Long-lived assets, including property and equipment, are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. We have observed no indicators of impairment for the year ended December 31, 2010 and the six months ended June 30, 2011.

Related Party Loans

We have periodically lent or borrowed cash from certain of our employees and officers. These loans are unsecured, short-term in nature and do not bear interest. As of December 31, 2010 and June 30, 2011, we had $90,000 and $290,000 in outstanding receivables and $170,000 and $10,000 in outstanding payables from related parties.

Revenue Recognition

We recognize revenues when the four basic criteria are met: (1) persuasive evidence exists of an arrangement with the customer reflecting the terms and conditions under which products or services will be provided; (2) services have been provided or delivery has occurred; (3) the fee is fixed or determinable; and (4) collection is reasonably assured. We consider a signed agreement, a binding insertion order, a third-party commission statement, or other similar documentation to be persuasive evidence of an arrangement. Collectability is assessed based on a number of factors, including the creditworthiness of a customer and transaction history.

We generate revenues primarily from fees earned through the delivery of qualified in-stream online video advertising across a wide variety of third-party owned digital media content provider properties for marketing campaigns under short-term contracts, which generally range from 30 to 90 days. Revenues from agreements based on impressions are recognized as the impressions are delivered. Revenues from agreements based on user engagements or actions are recognized when a user engagement or action occurs.

We recognize revenues as a principal based upon a variety of factors, including acting as the primary obligor in the arrangement, performing a significant portion of the services, setting the pricing and retaining the credit risk. Accordingly, in the period advertising services are delivered, revenues are recognized on a gross basis and the corresponding third-party digital media content provider expenses are recognized and recorded as a component of cost of revenues.

F-45

NEW WAVE MEDIA INC.

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 2010 and the

Six Months Ended June 30, 2010 and 2011 (Unaudited)

Revenue Recognition for Multiple-Element Arrangements

We enter into arrangements with customers to deliver marketing campaigns that include multiple media advertisements within the same time period or within close proximity of one another. Because we had not yet established the fair value for each deliverable and our agreements contain mid-campaign cancellation clauses, revenues prior to January 1, 2011 were recognized as the lower of revenues calculated on a time-based straight-line basis over the term of the contract or revenues earned on the delivered media advertisement and priced as specified on the applicable insertion order.

Effective January 1, 2011, we adopted new authoritative guidance on multiple-element arrangements using the prospective method for all arrangements entered into or materially modified from the date of adoption. Under this new guidance, we allocate arrangement consideration in multiple-deliverable revenue arrangements at the inception of an arrangement to all deliverables, based on the relative selling price method in accordance with the selling price hierarchy, which includes: (1) vendor-specific objective evidence (VSOE) if available; (2) third-party evidence (TPE) if VSOE is not available; and (3) best estimate of selling price (BESP) if neither VSOE nor TPE is available. BESP is generally used to allocate the selling price to deliverables in our multiple element arrangements as we have not historically been able to establish selling prices based on VSOE or TPE. The adoption of this recent authoritative guidance did not have a material impact on our consolidated financial statements.

Cost of Revenues

Cost of revenues consists primarily of amounts due to third-party digital media content providers for the placement of advertising on their properties. Cost of revenues also includes third-party data acquisition costs, and ad verification and ad-serving fees related to our revenue-generating technology infrastructure. We are obligated to make payments to digital media content providers for the period in which the advertising impressions, click-throughs, actions, or lead-based information are delivered or during which user engagements or actions have occurred, which correspond to the period in which the revenues are recognized.

Advertising Costs

Advertising costs are expensed to sales and marketing expenses as incurred in the accompanying consolidated statements of operations. For the year ended December 31, 2010, and the six months ended June 30, 2010 and 2011, we recognized advertising expense of $59,000, $2,000 and $82,000.

Product Development Expenses

Product development expenses are expensed as incurred and are primarily related to the development and enhancement of our proprietary advertising serving technology. These expenses consist of personnel, information technology, consulting and facility-related costs.

Foreign Currency

The functional currency of our Ukrainian subsidiary is the U.S. dollar. Gains and losses from foreign currency transactions in currencies other than the U.S. dollar are included in other income, net in the consolidated statements of operations and have not been material to date.

F-46

NEW WAVE MEDIA INC.

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 2010 and the

Six Months Ended June 30, 2010 and 2011 (Unaudited)

Comprehensive Income (Loss)

During the year ended December 31, 2010, and the six months ended June 30, 2010 and 2011, there were no items qualifying as other comprehensive income (loss) and, therefore, our comprehensive income (loss) was the same as the reported net income (loss) for the periods reported.

Stock-Based Compensation

Compensation expense related to stock option and restricted stock grants made to employees are calculated based on the fair value of the awards on the date of grant, net of estimated forfeitures. The grant date fair value of the options is determined using the Black-Scholes option-pricing model and the related stock-based compensation is recognized on a straight-line basis over the period in which an employee is required to provide service in exchange for the options, which is generally between three and four years.

For stock options issued to non-employees, we record expense based on the fair value of the options calculated using the Black-Scholes option-pricing model over the service performance period. The fair value of options granted to non-employees is remeasured over the vesting period and recognized as an expense over the period the services are received.

Income Taxes

We account for income taxes using an asset and liability approach to record deferred taxes. Our deferred income tax assets represent temporary differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities that will result in deductible amounts in future years. The measurement of current and deferred tax assets and liabilities is based on provisions of enacted tax laws; the effects of future changes in tax laws or rates are not anticipated. Valuation allowances are provided if based upon the weight of available evidence, it is more likely than not that some or all of the net deferred tax assets will not be realized. We have recorded full valuation allowances against our deferred tax assets for all periods presented.

We account for uncertain tax positions by reporting a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. We recognize interest and penalties, if any, related to unrecognized tax benefits in the income tax provision in the accompanying consolidated statements of operations.

Recently Issued and Adopted Accounting Standards

In January 2010, FASB, issued Accounting Standards Update or ASU No. 2010-06, Improving Disclosures about Fair Value Measurements (Topic 820) — Fair Value Measurements and Disclosures, to add additional disclosures about the different classes of assets and liabilities measured at fair value, the valuation techniques and inputs used and the activity in Level III fair value measurements. We adopted ASU 2010-06 on January 1, 2011 and the adoption did not have a material impact on our consolidated financial statements.

F-47

NEW WAVE MEDIA INC.

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 2010 and the

Six Months Ended June 30, 2010 and 2011 (Unaudited)

3. Property and Equipment, Net

Property and equipment, net consist of the following:

	As of December 31, 2010			As of June 30, 2011
				(Unaudited)
	(In thousands)
Computer and equipment	$	28		$	53
Software		15			37
Furniture and fixtures		—			4
Leasehold improvements		—			8
Total property and equipment, gross		43			102
Accumulated depreciation and amortization		(16	)		(24	)
Total property and equipment, net	$	27		$	78

Depreciation and amortization expense for the year ended December 31, 2010, and the six months ended June 30, 2010 and 2011, were $6,000, $3,000 and $8,000.

4. Borrowings

Secured Loan Agreement

In December 2009, we entered into a Secured Loan Agreement with a lender, which provided for borrowings up to $500,000 for working capital purposes, which we fully borrowed in December 31, 2009. Borrowings under this agreement bore a compounded interest rate of 1.6% per month and were secured by our accounts receivable. The principal balance and accrued interest, of $517,000, were fully repaid in March 2010.

Loan Agreement

In February 2010, we entered into a Loan Agreement with a financial company with a principal amount of $300,000. In April 2010, the lender demanded payment of the full principal amount prior to maturity. In consideration for the accelerated payment of the principal balance in April 2010 the lender agreed to forgive $75,000 of the principal balance outstanding. The forgiveness of $75,000 was recorded as a gain on early extinguishment of debt and is included in other income, net in the accompanying consolidated statements of operations for the year ended December 31, 2010 and the six months ended June 30, 2010.

Convertible Note Payable

In January 2011, we entered into a Convertible Note Purchase Agreement with a third party venture capital firm for a total principal amount of $1,800,000 at an annual interest rate of 4%, to be paid on a quarterly basis. The principal amount on the convertible note payable was due and payable in December 2017. On the maturity date, the Convertible Note would automatically convert into an aggregate of 9,911,173 shares of convertible preferred stock. As of June 30, 2011, we had $1,645,000 of borrowings outstanding on our convertible note payable.

F-48

NEW WAVE MEDIA INC.

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 2010 and the

Six Months Ended June 30, 2010 and 2011 (Unaudited)

The convertible note payable contained a beneficial conversion feature related to the convertible preferred shares totaling $167,000, which was initially recorded as reduction in additional paid-in capital and a discount on the convertible note payable. The beneficial conversion feature was amortized to interest expense on a straight-line basis over the term. For the six months ended June 30, 2011, we recorded $12,000 of amortization. As of June 30, 2011, the unamortized balance of the beneficial conversion feature was $155,000.

On September 13, 2011 we were acquired by Exponential Interactive, Inc. Upon acquisition, the convertible note payable converted into shares of our convertible preferred stock, which then automatically converted into 9,934,352 shares of our common stock which were acquired by Exponential for cash consideration of $2,752,000. On acquisition, we recognized the remaining unamortized debt discount of $151,000 as interest expense.

5. Related Party Transactions

Related Party Notes Receivable

In August 2007 and January 2008, we entered into non-interest bearing Promissory Note Agreements for $20,000 and $70,000 with our Chief Executive Officer. The aggregate outstanding principal balance on the notes as of December 31, 2010 and June 30, 2011 was $90,000. This balance was repaid by October 2011.

In January 2011, we entered into a non-interest bearing Loan Agreement for $200,000 with our President. The loan becomes due and payable 30 days after the receipt of our written payment demand notification. The loan balance was repaid in August 2011.

Related Party Borrowings

In March 2009, we entered into a non-interest bearing and non-secured Loan Agreement with a stockholder for a principal amount of $50,000 for working capital purposes. The loan was secured by our accounts receivable. We repaid the outstanding principal balance in November 2010.

In April 2009, we entered into a Secured Loan Agreement with a stockholder for a principal amount of $75,000 for working capital purposes. The loan bore an interest rate of 12% per year, compounded monthly, and was secured by our accounts receivable. The outstanding principal balance as of December 31, 2010 and June 30, 2011 was $70,000 and $10,000. We repaid the outstanding principal balance in July 2011.

In July 2009, we entered into a Convertible Loan Agreement with a relative of an executive for a principal amount of $100,000. The loan bore an interest rate equal to the prime rate minus 0.5% per year, compounded annually. Under the agreement, the lender had the option to convert the total principal amount and accrued interest into shares of our common stock. In February 2010, the lender made the election to convert the outstanding principal amount of $100,000 into shares, resulting in the issuance of 1,227,673 shares of our common stock.

In October 2009, we entered into a non-secured Loan Agreement with a stockholder for a principal amount of $150,000 for working capital purposes. The loan bore an interest rate of 13% per year, compounded monthly, and was secured by our accounts receivable. We repaid the outstanding principal balance and accrued interest in December 2010.

F-49

NEW WAVE MEDIA INC.

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 2010 and the

Six Months Ended June 30, 2010 and 2011 (Unaudited)

In May 2010, we entered into a Secured Loan Agreement with our President for a principal amount of $100,000 for working capital purposes. This loan bore an interest rate of 18% per year, compounded monthly, and was secured by our accounts receivable. As of December 31, 2010, the outstanding principal balance totaled $100,000. We repaid the outstanding principal balance and accrued interest in January 2011.

Deferred Compensation

We entered into deferred compensation arrangements with certain key employees between 2007 and 2011 in lieu of paying them in cash for their employment services and executed demand notes and employment agreements to evidence these arrangements.

The notes payable are non-interest bearing and principal is due on demand by the noteholders. The noteholders used $22,000 of the principal on the notes as payment for 17,856,911 shares of common stock issued to them prior to 2010. The outstanding principal balance due on the notes totaled $778,000 and $778,000 as of December 31, 2010 and June 30, 2011. For the year ended December 31, 2010 and the six months ended June 30, 2010 and 2011, we recorded compensation expense of $120,000, $120,000 and $0 related to the employment services in the accompanying consolidated statements of operations.

In July 2011, we entered into Forgiveness of Demand Promissory Note Agreements under which the noteholders agreed to forgive and release us from any remaining obligations owed to them under the notes. Since the noteholders were the principal shareholders of the company, the outstanding principal due under the notes totaling $778,000 was accounted for as a capital contribution.

As part of their employment agreements, during the year ended December 31, 2010 and the six months ended June 30, 2011 the employees used $58,000 and $27,000 of the deferred compensation liability during 2010 and 2011 as payment for 797,617 and 138,354 shares of common stock. The liability associated with these deferred compensation arrangements totaled $40,000 and $15,000 as of December 31, 2010 and June 30, 2011. For the years ended December 31, 2010 and the six months ended June 30, 2010 and 2011, we recorded compensation expense of $75,000, $23,000 and $37,000 in the accompanying consolidated statements of operations. The remaining deferred compensation liability of $15,000 relating to the employment agreements was paid in August 2011.

6. Commitments and Contingencies

Operating Lease Commitments

We have entered into several non-cancelable operating leases for office space which contain renewal clauses. Under these agreements, we are required to pay for certain operating expenses, such as taxes, parking and repairs.

F-50

NEW WAVE MEDIA INC.

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 2010 and the

Six Months Ended June 30, 2010 and 2011 (Unaudited)

Subsequent to December 31, 2010, we entered into certain non-cancelable operating leases for additional office space in New York, Chicago and Ukraine. As of June 30, 2011, approximate future minimum lease payments under these non-cancelable lease agreements are as follows (in thousands):

Years Ending December 31,
2011(remainder of the year)	$	156
2012		306
2013		278
2014		248
2015		241
Thereafter		101
Total minimum future lease obligations	$	1,330

For the year ended December 31, 2010, and the six months ended June 30, 2010 and 2011, rent expense for office facilities was $150,000, $34,000 and $73,000.

Legal

From time to time, we may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. In addition, we may receive letters alleging infringement of patent or other intellectual property rights. We are not currently a party to any material legal proceedings, nor is management aware of any pending or threatened litigation that, in management’s opinion, would have a material adverse effect on our business, operating results, cash flows or financial condition should such litigation be resolved unfavorably.

Indemnification Agreements

In the ordinary course of business, we may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by us or from intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with our directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers or employees.

While the outcome of these matters cannot be predicted with certainty, management does not believe that the outcome of any claims under indemnification arrangements or any legal matters will have a material adverse effect on our financial position, results of operations or cash flows.

7. Stockholders’ Equity (Deficit)

As of December 31, 2010 and June 30, 2011, the authorized number of shares of our common stock was 150.0 million shares.

In March 2011, we amended our Articles of Incorporation, to state a par value of $0.000001 per share for our common stock and to authorize the issuance of 9,911,173 shares of preferred stock at a par value of $0.000001 per share.

F-51

NEW WAVE MEDIA INC.

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 2010 and the

Six Months Ended June 30, 2010 and 2011 (Unaudited)

8. Stock-Based Compensation

In April 2009 we adopted the New Wave Media Inc. Nonqualified Stock Option Plan. In August 2009, our board of directors amended the plan to increase the number of shares reserved for issuance to a total of 5,727,356 shares, and in January 2011, we again amended the plan to increase the number of shares reserved for issuance by 1,517,201 to a total of 7,244,557 shares reserved. The plan provides for the granting of stock options to employees and consultants. All options granted under the plan are nonqualified stock options.

Options under the plan may be granted for periods of up to 10 years. The exercise price of a NSO shall not be less than 100% of the estimated fair value of the shares on the date of grant as determined by our board of directors. Options granted generally vest over a three to four year period with 20% to 30% vesting upon the first anniversary and the balance vesting ratably, on a monthly basis over the remaining term.

We recognized stock-based compensation for our employees and non-employees under the plan in the accompanying consolidated statements of operations as follows:

	Year Ended December 31, 2010		Six Months Ended June 30,
			2010		2011
	(In thousands)
			(Unaudited)
Product development	$	60	$	19	$	33
Sales and marketing		336		49		45
General and administrative		84		27		36
Total stock-based compensation	$	480	$	95	$	114

The following table summarizes option activity under the plan and related information:

				Outstanding
	Shares Available for Grant			Number of     Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life
								(in years)
Outstanding as of December 31, 2009		885,266			4,842,090	$	0.01
Options granted		(867,658	)		867,658	$	0.01
Outstanding as of December 31, 2010		17,608			5,709,748	$	0.01		8.6
Additional shares authorized (unaudited)		1,517,201			—
Options granted (unaudited)		(1,260,000	)		1,260,000	$	0.22
Outstanding as of June 30, 2011 (unaudited)		274,809			6,969,748	$	0.05		8.4
Options vested and expected to vest as of December 31, 2010					5,659,748	$	0.01		8.6
Options exercisable as of December 31, 2010					1,452,627	$	0.01		8.6
Options vested and expected to vest as of June 30, 2011 (unaudited)					6,269,748	$	0.03		8.3
Options exercisable as of June 30, 2011 (unaudited)					2,548,242	$	0.01		8.4

F-52

NEW WAVE MEDIA INC.

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 2010 and the

Six Months Ended June 30, 2010 and 2011 (Unaudited)

Determining the Fair Value of Stock Options

The estimated grant date fair value of all of our equity-based awards was calculated based on the assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment to determine.

	Employees						Non-employees
	Year Ended December 31, 2010		Six Months Ended June 30,				Year Ended December 31, 2010		Six Months Ended June 30,
			2010		2011				2010		2011
			(Unaudited)						(Unaudited)
Expected term (in years)		5.3		5.3		5.2		8.3-9.4		8.8-9.4		7.8-8.4
Volatility		73.0%		72.0%		74.0%		72.0%-75.0%		72.0%		74.0%
Risk-free interest rate		1.9%		1.8%		1.8%		2.7%-3.0%		2.7%-3.0%		2.5%-2.8%
Dividend yield		0%		0%		0%		0%		0%		0%
Forfeiture rate		0%		0%		0%		0%		0%		0%
Weighted-average grant date fair value		$0.10		$0.09		$0.12		(*)		(*)		(*)

(*) The fair value of the stock options granted to non-employees is calculated using the Black-Scholes option-pricing model and the related stock-based compensation is recognized as earned. Accordingly, at each reporting date, we remeasure the fair value of options granted to non-employees over the vesting period based upon the then-current fair value and recognize expense over the period the services are rendered.

For the year ended December 31, 2010, and the six months ended June 30, 2010 and 2011, the assumptions used in applying the Black-Scholes option pricing model were as follows:

Expected term — The expected term is based upon employee historical and expected exercise and post-vesting employment termination behavior which also takes into account the contractual life of the award.

Risk-free interest rate — Risk-free interest rate is based on the interest yield in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the option’s expected term.

Expected volatility — Since we do not have a trading history of our common stock, the expected volatility was derived from the average historical stock volatilities of several unrelated public companies within our industry that are considered to be comparable to our business over a period equivalent to the expected term of the stock option grants.

Dividend rate — The expected dividend rate was assumed to be zero as we have never paid dividends.

Forfeiture rate — We estimate our forfeiture rate based on an analysis of our actual and expected forfeitures. For the year ended December 31, 2010, and the six months ended June 30, 2010 and 2011, our forfeiture rate is 0% based on our actual forfeiture experience. We will continue to evaluate the adequacy of the forfeiture rate based on actual and expected forfeiture experience, analysis of employee turnover behavior and other factors. The impact from any forfeiture rate adjustment would be recognized in full in the period of adjustment, and if the actual number of future forfeitures differ from our estimates, we might be required to record adjustments to stock-based compensation in future periods.

F-53

NEW WAVE MEDIA INC.

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 2010 and the

Six Months Ended June 30, 2010 and 2011 (Unaudited)

Fair value of common stock — Because there has been no public market for our common stock, our board of directors has determined the fair value of the common stock at the time of grant of the option by considering a number of objective and subjective factors, including valuations performed by an unrelated third-party specialist, valuations of comparable companies, operating and financial performance, the lack of liquidity of capital stock and general and industry specific economic outlook. The fair value of the underlying common stock will be determined by our board of directors until such time as our common stock is listed on an established stock exchange or national market system.

As of December 31, 2010 and June 30, 2011, total compensation cost related to unvested stock-based awards granted to employees under the plan, but not yet recognized, was $205,000 and $179,000, net of estimated forfeitures. As of December 31, 2010 and June 30, 2011, this cost will be amortized to expense over a weighted-average remaining period of 2.0 years and 1.8 years and will be adjusted for subsequent changes in estimated forfeitures.

Restricted Stock

During 2008 and 2009, we entered into restricted stock agreements with certain employees and non-employees, under which the vesting of the underlying shares is contingent on continued employment, generally over a two or three year period. Under these agreements, we issued an aggregate of 2,019,950 shares of common stock at an issuance price ranging from $0.001 to $0.0149 per share, when the deemed fair value of our common stock ranged from $0.075 to $0.124 per share. We recorded stock-based compensation expense in connection with these issuances of restricted stock in the amount of $299,000, $19,000 and $11,000 for the year ended December 31, 2010, and the six months ended June 30, 2010 and 2011.

As of December 31, 2009, December 31, 2010 and June 30, 2011, our restricted stockholders held 1,069,950, 405,442 and 165,442 shares of nonvested stock, with the fair values of such stock (net of exercise price) of $171,000, $72,000 and $22,000. During the year ended December 31, 2010, 664,508 shares with a fair value (net of exercise price) of $94,000 vested. During the six months ended June 30, 2011, 240,000 shares with a fair value (net of exercise price) of $47,000 vested.

F-54

NEW WAVE MEDIA INC.

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 2010 and the

Six Months Ended June 30, 2010 and 2011 (Unaudited)

9. Income Taxes

The components of the provision for income tax are as follows:

	Year Ended December 31, 2010		Six Months Ended June 30,
			2010		2011
			(Unaudited)
	(In thousands)
Current:
Federal	$	—	$	—	$	—
State		8		4		12
Foreign		55		24		27
Total current		63		28		39
Deferred:
Federal		—		—		—
State		—		—		—
Foreign		—		—		—
Total deferred		—		—		—
Total income tax expense	$	63	$	28	$	39

We recognize deferred tax assets and liabilities for temporary differences between the financial statement and tax bases of assets and liabilities.

The components of our deferred tax assets are as follows:

	As of December 31, 2010
	(In thousands)
Net operating loss carryforward	$	111
Accrual to cash adjustment		286
Sub-total		397
Less: valuation allowance		(397	)
Deferred tax asset, net	$	—

A valuation allowance has been established within the U.S. and selected international jurisdictions to offset deferred tax assets as realization of such assets is uncertain.

At December 31, 2010, we have federal and state net operating loss carryforwards of approximately $296,000 and $209,000. The federal and state net operating loss carryforwards begin to expire in 2030, unless previously utilized.

The provision for income taxes in the accompanying consolidated statements of operations differ from the expense calculated by applying the U.S. federal statutory income tax rate of 34% to loss before provision for income taxes primarily due to the valuation allowance.

F-55

NEW WAVE MEDIA INC.

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31, 2010 and the

Six Months Ended June 30, 2010 and 2011 (Unaudited)

Our policy is to classify interest and penalties related to unrecognized tax benefits as a component of income tax provision in the accompanying consolidated statements of operations.

The aggregate balance of gross unrecognized tax benefits, which includes interest and penalties, for the year ended December 31, 2010 and the period ended June 30, 2011, is as follows (in thousands):

Unrecognized tax benefits — December 31, 2009	$	20
Gross increases — tax positions in a prior period		—
Gross increases — tax positions in the current period		29
Unrecognized tax benefits — December 31, 2010		49
Gross increases — tax positions in a prior period		—
Gross increases — tax positions in the current period		27
Unrecognized tax benefits — June 30, 2011 (unaudited)	$	76

We recognize interest accrued related to unrecognized tax benefits and penalties as income tax expense. We have recognized a cumulative liability for interest and penalties of $57,000 as of December 31, 2010 and $56,000 as of June 30, 2011 related to the uncertain tax benefits noted above.

We remain open for audit by the U.S. Internal Revenue Service and various state taxing authorities since inception.

We do not believe there will be an increase or decrease of unrecognized tax benefits that may occur within the next 12 months. To the extent there is an increase or decrease, we believe any impact to the effective tax rate would be immaterial.

10. Subsequent Events

On September 13, 2011, we were acquired by Exponential Interactive, Inc. for up-front cash consideration of $13.7 million and guaranteed deferred cash payments of $6.5 million. Furthermore, under the terms of the merger agreement, Exponential is required to pay our former owners contingent deferred consideration in January 2013 and 2014. The contingent deferred consideration consists of up to $5.7 million in cash payments and the issuance of up to 534,287 shares of Exponential common stock and is contingent on the continued employment of our two principal former owners through December 31, 2013 and the former AdoTube business achieving specified revenue and EBITDA targets in 2012 and 2013.

F-56

             Shares

Common Stock

PRELIMINARY PROSPECTUS

Citigroup

BofA Merrill Lynch

RBC Capital Markets

ThinkEquity LLC

Until                      , 2012 (25 days after the date of this prospectus), all dealers that buy, sell or trade shares of our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

                    , 2012

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. Other Expenses of Issuance and Distribution.

The following table sets forth the costs and expenses to be paid by the Registrant in connection with the sale of the shares of common stock being registered hereby. All amounts are estimates.

SEC registration fee	$	8,595.00
FINRA filing fee		8,000.00
The             listing fee		*
Printing and engraving		*
Legal fees and expenses		*
Accounting fees and expenses		*
Road show expenses		*
Blue sky fees and expenses		*
Transfer agent and registrar fees and expenses		*
Miscellaneous		*
Total	$	*

* To be filed by amendment.

ITEM 14. Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporation’s board of directors to grant, indemnity to directors and officers under certain circumstances and subject to certain limitations. The terms of Section 145 of the Delaware General Corporation Law are sufficiently broad to permit indemnification under certain circumstances for liabilities, including reimbursement of expenses incurred, arising under the Securities Act of 1933, as amended (the “Securities Act”).

As permitted by the Delaware General Corporation Law, the Registrant’s restated certificate of incorporation to be in effect upon the closing of this offering contains provisions that eliminate the personal liability of its directors for monetary damages for any breach of fiduciary duties as a director, except liability for the following:

• any breach of the director’s duty of loyalty to the Registrant or its stockholders;

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

• under Section 174 of the Delaware General Corporation Law (regarding unlawful dividends and stock purchases); or

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

As permitted by the Delaware General Corporation Law, the Registrant’s restated bylaws to be in effect upon the closing of this offering provide that:

• the Registrant is required to indemnify its directors and officers to the fullest extent permitted by the Delaware General Corporation Law, subject to very limited exceptions;

• the Registrant may indemnify its other employees and agents as set forth in the Delaware General Corporation Law;

• the Registrant is required to advance expenses, as incurred, to its directors and officers in connection with a legal proceeding to the fullest extent permitted by the Delaware General Corporation Law, subject to very limited exceptions; and

• the rights conferred in the bylaws are not exclusive.

II-1

The Registrant intends to enter into indemnification agreements with each of its current directors and executive officers to provide these directors and executive officers additional contractual assurances regarding the scope of the indemnification set forth in the Registrant’s restated certificate of incorporation and restated bylaws to be effective upon the closing of this offering and to provide additional procedural protections. At present, there is no pending litigation or proceeding involving a director, executive officer or employee of the Registrant regarding which indemnification is sought. Reference is also made to Section 8 of the Underwriting Agreement, which provides for the indemnification of executive officers, directors and controlling persons of the Registrant against certain liabilities. The indemnification provision in the Registrant’s restated certificate of incorporation, restated bylaws and the indemnification agreements entered into or to be entered into between the Registrant and each of its directors and executive officers may be sufficiently broad to permit indemnification of the Registrant’s directors and executive officers for liabilities arising under the Securities Act.

The Registrant has directors’ and officers’ liability insurance for securities matters.

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		1.01
Form of Restated Certificate of Incorporation of the Registrant		3.02
Form of Restated Bylaws of the Registrant		3.04
Form of Indemnity Agreement		10.02

ITEM 15. Recent Sales of Unregistered Securities.

Since January 1, 2009, the Registrant has issued and sold the following securities:

Option and Option-Related Common Stock Issuances

• From January 1, 2009 through March 8, 2012, we granted to our directors, officers, employees, consultants and other service providers options to purchase 4,380,500 shares of our common stock with per share exercise prices ranging from $1.21 to $1.31 under our 2000 Plan.

• From January 1, 2009 through March 8, 2012, we issued to our directors, officers, employees, consultants and other service providers an aggregate of 825,853 shares of our common stock at exercise prices ranging from $0.48 to $1.97 pursuant to exercises of options granted under our 2000 Plan.

• From January 1, 2009 through March 8, 2012, we granted to our directors, officers, employees, consultants and other service providers options to purchase 14,804,325 shares of our common stock with per share exercise prices ranging from $1.27 to $2.75 under our 2010 Plan.

• From January 1, 2009 through March 8, 2012, we issued to our directors, officers, employees, consultants and other service providers 21,374 shares of our common stock at exercise prices ranging from $1.31 to $1.34 per share pursuant to exercises of options granted under our 2010 Plan.

Restricted Stock Issuances

• From January 1, 2009 through March 8, 2012, we granted to our directors, officers, employees, consultants and other service providers an aggregate of 591,250 shares of our common stock at prices ranging from $0.005 to $0.48 per share under our 2010 Plan.

• From January 1, 2009 to March 8, 2012, we granted to our directors, officers, employees, consultants and other service providers an aggregate of 120,000 Restricted Stock Units under our 2010 Plan

• From January 1, 2009 through March 8, 2012, we issued to certain consultants 11,000 shares of our common stock at an exercise price of $2.75 per share.

II-2

Unless otherwise indicated, the sales of the securities described above were deemed to be exempt from registration under the Securities Act in reliance upon Section 4(2) of the Securities Act or Regulation D promulgated thereunder. The recipients of the securities in each of these transactions represented their intentions 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 placed upon the share certificates issued in these transactions. All recipients had adequate access, through their relationships with the Registrant, to information about the Registrant. The sales of the securities described above were deemed to be exempt from registration under the Securities Act in reliance upon Rule 701 promulgated under Section 3(b) of the Securities Act as transactions pursuant to benefit plans and contracts relating to compensation as provided under Rule 701.

ITEM 16. Exhibits and Financial Statement Schedules.

(a) Exhibits.

Exhibit Number	Exhibit Title
1.01*	Form of Underwriting Agreement.
2.01	Agreement and Plan of Merger, dated as of September 2, 2011, by and among the Registrant, Alameda Acquisition Corp., New Wave Media Inc. (d/b/a AdoTube) and Leo Grzhonko.
3.01	Amended and Restated Certificate of Incorporation of the Registrant, as amended.
3.02*	Form of Restated Certificate of Incorporation of the Registrant, to be effective upon the closing of this offering.
3.03	Bylaws of the Registrant, as amended to date.
3.04*	Form of Amended and Restated Bylaws of the Registrant, to be effective upon the closing of this offering.
4.01*	Form of Registrant’s Common Stock certificate.
5.01*	Opinion of Fenwick & West LLP regarding the legality of the securities being registered.
10.01	Credit Agreement, dated April 12, 2007, among the Registrant, the Lenders and Bank of America, N.A., as the Administrative Agent and Banc of America Securities LLC (as Sole Lead Arranger and Sole Book Manager), as amended on November 10, 2009 and May 6, 2011.
10.02*	Form of Indemnification Agreement by and between the Registrant and each of its directors and executive officers.
10.03	2000 Equity Incentive Plan and form of option agreement.
10.04	2010 Equity Incentive Plan and form of option agreement.
10.05*	2012 Equity Incentive Plan and form of option agreement.
10.06*	2012 Employee Stock Purchase Plan.
10.07	Lease Agreement, dated as of July 26, 2011, by and between Emeryville Office, L.L.C. and the Registrant, as amended on August 29, 2011.
10.08	Offer letter to John R. Rettig from the Registrant, dated as of May 9, 2005, as amended on January 1, 2008.
21.01	List of subsidiaries.
23.01*	Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02	Consent of independent registered public accounting firm.
23.03	Consent of independent registered public accounting firm.
24.01	Power of Attorney (included on page II-5).

* To be filed by amendment.

II-3

(b) Financial Statement Schedules.

All financial statement schedules are omitted because they are not applicable or the information is included in the Registrant’s consolidated financial statements or related notes.

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 provisions described in Item 14 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission 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, 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.

(2) for the purpose of determining any liability under the Securities Act, 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-4

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Emeryville, State of California, on March 16, 2012.

EXPONENTIAL INTERACTIVE, INC.
By:	/s/ Dilip S. DaSilva
	Dilip S. DaSilva
	Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints Dilip S. DaSilva and John R. Rettig, and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to sign any registration statement for the same offering covered by the 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 all exhibits thereto and all 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, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Name	Title	Date
/s/ Dilip S. DaSilva Dilip S. DaSilva	Chairman and Chief Executive Officer (Principal Executive Officer)	March 16, 2012
/s/ John R. Rettig John R. Rettig	Chief Financial Officer (Principal Financial and Accounting Officer)	March 16, 2012
/s/ Steve M. Cakebread Steve M. Cakebread	Director	March 16, 2012
/s/ John F. Farrell John F. Farrell	Director	March 16, 2012
/s/ Robert T. Goldberg Robert T. Goldberg	Director	March 16, 2012
/s/ Dennis P. Wolf Dennis P. Wolf	Director	March 16, 2012

II-5

EXHIBIT INDEX

Exhibit Number	Exhibit Title
1.01*	Form of Underwriting Agreement.
2.01	Agreement and Plan of Merger, dated as of September 2, 2011, by and among the Registrant, Alameda Acquisition Corp., New Wave Media Inc. (d/b/a AdoTube) and Leo Grzhonko ..
3.01	Amended and Restated Certificate of Incorporation of the Registrant, as amended.
3.02*	Form of Restated Certificate of Incorporation of the Registrant, to be effective upon the closing of this offering.
3.03	Bylaws of the Registrant, as amended to date.
3.04*	Form of Amended and Restated Bylaws of the Registrant, to be effective upon the closing of this offering.
4.01*	Form of Registrant’s Common Stock certificate.
5.01*	Opinion of Fenwick & West LLP regarding the legality of the securities being registered.
10.01	Credit Agreement, dated April 12, 2007, among the Registrant, the Lenders and Bank of America, N.A., as the Administrative Agent and Banc of America Securities LLC (as Sole Lead Arranger and Sole Book Manager), as amended on November 10, 2009 and May 6, 2011.
10.02*	Form of Indemnification Agreement by and between the Registrant and each of its directors and executive officers.
10.03	2000 Equity Incentive Plan and form of option agreement.
10.04	2010 Equity Incentive Plan and form of option agreement.
10.05*	2012 Equity Incentive Plan and form of option agreement.
10.06*	2012 Employee Stock Purchase Plan.
10.07	Lease Agreement, dated as of July 26, 2006, by and between Emeryville Office, L.L.C. and the Registrant, as amended on August 29, 2011.
10.08	Offer letter to John R. Rettig from the Registrant, dated as of May 9, 2005, as amended on January 1, 2008.
21.01	List of subsidiaries.
23.01*	Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02	Consent of independent registered public accounting firm.
23.03	Consent of independent registered public accounting firm.
24.01	Power of Attorney (included on page II-5).

* To be filed by amendment.

EX-2.01

Exhibit 2.01

EXECUTION VERSION

AGREEMENT AND PLAN OF MERGER

by and among

EXPONENTIAL INTERACTIVE, INC.

a Delaware corporation,

ALAMEDA ACQUISITION CORP.

a Delaware corporation,

NEW WAVE MEDIA INC. (D/B/A ADOTUBE)

a Delaware corporation,

and

Leo Grzhonko as Stockholders’ Agent

Dated as of September 2, 2011

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made and entered into as of September 2, 2011 (the “Agreement Date”), by and among Exponential Interactive, Inc., a Delaware corporation (“Acquirer”), Alameda Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Acquirer (“Merger Sub”), New Wave Media Inc. (d/b/a AdoTube), a Delaware corporation (the “Company”), and Leo Grzhonko, in his capacity as stockholders’ agent and not in his individual capacity (the “Stockholders’ Agent”). Certain other capitalized terms used in this Agreement are defined in Exhibit A.

RECITALS

A. Acquirer, Merger Sub and the Company intend to effect a merger of Merger Sub into the Company in accordance with this Agreement and Delaware Law (the “Merger”). Upon consummation of the Merger, Merger Sub will cease to exist, and the Company will become a wholly owned subsidiary of Acquirer.

B. This Agreement has been approved by the respective boards of directors of Acquirer, Merger Sub and the Company.

C. Concurrently with the execution of this Agreement, and as a condition and inducement to Acquirer’s and Merger Sub’s willingness to enter into this Agreement, the individuals listed on Schedule B (each, a “Key Employee”) have each entered into employment agreements with Acquirer, together with a confidential information and assignment agreement, in each case in substantially the form attached as an exhibit to the applicable offer letter, executed by each of the Key Employees and effective upon the Closing (the “Key Employees Employment Agreements”).

D. Concurrently with the execution of this Agreement, and as a condition and inducement to Acquirer’s and Merger Sub’s willingness to enter into this Agreement, Constantine Goltsev and Leo Grzhonko have each entered into non-competition agreements in substantially the form of attached Exhibit B with Acquirer effective upon the Closing (the “Non-Competition Agreements”).

E. As soon as reasonably practical following the execution and delivery of this Agreement, and as a condition and inducement to Acquirer’s and Merger Sub’s willingness to enter into this Agreement, the Converting Holders, other than holders of Non-Employee Capital Stock, as set forth on the Spreadsheet (as defined below), are entering into investment representation letters with Acquirer in the form attached hereto as Exhibit C (the “Investor Rep Letter”).

F. As soon as practical following the execution and delivery of this Agreement, it is intended that the Company obtain and deliver to Acquirer a true, correct and complete copy of a written consent of stockholders evidencing the approval of this Agreement in the form attached hereto as Exhibit D (the “Company Stockholder Approval”), signed by certain Company Securityholders constituting the Requisite Stockholder Approval (as defined in Section 6.3(h)).

NOW, THEREFORE, in consideration of the representations, warranties, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1

ARTICLE 1

THE MERGER

1.1        The Merger.

(a)        Merger of Merger Sub into the Company. Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, Merger Sub shall be merged with and into the Company, and the separate existence of Merger Sub shall cease. The Company will continue as the surviving corporation in the Merger (the “Surviving Corporation”).

(b)        Effects of the Merger. The Merger shall have the effects set forth in this Agreement and in the applicable provisions of Delaware Law.

(c)        Closing. The consummation of the Merger (the “Closing”) shall take place at the offices of Fenwick & West LLP, Silicon Valley Center, 801 California Street, Mountain View, California, or at such other location as the parties hereto agree on a date and time to be mutually agreed upon by the Acquirer and the Company, which date shall be no later than the third Business Day after all of the conditions set forth in ARTICLE 6 of this Agreement have been satisfied or waived (other than those conditions which, by their terms, are intended to be satisfied at the Closing), or at such other time and place as the Acquirer and the Company shall mutually agree. The date on which the Closing occurs is sometimes referred to in this Agreement as the “Closing Date.”

(d)        Effective Time. Subject to the provisions of this Agreement, a certificate of merger satisfying the applicable requirements of Delaware Law (the “Certificate of Merger”) shall be duly executed by the Company and, concurrently with or as soon as practicable following the Closing, delivered by the Company to the Secretary of State of the State of Delaware for filing. The Merger shall become effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware (the “Effective Time”).

(e)        Certificate of Incorporation and Bylaws; Directors and Officers. Unless otherwise determined by Acquirer prior to the Effective Time, at the Effective Time:

  (i)        the certificate of incorporation of the Surviving Corporation shall be amended and restated as of the Effective Time to conform to Exhibit E;

  (ii)        the bylaws of the Surviving Corporation shall be amended and restated as of the Effective Time to conform to the bylaws of Merger Sub as in effect immediately prior to the Effective Time; and

  (iii)        the directors and officers of the Surviving Corporation immediately after the Effective Time shall be the individuals identified on Exhibit F or such other individuals as may be designated by Acquirer.

1.2      Closing Deliveries.

(a)        Acquirer Deliveries. Acquirer shall deliver to the Company, at or prior to the Closing:

  (i)        a certificate, dated as of the Closing Date, executed on behalf of Acquirer by a duly authorized officer of Acquirer to the effect that each of the conditions set forth in clause (a) of Section 6.2 have been satisfied;

2

(ii)        a certificate, dated as of the Closing Date and executed on behalf of the Acquirer by its Secretary, certifying the Acquirer’s (A) certificate of incorporation, (B) bylaws, and (C) board resolutions approving the Merger and adopting this Agreement.

(b)      Company Deliveries. The Company shall deliver to Acquirer, at or prior to the Closing:

(i)        a certificate, dated as of the Closing Date and executed on behalf of the Company by its Chief Executive Officer, to the effect that each of the conditions set forth in clause (a) of Section 6.3 has been satisfied;

(ii)        a certificate, dated as of the Closing Date and executed on behalf of the Company by its Secretary, certifying the Company’s (A) certificate of incorporation (the “Certificate of Incorporation”), (B) bylaws (the “Bylaws”), (C) board resolutions approving the Merger and adopting this Agreement, (D) Company Stockholder Approval, and (E) other matters in Acquirer’s reasonable discretion;

(iii)        a written opinion from the Company’s legal counsel, covering the matters set forth on Exhibit G, dated as of the Closing Date and addressed to Acquirer;

(iv)        the Securityholder Agreement (as attached hereto as Exhibit H) executed by each Company Stockholder;

(v)         a Non-Competition Agreement executed by each of the Key Employees;

(vi)        the Key Employee Employment Agreements;

(vii)      evidence satisfactory to Acquirer of the resignation of each of the directors and each of the officers of the Company and any Subsidiary in office immediately prior to the Closing as directors and/or officers of the Company and any Subsidiary effective no later than immediately prior to the Effective Time;

(viii)        if requested by Acquirer in writing no less than 3 Business Days prior to the Closing Date, a true, correct and complete copy of resolutions adopted by the board of directors of the Company (the “Board of Directors”), certified by the Secretary of the Company, authorizing the termination of each or all of the Company Employee Plans (as such term is defined in Section 2.11(a)) that are “employee benefit plans” within the meaning of ERISA;

(ix)        a certificate from the Secretary of State of the States of Delaware and each other State or other jurisdiction in which the Company is qualified to do business as a foreign corporation dated within three Business Days prior to the Closing Date certifying that the Company is in good standing and that all applicable Taxes and fees of the Company or such Subsidiary through and including the Closing Date have been paid;

(x)        the Spreadsheet (as such term is defined in Section 5.8) completed to include all of the information specified in Section 5.8 in a form acceptable to Acquirer and a certificate executed by the Chief Executive Officer of the Company, dated as of the Closing Date, certifying that such Spreadsheet is true, correct and complete;

3

(xi)        the Company Net Working Capital Certificate, which certificate shall be accompanied by such supporting documentation, information and calculations as are necessary for Acquirer to verify and determine the amount of Company Net Working Capital;

(xii)        FIRPTA documentation, including (A) a notice to the Internal Revenue Service, in accordance with the requirements of Treasury Regulation Section 1.897-2(h)(2), in substantially the form attached hereto as Exhibit I-1, dated as of the Closing Date and executed by the Company, together with written authorization for Acquirer to deliver such notice form to the Internal Revenue Service on behalf of the Company after the Closing, and (B) a FIRPTA Notification Letter, in substantially the form attached hereto as Exhibit I-2, dated as of the Closing Date and executed by the Company;

(xiii)        the original Company Convertible Note for cancellation and related pay-off letters (the “Note Pay-off Letters”) executed by the Company Convertible Noteholder;

(xiv)        the Certificate of Merger, executed by the Company; and

(xv)         executed confirmatory assignments of Intellectual Property from any of the Company’s or any Subsidiary’s current and former employees and independent contractors and consultants that have not executed such agreements in each case in a form that is reasonably acceptable to Acquirer.

1.3      Effect on Capital Stock and Options.

(a)        Treatment of Company Securities. On the terms and subject to the conditions set forth in this Agreement, and without any action on the part of any Company Securityholder:

(i)         At the Effective Time, each In the Money Option shall, on the terms and subject to the conditions set forth in this Agreement, be cancelled and converted into and represent the right to receive an amount in cash, without interest, with respect to each share of Company Common Stock underlying such In the Money Option, equal to: (a) the excess of the Employee Closing Payment Per Share over the per share exercise price of such In the Money Option; (b) the right to receive the 2013 Guaranteed Deferred Payment Per Share on or about January 31, 2013; (c) the right to receive the 2014 Guaranteed Deferred Payment Per Share on or about January 31, 2014; (d) the 2013 Contingent Deferred Payment Per Share; and (e) the 2014 Contingent Deferred Payment Per Share (collectively, the “Option Payments”). The amount of cash each holder of In the Money Options is entitled to receive for the In the Money Option held by such holder upon each applicable Option Payment shall be rounded down to the nearest cent and computed after aggregating cash amounts for all In the Money Options held by such holder and will be reduced by any applicable payroll, income tax, or other withholding taxes.

(ii)        At the Effective Time, each share of Non-Employee Capital Stock issued and outstanding immediately prior to the Effective Time (other than Dissenting Shares and shares owned by the Company) shall, on the terms and subject to the conditions set forth in this Agreement, be automatically converted into the right to receive, subject to and in accordance with Section 1.4(a), the Non-Employee Closing Payment Per Share.

(iii)        At the Effective Time, each share of Employee Capital Stock issued and outstanding immediately prior to the Effective Time (other than Dissenting Shares and shares owned by the Company) shall, on the terms and subject to the conditions set forth in this Agreement, be automatically converted into the right to receive, subject to and in accordance with Section 1.4(a): (a) the Employee Closing Payment Per Share; (b) the right to receive the 2013 Guaranteed Deferred Payment Per

4

Share on or about January 31, 2013; (c) the right to receive the 2014 Guaranteed Deferred Payment Per Share on or about January 31, 2014; and (d) the 2013 Contingent Deferred Payment Per Share; and (e) the 2014 Contingent Deferred Payment Per Share.

(iv)        Subject to subsection (i) above, no Company Options and no Company Warrants, whether vested or unvested, shall be assumed by Acquirer in the Merger, and at the Effective Time, each Company Option and each Company Warrant will, pursuant to termination agreements with each holder thereof, be cancelled and extinguished and all holders of Company Options shall have consented in writing to such cancellation.

(v)         Notwithstanding anything to the contrary contained in this Agreement, in no event shall the aggregate amount of cash and number of shares of Acquirer Common Stock to be issued by Acquirer to the Company Securityholders exceed the Merger Consideration.

(vi)        Each share of capital stock of Merger Sub that is issued and outstanding immediately prior to the Effective Time will, by virtue of the Merger and without further action on the part of the sole stockholder of Merger Sub, be converted into and become one share of common stock of the Surviving Corporation (and the shares of Surviving Corporation into which the shares of Merger Sub capital stock are so converted shall be the only shares of the Surviving Corporation’s capital stock that are issued and outstanding immediately after the Effective Time). Each certificate evidencing ownership of shares of Merger Sub capital stock will evidence ownership of such shares of common stock of the Surviving Corporation.

(vii)        At the Effective Time, and pursuant to the terms of the Note Pay-Off Letter, the Company Convertible Note shall be cancelled and converted into and represent the right of the Company Convertible Noteholder to receive, prior to any other payment to the Company Securityholders of any of the Merger Consideration, the Convertible Note Payment Amount.

(b)        Treatment of Company Capital Stock Owned by the Company. At the Effective Time, all shares of Company Capital Stock that are owned by the Company immediately prior to the Effective Time shall be canceled and extinguished without any conversion thereof.

(c)        Adjustments. In the event of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into capital stock), reorganization, reclassification, combination, recapitalization or other like change with respect to the Company Capital Stock or Acquirer Common Stock occurring after the date hereof and prior to the issuance of such Acquirer Common Stock in accordance with Schedule A, all references in this Agreement to specified numbers of shares of any class or series affected thereby, and all calculations provided for that are based upon numbers of shares of any class or series (or trading prices therefor) affected thereby, shall be equitably adjusted to the extent necessary to provide the parties the same economic effect as contemplated by this Agreement prior to such stock split, reverse stock split, stock dividend, reorganization, reclassification, combination, recapitalization or other like change.

(d)        Appraisal Rights. Notwithstanding anything contained herein to the contrary, any Dissenting Shares shall not be converted into the right to receive the applicable Pro Rata Portion of the Merger Consideration, but shall instead be converted into the right to receive such consideration as may be determined to be due with respect to any such Dissenting Shares pursuant to Delaware Law. Each holder of Dissenting Shares who, pursuant to the provisions of Delaware Law, becomes entitled to payment thereunder for such shares shall receive payment therefor in accordance with Delaware Law (but only after the value therefor shall have been agreed upon or finally determined pursuant to such provisions). If, after the Effective Time, any Dissenting Shares shall lose their status as Dissenting

5

Shares, then any such shares shall immediately be converted into the right to receive the applicable Pro Rata Portion of the Merger Consideration as if such shares never had been Dissenting Shares, and Acquirer shall issue and deliver to the holder thereof, at (or as promptly as reasonably practicable after) the applicable time or times specified in Section 1.4(a), following the satisfaction of the applicable conditions set forth in Section 1.4(a), the applicable Pro Rata Portion of the Merger Consideration as if such shares never had been Dissenting Shares. The Company shall give Acquirer (i) prompt notice of any demands for appraisal received by the Company, withdrawals of such demands, and any other instruments served pursuant to Delaware Law and received by the Company and (ii) the right to direct all negotiations and proceedings with respect to demands for appraisal under Delaware Law. The Company shall not, except with the prior written consent of Acquirer, or as otherwise required under Delaware Law, voluntarily make any payment or offer to make any payment with respect to, or settle or offer to settle, any claim or demand in respect of any Dissenting Shares. The payout of consideration under this Agreement to the Converting Holders (other than to holders of Dissenting Shares who shall be treated as provided in this Section 1.3(d) and under Delaware Law) shall not be affected by the exercise or potential exercise of appraisal rights or dissenters’ rights under Delaware Law by any other stockholder of the Company.

(e)        Rights Not Transferable. The rights of the Company Securityholders under this Agreement as of immediately prior to the Effective Time are personal to each such Company Securityholder and shall not be transferable for any reason otherwise than by operation of law, will or the laws of descent and distribution. Any attempted transfer of such right by any holder thereof (otherwise than as permitted by the immediately preceding sentence) shall be null and void.

(f)        Fractional Shares. No fractional shares of Acquirer Common Stock will be issued pursuant to this Agreement, but in lieu thereof each holder of shares of Company Common Stock who would otherwise be entitled to a fraction of a share of Acquirer Common Stock (after aggregating for each particular stock certificate representing Company Common Stock all fractional shares of Acquirer Common Stock to be received by such holder) shall receive from Acquirer an amount of cash (rounded to the nearest whole cent) equal to the product of (i) such fraction and (ii) the Fair Market Value of Acquirer Common Stock.

1.4        Surrender of Certificates.

(a)        Exchange Procedures.

(i)        As soon as reasonably practicable after the Closing Date, Acquirer shall mail or instruct U.S. Bank National Association (or other bank or trust company as Acquirer may choose in its reasonable discretion (the “Paying Agent”)) to mail to every holder of record of Company Capital Stock that was issued and outstanding immediately prior to the Effective Time and that has not previously delivered its certificates or instruments, which immediately prior to the Effective Time represented issued and outstanding Company Capital Stock ( the “Converting Instruments”), with a properly completed and duly executed letter of transmittal in customary form (the “Letter of Transmittal”) together with instructions for use of the Letter of Transmittal in effecting the surrender of the Converting Instruments into the right to receive a Pro Rata Portion of the Merger Consideration. The Letter of Transmittal shall specify that delivery of the Converting Instruments shall be effected, and risk of loss and title to the Converting Instruments shall pass, only upon receipt thereof by Paying Agent, together with a properly completed and duly executed Letter of Transmittal, duly executed on behalf of each Person effecting the surrender of such Converting Instruments, and shall be in such form and have such other provisions as Acquirer may reasonably specify, including that the Converting Holders agree to be bound by the provisions of Section 1.5 and ARTICLE 8 and agree to release the Company and the Surviving

6

Corporation from any claims, rights, liabilities and causes of action whatsoever based upon, relating to or arising out of the Converting Instruments. The Company will pay Merger Consideration due in exchange for In the Money Options through Company payroll and no Converting Holder shall be required to deliver evidence of In the Money Options.

(ii)        At the Closing, Acquirer shall cause to be deposited with Paying Agent an amount of cash sufficient to pay the Closing Payment.

(iii)        At the Effective Time and upon receipt of written confirmation of the effectiveness of the Merger from the Secretary of State of the State of Delaware, (i) Acquirer shall cause to be paid directly to the Company Convertible Noteholder the Convertible Note Payment Amount as promptly as practicable following the submission of the Note Pay-off Letter and (ii) will instruct the Paying Agent to pay by check or wire transfer the applicable Pro Rata Portion of the Closing Payment, pursuant to Section 1.3 and subject to the terms of this Agreement, to each Converting Holder, other than to those holders of Dissenting Shares not entitled to payment, as promptly as practicable following the submission of the Converting Instrument to the Paying Agent and a duly executed Letter of Transmittal by such holder of record. If any Converting Instrument shall have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the Person claiming such document to be lost, stolen, or destroyed and, if required by the Paying Agent, the payment of any reasonable fees, and the posting by such Person of a bond, in such reasonable amount as the Paying Agent may direct as indemnity against any claim that may be made against it with respect to such document, the Paying Agent will issue in exchange for such lost, stolen, or destroyed document, the applicable Pro Rata Portion of the Closing Payment to which the holder is entitled under Section 1.3.

(iv)        The adoption of this Agreement and the approval of the Merger by the Company Stockholders shall constitute approval of the appointment of the Stockholders’ Agent.

(v)         No interest shall accumulate on any cash payable in connection with the Merger.

(vi)        If any cash amount payable pursuant to Section 1.3(a) is to be paid to a Person other than the Person to which the Converting Instruments are surrendered in exchange therefor is registered, it shall be a condition of the payment thereof that the Converting Instruments so surrendered shall be properly endorsed and otherwise in proper form for transfer and that the person requesting such exchange shall have paid to Acquirer or any agent designated by it any transfer or other Taxes required by reason of the payment of cash in any name other than that of the registered holder of the Certificate surrendered, or established to the satisfaction of Acquirer or any agent designated by it that such Tax has been paid or is not payable.

(b)        No Liability. Notwithstanding anything to the contrary in this Section 1.4, none of the Surviving Corporation or any party hereto shall be liable to any Person for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.

(c)        Unclaimed Consideration. Any portion of the funds held by the Paying Agent which has not been delivered to any holders of Converting Instruments pursuant to this Article I within twelve (12) months after the Effective Time shall promptly be paid to Acquirer, and thereafter each holder of a Converting Instrument who has not theretofore complied with the exchange procedures set forth in and contemplated by Section 1.4(a) shall look only to the Surviving Corporation (subject to abandoned property, escheat and similar laws) for its claim, only as a general unsecured creditor thereof, to the Pro Rata Portion of the Merger Consideration issuable pursuant to Section 1.3(a). Notwithstanding anything to the contrary contained herein, if any Converting Instrument has not been surrendered

7

immediately prior to the earlier of the first anniversary of the Effective Time or such date on which the Pro Rata Portion of the Merger Consideration contemplated by Section 1.3 in respect of such Converting Instrument would otherwise escheat to or become the property of any Governmental Entity, any amounts payable in respect of such Converting Instrument shall, to the extent permitted by applicable law, become the property of Acquirer, free and clear of all claims or interests of any Person previously entitled thereto.

1.5        No Further Ownership Rights in the Company Capital Stock, Company Options or Company Warrants. The Merger Consideration paid or payable following the surrender for exchange of shares of the Converting Instruments in accordance with the terms hereof shall be paid or payable in full satisfaction of all rights pertaining to such shares of Company Capital Stock and In the Money Options, and there shall be no further registration of transfers on the records of the Surviving Corporation of shares of Company Capital Stock and In the Money Options which were issued and outstanding immediately prior to the Effective Time. If, after the Effective Time, any Converting Instrument is presented to the Surviving Corporation for any reason, such Converting Instrument shall be canceled and exchanged as provided in this ARTICLE 1.

1.6        Company Net Working Capital Adjustment.

(a)        Pursuant to Section 5.14, the Company shall deliver a draft of the Company Net Working Capital Certificate to Acquirer not less than 2 Business Days prior to the Closing Date.

(b)        As soon as practicable, but in any case no later than ninety (90) days after the Closing, Acquirer may object to the Company Net Working Capital calculations included in the Company Net Working Capital Certificate (the “NWC Calculations”) by delivering to the Stockholders’ Agent a certificate (the “Acquirer NWC Certificate”) executed by Acquirer’s Chief Financial Officer setting forth Acquirer’s calculation of the Company Net Working Capital and the amount by which Company Net Working Capital as calculated by Acquirer is less than the Company Net Working Capital set forth in the Company Net Working Capital Certificate.

(c)        The Stockholders’ Agent may object to the Company Net Working Capital calculations set forth in the Acquirer NWC Certificate by providing written notice of such objection to Acquirer within twenty (20) Business Days after Acquirer’s delivery of the Acquirer NWC Certificate (the “Notice of Objection”).

(d)        If the Stockholders’ Agent timely provides the Notice of Objection, then the parties shall confer in good faith for a period of up to ten (10) Business Days following Acquirer’s timely receipt of the Notice of Objection, in an attempt to resolve any disagreement and any resolution by them shall be in writing and shall be final and binding.

(e)        If, after such ten (10) Business Day period, the Stockholders’ Agent and Acquirer cannot resolve any such disagreement, then the parties shall an independent third party auditing firm acceptable to both the Stockholders’ Agent and Acquirer (the “Reviewing Accountant”) to review the NWC Calculations. After review of the NWC Calculations and the Company’s books and records, the Reviewing Accountant shall promptly determine the Company Net Working Capital and such determination shall be final and binding on the parties.

(f)        If the Company Net Working Capital, as determined pursuant to Section 1.6(b) (in the event there is no Notice of Objection), Section 1.6(d) or Section 1.6(e), as the case may be, is in fact less than the Company Net Working Capital set forth in the Company Net Working Capital Certificate (such difference, the “Negative Adjustment Amount”), then each Converting Holder will

8

indemnify and hold harmless Acquirer without any dispute by the Stockholders’ Agent, for the full amount of:

  (i)        the Negative Adjustment Amount; and

  (ii)        all fees and expenses, if any, of the Reviewing Accountant.

(g)        If the Company Net Working Capital as determined by the Reviewing Accountant, if applicable, is greater than the Company Net Working Capital as set forth in the Acquirer NWC Certificate, all fees and expenses, if any, of the Reviewing Accountant, will be paid by Acquirer. Acquirer’s right to indemnification pursuant to this Section 1.6 will not be subject to any of the limitations set forth in ARTICLE 8.

1.7        Tax Consequences. Neither Acquirer nor the Company makes any representations or warranties to such other party or to any Company Securityholder regarding the Tax treatment of the Merger, or any of the Tax consequences to the Acquirer or the Company or any Company Securityholder of this Agreement, the Merger or any of the other transactions or agreements contemplated hereby. Each of the Acquirer and the Company acknowledges that the Company and the Company Securityholders are relying solely on their own Tax advisors in connection with this Agreement, the Merger and the other transactions and agreements contemplated hereby.

1.8        Withholding Rights. Acquirer, the Surviving Corporation and the Paying Agent shall be entitled to deduct and withhold from the Merger Consideration cash or shares of Acquirer Common Stock otherwise deliverable under this Agreement, and from any other payments otherwise required pursuant to this Agreement, to any Key Employee, any other employee of the Company who becomes an employee or consultant of the Surviving Corporation or Acquirer, any holder of any shares of Company Capital Stock, any Company Options, any Company Warrants or any Converting Instruments such amounts in cash or shares as Acquirer, the Surviving Corporation or the Paying Agent is required to deduct and withhold with respect to any such deliveries and payments under the Code or any provision of state, local, provincial or foreign Tax law. In addition, and notwithstanding any provision of this Agreement to the contrary, Acquirer and the Surviving Corporation shall, as a condition to any obligation to grant Acquirer Common Stock, be entitled to require a cash payment by or on behalf of the recipient of any sums required by the Code or any provision of state, local or non-U.S. tax law to be withheld with respect to such distribution or payment. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been delivered and paid to such holders in respect of which such deduction and withholding was made.

1.9        Taking of Necessary Action; Further Action. If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Corporation with full right, title and interest in, to and under, and/or possession of, all assets, property, rights, privileges, powers and franchises of the Company, the officers and directors of the Surviving Corporation are fully authorized, in the name and on behalf of the Company or otherwise, to take all lawful action necessary or desirable to accomplish such purpose or acts, so long as such action is not inconsistent with this Agreement.

1.10        Right to Make Setoffs. Acquirer shall have the right to make Setoffs against such portions of the Deferred Payments to the extent as are permitted by ARTICLE 8 below.

9

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Subject to the disclosures set forth in the disclosure letter of the Company delivered to Acquirer concurrently with the parties’ execution of this Agreement (the “Company Disclosure Letter”) (each of which disclosures, in order to be effective, shall clearly indicate the Section and, if applicable, the Subsection of this ARTICLE 2 to which it relates (unless and only to the extent the relevance to other representations and warranties is readily apparent), and each of which disclosures shall also be deemed to be incorporated by reference into the representations and warranties made by the Company to Acquirer under this ARTICLE 2), the Company represents and warrants to Acquirer, as of the date hereof and as of the Closing Date, as follows:

2.1        Organization, Standing, Power and Subsidiaries.

(a)        The Company is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. The Company has the corporate power to own, operate and lease its properties and to conduct its Business and is duly qualified to do business and is in good standing in each jurisdiction where the failure to be so qualified or in good standing, individually or in the aggregate with any such other failures, would reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole. The Company has and, since its inception has had, no Subsidiaries or any equity or ownership interest, whether direct or indirect, in, or any loans to, any corporation, partnership, limited liability company, joint venture or other business entity.

(b)        Schedule 2.1(b) of the Company Disclosure Letter sets forth a true, correct and complete list of: (i) the names of the members of the Board of Directors (or similar body); (ii) the names of the members of each committee of the Board of Directors (or similar body); and (iii) the names and titles of the officers of the Company.

2.2        Capital Structure.

(a)        The authorized capital stock of the Company consists solely of (i) 150,000,000 shares of Company Common Stock and (ii) 9,911,173 shares of Company Preferred Stock, all of which are designated as Company Series A Stock. A total of 83,972,536 shares of Company Common Stock and no shares of Company Series A Stock, are issued and outstanding as of the Agreement Date. The Company holds no treasury shares. As of the Agreement Date, there are no other issued and outstanding shares of capital stock or other securities of the Company and no outstanding commitments or Contracts to issue any shares of capital stock or other securities of the Company other than (i) the Company Convertible Note and (ii) pursuant to the exercise of outstanding Company Options under the Company Option Plans. Schedule 2.2(a) of the Company Disclosure Letter accurately sets forth, as of the Agreement Date, the name of each Person that is the registered owner of any shares of Company Common Stock and the number of such shares so owned by such Person. The number of such shares set forth as being so owned by such Person constitutes the entire interest of such person in the issued and outstanding capital stock or voting securities of the Company. All issued and outstanding shares of Company Capital Stock are duly authorized, validly issued, fully paid and non-assessable and are free of any Encumbrances, preemptive rights, rights of first refusal or “put” or “call” rights created by statute, the Certificate of Incorporation or Bylaws or any Contract to which the Company is a party or by which the Company is bound. The Company has never declared or paid any dividends on any shares of Company Capital Stock. There is no liability for dividends accrued and unpaid by the Company. The Company is not under any obligation to register under the Securities Act any shares of Company Capital Stock or any other securities of the Company, whether currently outstanding or that may subsequently be issued. All issued and outstanding shares of Company Capital Stock, and all Company Options were issued in compliance with all applicable Legal Requirements and all requirements set forth in applicable Contracts.

10

(b)        As of the Agreement Date, the Company has reserved 7,244,558 shares of Company Common Stock for issuance to employees, non-employee directors and consultants pursuant to the Company Option Plans, of which 7,044,748 shares are subject to outstanding and unexercised Company Options, and 149,810 shares remain available for issuance thereunder. Schedule 2.2(b) of the Company Disclosure Letter sets forth, as of the Agreement Date, a true, correct and complete list of all holders of outstanding Company Options, whether or not granted under the Company Option Plans, including the number of shares of Company Common Stock subject to each Company Option, the date of grant, the vesting schedule (and the terms of any acceleration thereof), the exercise price per share, the Tax status of such option under Section 422 of the Code, the term of each Company Option and the plan from which such Company Option was granted. In addition, Schedule 2.2(b) of the Company Disclosure Letter indicates which outstanding Company Options are held by Persons that do not have a right to participate in the Contingent Deferred Payment, if and when earned (including non-employee directors, consultants, advisory board members, vendors, service providers or other similar persons). Correct and complete copies of each Company Option Plan, all agreements and instruments relating to or issued under each Company Option Plan (including executed copies of all Contracts relating to each Company Option and the shares of Company Capital Stock purchased under such option) have been made available to Acquirer’s counsel, and such plans and Contracts have not been amended, modified or supplemented since being made available to Acquirer’s counsel, and there are no agreements, understandings or commitments to amend, modify or supplement such plans or Contracts in any case from those made available to Acquirer’s counsel. The terms of the Company Option Plans permit the cancellation of Company Options to purchase Company Common Stock as made available in this Agreement, without the consent or approval of the holders of such securities, the Company Stockholders, or otherwise and neither the terms of the Company Options Plans nor and any Contract of any character to which the Company and/or any Subsidiary is a party to or by which the Company is bound relating to any Company options provides for any acceleration of the exercise schedule or vesting provisions in effect for those Company Options in connection with the Merger or any other transaction contemplated by this Agreement or upon termination of employment or service with the Company or with Acquirer or any Subsidiary, or any other event, whether before, upon or following the Merger or otherwise. No benefits under any of such Company Option Plans will accelerate in connection with the Merger. No other outstanding Company Options, whether under the Company Option Plans or otherwise, will be accelerated in connection with the Merger.

(c)        Other than as set forth on Schedules 2.2(a) and 2.2(b) of the Company Disclosure Letter, as of the Agreement Date, to the knowledge of the Company, no Person has any right to acquire any shares of Company Capital Stock or any Company Options, Company Warrants or other rights to purchase shares of Company Capital Stock or other securities of the Company, from the Company or, to the knowledge of the Company, from any Company Securityholder.

(d)        Except for the Company Options described in Schedule 2.2(b) of the Company Disclosure Letter, there are no options, warrants, calls, rights or Contracts of any character to which the Company is a party or by which it is bound obligating the Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any shares of any Company Capital Stock, Company Options or other rights to purchase shares of Company Capital Stock or other securities of the Company, or any Company Voting Debt, or obligating the Company to grant, extend, accelerate the vesting and/or repurchase rights of, change the price of, or otherwise amend or enter into any such Company Option, call, right or Contract. There are no Contracts relating to voting, purchase, sale or transfer of any Company Capital Stock (i) between or among the Company and any Company Securityholder, other than written contracts granting the Company the right to purchase unvested shares upon termination of employment or service, and (ii) to the knowledge of the Company, between or among any of the Company Securityholders.

11

(e)        The Spreadsheet will accurately set forth, as of the Closing, the name of each Person that is the registered owner of any shares of Company Capital Stock and/or Company Options and/or Company Warrants and the number and kind of such shares so owned, or subject to Company Options or Company Warrants so owned, by such Person. The number of such shares set forth as being so owned, or subject to Company Options or Company Warrants so owned, by such Person will constitute the entire interest of such person in the issued and outstanding capital stock, voting securities or other securities of the Company. As of the Closing, no other Person not disclosed in the Spreadsheet will have a right to acquire any shares of Company Capital Stock and/or Company Options and/or Company Warrants from the Company. In addition, the shares of Company Capital Stock and/or Company Options and/or Company Warrants disclosed in the Spreadsheet will be, as of the Closing, free and clear of any Encumbrances created by the Certificate of Incorporation or Bylaws or any Contract to which the Company is a party or by which it is bound.

2.3        Authority; Noncontravention.

(a)        Subject to approval of the Merger and adoption of this Agreement pursuant to the Company Stockholder Approval, the Company has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly executed and delivered by the Company and constitutes the valid and binding obligation of the Company enforceable against the Company in accordance with its terms subject only to the effect, if any, of (i) applicable bankruptcy and other similar laws affecting the rights of creditors generally and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies. The Board of Directors, by resolutions duly adopted (and not thereafter modified or rescinded) by the unanimous vote of the Board of Directors, has approved and adopted this Agreement and approved the Merger and the other transactions contemplated hereby, determined that this Agreement and the terms and conditions of the Merger and this Agreement are advisable and in the best interests of the Company and the Company Stockholders, and directed that the adoption of this Agreement be submitted to the Company Stockholders for consideration and unanimously recommended that all of the Company Stockholders adopt this Agreement. The affirmative votes of the holders of a majority of the outstanding shares of Company Common Stock is the only vote of the holders of the Company Capital Stock necessary to adopt this Agreement and approve the Merger.

(b)        The execution and delivery of this Agreement by the Company does not, and the consummation of the transactions contemplated hereby will not, (i) result in the creation of any Encumbrance on any of the material properties or assets of the Company or any of the shares of Company Capital Stock or (ii) conflict with, or result in any violation of or default under (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation or acceleration of any obligation or loss of any benefit under, or require any consent, approval or waiver from any Person pursuant to, (A) any provision of the Certificate of Incorporation or Bylaws or other equivalent organizational or governing documents of the Company, in each case as amended to date, (B) any Contract of the Company or any Contract applicable to any of its material properties or assets, or (C) any Legal Requirements applicable to the Company or any of its material properties or assets.

(c)        No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity or any other Person is required by or with respect to the Company in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby, except for (i) the filing of the Certificate of Merger, as provided in Section 1.1(d), and (ii) such other consents, authorizations, filings, approvals, notices and registrations which, if not

12

obtained or made, would not be material to the Company’s ability to consummate the Merger or to perform its obligations under this Agreement and would not prevent, materially alter or delay any of the transactions contemplated by this Agreement.

2.4        Financial Statements.

(a)        The Company has made available to Acquirer its audited consolidated financial statements for the fiscal year ending on December 31, 2010 and its unaudited consolidated financial statements for the 6-month period ended June 30, 2011 (including, in each case, balance sheets, statements of operations and statements of cash flows) (collectively, the “Financial Statements”), which are included as Schedule 2.4(a) of the Company Disclosure Letter. The Financial Statements (i) are derived from and in accordance with the books and records of the Company, (ii) complied as to form with GAAP with respect thereto as of their respective dates, (iii) fairly and accurately present the consolidated financial condition of the Company at the dates therein indicated and the consolidated results of operations and cash flows of the Company for the periods therein specified, and (iv) are true, complete and correct in all material respects.

(b)        The Company has no Liabilities of any nature other than (i) those set forth or adequately provided for in the Balance Sheet included in the Financial Statements as of June 30, 2011 (the “Company Balance Sheet”), (ii) those incurred in the conduct of the Company’s business since June 30, 2011 (the “Company Balance Sheet Date”) in the ordinary course, and, individually or in the aggregate, are not material in nature or amount and do not result from any breach of Contract, warranty, infringement, tort or violation of law, (iii) those incurred by the Company in connection with the execution of this Agreement. Except for Liabilities reflected in the Financial Statements, the Company has no off balance sheet Liability of any nature to, or any financial interest in, any third party or entities, the purpose or effect of which is to defer, postpone, reduce or otherwise avoid or adjust the recording of expenses incurred by the Company. Without limiting the generality of the foregoing, the Company has no outstanding guarantees of any debt or other obligation of any other Person.

(c)        Schedule 2.4(c) of the Company Disclosure Letter accurately lists all indebtedness of Company and its Subsidiaries for money borrowed (“Company Debt”), including, for each item of Company Debt, the agreement governing the Company Debt and the interest rate, maturity date and any assets or properties securing such Company Debt. All Company Debt may be prepaid at the Closing without penalty under the terms of the Contracts governing such Company Debt.

(d)         Schedule 2.4(d) of the Company Disclosure Letter sets forth the names and locations of all banks and other financial institutions at which the Company maintains accounts and the names of all persons authorized to make withdrawals therefrom.

(e)        Schedule 2.4(e) of the Company Disclosure Letter sets forth the amounts and an accurate aging of the Company’s accounts receivable in the aggregate and by customer, and indicates the amounts of allowances for doubtful accounts. Subject to any accruals, reserves or allowances for doubtful accounts, the accounts receivable shown on Schedule 2.4(e) of the Company Disclosure Letter arose in the ordinary course of business, consistent with past practices, represented bona fide claims against debtors for sales and other charges, and have been collected or are collectible in the book amounts thereof within 150 days of the date hereof. None of the accounts receivable of the Company is subject to any claim of offset, recoupment, setoff or counter-claim, and the Company has no knowledge of any specific facts or circumstances (whether asserted or unasserted) that could give rise to any such claim. None of the accounts receivable of the Company is contingent upon the performance by the Company of any obligation or Contract and no agreement for deduction or discount has been made with respect to any

13

of such accounts receivable. The amount carried for doubtful accounts and allowances disclosed in the Financial Statements was calculated in a manner consistent with prior periods.

2.5        Litigation. There is no private or governmental action, claim, proceeding, suit, hearing, litigation, audit or investigation (whether civil, criminal, administrative, judicial or investigative), or any appeal therefrom pending before any Governmental Entity (a “Legal Proceeding”), or, to the knowledge of the Company, threatened against the Company or any of its assets or properties or any of its directors, officers or employees (in their capacities as such or relating to their employment, services or relationship with the Company), nor, to the knowledge of the Company, is there any reasonable basis for any such Legal Proceeding. There is no judgment, decree, rule, injunction or order against the Company, any of its assets or properties, or, to the knowledge of the Company, any of its directors, officers or employees (in their capacities as such or relating to their employment, services or relationship with the Company). To the Company’s knowledge, there is no reasonable basis for any Person to assert a claim against the Company or any of its assets or properties or any of its directors, officers or employees (in their capacities as such or relating to their employment, services or relationship with the Company) based upon: (a) the Company entering into this Agreement or any of the other transactions or agreements contemplated hereby; (b) any confidentiality or similar agreement entered into by the Company regarding its assets or properties; or (c) any claim that the Company has agreed to sell or dispose of any of its assets or properties to any party other than Acquirer, whether by way of merger, consolidation, sale of assets or otherwise. The Company does not have any Legal Proceeding pending against any other Person.

2.6        Restrictions on Business Activities. There is no Contract, judgment, injunction, order or decree binding upon the Company that restricts or prohibits, purports to restrict or prohibit, has or would reasonably be expected to have, whether before or after consummation of the Merger, the effect of prohibiting, restricting or impairing any current or presently proposed business practice of the Company, any acquisition of property by the Company or the conduct or operation of Business or limiting the freedom of the Company to engage in the Business or any line of business, to sell, license or otherwise distribute services or products in any market or geographic area, or to compete with any Person, including any grants by the Company of exclusive rights or exclusive licenses.

2.7        Compliance with Laws; Governmental Permits.

(a)        The Company has complied in all material respects with, is not in violation of, and has not received any notices of violation with respect to, any Legal Requirement.

(b)        The Company has obtained each material federal, state, county, local or foreign governmental consent, license, permit, grant, or other authorization of a Governmental Entity (i) pursuant to which the Company currently operates or holds any interest in any of its assets or properties or (ii) that is required for the operation of the Company’s business or the holding of any such interest (all of the foregoing consents, licenses, permits, grants, and other authorizations, collectively, the “Company Authorizations”), and all of the Company Authorizations are in full force and effect. The Company has not received any notice or other communication from any Governmental Entity regarding (i) any actual or possible violation of any Company Authorization or (ii) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any Company Authorization. The Company has materially complied with all of the terms of the Company Authorizations and none of the Company Authorizations will be terminated or impaired, or will become terminable, in whole or in part, as a result of the consummation of the transactions contemplated by this Agreement.

14

2.8        Title to, Condition and Sufficiency of Assets.

(a)        The Company has good title to, or valid leasehold interest in all of its properties, and interests in properties and assets, real and personal, reflected on the Company Balance Sheet or acquired after the Company Balance Sheet Date (except properties and assets, or interests in properties and assets, sold or otherwise disposed of since the Company Balance Sheet Date in the ordinary course of business consistent with past practice), or, with respect to leased properties and assets, valid leasehold interests in such properties and assets which afford the Company valid leasehold possession of the properties and assets that are the subject of such leases, in each case, free and clear of all Encumbrances, except (i) Permitted Encumbrances or (ii) liens securing indebtedness that is reflected on the Company Balance Sheet. Schedule 2.8(a) of the Company Disclosure Letter identifies each parcel of real property leased by the Company. The Company has heretofore made available to Acquirer’s counsel true, correct and complete copies of all leases, subleases and other agreements under which the Company uses or occupies or has the right to use or occupy, now or in the future, any real property or facility, including all modifications, amendments and supplements thereto. The Company does not currently own any real property.

(b)        Except for Intellectual Property (the sole representations and warranties with respect thereto are provided in Section 2.9 below), the assets and properties owned by the Company (i) constitute all of the assets and properties that are necessary for the Company to conduct, operate and continue the Business as currently conducted, and (ii) constitute all of the assets and properties that are used in the Business.

2.9        Intellectual Property.

(a)        For purposes of this Section 2.9, the term “Company” shall include all of the Company’s Subsidiaries. As used in this Agreement, the following terms have the meanings indicated below:

(i)        “Company Intellectual Property” means any and all Company Owned Intellectual Property and any and all Third Party Intellectual Property that is licensed to the Company.

(ii)        “Company Intellectual Property Agreements” means any Contract governing any Company Intellectual Property to which the Company is a party or bound by, except for Contracts for Third Party Intellectual Property that is generally, commercially available software and (i) is not material to the Company; (ii) has not been modified or customized for the Company; and (iii) is licensed for an annual fee under $10,000.

(iii)        “Company Owned Intellectual Property” means any and all Intellectual Property that is owned by the Company.

(iv)        “Company Products” means all products or services produced, marketed, licensed, sold, distributed or performed by or on behalf of the Company and all products or services currently under development by the Company.

(v)        “Company Registered Intellectual Property” means the United States, international and foreign: (A) patents and patent applications (including provisional applications); (B) registered trademarks, applications to register trademarks, intent-to-use applications, or other registrations or applications related to trademarks; (C) registered Internet domain names; and (D) registered copyrights and applications for copyright registration; registered or filed in the name of, the Company.

15

(vi)        “Company Source Code” means, collectively, any software source code or database specifications or designs, or any material proprietary information or algorithm contained in or relating to any software source code or database specifications or designs, of any Company Owned Intellectual Property or Company Products.

(vii)        “Intellectual Property” means (A) Intellectual Property Rights; and (B) Proprietary Information and Technology.

(viii)        “Intellectual Property Rights” means any and all of the following and all rights in, arising out of, or associated therewith, throughout the world: patents, utility models, and applications therefor and all reissues, divisions, re-examinations, renewals, extensions, provisionals, continuations and continuations-in-part thereof, and equivalent or similar rights in inventions and discoveries anywhere in the world, including invention disclosures, common law and statutory rights associated with trade secrets, confidential and proprietary information, and know how, industrial designs and any registrations and applications therefor, trade names, logos, trade dress, trademarks and service marks, trademark and service mark registrations, trademark and service mark applications, and any and all goodwill associated with and symbolized by the foregoing items, Internet domain name applications and registrations, Internet and World Wide Web URLs or addresses, copyrights, copyright registrations and applications therefor, and all other rights corresponding thereto, mask works, mask work registrations and applications therefor, and any equivalent or similar rights in semiconductor masks, layouts, architectures or topology, moral and economic rights of authors and inventors, however denominated, and any similar or equivalent rights to any of the foregoing, and all tangible embodiments of the foregoing.

(ix)        “Open Source Materials” means software or other material that is distributed as “free software,” “open source software” or under similar licensing or distribution terms (including but not limited to the GNU General Public License (GPL), GNU Lesser General Public License (LGPL), Mozilla Public License (MPL), BSD licenses, the Artistic License, the Netscape Public License, the Sun Community Source License (SCSL) the Sun Industry Standards License (SISL) and the Apache License).

(x)        “Personal Data” means a natural person’s name, street address, telephone number, e-mail address, photograph, social security number, driver’s license number, passport number, or customer or account number, or any other piece of information that allows the identification of a natural person.

(xi)        “Proprietary Information and Technology” means any and all of the following: works of authorship, computer programs, source code and executable code, whether embodied in software, firmware or otherwise, assemblers, applets, compilers, user interfaces, application programming interfaces, protocols, architectures, documentation, annotations, comments, designs, files, records, schematics, test methodologies, test vectors, emulation and simulation tools and reports, hardware development tools, models, tooling, prototypes, breadboards and other devices, data, data structures, databases, data compilations and collections, inventions (whether or not patentable), invention disclosures, discoveries, improvements, technology, proprietary and confidential ideas and information, know-how and information maintained as trade secrets, tools, concepts, techniques, methods, processes, formulae, patterns, algorithms and specifications, customer lists and supplier lists and any and all instantiations or embodiments of the foregoing or any Intellectual Property Rights in any form and embodied in any media.

(xii)        “Third Party Intellectual Property” means any and all Intellectual Property owned by a third party.

16

(b)        Status. The Company has full title and ownership of, or is duly licensed under or otherwise authorized to use, all Intellectual Property (other than patents) necessary to enable it to carry on the Business as currently conducted, free and clear of any Encumbrances, and without any conflict with or infringement upon the rights of others. To the knowledge of the Company, the Company has full title and ownership of, or is duly licensed under or otherwise authorized to use, all patents necessary to enable it to carry on the Business as currently conducted, free and clear of any Encumbrances, and without any conflict with or infringement upon the rights of others. The Company has not transferred ownership of, or agreed to transfer ownership of, or granted any exclusive licenses to, or agreed to grant any exclusive licenses to any Intellectual Property to any third party. No third party has any ownership right, title, interest, claim in or lien on any of the Company Owned Intellectual Property.

(c)        Company Registered Intellectual Property. Schedule 2.9(c) of the Company Disclosure Letter lists all Company Registered Intellectual Property as of the date hereof, and the jurisdictions in which it has been issued or registered or in which any application for such issuance and registration has been filed, or in which any other filing or recordation has been made; and all actions that are required to be taken by the Company within 120 days of the Agreement Date with respect to such Intellectual Property Rights in order to avoid prejudice to, impairment or abandonment of such Intellectual Property Rights. Each item of Company Registered Intellectual Property is valid and subsisting (or in the case of applications, applied for), all registration, maintenance and renewal fees currently due in connection with such Company Registered Intellectual Property have been paid and all documents, recordations and certificates in connection with such Company Registered Intellectual Property currently required to be filed have been filed with the relevant patent, copyright, trademark or other authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of prosecuting, maintaining and perfecting such Company Registered Intellectual Property and recording Company’s ownership interests therein.

(d)        No Government Assistance. At no time during the conception of or reduction to practice of any of the Company Owned Intellectual Property was any developer, inventor or other contributor to such Company Owned Intellectual Property operating under any grants from any Governmental Entity or agency or private source, performing research sponsored by any Governmental Entity or agency or private source or subject to any employment agreement or invention assignment or nondisclosure agreement or other obligation with any third party that could adversely affect the Company’s rights in such Company Owned Intellectual Property.

(e)        Founders. All rights in, to and under all Intellectual Property created by the Company’s founders for or on behalf or in contemplation of the Company (i) prior to the inception of the Company or (ii) prior to their commencement of employment with the Company have been duly and validly assigned to the Company.

(f)        Invention Assignment and Confidentiality Agreement. The Company has secured from all consultants, advisors, employees and independent contractors who independently or jointly contributed to or participated in the conception, reduction to practice, creation or development of any Intellectual Property for the Company (each an “Author”), unencumbered and unrestricted exclusive ownership of, all of the Authors’ Intellectual Property in such contribution and has obtained the waiver of all non-assignable rights. No Author has retained any rights, licenses, claims or interest whatsoever with respect to any Intellectual Property developed by the Author for the Company. Without limiting the foregoing, the Company has obtained written and enforceable proprietary information and invention disclosure and Intellectual Property assignments from all current and former Authors. The Company has made available to Acquirer copies of all such forms currently and historically used by the Company.

17

(g)        No Violation. To the knowledge of the Company, no current or former employee, consultant, advisor or independent contractor of the Company: (i) is in violation of any term or covenant of any Contract relating to employment, invention disclosure, invention assignment, non-disclosure or non-competition or any other Contract with any other party by virtue of such employee’s, consultant’s, advisor’s or independent contractor’s being employed by, or performing services for, the Company or using trade secrets or proprietary information of others without permission; or (ii) has developed any technology, software or other copyrightable, patentable or otherwise proprietary work for the Company that is subject to any agreement under which such employee, consultant, advisor or independent contractor has assigned or otherwise granted to any third party any rights (including Intellectual Property Rights) in or to such technology, software or other copyrightable, patentable or otherwise proprietary work. Neither the execution nor delivery of this Agreement will conflict with or result in a breach of the terms, conditions, or provisions of, or constitute a default under, any Contract of the type described in clause (i) of the foregoing sentence.

(h)        Confidential Information. The Company has taken commercially reasonable steps to protect and preserve the confidentiality of all confidential or non-public information of the Company (including, without limitation, trade secrets) or provided by any third party to the Company (“Confidential Information”). All current and former employees and contractors of the Company and any third party having access to Confidential Information have executed and delivered to the Company a written legally binding agreement regarding the protection of such Confidential Information. The Company has implemented and maintains a reasonable security plan. To the knowledge of the Company, the Company has not experienced any breach of security or otherwise unauthorized access by third parties to the Confidential Information, including Personal Data in the Company’s possession, custody or control.

(i)        Non-Infringement. To the knowledge of the Company, there is no unauthorized use, unauthorized disclosure, infringement or misappropriation of any Company Owned Intellectual Property by any third party. The Company has not brought any action, suit or proceeding for infringement or misappropriation of any Intellectual Property. The Company is not infringing, misappropriating or violating and has not infringed, misappropriated or violated the Intellectual Property (other than patents) of any third party. To the knowledge of the Company, the Company is not infringing, misappropriating or violating and has not infringed, misappropriated or violated the patents of any third party. The Company has not been sued in any action, suit or proceeding or received any written communications (including any third party reports by users) alleging that the Company has infringed, misappropriated, or violated or, by conducting its business as presently proposed, would infringe, misappropriate, or violate any Intellectual Property of any other Person or entity. No Company Owned Intellectual Property or Company Product is subject to any proceeding, order, judgment, settlement agreement, stipulation or right that restricts in any manner the use, transfer, or licensing thereof by the Company, or which may affect the validity, use or enforceability of any such Company Owned Intellectual Property.

(j)        Licenses; Agreements. The Company has not granted any options, licenses or agreements of any kind relating to any Company Owned Intellectual Property outside of normal nonexclusive end use terms of service entered into by users of the Company Products in the ordinary course (copies of which have been made available to Acquirer’s counsel), nor is the Company bound by or a party to any option, license or agreement of any kind with respect to any of the Company Owned Intellectual Property. The Company is not obligated to pay any royalties or other payments to third parties with respect to the marketing, sale, distribution, manufacture, license or use of any Company Products or Company Owned Intellectual Property or any other property or rights.

18

(k)        Other Intellectual Property Agreements. With respect to the Company Intellectual Property Agreements:

(i)        The Company is not (and will not be as a result of the execution and delivery or effectiveness of this Agreement or the performance of the Company’s obligations under this Agreement), in breach of any Company Intellectual Property Agreement and the consummation of the transactions contemplated by this Agreement will not result in the modification, cancellation, termination, suspension of, or acceleration of any payments, rights, obligations, or remedies with respect to any material Company Intellectual Property Agreements, or give any non-Company party to any Company Intellectual Property Agreement the right to do any of the foregoing;

(ii)        At the Closing, the Surviving Corporation (as a wholly owned subsidiary of Acquirer) will be permitted to exercise all of the Company’s rights under the Company Intellectual Property Agreements to the same extent the Company would have been able to had the transactions contemplated by this Agreement not occurred and without the payment of any additional amounts or consideration other than ongoing fees, royalties or payments which the Company would otherwise be required to pay;

(iii)        To the knowledge of the Company, there are no disputes regarding the scope of any Company Intellectual Property Agreements, or performance under any Company Intellectual Property Agreements including with respect to any payments to be made or received by the Company thereunder;

(iv)        No Company Intellectual Property Agreement requires the Company to include any Third Party Intellectual Property in any Company Product or obtain any Person’s approval of any Company Product at any stage of development, licensing, distribution or sale of that Company Product;

(v)         None of the Company Intellectual Property Agreements grants any third party exclusive rights to or under any Company Intellectual Property;

(vi)        None of the Company Intellectual Property Agreements grants any third party the right to sublicense any Company Intellectual Property; and

(vii)      The Company has no obligation under any Company Intellectual Property Agreement or other Contract to provide or pay to any advertisers, agencies, or other customers any refunds, credits, or “make good” impressions or inventory, and Schedule 2.9(k)(vii) of the Company Disclosure Letter includes a complete and accurate list as of the date hereof of all unpaid commissions or revenue share payments that are payable by the Company to any publishers.

(l)        Neither this Agreement nor the transactions contemplated by this Agreement, or the assignment to Acquirer and/or the Surviving Corporation by operation of law or otherwise of any Contracts to which the Company is a party, will result in: (i) Acquirer or any of its Affiliates granting to any third party any right to or with respect to any Intellectual Property Rights owned by, or licensed to Acquirer or any of its Affiliates, (ii) Acquirer or any of its Affiliates, being bound by or subject to, any exclusivity obligations, non-compete or other restriction on the operation or scope of their respective businesses, or (iii) Acquirer or the Surviving Corporation being obligated to pay any royalties or other material amounts to any third party in excess of those payable by any of them, respectively, in the absence of this Agreement or the transactions contemplated hereby.

19

(m)        Source Code. The Company has not disclosed, delivered or licensed to any Person or agreed or obligated itself to disclose, deliver or license to any Person, or permitted the disclosure or delivery to any escrow agent or other Person of, any Company Source Code, other than disclosures to employees and consultants involved in the development of Company Products. No event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time, or both) will, or would reasonably be expected to, result in the disclosure, delivery or license by the Company of any Company Source Code, other than disclosures to employees and consultants involved in the development of Company Products. Without limiting the foregoing, neither the execution of this Agreement nor any of the transactions contemplated by this Agreement will result in a release from escrow or other delivery to a third party of any Company Source Code.

(n)        Open Source Software. Section 2.9(n) of the Company Disclosure Letter identifies all Open Source Materials used in any Company Products or in the conduct of the Business, describes the manner in which such Open Source Materials were used (such description shall include whether (and, if so, how) the Open Source Materials were modified and/or distributed by the Company) and identifies the licenses under which such Open Source Materials were used. The Company is in compliance with the terms and conditions of all licenses for the Open Source Materials. The Company has not (i) incorporated Open Source Materials into, or combined Open Source Materials with, the Company Owned Intellectual Property or Company Products; (ii) distributed Open Source Materials in conjunction with any Company Owned Intellectual Property or Company Products; or (iii) used Open Source Materials, in such a way that, with respect to (i), (ii), or (iii), creates, or purports to create obligations for the Company with respect to any Company Owned Intellectual Property or grant, or purport to grant, to any third party, any rights or immunities under any Company Owned Intellectual Property (including using any Open Source Materials that require, as a condition of use, modification and/or distribution of such Open Source Materials that other software incorporated into, derived from or distributed with such Open Source Materials be (A) disclosed or distributed in source code form, (B) be licensed for the purpose of making derivative works, or (C) be redistributable at no charge).

(o)        Privacy. The Company has complied with all applicable laws, regulations and its internal privacy policies relating to the use, collection, storage, disclosure and transfer of any Personal Data collected by the Company or by third parties having authorized access to the records of the Company. The execution, delivery and performance of this Agreement, will comply with all applicable laws and regulations relating to privacy and with the Company’s privacy policies. The Company has not received any complaint regarding the Company’s collection, use or disclosure of Personal Data. Schedule 2.9(o) of the Company Disclosure Letter accurately describes the Company’s practices with respect to the use of cookies, beacons, or other mechanisms used by the Company to track end user behavior with respect to the Company Products and visitors to publisher websites, and the Company has at all times disclosed and obtained end user consent to such practices in compliance with all applicable laws and none of such disclosures made or contained in any of the Company’s website, privacy policies, or other materials have been inaccurate, incomplete, misleading or deceptive or in violation of any applicable laws.

(p)        Personal Data. Section 2.9(p) of the Company Disclosure Letter identifies and describes each distinct electronic or other database containing (in whole or in part) Personal Data maintained by or for the Company at any time (“Company Databases”), the types of Personal Data in each such database, the means by which the Personal Data was collected, and the security policies that have been adopted and maintained with respect to each such database. No breach or violation of any such security policy by the Company has occurred or, to the knowledge of the Company, is threatened, and to the knowledge of the Company, there has been no unauthorized or illegal use of or access to any of the data or information in any of the Company Databases.

20

2.10      Taxes.

(a)        The Company has properly completed and timely filed all Tax Returns required to be filed by it prior to the Closing Date, has timely paid all Taxes required to be paid by it for which payment is due (whether or not shown on any Tax Return), and has no liability for Taxes in excess of the amount so paid. There is no claim for Taxes being asserted against the Company that has resulted in an Encumbrance against any of the assets or properties of the Company. All Taxes required to be withheld or paid by the Company in connection with amounts paid or owing to any employee of the Company have been duly and timely withheld or paid, and any such withheld Taxes have been either duly and timely paid to the proper Tax Authority or properly set aside in accounts for such purpose and will be duly and timely paid to the proper Tax Authority. There are no liens on or against any of the assets or properties of the Company other than the Permitted Encumbrances.

(b)        The Company has made available to Acquirer correct and complete copies of all Tax Returns, examination reports, and statements of deficiencies assessed against or agreed to by the Company or any of its Subsidiaries.

(c)        The Company Balance Sheet reflects all Liabilities for unpaid Taxes of the Company and/or any Subsidiary for periods (or portions of periods) through the Company Balance Sheet Date. Neither the Company nor any Subsidiary has any Liability for unpaid Taxes accruing after the Company Balance Sheet Date except for Taxes arising in the ordinary course of business subsequent to the Company Balance Sheet Date.

(d)        There is (i) no audit or pending audit of, or Tax controversy associated with, any Tax Return of the Company or any Subsidiary being conducted by a Tax Authority, (ii) no extension of any statute of limitations on the assessment of any Taxes granted by the Company or any Subsidiary currently in effect, and (iii) no agreement to any extension of time for filing any Tax Return which has not been filed. No claim has ever been made in writing by any Governmental Entity in a jurisdiction where the Company or any Subsidiary does not file Tax Returns that the Company or any Subsidiary is or may be subject to taxation by that jurisdiction.

(e)        Neither the Company nor any Subsidiary has been or will be required to include any adjustment in Taxable income for any Tax period (or portion thereof) pursuant to Section 481 or 263A of the Code or any comparable provision under state, local or foreign Tax laws as a result of transactions, events or accounting methods employed prior to the Merger.

(f)        Neither the Company nor any Subsidiary is a party to or bound by any Tax sharing, Tax indemnity, or Tax allocation agreement nor does the Company or any Subsidiary have any Liability or potential Liability to another party under any such agreement.

(g)        Each of the Company and each Subsidiary has disclosed on its Tax Returns any Tax reporting position taken in any Tax Return which could result in the imposition of penalties under Section 6662 of the Code or any comparable provisions of state, local or foreign law.

(h)        Neither the Company nor any Subsidiary has consummated or participated in, and none of them are currently participating in any transaction which was or is a “Tax shelter” transaction as defined in Sections 6662 or 6111 of the Code or the Treasury Regulations promulgated thereunder. Neither the Company nor any Subsidiary has participated in, nor are any of them currently participating in, a “Listed Transaction” or a “Reportable Transaction” within the meaning of Section 6707A(c) of the Code or Treasury Regulation Section 1.6011-4(b), or any transaction requiring disclosure under a corresponding or similar provision of state, local, or foreign law.

21

(i)        Neither the Company nor any Subsidiary or any predecessor of the Company or any Subsidiary has ever been a member of a consolidated, combined, unitary or aggregate group of which the Company or any predecessor of the Company was not the ultimate parent corporation.

(j)        Neither the Company nor any Subsidiary has any Liability for the Taxes of any Person (other than the Company or any Subsidiary) under Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local or foreign law) as a transferee or successor, by Contract or otherwise.

(k)        Neither the Company nor any Subsidiary will be required to include in income, or exclude any item of deduction from, Taxable income for any Taxable period (or portion thereof) ending after the Closing Date as a result of any (i) change in method of accounting for a Taxable period ending on or prior to the Closing Date; (ii) “closing agreement” described in Section 7121 of the Code (or any corresponding or similar provision of state, local, or foreign Tax law); (iii) intercompany transactions or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local, or foreign Tax law); (iv) installment sale or open transaction disposition made on or prior to the Closing Date; or (v) prepaid amount received on or prior to the Closing Date.

(l)         Neither the Company nor any Subsidiary has incurred a dual consolidated loss within the meaning of Section 1503 of the Code.

(m)      The Company has not utilized any Tax holidays or incentives.

(n)        Neither the Company nor any Subsidiary is or has ever been a “United States real property holding corporation” within the meaning of Section 897 of the Code, and the Company and each Subsidiary has filed with the Internal Revenue Service all statements, if any, which are required under Section 1.897-2(h) of the Treasury Regulations.

(o)        Neither the Company nor any Subsidiary has constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock qualifying for Tax-free treatment under Section 355 of the Code (i) in the two (2) years prior to the date of this Agreement or (ii) in a distribution that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with the Merger.

(p)        Schedule 2.10(p) to the Company Disclosure Letter lists all “nonqualified deferred compensation plans” (within the meaning of Section 409A of the Code) to which the Company is a party. Each such nonqualified deferred compensation plan to which the Company is a party complies with the requirements of paragraphs (2), (3) and (4) of Section 409A(a) by its terms and has been operated in accordance with such requirements. With respect to any nonqualified deferred compensation plan, no event has occurred that would be treated by Section 409A(b)(2) of the Code as a transfer of property for purposes of Section 83 of the Code.

(q)        No amount paid or payable by the Company in connection with the transactions contemplated by this Agreement, whether alone or in combination with another event, will be an “excess parachute payment” within the meaning of Code Section 280G or Code Section 4999 or will not be deductible by the Company by reason of Code Section 280G. Section 2.11(h) of the Company Disclosure Letter lists each Person who the Company reasonably believes is, with respect to the Company and/or any ERISA Affiliate, a “disqualified individual” (within the meaning of Section 280G of the Code and the regulations promulgated thereunder).

22

2.11      Employee Benefit Plans and Employee Matters.

(a)         Schedule 2.11(a) of the Company Disclosure Letter lists, with respect to the Company and any trade or business (whether or not incorporated) which is treated as a single employer with the Company (an “ERISA Affiliate”) within the meaning of Section 414(b), (c), (m) or (o) of the Code, (i) all “employee benefit plans” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (ii) each loan to an employee, (iii) other than the Company Option Plan, all stock option, stock purchase, phantom stock, stock appreciation right, supplemental retirement, severance, sabbatical, medical, dental, vision care, disability, employee relocation, cafeteria benefit (Section 125 of the Code), dependent care (Section 129 of the Code), life insurance or accident insurance plans, programs or arrangements, (iv) all bonus, pension, profit sharing, savings, severance, retirement, deferred compensation or incentive plans, programs or arrangements, (v) all other fringe or employee benefit plans, programs or arrangements, and (vi) all employment or executive compensation or severance agreements, written or otherwise, as to which any unsatisfied obligations of the Company remain for the benefit of, or relating to, any present or former employee, consultant or non-employee director of the Company (all of the foregoing described in clauses (i) through (vi), collectively, the “Company Employee Plans”).

(b)        The Company has made available to Acquirer’s counsel a true, correct and complete copy of each of the Company Employee Plans and related plan documents. The Company does not sponsor or maintain any self-funded Company Employee Plan, including, without limitation, any plan to which a stop-loss policy applies.

(c)        None of the Company Employee Plans promises or provides retiree medical or other retiree welfare benefits to any person other than as required under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) or similar state law and the Company has complied with the requirements of COBRA. There has been no “prohibited transaction” (within the meaning of Section 406 of ERISA and Section 4975 of the Code and not exempt under Section 408 of ERISA and regulatory guidance thereunder) with respect to any Company Employee Plan. Each Company Employee Plan has been administered in accordance with its terms and in compliance with the requirements prescribed by any and all statutes, rules and regulations (including ERISA and the Code), and the Company and each ERISA Affiliate has performed all obligations required to be performed by it under, is not in default under or in violation of, and has no knowledge of any default or violation by any other party to, any of the Company Employee Plans. No Company Employee Plan is covered by, and neither the Company nor ERISA Affiliate has incurred or expects to incur any Liability under Title IV of ERISA or Section 412 of the Code. Each Company Employee Plan can be amended, terminated or otherwise discontinued after the Effective Time in accordance with its terms, without Liability to Acquirer (other than ordinary administrative expenses typically incurred in a termination event). No suit, administrative proceeding, action, litigation or claim has been brought, or to the knowledge of the Company, is threatened, against or with respect to any such Company Employee Plan, including any audit or inquiry by the Internal Revenue Service or United States Department of Labor.

(d)        Neither the Company nor current or former ERISA Affiliate currently maintains, sponsors, participates in or contributes to, or has ever maintained, established, sponsored, participated in, or contributed to, any pension plan (within the meaning of Section 3(2) of ERISA) which is subject to Part 3 of Subtitle B of Title I of ERISA, Title IV of ERISA or Section 412 of the Code.

(e)        Neither the Company nor ERISA Affiliate is a party to, or has made any contribution to or otherwise incurred any obligation under, any “multiemployer plan” as such term is

23

defined in Section 3(37) of ERISA or any “multiple employer plan” as such term is defined in Section 413(c) of the Code.

(f)        No Company Employee Plan is sponsored, maintained or contributed to under the law or applicable custom or rule of the any jurisdiction outside of the United States.

(g)        The Company is in compliance in all material respects with all currently applicable Legal Requirements respecting employment, discrimination in employment, terms and conditions of employment, worker classification (including the proper classification of workers as independent contractors and consultants), wages, hours and occupational safety and health and employment practices, including the Immigration Reform and Control Act, and is not engaged in any unfair labor practice. The Company is not liable for any arrears of wages, compensation, Taxes, penalties or other sums for failure to comply with any of the foregoing. The Company has paid in full to all employees, independent contractors and consultants all wages, salaries, commissions, bonuses, benefits and other compensation due to or on behalf of such employees, independent contractors and consultants. The Company is not liable for any payment to any trust or other fund or to any Governmental Entity, with respect to unemployment compensation benefits, social security or other benefits or obligations for employees (other than routine payments to be made in the normal course of business and consistently with past practice).

(h)        Neither the execution or delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement or any termination of employment or service or any other event in connection therewith or subsequent thereto will, individually or together or with the occurrence of some other event, (whether contingent or otherwise), (i) result in any material payment or benefit (including severance, unemployment compensation, golden parachute, bonus or otherwise) becoming due or payable, or required to be provided, to any current or former employee, director, independent contractor or consultant, (ii) materially increase the amount or value of any benefit or compensation otherwise payable or required to be provided to any current or former employee, director, independent contractor or consultant, (iii) result in the acceleration of the time of payment, vesting or funding of any such benefit or compensation, (iv) increase the amount of compensation due to any Person, or (v) result in the forgiveness in whole or in part of any outstanding loans made by the Company to any Person.

2.12      Interested Party Transactions. None of the officers and directors of the Company and, to the knowledge of the Company, none of the employees or stockholders of the Company, nor any immediate family member of an officer, director, employee or stockholder of the Company owning more than 5% of the Common Stock of the Company, has any direct or indirect ownership, participation, royalty or other interest in, or is an officer, director, employee of or consultant or contractor for any firm, partnership, entity or corporation that competes with, or does business with, or has any contractual arrangement with, the Company (except with respect to any interest in less than 5% of the stock of any corporation whose stock is publicly traded). None of said officers and directors of the Company, and, to the knowledge of the Company, none of the employees or stockholders of the Company, nor any member of their immediate families, is a party to, or to the knowledge of the Company, otherwise directly or indirectly interested in, any Contract to which the Company is a party or by which the Company or any of its assets or properties may be bound or affected, except for normal compensation for services as an officer, director or employee thereof. To the knowledge of the Company, none of said officers, directors, employees, stockholders or immediate family members has any interest in any property, real or personal, tangible or intangible (including any Intellectual Property) that is used in, or that relates to, the business of the Company, except for the rights of stockholders under applicable Legal Requirements.

24

2.13      Insurance. The Company maintains the policies of insurance and bonds set forth in Schedule 2.13 of the Company Disclosure Letter, including all legally required workers’ compensation insurance and errors and omissions, casualty, fire and general liability insurance. Schedule 2.13 of the Company Disclosure Letter sets forth the name of the insurer under each such policy and bond, the type of policy or bond, the coverage amount and any applicable deductible and any other material provisions as of the Agreement Date as well all material claims made under such policies and bonds since January 1, 2009. The Company has made available to Acquirer’s counsel correct and complete copies of all such policies of insurance and bonds issued at the request or for the benefit of the Company. There is no material claim pending under any of such policies or bonds as to which coverage has been denied or disputed by the underwriters of such policies or bonds. The Company is in compliance with the terms of such policies and bonds. All such policies and bonds remain in full force and effect, and the Company has no knowledge of any threatened termination of, or written notice of a material premium increase with respect to, any of such policies, other than as disclosed on Schedule 2.13 of the Company Disclosure Letter.

2.14      Books and Records. The Company has made available to Acquirer or its counsel complete and correct copies of (a) all documents identified on the Company Disclosure Letter, (b) the Certificate of Incorporation and Bylaws or equivalent organizational or governing documents of the Company, each as currently in effect, (c) the minute books containing records of all proceedings, consents, actions and meetings of the Board of Directors, committees of the Board of Directors and stockholders of the Company, (d) the stock ledger, journal and other records reflecting all stock issuances and transfers and all stock option and warrant grants and agreements of the Company, and (e) all permits, orders and consents issued by any regulatory agency with respect to the Company, or any securities of the Company, and all applications for such permits, orders and consents. The minute books of the Company made available to Acquirer contain a complete and accurate summary of all actions taken at meetings of directors and stockholders or actions by written consent since the time of incorporation of the Company through the date of this Agreement. The books, records and accounts of the Company (i) are true, correct and complete in all material respects, (ii) have been maintained in accordance with customary business practices for similarly situated companies on a basis consistent with prior years, (iii) accurately and fairly reflect all of the transactions and dispositions of the assets and properties of the Company, and (iv) accurately and fairly reflect the basis for the Financial Statements.

2.15      Material Contracts.

(a)        Schedules 2.15(a)(i) through (xx) of the Company Disclosure Letter set forth a list of each of the following Contracts to which the Company is a party, in each case identified by the applicable sub-section (“Material Contracts”):

(i)        any Contract providing for payments by or to Seller in the period since January 1, 2008 in an aggregate amount of $10,000 or more;

(ii)        any Contract with any advertiser or agency for the purchase, licensing, or sale of any Company Products or other advertising or services, including ad insertion orders, click through agreements, or other purchasing arrangements;

(iii)        any Contract with any publisher with respect to the publication or display of Company Products or other advertising, and any Contract granting any third party the right to market or sell any Company Products, or relating to the advertising or promotion of the business of the Company or pursuant to which any third parties advertise on any websites operated by the Company;

25

(iv)        (1) any joint venture Contract, (2) any Contract that involves a sharing of revenues, profits, cash flows, expenses or losses with other Persons (other than Contracts with Publishers identified in response to Section 2.15(a)(ii) or (3) any Contract that involves the payment of royalties to any other Person;

(v)         any Contract for or relating to the employment or service of any director or officer or any other type of Contract with any of its directors or officers, as the case may be;

(vi)      any agreement pursuant to which any other party is granted exclusive rights or “most favored party” rights of any type or scope with respect to any of the Company Products or Company Intellectual Property, or containing any non-competition covenants or other restrictions relating to the Company Products or Company Intellectual Property; or that limits the freedom of the Company to engage or participate, or compete with any other Person, in any line of business, market or geographic area with respect to the Company Products or Company Intellectual Property, or to make use of any Company Intellectual Property Rights;

(vii)        other than “shrink wrap” and similar generally available commercial end-user licenses to software that have an individual acquisition cost of $1,000 or less, all licenses, sublicenses and other Contracts to which Seller is a party and pursuant to which Seller acquired or is authorized to use any Third Party Intellectual Property Rights used in the development, marketing or licensing of the Seller Products;

(viii)        any license, sublicense or other Contract to which Seller is a party and pursuant to which any Person is authorized to use any Company Intellectual Property;

(ix)        any license, sublicense or other Contract pursuant to which Company has agreed to any restriction on the right of Company to use or enforce any Company Owned Intellectual Property Rights or pursuant to which Company agrees to encumber, transfer or sell rights in or with respect to any Company Owned Intellectual Property Rights;

(x)        any Contracts relating to the membership of, or participation by, the Company in, or the affiliation of the Company with, any industry standards group or association;

(xi)        any Contract providing for the development of any of the any software, technology or Intellectual Property Rights, independently or jointly, either by or for Company (other than employee invention assignment agreements and consulting agreements with Authors on Company’s standard form of agreement, copies of which have been made available to Acquirer’s counsel);

(xii)         any confidentiality, secrecy or non-disclosure Contract other than any such Contract entered into by Seller in the ordinary course of business consistent with past practice;

(xiii)      any Contract to license or authorize any third party to manufacture or reproduce any of the Company Products or Company Intellectual Property;

(xiv)        any agreement containing any support, maintenance or service obligation or cost on the part of Company;

(xv)        any settlement agreement;

(xvi)        any Contract pursuant to which rights of any third party are triggered or become exercisable, or under which any other consequence, result or effect arises, in connection with or

26

as a result of the execution of this Agreement or the consummation of the Merger or other transactions contemplated hereunder, either alone or in combination with any other event;

(xvii)        any Contract pursuant to which the Company agrees to provide any Intellectual Property or other indemnity that is not capped at the fees paid or payable to the Company;

(xviii)      any Contract or plan (including any stock option, merger and/or stock bonus plan) relating to the sale, issuance, grant, exercise, award, purchase, repurchase or redemption of any shares of Company Capital Stock or any other securities of the Company or any options, warrants, convertible notes or other rights to purchase or otherwise acquire any such shares of stock, other securities or options, warrants or other rights therefor, except for the repurchase rights disclosed on Schedule 2.2(a) of the Company Disclosure Letter;

(xix)        any Contract with any labor union or any collective bargaining agreement or similar contract with its employees;

(xx)        any Contract with any Governmental Entity, any Company Authorization, or any Contract with a government prime contractor, or higher-tier government subcontractor, including any indefinite delivery/indefinite quantity contract, firm-fixed-price contract, schedule contract, blanket purchase agreement, or task or delivery order (each a “Government Contract”).

(b)        Unless otherwise provided in Section 2.15(b) of the Company Disclosure Letter, all Material Contracts are in written form. The Company has performed all of the obligations required to be performed by it and, subject to compliance by third parties, is entitled to all benefits under, and is not alleged to be in default in respect of, any Material Contract. Each of the Material Contracts is in full force and effect, subject only to the effect, if any, of applicable bankruptcy and other similar laws affecting the rights of creditors generally and rules of law governing specific performance, injunctive relief and other equitable remedies. There exists no default or event of default or event, occurrence, condition or act, with respect to the Company or to the Company’s knowledge, with respect to any other contracting party, which, with the giving of notice, the lapse of time or the happening of any other event or condition, would reasonably be expected to (i) become a default or event of default under any Material Contract or (ii) give any third party (A) the right to declare a default or exercise any remedy under any Material Contract, (B) the right to a rebate, chargeback, refund, credit, penalty or change in delivery schedule under any Material Contract, (C) the right to accelerate the maturity or performance of any obligation of the Company under any Material Contract, or (D) the right to cancel, terminate or modify any Material Contract. The Company has not received any notice or other communication regarding any actual or possible violation or breach of, default under, or intention to cancel or modify any Material Contract. The Company has no Liability for renegotiation of Government Contracts. Correct and complete copies of all Material Contracts have been made available to Acquirer prior to the Agreement Date.

2.16        Transaction Fees. Except as set forth on Schedule 2.16 of the Company Disclosure Letter, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company or its Affiliates.

2.17        Representations Complete. To the knowledge of the Company, none of the representations or warranties made by the Company herein or in any exhibit or schedule hereto, including the Company Disclosure Letter, or in any certificate furnished by the Company pursuant to this Agreement, when all such documents are read together in their entirety, contains any untrue statement of

27

a material fact, or omits to state any material fact necessary in order to make the statements contained herein or therein, in the light of the circumstances under which made, not misleading.

2.18        Disclaimer of Other Representations and Warranties.

(a)        Except as set forth in this Agreement (as modified by the Company Disclosure Letter), none of the Company or any of its Subsidiaries makes any other representation or warranty, express or implied, at law, or in equity, in respect of the Company, any of its Subsidiaries or any of their respective assets, liabilities or operations in connection with the transactions contemplated by this Agreement, and any such other representations or warranties are hereby expressly disclaimed.

(b)        Without limiting the generality of the foregoing, except as expressly set forth in this Agreement (as modified by the Company Disclosure Letter), none of the Company or any of its Subsidiaries or any Related Person has made, and shall not be deemed to have made, any representations or warranties in the materials relating to the business of the Company or any of its Subsidiaries made available to the Buyer Parties or their representatives, including due diligence materials, or in any presentation of the business of the Company by its management to the Buyer Parties or their representatives in connection with the transactions contemplated by this Agreement and no such statement contained in any such materials or made in any such presentation shall be deemed a representation or warranty hereunder or otherwise or deemed to be relied upon by the Buyer Parties in executing, delivering and performing this Agreement and consummating the transactions contemplated hereby.

2.19        Information Statement. None of the information supplied by the Company for inclusion in the Information Statement (as defined below in Section 5.1(b)) will contain, as of the date of the Information Statement, any untrue statement of a material fact, or will omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF ACQUIRER AND MERGER SUB

Subject to the disclosures set forth in the disclosure letter of the Acquirer delivered to the Company concurrently with the parties’ execution of this Agreement (the “Acquirer Disclosure Letter”) (each of which disclosures, in order to be effective, shall clearly indicate the Section and, if applicable, the Subsection of this ARTICLE 3 to which it relates (unless and only to the extent the relevance to other representations and warranties is readily apparent), and each of which disclosures shall also be deemed to be representations and warranties made by Acquirer to the Company under this ARTICLE 3), the Acquirer represents and warrants to the Company, as of the date hereof and as of the Closing Date, as follows:

3.1        Organization and Standing. Each of Acquirer and Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. Neither Acquirer nor Merger Sub is in violation of any of the provisions of its articles or certificate of incorporation, as applicable, or bylaws or equivalent organizational or governing documents.

3.2        Authority; Noncontravention.

(a)        Each of Acquirer and Merger Sub has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly

28

authorized by all necessary corporate action on the part of Acquirer and Merger Sub. This Agreement has been duly executed and delivered by each of Acquirer and Merger Sub and constitutes the valid and binding obligation of Acquirer and Merger Sub enforceable against Acquirer and Merger Sub, respectively, in accordance with its terms, subject only to the effect, if any, of (i) applicable bankruptcy and other similar laws affecting the rights of creditors generally and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

(b)        The execution and delivery of this Agreement by Acquirer and Merger Sub do not, and the consummation of the transactions contemplated hereby will not, conflict with, or result in any violation of, or default under (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation or acceleration of any obligation or loss of a benefit under, or require any consent, approval or waiver from any Person pursuant to, (i) any provision of the articles or certificate of incorporation, as applicable, or bylaws or other equivalent organizational or governing documents of Acquirer and Merger Sub, in each case as amended to date, or (ii) any applicable Legal Requirement, except where such conflict, violation, default, termination, cancellation or acceleration, individually or in the aggregate, would not be material to Acquirer’s or Merger Sub’s ability to consummate the Merger or to perform their respective obligations under this Agreement.

(c)        Except as required by applicable federal and state securities laws in connection with the issuance of the Shares, no consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity or any other Person is required by or with respect to Acquirer or Merger Sub in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby and thereby that would reasonably be expected to adversely affect the ability of Acquirer or Merger Sub to consummate the Merger or any of the other transactions contemplated hereby.

3.3        Capital Structure.

(a)        The authorized capital stock of the Acquirer consists solely of 100,000,000 shares of Acquirer Common Stock . A total of 53,254,094 shares of Acquirer Common Stock are issued and outstanding as of the Agreement Date. Acquirer holds no treasury shares. As of the Agreement Date, there are no other issued and outstanding shares of capital stock or other securities of Acquirer and no outstanding commitments or Contracts to issue any shares of capital stock or other securities of the Acquirer other than pursuant to the exercise of outstanding Acquirer Options. There is no liability for dividends accrued and unpaid by Acquirer.

(b)        As of the Agreement Date, Acquirer has reserved 15,720,353 shares of Company Common Stock for issuance to employees, non-employee directors and consultants pursuant to the Acquirer Option Plans, of which 11,708,053 shares are subject to outstanding and unexercised Company Options, and 4,012,300 shares remain available for issuance thereunder.

3.4         Financial Statements. Acquirer has delivered to the Company its audited consolidated financial statements for the fiscal year ending on December 31, 2010 and its unaudited consolidated financial statements for the 6-month period ended June 30, 2011 (including, in each case, balance sheets, statements of operations and statements of cash flows) (collectively, the “Acquirer Financial Statements”), which are included as Schedule 3.4 of Acquirer Disclosure Letter. The Acquirer Financial Statements (i) are derived from and in accordance with the books and records of Acquirer Parties, (ii) complied as to form with GAAP with respect thereto as of their respective dates, (iii) fairly and accurately present the consolidated financial condition of Acquirer at the dates therein indicated and the consolidated results of operations and cash flows of Acquirer Parties for the periods therein specified, and (iv) are true, complete and correct.

29

3.5        Litigation. There are no actions, suits, arbitrations, mediations, proceedings or claims pending or, to the knowledge of Acquirer, threatened against Acquirer or Merger Sub that seek to restrain or enjoin the consummation of the Merger or the other transactions contemplated hereby. To the Acquirer Parties’ knowledge, there is no Legal Proceeding or threatened Legal Proceeding against the Acquirer Parties or any of their assets or properties or any of their directors, officers or employees (in their capacities as such or relating to their employment, services or relationship with the Acquirer Parties), that could reasonably be expected to have a Material Adverse Effect on Acquirer. To the Acquirer Parties’ knowledge, there is no judgment, decree, rule, injunction or order against the Acquirer Parties or any of their assets or properties that could reasonably be expected to have a Material Adverse Effect on Acquirer.

3.6        Solvency; Issuance of Shares. To the knowledge of Acquirer, Acquirer is solvent such that Acquirer will be able to meet its obligations with respect to payment of the Closing Merger Consideration hereunder. The shares of Acquirer Common Stock that may comprise a portion of the Merger Consideration, when issued by Parent in accordance with the terms of this Agreement, assuming the accuracy of the representations and warranties of Company and the Company Securityholders contained in this Agreement or in the Investor Rep Letter, will be duly issued, fully paid and nonassessable.

3.7        No Prior Merger Sub Operations. Merger Sub was formed solely for the purpose of effecting the Merger and has not engaged in any business activities or conducted any operations other than in connection with the transactions contemplated hereby.

3.8        Disclaimer of Other Representations and Warranties.

(a)        Except as set forth in this Agreement (as modified by the Acquirer Disclosure Letter), none of Acquirer or any of its Subsidiaries makes any other representation or warranty, express or implied, at law, or in equity, in respect of Acquirer, Merger Sub or any of their respective assets, liabilities or operations in connection with the transactions contemplated by this Agreement, and any such other representations or warranties are hereby expressly disclaimed.

(b)        Without limiting the generality of the foregoing, except as expressly set forth in this Agreement (as modified by the Acquirer Disclosure Letter), none of Acquirer, Merger Sub or any of their Subsidiaries or any Related Person has made, and shall not be deemed to have made, any representations or warranties in the materials relating to the business of the Acquirer, Merger Sub or any of their respective Subsidiaries made available to the Company or their representatives, including due diligence materials, or in any presentation of the business of the Acquirer by its management to the Company or the Company Stockholders or their representatives in connection with the transactions contemplated by this Agreement and no such statement contained in any such materials or made in any such presentation shall be deemed a representation or warranty hereunder or otherwise or deemed to be relied upon by the Company or the Company Stockholders in executing, delivering and performing this Agreement and consummating the transactions contemplated hereby.

ARTICLE 4

CONDUCT PRIOR TO THE EFFECTIVE TIME

4.1        Conduct of Business of the Company. During the period from the Agreement Date and continuing until the earlier of the termination of this Agreement and the Effective Time:

(a)        the Company shall conduct its business solely in the usual, regular and ordinary course in substantially the same manner as heretofore conducted (except to the extent expressly provided

30

otherwise in this Agreement or as consented to in writing by Acquirer) and in compliance with all applicable Legal Requirements;

(b)        the Company shall (A) pay and perform all of its debts and other obligations (including Taxes) when due, (B) use commercially reasonable efforts consistent with past practice and policies to collect accounts receivable when due and not extend credit outside of the ordinary course of business consistent with past practices, (C) sell Company products consistent with past practices as to license, service and maintenance terms, incentive programs, and revenue recognition and (D) use its commercially reasonable efforts consistent with past practice and policies to preserve intact its present business organizations, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, to the end that its goodwill and ongoing businesses shall be unimpaired at the Closing;

(c)        the Company shall promptly notify Acquirer of any change, occurrence or event not in the ordinary course of its Business or any Subsidiary’s business, or of any change, occurrence or event which, individually or in the aggregate with any other changes, occurrences and events, would reasonably be expected to be materially adverse to the Company and its Subsidiaries taken together or cause any of the conditions to closing set forth in ARTICLE 6 not to be satisfied.

4.2        Restrictions on Conduct of Business of the Company. Without limiting the generality or effect of the provisions of Section 4.1, except as set forth on Schedule 4.2, during the period from the Agreement Date and continuing until the earlier of the termination of this Agreement and the Effective Time, the Company shall not, and shall cause each Subsidiary not to, do, cause or permit any of the following (except to the extent expressly provided otherwise in this Agreement or as consented to in writing by Acquirer):

(a)        Charter Documents. Cause or permit any amendments the Certificate of Incorporation or Bylaws or equivalent organizational or governing documents;

(b)        Dividends; Changes in Capital Stock. Declare or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any of its capital stock, or split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock except from former employees, non-employee directors and consultants in accordance with agreements providing for the repurchase of shares in connection with any termination of service;

(c)        Material Contracts. Enter into any Contract that would constitute a Material Contract, other material Contract or a Contract requiring a novation or consent in connection with the Merger, or violate, terminate, amend, or otherwise modify (including by entering into a new Contract with such party or otherwise) or waive any of the terms of any of its Material Contracts; provided, however, that this provision shall not require the Company to seek or obtain Acquirer’s consent in order to set or change the prices at which the Company sells products or provides services to current customers, in the ordinary course of business;

(d)        Issuance of Securities. Issue, deliver or sell or authorize or propose the issuance, delivery or sale of, or purchase or propose the purchase of, any Company Voting Debt or any shares of Company Capital Stock or securities convertible into, or subscriptions, rights, warrants or options to acquire, or other Contracts of any character obligating it to issue any such shares or other convertible securities, other than: (i) the issuance of shares of Company Capital Stock pursuant to the exercise of Company Options that are outstanding as of the Agreement Date; (ii) the issuance of Company Common

31

Stock upon conversion of Company Preferred Stock outstanding on the Agreement Date, and (iii) the repurchase of any shares of Company Capital Stock from former employees, non-employee directors and consultants in accordance with Contracts providing for the repurchase of shares in connection with any termination of service;

(e)        Employees; Consultants; Independent Contractors. (i) Hire any additional officers or other employees, or any consultants or independent contractors, (ii) terminate the employment, change the title, office or position, or materially reduce the responsibilities of any management, supervisory or other key personnel of the Company, (iii) enter into, amend or extend the term of any employment or consulting agreement with any officer, employee, consultant or independent contractor, or (iv) enter into any Contract with a labor union or collective bargaining agreement (unless required by applicable Legal Requirements);

(f)        Loans and Investments. Make any loans or advances (other than routine expense advances to employees of the Company consistent with past practice) to, or any investments in or capital contributions to, any Person, or forgive or discharge in whole or in part any outstanding loans or advances, or prepay any indebtedness for borrowed money;

(g)        Intellectual Property. Transfer or license from any Person any rights to any Intellectual Property, or transfer or license to any Person any rights to any Company Intellectual Property, or transfer or provide a copy of any Company Source Code to any Person (including any current or former employee or consultant of the Company or any contractor or commercial partner of the Company) (other than providing access to Company Source Code to current employees and consultants of the Company involved in the development of the Company Products on a need to know basis, consistent with past practices);

(h)        Patents. Take any action regarding a patent, patent application or other Intellectual Property right, other than filing continuations for existing patent applications or completing or renewing registrations of existing patents, domain names, trademarks or service marks in the ordinary course of business;

(i)        Dispositions. Sell, lease, license or otherwise dispose of any of its properties or assets, other than sales and nonexclusive licenses of Company Products in the ordinary course of business consistent with its past practice, or enter into any Contract with respect to the foregoing;

(j)        Indebtedness. Incur any indebtedness for borrowed money or guarantee any such indebtedness;

(k)        Payment of Obligations. Pay, discharge or satisfy (i) any Liability to any Person who is an officer, director or stockholder of the Company (other than compensation due for services as an officer or director) or (ii) any claim or Liability arising otherwise than in the ordinary course of business, other than the payment, discharge or satisfaction of Liabilities reflected or reserved against in the Financial Statements and Transaction Expenses, or defer payment of any accounts payable other than in the ordinary course of business consistent with past practice, or give any discount, accommodation or other concession other than in the ordinary course of business consistent with past practice, in order to accelerate or induce the collection of any receivable;

(l)        Capital Expenditures. Make any capital expenditures, capital additions or capital improvements in excess of $10,000 individually or $20,000 in the aggregate;

(m)      Insurance. Materially change the amount of any insurance coverage;

32

(n)        Termination or Waiver. Cancel, release or waive any claims or rights held by the Company;

(o)        Employee Benefit Plans; Pay Increases. (i) Adopt or amend any employee or compensation benefit plan, including any stock issuance or stock option plan, or amend any compensation, benefit, entitlement, grant or award provided or made under any such plan, except in each case as required under ERISA, applicable Legal Requirements or as necessary to maintain the qualified status of such plan under the Code, (ii) materially amend any deferred compensation plan within the meaning of Section 409A of the Code and Internal Revenue Service Notice 2005-1 except to the extent necessary to meet the requirements of such Section or Notice, (iii) pay any special bonus or special remuneration to any employee or non-employee director or consultant or (iv) increase the salaries, wage rates or fees of its employees or consultants (other than as disclosed to Acquirer and are set forth on Schedule 4.2(o) of the Company Disclosure Letter);

(p)        Severance Arrangements. Grant or pay, or enter into any Contract providing for the granting of any severance, retention or termination pay, or the acceleration of vesting or other benefits, to any Person (other than payments or acceleration which have been disclosed to Acquirer and are set forth on Schedule 4.2(p) of the Company Disclosure Letter);

(q)        Lawsuits; Settlements. (i) Commence a lawsuit other than (A) for the routine collection of bills, (B) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business (provided that it consults with Acquirer prior to the filing of such a suit), or (C) for a breach of this Agreement or (ii) settle or agree to settle any pending or threatened lawsuit or other dispute;

(r)        Acquisitions. Acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the Business, or enter into any Contract with respect to a joint venture, strategic alliance or partnership;

(s)        Taxes. Make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any federal, state, or foreign income Tax Return or any other material Tax Return without the consent of the Acquirer prior to filing, file any amendment to a federal, state, or foreign income Tax Return or any other material Tax Return, enter into any Tax sharing or similar agreement or closing agreement, settle any claim or assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, or enter into intercompany transactions giving rise to deferred gain or loss of any kind, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption or other action would have the effect of increasing the Tax liability of the Company for any period ending after the Closing Date or decreasing any Tax attribute of the Company existing on the Closing Date;

(t)        Accounting. Change accounting methods or practices (including any change in depreciation or amortization policies) or revalue any of its assets (including writing down the value of inventory or writing off notes or accounts receivable otherwise than in the ordinary course of business), except in each case as required by changes in GAAP as concurred with its independent accountants and after notice to Acquirer;

(u)        Real Property. Enter into any agreement for the purchase, sale or lease of any real property;

33

(v)        Encumbrances. Place or allow the creation of any Encumbrance (other than a Permitted Encumbrance) on any of its properties;

(w)        Warranties, Discounts. Materially change the manner in which it provides warranties, discounts or credits to customers;

(x)        Interested Party Transactions. Enter into any Contract in which any officer, director, employee, agent or stockholder of the Company (or any member of their immediate families) has an interest under circumstances that, if entered immediately prior to the Agreement Date, would require that such Contract be listed on Schedule 2.12 of the Company Disclosure Letter; and

(y)        Other. Take or agree in writing or otherwise to take, any of the actions described in clauses (a) through (y) in this Section 4.2, or any action which would reasonably be expected to make any of the Company’s representations or warranties contained in this Agreement untrue or incorrect (such that the condition set forth in the first sentence of Section 6.3(a) would not be satisfied) or prevent the Company from performing or cause the Company not to perform one or more covenants required hereunder to be performed by the Company (such that the condition set forth in the second sentence of Section 6.3(a) would not be satisfied).

ARTICLE 5

ADDITIONAL AGREEMENTS

5.1        Stockholder Approval and Board Recommendation

(a)        The Company shall take all action necessary in accordance with this Agreement, Delaware Law, the Certificate of Incorporation and Bylaws to secure the Company Stockholder Approval. The Company’s obligation to secure the Company Stockholder Approval in accordance with this Section 5.1 shall not be limited to or otherwise affected by the commencement, disclosure, announcement or submission to Company of any Acquisition Proposal, including a Superior Proposal, or in the event that the Company Board withholds, withdraws, amends or modifies its recommendation to the Company Stockholders in favor of the Company Stockholder Approval. The Company shall exercise commercially reasonable efforts to obtain an executed Company Stockholder Approval from each Company Stockholder. Promptly upon receipt of the Requisite Stockholder Approval, the Company shall deliver copies thereof to Acquirer.

(b)        (i) The Board of Directors shall unanimously recommend that the Company Stockholders vote in favor of the approval of the Merger and adoption of this Agreement pursuant to the Company Stockholder Approval; (ii) any information statement or other disclosure document distributed to the Company Stockholders in connection with this transaction shall include a statement to the effect that the Board of Directors has unanimously recommended that the Company Stockholders vote in favor of the approval of the Merger and adoption of this Agreement pursuant to the Company Stockholder Approval (such document, the “Information Statement”); and (iii) neither the Board of Directors nor any committee thereof shall withhold, withdraw, amend or modify, or propose or resolve to withhold, withdraw, amend or modify in a manner adverse to Acquirer, the unanimous recommendation of the Board of Directors that the Company stockholders vote in favor of the approval of the Merger and adoption of this Agreement.

5.2         No Solicitation.

(a)         From and after the date of this Agreement until the Closing or termination of this Agreement pursuant to ARTICLE 7, neither the Company nor any of its Subsidiaries will, nor will any of

34

them authorize or permit any of their respective officers, directors, affiliates, stockholders or employees or any investment banker, attorney or other advisor or representative retained by any of them (all of the foregoing collectively being the “Company Representatives”) to, directly or indirectly, (i) solicit, initiate, seek, entertain, encourage, facilitate, support or induce the making, submission or announcement of any inquiry, expression of interest, proposal or offer that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal (as hereinafter defined), (ii) enter into, participate in, maintain or continue any communications (except solely to provide written notice as to the existence of these provisions) or negotiations regarding, or deliver or make available to any Person any non-public information with respect to, or take any other action regarding, any inquiry, expression of interest, proposal or offer that constitutes, or could reasonably be expected to lead to, an Acquisition Proposal, (iii) agree to, accept, approve, endorse or recommend (or publicly propose or announce any intention or desire to agree to, accept, approve, endorse or recommend) any Acquisition Proposal, (iv) enter into any letter of intent or any other Contract contemplating or otherwise relating to any Acquisition Proposal, (v) submit any Acquisition Proposal to the vote of any securityholders of Company or any Subsidiary or (vi) enter into any other transaction or series of transactions not in the ordinary course of the Company’s business, the consummation of which could reasonably be expected to impede, interfere with, prevent or materially delay the Merger. Each of the Company and its Subsidiaries will immediately cease and cause to be terminated any and all existing activities, discussions or negotiations with any Persons conducted prior to or on the date of this Agreement with respect to any Acquisition Proposal. If any Company Representative, whether in his or her capacity as such or in any other capacity, takes any action that the Company is obligated pursuant to this Section 5.2 not to authorize or permit such Company Representative to take, then the Company shall be deemed for all purposes of this Agreement to have breached this Section 5.2.

“Acquisition Proposal” shall mean, with respect to the Company, any agreement, offer, proposal or bona fide indication of interest (other than this Agreement or any other offer, proposal or indication of interest by Acquirer), or any public announcement of intention to enter into any such agreement or of (or intention to make) any offer, proposal or bona fide indication of interest, relating to, or involving: (A) any acquisition or purchase from the Company or any of its Subsidiaries, or from the stockholders of the Company, by any Person or Group (as hereinafter defined) of more than a 10% interest in the total outstanding voting securities of Company or any of its Subsidiaries or any tender offer or exchange offer that if consummated would result in any Person or Group beneficially owning 10% or more of the total outstanding voting securities of the Company or any of its Subsidiaries or any merger, consolidation, business combination or similar transaction involving the Company or any of its Subsidiaries; (B) any sale, lease, mortgage, pledge, exchange, transfer, license (other than in the ordinary course of business), acquisition, or disposition of more than 10% of the assets of the Company and its Subsidiaries in any single transaction or series of related transactions; (C) any liquidation, dissolution, recapitalization or other significant corporate reorganization of the Company or any of its Subsidiaries, or any extraordinary dividend, whether of cash or other property; or (D) any other transaction outside of the ordinary course of the Company’s business the consummation of which would reasonably be expected to materially impede, interfere with, prevent or delay the Merger.

“Group” shall have the definition ascribed to such term under Section 13(d) of the Exchange Act, the rules and regulations thereunder and related case law.

(b)        The Company shall immediately (but in any event, within 24 hours) notify Acquirer orally and in writing after receipt by the Company and/or any Subsidiary (or, to the knowledge of the Company, by any of the Company Representatives), of (i) any Acquisition Proposal, (ii) any inquiry, expression of interest, proposal or offer that constitutes, or would reasonably be expected to lead to, an Acquisition Proposal, (iii) any other notice that any Person is considering making an Acquisition

35

Proposal, or (iv) any request for nonpublic information relating to the Company or any Subsidiary or for access to any of the properties, books or records of the Company or any Subsidiary by any Person or Persons other than Acquirer. Such notice shall describe (1) the material terms and conditions of such Acquisition Proposal, inquiry, expression of interest, proposal, offer, notice or request, and (2) the identity of the Person or Group making any such Acquisition Proposal, inquiry, expression of interest, proposal, offer, notice or request. The Company shall keep Acquirer fully informed of the status and details of, and any modification to, any such inquiry, expression of interest, proposal or offer and any correspondence or communications related thereto and shall provide to Acquirer a true, correct and complete copy of such inquiry, expression of interest, proposal or offer and any amendments, correspondence and communications related thereto, if it is in writing, or a reasonable written summary thereof, if it is not in writing. The Company shall provide Acquirer with 48 hours prior notice (or such lesser prior notice as is provided to the members of the Board of Directors) of any meeting of the Board of Directors at which the Board of Directors is reasonably expected to discuss any Acquisition Proposal.

5.3        Confidentiality; Public Disclosure.

(a)        The parties hereto acknowledge that Acquirer and the Company have previously executed a non-disclosure agreement dated March 11, 2011 (the “Confidentiality Agreement”) which shall continue in full force and effect in accordance with its terms. The Merger Sub, the Stockholders’ Agent and the Representatives of the parties hereto, shall be bound by the terms and conditions of the Confidentiality Agreement to the same extent as though they were a party thereto. With respect to the Stockholders’ Agent and the Representatives of the parties hereto, as used in the Confidentiality Agreement the term “Confidential Information” shall include information relating to the Merger or this Agreement received by the Stockholders’ Agent after the Closing or relating to the period after the Closing.

(b)        The Company shall not issue any press release or other public statement relating to the terms of this Agreement or the transactions contemplated hereby or use Acquirer’s name or refer to Acquirer directly or indirectly in connection with Acquirer’s relationship with the Company in any media interview, advertisement, news release, press release or professional or trade publication, or in any print media, whether or not in response to an inquiry, without the prior written approval of Acquirer, unless required by law (in which event a satisfactory opinion of counsel to that effect shall be first delivered to Acquirer prior to any such disclosure) and except as reasonably necessary for the Company to obtain the consents and approvals of Company Stockholders and other third parties contemplated by this Agreement. Notwithstanding anything herein or in the Confidentiality Agreement, Acquirer and the Company shall mutually agree on the content of the press release announcing the Merger and thereafter Acquirer may make such other public statements regarding this Agreement or the transactions contemplated hereby as Acquirer may determine is reasonably appropriate.

5.4        Reasonable Efforts. Each of the parties hereto agrees to use its commercially reasonable efforts, and to cooperate with each other party hereto, to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, appropriate or desirable to consummate and make effective, in the most expeditious manner practicable, the Merger and the other transactions contemplated hereby, including the satisfaction of the respective conditions set forth in ARTICLE 6, and including to execute and deliver such other instruments and do and perform such other acts and things as may be necessary or reasonably desirable for effecting completely the consummation of the Merger and the other transactions contemplated hereby.

36

5.5        Third Party Consents; Notices.

(a)         The Company shall use all commercially reasonable efforts to obtain prior to the Closing, and deliver to Acquirer at or prior to the Closing, all consents, waivers and approvals under each Contract listed or described on Schedule 2.3(b)(ii)(B) of the Company Disclosure Letter (and any Contract entered into after the Agreement Date that would have been required to be listed or described on Schedule 2.3(b)(ii)(B) of the Company Disclosure Letter if entered into prior to the Agreement Date). Provided the Company has so exercised its commercially reasonable efforts to obtain such consents, waivers and approvals, the failure to obtain any particular consent, waiver or approval shall not be deemed to be a breach of the foregoing covenant.

(b)        The Company shall give all notices and other information required to be given to the employees of the Company, any collective bargaining unit representing any group of employees of the Company, and any applicable government authority under the WARN Act, the National Labor Relations Act, as amended, the Code, COBRA and other applicable Legal Requirements in connection with the transactions contemplated by this Agreement.

5.6        Litigation. The Company will (i) notify Acquirer in writing promptly after learning of any Legal Proceeding initiated by or against it, or known by the Company to be threatened against the Company, or any of its directors, officers, employees or stockholders in their capacity as such (a “New Litigation Claim”), (ii) notify Acquirer of ongoing material developments in any New Litigation Claim and (iii) consult in good faith with Acquirer regarding the conduct of the defense of any New Litigation Claim.

5.7        Access to Information.

(a)        During the period commencing on the Agreement Date and continuing until the earlier of the termination of this Agreement and the Closing, (i) the Company shall afford Acquirer and its accountants, counsel and other representatives, reasonable access during business hours to (A) all of the Company’s properties, books, Contracts and records and (B) all other information concerning the business, properties and personnel of the Company as Acquirer may reasonably request, and (ii) the Company shall provide to Acquirer and its accountants, counsel and other representatives correct and complete copies of the Company’s (A) internal financial statements, (B) Tax Returns, Tax elections and all other records and workpapers relating to Taxes, (C) a schedule of any deferred intercompany gain or loss with respect to transactions to which the Company has been a party, and (D) receipts for any Taxes paid to foreign Tax Authorities. Notwithstanding the foregoing, the Company may restrict such access to the extent that any law, treaty, rule or regulation of any Governmental Entity applicable to the Company requires the Company or its Subsidiaries to restrict or prohibit access to any such properties, personnel or information.

(b)        Subject to compliance with applicable Legal Requirements, from the Agreement Date until the earlier of the termination of this Agreement and the Closing, the Company shall confer from time to time as requested by Acquirer with one or more representatives of Acquirer to discuss any material changes or developments in the operational matters of the Company and the general status of the ongoing operations of the Company.

(c)        No information or knowledge obtained by Acquirer during the pendency of the transactions contemplated by this Agreement in any investigation pursuant to this Section 5.7 shall affect or be deemed to modify any representation, warranty, covenant, condition or obligation under this Agreement.

5.8        Spreadsheet. The Company shall prepare and deliver to Acquirer, at least two Business Days prior to the Closing, a spreadsheet (the “Spreadsheet”), in draft form, reasonably acceptable to

37

Acquirer, which spreadsheet shall be dated as of the Closing Date and shall set forth all of the following information (in addition to the other required data and information specified therein), as of the Closing Date and immediately prior to the Effective Time: (a) the names of all the Company Convertible Noteholders, the Company Stockholders and Company Optionholders and their respective addresses and where available, taxpayer identification numbers; (b) the number, kind of shares and classification as Employee Capital Stock or Non-Employee Capital Stock of Company Capital Stock held by, or subject to the Company Options held by, such Persons and, in the case of outstanding shares, the respective certificate numbers; (c) the number of shares of Company Capital Stock subject to and the exercise price per share in effect for each Company Option; (d) the vesting status and schedule with respect to Company Options and unvested Company Capital Stock and terms of the Company’s rights to repurchase such unvested Company Capital Stock (including the repurchase price payable per share under each share of unvested Company Capital Stock); (e) the Tax status of each Company Option under Section 422 of the Code; (f) the calculation of the Fully-Diluted Company Common Stock, Employee Closing Payment Per Share, Non-Employee Closing Payment Per Share, Merger Consideration, and Option Payment per In the Money Option; and (g) the total amount of Taxes to be withheld from the Merger Consideration that each Company Securityholder immediately prior to the Effective Time is entitled to receive pursuant to Section 1.8.

5.9        Expenses. Whether or not the Merger is consummated, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby (including Transaction Expenses) shall be paid by the party incurring such expense.

5.10      Employees.

(a)        With respect to any employee of the Company who receives an offer of employment from Acquirer or the Surviving Corporation, the Company shall assist Acquirer with its efforts to enter into an offer letter and confidential information and assignment agreement with such employee prior to the Closing Date. Notwithstanding any of the foregoing, with the exception of the Key Employee, neither Acquirer nor Merger Sub (including the Surviving Corporation) shall have any obligation to make an offer of employment to any employee of the Company. With respect to matters described in this Section 5.10, the Company will consult with Acquirer (and will consider in good faith the advice of Acquirer) prior to sending any notices or other communication materials to its employees. Effective no later than immediately prior to the Closing, the Company shall terminate the employment of each of those Company employees who (i) have not received an offer of continued employment with the Surviving Corporation or Acquirer prior to the Closing Date and (ii) have declined an offer of continued employment with the Surviving Corporation or Acquirer prior to the Closing Date (the “Designated Employees”), and the Company shall require such Designated Employees to execute a general waiver and release of claims, in a form approved by Acquirer, as a condition to the receipt of any severance paid by the Company, if any and cause all unvested Company Options held by such Designated Employees to be terminated in accordance with their terms at the time of such termination.

(b)        As soon as practicable following the Closing Date, Acquirer shall (or shall cause one or more of its Subsidiaries to) provide the Designated Employees with employee benefits (other than equity-based awards) that are substantially similar in the aggregate to those employee benefits provided to similarly situated employees of the Company and its Subsidiaries as of immediately prior to the Effective Time.

(c)        Acquirer shall (or shall cause one or more of its Subsidiaries to) provide any Designated Employees with service credit (if applicable) with respect to Acquirer’s vacation and Code Section 401(k) defined contribution benefit plans in which the Designated Employees become eligible to

38

participate for such Designated Employees’ service with the Company for purposes of eligibility, participation, vesting and, in the case of Acquirer’s vacation plan, benefit accrual (except to the extent such service credit or benefit accruals would result in a duplication of benefits). With respect to any welfare benefit plans maintained by Acquirer or its applicable Subsidiaries for the benefit of the Designated Employees on and after the Closing Date, Acquirer shall (or shall cause its applicable Subsidiaries to) use commercially reasonable efforts to (i) give effect, in determining any deductible limitations, to any amounts paid by such Designated Employees for calendar year 2011 with respect to similar plans maintained by the Company and (ii) with respect to any health benefit plans maintained by Acquirer or its applicable Subsidiaries (excluding, for the avoidance of doubt, any disability plans maintained by them), ensure that no pre-existing condition limitations or exclusion shall apply with respect to the Designated Employees.

(d)        The Company shall ensure that, there shall be no outstanding securities, commitments or agreements of the Company immediately prior to the Effective Time that purport to obligate the Company to issue any shares of Company Capital Stock or Company Options under any circumstances other than as required to allow the conversion of the Company Series A Stock into Company Common Stock.

5.11        Termination of Benefit Plans. If requested by the Acquirer, effective as of the day immediately preceding the Closing Date, the Company shall terminate all Company Employee Plans that are “employee benefit plans” within the meaning of ERISA. The Company shall provide Acquirer with evidence that such Company Employee Plan(s) have been terminated (effective no later than the day immediately preceding the Closing Date) pursuant to resolutions of the Board of Directors. The form and substance of such resolutions, if any, shall be subject to review and approval of Acquirer. If requested, the Company shall also take such other actions in furtherance of terminating such Company Employee Plan(s) as Acquirer may reasonably require.

5.12        Company Options. The Company shall obtain consents from all Company Option holders regarding treatment of Company Options in the Agreement prior to the Effective Time.

5.13        Management Incentive Pool. Following the Closing Date, Acquirer will adopt a management incentive plan substantially similar to that attached hereto as Exhibit K.

5.14        Certain Closing Certificates and Documents. The Company shall prepare and deliver to Acquirer, a draft of each of the Company Net Working Capital Certificate and the Spreadsheet not later than 2 Business Days prior to the Closing Date. The Company shall prepare and deliver the Company Net Working Capital Certificate to Acquirer at or prior to the Closing. Without limiting the generality or effect of the foregoing or the provisions of Section 5.7, Company shall provide to Acquirer, promptly after Acquirer’s request, copies of the documents or instruments evidencing the amounts set forth on any such draft or final certificate.

5.15        Tax Matters.

(a)        Acquirer, the Company Securityholders and the Company shall cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax Returns and any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the retention and (upon the other party’s request) the provision of records and information reasonably relevant to any such audit, litigation, or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Acquirer, the Company Securityholders and the Company agree to retain all books and records with respect to Tax matters pertinent to the Company relating to any taxable period beginning before the

39

Closing Date until expiration of the statute of limitations of the respective taxable periods, and to abide by all record retention agreements entered into with any Tax Authority.

(b)        The parties agree that unless otherwise required by applicable law, a Company’s Stockholder’s exchange of vested Company Capital Stock for unvested shares of Acquirer Common Stock pursuant to Section 1.4(a) shall not be treated as compensation when such shares vest.

5.16        280G Stockholder Approval. Promptly following the execution of this Agreement, the Company shall submit to the Company Stockholders for approval (in a manner reasonably satisfactory to Acquirer), by such number of holders of Company Stockholders as is required by the terms of Section 280G(b)(5)(B) of the Code, any payments and/or benefits that may separately or in the aggregate, constitute “parachute payments” pursuant to Section 280G of the Code (“Section 280G Payments”) (which determination shall be made by the Company and shall be subject to review and approval by Acquirer, such approval not to be unreasonably withheld, conditioned or delayed), such that such payments and benefits shall not be deemed to be Section 280G Payments, and prior to the Closing, the Company shall deliver to Acquirer notification and documentation reasonably satisfactory to Acquirer that (a) a vote of the holders of Company Capital Stock was solicited in conformance with Section 280G and the regulations promulgated thereunder and the requisite stockholder approval was obtained with respect to any payments and/or benefits that were subject to the stockholder vote (the “280G Stockholder Approval”), or (b) that the 280G Stockholder Approval was not obtained and as a consequence, that such payments and/or benefits shall not be made or provided to the extent they would cause any amounts to constitute Section 280G Payments, pursuant to the waivers of those payments and/or benefits which were executed by the affected individuals prior to the vote of the holders of Company Capital Stock entitled to vote on this matter pursuant to this Section 5.16.

5.17        Completion of Audit. Prior to Closing, the Company shall prepare and deliver to the Acquirer its draft audited consolidated financial statements for the fiscal year end ending on December 31, 2010 and draft unaudited consolidated financial statements for the six month period ending on June 30, 2011 (the “Audited Financials”), which Audited Financials shall be reasonable satisfactory to Acquirer.

ARTICLE 6

CONDITIONS TO THE MERGER

6.1        Conditions to Obligations of Each Party to Effect the Merger. The respective obligations of each party hereto to consummate the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions:

(a)        Company Stockholder Approval. The Merger shall have been duly and validly approved and this Agreement shall have been duly and validly adopted, as required by Delaware Law, and the Certificate of Incorporation and Bylaws, each as in effect on the date of such approval and adoption, by the requisite written consent of the Company Stockholders.

(b)        Illegality. No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal or regulatory restraint or prohibition preventing the consummation of the Merger shall be in effect, nor shall any action have been taken by any Governmental Entity seeking any of the foregoing, and no statute, rule, regulation or order shall have been enacted, entered, enforced or deemed applicable to the Merger, which makes the consummation of the Merger illegal.

40

(c)        Governmental Approvals. Acquirer, Merger Sub and the Company shall have timely obtained from each Governmental Entity all approvals, waivers and consents, if any, necessary for consummation of, or in connection with, the Merger and the other transactions contemplated hereby.

6.2        Additional Conditions to Obligations of the Company. The obligations of the Company to consummate the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions (it being understood that each such condition is solely for the benefit of the Company and may be waived by the Company in writing in its sole discretion without notice or Liability to any Person):

(a)        Representations, Warranties and Covenants. The representations and warranties of Acquirer in this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality or Material Adverse Effect, which representations and warranties as so qualified shall be true and correct in all respects) on and as of the date hereof and on and as of the Closing Date as though such representations and warranties were made on and as of such date (except for representations and warranties which address matters only as to a specified date, which representations and warranties shall be true and correct with respect to such specified date). Acquirer shall have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required to be performed and complied with by it at or prior to the Closing.

(b)        Receipt of Closing Deliveries. The Company shall have received each of the agreements, instruments and other documents set forth in Section 1.2(a).

6.3        Additional Conditions to the Obligations of Acquirer. The obligations of Acquirer to consummate the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions (it being understood that each such condition is solely for the benefit of Acquirer and may be waived by Acquirer in writing in its sole discretion without notice or Liability to any Person):

(a)        Representations, Warranties and Covenants. The representations and warranties of the Company in this Agreement shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to materiality or Material Adverse Effect, which representations and warranties shall be true and correct in all respects) on and as of the date hereof and on and as of the Closing Date as though such representations and warranties were made on and as of such date (except for representations and warranties which address matters only as to a specified date, which representations and warranties shall be true and correct with respect to such specified date). The Company shall have performed and complied in all material respects with all covenants, obligations and conditions of this Agreement required to be performed and complied with by the Company at or prior to the Closing.

(b)        Receipt of Closing Deliveries. Acquirer shall have received each of the agreements, instruments and other documents set forth in Section 1.2(a)(ii); provided, however, that such receipt shall not be deemed to be an agreement by Acquirer that the amounts set forth on the Company Net Working Capital Certificate or the Spreadsheet or any of the other agreements, instruments or documents set forth in Section 1.2(a)(ii) is accurate and shall not diminish Acquirer’s remedies hereunder if any of the foregoing documents is not accurate.

(c)        Injunctions or Restraints on Conduct of Business. No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal or regulatory restraint provision limiting or restricting Acquirer’s ownership, conduct or

41

operation of the business of the Company following the Closing shall be in effect nor shall there be pending or threatened any Legal Proceeding seeking any of the foregoing, or any other injunction, restraint or material damages in connection with the Merger or the other transactions contemplated hereby.

(d)        No Legal Proceedings. No Governmental Entity shall have commenced or threatened to commence any Legal Proceeding challenging or seeking the recovery of a material amount of damages in connection with the Merger or seeking to prohibit or limit the exercise by Acquirer of any material right pertaining to ownership of stock of the Surviving Corporation.

(e)        No Material Adverse Effect. There shall not have occurred a Material Adverse Effect with respect to the Company.

(f)        No Outstanding Securities. There shall be no outstanding securities, warrants, options, commitments or agreements of the Company immediately prior to the Effective Time that purport to obligate the Company to issue any shares of Company Capital Stock, Company Options or any other securities following the Effective Time under any circumstances.

(g)        Employees. Each Key Employee shall have signed a Key Employee Offer Letter and a Non-Competition Agreement, each of which shall continue to be in full force and effect and no action shall have been taken by any such individual to rescind any of such agreements.

(h)        Company Stockholder Approval. The Company Stockholder Approval shall have been duly and validly obtained, as required by Delaware Law and the Certificate of Incorporation and Bylaws, in each case as in effect on the date of such approval and, in addition, this Agreement and the Merger shall have been duly and validly approved by holders of outstanding Company Capital Stock representing at least 90% of all outstanding shares of Company Capital Stock and at least 90% of the voting power of all outstanding shares of Company Capital Stock (the “Requisite Stockholder Approval”).

(i)        Section 280G Payments. The Company shall have delivered to Acquirer the notification and evidence required by Section 5.16.

ARTICLE 7

TERMINATION, AMENDMENT AND WAIVER

7.1        Termination. At any time prior to the Closing, this Agreement may be terminated and the Merger abandoned by authorized action taken by the terminating party, whether before or after the Company Stockholder Approval:

(a)        by mutual written consent duly authorized by Acquirer and the Board of Directors of the Company;

(b)        by either Acquirer or the Company, if the Closing shall not have occurred within 60 days following the Agreement Date or such other date that Acquirer and the Company may agree upon in writing (the “Termination Date”); and provided, further, that the right to terminate this Agreement under this clause (b) of Section 7.1 shall not be available to any party whose breach of any covenant or agreement hereunder will have been the principal cause of, or will have directly resulted in, the failure of the Closing to occur on or before the Termination Date;

42

(c)        by either Acquirer or the Company, if any permanent injunction or other order of a Governmental Entity of competent authority preventing the consummation of the Merger shall have become final and nonappealable;

(d)        by Acquirer, if (i) the Company shall have breached any representation, warranty, covenant or agreement contained herein and such breach shall not have been cured within 10 Business Days after receipt by the Company of written notice of such breach and if not cured within the timeframe above and at or prior to the Closing, such breach would result in the failure of any of the conditions set forth in Section 6.1 or Section 6.3 to be satisfied, (ii) there shall have been a Material Adverse Effect with respect to the Company or (iii) the Company shall have breached Section 5.3 or Section 5.4, or (iv) delivery of the Company Stockholder Approval by stockholders representing at least 51% of the outstanding Company Capital Stock is not obtained within 1 hour following the execution of this Agreement by the parties hereto; or

(e)        by the Company, if Acquirer shall have breached any representation, warranty, covenant or agreement contained herein and such breach shall not have been cured within 5 Business Days after receipt by Acquirer of written notice of such breach and if not cured within the timeframe above and at or prior to the Closing, such breach would result in the failure of any of the conditions set forth in Section 6.1 or Section 6.2 to be satisfied.

7.2        Effect of Termination. In the event of termination of this Agreement as provided in Section 7.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of Acquirer, Sub, the Company or their respective officers, directors, stockholders or affiliates; provided, however, that (a) the provisions of this Section 7.2 (Effect of Termination), ARTICLE 9 (General Provisions) and the Confidentiality Agreement shall remain in full force and effect and survive any termination of this Agreement and (b) nothing herein shall relieve any party hereto from liability in connection with any breach of such party’s representations, warranties or covenants contained herein.

7.3        Amendment. Subject to the provisions of applicable Legal Requirements, the parties hereto may amend this Agreement by authorized action at any time pursuant to an instrument in writing signed on behalf of each of the parties hereto (provided that after such approval, no amendment shall be made which by law requires further approval by such stockholders without such further stockholder approval). To the extent permitted by applicable Legal Requirements, Acquirer and the Stockholders’ Agent may cause this Agreement to be amended at any time after the Closing by execution of an instrument in writing signed on behalf of Acquirer and the Stockholders’ Agent.

7.4        Extension; Waiver. At any time at or prior to the Closing, any party hereto may, to the extent legally allowed, (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties made to such party contained herein or in any document delivered pursuant hereto, and (c) waive compliance with any of the agreements or conditions for the benefit of such party contained herein. At any time after the Closing, the Stockholders’ Agent and Acquirer may, to the extent legally allowed, (i) extend the time for the performance of any of the obligations or other acts of the other, (ii) waive any inaccuracies in the representations and warranties made to such party contained herein or in any document delivered pursuant hereto, and (iii) waive compliance with any of the agreements or conditions for the benefit of such Person contained herein. Any agreement on the part of a party hereto or the Stockholders’ Agent to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. Without limiting the generality or effect of the preceding sentence, no delay in exercising any right under this Agreement shall constitute a waiver of such right, and no waiver of any breach or

43

default shall be deemed a waiver of any other breach or default of the same or any other provision in this Agreement.

ARTICLE 8

INDEMNIFICATION

8.1        Indemnification. Subject to the limitations set forth in this ARTICLE 8, the Converting Holders shall severally and not jointly indemnify and hold harmless Acquirer and its officers, directors, agents and employees, and each person, if any, who controls or may control Acquirer within the meaning of the Securities Act (each of the foregoing being referred to individually as an “Indemnified Person” and collectively as “Indemnified Persons”) from and against any and all losses, Liabilities, damages, fees, Tax, interest, costs and expenses, including costs of investigation and defense and reasonable fees and expenses of lawyers, experts and other professionals, directly or indirectly, whether or not due to a third-party claim (collectively, “Indemnifiable Damages”), arising out of, resulting from or in connection with (i) any failure of any representation or warranty made by the Company in this Agreement as modified by the Company Disclosure Letter (including any exhibit or schedule to the Company Disclosure Letter) to be true and correct as of the Agreement Date and as of the Closing Date as though such representation or warranty were made as of the Closing Date (except in the case of representations and warranties which by their terms speak only as of a specific date or dates, which representations and warranties shall be true and correct as of such date), (ii) any failure of any certification, representation or warranty made by the Company in any certificate (other than the Spreadsheet and the Company Net Working Capital Certificate) delivered to Acquirer pursuant to any provision of this Agreement to be true and correct as of the date such certificate is delivered to Acquirer, (iii) any breach of or default in connection with any of the covenants or agreements made by the Company in this Agreement or any other agreements contemplated by this Agreement or the Merger, (iv) any inaccuracies in the Spreadsheet or the Company Net Working Capital Certificate, (v) any payments paid with respect to Dissenting Shares to the extent that such payments, in the aggregate, exceed the value of the amounts that otherwise would have been payable pursuant to Section 1.3(a) upon the exchange of such Dissenting Shares, and any interest, costs, expenses and fees incurred by any Indemnified Person in connection with the exercise of any dissenters’ rights, (vi) any Indemnifiable Transaction Expenses (excluding any such amounts set forth on the Company Net Working Capital Certificate), and (vii) any matter set forth in Section 2.10(r) or Section 2.11(g) of the Company Disclosure Letter or that is or would be an exception to the representations and warranties made on each date in Section 2.10(r) or Section 2.11(g). Materiality standards or qualifications, and qualifications by reference to the defined term “Material Adverse Effect” in any representation, warranty or covenant shall only be taken into account in determining whether a breach of or default in connection with such representation, warranty or covenant (or failure of any representation or warranty to be true and correct) exists, and shall not be taken into account in determining the amount of any Indemnifiable Damages with respect to such breach, default or failure to be true and correct. The Converting Holders shall not have any right of contribution, indemnification or right of advancement from the Surviving Corporation or Acquirer with respect to any Indemnifiable Damages claimed by an Indemnified Person with respect to the pre-Closing period.

8.2        Indemnifiable Damage Threshold; Other Limitations.

(a)        Notwithstanding anything contained herein to the contrary, no Indemnified Person may make a claim for Indemnifiable Damages arising out of, resulting from or in connection with clauses (i) or (ii) in Section 8.1 unless and until a Claim Certificate describing Indemnifiable Damages in an aggregate amount greater than $140,000 (the “Aggregate Threshold”) has been delivered, in which case the Indemnified Person may make claims for indemnification for all Indemnifiable Damages

44

(including the amount of the Aggregate Threshold). The Aggregate Threshold shall not apply to any other Indemnifiable Damages.

(b)        If the Merger is consummated, Acquirer’s right of Setoff against the Guaranteed Deferred Payments in an amount equal to $4,200,000.00 shall constitute the sole and exclusive remedy for the indemnity obligations under this Agreement for the matters listed in clauses (i) and (ii) of the first sentence of Section 8.1, except (i) in the case of fraud or Intentional Misrepresentation by any Person, and (ii) any failure of any of the representations and warranties contained in Section 2.2 (Capital Structure), Section 2.3 (Authority; Noncontravention), the first sentence of Section 2.8(a) and Section 2.8(b) (Title to, Condition and Sufficiency of Assets) or Section 2.10 (Taxes) (collectively, the “Special Representations”) to be true and correct as aforesaid; provided, however, that with respect to breaches of Section 2.9 (Intellectual Property) to be true and correct as a foresaid, Acquirer’s right of Setoff against the Guaranteed Deferred Payment and up to 75% of any Contingent Deferred Payment shall constitute the sole and exclusive remedy for the indemnity obligations under this Agreement. In the case of all other claims, including claims arising out of, resulting from or in connection with (i) fraud or Intentional Misrepresentation by any Person, (ii) any failure of any of the Special Representations to be true and correct as aforesaid, after Indemnified Persons have exhausted or made claims upon all amounts subject to Setoff (after taking into account all other claims for indemnification made by Indemnified Persons), each Converting Holder shall be liable for such Person’s Pro Rata Share of the amount of any Indemnifiable Damages resulting therefrom; provided, however, that such liability shall be limited to such Person’s Pro Rata Share of the Merger Consideration.

(c)        Setoffs/Primacy. Acquirer’s first course of recourse for all Indemnifiable Damages shall be Setoff from the Guaranteed Deferred Payment and then via Setoff from the Contingent Deferred Payment, except in cases of Fraud. Subject to Section 8.3(b) above, after Indemnified Persons have exhausted or made claims upon all amounts of cash constituting the Deferred Payment (after taking into account all other claims for indemnification made by Indemnified Persons), each Earnout Recipient shall be liable for such holder’s Pro Rata Share of the amount of any Indemnifiable Damages (the “Excess Liability”); provided, however, that such liability shall be limited to such Earnout Recipient’s Pro Rata Share of the Excess Liability

8.3        Period for Claims Against Holdback Fund. Except as set forth below and in the case of claims alleging fraud or Intentional Misrepresentation by any Person, the period during which claims for Indemnifiable Damages may be made (the “Claims Period”) for Indemnifiable Damages arising from or in connection with the matters listed in clauses (i) and (ii) of the first sentence of Section 8.1 (other than with respect to any of the Special Representations) shall commence at the Closing and terminate January 31, 2013 (the “Holdback Period”). The Claims Period for Indemnifiable Damages arising out of, resulting from or in connection with all other claims, including (i) fraud or Intentional Misrepresentation by any Person, and (ii) any failure of any of the Special Representations to be true and correct, shall commence at the Closing and terminate upon the expiration of the applicable statute of limitations. Notwithstanding anything contained herein to the contrary, such portion of a Guaranteed Deferred Payment at the conclusion of the Holdback Period as in the reasonable judgment of Acquirer may be necessary to satisfy any unresolved or unsatisfied claims for Indemnifiable Damages specified in any Claim Certificate delivered to the Stockholder’s Agent prior to the expiration of the Holdback Period shall continue to be held by Acquirer until such claims for Indemnifiable Damages have been resolved or satisfied. The availability of a Guaranteed Deferred Payment to indemnify the Indemnified Persons will be determined without regard to any right to indemnification that any Converting Holder may have in his or her capacity as an officer, director, employee, or agent of the Company and no such Converting Holder will be entitled to any indemnification from the Company or the Surviving Corporation for amounts paid for indemnification under this ARTICLE 8.

45

8.4        Claims.

On or before the last day prior to the payment of the 2013 Guaranteed Deferred Payment, Acquirer may deliver to the Stockholders’ Agent a certificate signed by any officer of Acquirer (an “Claim Certificate”):

(i)        stating that an Indemnified Person has incurred, paid, reserved or accrued, or in good faith believes that it may incur, pay, reserve or accrue, Indemnifiable Damages (or that with respect to any Tax matters, that any Tax Authority may raise such matter in audit of Acquirer or its subsidiaries, which could give rise to Indemnifiable Damages);

(ii)        stating the amount of such Indemnifiable Damages (which, in the case of Indemnifiable Damages not yet incurred, paid, reserved or accrued, may be the maximum amount believed by Acquirer in good faith to be incurred, paid, reserved, accrued or demanded by a third party); and

(iii)        specifying in reasonable detail (based upon the information then possessed by Acquirer) the individual items of such Indemnifiable Damages included in the amount so stated and the nature of the claim to which such Indemnifiable Damages are related.

No delay in providing such Claim Certificate prior to the expiration of the Claims Period shall affect an Indemnified Person’s rights hereunder, unless (and then only to the extent that) the Stockholders’ Agent or the Converting Holders are materially prejudiced thereby.

8.5        Resolution of Objections to Claims.

(a)        If the Stockholders’ Agent does not contest, by written notice to Acquirer, any claim or claims by Acquirer made in any Claim Certificate within the 20 Business Day period following receipt of the Claim Certificate, then Acquirer shall Setoff an amount of cash from the Deferred Payments having a total value equal to the amount of any Indemnifiable Damages corresponding to such claim or claims as set forth in such Claim Certificate.

(b)        If the Stockholders’ Agent objects in writing to any claim or claims by Acquirer made in any Claim Certificate within such 20 Business Day period, Acquirer and the Stockholders’ Agent shall attempt in good faith for 45 days after Acquirer’s receipt of such written objection to resolve such objection. If Acquirer and the Stockholders’ Agent shall so agree, a memorandum setting forth such agreement shall be prepared and signed by both parties. Acquirer shall be entitled to conclusively rely on any such memorandum and Acquirer shall Setoff an amount of cash from the Guaranteed Deferred Payments in accordance with the terms of such memorandum.

(c)        If no such agreement can be reached during the 45-day period for good faith negotiation, but in any event upon the expiration of such 45-day period, either Acquirer or the Stockholders’ Agent may bring an arbitration in accordance with the terms of Section 9.9 to resolve the matter. The decision of the arbitrator as to the validity and amount of any claim in such Claim Certificate shall be nonappealable, binding and conclusive upon the parties to this Agreement and Acquirer shall be entitled to act in accordance with such decision and Acquirer shall Setoff an amount of cash from the Deferred Payments in accordance therewith.

(d)        Judgment upon any award rendered by the trial court may be entered in any court having jurisdiction. For purposes of this Section 8.5(d), in any suit hereunder in which any claim or the amount thereof stated in the Claim Certificate is at issue, Acquirer shall be deemed to be the non-

46

prevailing party unless the trial court awards Acquirer more than one-half of the amount in dispute, in which case the Converting Holders shall be deemed to be the non-prevailing party. The non-prevailing party to a suit shall pay its own expenses and the expenses and the fees and expenses of the prevailing party, including attorneys’ fees and costs, reasonably incurred in connection with such suit.

(e)        Acquirer shall cause the 2013 Guaranteed Deferred Payment and 2014 Guaranteed Deferred Payment to be paid to the Company Securityholders pursuant to Section 1.3 within five (5) Business Days following January 31, 2013 and January 31, 2014, respectively; provided, however, that any portion of the Guaranteed Deferred Payments subject to an outstanding Claim shall not be paid until such Claim is resolved in accordance with this Article 8.

8.6        Stockholders’ Agent.

(a)        At the Closing, Leo Grzhonko shall be constituted and appointed as the Stockholders’ Agent. For purposes of this Agreement, the term “Stockholders’ Agent” shall mean the agent for and on behalf of the Converting Holders to: (i) execute, as Stockholders’ Agent, this Agreement and any agreement or instrument entered into or delivered in connection with the transactions contemplated hereby; (ii) give and receive notices, instructions, and communications permitted or required under this Agreement, or any other agreement, document or instrument entered into or executed in connection herewith, for and on behalf of any Converting Holder, to or from Acquirer (on behalf of itself or any other Indemnified Person) relating to this Agreement or any of the transactions and other matters contemplated hereby or thereby (except to the extent that this Agreement expressly contemplates that any such notice or communication shall be given or received by each Converting Holder individually); (ii) review, negotiate and agree to claims asserted by Acquirer (on behalf of itself or any other Indemnified Person, including by not objecting to such claims) pursuant to this ARTICLE 8 and authorize Acquirer to Setoff an amount of cash from the Deferred Payments in satisfaction of claims asserted by Acquirer (on behalf of itself or any other Indemnified Person, including by not objecting to such claims) pursuant to this ARTICLE 8; (iii) object to such claims pursuant to Section 8.3; (iv) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions in connection with the resolution of any dispute relating hereto or to the transactions contemplated hereby by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Converting Holder or necessary in the judgment of the Stockholders’ Agent for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement; (v) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Converting Holders; (vi) consent or agree to any amendment to this Agreement or to waive any terms and conditions of this Agreement providing rights or benefits to the Converting Holders in accordance with the terms hereof and in the manner provided herein; and (vii) take all actions necessary or appropriate in the judgment of the Stockholders’ Agent for the accomplishment of the foregoing, in each case without having to seek or obtain the consent of any Person under any circumstance. Acquirer, Merger Sub and their respective Affiliates (including without limitation, after the Effective Time, the Surviving Corporation) shall be entitled to rely on the appointment of Leo Grzhonko as the Stockholders’ Agent and treat such Stockholders’ Agent as the duly appointed attorney-in-fact of each Converting Holder and has having the duties, power and authority provided for in this Section 8.6. The Converting Holders shall be bound by all actions taken and documents executed by the Stockholders’ Agent in connection with this ARTICLE 8, and Acquirer and other Indemnified Persons shall be entitled to rely exclusively on any action or decision of the Stockholders’ Agent. The Person serving as the Stockholders’ Agent may be replaced from time to time by the holders of a majority in interest of the aggregate value of the Guaranteed

47

Deferred Payments upon not less than 30 days’ prior written notice to Acquirer. No bond shall be required of the Stockholders’ Agent.

(b)        The Stockholders’ Agent shall not be liable to any former holder of Company Capital Stock for any act done or omitted hereunder as the Stockholders’ Agent while acting in good faith (and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith) and without gross negligence or willful misconduct. The Stockholders’ Agent shall serve as the Stockholders’ Agent without compensation; provided, that the Converting Holders shall severally indemnify the Stockholders’ Agent and hold him harmless against any loss, liability or expense incurred without gross negligence, willful misconduct or bad faith on the part of the Stockholders’ Agent and arising out of or in connection with the acceptance or administration of his duties hereunder, including all reasonable out-of-pocket costs and expenses and legal fees and other legal costs reasonably incurred by the Stockholders’ Agent.

(c)        Any notice or communication given or received by, and any decision, action, failure to act within a designated period of time, agreement, consent, settlement, resolution or instruction of, the Stockholders’ Agent that is within the scope of the Stockholders’ Agent’s authority under Section 8.6(a) shall constitute a notice or communication to or by, or a decision, action, failure to act within a designated period of time, agreement, consent, settlement, resolution or instruction of all the Converting Holders and shall be final, binding and conclusive upon each such Converting Holder; and each Indemnified Person shall be entitled to rely exclusively upon any such notice, communication, decision, action, failure to act within a designated period of time, agreement, consent, settlement, resolution or instruction as being a notice or communication to or by, or a decision, action, failure to act within a designated period of time, agreement, consent, settlement, resolution or instruction of, each and every such Converting Holder. Acquirer, Merger Sub, the Surviving Corporation and the Indemnified Persons are hereby relieved from any Liability to any Person for any acts done by them in accordance with such notice, communication, decision, action, failure to act within a designated period of time, agreement, consent, settlement, resolution or instruction of the Stockholders’ Agent.

8.7        Third-Party Claims. In the event Acquirer becomes aware of a third-party claim which Acquirer in good faith believes may result in an indemnity claim by or on behalf of an Indemnified Person, Acquirer shall have the right in its sole discretion to conduct the defense of and to settle or resolve any such claim (and the costs and expenses incurred by Acquirer in connection with such defense, settlement or resolution (including reasonable attorneys’ fees, other professionals’ and experts’ fees and court or arbitration costs) shall be included in the Indemnifiable Damages for which Acquirer may seek indemnification pursuant to a claim made hereunder). The Stockholders’ Agent shall have the right to receive copies of all pleadings, notices and communications with respect to the third-party claim to the extent that receipt of such documents does not affect any privilege relating to any Indemnified Person and shall be entitled, at its expense, to participate in, but not to determine or conduct, any defense of the third-party claim or settlement negotiations with respect to the third-party claim. However, except with the consent of the Stockholders’ Agent, which consent shall be deemed to have been given unless the Stockholders’ Agent shall have objected within 30 days after a written request for such consent by Acquirer, no settlement or resolution by Acquirer of any claim that gives rise to a indemnity claim by or on behalf of an Indemnified Person shall be determinative of the existence of or amount of Indemnifiable Damages relating to such matter. In the event that the Stockholders’ Agent has consented to any such settlement or resolution, neither the Stockholders’ Agent nor any Converting Holder shall have any power or authority to object under Section 8.4 or any other provision of this ARTICLE 8 to the amount of any claim by or on behalf of any Indemnified Person against the Holdback Amount for indemnity with respect to such settlement or resolution.

48

8.8        Treatment of Indemnification Payments. The Converting Holders, the Stockholders’ Agent and Acquirer agree to treat (and cause their Affiliates to treat) any payment received pursuant to this ARTICLE 8 as adjustments to the Merger Consideration for all Tax purposes, to the maximum extent permitted by Legal Requirements.

ARTICLE 9

GENERAL PROVISIONS

9.1        Survival of Representations and Warranties and Covenants. If the Merger is consummated, the representations and warranties of the Company contained in this Agreement, the Company Disclosure Letter (including any exhibit or schedule to the Company Disclosure Letter), and the other certificates contemplated hereby shall survive the Closing and remain in full force and effect, regardless of any investigation or disclosure made by or on behalf of any of the parties to this Agreement, until the date January 31, 2013; provided, however, that the Special Representations and the representations and warranties of the Company contained in any certificate delivered to Acquirer regarding the same subject matter as those covered by the Special Representations pursuant to any provision of this Agreement, will remain operative and in full force and effect, regardless of any investigation or disclosure made by or on behalf of any of the parties to this Agreement, until the expiration of the applicable statute of limitations (if later than January 31, 2014) for claims against the Converting Holders which seek recovery of Indemnifiable Damages arising out of an inaccuracy or breach of such representations or warranties; provided further, no right to indemnification pursuant to ARTICLE 8 in respect of any claim that is set forth in an Claim Certificate delivered to the Stockholders’ Agent shall be affected by the expiration of such representations and warranties; and provided, further, that such expiration shall not affect the rights of any Indemnified Person under ARTICLE 8 or otherwise to seek recovery of Indemnifiable Damages arising out of any fraud or Intentional Misrepresentation by the Company until the expiration of the applicable statute of limitations. If the Merger is consummated, the representations and warranties of Acquirer contained in this Agreement and the other certificates contemplated hereby shall expire and be of no further force or effect as of the Closing. If the Merger is consummated, all covenants of the parties shall expire and be of no further force or effect as of the Closing, except to the extent such covenants provide that they are to be performed after the Closing; provided, however, that no right to indemnification pursuant to ARTICLE 8 in respect of any claim based upon any breach of a covenant shall be affected by the expiration of such covenant.

9.2        Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery service, or mailed by registered or certified mail (return receipt requested) or sent via facsimile (with confirmation of receipt) to the parties hereto at the following address (or at such other address for a party as shall be specified by like notice):

(i) if to Acquirer or Merger Sub, to:

Exponential Interactive, Inc.

2200 Powell Street, Suite 600

Emeryville, CA 94608

Attention: John Rettig

Facsimile No.: (510) 250-5700

Telephone No.: (510) 250-5500

49

with a copy (which shall not constitute notice) to:

Fenwick & West LLP

Silicon Valley Center

801 California Street

Mountain View, CA 94041

Attention: [Personally identifiable information withheld]

Facsimile No.: [Personally identifiable information withheld]

Telephone No.: [Personally identifiable information withheld]

(ii) if to the Company, to:

New Wave Media Inc.

915 Broadway, Suite 1301

New York, NY 10010

Attention: [Personally identifiable information withheld]

Facsimile No.: [Personally identifiable information withheld]

Telephone No.: [Personally identifiable information withheld]

with a copy (which shall not constitute notice) to:

Sheppard, Mullin, Richter & Hampton LLP

390 Lytton Avenue

Palo Alto, California 94301

Attn: [Personally identifiable information withheld]

Facsimile No.: [Personally identifiable information withheld]

Telephone No.: [Personally identifiable information withheld]

(iii) If to the Stockholders’ Agent, to:

Leo Grzhonko

65 4th Ave. #PHA

New York, NY 10003

Telephone No.: [Personally identifiable information]

Facsimile No.: [Personally identifiable information]

with a copy (which shall not constitute notice) to:

Sheppard, Mullin, Richter & Hampton LLP

390 Lytton Avenue

Palo Alto, California 94301

Attn: [Personally identifiable information]

Facsimile No.: [Personally identifiable information]

Telephone No.: [Personally identifiable information]

email: [Personally identifiable information]

9.3        Interpretation. When a reference is made in this Agreement to Articles, Sections or Exhibits, such reference shall be to an Article or Section of, or an Exhibit to this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall

50

not affect in any way the meaning or interpretation of this Agreement. The words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.” Unless the context of this Agreement otherwise requires: (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; and (iii) the terms “hereof,” “herein,” “hereunder” and derivative or similar words refer to this entire Agreement.

9.4        Counterparts. This Agreement may be executed in one or more counterparts, including by .pdf, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto; it being understood that all parties hereto need not sign the same counterpart.

9.5        Entire Agreement; Nonassignability; Parties in Interest. This Agreement and the documents and instruments and other agreements specifically referred to herein or delivered pursuant hereto, including all the exhibits attached hereto, the Schedules, including the Company Disclosure Letter, (a) constitute the entire agreement among the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties hereto with respect to the subject matter hereof, except for the Confidentiality Agreement, which shall continue in full force and effect, and shall survive any termination of this Agreement, in accordance with its terms, (b) are not intended to confer, and shall not be construed as conferring, upon any Person other than the parties hereto any rights or remedies hereunder (except that ARTICLE 8 is intended to benefit Indemnified Persons) and (c) shall not be assigned by operation of law or otherwise except as otherwise specifically provided herein.

9.6        Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise by any of the parties hereto without the prior written consent of the other parties hereto, and any such assignment without such prior written consent shall be null and void, except that Acquirer may assign this Agreement to any direct or indirect wholly owned subsidiary of Acquirer without the prior consent of the Company; provided, however, that Acquirer shall remain liable for all of its obligations under this Agreement. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and assigns.

9.7        Severability. In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement shall continue in full force and effect and shall be interpreted so as reasonably necessary to effect the intent of the parties hereto. The parties hereto shall use all reasonable efforts to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that shall achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.

9.8        Remedies Cumulative. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party hereto shall be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party hereto of any one remedy shall not preclude the exercise of any other remedy and nothing in this Agreement shall be deemed a waiver by any party of any right to specific performance or injunctive relief. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which they are entitled at law or in equity, and the parties hereby waive the requirement of any posting of a bond in connection with the remedies described herein.

51

9.9        Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without reference to such state’s principles of conflicts of law; provided, however, that all matters relating to the effectuation and effect of the Merger shall be construed in accordance with, and governed in all respects by, Delaware Law.

9.10        Submission to Jurisdiction; Consent to Service of Process.

Subject to the foregoing, the parties hereto hereby irrevocably submit to the exclusive jurisdiction of the courts of the State of California and the Federal courts of the United States of America located in the State of California, the place where this Agreement was entered and is to be performed, in respect of the interpretation and enforcement of the provisions of this Agreement and of the documents referred to in this Agreement, and in respect of the transactions contemplated hereby and thereby, and hereby waive, and agree not to assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or thereof, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement or any such document may not be enforced in or by such courts, and the parties hereto irrevocably agree that all claims with respect to such action or proceeding shall be heard and determined in such a California State or Federal court. The parties hereby consent to and grant any such court jurisdiction over the person of such parties and over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner provided in Section 9.2 or in such other manner as may be permitted by applicable Legal Requirements, shall be valid and sufficient service thereof. With respect to any particular action, suit or proceeding, venue shall lie solely in the County of Santa Clara, California. A party may apply either to a court of competent jurisdiction or to an arbitrator, if one has been appointed, for prejudgment remedies and emergency relief pending final determination of a claim pursuant to this Section 9.9. The appointment of an arbitrator does not preclude a party from seeking prejudgment remedies and emergency relief from a court of competent jurisdiction.

9.11        Rules of Construction. The parties hereto have been represented by counsel during the negotiation, preparation and execution of this Agreement and, therefore, hereby waive, with respect to this Agreement, each Schedule and each Exhibit attached hereto, the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document shall be construed against the party drafting such agreement or document.

[SIGNATURE PAGE NEXT]

52

IN WITNESS WHEREOF, Acquirer, Merger Sub, the Company and the Stockholders’ Agent have caused this Agreement and Plan of Merger to be executed and delivered by their respective officers thereunto duly authorized (or with respect to the Stockholders’ Agent, personally), all as of the date first written above.

EXPONENTIAL INTERACTIVE, INC.
By:	/s/ John R. Rettig
Name: John R. Rettig
Title: CFO

ALAMEDA ACQUISITION CORP.
By:	/s/ John R. Rettig
Name: John R. Rettig
Title: CFO

NEW WAVE MEDIA, INC.
By:	/s/ Leo Grzhonko
Name: Leo Grzhonko
Title: President

STOCKHOLDERS’ AGENT
By:	/s/ Leo Grzhonko
Name: Leo Grzhonko

Schedule A

Earnout

1.        Earnout Period; Earnout Payments.

(a)        Earnout Payments. Subject to paragraph 1(c) below, Earnout Recipients shall receive their pro rata portion of the applicable 2013 Contingent Deferred Payment, if any, subject to paragraph 1(a)(i) below, and the applicable 2014 Contingent Deferred Payment Per Share, if any, subject to paragraph 1(a)(ii) below.

(i)        If the stand-alone operations of the AdoTube Business Unit results in a Gross Revenue equal to or greater than $28,000,000 (the “FY2012 Target”) for the fiscal year ending on December 31, 2012 (the “First Earnout Period”), the Acquirer shall pay each Earnout Recipient their pro rata portion of the 2013 Contingent Deferred Payment; provided, however, that if the Gross Revenue of the AdoTube Business Unit is less than the FY2012 Target but greater than 75% of FY2012 Target, the Acquirer shall pay each Earnout Recipient their pro rata portion of a percentage of the 2013 Contingent Deferred Payment equal to the applicable percentage set forth in the table below.

Percentage of Gross Revenue for the Applicable Earnout Period to the Applicable FY Target	Payout Percentage
Less than 75%	0%
Greater than or equal to 75% but less than 80%	75%
Greater than or equal to 80% but less than 85%	80%
Greater than or equal to 85% but less than 90%	85%
Greater than or equal to 90% but less than 95%	90%
Greater than or equal to 95% but less than 100%	95%

(ii)        If the stand-alone operations of the AdoTube Business Unit results in a Gross Revenue equal to or greater than $40,000,000 (the “FY2013 Target”) for the fiscal year ending on December 31, 2013 (the “Second Earnout Period”), the Acquirer shall pay each Earnout Recipient their pro rata portion of the 2014 Contingent Deferred Payment; provided, however, that if the Gross Revenue of the AdoTube Business Unit is less than the FY2013 Target but greater than 75% of FY2013 Target, the Acquirer shall pay each Earnout Recipient their pro rata portion of a percentage of the 2014 Contingent Deferred Payment equal to the applicable percentage set forth in the table above.

(b)        Definitions. For purposes of this paragraph 1, the following definitions shall apply:

(i)        “AdoTube Business Unit” means the Surviving Corporation as of the Effective Time, or any successor entity or business unit within Acquirer’s corporate structure that carries on the Business.

(ii)        “Cause” shall be deemed to exist if you are terminated for any of the following reasons: (i) willful failure to perform your duties and responsibilities to the Company or violation of any written Company policy continuing for ten (10) days after receipt of written notice from the Company of the need to cure; (ii) commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in injury to the Company, (iii) unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom you owe an obligation of nondisclosure as a result of your relationship to the Company; (iv) material breach of any of your obligations under any written agreement or covenant with the Company that remains uncured ten (10) days after receipt of written notice from the Company of the need to cure; or (v) gross misconduct that remains uncured ten (10) days after receipt of written notice from the Company of the need to cure.

(iii)        “Earnout Recipient” means the employees of the Company as of the Effective Time; provided that, (a) Constantine Goltsev shall not be considered an Earnout Recipient for the purposes of the 2013 Contingent Deferred Payment if his service to the Company is terminated by the Company without Cause or by him for Good Reason prior to the expiration of the First Earnout Period; (b) Leo Grzhonko shall not be considered an Earnout Recipient for the purposes of the 2013 Contingent Deferred Payment if his service to the Company is terminated by the Company without Cause or by him for Good Reason prior to the expiration of the First Earnout Period; (c) Constantine Goltsev shall not be considered an Earnout Recipient for the purposes of the 2014 Contingent Deferred Payment if his service to the Company is terminated by the Company without Cause or by him for Good Reason prior to the expiration of the Second Earnout Period; and (d) Leo Grzhonko shall not be considered an Earnout Recipient for the purposes of the 2014 Contingent Deferred Payment if his service to the Company is terminated by the Company without Cause or by him for Good Reason prior to the expiration of the Second Earnout Period. For clarity, employees of the Company, other than Constantine Goltsev and Leo Grzhonko, shall be considered Earnout Recipients regardless of their employment status at the expiration of the First Earnout Period or the Second Earnout Period or on the First Earnout Payment Date or the Second Earnout Payment Date.

(iv)        “EBITDA” means the earnings before interest, taxes, depreciation and amortization of the AdoTube Business Unit, disregarding any corporate overhead expenses that would otherwise be allocated to the AdoTube Business Unit in accordance with Acquirer’s practice for its other Affiliates. The components of EBITDA shall be calculated in a manner consistent with GAAP applied on a consistent basis with Acquirer’s historical accounting policies and practices and EBITDA shall be calculated based upon the stand-alone operations of the AdoTube Business Unit, disregarding any corporate overhead expenses that would otherwise be allocated to the Company’s operations in accordance with Acquirer’s practice for its other affiliates.

(v)        “Good Reason” shall mean any of the following taken without your written consent and provided (i) the Company receives, within thirty (30) days following the occurrence of any of the events set forth in clauses (A) through (C) below, written notice from you specifying the basis for your belief that you are entitled to terminate employment for Good Reason, (ii) the Company fails to cure the event constituting Good Reason within thirty (30) days after receipt of such written notice thereof, and (iii) you terminate employment on the earlier of (X) receipt by you from the Company written notice that the Company intends not to cure or (Y) expiration of the fifteen (15) day cure period: (A) a material reduction in your job responsibilities or duties and the continuation thereof for a period of

ii

thirty (30) days after written notice from you that you are unwilling to accept such changes in responsibilities or duties, provided that neither a change in title alone nor reassignment to a position that is substantially similar to the position held immediately prior to such change solely by virtue of the Company being acquired or made part of a larger entity shall constitute a material reduction in job responsibilities or change in responsibilities or duties; (B) relocation by the Company or a Subsidiary, Parent, or successor thereto, as appropriate, of your work site to a facility or location more than fifty (50) miles; or (C) a reduction in your level of base annual compensation by at least ten percent (10%). In the event of any of the foregoing, the Company shall have thirty (30) days to cure.

(vi)        “Gross Revenue” means gross revenue as defined under GAAP applied on a consistent basis with Acquirer’s historical accounting policies and practices.

(vii)        “pro rata portion” means, with respect to a particular Earnout Recipient, the quotient of (i) the 2013 Contingent Deferred Payment or the 2014 Contingent Deferred Payment, as applicable, that such Earnout Recipient is entitled to receive pursuant to Section 1.3(a) with respect to its Company Capital Stock (other than Dissenting Shares) and In the Money Options, divided by (ii) the 2013 Contingent Deferred Payment or the 2014 Contingent Deferred Payment, as applicable, to which all Earnout Recipients are entitled to receive pursuant to Section 1.3(a) with respect to their Company Capital Stock (other than Dissenting Shares) and In the Money Options.

(c)        Conditions and Additional Terms.

(i)        Acquirer shall only be obligated to pay the 2013 Contingent Deferred Payment if:

(A)        each of Constantine Goltsev and Leo Grzhonko have remained continuously employed by either the Company, the Acquirer or a Subsidiary of Acquirer from the Agreement Date through the First Earnout Payment Date (unless such employment has been terminated by Acquirer (or the applicable Subsidiary of Acquirer) without Cause or by either Constantine Goltsev or Leo Grzhonko for Good Reason); and

(B)        the AdoTube Business Unit’s EBITDA margin is equal to or greater than 2%.

(ii)        Acquirer shall only be obligated to pay the 2014 Contingent Deferred Payment if:

(A)        each of Constantine Goltsev and Leo Grzhonko have remained continuously employed by either the Company, the Acquirer or a Subsidiary of Acquirer from the Agreement Date through the last day of the Second Earnout Payment Date (unless such employment has been terminated by Acquirer (or the applicable Subsidiary of Acquirer) without Cause or by either Constantine Goltsev or Leo Grzhonko for Good Reason); and

(B)        for the Second Earnout Period, the AdoTube Business Unit’s EBITDA margin is equal to or greater than 4%.

(iii)        Notwithstanding anything to the contrary set forth in this Schedule A, 75% of 2013 Contingent Deferred Payments and 2014 Contingent Deferred Payments are subject to Setoffs as set forth in ARTICLE 8 of the Agreement.

iii

(iv)        For purposes of this Schedule A, a termination of employment will be determined consistent with the rules relating to a “separation from service” as defined in Section 409A of the Code and the regulations thereunder (“Section 409A”). Notwithstanding anything else provided herein, to the extent any payments provided under this Schedule A in connection with a termination of employment constitutes deferred compensation subject to Section 409A, and an Earnout Recipient is deemed at the time of such termination of employment to be a “specified employee” under Section 409A, then such payment shall not be made or commence until the earlier of (i) the expiration of the 6-month period measured from such separation from service from Acquirer or (ii) the date of an Earnout Recipient’s death following such a separation from service; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to an Earnout Recipient including, without limitation, the additional tax for which an Earnout Recipient would otherwise be liable under Section 409A(a)(1)(B) in the absence of such a deferral. The first payment thereof will include a catch-up payment covering the amount that would have otherwise been paid during the period between the termination of employment and the first payment date but for the application of this provision, and the balance of the installments (if any) will be payable in accordance with their original schedule. To the extent that any provision of this Schedule A is ambiguous as to its compliance with Section 409A, the provision will be read in such a manner so that all payments hereunder comply with Section 409A. To the extent any payment under this Schedule A is classified as a “short-term deferral” within the meaning of Section 409A, such payment shall be deemed a short-term deferral, even if it may also qualify for an exemption from Section 409A under another provision of Section 409A. Payments pursuant to this section are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

(vi)        The Company Securityholders, the Company and Acquirer intend that (i) no portion of any payment under this Schedule A to an Earnout Recipient who is a Company Securityholder shall be treated as compensation for any Tax purpose (and therefore shall not constitute deferred compensation to which Section 409A could apply), and (ii) the 2013 Contingent Deferred Payment and the 2014 Contingent Deferred Payment shall each qualify under the exception for transaction-based payments of deferred compensation under Treasury Regulations Section 1.409A-3(i)(5)(iv)(A). All references in this Schedule A to Section 409A or any Treasury Regulations thereunder have been included solely for the purpose of ensuring that, in the event of a determination by a Governmental Entity that is contrary to the parties’ intention as described in the preceding sentence, each of the 2013 Contingent Deferred Payment and the 2014 Contingent Deferred Payment shall comply with the requirements of Section 409A.

(vii)      During the First Earnout Period and the Second Earnout Period, Acquirer agrees that:

(A)        it will not impose any management fees or expenses on AdoTube Business Unit;

(B)        use commercially reasonable efforts consistent with sound business practice to (1) operate the AdoTube Business Unit in the ordinary course of business (subject to certain items to be mutually agreed upon and set forth on in this Schedule A), (ii) avoid taking actions the primary purpose of which is to prevent the AdoTube Business Unit from satisfying the Gross Revenue targets set forth paragraph 1. Provided however, that the parties recognize that Acquirer’s Board of Directors and management shall retain sole discretion over decisions with respect to the operations of Acquirer, the Company, the Surviving Corporation and the AdoTube Business Unit consistent with their fiduciary duties

iv

2.        Subject to paragraph 1(c) above, the following provisions shall apply at the end of the First Earnout Period and the Second Earnout Period (each such date, a “Gross Revenue Determination Date”.

(a)        As promptly as practicable each Gross Revenue Determination Date (but in any event within 20 Business Days of such dates), Acquirer shall deliver to the Stockholders’ Agent a written report (each, an “Earnout Report”) setting forth Acquirer’s reasonable good faith computation of the 2013 Contingent Deferred Payment or the 2014 Contingent Deferred Payment, as applicable, if any. The Earnout Report shall be accompanied by reasonably detailed documentary evidence supporting the basis for such calculation.

(b)        Within 15 Business Days following Acquirer’s delivery of each Earnout Report described in paragraph 3(a), the Stockholders’ Agent may object to the calculations set forth in the applicable Earnout Report by delivering a written notice to Acquirer stating in reasonable detail the Stockholders’ Agent’s objections to the determination of such Earnout Report. During such 15 Business Day period, Acquirer will provide the Stockholders’ Agent with access at reasonable times to Acquirer’s work papers and back-up materials relating to the calculations set forth in the Earnout Report as reasonably requested by the Stockholders’ Agent. Any Earnout Report shall be conclusive and binding on the parties hereto unless the Stockholders’ Agent gives written notice of any objections thereto setting forth in reasonable detail the amounts in dispute and the basis for such dispute (each, an “Earnout Objection Notice”) to Acquirer within 10 Business Days after its receipt of such Earnout Report. If the Stockholders’ Agent delivers an Earnout Objection Notice as provided above, Acquirer and the Stockholders’ Agent shall attempt in good faith to resolve such dispute for 30 Business Days, and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties hereto. If Acquirer and the Stockholders’ Agent are unable to resolve, despite good faith negotiations, all disputes reflected in the Earnout Objection Notice within 30 Business Days thereafter (the “Earnout Resolution Period”), then the parties will resolve such dispute pursuant to Section 9.10 of the Agreement. Notwithstanding the foregoing, any dispute relating to either the 2013 Contingent Deferred Payment or the 2014 Contingent Deferred Payment shall, to the maximum extent possible, be resolved in accordance with the provisions of Treasury Regulation Section 1.409A-3(g) so that such payment shall be treated as paid as of the date such payment is due pursuant to paragraph 3 for purposes of applying Section 409A to such payment.

3.         Earnout Payment Date

(a)        Subject to paragraph 2(b), all payments to be made pursuant to paragraph 1(a)(i) above, shall be made in a lump sum payment to the applicable Earnout Recipient on the last day of the 1^st month following the First Earnout Period; provided that if such payment date falls on a Saturday, Sunday or holiday, such payment will be made on the next Business Day following such payment date (the “First Earnout Payment Date”).

(b)        Subject to paragraph 2(b), all payments to be made pursuant to paragraph 1(a)(ii) above, shall be made in a lump sum payment to the applicable Earnout Recipient on the last day of the 1^st month following the Second Earnout Period; provided that if such payment date falls on a Saturday, Sunday or holiday, such payment will be made on the next Business Day following such payment date (the “Second Earnout Payment Date”).

v

EX-3.01

Exhibit 3.01

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

TRIBAL FUSION, INC.

The undersigned, Dilip DaSilva, hereby certifies that:

1. He is the duly elected and acting President of Tribal Fusion, Inc., a Delaware corporation.

2. The Certificate of Incorporation of this corporation was originally filed with the Secretary of State of Delaware on June 5, 2000.

3. The Certificate of Incorporation of this corporation shall be amended and restated to read in full as follows:

“ARTICLE I

The name of the corporation is Tribal Fusion, Inc. (the “Corporation”).

ARTICLE II

The address of the Corporation’s registered office in the State of Delaware is 2711 Centerville Road, Suite 400, in the city of Wilmington, County of New Castle. The name of the registered agent at such address is Corporation Service Company.

ARTICLE III

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

ARTICLE IV

Upon the effective date of the filing of this Amended and Restated Certificate of Incorporation, every share of this corporation’s outstanding Common Stock, each with $0.0001 par value, shall be converted and reconstituted into ten shares of Common Stock or Preferred Stock, respectively, each with $0.00001 par value (the “Stock Split”). No further adjustment of any preference, price or right set forth in this Article IV shall be made as a result of the Stock Split, as all share amounts, amounts per share and per share numbers set forth in this Amended and Restated Certificate of Incorporation have been appropriately adjusted to reflect the Stock Split.

The aggregate number of shares which the Corporation shall have authority to issue is 100,000,000 shares of capital stock, all of which shall be designated “Common Stock” and have a par value of $0.00001 per share.

ARTICLE V

In furtherance of and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors of the Corporation is expressly authorized to make, amend or repeal Bylaws of the Corporation.

ARTICLE VI

The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. Elections of directors need not be by written ballot unless otherwise provided in the Bylaws of the Corporation.

ARTICLE VII

(A) To the fullest extent permitted by the Delaware General Corporation Law, as the same exists or as may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director.

(B) The Corporation shall indemnify to the fullest extent permitted by law any person made or threatened to be made a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he, his testator or intestate is or was a director or officer of the Corporation or any predecessor of the Corporation, or serves or served at any other enterprise as a director or officer at the request of the Corporation or any predecessor to the Corporation.

(C) Neither any amendment nor repeal of this Article VII, nor the adoption of any provision of the Corporation’s Certificate of Incorporation inconsistent with this Article VII, shall eliminate or reduce the effect of this Article VII in respect of any matter occurring, or any action or proceeding accruing or arising or that, but for this Article VII, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.”

*_*_*

2

The foregoing Amended and Restated Certificate of Incorporation has been duly adopted by this corporation’s Board of Directors and stockholders in accordance with the applicable provisions of Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware.

Executed at Emeryville, California, on November 2, 2005.

/s/ Dilip DaSilva

Dilip DaSilva, President

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF TRIBAL FUSION, INC.

CERTIFICATE OF AMENDMENT OF

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF

TRIBAL FUSION, INC.

The undersigned, Dilip DaSilva, hereby certifies that:

1. He is the duly elected President of Tribal Fusion, Inc., a Delaware corporation.

2. The Certificate of Incorporation of this corporation was originally filed with the Secretary of State of Delaware on June 5, 2000.

3. Pursuant to Section 242 of the General Corporation Law of the State of Delaware, this Certificate of Amendment of Amended and Restated Certificate of Incorporation amends Article I of this corporation’s Amended and Restated Certificate of Incorporation to read in its entirety as follows:

“The name of the corporation shall be “Exponential Interactive, Inc. (the “Corporation”).”

4. The foregoing Certificate of Amendment has been duly adopted by this corporation’s Board of Directors and stockholders in accordance with the applicable provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware.

Executed at Emeryville, California, on April 13, 2006.

/s/ Dilip DaSilva

Dilip DaSilva, President

EX-3.03

Exhibit 3.03

BYLAWS

OF

EXPONENTIAL INTERACTIVE, INC.

TABLE OF CONTENTS

	PAGE
ARTICLE I : OFFICES		1
Section 1. Registered Office		1
Section 2. Other Offices		1
ARTICLE II MEETINGS OF STOCKHOLDERS		1
Section 1. Place of Meetings		1
Section 2. Annual Meeting		1
Section 3. Special Meeting		1
Section 4. Notice of Stockholders’ Meetings		1
Section 5. List of Stockholders Entitled to Vote		2
Section 6. Quorum		2
Section 7. Adjourned Meeting; Notice		2
Section 8. Voting		2
Section 9. Waiver of Notice or Consent by Absent Stockholders		3
Section 10. Stockholder Action by Written Consent Without a Meeting		3
Section 11. Record Date for Stockholder Notice, Voting, and Giving Consents		4
Section 12. Proxies		4
Section 13. Inspectors of Election		4
ARTICLE III : DIRECTORS		5
Section 1. Powers		5
Section 2. Number and Qualification of Directors		5
Section 3. Election and Term of Office of Directors		6
Section 4. Vacancies		6
Section 5. Place of Meetings		6
Section 6. Annual Meeting		6
Section 7. Other Regular Meetings		6
Section 8. Special Meetings		6
Section 9. Quorum		6
Section 10. Waiver of Notice		7
Section 11. Action Without Meeting		7
Section 12. Telephone Meetings		7
Section 13. Fees and Compensation of Directors		7
ARTICLE IV : COMMITTEES		7
Section 1. Committees of Directors		7
Section 2. Meetings and Action of Committees		8
ARTICLE V : OFFICERS		8
Section 1. Officers		8
Section 2. Election of Officers		8
Section 3. Subordinate Officers		8
Section 4. Removal and Resignation of Officers		8
Section 5. Vacancies in Offices		8
Section 6. Chairman of the Board		8
Section 7. President		8

i

Section 8. Vice Presidents	9
Section 9. Secretary	9
Section 10. Chief Financial Officer	9
ARTICLE VI : RECORDS AND REPORTS	9
Section 1. Form of Records	9
Section 2. Inspection by Stockholders	9
Section 3. Inspection by Directors	10
ARTICLE VII : GENERAL CORPORATE MATTERS	10
Section 1. Certificates for Shares	10
Section 2. Lost Certificates	10
Section 3. Registered Stockholders	10
Section 4. Representation of Shares of Other Corporations	10
Section 5. Construction and Definitions	10
Section 6. Right of First Refusal	11
ARTICLE VIII : AMENDMENTS	12
Section 1. Amendment by Stockholders	12
Section 2. Amendment by Directors	12
ARTICLE IX : INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, AND OTHER AGENTS	12
Section 1. Right to Indemnification	12
Section 2. Prepayment of Expenses	13
Section 3. Claims	13
Section 4. Non-Exclusivity of Rights	13
Section 5. Indemnification of Employees and Agents of the Corporation	13
Section 6. Other Indemnification	13
Section 7. Amendment or Repeal	13

ii

BYLAWS

OF

EXPONENTIAL INTERACTIVE, INC.

ARTICLE I: OFFICES

Section 1. Registered Office. The registered office shall be 2711 Centerville Road, Suite 400, Wilmington, DE 19801.

Section 2. Other Offices. The corporation 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 MEETINGS OF STOCKHOLDERS

Section 1. Place of Meetings. Meetings of stockholders shall be held at any place within or outside the State of Delaware designated either by the board of directors or the president (if not contrary to any action taken by the board of directors). In the absence of any such designation, stockholders’ meetings shall be held at the principal executive office of the corporation in the City of Oakland, State of CA.

Section 2. Annual Meeting. The annual meeting of stockholders of the corporation for the purpose of electing directors and for the transaction of such other proper business as may come before such meetings, shall be held at such time and place as the board of directors shall determine by resolution.

Section 3. Special Meeting. A special meeting of the stockholders may be called for any purpose or purposes at any time by the board of directors, or by the chairman of the board, or by the president, the chief executive officer or by one or more stockholders holding shares in the aggregate entitled to cast not less than ten percent (10%) of the votes at that meeting, but such special meetings may not be called by any other person or persons.

If a special meeting is called by any person or persons other than the board of directors, the chairman of the board, the president or the chief executive officer, the request shall be in writing, specifying the time of such meeting (such time to be not less than thirty-five (35) nor more than sixty (60) days after the receipt of the request) and the general nature of the business proposed to be transacted, and shall be delivered personally or sent by registered mail or by telegraphic or other facsimile transmission to the chairman of the board, the president, any vice president, or the secretary of the corporation. The officer receiving the request shall cause notice to be given promptly to the stockholders entitled to vote, in accordance with the provisions of Sections 4 and 5 of this Article II, that a meeting will be held at the time requested by the person or persons calling the meeting.

Section 4. Notice of Stockholders’ Meetings. All notices of meetings of stockholders shall specify the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Unless otherwise provided by law, the certificate of incorporation or these bylaws, the written notice of any annual or special meeting of stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the 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.

If action is proposed to be taken at any meeting for approval of an amendment of the certificate of incorporation, pursuant to Section 242 of the Delaware Corporation Law, the notice shall set forth such amendment in full or a brief summary of the changes to be effected thereby, as the directors shall deem advisable.

If action is proposed to be taken at any meeting for approval of an agreement relating to any merger or

1

consolidation, pursuant to Section 251 of the Delaware Corporation Law, the notice shall be mailed to each stockholder at least twenty (20) days prior to the date of the meeting. The notice shall contain a copy of the agreement or a brief summary thereof, as the directors shall deem advisable.

An affidavit of the secretary or an assistant secretary or of the transfer agent of the corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

Section 5. List of Stockholders Entitled to Vote. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten (10) days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

Section 6. Quorum. The presence in person or by proxy of the holders of a majority of the shares entitled to vote at any meeting of stockholders shall constitute a quorum for the transaction of business. The stockholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum.

Section 7. Adjourned Meeting; Notice. Any stockholders’ meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of the majority of the shares represented at that meeting, either in person or by proxy, but in the absence of a quorum, no other business may be transacted at that meeting, except as provided in Section 6 of this Article II.

When any meeting of stockholders, either annual or special, is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place are announced at a meeting at which the adjournment is taken, unless a new record date for the adjourned meeting is fixed, or unless the adjournment is for more than thirty (30) days from the date set for the original meeting, in which case the board of directors shall set a new record date. Notice of any such adjourned meeting shall be given to each stockholder of record entitled to vote at the adjourned meeting in accordance with the provisions of Section 4 of this Article II. At any adjourned meeting the corporation may transact any business which might have been transacted at the original meeting.

Section 8. Voting. Unless otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power upon the matter in question held by such stockholder, but no proxy shall be voted on or after three years from its date, unless the proxy provides for a longer period. Vote may be via voice or ballot; provided, however, that elections for directors must be by ballot if demanded by any shareholder at the meeting and before the voting has begun.

Any holder of shares entitled to vote on any matter may vote a part of the shares in favor of the proposal and refrain from voting the remaining shares or, except when the matter is the election of directors, vote there against the proposal, but, if the stockholder fails to specify the number of shares which the stockholder is voting affirmatively, it will be conclusively presumed that the stockholder’s approving vote is with respect to all shares that the stockholder is entitled to vote.

At all meetings of stockholders for the election of directors a plurality of the votes cast shall be sufficient to elect. All other elections and questions shall, unless otherwise provided by law, the certificate of incorporation or these bylaws, be decided by the vote of the holders of shares of stock having a majority of the votes which could be cast by the holders of all shares of stock entitled to vote thereon which are present in person or represented by proxy at the meeting.

2

Section 9. Waiver of Notice or Consent by Absent Stockholders. The transaction of any meeting of stockholders, either annual or special, however called and noticed, and wherever held, shall be as valid as though transacted at a meeting duly held after regular call and notice, if a quorum be present either in person or by proxy, and if, either before or after the meeting, each person entitled to vote, who was not present in person or by proxy, signs a written waiver of notice or a consent to a holding of the meeting, or an approval of the minutes. Such waiver, consent or approval need not specify either the business to be transacted or the purpose of any annual or special meeting of stockholders, unless so provided by the certificate of incorporation or these bylaws. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.

Attendance by a person at a meeting shall also constitute a waiver of notice of and presence at that meeting, except when the person objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters required by law to be included in the notice of the meeting but not so included if that objection is expressly made at the meeting.

Section 10. Stockholder Action by Written Consent Without a Meeting. Any action which may be taken at an annual or special meeting of stockholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take that action at a meeting at which all shares entitled to vote on that action were present and voted. All such consents shall be delivered to the corporation by delivery to its registered office in Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded.

Any stockholder giving a written consent, or the stockholder’s proxy holder, or a transferee of the shares or a personal representative of the stockholder or their respective proxy holders, may revoke the consent by a writing received by the secretary of the corporation before written consents of the number of shares required to authorize the proposed action have been delivered to the corporation. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days after the date of the earliest dated consent delivered to the corporation, a written consent or consents signed by a sufficient number of holders to take action are delivered to the corporation in the manner prescribed in the first paragraph of this Section.

A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxy holder, or a person or persons authorized to act for a stockholder or proxy holder, shall be deemed to be written, signed and dated for the purposes of this section, provided that any such telegram, cablegram or other electronic transmission sets forth or is delivered with information from which the corporation can determine (a) that the telegram, cablegram or other electronic transmission was transmitted by the stockholder or proxy holder or by a person or persons authorized to act for the stockholder or proxy holder and (b) the date on which such stockholder or proxy holder or authorized person or persons transmitted such telegram, cablegram or electronic transmission. The date on which such telegram, cablegram or electronic transmission is transmitted shall be deemed to be the date on which such consent was signed. No consent given by telegram, cablegram or other electronic transmission shall be deemed to have been delivered until such consent is reproduced in paper form and until such paper form shall be delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a corporation’s registered office shall be made by hand or by certified or registered mail, return receipt requested. Notwithstanding the foregoing limitations on delivery, consents given by telegram, cablegram or other electronic transmission may be otherwise delivered to the principal place of business of the corporation or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded if, to the extent and in the manner provided by resolution of the board. Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.

3

Section 11. Record Date for Stockholder Notice, Voting, and Giving Consents. 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, or entitled to express consent to corporate action without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or 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 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:

(a) In the case of determination of stockholders entitled to vote at any meeting of stockholders or adjournment thereof, shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting;

(b) In the case of determination of stockholders entitled to express consent to corporate action in writing without a meeting, shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the board of directors; and

(c) In the case of other action, shall not be more than sixty (60) days prior to such other action.

if no record date is fixed by the board of directors:

(a) 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;

(b) The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting when no prior action of the board of directors is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation in accordance with applicable law, or if prior action by the board of directors is required by law, shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action; and

(c) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto.

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.

Section 12. Proxies. Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for him by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary of the corporation.

Section 13. Inspectors of Election. The corporation may, in advance of any meeting of stockholders, appoint one (1) or more inspectors to act at the meeting and make a written report thereof. The corporation may designate one (1) or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the chairman of the meeting may appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of such inspector’s duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such his or her ability.

4

These inspectors shall:

(a) Ascertain the number of shares outstanding and the voting power of each;

(b) Determine the shares represented at the meeting and the validity of proxies and ballots;

(c) Count all votes and ballots;

(d) Determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors;

(e) Certify the determination of the number of shares represented at the meeting, and the count of all votes and ballots; and

(f) Do any other acts that may be proper to conduct the election or vote with fairness to all stockholders.

The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of their duties.

ARTICLE III: DIRECTORS

Section 1. Powers. The business of the corporation shall be managed by or under the direction of its board of directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these bylaws directed or required to be exercised or done by the stockholders.

Without prejudice to these general powers, and subject to the same limitations, the directors shall have the power to:

(a) Select and remove all officers, agents, and employees of the corporation; prescribe any powers and duties for them that are consistent with law, with the certificate of incorporation, and- with these bylaws; fix their compensation; and require from them security for faithful service.

(b) Change the principal executive office or the principal business office from one location to another; cause the corporation to be qualified to do business in any state, territory, dependency, or country and conduct business within or without the State of Delaware; and designate any place within or without the State of Delaware for the holding of any stockholders’ meeting, or meetings, including annual meetings.

(c) Adopt, make, and use a corporate seal; prescribe the forms of certificates of stock; and alter the form of the seal and certificates.

(d) Authorize the issuance of shares of stock of the corporation on any lawful terms, for such consideration as permitted by law.

(e) Borrow money and incur indebtedness on behalf of the corporation, and cause to be executed and delivered for the corporation’s purposes, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations, and other evidence of debt and securities.

Section 2. Number and Qualification of Directors. The board of directors shall consist of one or more members. The initial number of directors shall be one (1), and, thereafter, unless otherwise required by law or

5

the certificate of incorporation, shall be fixed from time to time by a duly approved resolution of the board of directors. No decrease in the authorized number of directors constituting the board of directors shall shorten the term of any incumbent director. Directors need not be stockholders of the corporation.

Section 3. Election and Term of Office of Directors. Directors shall be elected at each annual meeting of the stockholders, but if any such annual meeting is not held, or the directors are not elected thereat, the directors may be elected at any special meeting of the stockholders held for that purpose. All directors shall hold office until the expiration of the term for which elected and until their respective successors are elected, except in the case of death, resignation or removal of any director.

Section 4. Vacancies. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the remaining members of the board of directors, although such majority is less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the expiration of the term for which elected and until their successors are duly elected and shall qualify, unless sooner displaced.

A vacancy or vacancies in the board of directors shall be deemed to exist in the event of the death, resignation, or removal of any director, or if the authorized number of directors is increased, or if the stockholders fail, at any meeting of stockholders at which any director or directors arc elected, to elect the number of directors to be voted for at that meeting. Any director may resign at any time upon giving written notice to the corporation. The entire board of directors or any individual director may be removed from office, prior to the expiration of their or his term of office only in the manner and within the limitations provided by the General Corporation Law of Delaware.

Section 5. Place of Meetings. Meetings of the board of directors may be held at any place within or outside the State of Delaware that has been designated in the notice of the meeting or, if not so stated or if there is no notice, by resolution of the board or by the chairman of the board or by the president (if not contrary to any action taken by the board of directors). In the absence of such a designation, meetings shall be held at the principal executive office of the corporation.

Section 6. Annual Meeting. Immediately following each annual meeting of stockholders, the board of directors shall hold a regular meeting for the purpose of organization, any desired election of officers, and the transaction of other business. Notice of this meeting shall not be required.

Section 7. Other Regular Meetings. Other regular meetings of the board of directors shall 1 at such time as shall from time to time be fixed by the board of directors. Such regular meetings may be held without notice.

Section 8. Special Meetings. Special meetings of the board of directors for any purpose or purposes may be called at any time by the chairman of the board or the president or any vice president or secretary or any two directors. Notice of the time and place of special meetings shall be delivered personally or by telephone to each director or sent by first-class mail or telegram, charges prepaid, addressed to each director at that director’s address as it is shown on the records of the corporation. In case the notice is mailed, it shall be deposited in the United States mail at least four (4) days before the time of the holding of the meeting. In case the notice is delivered personally, or by telephone or telegram, it shall be delivered personally, or by telephone or to the telegraph company, at least forty-eight (48) hours before the time of the holding of the meeting. Any oral notice given personally or b telephone may be communicated either to the director or to a person at the office of the director who the person giving the notice has reason to believe will promptly communicate it to the director. The notice need not specify the purpose of the meeting nor the place if the meeting is to be held at the principal executive office of the corporation.

Section 9. Quorum. At all meetings of the board of directors, a majority of the total number of directors shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as provided herein, by the certificate of incorporation or required by applicable law. If a quorum shall not be

6

present at any meeting of the board of directors, the directors present thereat may adjourn the meeting to another place, date or time from time to time, without notice other than announcement at the meeting, until a quorum shall be present. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.

Section 10. Waiver of Notice. Notice of a meeting need not be given to any director who signs a waiver of notice or a consent to holding the meeting or an approval of the minutes thereof, either before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to said director. All such waivers, consents, and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. A waiver of notice need not specify the purpose of any regular or special meeting of the board of directors.

Section 11. Action Without Meeting. 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 or such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the board or committee, respectively, in the minute books of the corporation. 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 12. Telephone Meetings. Members of the board of directors, or any committee designated by the board of directors, may participate in a meeting thereof by means of, conference telephone or similar communication equipment, so long as all persons participating in the meeting can hear one another, and all such persons shall be deemed to be present in person at the meeting.

Section 13. Fees and Compensation of Directors. Directors and members of committees may receive such compensation, if any, for their services, and such reimbursement of expenses, as may be fixed or determined by resolution of the board of directors. This Section 13 shall not be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise, and receiving compensation for those services.

ARTICLE IV: COMMITTEES

Section 1. Committees of Directors. The board of directors may, by resolution adopted by a majority of the whole board of directors, designate one or more committees, each consisting of one or more directors, to serve at the pleasure of the board. The board 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. In the absence or disqualification of a member of a committee, the member or members thereof present at any 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.

Any committee, to the extent provided in the resolution of the board, shall have and may exercise all the powers and authority of the board 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 amending the certificate of incorporation, adopting an agreement of merger or consolidation under Sections 251 or 152 of the General Corporation Law of Delaware, recommending to the stockholders the sale, lease or exchange of all or substantially all of the corporation’s property and assets, recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or amending the bylaws of the corporation; and, unless the resolution or the certificate of incorporation expressly so provide, it shall not have the power or authority to declare a dividend to authorize the issuance of stock, or to adopt a certificate of ownership and merger pursuant to Section 253 of the General Corporation Law of Delaware.

7

Section 2. Meetings and Action of Committees. Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of Article III of these bylaws, with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the board of directors and its members, except that the time of regular meetings of committees may be determined either by resolution of the board of directors or by resolution of the committee; special meetings of committees may also be called by resolution of the board of directors; and notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The board of directors may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws.

ARTICLE V: OFFICERS

Section 1. Officers. The officers of the corporation shall be a president, a secretary and a chief financial officer. The corporation may also have, at the discretion of the board of directors, a chairman of the board, one or more vice presidents, one or more assistant secretaries, and such other officers as may be appointed in accordance with the provisions of Section 3 of this Article V. Any number of offices may be held by the same person.

Section 2. Election of Officers. The officers of the corporation, except such officers as may he appointed in accordance with the provisions of Section 3 or Section 5 of this Article V, shall be chosen by the board of directors, and each shall serve at the pleasure of the board, subject to the rights, if any, of an officer under any contract of employment.

Section 3. Subordinate Officers. The board of directors may appoint, and may empower the president to appoint, such other officers as the business of the corporation may require, each of whom shall hold office for such period, have such authority and perform such duties as are provided in the bylaws or as the board of directors may from time to time determine.

Section 4. Removal and Resignation of Officers. Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by the board of directors, at any regular or special meeting of the board, or, except in case of an officer chosen by the board of directors, by any officer upon whom such power of removal may be conferred by the board of directors.

Any officer may resign at any time by giving written notice to the corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party.

Section 5. Vacancies in Offices. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these bylaws for regular appointments to that office.

Section 6. Chairman of the Board. The chairman of the board, if such an officer be elected, shall, if present, preside at meetings of the board of directors and exercise and perform such other powers and duties as may be from time to time assigned to him by the board of directors or prescribed by the bylaws. If there is no president, the chairman of the board shall in addition be the chief executive officer of the corporation and shall have the powers and duties prescribed in Section 7 of this Article V.

Section 7. President. Subject to such supervisory powers, if any, as may be given by the board of directors to the chairman of the board, if there he such an officer, 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 the officers of the corporation. He shall preside at all meetings of the stockholders and, in the absence of the chairman of the board, or if there be none, at all meetings of the board of directors. He shall have the general powers and duties of management usually vested in the office of president of a corporation, and shall have such other powers and duties as may be prescribed by the board of directors or the bylaws.

8

Section 8. Vice Presidents. In the absence or disability of the president, the vice presidents, if any, in order of their rank as fixed by the board of directors or, if not ranked, a vice president designated by the board of directors, shall perform all the duties of the president, and when so acting shall have all the powers of, and be subject to all the restrictions upon, the president. The vice presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the board of directors or the bylaws, and the president, or the chairman of the board.

Section 9. Secretary. The secretary shall keep or cause to be kept, at the principal executive office or such other place as the board of directors may direct, a book of minutes of all meetings and actions of the directors, committees of directors, and stockholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice given, the names of those present at directors’ meetings or committee meetings, the number of shares present or represented at stockholders’ meetings, and the proceedings.

The secretary shall keep, or cause to be kept, at the principal executive office or at the office of the corporation’s transfer agent or registrar, as determined by resolution of the board of directors, a share register, or a duplicate share register, showing the names of all stockholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation.

The secretary shall give, or cause to be given, notice of all meetings of the stockholders and of the board of directors required by the bylaws or by law to be given, and he shall keep the seal of the corporation if one be adopted, in safe custody, and shall have such other powers and perform such other duties as may he prescribed by the board of directors or by the bylaws.

Section 10. Chief Financial Officer. The chief financial officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings, and shares. The books of account shall at all reasonable times be open to inspection by any director.

The chief financial officer shall deposit all monies and other valuables in the name and to the credit of the corporation with such depositories as may be designated by the board of directors. He shall disburse the funds of the corporation as may be ordered by the board of directors, shall render to the president and directors, whenever they request it, an account of all of his transactions as chief financial officer and of the financial condition of the corporation, and shall have other powers and perform such other duties as may be prescribed by the board of directors or the bylaws.

ARTICLE VI: RECORDS AND REPORTS

Section 1. Form of Records. Any records maintained by the corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs, or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The corporation shall so convert any records so kept upon the request of any person entitled to inspect the same.

Section 2. Inspection by Stockholders. Any stockholder, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation’s stock ledger, a list of stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person’s interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or other such writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand shall be directed to the corporation at its registered office in Delaware or at its principal place of business.

9

Section 3. Inspection by Directors. Any director shall have the right to examine the corporation’s stock ledger, a list of its stockholders and its other books and records for a purpose reasonably related to his position as a director.

ARTICLE VII: GENERAL CORPORATE MATTERS

Section 1. Certificates for Shares. Every holder of stock shall be entitled to have a certificate signed by or in the name of the corporation by the chairman or vice chairman of the board of directors, if any, or the president or a vice president, and by chief financial officer or an assistant treasurer, or the secretary or an assistant secretary, of the corporation, certifying the number of shares owned by such stockholder in the corporation. Any of or all the signatures on the certificate may be a facsimile. 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 by the corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

The board of directors may authorize the issuance of shares as partly paid and subject to call for the remainder of the consideration to be paid therefor; provided that upon the face or back of each certificate issued to represent any such partly paid shares or upon the books and records of the corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.

Section 2. Lost Certificates. Except as provided in this Section 2, no new certificates for shares shall be issued to replace an old certificate unless the latter is surrendered to the corporation and canceled at the same time. The board of directors may, in case any share certificate or certificate for any other security is lost, stolen, or destroyed, authorize the issuance of a replacement certificate on such terms and conditions as the board may require, including provision for indemnification of the corporation secured by a bond or other adequate security sufficient to protect the corporation against any claim that may be made against it, including any expense or liability, on account of the alleged loss, theft, or destruction of the certificate or the issuance of the replacement certificate.

Section 3. 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 to hold liable for calls and assessments a person registered on its books as the owner of shares 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.

Section 4. Representation of Shares of Other Corporations. The chairman of the board, the president, or any vice president, or any other person authorized by resolution of the board of directors or by any of the foregoing designated officers, is authorized to vote on behalf of the corporation any and all shares of any other corporation or corporations, foreign or domestic, standing in the name of the corporation. The authority granted to these officers to vote or represent on behalf of the corporation any and all shares held by the corporation in any other corporation or corporations may be exercised by any of these officers in person or by any person authorized to do so by a proxy duly executed by these officers.

Section 5. Construction and Definitions. Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the General Corporation Law of Delaware shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term “person” includes both a corporation and a natural person.

10

Section 6. Right of First Refusal. No stockholder shall sell, assign, pledge, or in any manner transfer any of the shares of stock of the corporation or any right or interest therein, whether voluntarily or by operation of law, or by gift or otherwise, except by transfer wt.& meets the requirements hereinafter set forth in this bylaw:

(a) If the stockholder desires to sell or otherwise transfer any of this shares of stock, then the stockholder shall first give written notice thereof to the corporation. The notice shall name the proposed transferee and state the number of shares to be transferred, the proposed consideration, and all other terms and conditions of the proposed transfer.

(b) For thirty (30) days following receipt of such notice, the corporation shall have the option to purchase all (but not less than all) of the shares specified in the notice at the price and upon the terms set forth in such notice; provided, however, that with the consent of the stockholder, the corporation shall have the option to purchase a lesser portion of the shares specified in said notice at the price and upon the terms set forth therein. In the event of a gift, property settlement or other transfer in which the proposed transferee is not paying the full price for the shares, and that is not otherwise exempted from the provisions of this Section 6, the price shall be deemed to be the fair market value of the stock at such time as determined in good faith by the Board of Directors. In the event the corporation elects to purchase all of the shares or, with consent of the stockholder, a lesser portion of the shares, it shall give written notice to the transferring stockholder of its election and settlement for said shares shall be made as provided below in paragraph (d).

(c) The corporation may assign its rights hereunder.

(d) In the event the corporation and/or its assignee(s) elect to acquire any of the shares of the transferring stockholder as specified in said transferring stockholder’s notice, the Secretary of the corporation shall so notify the transferring stockholder and settlement thereof shall be made in cash within thirty (30) days after the Secretary of the corporation receives said transferring stockholder’s notice; provided that if the terms of payment set forth in said transferring stockholder’s notice were other than cash against delivery, the corporation and/or its assignee(s) shall pay for said shares on the same terms and conditions set forth in said transferring stockholder’s notice.

(e) In the event the corporation and/or its assignees(s) do not elect to acquire all of the shares specified in the transferring stockholder’s notice, said transferring stockholder may, within the sixty-day period following the expiration of the option rights granted to the corporation and/or its assignees(s) herein, transfer the shares specified in said transferring stockholder’s notice which were not acquired by the corporation and/or its assignees(s) as specified in said transferring stockholder’s notice. All shares so sold by said transferring stockholder shall continue to be subject to the provisions of this bylaw in the same manner as before said transfer.

(f) Anything to the contrary contained herein notwithstanding, the following transactions shall be exempt from the provisions of this bylaw:

(1) A stockholder’s transfer of any or all shares held either during such stockholder’s lifetime or on death by will or intestacy to such stockholder’s immediate family or to any custodian or trustee for the account of such stockholder or such stockholder’s immediate family or to any limited partnership of which the stockholder, members of such stockholder’s immediate family or any trust for the account of such stockholder or such stockholder’s immediate family will be the general of limited partner(s) of such partnership. “Immediate family” as used herein shall mean spouse, lineal descendant, father, mother, brother, or sister of the stockholder making such transfer.

(2) A stockholder’s bona fide pledge or mortgage of any shares with a commercial lending institution, provided that any subsequent transfer of said shares by said institution shall be conducted in the manner set forth in this bylaw.

(3) A stockholder’s transfer of any of all of such stockholder’s shares to the corporation or to any other stockholder of the corporation.

11

(4) A stockholder’s transfer of any or all of such stockholder’s shares to a person who, at the time of such transfer, is an officer or director of the corporation.

(5) A corporate stockholder’s transfer of any or all of its shares pursuant to and in accordance with the terms of any merger, consolidation, reclassification of shares or capital reorganization of the corporate stockholder, or pursuant to a sale of all or substantially all of the stock or assets of a corporate stockholder.

(6) A transfer by a stockholder which is a limited or general partnership to any or all of its partners or former partners.

In any such case, the transferee, assignee, or other recipient shall receive and hold such stock subject to the provisions of this bylaw, and there shall be no further transfer of such stock except in accord with this bylaw.

(g) The provisions of this bylaw may be waived with respect to any transfer either by the corporation, upon duly authorized action of its Board of Directors, or by the stockholders, upon the express written consent of the owners of a majority of the voting securities of the corporation (excluding the votes represented by those shares to be transferred by the transferring stockholder). This bylaw may be amended or repealed either by a duly authorized action of the Board of Directors or by the stockholders, upon the express written consent of the owners of a majority of the voting securities of the corporation.

(h) Any sale or transfer, or purported sale or transfer, of securities of the corporation shall be null and void unless the terms, conditions, and provisions of this bylaw are strictly observed and followed.

(i) The foregoing right of first refusal shall terminate on either of the following dates, whichever shall first occur:

(1) On October 31, 2015; or

(2) Upon the date securities of the corporation are first offered to the public pursuant to a registration statement filed with, and declared effective by, the United States Securities and Exchange Commission under the Securities Act of 1933, as amended.

(j) The certificates representing shares of stock of the corporation shall bear on their face the following legend so long as the foregoing right of first refusal remains in effect:

“The shares represented by this Certificate are subject to a right of first refusal option in favor of the Company and/or its Assignee(s), as provided in the Bylaws of the Company.”

ARTICLE VIII: AMENDMENTS

Section 1. Amendment by Stockholders. New bylaws may be adopted or these bylaws may be amended or repealed by the vote or written assent of stockholders entitled to exercise a majority of the voting power of the corporation, except as otherwise provided by law or by the certificate of incorporation.

Section 2. Amendment by Directors. Subject to the rights of the stockholders as provided in Section 1 of this Article IX, to adopt, amend, or repeal bylaws, bylaws may be adopted, amended, or repealed by the board of directors.

ARTICLE IX: INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES,

AND OTHER AGENTS

Section 1. Right to Indemnification. The corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended (hut, in the case of any such amendment, only to the extent such amendment permits the corporation to provide broader indemnification

12

rights than such law permitted the corporation to provide prior to such amendment) any person who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) by reason of the fact that he, or a person for whom he is the legal representative, is or was a director or officer of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person. The corporation shall be required to indemnify a person in connection with a proceeding initiated by such person only if the proceeding was authorized by the board of directors of the corporation.

Section 2. Prepayment of Expenses. The corporation shall pay the expenses incurred in defending any proceeding in advance of its final disposition, provided, however, that the payment of expenses incurred by a director or officer in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by the director or officer to repay all amounts advanced if it should be ultimately determined that the director or officer is not entitled to be indemnified under this Article or otherwise. The corporation shall be required to pay or advance expenses in connection with a proceeding initiated by such person only if the proceeding was authorized by the board of directors of the corporation.

Section 3. Claims. If a claim for indemnification or payment of expenses under this Article is not paid in full within sixty days (60) after a written claim therefor has been received by the corporation, the claimant may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification or payment of expenses under applicable law.

Section 4. Non-Exclusivity of Rights. The rights conferred on any person by this Article VI shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the certificate of incorporation, these bylaws, agreement, vote of stockholders or disinterested directors or otherwise.

Section 5. Indemnification of Employees and Agents of the Corporation. The corporation may, to the extent authorized from time to time by the board of directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the corporation to the fullest extent of the provisions of this Article with respect to the indemnification and advancement of expenses of directors and officers of the corporation.

Section 6. Other Indemnification. The corporation’s obligation, if any, to indemnify any person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or non-profit entity shall be reduced by any amount such person may collect as indemnification from such other corporation, partnership, joint venture, trust, enterprise or non-profit enterprise.

Section 7. Amendment or Repeal. Any repeal or modification of the foregoing provisions of this Article VI shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification.

13

EX-10.01

Exhibit 10.01

Execution Copy

$40,000,000

CREDIT AGREEMENT

Dated as of April 12, 2007

among

EXPONENTIAL INTERACTIVE, INC.

as the Borrower

BANK OF AMERICA, NA.,

as Administrative Agent,

and

The Other Lenders Party Hereto

BANC OF AMERICA SECURITIES LLC,

as

Sole Lead Arranger and Sole Book Manager

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS			1
1.01	Defined Terms		1
1.02	Other Interpretive Provisions		22
1.03	Accounting Terms		23
1.04	Rounding		23
1.05	Times of Day		23
ARTICLE II THE COMMITMENTS			24
2.01	Loans		24
2.02	Borrowings, Conversions and Continuations of Loans		24
2.03	Prepayments		26
2.04	Termination or Reduction of Commitments		26
2.05	Repayment of Loans		27
2.06	Interest		28
2.07	Fees		28
2.08	Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate		29
2.09	Evidence of Debt		30
2.10	Payments Generally; Administrative Agent’s Clawback		30
2.11	Sharing of Payments by Lenders		32
2.12	Increase in Revolving Credit Facility		33
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY			34
3.01	Taxes		34
3.02	Illegality		36
3.03	Inability to Determine Rates		36
3.04	Increased Costs; Reserves on Eurodollar Rate Loans		37
3.05	Compensation for Losses		38
3.06	Mitigation Obligation; Replacement of Lenders		39
3.07	Survival		39
ARTICLE IV CONDITIONS PRECEDENT TO BORROWINGS			39
4.01	Conditions of Initial Loan		39
4.02	Conditions to all Loans		42
ARTICLE V REPRESENTATIONS AND WARRANTIES			43
5.01	Existence, Qualification and Power		43
5.02	Authorization; No Contravention		43
5.03	Governmental Authorization; Other Consents		44
5.04	Binding Effect		44
5.05	Financial Statements; No Material Adverse Effect		44
5.06	Litigation		45
5.07	No Default		45

i

TABLE OF CONTENTS

(continued)

		Page
5.08	Ownership of Property; Liens		45
5.09	Environmental Compliance		46
5.10	Insurance		46
5.11	Taxes		46
5.12	ERISA Compliance		46
5.13	Subsidiaries; Equity Interests		47
5.14	Margin Regulations; Investment Company Act		47
5.15	Disclosure		47
5.16	Compliance with Laws		48
5.17	Taxpayer Identification Number		48
5.18	Intellectual Property; Licenses, Etc.		48
5.19	Security Interest		48
5.20	Solvency		48
5.21	Labor Matters		48
5.22	Consummation of the Transaction		49
5.23	Transaction Document Representations		49
ARTICLE VI AFFIRMATIVE COVENANTS			49
6.01	Financial Statements		49
6.02	Certificates; Other information		50
6.03	Notices		52
6.04	Payment of Obligations		53
6.05	Preservation of Existence, Etc.		53
6.06	Maintenance of Properties		53
6.07	Maintenance of Insurance		53
6.08	Compliance with Laws		53
6.09	Books and Records		54
6.10	Inspection Rights		54
6.11	Use of Proceeds		54
6.12	Subsidiaries		54
6.13	Post-Closing Items		55
6.14	Further Assurances		55
ARTICLE VII NEGATIVE COVENANTS			55
7.01	Liens		55
7.02	Investments		57
7.03	Indebtedness		58
7.04	Fundamental Changes		59
7.05	Dispositions		59
7.06	Restricted Payments		60
7.07	Change in Nature of Business		61
7.08	Transactions with Affiliates		61
7.09	Burdensome Agreements		61
7.10	Use of Proceeds		61

ii

TABLE OF CONTENTS

(continued)

		Page
7.11	Amendments		61
7.12	Subordinated Debt Payments		62
7.13	Financial Covenants		62
7.14	Capital Expenditures		62
7.15	Accounting Changes		63
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES			63
8.01	Events of Default		63
8.02	Remedies Upon Event of Default		65
8.03	Application of Funds		65
ARTICLE IX ADMINISTRATIVE AGENT			66
9.01	Appointment and Authority		66
9.02	Rights as a Lender		67
9.03	Exculpatory Provisions		67
9.04	Reliance by Administrative Agent		68
9.05	Delegation of Duties		68
9.06	Resignation of Administrative Agent		69
9.07	Non-Reliance on Administrative Agent and Other Lenders		69
9.08	No Other Duties, Etc.		70
9.09	Administrative Agent May File Proofs of Claim		70
9.10	Collateral and Guaranty Matters		70
ARTICLE X MISCELLANEOUS			71
10.01	Amendments, Etc.		71
10.02	Notices; Effectiveness; Electronic Communication		72
10.03	No Waiver; Cumulative Remedies		74
10.04	Expenses; Indemnity; Damage Waiver		75
10.05	Payments Set Aside		76
10.06	Successors and Assigns		77
10.07	Treatment of Certain Information; Confidentiality		80
10.08	Right of Setoff		81
10.09	Interest Rate Limitation		81
10.10	Counterparts; Integration; Effectiveness		82
10.11	Survival of Representations and Warranties		82
10.12	Severability		82
10.13	Replacement of Lenders		82
10.14	Governing Law; Jurisdiction; Etc.		83
10.15	Waiver of Jury Trial		84
10.16	California Judicial Reference		84
10.17	No Advisory or Fiduciary Responsibility		84
10.18	USA PATRIOT Act Notice		85
10.19	Time of the Essence		85

iii

TABLE OF CONTENTS

(continued)

SCHEDULES
2.01	Commitments and Applicable Percentages
5.06	Litigation
5.13	Subsidiaries, Other Equity Investments and Equity Interests in the Borrower
5.21	Labor Matters
7.01	Existing Liens
7.02	Existing Investments
7.03	Existing Indebtedness
10.02	Administrative Agent’s Office; Certain Addresses for Notices
EXHIBITS
	Form of
A	Loan Notice
B-1	Term Note
B-2	Revolving Credit Note
C	Compliance Certificate
D	Assignment and Assumption
E.	Guaranty
F.	Security Agreement
G.	Opinion Matters

iv

Execution Copy

CREDIT AGREEMENT

This CREDIT AGREEMENT (“Agreement”) is entered into as of April 12, 2007, among EXPONENTIAL INTERACTIVE, INC., a Delaware corporation (the “Borrower”), each Lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), and BANK OF AMERICAN, N.A., as Administrative Agent.

The Borrower has requested that the Lenders provide a revolving credit facility and term loan facility, and the Lenders are willing to do so on the terms and conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

“Acquired Business” has the meaning specified in Section 7.13.

“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of a Person, (b) the acquisition of in excess of 50% of the Equity Interests of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person (other than a Person that is a Subsidiary) in which the Borrower or a Subsidiary is the surviving Person.

“Administrative Agent” means Bank of America in its capacity as Administrative Agent under any of the Loan Documents, or any successor Administrative Agent.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Aggregate Commitments” means the Commitments of all the Lenders.

“Agreement” means this Credit Agreement.

“Annual Expenditure Limit” means an aggregate amount equal to 80% of (Consolidated EBITDA minus Taxes and minus Consolidated Scheduled Debt Amortization) for the most recent fiscal year for which a Compliance Certificate has been delivered.

“Applicable Percentage” means (a) in respect of the Term. Facility, with respect to any feint Lender at any time, the percentage (carried out to the ninth decimal place) of the Term Facility represented by (i) on or prior to the Closing Date, such Term Lender’s Term Commitment at such time and (ii) thereafter, the principal amount of such Term Lender’s Term Loans at such time, and (b) in respect of the Revolving Credit Facility, with respect to any Revolving Credit Lender at any time, the percentage (carried out to the ninth decimal place) of the Revolving Credit Facility represented by such Revolving Credit Lender’s Revolving Credit Commitment at such time. If the commitment of each Revolving Credit Lender to make Revolving Credit Loans has been terminated pursuant to Section 8.02, or if the Revolving Credit Commitments have expired, then the Applicable Percentage of each Revolving Credit Lender in respect of the Revolving Credit Facility shall be determined based on the Applicable Percentage of such Revolving Credit Lender in respect of the Revolving Credit Facility most recently in effect, giving effect to any subsequent assignments. The initial Applicable Percentage of each Lender in respect of each Facility is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

“Applicable Rate” means the following percentages per annum, based upon the Consolidated Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b):

Applicable Rate

Pricing Level	Consolidated Leverage Ratio	Commitment Fee			Eurodollar Rate +			Base Rate +
I	< 0.50:1.00		0.375	%		2.000	%		0.000	%
II	> 0.50:1.00 but • 1.00:1.00		0.500	%		2.250	%		0.000	%
III	> 1.00:1.00 but < 1.75:1.00		0.500	%		2.500	%		0.000	%
IV	> 1.75:1.00		0.500	%		3.000	%		0.100	%

Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b); provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then Pricing Level IV shall apply as of the Business Day after the date on which such Compliance Certificate was required to have been delivered, and shall continue to so apply to and including the date on which such Compliance Certificate is so delivered (and thereafter the Pricing Level otherwise determined in accordance with this definition shall apply). The Applicable Rate in effect from the Closing Date through the first Business Day immediately following the date on which a Compliance Certificate is first delivered (or required to be delivered) following March 31, 2007, shall be determined based upon Pricing Level III.

2

Notwithstanding anything to the contrary contained in this definition, the determination of the Applicable Rate for any period shall be subject to the provisions of Section 2.08(b).

“Applicable Revolving Credit Percentage” means with respect to any Revolving Credit Lender at any time, such Revolving Credit Lender’s Applicable Percentage in respect of the Revolving Credit Facility at such time.

“Appropriate Lender” means, at any time, with respect to any of the Term Facility or the Revolving Credit Facility, a Lender that has a Commitment with respect to such Facility or holds a Term Loan or a Revolving Credit Loan, respectively, at such time.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Arranger” means Banc of America Securities LLC, in its capacity as sole lead arranger and sole book manager.

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit D or any other form approved by the Administrative Agent.

“Attributable Indebtedness” means, on any date, (a) in respect of any capital lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease.

“Audited Financial Statements” means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year ended December 31, 2005, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Borrower and its Subsidiaries, including the notes thereto.

“Availability Period” means in respect of the Revolving Credit Facility, the period from and including the Closing Date to the earliest of (i) the Maturity Date for the Revolving Credit Facility, (ii) the date of termination of the Revolving Credit Commitments pursuant to Section 2.06, and (in) the date of termination of the commitment of each Revolving Credit Lender to make Revolving Credit Loans pursuant to Section 8.02.

“Bank of America” means Bank of America, N.A. and its successors.

3

“Base Rate” means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.” The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

“Borrower” has the meaning specified in the introductory paragraph hereto.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrowing” means a Revolving Credit Borrowing or a Term Borrowing, as the context may require.

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

“Cash Management Provider” means any Person making credit extensions to the Borrower or any of its Subsidiaries in respect of any Cash Management Obligations to the extent such Person (i) is a Lender or an Affiliate of a Lender or (ii) is a Person that was a Lender (or an Affiliate of a Lender) at the time any such Cash Management Obligations were incurred but has ceased to be a Lender (or whose Affiliate has ceased to be a Lender) hereunder.

“Cash Management Obligations” means any and all obligations of the Borrower or any of its Subsidiaries owing to any Person under any agreement to provide foreign exchange or cash management services (including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements).

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.

“Change of Control” means that (a) Dilip DaSilva, directly or indirectly (including through trusts or similar entities formed by Dilip DaSilva for estate planning purposes), shall fail to own and control at least (i) 51% (prior to any issuances of Equity Interests by the Borrower after the Closing Date) or (ii) 25% (after any issuances of Equity Interests by the Borrower after the Closing Date) of the combined voting power of all Equity ‘Interests in the Borrower, or (b) Dilip DaSilva is either no longer chief executive officer or chairman of the board of directors of the Borrower.

4

“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 10.01

“Code” means the Internal Revenue Code of 1986;

“Collateral” means all of the “Collateral” referred to in the Security Agreement and all of the other property that is or is intended under the terms hereof or of the Collateral Documents to be subject to Liens in favor of the Administrative Agent (for the benefit of the Secured Parties) securing the Secured Obligations.

“Collateral Documents” means, collectively, the Security Agreement and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Administrative Agent (for the benefit of the Secured. Parties) securing the Secured Obligations.

“Company” means TechBargains.com, LLC, a California limited liability company.

“Compliance Certificate” means a certificate substantially in the form of Exhibit C.

“Commitment” means a Term Commitment or a Revolving Credit Commitment, as the context may require.

“Consolidated EBITDA” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income for such period plus (a) the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges for such period, (ii) the provision for Federal, state, local and foreign income taxes payable by the Borrower and its Subsidiaries for such period, (iii) depreciation and amortization expense, (iv) other non-recurring expenses of the Borrower and its Subsidiaries reducing such Consolidated Net Income which do not represent a cash item in such period or any future period, (v) all cash and non-cash charges relating to (A) earnout payments made under the Transaction Agreement and (B) transaction costs incurred in connection with the Transaction not to exceed in the aggregate amount of $500,000 for the fiscal year ending December 31, 2007, (vi) non-cash charges or expenses related to equity plans or stock option awards in such period, and (vii) payroll taxes on exercise of stock options in such period. minus (b) the following to the extent included in calculating such Consolidated Net Income: (i) Federal, state, local and foreign income tax credits of the Borrower and its Subsidiaries for such period and (ii) all non-cash items increasing Consolidated Net Income for such period; provided, however, that solely for the purpose of the computations of the Consolidated Leverage Ratio or the fixed Charge Coverage Ratio, if there has occurred an Acquisition during the relevant period, Consolidated EBITDA shall be calculated, at the option of the Borrower, on a pm forma basis in accordance with the SEC pro forma reporting rules under the Exchange Act, as if such Acquisition occurred on the first day of the applicable period.

“Consolidated Fixed Charge Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated EBITDA for the period of the four prior fiscal quarters ending on such date, minus taxes for such period, to (b) Consolidated Interest Charges for such period plus Consolidated Scheduled Debt Amortization for such period.

5

“Consolidated Funded Indebtedness” means, as of any date of determination, for the Borrower and its Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including Obligations hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (b) all purchase money Indebtedness, (c) all direct obligations arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (d) all obligations (including earnout obligations) in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business), (e) Attributable Indebtedness in respect of capital leases and Synthetic Lease Obligations, (f) without duplication, all Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) through (e) above of Persons other than the Borrower or any Subsidiary, and (g) all Indebtedness of the types referred to in clauses (a) through (f) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which the Borrower or a Subsidiary is a general partner or joint venturer, unless such Indebtedness is expressly made non- recourse to the Borrower or such Subsidiary; provided that the Contingent Cash Amount and Earn-Out (as such terms are defined in the Transaction Agreement) shall be excluded in determining Consolidated Funded Indebtedness hereunder. The amount of any Consolidated Funded Indebtedness of the type described in clause (g) above shall be deemed equal to the Borrower’s or its Subsidiaries’ pro rata share (in relation to the other partners or joint venturers) of the stated or determinable amount of the primary obligation in respect of which such Indebtedness relates or, if not stated or if indeterminable, the maximum reasonably anticipated liability in respect thereof.

“Consolidated Interest Charges” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium payments, debt discount, fees, charges and related expenses of the Borrower and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, and (b) the portion of rent expense of the Borrower and its Subsidiaries with respect to such period under capital leases that is treated as interest in accordance with GAAP.

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA for the period of the four fiscal quarters most recently ended.

“Consolidated Net Income” means, for any period, for the Borrower and its Subsidiaries on a consolidated basis, the net income of the Borrower and its Subsidiaries (excluding extraordinary gains and extraordinary losses) for that period.

“Consolidated Net Worth” means, as of any date of determination, consolidated shareholders’ equity of the Borrower and its Subsidiaries as of that date determined in accordance with GAAP.

“Consolidated Scheduled Debt Amortization” means, for any period, the aggregate principal amount of all regularly scheduled principal payments of Indebtedness made by the Borrower and its Subsidiaries during such period (excluding (i) principal payments in respect of any revolving loans under any revolving credit facility and (ii) the Contingent Cash Amount (as such term is defined in the Transaction Agreement)) determined on a consolidated basis.

6

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would (if not cured or otherwise remedied during such time) be an Event of Default.

“Default Rate” means an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum.

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of the Loans required to be funded, by it hereunder within one Business Day of the date required to be funded by it hereunder unless such failure has been cured, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute or unless such failure has been cured, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

“Dollar” and “$” mean lawful money of the United States.

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States.

7

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 10.06(b)(iii), (v) and (vi) (subject to such consents, if any, as may be required under Section 10.06(b)(iii)).

“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grams, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous. Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

8

“Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the Eurodollar Rate.

“Event of Default” has the meaning specified in Section 8.01.

“Exchange Act” means the Securities Exchange Act of 1934.

“Excluded Intellectual Property” means any Intellectual Property which is not included in the Collateral pursuant to the terms of the Security Agreement.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which the Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 10.13), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 3.01(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 3.01(a).

“Facility” means the Term Facility or the Revolving Credit Facility, as the context may require.

9

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

“Fee Letter” means the letter agreement, dated March 27, 2007 among the Borrower, the Administrative Agent and the Arranger.

“First Tier Foreign Subsidiary” means, at any date of determination, each Foreign Subsidiary directly owned by the Borrower or any of its Domestic Subsidiaries.

“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

10

“Guarantee” means, as to any Person, any (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain, any such Lien); provided that the term “Guarantee” shall not include endorsements for collection or deposit, in either case in the ordinary course of business, or contingent or inchoate indemnity obligations in effect on the Closing Date or entered into in connection with any Permitted Acquisitions or Disposition permitted under this Agreement (other than such obligations with respect to Indebtedness). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

“Guarantors” means, collectively, the Domestic Subsidiaries of the Borrower.

“Guaranty” means the Guaranty made by any Guarantors in favor of the Administrative Agent, the Lenders, the Cash Management Providers and the Swap Providers, substantially in the form of Exhibit E.

“Guaranty Accession” means the Accession Agreement, substantially in the form of Annex I to the Guaranty.

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

“Increase Amount” the aggregate principal amount by which the Commitments are increased pursuant to Section 2.12.

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

11

all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

net obligations of such Person under any Swap Contract;

all obligations (including earnout obligations) of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);

indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

capital leases and Synthetic Lease Obligations;

all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and

all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof; the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person; provided that, the amount of any Indebtedness of the type described in clause shall be deemed equal to the Borrower’s or its Subsidiaries’ pro rata share (in relation to the other partners or joint venturers) of the stated or determinable amount of the primary obligation in respect of which such Indebtedness relates or, if not stated or if indeterminable, the maximum reasonably anticipated liability in respect thereof. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any capital lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indian Subsidiary” means Tribal Fusion R&D Private Limited, a limited company incorporated under the laws of India.

“Indemnitees” has the meaning specified in Section 10.04(b).

“Information” has the meaning specified in Section 10.07.

“Intellectual Property” means any “Intellectual Property” as defined in the Security Agreement.

12

“Interest Payment Date” means, (a) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date of the Facility under which such Loan was made; provided, however, that it any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan, the last Business Day of each March, June, September and December and the Maturity Date of the Facility under which such Loan was made.

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrower in its Loan Notice; provided that:

(i) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such. Interest Period shall end on the next preceding Business Day;

(ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(iii) no Interest Period shall extend beyond the Maturity Date of the Facility under which such Loan was made.

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor Guarantees Indebtedness of such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“IP Rights” has the meaning specified in Section 5.18.

“IRS” means the United States Internal Revenue Service.

“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof; and all applicable administrative orders, directed duties, requests, licenses; authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

13

“Lender” has the meaning specified in the introductory paragraph hereto.

“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

“Loan” means an extension of credit by a Lender to the Borrower under Article II in the form of a Revolving Credit Loan or a Term Loan.

“Loan Documents” means this Agreement, each Note, the Fee Letter, each Collateral Document, any Guaranty and any Subordination Agreement.

“Loan Notice” means a notice of (a) a Revolving Credit Borrowing, (b) a Term Borrowing, (c) a conversion of Loans from one Type to the other, or (d) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.

“Loan Parties” means, collectively, the Borrower and Guarantors.

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, assets, properties, liabilities (actual or contingent) or financial condition of the Borrower or the Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the rights and remedies of the Administrative Agent or any Lender under any Loan Document, or of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party; or (d) a material adverse effect upon the perfection or priority of any Lien granted under any of the Collateral Documents.

“Maturity Date” means (a) with respect to the Revolving Credit Facility, April 12, 2011, and (b) with respect to the Term Facility, means April 12, 2011; provided, however, that, in each case, if such date is not a Business Day, the applicable Maturity Date shall be the next preceding Business Day.

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

“Net Cash Proceeds” means with respect to the sale or issuance of any Equity Interest by the Borrower the excess of (i) the sum of the cash and cash equivalents received in connection with such transaction over (ii) the underwriting discounts and commissions, and other reasonable and customary out-of-pocket expenses, incurred by the Borrower in connection therewith.

14

“Note” means a Term Note or a Revolving Credit Note, as the context may require.

“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

“Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of or otherwise with respect to, this Agreement or any other Loan Document.

“Outstanding Amount” means, with respect to Term Loans and Revolving Credit Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Term Loans and Revolving Credit Loans, as the case may be occurring on such date.

“Participant” has the meaning specified in Section 10.06(D).

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

15

“Permitted Acquisition” means any Acquisition that conforms to the following requirements: (a) the assets, Person, division or line of business to be acquired shall be (i) in substantially the same or related line of business as that conducted by the Borrower and its Subsidiaries on the date hereof or (ii) in a business that is ancillary and in furtherance of the line of business as that conducted by the Borrower and its Subsidiaries on the date hereof and in each case of clauses (i) and (ii), be located in the United States, (b) all transactions related to such Acquisition shall be consummated in all material respects in accordance with applicable Law, (c) no Loan Party shall, as a result of or in connection with any such acquisition, assume or incur any direct or contingent liabilities (whether relating to environmental, tax, litigation, or other matters) that could reasonably be expected, as of the date of such acquisition, to result in the existence or occurrence of a Material Adverse Effect; (d) such Acquisition may not be an Unfriendly Acquisition, (e) the Borrower shall have given the Administrative Agent and the Lenders at least 10 Business Days’ prior written notice of such Acquisition, (0 the Borrower shall be in compliance with the financial covenants set forth in Section 7.13 on a pro forma basis as of the last day of the fiscal quarter most recently ended, and immediately prior to, and after giving effect to, such Acquisition, no Default shall have occurred and be continuing or would result therefrom, and the Borrower shall have demonstrated such compliance to the reasonable satisfaction of the Administrative Agent and the Lenders, (g) all actions required to be taken under Section 6.12 with respect to any acquired or newly formed Subsidiary in connection with such Acquisition, shall have been or will be taken in accordance therewith, and (h) the Borrower provides to the Administrative Agent and the Lenders as soon as available but not later than five Business Days after the execution thereof, a copy of any executed purchase agreement or similar agreement with respect to such Acquisition; provided that at the time, of such Permitted Acquisition (and after giving effect thereto), the sum of all Permitted Acquisitions and capital expenditures during such fiscal year shall not exceed the Annual Expenditure Limit; and provided further, that if the Consolidated Leverage Ratio, as certified by the Borrower in the Compliance Certificate delivered hereunder as of the last day of the fiscal quarter most recently ended, is less than 1.00 to 1.00, then such Permitted Acquisition may exceed the Annual Expenditure Limit.

“Permitted Investments” means (a) direct obligations of or obligations fully guaranteed by, the United States or any agency thereof; (b) direct obligations of; or obligations fully guaranteed by, any State, territory or possession of the United States (including the District of Columbia) or any agency thereof which have a short-term rating of at least SP-1 by S&P (as defined below) or MIG-1 by Moody’s (as defined below) or a long-term rating of at least A by S&P or Al by Moody’s (or, in each case, the equivalent thereof by another Rating Agency (as defined below)); (c) commercial paper issued by corporations or financial institutions which have the highest short-term or long-term rating, as applicable, of at least one Rating Agency and at least the second highest short-term or long-term rating, as applicable, of another Rating Agency; (d) unsecured promissory notes (other than commercial paper) issued by corporations or financial institutions which have a short-term debt rating of at least A-1 from S&P and P-1 from Moody’s (or the equivalent thereof by another Rating Agency) and a long-term debt rating of at least A from S&P and A-1 from Moody’s or the equivalent thereof by another Rating Agency); (e) time deposits with, and certificates of deposit, acceptances and similar instruments issued by, (i) any Lender or (ii) any office of any bank or trust company whose certificates of deposit are rated in one of the two highest grades by at least one Rating Agency; (1) repurchase agreements entered into with a bank or trust company described in clause (e) (or with securities broker- dealers of nationally recognized standing) with respect to obligations described in clause (a); (g) obligations of United States or foreign commercial banks having a minimum short-term debt rating of Fl from Fitch; and (h) shares of open-ended investment companies registered under the

16

Investment Company Act of 1940; provided that each such investment company complies with Rule 2a-7 of the Securities Exchange Act of 1934, maintains a constant net asset value, offers daily liquidity and has a weighted average maturity of not more than 90 days. For purposes of the foregoing, “Rating Agency” means S&P, Moody’s, Fitch or any other nationally-recognized credit rating agency; “Fitch” means Fitch, Inc., doing business as Fitch Ratings; “Moody’s means Moody’s Investors Service, Inc.; and “S&P” means Standard & Poor’s Rating Services.

“Permitted Liens” has the meaning specified in Section 7.01.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

“Platform” has the meaning specified in Section 6.02.

“Public Lender” has the meaning specified in Section 6.02.

“Register” has the meaning specified in Section 10.06(c).

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

“Required Lenders” means, as of any date of determination, (a) Lenders holding more than 50%, or in the event there are only two Lenders, Lenders holding 100%, of the sum of the (i) Total Outstandings and (ii) aggregate unused Revolving Credit Commitments; provided that the unused Revolving Credit Commitment of, and the portion of the Total. Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders, or ‘4)) in the event there are only three Lenders, at least two Lenders.

“Required Revolving Lenders” means, as of any date of determination, (a) Revolving Credit Lenders holding more than 50%, or in the event there are only two Revolving Credit Lenders, Revolving Credit Lenders holding 100%, of the sum of the (i) Total Revolving Credit Outstandings and (ii) aggregate unused Revolving Credit Commitments; provided that the unused Revolving Credit Commitment of; and the portion of the Total Revolving Credit Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolving Lenders, or (b) in the event there are only three Revolving Lenders, at least two Revolving Lenders.

17

“Required Term Lenders” means, as of any date of determination, (a) Term Lenders holding more than 50% of, or in the event there are only two Term Lenders, Term Lenders holding 100% of, the Term Facility on such date; provided that the portion of the Term Facility held by any Defaulting Lender shall be excluded for purposes of making a determination of Required Term Lenders, or (b) in the event there are only three Term Lenders, at least two Term Lenders.

“Responsible Officer” means the chief executive officer, president, chief financial officer, treasurer, assistant treasurer or controller of a Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interest of the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interest, or on account of any return of capital to the Borrower’s stockholders, partners or members (or the equivalent Person thereof).

“Revolving Credit Borrowing” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period, made by each of the Revolving Credit Lenders pursuant to Section 2.01(b).

“Revolving Credit Commitment” means, as to each Revolving Credit Lender, its obligation to make Revolving Credit Loans to the Borrower pursuant to Section 2.01(b), in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Revolving Credit Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to lime in accordance with this Agreement.

“Revolving Credit Facility” means, at any time, the aggregate amount of the Revolving Credit Lenders’ Revolving Credit Commitments at such time.

“Revolving Credit Lender” means, at any time, any Lender that has a Revolving Credit Commitment at such time.

“Revolving Credit Loan” has the meaning specified in Section 2.01(b),

“Revolving Credit Note” means a promissory note made by the Borrower in favor of a Revolving Credit Lender evidencing Revolving Credit Loans made by such Revolving Credit Lender, substantially in the form of Exhibit B-2.

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

18

“Secured Obligations” means, collectively, (i) the Obligations, (ii) the Cash Management Obligations owing to any Cash Management Providers, and (iii) the Swap Obligations owing to any Swap Providers.

“Secured Parties” means (i) the Administrative Agent, (ii) the Lenders, (iii) the Cash Management Providers and (iv) the Swap Providers.

“Security Agreement” means the Security Agreement dated as of the date hereof and made by the Borrower and each Domestic Subsidiary in favor of the Administrative Agent (for the benefit of the Secured Parties), substantially in the form of Exhibit F.

“Security Agreement Accession” means the Accession Agreement, substantially in the form of Exhibit A to the Security Agreement.

“Security Agreement Pledge Supplement” means the Pledge Supplement, substantially in the form of Exhibit B to the Security Agreement.

“Solvent” means, with respect to any Person, that as of the date of determination both (i) (a) the sum of such Person’s debt (including contingent liabilities) does not exceed all of its property, at a fair valuation; (b) the Person is able to pay the probable liabilities on such Person’s then existing debts as they become absolute and matured; (c) such Person’s capital is not unreasonably small in relation to its business or any contemplated or undertaken transaction; and (d) such Person does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due; and (ii) such Person is “solvent within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (discounted to present value at rates believed to be reasonable by such Person acting in good faith).

“Subordinated Debt” means (i) the Indebtedness of the Borrower pursuant to the Subordinated Seller Note, and (ii) Indebtedness of the Borrower or any Subsidiary pursuant to any Subordinated Debt Documents.

“Subordinated Debt Document” means all agreements, certificates, documents and instruments executed or delivered by the Borrower or any Subsidiary evidencing indebtedness of the Borrower or any Subsidiary which has maturities and terns, and which is subordinated to payment of the Obligations in a manner approved in writing by the Administrative Agent and the Required Lenders, and any renewals, modifications, or amendments thereof which are approved in writing by the Administrative Agent and the Required Lenders.

“Subordinated Seller Note” means that certain Secured Subordinated Promissory Note, dated April 12, 2007 made by the Borrower in favor of the Company.

“Subordination Agreement” means (i) the Subordination Agreement, dated as of April 12, 2007 among the Borrower, the Administrative Agent and the Company, and (ii) any subordination agreement with respect to Subordinated Debt among the Borrower, the applicable creditor(s) and the Administrative Agent, in each case form and substance reasonably satisfactory to the Administrative Agent and the Lenders.

19

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“Swap Provider” means a Person making credit extensions to the Borrower or any of its Subsidiaries in respect of any Swap Obligations to the extent such Person (i) is a Lender or an Affiliate of a Lender or (ii) is a Person that was a Lender (or an Affiliate of a Lender) at the time any such Swap Obligations were incurred but has ceased to be a Lender (or whose Affiliate has ceased to be a Lender) hereunder.

“Swap Obligations” means any and all obligations of the Borrower or any of its Subsidiaries owing to any Person under any Swap Contracts.

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating, to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

20

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so- called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Term Borrowing” means a borrowing consisting of simultaneous Term Loans of the same Type and in the case of Eurodollar Rate Loans, having the same Interest Period, made by each of the Term Lenders pursuant to Section 2.01(a).

“Term Commitment” means, as to each Term Lender, its obligation to make Term Loans to the Borrower pursuant to Section 2.01(a) in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Term Lender’s name on Schedule 2.01 under the caption “Term Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

“Term Facility” means, at any time, (a) on or prior to the Closing Date, the aggregate amount of the Term Commitments at such time and (b) thereafter, the aggregate principal amount of the Term Loans of all Term Lenders outstanding at such time.

“Term Lender” means (a) at any time on or prior to the Closing Date, any Lender that has a Term Commitment at such time and (b) at any time after the Closing Date, any Lender that holds Term Loans at such time.

“Term Loan” means an advance made by any Term Lender under the Term Facility.

“Term Note” means a promissory note made by the Borrower in favor of a Term Lender evidencing Term Loans made by such Term Lender, substantially in the form or Exhibit B-1.

“Threshold Amount” means $1,500,000.

“Transaction” means the purchase of all or substantially all of the assets of the Company pursuant to the Transaction Documents.

“Transaction Agreement” means the Asset Purchase Agreement, dated as of March 30, 2007, between the Borrower and the Company.

“Transaction Documents” means the Transaction Agreement and all other documents instruments and agreements executed or entered into in connection with the Transaction.

“Total Revolving Credit Outstandings” means the aggregate Outstanding Amount of all Revolving Credit Loans.

21

“Total Outstandings” means the aggregate Outstanding Amount of all Loans.

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.

“UCC” means the Uniform Commercial Code as in effect in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

“Unfriendly Acquisition” means any Acquisition that has not, at the time of the first public announcement of an offer relating thereto, been approved by the board of directors (or other legally recognized governing body) of the Person to be acquired; except that with respect to any Acquisition of a non-U.S. Person, an otherwise friendly Acquisition shall not be deemed to be unfriendly if it is not customary in such jurisdiction to obtain such approval prior to the first public announcement of an offer relating to a friendly Acquisition.

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities under Section 4001(0(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

“United States” and “U.S.” mean the United States of America.

1.02 Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision, thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified,

22

refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

1.03 Accounting Terms.(a) Generally. All accounting teens not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

(b) Changes in GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required. Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

1.04 Rounding. Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

1.05 Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Pacific time (daylight or standard, as applicable).

23

ARTICLE II

THE COMMITMENTS

2.01 Loans. (a) The Term Borrowing. Subject to the terms and conditions set forth herein, each Term Lender severally agrees to make a single loan to the Borrower on the Closing Date in an amount not to exceed such Term Lender’s Term Commitment. The Term Borrowing shall consist of Term Loans made simultaneously by the Term Lenders in accordance with their respective Applicable Percentage of the Term Facility. Amount borrowed under this Section 2.01(a) and repaid or prepaid may not be reborrowed. Term Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein; provided that Term Loans made on the Closing Date shall be Base Rate Loans.

(b) The Revolving Credit Borrowings. Subject to the terms and conditions set forth herein, each Revolving Credit Lender severally agrees to make loans (each such loan, a “Revolving Credit Loan”) to the Borrower from time to time on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s Revolving Credit Commitment; provided, however, that after giving effect to any Revolving Credit Borrowing, the Total Revolving Credit Outstandings shall not exceed the Revolving Credit Facility. Within the limits of each Revolving Credit Lender’s Revolving Credit Commitment, and subject to the other terms and conditions hereof; the Borrower may borrow under this Section 2.01(b). prepay under Section 2.03, and reborrow under this Section 2.01(b). Revolving Credit Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein; provided that Revolving Credit Loans made on the Closing Date shall be Base Rate Loans.

2.02 Borrowings, Conversions and Continuations of Loans.

(a) Each Term Borrowing, each Revolving Credit Borrowing, each conversion of Term Loans or Revolving Credit Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent (i) not later than 11:00 a.m. three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) not later than 11:00 am (or 1:00 p.m. in the case of the Closing Date) on the requested date of any Borrowing of Base Rate Loans. Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $100,000 or a whole multiple of $100,000 in excess thereof. Each Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Term Borrowing, a Revolving Credit Borrowing, a conversion of Term Loans or Revolving Credit Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Loans to be borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to which existing Term Loans

24

or Revolving Credit Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Term Loans or Revolving Credit Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.

(b) Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage under the applicable Facility of the applicable Term Loans or Revolving Credit Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in Section 2.02(a). In the ease of a Term Borrowing or a Revolving Credit Borrowing, each Appropriate Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 12:00 noon, on the Business Day specified in the applicable Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Borrowing, Section 4.01), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower.

(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the Required Lenders.

(d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in Bank of America’s prime rate used in determining the Base Rate promptly following the public announcement of such change.

(e) After giving effect to all Term Borrowings, all conversions of Term Loans from one Type to the other, and all continuations of Term Loans as the same Type, there shall not be more than five Interest Periods in effect in respect of the Term Facility. After giving effect to all Revolving Credit Borrowings, all conversions of Revolving Credit Loans from one Type to the other, and all continuations of Revolving Credit Loans as the same Type, there shall not be more than five Interest Periods in effect in respect of the Revolving Credit Facility.

25

2.03 Prepayments.

(a) Optional. The Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Term Loans and Revolving Credit Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than 11:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar Rate Loans and (B) on the date of prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Rate Loans shall be in a principal amount of at least $500,000 or a whole multiple of $500,000 in excess thereof; and (iii) any prepayment of Base Rate Loans shall be in a principal amount of at least $500,000 or a whole multiple of $500,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s ratable portion of such prepayment (based on such Lender’s Applicable Percentage in respect of the relevant Facility). If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05. Each prepayment of the outstanding Term Loans pursuant to this Section 2.03(a) shall be applied to the principal repayment installments thereof in inverse order of maturity, and each such prepayment shall be paid to the Lenders in accordance with their respective Applicable Percentages in respect of the Term Loan Facility.

(b) Mandatory.

(i) Upon the sale or issuance by the Borrower of any of its Equity Interests, the Borrower shall prepay an aggregate principal amount of Term Loans equal to 50% of all Net Cash Proceeds received therefrom immediately upon receipt thereof by the Borrower (such prepayments to be applied as set forth in clauses (ii) and (iv) below).

(ii) Each prepayment of Term Loans pursuant to the foregoing provisions of this Section 2.03(b) shall be applied to the Term Facility and to the principal repayment installments thereof in inverse order of maturity.

(iii) If for any reason the Total Revolving Credit Outstandings at any time exceed the Revolving Credit Facility at such time, the Borrower shall immediately prepay Revolving Credit Loans in an aggregate amount equal to such excess.

2.04 Termination or Reduction of Commitments. (a) Optional. The Borrower may upon notice to the Administrative Agent, terminate the Revolving Credit Facility, or from time to time permanently reduce the Revolving Credit Facility; provided that (i) any such notice shall be received by the Administrative Agent not later than 10:00 a.m. five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $1,000,000 or any whole multiple of $100,000 in excess thereof, and (iii) the Borrower shall not terminate or reduce the Revolving Credit Facility if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Revolving Credit Outstandings would exceed the Revolving Credit Facility.

26

(b) Mandatory. (i) The aggregate Term Commitments shall be automatically and permanently reduced to zero on the date of the Term Borrowing.

(ii) In the event that the Borrower opts to increase the Revolving Credit Commitment pursuant to the terms set forth in Section 2.12, then the Revolving Credit Facility shall be automatically and permanently reduced after the third anniversary of the Closing Date and on the last day of each subsequent calendar quarter thereafter, in an amount equal to 25% of the Increase Amount.

(c) Application of Commitment Reductions; Payment of Fees. (i) The Administrative Agent will promptly notify the Lenders of any termination or reduction of the Revolving Credit Commitment under this Section 2.04. Upon any reduction of the Revolving Credit Commitments, the Revolving Credit Commitment of each Revolving Credit Lender shall be reduced by such Lender’s Applicable Revolving Credit Percentage of such reduction amount. All fees in respect of the Revolving Credit Facility accrued until the effective date of any termination of the Revolving Credit Facility shall be paid on the effective date of such termination.

2.05 Repayment of Loans. (a) Term Loans. The Borrower shall repay to the Term Lenders the aggregate principal amount of all Term Loans outstanding on the following dates in the respective amounts set forth opposite such dates (which amounts shall be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Section 2.04):

Date	Principal Amount of Repayment
July 12, 2007	$1,250,000
October 12, 2007	$1,250,000
January 12, 2008	$1,250,000
April 12, 2008	$1,250,000
July 12, 2008	$1,875,000
October 12, 2008	$1,875,000
January 12, 2009	$1,875,000
April 12, 2009	$1,875,000
July 12, 2009	$2,500,000
October 12, 2009	$2,500,000
January 12, 2010	$2,500,000
April 12, 2010	$2,500,000
July 12, 2010	$1,875,000
October 12, 2010	$1,875,000
January 12, 2011	$1,875,000
April 12, 2011	$1,875,000

27

provided, however, that the final principal repayment installment of the Term Loans shall be repaid on the Maturity Date for the Term Facility and in any event shall be in an amount equal to the aggregate principal amount of all Term Loans outstanding on such date.

(b) Revolving Credit Loans. The Borrower shall repay to the Revolving Credit Lenders on the Maturity Date for the Revolving Credit Facility the aggregate principal amount of all Revolving Credit Loans outstanding on such date.

2.06 Interest.

(a) Subject to the provisions of subsection (b), (i) each Eurodollar Rate Loan, under a Facility shall hear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate for such Facility; and (ii) each Base Rate Loan under a Facility shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to, the Base Rate plus the Applicable Rate for such Facility.

(b) (i) If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether, at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(ii) If any amount (other than principal of any Loan) payable by the Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iii) Upon the request of the Required Lenders, while any Event of Default exists, the Borrower shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iv) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

(c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

2.07 Fees.

(a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the account of each Revolving Credit Lender in accordance with its Applicable Revolving Credit Percentage, a commitment fee equal to the Applicable Rate times the actual daily amount by

28

which the Revolving Credit Facility exceeds the then-Outstanding Amount of Revolving Credit Loans. The commitment fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period for the Revolving Credit Facility. The commitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.

(b) Closing Fee. The Borrower shall pay to Administrative Agent for the account of each Lender a closing fee in an amount of 1.00% of such Lender’s Commitments. Such fee shall be fully earned when paid and shall not be refundable for any reason whatsoever.

(c) Other Fees. (i) The Borrower shall pay to the Arranger and the Administrative Agent for their own respective accounts fees in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

(ii) The Borrower shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

2.08 Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate. (a) All computations of interest for Base Rate Loans when the Base Rate is determined by Bank of America’s “prime rate” shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.10(a) bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

(b) If, as a result of any restatement of or other adjustment to the financial statements of the Borrower or for any other reason, the Borrower or the Lenders determine that (i) the Consolidated Leverage Ratio as calculated by the Borrower as of any applicable date was inaccurate and (ii) a proper calculation of the Consolidated Leverage Ratio would have resulted in higher pricing for such period, the Borrower shall immediately and retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, automatically and without further action by the Administrative Agent or any Lender), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period. This paragraph shall not limit the rights of the Administrative Agent or any Lender, as the case may be, under Article VIII. The Borrower’s obligations under this paragraph shall survive the termination of the Aggregate Commitments and the repayment of all other Obligations hereunder.

29

2.09 Evidence of Debt. The Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit, or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

2.10 Payments Generally; Administrative Agent’s Clawback.

(a) General. All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage in respect of the relevant Facility (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available

30

funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

(ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Appropriate Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Appropriate Lenders severally agrees to repay to the Administrative Agent forthwith on, demand the amount so distributed to such Lender, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Borrowing set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make Term Loans and Revolving Credit Loans and to make payments pursuant to Section 10.04(c) are several and not joint. The failure of any Lender to make any Loan, to fund any such participation or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 10.04(c).

31

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

(f) Insufficient Funds. If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, toward payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

2.11 Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of (a) Obligations in respect of any the Facilities due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender at such time to (ii) the aggregate amount of the Obligations in respect of the Facilities due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Obligations in respect of the Facilities due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time or (b) Obligations in respect of any of the Facilities owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing (but riot due and payable) to such Lender at such time to (ii) the aggregate amount of the Obligations in respect of the Facilities owing (but not due and payable) to all Lenders hereunder and under the other Loan Parties at such time) of payment on account of the Obligations in respect of the Facilities owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of Obligations in respect of the Facilities then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, provided that:

(i) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(ii) the provisions of this Section shall not be construed to apply to (x) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).

32

The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

2.12 Increase in Revolving Credit Facility. (a) Request for Increase. Provided there exists no Default, upon notice to the Administrative Agent (which shall promptly notify the Revolving Credit Lenders), the Borrower may on a one-time basis, request an increase in the Revolving Credit facility by an amount not exceeding $5,000,000; provided that any such request for an increase shall be in a minimum amount of $1,000,000. At the time of sending such notice, the Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Revolving Credit Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Revolving Credit Lenders).

(b) Revolving Credit Lender Elections to Increase. Each Revolving Credit Lender shall notify the Administrative Agent within such time period whether or not it agrees to increase its Revolving Credit Commitment and, if so, whether by an amount equal to, greater than, or less than its Applicable Percentage of such requested increase. Any Revolving Credit Lender not responding within such time period shall be deemed to have declined to increase its Revolving Credit Commitment.

(c) Notification by Administrative Agent; Additional Revolving Credit Lenders. The Administrative Agent shall notify the Borrower and each Revolving Credit Lender of the Revolving Credit Lenders’ responses to each request made hereunder. To achieve the full amount of a requested increase and subject to the approval of the Administrative Agent (which approval shall not be unreasonably withheld), the Borrower may also invite additional Eligible Assignees to become Revolving Credit Lenders pursuant to a joinder agreement in form and substance satisfactory to the Administrative Agent and its counsel.

(d) Effective Date and Allocations. If the Revolving Credit Facility is increased in accordance with this Section, the Administrative Agent and the Borrower shall determine the effective date (the “Revolving Credit Increase Effective Date”) and the Final allocation of such increase. The Administrative Agent shall promptly notify the Borrower and the Lenders of the final allocation of such increase and the Revolving Credit Increase Effective Date.

(e) Conditions to Effectiveness of Increase. As a condition precedent to such increase, the Borrower shall deliver to the Administrative Agent a certificate of each Loan Party dated as of the Revolving Credit Increase Effective Date (in sufficient copies for each Revolving Credit Lender) signed by a Responsible Officer of such Loan Party (i) certifying and attaching the resolutions adopted by such. Loan Party approving or consenting to such increase, and (ii) in the case of the Borrower, certifying that, before and after giving effect to such increase, (A) the representations and warranties contained in Article V and the other Loan Documents are true and correct in all material respects (except that any representation or warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) on and as of the Revolving Credit Increase Effective Date, except to the extent that such representations and

33

warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (except that any representation or warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) as of such earlier date, and except that for purposes of this Section 2.12, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01, and (13) no Default exists. The Borrower shall prepay any Revolving Credit Loans outstanding on the Revolving Credit Increase Effective Date (and pay any additional amounts required pursuant to Section 3.05) to the extent necessary to keep the outstanding Revolving Credit Loans ratable with any revised Applicable Percentages arising from any nonratable increase in the Revolving Credit Commitments under this Section.

(f) Conflicting Provisions. This Section shall supersede any provisions in Section 10.01 to the contrary.

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes, provided that if the Borrower shall be required by applicable law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent or any Lender., as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b) Payment of Other Taxes by the Borrower. Without limiting the provisions of subsection (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c) Indemnification by the Borrower. The Borrower shall indemnify the Administrative Agent and each Lender, within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent or such Lender, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

34

(d) Evidence of Payments. As soon as practicable after any payment of Indemnified taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, it requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.

Without limiting the generality of the foregoing, in the event that the Borrower is resident for tax purposes in the United States, any Foreign Lender shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement and from time to time thereafter upon the request of the Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

(i) duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is ,a party,

(ii) duly completed copies of Internal Revenue Service Form W-8ECI,

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under section 881(c) of the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue Service Form W-8BEN, or

(iv) any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States Federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower to determine the withholding or deduction required to be made.

35

(f) Treatment of Certain Refunds. If the Administrative Agent or any determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving rise, to such refund), net of all out-of-pocket expenses of the Administrative Agent, such Lender, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that the Borrower, upon the request of the Administrative Agent, such Lender agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

3.02 Illegality. if any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable ending Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.

3.03 Inability to Determine Rates. If the Required Lenders determine that for any reason in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan , or (c) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.

36

3.04 Increased Costs; Reserves on Eurodollar Rate Loans.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement contemplated by Section 3.04(e));

(ii) subject any Lender to any tax of any kind whatsoever with respect to this Agreement or any Eurodollar Rate Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.01 and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender); or

(iii) impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such Lender;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Rate Loan (or of maintaining its obligation to make any such Loan), or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or any other amount), then, upon request of such Lender, the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender determines that any Change in Law affecting such Lender or any Lending Office of such Lender or such Lender’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be as specified in subsection (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such

37

Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation thereto’ (except that if the Change in Law giving use to such increased costs or reductions is retroactive, then the nine- month period referred to above shall be extended to include the period of retroactive effect thereof).

(e) Reserves on Eurodollar Rate Loans. The Borrower shall pay to each Lender, as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive); which shall be due and payable on each date on which interest is payable on such Loan, provided the Borrower shall have received at least 10 days’ prior notice (with a copy to the Administrative Agent) of such additional interest from such Lender. If a Lender fails to give notice 10 days prior to the relevant Interest Payment Date, such additional interest shall be due and payable 10 days from receipt of such notice.

3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the Administrative Agent) from time to time the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

(a) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

(b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Borrower; or

(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 10.13;

including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a compatible period, whether or not such Eurodollar Rate Loan was in fact so funded.

38

3.06 Mitigation Obligation; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender requests compensation under Section 3.04, or the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then such Lender shall use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if in the judgment of such Lender, such designation or :Assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b) Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, the Borrower may replace such Lender in accordance with Section 10.13.

3.07 Survival. All of the Borrower’s obligations under this Article III shall survive termination of the Aggregate Commitments and repayment of all other Obligations hereunder.

ARTICLE IV

CONDITIONS PRECEDENT TO BORROWINGS

4.01 Conditions of Initial Loan. The obligation of each Lender to make its initial Loan hereunder is subject to satisfaction of the following conditions precedent:

(a) The Administrative Agent’s receipt of the following, each of which shall be originals or telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to the Administrative Agent and each of the Lenders:

(i) executed counterparts of this Agreement and the Guaranty (if any), sufficient in number for distribution to the Administrative Agent, each Lender and the Borrower;

(ii) a Note executed by the Borrower in favor of each Lender requesting a Note;

(iii) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party;

(iv) such documents and certifications from the Secretary of State (or similar, applicable Governmental Authority) as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and that each Loan Party is validly existing, in good standing and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

39

(v) a favorable opinion of (A) Orrick, Herrington & Sutcliffe LLP, counsel to the Loan Parties, addressed to the Administrative Agent and each Lender, as to the matters set forth in Exhibit G and such other matters concerning the Loan Parties and the Loan Documents as the Administrative Agent or the Required Lenders may reasonably request; and (B) local counsel to each Foreign Subsidiary, addressed to the Administrative Agent and each Lender, as to such matters concerning the pledge, if any, of each such Subsidiary’s Equity Interests under the Security Agreement occurring on the Closing Date, as the Administrative Agent or the Required Lenders may reasonably request (provided that any such opinion delivery shall be waived with respect to the Indian Subsidiary);

(vi) a certificate of a Responsible Officer of each Loan Party either (A) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by such Loan Party and the validity against such Loan Party of the Loan Documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (B) stating that (except as may be required by the Reserve Bank of India with respect to the pledge of the Indian Subsidiary under the Security Agreement) no such consents, licenses or approvals are so required;

(vii) a certificate signed by a Responsible Officer of the Borrower certifying (A) that the conditions specified in Sections 4.02(a) and (b) have been satisfied, and (B) that there has been no event or circumstance since the date of the Audited Financial Statements that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect;

(viii) a duly completed pro forma Compliance Certificate as of the last day of the fiscal period of the Borrower ended on December 31, 2006, signed by a Responsible Officer of the Borrower;

(ix) evidence that all insurance required to be maintained pursuant to the Loan Documents has been obtained and is in effect, together with the certificates of insurance, naming the Administrative Agent, on behalf of the Lenders, as an additional insured or loss payee, as the case may be, under all insurance policies maintained with respect to the assets and properties of the Loan Parties that constitutes Collateral;

(x) executed counterparts of the Collateral Documents, including control agreements with respect to the bank and investment accounts of the Loan Parties, executed by each Loan Party and other Persons required to be a party thereto, in appropriate form for recording or filing, where necessary, together with: (A) acknowledgment copies of all UCC-1 financing statements tiled, registered or recorded to perfect the Liens of the Administrative Agent (for the benefit of the Secured Parties), or other evidence satisfactory to the Administrative Agent that there has been filed, registered or recorded (or arrangements made with a reputable filing service to file,

40

register or record) all financing statements and other filings, registrations and recordings necessary and advisable to perfect the Liens of the Administrative Agent (for the benefit of the Secured Parties) in accordance with applicable law; (B) delivery to the Administrative Agent of the certificates or instruments representing any pledged Collateral under any Collateral Documents, together with undated stock powers or endorsements, as the case may be, executed in blank, with respect thereto (provided that any such delivery shall be waived with respect to the Indian Subsidiary) and (C) such Lien and judgment searches as the Administrative Agent shall have requested, and such termination statements or other documents as may be necessary, to confirm that the Collateral is subject to no other Liens in favor of any Persons (other than Permitted Liens);

(xi) such other evidence satisfactory to the Administrative Agent as it shall require to confirm that the Liens granted to the Administrative Agent for the benefit of the Secured Parties) in the Collateral pursuant to the Collateral Documents are valid, perfected, first priority Liens, subject to no other Liens (other than Permitted Liens), securing the Secured Obligations;

(xii) certificates attesting to the Solvency of each Loan Party before and after giving effect to the entering into by the Borrower and its Subsidiaries of the Loan Documents and the Transaction Documents to which they are or are intended to be a party and the making of the initial Loans hereunder and the consummation of the Transaction, from its chief executive officer, chief financial officer, treasurer or controller; and

(xiii) such other assurances, certificates, documents, consents or opinions as the Administrative Agent or the Required Lenders reasonably may require.

(b)(i) All fees required to be paid to the Administrative Agent and the Arranger on or before the Closing Date shall have been paid; and (ii) all fees required to be paid to the Lenders on or before the Closing Date shall have been paid.

(c) Unless waived by the Administrative Agent, the Borrower shall have paid all fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).

(d) The Administrative Agent shall have received in sufficient copies for the Lenders, in form and substance satisfactory to it and the Lenders, each (except in the case of clause (iii)) certified by the chief executive officer, chief financial officer, treasurer or controller of the Borrower; (a) the Audited Financial Statements, (b) the unaudited consolidated balance sheets of the Borrower and its Subsidiaries for the fiscal periods ended December 31, 2006 and February 28, 2007, and the related consolidated statements of income or operations, shareholders’ equity and cash flows, for the fiscal quarters then ended, (iii) the financial

41

statements of the Company and its Subsidiaries referred to in Section 3.12 of the ‘Transaction Agreement, and (iv) the pro forma balance sheet of and five-year financial statement projections for the Borrower and its Subsidiaries as of and commencing at April 1, 2007, after giving effect to the Transaction.

(e) The Administrative Agent shall have received, in form and substance satisfactory to it and the Lenders, a certificate of a Responsible Officer of the Borrower (i) attaching true and complete copies of all Transaction Documents, (ii) certifying that the Transaction Documents have not been altered amended or otherwise changed or supplemented and that no condition therein or provision thereof has been waived in a manner adverse to any Loan Party or the Administrative Agent and the Lenders, (iii) certifying that all (A) material authorizations, consents or approvals of, notices to or filings with, any Governmental Authority, including pursuant to the HSR Act, and (B) material approvals and consents of any other Person, required in connection with the Transaction or the execution, delivery and performance of the Transaction Documents, shall have been obtained and remain in full force and effect and that all applicable waiting periods have expired without notice of any action by any Governmental Authority which seeks to restrain, prevent or impose materially adverse conditions upon the Transaction, (iv) certifying that there does not exist (A) any Law, order, decree, judgment, ruling or injunction which could restrain or prevent the consummation of the Transaction in the manner contemplated by the Transaction Documents, and (B) any pending or, to the best knowledge of such Responsible Officers, threatened action, suit, investigation or proceeding relating to the Transaction which seeks or threatens any of the foregoing and (v) certifying that on the Closing Date the Transaction will be consummated in accordance with the •terms of the Transaction Documents and in compliance with applicable Law.

(f) The Administrative Agent shall have received, in form and substance satisfactory to it and the Lenders, (i) an executed counterpart of the Subordination Agreement with the Company, and (ii) a copy of the executed Seller Note.

(g) The Closing Date shall have occurred on or before April 16, 2007.

Without limiting the generality of the provisions of the last paragraph of Section 9.03, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

4.02 Conditions to all Loans. The obligation of each Lender to honor any Loan Notice (other than a Loan Notice requesting only a conversion of Loans to the other Type, or a continuation of Eurodollar Rate Loans) is subject to the following conditions precedent:

(a) The representations and warranties of the Borrower contained in Article V or any other Loan Document or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects (except that any representation or warranty that is qualified as to “materiality” or “Material Adverse Effect”

42

shall be true and correct in all respects) on and as of the date of such Loan, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (except that any representation or warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) as of such earlier date, and except that for purposes of this Section 4.02, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01.

(b) No Default shall exist, or would result from such proposed Loan or from the application of the proceeds thereof.

(c) The Administrative Agent shall have received a Loan Notice in accordance with the requirements hereof.

Each Loan Notice (other than a Loan Notice requesting only a conversion of Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Borrowing.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Administrative Agent and the Lenders that:

5.01 Existence, Qualification and Power. Each Loan Party and each Subsidiary thereof (a) is duly organized or formed, validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its material assets and carry on its business substantially as now conducted and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, and (c) is duly qualified and is licensed and, as applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

5.02 Authorization; No Contravention. The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is party, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law except to the extent any such violation could not reasonably be expected to have a Material Adverse Effect.

43

5.03 Governmental Authorization; Other Consents. No approval, consent, exemption, authorization, or other action by or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document except for those which have been made or obtained and are in full force and effect and except as may be required by the reserve Bank of India with respect to the pledge of the Indian Subsidiary under the Security Agreement. No material approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority (including pursuant to the HSR Act) or any other Person is necessary or required in connection with the Transaction or the execution, delivery and performance of the Transaction Documents, which has not been obtained and which does not remain in full force and effect, and all applicable waiting periods have expired without any action having been taken by any Governmental Authority restraining, preventing or imposing materially adverse conditions upon the Transaction.

5.04 Binding Effect. This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditor’s rights generally and by equitable principles (regardless of whether enforcement is sought in equity or at law).

5.05 Financial Statements; No Material Adverse Effect.

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, (ii) fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.

(b) The unaudited consolidated balance sheets of the Borrower and its Subsidiaries dated December 31, 2006 and February 28, 2007 and the related consolidated statements of income or operations, shareholders’ equity and cash flows for the fiscal quarter ended on that date (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments, and without regard to the impact (if any) of the application of Section 409A of the Code and the final regulations issued thereunder.

44

(c) Since the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect (provided that in the case of the impact (if any) of the application of Section 409A of the Code and the final regulations issued thereunder, such representation is made only to the best of the Borrower’s knowledge).

(d) The consolidated pro forma balance sheet of the Borrower and its Subsidiaries as at December 31, 2006 and the related consolidated pro forma statements of income and cash flows of the Borrower and its Subsidiaries for the 12 months then ended, certified by the chief executive officer, chief financial officer, treasurer or controller of the Borrower, copies of which have been furnished to each Lender, fairly present in all material respects the consolidated pro forma financial condition of the Borrower and its Subsidiaries as at such date and the consolidated pro forma results of operations of the Borrower and its Subsidiaries for the period ended on such date, all in accordance with GAAP without regard to the impact (if any) of the application of Section 409A of the Code and the final regulations issued thereunder.

(e) All financial projections and forecasts delivered to the Lenders in connection herewith were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in light of the conditions existing at the time of delivery of such projections and forecasts, and represented, at the time of delivery, the Borrower’s best estimate of its future financial condition and performance.

5.06 Litigation. There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower after due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any of its Subsidiaries or against any of their properties or revenues that (a) purport to affect or pertain to this Agreement or any other Loan Document, or any of the transactions contemplated hereby, or (b) except as specifically disclosed in Schedule 5.06, either individually or in the aggregate, if determined adversely, could reasonably be expected to have a Material Adverse Effect, and there has been no materially adverse change in the status, or financial effect on any Loan Party or any Subsidiary thereof, of the matters described on Schedule 5.06.

5.07 No Default. Neither any Loan Party nor any Subsidiary thereof is in default under or with respect to any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

5.08 Ownership of Property; Liens. Each of the Borrower and each Subsidiary has good record and marketable title in fee simple to or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be, expected to have a Material Adverse Effect. The property of the Borrower and its Subsidiaries is subject to no Liens, other than Permitted Liens.

45

5.09 Environmental Compliance. The Borrower and its Subsidiaries conduct in the ordinary course of business a review of the effect of existing Environmental Laws and claims alleging potential liability or responsibility for violation of any Environmental Law on their respective businesses, operations and properties, and as a result thereof the Borrower has reasonably concluded that such Environmental Laws and claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

5.10 Insurance. The properties of the Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of the Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower or the applicable Subsidiary operates.

5.11 Taxes. The Borrower and its Subsidiaries have filed all Federal, state and other material tax returns and reports required to be filed, and have paid all Federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP. There is no proposed tax assessment against the Borrower or any Subsidiary that would, if made, have a Material Adverse Effect. Neither any Loan Party nor any Subsidiary thereof is party to any tax sharing agreement.

5.12 ERISA Compliance.

(a) Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the best knowledge of the Borrower, nothing has occurred which would prevent, or cause the loss of, such qualification. The Borrower and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.

(b) There are no pending or, to the best knowledge of the Borrower, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Borrower nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA.

46

5.13 Subsidiaries; Equity Interests. (a) As of the Closing Date, the Borrower has no Subsidiaries other than those specifically disclosed in Part (a) of Schedule 5.13, and all of the outstanding Equity Interests in such Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by a Loan Party in the amounts specified on Part (a) of Schedule 5.13 free and clear of all Liens (except as contemplated hereby and by the Collateral Documents). Schedule 5.13 accurately sets forth as of the date hereof (i) the status of each Subsidiary as either a Domestic Subsidiary, a First Tier Foreign Subsidiary or any other Foreign Subsidiary, (ii) a list of all issued and outstanding Equity Interests of each such Domestic Subsidiary or Foreign Subsidiary (other than directors’ qualifying shares or other amounts of Equity Interests required to be held other than by the Borrower or any Subsidiary by any applicable Laws), and (iii) the percentage of such Equity Interests that is directly owned by the Borrower or any of its Domestic Subsidiaries.

(b) As of the Closing Date, the Borrower has no equity investments in any other Person other than those specifically disclosed in Part (b) of Schedule 5.13.

(c) As of December 31, 2006, all of the outstanding Equity Interests in the Borrower have been validly issued, are fully paid and nonassessable and are owned by the Persons named in Schedule 5.13 in the amounts specified on Part (c) of Schedule 5.13 free and clear of all Liens.

5.14 Margin Regulations; Investment Company Act.

(a) The Borrower is not engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.

(b) None of the Borrower, any Person Controlling the Borrower, or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

5.15 Disclosure. The Borrower has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect and without regard to the impact (if any) of the application of Section 409A of the Code and the final regulations issued thereunder. No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document in each case, as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

47

5.16 Compliance with Laws. Each Loan Party and each Subsidiary thereof is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

5.17 Taxpayer Identification Number. The Borrower’s true and correct U.S. taxpayer identification number is set forth on Schedule 10.02, and each Subsidiary’s true and correct U.S. taxpayer identification number or, in the case of any Foreign Subsidiary that does not have a U.S. taxpayer identification number, its unique identification number issued to it by the jurisdiction of its organization, is set forth on Schedule 5.13.

5.18 Intellectual Property; Licenses, Etc. The Borrower and its Subsidiaries own, or possess the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of their respective businesses, without, to the best knowledge of the Borrower, conflict with the rights of any other Person. To the best knowledge of the Borrower, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by the Borrower or any Subsidiary infringes upon any rights held by any other Person. No claim or litigation regarding any of the foregoing is pending or, to the best knowledge of the Borrower, threatened, which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

5.19 Security Interest. The Collateral Documents create in favor of the Administrative Agent (for the benefit of the Secured Parties) a valid and perfected first priority Lien on the Collateral described in the Collateral Documents, subject to no other Liens (other than as expressly permitted by this Agreement and the Collateral Documents), securing in each case the payment of the Secured Obligations. Except for filings completed prior to the Closing Date and as contemplated hereby and by the Collateral Documents, no filing or other action will be necessary to perfect or protect such Liens.

5.20 Solvency. The Each Loan Party is, and upon the incurrence of any Obligation by such Loan Party on any date on which this representation and warrant is made will be, Solvent.

5.21 Labor Matters. There are no collective bargaining agreements or Multiemployer Plans in which any of the Loan Parties or their Subsidiaries are participating employers as of the Closing Date, other than as set forth in Schedule 5.21, and none of the Loan Parties and their Subsidiaries (a) has suffered any strikes, walkouts, work stoppages or other material labor difficulty, (b) has knowledge as of the Closing Date of any pending strike, walkout or work stoppage, or (c) has knowledge of any existing strike, walkout or work

48

stoppage, except (with respect to any specific matters set forth in clauses (a), (b) and (c) above) which in the aggregate could not reasonably be expected to cause a Material Adverse Effect. Other than as set forth on Schedule 5.21, no unfair labor practice complaint is pending against any Loan Party or any of its Subsidiaries as of the Closing Date.

5.22 Consummation of the Transaction. As of the Closing Date the Transaction has been consummated in accordance with the terms of the Transaction Documents and in compliance with applicable Law. The Transaction Documents have not been altered, amended or otherwise changed or supplemented, and no condition therein or provision thereof has been waived, in any manner adverse to any Loan Party or the Administrative Agent and the Lenders. The Transaction Documents are in full force and effect and to the best knowledge of the Borrower (as to the Company) are legal, valid and binding obligations of each party thereto enforceable against each such party in accordance with their respective terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditor’s rights generally and by equitable principles (regardless of whether enforcement is sought in equity or at law).

5.23 Transaction Document Representations. All representations and warranties of the Borrower in the Transaction Documents are true and correct in all material respects as of each date made or deemed made. To the Borrower’s knowledge, all representations and warranties of the Company in the Transaction Documents are true and correct in all material respects as of each date made or deemed made.

ARTICLE VI

AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, or any Loan or other Obligation (other than inchoate indemnity obligations) hereunder shall remain unpaid or unsatisfied, the Borrower shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02 and 6.03) cause each Subsidiary to:

6.01 Financial Statements. Deliver to the Administrative Agent and each Lender in form and detail satisfactory to the Administrative Agent and the Required Lenders:

(a) as soon as available, but in any event (i) within 180 days after the end of the fiscal year of the Borrower ending December 31, 2006, and (ii) within 150 days after the end of each fiscal year of the Borrower thereafter (unless Borrower has provided notice that delivery will be delayed, in which case, the Borrower, subject to the prior written consent of the Required Lenders (not to be unreasonably withheld), will have up to an additional 30 days), a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and opinion of an independent certified public accountant of nationally recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit;

49

(b) as soon as available, but in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower (commencing with the fiscal quarter ended March 31, 2007), a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations, shareholders equity and cash flows for such fiscal quarter and for the portion of the Borrower’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail, certified by the chief executive officer, chief financial officer, treasurer or controller of the Borrower as fairly presenting in all material respects the financial condition, results of operations, shareholders’ equity and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes; and

(c) as soon as available, but in any event no later than 30 days after the end of each fiscal year of the Borrower, forecasts prepared by management of the Borrower, in form satisfactory to the Administrative Agent and the Required Lenders, of consolidated balance sheets and statements of income or operations and cash flows of the Borrower and its Subsidiaries on a monthly basis for the immediately following fiscal year (including the fiscal year in which the Maturity Date occurs).

As to any information contained in materials furnished pursuant to Section 6,02(d), the Borrower shall not be separately required to furnish such information under clause (a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Borrower to furnish the information and materials described in clauses (a) and (b) above at the times specified therein.

6.02 Certificates; Other information. Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders:

(a) concurrently with the delivery of the financial statements referred to in Section 6.01(a), a certificate of its independent certified public accountants certifying such financial statements;

(b) concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b), (i) a duly completed Compliance Certificate signed by the chief executive officer, chief financial officer, treasurer or controller of the Borrower, and (ii) a list of Domestic Subsidiaries, First Tier Foreign Subsidiaries, other Foreign Subsidiaries as of the date of such Compliance Certificate, containing the information with respect thereto as is contemplated by Schedule 5.13;

(c) promptly after any request by the Administrative Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Borrower by independent accountants in connection with the accounts or books of the Borrower or any Subsidiary, or any audit of any of them;

50

(d) promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Borrower, and copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Exchange Act, and not otherwise required to be delivered to the Administrative Agent pursuant hereto;

(e) promptly after the furnishing thereof, copies of any statement or report furnished to any holder of debt securities of any Loan Party or any Subsidiary thereof pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lenders pursuant to Section 6.01 or any other clause of this Section 6.02;

(f) promptly, and in any event within five Business Days after receipt thereof by any Loan Party or any Subsidiary thereof, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of any Loan Party or any Subsidiary thereof; and

(g) promptly, such additional information regarding the business, financial or corporate affairs of the Borrower or any Subsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request.

Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(d) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed on Schedule 10.02; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Borrower shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide paper copies of the Compliance Certificates required by Section 6.02(b) to the Administrative Agent. Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

51

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arranger will make available to the Lenders materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower hereby agrees that so long as the Borrower is the issuer of any outstanding debt or equity securities that are registered or issued pursuant to a private offering or is actively contemplating issuing any such securities (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Arranger and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrower or its securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 10.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) the Administrative Agent and the Arranger shall be entitled to treat any Borrower Materials that are not marked ‘PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.” Notwithstanding the foregoing, the Borrower shall be under no obligation to mark any Borrower Materials “PUBLIC.”

6.03 Notices. Promptly notify the Administrative Agent and each Lender:

(a) of the occurrence of any Default;

(b) of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including (i) breach or non-performance o1 or any default under, a Contractual Obligation of the Borrower or any Subsidiary; (ii) any dispute, litigation, investigation, proceeding or suspension between the Borrower or any Subsidiary and any Governmental Authority; or (iii) the commencement of, or any material development in, any litigation or proceeding affecting the Borrower or any Subsidiary, including pursuant to any applicable Environmental Laws;

(c) of the occurrence of any ERISA Event;

(d) of any material change in accounting policies or financial reporting practices by the Borrower or any Subsidiary, including any determination by the Borrower referred to in Section 2.08(b); and

(e) of the occurrence of any sale of, capital stock or other Equity Interests by the Borrower.

52

Each notice pursuant to this Section 6.03 (other than Section 6.03(e)) shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

6.04 Payment of Obligations. Pay and discharge as the same shall become due and payable, all its obligations and liabilities, including (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in, good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAP are being maintained by the Borrower or such Subsidiary; (b) all lawful claims which, if unpaid, would by law become a Lien upon its property; and (c) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness.

6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain in hill force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.04 or 7.05 (provided, however, that nothing herein shall prevent the Borrower from dissolving any Subsidiary that is no longer active or material to the Borrower’s business); (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.

6.06 Maintenance of Properties. (a) Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; (b) make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) use the standard of care typical in the industry in the operation and maintenance of its facilities.

6.07 Maintenance of Insurance. Maintain with financially sound and reputable insurance companies not Affiliates of the Borrower, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons and providing for not less than 20 days’ prior notice to the Administrative Agent of termination, lapse or cancellation of such insurance.

6.08 Compliance with Laws. Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

53

6.09 Books and Records. (a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Borrower or such Subsidiary, as the case may be.

6.10 Inspection Rights. Permit representatives and independent contractors of the Administrative Agent and each Lender, no more than once each calendar year, to visit and inspect any of its properties, to examine its corporate, financial and operating records, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, at reasonable times during normal business hours, and upon reasonable advance notice to the Borrower; provided, however, that when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice and without any annual limitation on the number of such visits or inspections.

6.11 Use of Proceeds. Use the proceeds of the Loans (a) to finance Permitted Acquisitions, (b) to consummate the Transaction, (c) to pay fees and expenses incurred in connection with this Agreement and the Transaction Documents, and (d) for working capital, capital expenditures and other lawful corporate purposes, in each case not in contravention of any Law or of any Loan Document.

6.12 Subsidiaries. Within (a) thirty (30) days after the time that any Person becomes a Domestic Subsidiary as a result of the creation or formation of such Subsidiary, a Permitted Acquisition or otherwise, then, unless such Domestic Subsidiary is merged into the Borrower or a Guarantor (with the Borrower or such Guarantor being the surviving Person) prior to the expiration of such thirty-day period, the Borrower shall (i) cause such Subsidiary to execute and deliver to the Administrative Agent a Guaranty Accession and a Security Agreement Accession, (ii) execute and deliver (or cause its Subsidiary which is the direct owner of such new Domestic Subsidiary to execute and deliver) to the Administrative Agent a Security Agreement Pledge Supplement and such other Collateral Documents, in form and substance reasonably satisfactory to the Administrative Agent, as the Administrative Agent shall reasonably request, (iii) take such action and deliver such evidence as shall be reasonably satisfactory to the Administrative Agent to conform that the Administrative Agent (for the benefit of the Secured Parties) has a valid, perfected, first priority Lien, subject to no other Liens (excepted as permitted by the Collateral Documents), securing the Secured Obligations, in (A) all Collateral of such Domestic Subsidiary under the Collateral Documents, and (B) 100% of the Equity Interests of such Domestic Subsidiary, including delivery to the Administrative Agent of the certificates, if any, evidencing such Equity Interests, and (iv) provide the Administrative Agent such board resolutions, officer’s certificates, corporate and other documents and opinions of counsel as the Administrative Agent shall reasonably request in connection with the actions described in clauses (i), (ii) and (iii) above, and (b) thirty days after the time that any Person becomes a First Tier Foreign Subsidiary as a result of the creation or formation of such Foreign Subsidiary, a Permitted Acquisition or otherwise, then prior to the expiration of such thirty-day period, the Borrower shall (i) execute and deliver (or cause its Subsidiary which is the direct owner of such

54

First Tier Foreign Subsidiary to execute and deliver) to the Administrative Agent a Security Agreement Pledge Supplement, (ii) take such action and deliver such evidence as shall be satisfactory to the Administrative Agent to confirm that the Administrative Agent (for the benefit of the Secured Parties) has a valid, perfected, first priority Lien, subject to no other Liens (excepted as permitted by the Collateral Documents), in 66% of the Equity Interests of such First Tier Foreign Subsidiary securing the Secured Obligations, including delivery to the Administrative Agent of the certificates, if any, evidencing such Equity Interests, and (iii) provide the Administrative Agent such board resolutions, officer’s certificates, corporate and other documents and opinions of counsel as the Administrative Agent shall reasonably request in connection with the actions described in clauses (i) and (ii) above.

6.13 Post-Closing Items. Within 30 days after the Closing Date the Borrower shall deliver to the Administrative Agent, to the extent not delivered prior thereto, such documents, certificates, assurances and confirmations as may be reasonably required by the Administrative Agent regarding the pledge of the Equity Interests in the Indian Subsidiary pursuant to the Security Agreement.

6.14 Further Assurances. Promptly upon request by the Administrative Agent, or any Lender through the Administrative Agent, execute and deliver such further documents and do such other acts and things as the Administrative Agent or any Lender through the Administrative Agent, may reasonably request in order to effect fully the purposes of this Agreement and the other Loan Documents and to provide for payment of the Obligations and for the granting and perfection of Liens in the Collateral in accordance with the terms of this Agreement and the other Loan Documents.

ARTICLE VII

NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, or any Loan or other Obligation (other than inchoate indemnity obligations) hereunder shall remain unpaid or unsatisfied, the Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly:

7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following (each, a “Permitted Lien”):

(a) Liens pursuant to any Loan Document;

(b) Liens existing on the date hereof and listed on Schedule 7.01 and any renewals or extensions thereof, provided that (i) the property covered thereby is not changed, (ii) the amount secured or benefited thereby is not increased except as contemplated by Section 7.03(b), (iii) the direct or any contingent obligor with respect thereto is not changed, and (iv) any renewal or extension of the obligations secured or benefited thereby is permitted by Section 7.03(b);

(c) Liens for taxes not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

55

(d) carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 60 days or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person;

(e) pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA;

(f) deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

(g) easements, rights-of-way, restrictions and other similar encumbrances affecting real property which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;

(h) Liens securing judgments for the payment of money not constituting an Event of Default under Section 8.01(h);

(i) Liens securing Indebtedness permitted under Section 7.03(e); provided that (i) such Liens do not at any time encumber any property other than the property financed by such Indebtedness and the proceeds thereof, and (ii) the Indebtedness secured thereby does not exceed the cost or fair market value, whichever is lower, of the property being acquired on the date of acquisition;

(j Liens arising from precautionary filings in respect of operating leases; and

(k) Liens arising solely by virtue of any statutory or common law provision relating to bankers’ liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; provided that (i) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Borrower in excess of those set forth by regulations promulgated by the FRB and (ii) such deposit account is not intended by the Borrower or any Subsidiary to provide collateral to the depository institution;

(l) Liens on specific tangible assets (including real estate, but not including inventory and other current assets) acquired in any Permitted Acquisitions after the date of this Agreement; provided, however, that, subject to limitations in Section 7.03(e), (i) such Liens existed at the time of such Permitted Acquisition and were not created in anticipation thereof, (ii) any such Lien does not by its terms cover any assets after the time of such Permitted Acquisition which were not covered immediately prior thereto, and (iii) any such Lien does not by its terms secure any Indebtedness other than Indebtedness existing immediately prior to the time of such Permitted Acquisition;

56

(m) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(n) Liens in the form of licenses, leases or subleases granted or created by the Borrower or any of its Subsidiaries, which licenses, leases or subleases do not interfere, individually or in the aggregate, in any material respect with the business of the Borrower and its Subsidiaries, taken as a whole;

(o) Liens securing Indebtedness permitted under Section 7.03(i); provided that such Liens extend only to the assets or properties of Foreign Subsidiaries; and

(p) other Liens, so long as the aggregate amount of Indebtedness secured by such other Liens does not exceed $500,000 at any time;

provided, that, notwithstanding any of Sections 7.01(a) through 7.01(p), in no event shall the Borrower or any Subsidiary of the Borrower create, incur, assume or suffer to exist any Lien (other than non-consensual Liens permitted in this Section 7.01 and Liens permitted under Section 7.01(n)) upon any Intellectual Property of the Borrower and its Subsidiaries in favor of any Person (other than non-exclusive licenses or sublicenses of its Intellectual Property entered into in the ordinary course of business).

7.02 Investments. Make any Investments, except:

(a) Investments held by the Borrower or such Subsidiary which when made constitute Permitted Investments;

(b) advances to officers, directors and employees of the Borrower and Subsidiaries in an aggregate amount not to exceed $100,000 at any time outstanding, for travel, entertainment, relocation and analogous ordinary business purposes;

(c) Investments of the Borrower in any wholly-owned Subsidiary and Investments of any wholly-owned Subsidiary in the Borrower or in another wholly-owned Subsidiary;

(d) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

(e) Guarantees permitted by Section 7.03;

(f) Acquisitions which constitute Permitted Acquisitions;

(g) the consummation of the Transaction;

(h) Investments constituting Swap Contracts permitted hereunder; and

(i) Investments existing on the Closing Date and listed on Schedule 7.02;

57

Notwithstanding anything in this Section 7.02, Section 7.03, Section 7.04, Section 7.05 or elsewhere in this Agreement to the contrary, after the Closing Date in no event shall aggregate Investments made in intercompany Indebtedness incurred by, and Dispositions to all Subsidiaries that are not Loan Parties, including Investments as a result of Acquisitions, Investments in Foreign Subsidiaries, intercompany Indebtedness incurred by Foreign Subsidiaries, and Dispositions to Foreign Subsidiaries, exceed 5% of Consolidated Net Worth.

7.03 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:

(a) Indebtedness under the Loan Documents;

(b) Indebtedness outstanding on the date hereof and listed on Schedule 7.03 and any refinancings, refundings, renewals or extensions thereof; provided that (i) the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder and (ii) the terms relating to principal amount, amortization, maturity, collateral (if any) and subordination (if any), and other material terms taken as a whole, of any such refinancing, refunding; renewing or extending Indebtedness, and of any agreement entered into and of any instrument issued in connection therewith, are no less favorable in any material respect to the Loan Parties or the Lenders than the terms of any agreement or instrument governing the Indebtedness being refinanced, refunded, renewed or extended and the interest rate applicable to any such refinancing, refunding, renewing or extending Indebtedness does not exceed the then applicable market interest rate;

(c) Guarantees of the Borrower or any Subsidiary in respect of Indebtedness otherwise permitted hereunder of the Borrower or any wholly-owned Subsidiary;

(d) obligations (contingent or otherwise) of the Borrower or any Subsidiary existing or arising under any Swap Contract, provided that (i) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person, and not for purposes of speculation or taking a “market view;” and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party, and provided further that the aggregate Swap Termination Values thereof shall not exceed $1,000,000 at any time outstanding;

(e) Indebtedness in respect of capital leases, Synthetic Lease Obligations and purchase money obligations for fixed or capital assets within the limitations set forth in Section 7.01(i); provided, however, that the aggregate amount of all such Indebtedness at any one time outstanding shall not exceed $6,000,000 (inclusive of any such Indebtedness set forth on Schedule 7.03);

(f) the Subordinated Seller Note;

(g) Indebtedness which is an Investment permitted under Section 7.02;

58

(h) other Subordinated Debt in an aggregate principal amount not to exceed $1,000,000 at any time outstanding;

(i) Indebtedness incurred by Foreign Subsidiaries; provided, however, that the aggregate amount of all such Indebtedness at any one time shall not exceed $500,000; and

(j) other unsecured Indebtedness of the Borrower and its Subsidiaries in an aggregate principal amount not to exceed $500,000 at any time outstanding.

Notwithstanding anything in this Section 7.03, Section 7.02, Section 7.04, Section 7.05 or elsewhere in this Agreement to the contrary, after the Closing Date in no event shall aggregate Investments made in, intercompany Indebtedness incurred by, and Dispositions to, all Subsidiaries that are not Loan Parties, including Investments as a result of Acquisitions, Investments in Foreign Subsidiaries, intercompany Indebtedness incurred by Foreign Subsidiaries, and Dispositions to Foreign Subsidiaries, exceed 5% of Consolidated Net Worth.

7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Default exists or would result therefrom:

(a) any Subsidiary may merge with (i) the Borrower, provided that the Borrower shall be the continuing or surviving Person, or (ii) any one or more other Subsidiaries, provided that when any wholly-owned Subsidiary is merging with another Subsidiary, the wholly-owned Subsidiary shall be the continuing or surviving Person;

(b) any Subsidiary may Dispose of all or substantially all of its assets (upon voluntary liquidation, dissolution or otherwise) to the Borrower or to another Subsidiary; provided that if the transferor of such property is a Guarantor, the transferee thereof must either be the Borrower or a Guarantor; and

(c) the Borrower or any of its Subsidiaries may make any Investment permitted by Section 7.02 or any Disposition permitted by Section 7.05.

7.05 Dispositions. Make any Disposition or enter into any agreement to make any Disposition, except:

(a) Dispositions of obsolete, surplus, damaged or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;

(b) Dispositions of inventory in the ordinary course of business;

(c) Dispositions of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property;

59

(d) Dispositions of property by any Subsidiary to the Borrower or to a wholly-owned Subsidiary; provided that if the transferor of such property is a Guarantor, the transferee thereof must either be the Borrower or a Guarantor;

(e) Dispositions permitted by Section 7.04;

(f) the Borrower or any of its Subsidiaries may make any Investment permitted by Section 7.02;

(g) non-exclusive licenses of IP Rights in the ordinary course of business and substantially consistent with past practice;

(h) Dispositions by the Borrower and its Subsidiaries of defaulted receivables to a collection agency in the ordinary course of their business; and

(i) Dispositions by the Borrower and its Subsidiaries not otherwise permitted under this Section 7.05; provided that (i) at the time of such Disposition, no Default shall exist or would result from such Disposition and (ii) the aggregate book value of all property Disposed of in reliance on this clause (h) in any fiscal year shall not exceed $500,000;

provided, however, that any Disposition pursuant to clauses (a) through (i) shall be for fair market value; and, notwithstanding anything in this Section 7.05, Section 7.02, Section 7.03, Section 7.04 or elsewhere in this Agreement to the contrary, after the Closing Date in no event shall aggregate Investments made in, intercompany Indebtedness incurred by, and Dispositions to, all Subsidiaries that are not Loan Parties, including Investments as a result of Acquisitions, Investments in Foreign Subsidiaries, intercompany Indebtedness incurred by Foreign Subsidiaries, and Dispositions to Foreign Subsidiaries, exceed 5% of Consolidated Net Worth.

7.06 Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, or issue or sell any Equity Interests, except that, so long as no Default shall have occurred and be continuing at the time of any action described below or would result therefrom:

(a) each Subsidiary may make Restricted Payments to the Borrower, the Guarantors and any other Person that owns an Equity Interest in such Subsidiary, ratably according to their respective holdings of the type of Equity Interest in respect of which such Restricted Payment is being made;

(b) the Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests of such Person;

(c) the Borrower and each Subsidiary may purchase, redeem or otherwise acquire Equity Interests issued by it with the proceeds received from the substantially concurrent issue of new shares of its common stock or other common Equity Interests;

60

(d) the Borrower may repurchase the stock of directors, officers, former employees or consultants (or transferees of such stock), in an aggregate amount not to exceed $500,000 in any calendar year; and

(e) the Borrower may issue and sell its common Equity Interests, so long as the Net Cash Proceeds thereof are applied to the prepayment of the Loans pursuant to Section 2.03(b).

7.07 Change in Nature of Business. Engage in any material line of business substantially different from those lines of business conducted by the Borrower, and its Subsidiaries on the date hereof or any business substantially related or incidental thereto.

7.08 Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate of the Borrower, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Borrower or such Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate, provided that the foregoing restriction shall not apply to transactions between or among the Borrower and any of its wholly-owned Subsidiaries or between and among any wholly-owned Subsidiaries.

7.09 Burdensome Agreements. Enter into any Contractual Obligation (other than this Agreement or any other Loan Document) that (a) limits the ability (i) of any Subsidiary to make Restricted Payments to the Borrower or any Guarantor or to otherwise transfer property to the Borrower or any Guarantor, (ii) of any Subsidiary to Guarantee the Indebtedness of the Borrower or (iii) of the Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens on property of such Person; provided, however, that this clause (iii) shall not prohibit any negative pledge incurred or provided in favor of any holder of Indebtedness permitted under Section 7.03(e) solely to the extent any such negative pledge relates to the property financed by or the subject of such Indebtedness (and the proceeds thereof); or (b) requires the grant of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person.

7.10 Use of Proceeds. Use the proceeds of any Borrowing, whether directly or indirectly, and whether immediately, incidentally or ultimately, to (a) purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose, in each case in violation of, or for a purpose which violates, or would be inconsistent with, Regulation T, U or X of the FRB, or (b) finance any Unfriendly Acquisition.

7.11 Amendments. (a) Amend, modify, supplement, waive compliance with, or consent to noncompliance with, any Subordinated Debt Document, unless the amendment, modification, supplement, waiver or consent (i) does not adversely affect the Borrower’s ability to pay and perform each of its Obligations at the time and in the manner set forth herein and in the other Loan Documents and is not otherwise adverse to the Administrative Agent and the Lenders, and (ii) is in compliance with the subordination provisions therein and any Subordination Agreement with respect thereto in favor of the Administrative Agent and the Lenders.

61

(b) Amend, modify, supplement, waive compliance with, or consent to noncompliance with, any provision of the Transaction Documents in any manner materially adverse to any Loan Party or the Administrative Agent and the Lenders.

7.12 Subordinated Debt Payments. Make, or permit any of its Subsidiaries to make, any voluntary or optional payment or repayment on, redemption, exchange or acquisition for value of, or any sinking fund or similar payment with respect to, any Subordinated Debt, except as permitted by the subordination provisions in the applicable Subordinated Debt Documents and any Subordination Agreement with respect thereto in favor of the Administrative Agent and the Lenders.

7.13 Financial Covenants.

(a) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio as of the end of any fiscal quarter of the Borrower to be less than the 1.25 to 1.00:

(b) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio at any time during any period of four fiscal quarters of the Borrower set forth below to be greater than the ratio set forth below opposite such period:

Four Fiscal Quarters Ending	Maximum Consolidated Leverage Ratio
Closing Date through December 31, 2008		2.25 to 1.00
March 31, 2009 and each fiscal quarter thereafter		2.00 to 1.00

For purposes of calculating the Consolidated Leverage Ratio and the Consolidated Fixed Charge Coverage Ratio for the fiscal quarters ending March 31, 2007, June 30, 2007 and September 31, 2007, Consolidated EBITDA attributed to the assets acquired under the Transaction Documents (the “Acquired Business”), shall be annualized during such fiscal quarters such that (a) for the calculation of the Consolidated Leverage Ratio as of March 31, 2007, Consolidated EB1TDA attributed to the Acquired Business for the fiscal quarter then ending will be multiplied by four (4), (b) for the calculation of the Leverage Ratio as of June 30, 2007, Consolidated EBITDA attributed to the Acquired Business for the two fiscal quarter period then ending will be multiplied by two (2) and (c) for the calculation of the Leverage Ratio as of September 30, 2007, Consolidated EBITDA attributed to the Acquired Business for the three fiscal quarter period then ending will be multiplied by one and one-third (1 1/3).

7.14 Capital Expenditures. Make or become legally obligated to make any expenditure in respect of the purchase or other acquisition of any fixed or capital asset (excluding (i) normal replacements and maintenance which are properly charged to current operations, (ii) expenditures made in connection with the replacement, substitution or restoration of assets to the extent financed (x) from insurance proceeds paid on account of the loss of or damage to the assets being replaced or restored or (y) with awards of compensation arising from the taking by eminent domain or condemnation of the assets being replaced, and (iii) expenditures made as a tenant as leasehold improvements during such period to the extent

62

reimbursed by the landlord during such period) except for capital expenditures not exceeding, in the aggregate for all capital expenditures and Permitted Acquisitions for the Borrower and its Subsidiaries during each fiscal year, the Annual Expenditure Limit; provided that, if the Consolidated Leverage Ratio, as certified by the Borrower in the Compliance Certificate delivered hereunder as of the last day of the fiscal quarter most recently ended, is less than 1.00 to 1.00, then such capital expenditures may exceed the Annual Expenditure Limit.

7.15 Accounting Changes. Make any change in its (a) accounting policies or reporting practices, except as required by GAAP, or (b) fiscal year.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

8.01 Events of Default. Any of the following shall constitute an Event of Default:

(a) Non-Payment. The Borrower or any other Loan Party fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan, or (ii) within three Business Days after the same becomes due, any interest on any Loan or any fee due hereunder, or (iii) within three Business Days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or

(b) Specific Covenants. The Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 6.01 (within three (3) Business Days after such failure to observe or perform), or Sections 6.02, 6.03, 6.05, 6.10, 6.11, 6.12 or 6.13 or Article VII; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 days after the earlier of (i) the date on which a Responsible officer of the Borrower knew or reasonably should have known of such failure and (ii) the date on which written notice thereof is given to the Borrower by the Administrative Agent or any Lender; or

(d) Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading when made or deemed made; or

(e) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or Guarantee or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with

63

the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which the Borrower or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which the Borrower or any Subsidiary is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the Borrower or such Subsidiary as a result thereof is greater than the Threshold Amount; or

(f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or

(g) Inability to Pay Debts; Attachment. (i) The Borrower or any Subsidiary becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 60 days after its issue or levy; or

(h) Judgments. There is entered against the Borrower or any Subsidiary (i) one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments or orders) exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have individually or in the aggregate, a Material Adverse Effect and in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 10 consecutive days during which a stay of enforcement of such judgment, by reason of ‘a pending appeal or otherwise, is not in effect; or

(i) ERISA. (i) An ERIS A Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

64

(j) Invalidity of Loan Documents. Any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations, ceases to be in full force and effect; or any Loan Party or any other Person contests in any manner the validity or enforceability of any Loan Document or any Loan. Party denies that it has any or further liability or obligation under any Loan Document, or purports to revoke; terminate or rescind any Loan Document; or

(k) Impairment of Security, etc. Any Collateral Document or any Lien granted thereunder shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of any Loan Party thereto; any Loan Party or any other Person shall, directly or indirectly, contest in any manner such effectiveness, validity, binding nature or enforceability; or, except as permitted under any Loan Document, any Lien securing any Secured Obligation shall, in whole or in part, cease to be a valid, perfected, first priority Lien, subject to no other Liens (other than as expressly permitted by the Collateral Documents), securing the Secured Obligations; or

(l) Subordination. (i) The subordination provisions of any Subordinated Debt Documents (the “Subordination Provisions”) shall, in whole or in part, terminate, cease to be effective or cease to be legally valid, binding and enforceable against any holder of the applicable subordinated Indebtedness; or (ii) the Borrower or any other Loan Party shall, directly or indirectly, disavow or contest in any manner (A) the effectiveness, validity or enforceability of any of the Subordination Provisions, (B) that the Subordination Provisions exist for the benefit of the Administrative Agent and the Lenders or (C) that all payments of principal of or premium and interest on the applicable subordinated Indebtedness, or realized from the liquidation of any property of any Loan Party, shall be subject to any of the Subordination Provisions; or

(j) Change of Control. There occurs any Change of Control.

8.02 Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, Or may, with the consent of, the Required Lenders, take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans to be terminated, whereupon such commitments shall be terminated; and

(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower;

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans shall automatically terminate, and the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, in each case without further act of the Administrative Agent or any Lender.

8.03 Application of Funds. After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable as set forth in the proviso to Section 8.02), any amounts received on account of the Secured Obligations shall be applied by the Administrative Agent in the following order:

65

First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including fees, charges and disbursements of counsel to the respective Lenders (including fees and time charges for attorneys who may be employees of any Lender) and amounts payable under Article III), ratably among them in proportion to the respective amounts described in this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting interest on the Loans and other Obligations, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them;

Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, ratably among the Lenders in proportion to the respective amounts described in this clause Fourth held by them;

Fifth, to payment of other Obligations, ratably among Administrative Agent and the Lenders in proportion to the respective amounts described in this clause Fifth held by them;

Sixth, to payment of Swap Obligations and Cash Management Obligations, ratably among the Cash Management Providers and the Swap Providers in proportion to the respective amounts described in this clause Sixth held by them; and

Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.

ARTICLE IX

ADMINISTRATIVE AGENT

9.01 Appointment and Authority.

(a) Each of the Lenders hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent and the Lenders, and the Borrower shall not have rights as a third party beneficiary of any of such provisions.

66

(b) The Administrative Agent shall also act as the collateral agent under the Loan Documents, and each of the Lenders (in its capacities as a Lender, potential Swap Provider and potential Cash Management Provider) hereby irrevocably (i) authorizes the Administrative Agent to enter into all other Loan Documents, as applicable, including the Security Agreement and any Subordination Agreements, and (ii) appoints and authorizes the Administrative Agent to act as the agent of such Lender for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Secured Obligations, together with such powers and discretion as are reasonably incidental thereto. The Administrative Agent, as collateral agent and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this Article IX and Article X (including Section 10.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the collateral agent under the Loan Documents) as if set forth in full herein with respect thereto. Without limiting the generality of the foregoing, the Administrative Agent is further authorized on behalf of all the Lenders, without the necessity of any notice to or further consent from the Lenders, from time to time to take any action, or permit the any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent to take any action, with respect to any Collateral or the Loan Documents which may be necessary to perfect and maintain perfected the Liens upon any Collateral granted pursuant to any Loan Document.

9.02 Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the, term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

9.03 Exculpatory Provisions. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law; and

67

(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the Borrower or a Lender.

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

9.04 Reliance by Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or Intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

9.05 Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article

68

shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

9.06 Resignation of Administrative Agent. The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its, duties and obligations hereunder and under the other Loan Documents (except that in the case of any Collateral held by the Administrative Agent on behalf of the Secured Parties under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such Collateral until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender acknowledges that it has independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

69

9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, neither the Arranger or the Sole Book Manager listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender hereunder.

9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 2.07 and 10.04) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.07 and 10.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

9.10 Collateral and Guaranty Matters. The Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion.

(a) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon termination of the Aggregate Commitments and payment in full of all Obligations (other than contingent indemnification obligations), (ii) that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other Loan Document, or (iii) subject to Section 10.01, if approved, authorized or ratified in writing by the Required Lenders;

70

(b) to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 7.01(i); and

(c) to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder.

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.

ARTICLE X

MISCELLANEOUS

10.01 Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

(a) waive any condition set forth in Section 4.01 (other than Section 4.01(b)(i) or (c)), or in the case of the initial Loan, Section 4.02, without the written consent of each Lender;

(b) without limiting the generality of clause (a) above, waive any condition set forth in Section 4.02 as to any Loan under a particular Facility without the written consent of the Required Revolving Lenders or the Required Term Lenders, as the case may be;

(c) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of such Lender;

(d) postpone any date fixed by this Agreement or any other Loan Document for (i) any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under such other Loan Document without the written consent of each Lender entitled to such payment or (ii) any scheduled reduction of any Facility hereunder or under any other Loan Document without the written consent of each Appropriate Lender;

(e) reduce the principal of or the rate of interest specified herein on, any Loan, or (subject to clause (ii) of the second proviso to this Section 10.01) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender entitled to such amount; provided, however, that only the consent of the Required Lenders shall be necessary (i) to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest at the Default Rate or (ii) to amend any, financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or to reduce any fee payable hereunder;

71

(f) change (i) Section 2.11 or Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender or (ii) the order of application of any reduction in the Commitments or any prepayment of Loans between the Facilities from the application thereof set forth in the applicable provisions of Section 2.03(b) or 2.04(b), respectively, in any manner that materially and adversely affects the Lenders under a Facility without the written consent of (i) if such Facility is the Term Facility, the Required Term Lenders, and (ii) if such Facility is the Revolving Credit Facility, the Required Revolving Lenders;

(g) change (i) any provision of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder without the written consent of each Lender or (ii) the definition of “Required revolving Lenders,” or “Required Term Lenders” without the written consent of each Lender under the applicable Facility;

(h) release all or substantially all of the Collateral in any transaction or series of related transactions, without the written consent of each Lender;

(i) release all or substantially all of the value of the Guaranty without the written consent of each Lender, except to the extent the release of any Guarantor is permitted pursuant to Section 9.10 (in which case such release may be made by the Administrative Agent acting alone); or

(j) impose any greater restriction on the ability of any Lender under a Facility to assign any of its rights or obligations hereunder without the written consent of (i) if such Facility is the Term Facility, the Required Term Lenders, and (ii) if such Facility is the Revolving Credit Facility, the Required Revolving Lenders;

and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; and (ii) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender.

10.02 Notices; Effectiveness; Electronic Communication.

(a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

(i) if to the Borrower, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 10.02; and

72

(ii) if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or Intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OE THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OE ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON- INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any Lender or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s or the

73

Administrative Agent’s transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to the Borrower, any Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

(d) Change of Address, Etc. Each of the Borrower and the Administrative Agent may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Borrower and the Administrative Agent. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable Law, including United States Federal and state securities Laws, to make reference to Borrower Materials that are not made available through the “Public Side Information” portion of the Platform and that may contain material non-public information with respect to the Borrower or its securities for purposes of United States Federal or state securities laws.

(e) Reliance by Administrative Agent and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic Loan Notices) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify the Administrative Agent., each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

10.03 No Waiver; Cumulative Remedies.

No failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

74

10.04 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable and documented fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), and (ii) all out-of-pocket expenses incurred by the Administrative Agent or any Lender (including the documented fees, charges and disbursements of any counsel for the Administrative Agent or any Lender), and shall pay all fees and time charges for attorneys who may be employees of the Administrative Agent or any Lender, in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans. The foregoing costs and expenses shall include (i) all search, filing, and recording charges, and fees and taxes related thereto, (ii) other reasonable out-of-pocket expenses incurred by the Administrative Agent and each Related Party thereof arising with respect to or in connection with creating and perfecting Liens in favor of the Administrative Agent, for the benefit of Secured Parties pursuant hereto or otherwise relating to the Collateral, including the reasonable and documented tees, expenses and disbursements of counsel to the Administrative Agent and of counsel providing any opinions that the Administrative Agent or Required Lenders may request in respect of Collateral or the Liens created pursuant to the Collateral Documents, and (iii) all the reasonable costs and expenses (including the reasonable and documented fees, expenses and disbursements of any appraisers, consultants, advisors and agents employed or retained by the Administrative Agent and its counsel) in connection with the custody or preservation of any of the Collateral.

(b) Indemnification by the Borrower. The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the documented fees, charges and disbursements of any counsel for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from all documented fees, time charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Loan Party arising out of, in connection with or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby- or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Loan Party, and regardless of whether

75

any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if the Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

(c) Reimbursement by Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof) or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such subagent) or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.10(d).

(d) Waiver of Consequential Damages Etc. To the fullest extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

(e) Payments. All amounts due under this Section shall be payable not later than ten Business Days after demand therefor.

(f) Survival. The agreements in this Section shall survive the resignation of the Administrative Agent, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.

10.05 Payments Set Aside. To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required

76

(including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

10.06 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment(s) and the Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment under any Facility and the Loans at the time owing to it under such Facility or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B) in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the

77

Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $2,000,000, in the case of any assignment in respect of the Revolving Credit Facility, or $1,000.000, in the case of any assignment in respect of the Term Facility, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Croup to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met.

(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Commitment assigned, except that this clause (ii) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among separate Facilities on a non-pro rata basis;

(iii) Required Consents. No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) an Event of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; and

(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (1) any Term Commitment or Revolving Credit Commitment if such assignment is to a Person that is not a Lender with a Commitment in respect of the applicable Facility, an Affiliate of such Lender or an Approved Fund with respect to such Lender or (2) any Term Loan to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund.

(iv) Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(v) No Assignment to Borrower. No such assignment shall be made to the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

78

(vi) No Assignment to Natural Persons. No such assignment shall be made to a natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment. Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.

(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural person or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 10.01 that affects such Participant. Subject to subsection (e) of this Section, the

79

Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.11 as though it were a Lender.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 3.01(e) as though it were a Lender.

(f) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(g) Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

10.07 Treatment of Certain Information; Confidentiality. Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates respective partners, directors, officers, employees, agents, advisors and representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or any Eligible Assignee invited to be a Lender pursuant to Section 2.12(c) or (ii) any actual or prospective counterparty (or its advisors)

80

to any map or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower.

For purposes of this Section, “Information” means all information received from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower or any Subsidiary, provided that in the case of information received from the Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its on confidential information.

Each of the Administrative Agent and the Lenders acknowledges that (a) the Information may include material non-public information concerning the Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including United States Federal and state securities Laws.

10.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fillies/ extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender or any such Affiliate to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement or any other Loan Document to such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower may be contingent or unmatured or are owed to a branch or office of such Lender different from the branch or office holding such deposit or obligated on such indebtedness. The rights of each Lender and its Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender or its Affiliates may have. Each Lender agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

10.09 Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender

81

exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof; and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract, This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

10.11 Survival of Representations and Warranties. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Borrowing, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied.

10.12 Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

10.13 Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01 or if any Lender is a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

(a) the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 10.06(b);

82

(b) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

(c) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will a reduction in such compensation or payments thereafter; and

(d) such assignment does not conflict with applicable Laws.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

10.14 Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) SUBMISSION TO JURISDICTION. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNTIED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING ID THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND ‘UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR TO THE FULLEST EXTENT PERMI’TT’ED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT N ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

83

(c) WAIVER OF VENUE. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

10.16 California Judicial Reference. If any action or proceeding is filed in a court of the State of California by or against any party hereto in connection with any of the transactions contemplated by this Agreement or any other Loan Document, (a) the court shall, and is hereby directed to, make a general reference pursuant to California Code of Civil Procedure Section 638 to a referee (who shall be a single active or retired judge) to hear and determine all of the issues in such action or proceeding (whether of fact or of law) and to report a statement of decision, provided that at the option of any party to such proceeding, any such issues pertaining to a “provisional remedy” as defined in California Code of Civil Procedure Section 1281.8 shall be heard and determined by the court, and (b) without limiting the generality of Section 10.04, the Borrower shall be solely responsible to pay all fees and expenses of any referee appointed in such action or proceeding.

10.17 No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent and the Arranger, are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent and the Arranger, on the other hand, (B) the Borrower has

84

consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative Agent and the Arranger, each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) neither the Administrative Agent nor the Arranger has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent and the Arranger and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and neither the Administrative Agent nor the Arranger has any obligation to disclose any of such interests to the Borrower or its Affiliates. To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against the Administrative Agent and the Arranger with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

10.18 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the Act.

10.19 Time of the Essence. Time is of the essence of the Loan Documents.

[Remainder of page intentionally left blank]

85

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

EXPONENTIAL INTERACTIVE, INC.
By:	/s/ John R. Rettig
Name:	John R Rettig
Title:	CFO

S-1

BANK OF AMERICA, N.A., as Administrative Agent
By:	/s/ Ken Puro
Name:	Ken Puro
Title:	Vice President

S-2

BANK OF AMERICA, N.A., as a Lender
By:	/s/ Ronald J. Dronby
Name:	Ronald J. Dronby
Title:	Senior Vice President

S-3

COMERICA BANK, as a Lender
By:	/s/ Philip Koblis
Name:	Philip Koblis
Title:	First Vice President

S-4

SCHEDULE 2.01

COMMITMENTS

AND APPLICABLE PERCENTAGES

Lender	Term Commitment		Revolving Credit Commitment		Term Applicable Percentage			Revolving Credit Applicable Percentage
Bank of America, N.A.	$	18,750,000	$	6,250,000		62.500000000	%		62.500000000	%
Comerica Bank	$	11,250,000	$	3,750,000		37.500000000	%		37.500000000	%
Total	$	30,000,000	$	10,000,000		100.000000000	%		100.000000000	%

Schedule 2.01

Page 1

Execution Version

BANK OF AMERICA, N.A.

COMERICA BANK

As of June 29, 2007

Exponential Interactive, Inc.

2200 Powell Street, Suite 600

Emeryville, CA 94608

Attention:             Mr. John Rettig, Chief Financial Officer

Re:             $40,000,000 Credit Agreement with Exponential Interactive, Inc.

Dear Christina:

Reference is made to the Credit Agreement dated as of April 13, 2007 (the “Credit Agreement”), by and among Exponential Interactive, Inc., a Delaware corporation (the “Company”), the Lenders from time to time party thereto, and Bank of America; N.A., as the Administrative Agent (the “Agent”). Unless otherwise defined herein, terms used herein shall have the meanings assigned to them in the Credit Agreement. The Company has informed the Agent and the Lenders that after June 29, 2007, the Company would be in non-compliance of Section 6.01(a) of the Credit Agreement, specific to the delivery of the Company’s audited financial statements for the fiscal year ending December 31, 2006 (the “2006 Financial Statements”), and there would be an associated delay in the delivery of the Compliance Certificate and other deliverables due under Section 6.02(b) of the Credit Agreement in connection with the delivery of the 2006 Financial Statements. As a result, the Company has requested that the Lenders waive non-compliance with Sections 6.01(a) and 6.02(b) of the Credit Agreement from June 29, 2007 through August 31, 2007 (the “Waiver Period”). Accordingly, the Lenders hereby waive such requirements contained in Sections 6.01(a) and 6.02(b) of the Credit Agreement for the Waiver Period. For the avoidance of doubt, the Lenders also confirm. that (notwithstanding such non-compliance) for purposes of the Applicable Rate determination, the existing Pricing Level, shall remain in effect through the next date a Compliance Certificate is required to be delivered under the Credit Agreement (i.e. with respect to the Company’s second fiscal quarter in 2007). The foregoing waiver and consent shall be subject to fulfillment of the conditions precedent that no Default has occurred or is continuing under the Credit Agreement. Except as just provided, the Credit Agreement and any and all other related documents and instruments shall remain unchanged and in full force and effect. The Agent’s and the Lenders’ execution and delivery hereof and any other documents and instruments in connection herewith shall not be deemed to create a course of dealing or otherwise create any express or implied duty by it to provide any other or further amendments, consents or waivers in the future. This waiver letter is governed by, and construed in accordance with, the laws of the State of New York.

Very truly yours,
BANK OF AMERICA, N.A., as Administrative Agent
By:	/s/ Ken Puro
Name:	Ken Puro
Title:	Vice President

BANK OF AMERICA, N.A., as a Lender
By:	/s/ Ronald J. Dronby
Name:	Ronald J. Dronby
Title:	Senior Vice President

COMERICA BANK, as a Lender
By:	/s/ Philip Koblis
Name:	Philip Koblis
Title:	FVP

[Signature Page to Consent and Waiver]

Acknowledged and Agreed:
EXPONENTIAL INTERACTIVE, INC.
By:	/s/ Dilip DaSilva
Name:	Dilip DaSilva
Title:	President & CEO

[Signature Page to Consent and Waiver]

EXHIBIT A

FORM OF LOAN NOTICE

Date: 7/9, 2007

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of April 12, 2007 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Exponential Interactive, Inc., a Delaware corporation (the “Borrower”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent.

The undersigned hereby requests (select one):

¨ A Borrowing of [Revolving Credit] [Term] Loans

x A conversion or continuation of [Revolving Credit] [Term] Loans

1. On 7/12/07 (a Business Day)

2. In the amount of $13,750,000.00

3. Comprised of LIBOR

[Type of Loan requested]

4. For Eurodollar Rate Loans: with an Interest Period of 3 months. (Maturity of 10/12/07)

[The Borrower hereby represents and warrants that the conditions specified in Sections 4.02(a) and (b) shall be satisfied on and as of the date of the Borrowing requested hereby.]¹

EXPONENTIAL INTERACTIVE, INC.
By:	/s/ Dilip DaSilva
Name:	DILIP DASILVA
Title:	CEO

¹  Include this sentence in the case of a Borrowing.

A-1

Form of Loan Notice

EXHIBIT A

FORM OF LOAN NOTICE

Date: 7/9, 2007

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of April 12, 2007 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Exponential Interactive, Inc., a Delaware corporation (the “Borrower”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent.

The undersigned hereby requests (select one):

¨ A Borrowing of [Revolving Credit] [Term] Loans

x A conversion or continuation of [Revolving Credit] [Term] Loans

1. On 7/12/07 (a Business Day)

2. In the amount of $15,000,000.00

3. Comprised of BASE RATE

[Type of Loan requested]

4. For Eurodollar Rate Loans: with an Interest Period of             months.

[The Borrower hereby represents and warrants that the conditions specified in Sections 4.02(a) and (b) shall be satisfied on and as of the date of the Borrowing requested hereby.]²

EXPONENTIAL INTERACTIVE, INC.
By:	/s/ Dilip DaSilva
Name:	DILIP DASILVA
Title:	CEO

²  Include this sentence in the case of a Borrowing.

A-1

Form of Loan Notice

Execution Copy

AMENDMENT AGREEMENT

This AMENDMENT AGREEMENT (this “Amendment”) is entered into as of November 10, 2009 among EXPONENTIAL INTERACTIVE, INC., a Delaware corporation (the “Borrower”), BANK OF AMERICA, N.A., as sole lender (the “Lender”), and BANK OF AMERICA, N.A., as Administrative Agent (the “Administrative Agent”).

The Borrower, the Lender and the Administrative Agent are parties to a Credit Agreement dated as of April 12, 2007 (as in effect as of the date of this Amendment, the “Credit Agreement”).

The Borrower has requested the Lender to agree to certain amendments to the Credit Agreement, and the Lender has agreed to such request, subject to the terms and conditions of this Amendment.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

1. Definitions; References; Interpretation.

(a) Unless otherwise specifically defined herein, each term used herein (including in the Recitals hereof) which is defined in the Credit Agreement shall have the meaning assigned to such term in the Credit Agreement.

(b) As used herein, “Amendment Documents” means this Amendment, the New Note (as defined below) and the Credit Agreement (as amended by this Amendment).

(c) Each reference to “this Agreement”, “hereof”, “hereunder”, “herein” and “hereby” and each other similar reference contained in the Credit Agreement, and each reference to “the Credit Agreement” and each other similar reference in the other Loan Documents, shall from and after the Effective Date (as defined in Section 2) refer to the Credit Agreement as amended hereby.

(d) The rules of interpretation set forth in Section 1.02 of the Credit Agreement shall be applicable to this Amendment.

2. Amendments to Credit Agreement. Subject to the terms and conditions hereof, the Credit Agreement is amended as follows, effective as of the date of satisfaction of the conditions set forth in Section 4 (the “Effective Date”):

(a) Amendments to Article I of the Credit Agreement.

1

(1) The pricing grid set forth in the definition of “Applicable Rate” is hereby amended in its entirety to read as follows:

Applicable Rate

Pricing Level	Consolidated Leverage Ratio	Commitment Fee			Eurodollar Rate +			Base Rate +
I	< 0.50:1.00		0.375	%		2.750	%		0.750	%
II	> 0.50:1.00 but < 1.00:1.00		0.500	%		3.000	%		0.750	%
III	> 1.00:1.00 but < 1.75:1.00		0.500	%		3.250	%		0.750	%
IV	> 1.75:1.00		0.500	%		3.750	%		0.850	%

(2) The proviso in the definition of “Consolidated EBITDA” in Article I is hereby amended in its entirety to read as follows:

“provided, however, that solely for the purpose of the computations of the Consolidated Leverage Ratio or TTM EBITDA, if there has occurred an Acquisition during the relevant period, Consolidated EBITDA shall be calculated, at the option of the Borrower, on a pro forma basis in accordance with the SEC pro forma reporting rules under the Exchange Act, as if such Acquisition occurred on the first day of the applicable period.”

(3) The definition of “Consolidated Leverage Ratio” is amended in its entirety to read as follows:

“Consolidated Leverage Ratio” means as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date, to (b) TTM EBITDA.”

(4) The term “Revolving Credit Note” defined in the Credit Agreement shall refer to on and after the Effective Date the New Note delivered under this Amendment.

(5) A new definition is inserted in Article I as follows:

“TTM EBITDA” means, as of any date of determination, Consolidated EBITDA for the period of the four fiscal quarters most recently ended.

(6) A new definition is inserted in Article I as follows:

“Unrestricted Liquidity” means the sum of (a) cash-on-hand, and (b) Permitted Investments and other cash equivalents, in each case not subject to a Lien (other than Liens in favor of the Administrative Agent pursuant to the Loan Documents) or any other restrictions.

(7) Article I is amended to delete the definition of “Consolidated Fixed Charge Coverage Ratio” in its entirety.

(b) Amendments to Article VII of the Credit Agreement.

(1) Section 7.13(a) of the Credit Agreement is amended in its entirety to provide as follows:

Minimum TTM EBTIDA. The Borrower shall not permit TTM EBITDA, as measured as of the last day of each fiscal quarter of the Borrower, to be less than $7,500,000.

2

(2) Section 7.13(b) of the Credit Agreement is amended in its entirety to provide as follows:

Minimum Unrestricted Liquidity. The Borrower shall not permit at any time, in respect of the Borrower and its Subsidiaries, (i) Consolidated Funded Indebtedness to equal or exceed (ii) the sum of (A) Unrestricted Liquidity, and (B) 70% of net accounts receivable.

(c) Amendment to Schedule 2.01 of the Credit Agreement. Schedule 2.01(b) of the Credit Agreement is replaced in its entirety by Schedule 2.01 of this Amendment.

(d) Amendment to Schedule 10.02 of the Credit Agreement. The Administrative Agent’s address for payments and Loan Notices is hereby amended in its entirety to read as follows:

(for payments and Loan Notices):
Bank of America, N.A.
San Francisco Commercial Banking #1499
Mail Code: CA5-704-13-11
315 Montgomery’ Street, 13th Floor
San Francisco, CA 94104
Attention:	Rowena Mendoza
Telephone:	[Personally identifiable information withheld]
Telecopier:	[Personally identifiable information withheld]
Electronic Mail:	[Personally identifiable information withheld]
Account No.:	[Personally identifiable information withheld]
Attn:	Transaction Processing
Account Name:	Exponential Interactive, Inc.
	[Personally identifiable information withheld]
	[Personally identifiable information withheld]
ABA#:	[Personally identifiable information withheld]

(e) Amendment to Exhibit C of the Credit Agreement. Exhibit C of the Credit Agreement is replaced in its entirety by Exhibit C of this Amendment.

(f) Additional Amendments to the Credit Agreement. References in the Credit Agreement to any Term Borrowing, the Term Commitment, the Term Facility, any Term Lender, any Term Loans and any Term Notes shall be disregarded.

3. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lender as follows:

(a) No Default has occurred and is continuing (or would result from the amendment of the Credit Agreement contemplated hereby).

3

(b) The execution, delivery and performance by the Borrower of the Amendment Documents have been duly authorized by all necessary corporate and other action and do not and will not require any registration with, consent or approval of, or notice to or action by, any Person (including any Governmental Authority) in order to be effective and enforceable.

(c) The Amendment Documents constitute the legal, valid and binding obligations of the Borrower, enforceable against it in accordance with their respective terms except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditor’s rights generally and by equitable principles (regardless of whether enforcement is sought in equity or at law).

(d) All representations and warranties of the Borrower contained in the Credit Agreement are true and correct in all material respects (except that any representation or warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects), except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (except that any representation or warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) as of such earlier date, and except that for purposes of this Section 3, the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Credit Agreement.

(e) The Borrower is entering into this Amendment on the basis of its own investigation and for its own reasons, without reliance upon the Administrative Agent and the Lender or any other Person.

(f) The Borrower’s obligations under the Credit Agreement and under the other Loan Documents are not subject to any defense, counterclaim, set-off, right of recoupment, abatement or other claim.

4. Conditions of Effectiveness.

(a) The effectiveness of Section 2 of this Amendment shall be subject to the satisfaction of each of the following conditions precedent:

(1) The Administrative Agent shall have received (A) from the Borrower and the Lender a duly executed original (or, if elected by the Administrative Agent, an executed facsimile copy) of this Amendment and (B) from the Borrower, a duly executed original (or an executed facsimile copy with an original to follow promptly thereafter) of a replacement Revolving Credit Note (the “New Note”) substantially in the form of Exhibit B-2 to the Credit Agreement (but dated the Effective Date and also stating that it replaces and supersedes, without novation, the Revolving Credit Notes previously delivered by the Borrower under the Credit Agreement (the “Old Notes”)).

4

(2) The Administrative Agent shall have received evidence of payment by the Borrower of all fees, costs and expenses due and payable as of the Effective Date under or in connection with this Amendment and the Credit Agreement, including any fees arising under or referenced in Section 5 of this Amendment and any costs and expenses payable under Section 6(g) of this Amendment (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, to the extent invoiced on or prior to the Effective Date).

(3) The Administrative Agent shall have received from the Borrower, in form and substance satisfactory to it, a Compliance Certificate as of September 30, 2009 calculated on a pro forma basis after giving effect to this Amendment.

(4) The Administrative Agent shall have received from the Borrower, in form and substance satisfactory to the Administrative Agent, a copy of the resolutions passed by the board of directors of the Borrower, certified as of the Effective Date by the Secretary or an Assistant Secretary of such Person, authorizing the execution, delivery and performance of the Amendment Documents.

(5) The Administrative Agent shall have received all other documents it or the Lender may reasonably request relating to any matters relevant hereto, all in form and substance satisfactory to the Administrative Agent.

(6) The representations and warranties in Section 3 of this Amendment shall be true and correct on and as of the Effective Date with the same effect as if made on and as of the Effective Date.

(7) No Term Loans shall be outstanding.

(b) From and after the Effective Date, the Credit Agreement is amended as set forth herein. Except as expressly amended pursuant hereto, the Credit Agreement shall remain unchanged and in full force and effect and is hereby ratified and confirmed in all respects.

(c) The Administrative Agent will notify the Borrower of the occurrence of the Effective Date.

5. Fees. The Borrower shall pay (through the Administrative Agent) to the Lender a non-refundable amendment fee equal to 0.25% of the Lender’s Revolving Credit Commitment as of the Effective Date. Such amendment fee shall be fully-earned upon becoming due and payable, shall not be refundable for any reason whatsoever and shall be in addition to any fee, cost or expense otherwise payable by the Borrower pursuant to the Credit Agreement or this Amendment.

6. Miscellaneous.

(a) The Borrower acknowledges and agrees that the execution and delivery by the Administrative Agent and the Lender of this Amendment shall not be deemed to create a course of dealing or an obligation to execute similar waivers or amendments under the same or similar circumstances in the future.

(b) This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted by the Credit Agreement.

5

(c) THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(d) This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Amendment and the other Amendment Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4, this Amendment shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Amendment by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Amendment.

(e) This Amendment may not be amended except in accordance with the provisions of Section 10.01 of the Credit Agreement.

(f) If any provision of this Amendment or the other Amendment Documents is held to be illegal, invalid or unenforceable, (i) the legality, validity and enforceability of the remaining provisions of this Amendment and the other Amendment Documents and Loan Documents shall not be affected or impaired thereby and (ii) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

(g) The Borrower agrees to pay or reimburse all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), in connection with the preparation, negotiation, execution, delivery and administration of this Amendment and the other Amendment Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated).

(h) From and after the Effective Date the outstanding Old Notes under the Credit Agreement shall be superseded and replaced by the New Note delivered under this Amendment.

(i) This Amendment shall constitute a Loan Document.

[signature pages follow]

6

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

EXPONENTIAL INTERACTIVE, INC.
By:	/s/ Dilip DaSilva
Name:	Dilip DaSilva
Title:	CEO

S-1

BANK OF AMERICA, NA., as Administrative Agent and Lender
By:	/s/ illegible
Name:	illegible
Title:	Senior Vice President

S-2

SCHEDULE 2.01

COMMITMENTS

AND APPLICABLE PERCENTAGES

Lender	Revolving Credit Commitment		Revolving Credit Applicable Percentage
Bank of America, N.A.	$	10,000,000		100.000000000	%
Total	$	10,000,000		100.000000000	%

Schedule 2.01

EXHIBIT C

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date:             ,

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of April 12, 2007 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Exponential Interactive, Inc., a Delaware corporation (the “Borrower”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent.

The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the             of the Borrower, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the Borrower, and that:

[Use following paragraph 1 for fiscal year-end financial statements]

1. The Borrower has delivered the year-end audited financial statements required by Section 6.01(a) of the Agreement for the fiscal year of the Borrower ended as of the above date, together with the report and opinion of an independent certified public accountant required by such section.

[Use following paragraph 1 for fiscal quarter-end financial statements]

1. The Borrower has delivered the unaudited financial statements required by Section 6.01(b) of the Agreement for the fiscal quarter of the Borrower ended as of the above date. Such financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes without regard to the impact (if any) of the application of Section 409A of the Code and the final regulations issued thereunder.

2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and condition (financial or otherwise) of the Borrower during the accounting period covered by such financial statements.

C-1

3. A review of the activities of the Borrower during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Borrower performed and observed all its Obligations under the Loan Documents, and

[select one:]

[to the best knowledge of the undersigned, during such fiscal period the Borrower performed and observed each covenant and condition of the Loan Documents applicable to it, and no Default has occurred and is continuing.]

-or-

[to the best knowledge of the undersigned, during such fiscal period the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]

4. The representations and warranties of the Borrower contained in Article V of the Agreement, and any representations and warranties of any Loan Party that are contained in any document furnished at any time under or in connection with the Loan Documents, are true and correct in all material respects (except that any representation or warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (except that any representation or warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) as of such earlier date, and except that for purposes of this Compliance Certificate, the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Agreement, including the statements in connection with which this Compliance Certificate is delivered.

5. The financial covenant analyses and information set forth on Schedules 1 and 2 attached hereto are true and accurate on and as of the date of this Certificate.

6. The list of Subsidiaries and the related information set forth on Schedule 3 attached hereto are true and accurate on and as of the date of this Certificate.

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of             ,             .

EXPONENTIAL INTERACTIVE, INC.

By:

Name:

Title:

C-2

For the Quarter/Year ended             (“Statement Date”)

SCHEDULE 1

to the Compliance Certificate

($ in 000’s)

I. Section 7.13(a) — Minimum TTM EBITDA.

A. Consolidated EBITDA for four consecutive fiscal quarters ending on above date (“Subject Period”):
1. Consolidated Net Income for Subject Period:	$	_________
2. Consolidated Interest Charges for Subject Period:	$	_________
3. Provision for income taxes for Subject Period:	$	_________
4. Depreciation expenses for Subject Period:	$	_________
5. Amortization expenses for Subject Period:	$	_________
6. Non-recurring non-cash reductions of Consolidated Net Income for Subject Period:	$	_________
7. Cash and non-cash charges relating to earnouts under the Transaction Documents for Subject Period:	$	_________
8. Non-cash charges or expenses related to equity plans or stock option awards for Subject Period:	$	_________
9. Payroll taxes on exercise of stock options for Subject Period:	$	_________
10. Non-cash additions to Consolidated Net Income for Subject Period:	$	_________
11. Income tax credits for Subject Period:	$	_________
B. TTM EBITDA for Subject Period (Lines LI.A.1 + 2 + 3 + 4 + 5 + 6 +7 +8+9 -10 -11):	$	_________
Minimum required: $7,500,000

II. Section 7.13 (b) — Minimum Unrestricted Liquidity.

A. Consolidated Funded Indebtedness for Subject Period:	$	_________
B. Unrestricted Liquidity for Subject Period:	$	_________
C. 70% of net accounts receivables for Subject Period:	$	_________
D. Minimum Unrestricted Liquidity (Line II.A < Line II.B + Line II.C):		[ ] < [ ]
Compliance		Yes/No

C-3

III. Section 7.14 — Capital Expenditures.

A. Capital expenditures made during fiscal year to date3:	$	_________
B. Available portion of Annual Expenditure Limit (i.e. Annual Expenditure Limit less Permitted Acquisitions YTD):	$	_________
C. Excess (deficient) for covenant compliance (Line III.B—III.A):	$	_________

IV. Consolidated Leverage Ratio.

A. Consolidated Funded Indebtedness as of the end of Subject Period:	$	_________
B. TTM EBITDA (Line LB):	$	_________
C. Consolidated Leverage Ratio (Line IV.A Line IV.B):		____ to 1

³  Exclusive of capital expenditures described in clauses (i) through (iii) of the parenthetical in Section 7.14.

C-4

For the Quarter/Year ended             (“Statement Date”)

SCHEDULE 2

to the Compliance Certificate

($ in 000’s)

TTM EBITDA

(in accordance with the definition of Consolidated EBITDA

as set forth in the Agreement)

Consolidated EBITDA	Quarter Ended	Quarter Ended	Quarter Ended	Quarter Ended	Twelve Months Ended
Consolidated Net Income
+ Consolidated Interest Charges
+ income taxes
+ depreciation expense
+ amortization expense
+ non-recurring non-cash reductions
+ cash and non-cash earn-out charges under Transaction Documents
+ non-cash charges or expenses related to equity plans or stock option awards
+ payroll taxes on exercise of stock options
- income tax credits
- non-cash income
= Consolidated EBITDA

C-5

For the Quarter/Year ended             (“Statement Date”)

SCHEDULE 3

to the Compliance Certificate

SUBSIDIARIES AND

OTHER EQUITY INVESTMENTS

Part (a). Subsidiaries.

Status:

DS	=	Domestic Subsidiary
FTFS	=	First Tier Foreign Subsidiary
FS	=	Other Foreign Subsidiary

Name of Subsidiary Jurisdiction of
Formation Name of Stockholder Equity Interests
Outstanding % Owned by
Stockholder Status of Subsidiary Tax ID or Other ID
Number

C-6

EXECUTION VERSION

AMENDMENT AGREEMENT

This AMENDMENT AGREEMENT (this “Amendment”) is entered into as of May 6, 2011, among EXPONENTIAL INTERACTIVE, INC., a Delaware corporation (the “Borrower”), BANK OF AMERICA, N.A., as sole lender (the “Lender”), and BANK OF AMERICA, N.A., as Administrative Agent (the “Administrative Agent”).

The Borrower, the Lender and the Administrative Agent are parties to a Credit Agreement dated as of April 12, 2007 (as amended prior to the date hereof, including as amended as of November 10, 2009, and as further amended as of April 8, 2011, the “Credit Agreement”).

The Borrower has requested the Lender to agree to certain amendments to the Credit Agreement, and the Lender has agreed to such request, subject to the terms and conditions of this Amendment.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

1. Definitions; References; Interpretation.

(a) Unless otherwise specifically defined herein, each term used herein (including in the Recitals hereof) which is defined in the Credit Agreement shall have the meaning assigned to such term in the Credit Agreement.

(b) As used herein, (i) “Amendment Documents” means, collectively, this Amendment, the New Note (as defined below) and the Credit Agreement (as amended by this Amendment), and (ii) “Representations and Warranties Certificate” means that certain Representations and Warranties Certificate, dated April 13, 2007, executed and delivered by the Borrower to the Administrative Agent in connection with the closing of the Credit Agreement.

(c) Each reference to “this Agreement”, “hereof”, “hereunder”, “herein” and “hereby” and each other similar reference contained in the Credit Agreement, and each reference to “the Credit Agreement” and each other similar reference in the other Loan Documents, shall from and after the Effective Date (as defined in Section 2) refer to the Credit Agreement as amended hereby.

(d) The rules of interpretation set forth in Section 1.02 of the Credit Agreement shall be applicable to this Amendment.

2. Amendments to Credit Agreement. Subject to the terms and conditions hereof, the Credit Agreement is amended as follows, effective as of the date of satisfaction of the conditions set forth in Section 4 (the “Effective Date”):

(a) Amendments to Article I of the Credit Agreement.

(1) The definition of “Applicable Rate” is hereby amended it its entirety to read as follows:

“Applicable Rate” means the following percentages per annum, based upon the Consolidated Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b):

Applicable Rate

Pricing Level	Consolidated Leverage Ratio		Commitment Fee			Eurodollar Rate +			Base Rate+
I	£	1.00:1.00		0.250	%		1.750	%		0.000	%
II		> 1.00:1.00		0.300	%		2.000	%		0.000	%

Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio shall become effective as of the first Business Day immediately following the first date occurring after such change or amendment on which a Compliance Certificate is delivered pursuant to Section 6.02(b); provided, however, that (a) the Applicable Rate in effect from the Amendment Effective Date through the first Business Day immediately following the date on which a Compliance Certificate is first delivered (or required to be delivered) following such Amendment Effective Date pursuant to Section 6.02(b) shall be determined based upon Pricing Level I, and (b) if a Compliance Certificate is not delivered when due in accordance with such Section, then Pricing Level II shall apply as of the Business Day after the date on which such Compliance Certificate was required to have been delivered, and shall continue to so apply to and including the date on which such Compliance Certificate is so delivered (and thereafter the Pricing Level otherwise determined in accordance with this definition shall apply). Notwithstanding anything to the contrary contained in this definition, the determination of the Applicable Rate for any period shall be subject to the provisions of Section 2.08(b).

(2) The definition of “Change in Law” is hereby amended by adding the following proviso to the end of such definition:

provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith, and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

(3) The definition of “Maturity Date is hereby amended in its entirety to read as follows:

“Maturity Date” means May 6, 2014; provided, however, that if such date is not a Business Day, the Maturity Date shall be deemed to be the next preceding Business Day.

(4) The definition of “Permitted Acquisition” is hereby amended by deleting each of the two provisos appearing at the end of such definition pertaining to the concept of the “Annual Expenditure Limit”.

(5) The term “Revolving Credit Note” defined in the Credit Agreement shall, with effect from and after the Effective Date, refer to the New Note delivered under this Amendment.

2

(6) A new definition is inserted in Article I as follows:

“Amendment Effective Date” means May 6, 2011.

(7) A new definition is inserted in Article I as follows:

“Consolidated Revenue” means, for any period, revenue of the Borrower and its Subsidiaries on a consolidated basis, for such period.

(8) A new definition is inserted in Article I as follows:

“Consolidated Total Assets” means, as of any date of determination, total assets of the Borrower and its Subsidiaries as of such date, on a consolidated basis.

(9) A new definition is inserted in Article I as follows:

“Immaterial First Tier Foreign Subsidiaries” means, collectively, as of any date of determination, one or more First Tier Foreign Subsidiaries which, when taken together, (a) hold assets (exclusive of goodwill) the net book value of which (measured as of the end of the Borrower’s most recently ended fiscal quarter) does not exceed 10% of Consolidated Total Assets, measured as of the last day of the Borrower’s most recent fiscal quarter for which financial statements are available, or (b) have generated revenues (for the Borrower’s most recent fiscal quarter) not in excess of 10% of Consolidated Revenue for the Borrower’s most recent fiscal quarter for which financial statements are available.

(10) Article I is amended to delete the definition of “Annual Expenditure Limit” in its entirety.

(b) Amendments to Article VI of the Credit Agreement.

(1) Section 6.01(a) of the Credit Agreement is hereby amended in its entirety to read as follows:

(a) (i) as soon as available, but in any event within 60 days after the end of each fiscal year of the Borrower, an internal management-prepared consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year, and the related internal management-prepared consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, and (ii) as previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and opinion of an independent certified public accountant of nationally recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit;

3

(2) Section 6.12(b) of the Credit Agreement is hereby amended in its entirety to read as follows:

(b) thirty days after the time that any Person becomes a First Tier Foreign Subsidiary as a result of the creation or formation of such First Tier Foreign Subsidiary, a Permitted Acquisition or otherwise, then prior to the expiration of such thirty-day period, the Borrower shall (or shall cause any applicable Subsidiary of the Borrower that is the direct owner of such First Tier Foreign Subsidiary to) (i) execute and deliver to the Administrative Agent a Security Agreement Pledge Supplement in respect of such First Tier Foreign Subsidiary, (ii) take such action and deliver such evidence as shall be satisfactory to the Administrative Agent to confirm that the Administrative Agent (for the benefit of the Secured Parties) has a valid, perfected, first priority Lien, subject to no other Liens (except as permitted by the Collateral Documents), in 66% of the Equity Interests of such First Tier Foreign Subsidiary securing the Secured Obligations, including delivery to the Administrative Agent of the certificates, if any, evidencing such Equity Interests, and (iii) provide the Administrative Agent with such board resolutions, officer’s certificates, corporate and other documents and opinions of counsel as the Administrative Agent shall reasonably request in connection with the actions described in clauses (i) and (ii) above; provided that (x) the Borrower shall only be required to take the actions specified in clauses (i) through (iii) of this clause (b) with respect to any particular First Tier Foreign Subsidiary to the extent necessary to ensure that, at all times, such actions have been completed to the reasonable satisfaction of the Lender with respect to all First Tier Foreign Subsidiaries, other than any such First Tier Foreign Subsidiaries which, when taken together at any time, constitute a group of Immaterial First Tier Foreign Subsidiaries at such time, and (y) from and after the date on which any of the actions specified in clauses (i), (ii) or (iii) of this clause (b) have been taken with respect to any particular First Tier Foreign Subsidiary, no such actions shall be unwound nor any documents delivered in connection therewith terminated. The parties hereby acknowledge and agree that in the event of any conflict between the terms of this clause (b), on the one hand, and the terms of the Security Agreement or that certain letter agreement between the parties dated on or about January 11, 2011, on the other hand, the terms of this clause (b) shall control.

(c) Amendments to Article VII of the Credit Agreement.

(1) Section 7.01 of the Credit Agreement is hereby amended by re-lettering existing clause (p) thereof as clause (q) and adding the following as new clause (p) thereof:

(p) Liens securing Indebtedness permitted under Section 7.03(f); and

(2) Section 7.13(a) of the Credit Agreement is hereby amended in its entirety to read as follows:

(a) Minimum TTM EBTIDA. Permit TTM EBITDA, as measured as of the last day of each fiscal quarter of the Borrower, to be less than $10,000,000.

(3) Section 7.14 of the Credit Agreement is hereby amended in its entirety to read as follows:

Reserved.

(d) Amendment to Schedule 2.01 of the Credit Agreement. Schedule 2.01 of the Credit Agreement is replaced in its entirety by Schedule 2.01 of this Amendment.

4

(e) Amendment to Exhibit C of the Credit Agreement. Exhibit C of the Credit Agreement is replaced in its entirety by Exhibit C of this Amendment.

3. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lender as follows:

(a) No Default has occurred and is continuing (or would result from the amendment of the Credit Agreement contemplated hereby).

(b) The execution, delivery and performance by the Borrower of the Amendment Documents have been duly authorized by all necessary corporate and other action and do not and will not require any registration with, consent or approval of, or notice to or action by, any Person (including any Governmental Authority) in order to be effective and enforceable.

(c) The Amendment Documents constitute the legal, valid and binding obligations of the Borrower, enforceable against it in accordance with their respective terms except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditor’s rights generally and by equitable principles (regardless of whether enforcement is sought in equity or at law).

(d) All representations and warranties of the Borrower contained in the Credit Agreement are true and correct in all material respects (except that any representation or warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects), except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (except that any representation or warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) as of such earlier date, and except that for purposes of this Section 3, the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Credit Agreement.

(e) The Borrower is entering into this Amendment on the basis of its own investigation and for its own reasons, without reliance upon the Administrative Agent and the Lender or any other Person.

(f) The Borrower’s obligations under the Credit Agreement and under the other Loan Documents are not subject to any defense, counterclaim, set-off, right of recoupment, abatement or other claim.

4. Conditions of Effectiveness.

(a) The effectiveness of Section 2 of this Amendment shall be subject to the satisfaction of each of the following conditions precedent:

(1) The Administrative Agent shall have received (A) from the Borrower and the Lender a duly executed original (or, if elected by the Administrative Agent, an executed facsimile copy) of this Amendment, and (B) from the Borrower, a duly executed original (or an executed facsimile copy with an original to follow promptly thereafter) of a replacement Revolving Credit Note (the “New Note”) substantially in the form of Exhibit D to this Amendment.

5

(2) The Administrative Agent shall have received evidence of payment by the Borrower of all fees, costs and expenses due and payable as of the Effective Date under or in connection with this Amendment and the Credit Agreement, including any fees arising under or referenced in Section 6 of this Amendment and any costs and expenses payable under Section 7(g) of this Amendment (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, to the extent invoiced on or prior to the Effective Date).

(3) The Administrative Agent shall have received from the Borrower, in form and substance satisfactory to it, a Secretary’s Certificate dated as of the Effective Date, executed by the Secretary of the Borrower and certifying (A) the incumbency, offices and signature specimens of each signatory authorized to execute and deliver Amendment Documents on behalf of the Borrower, (B) the attachment thereto of a true and accurate copy of the Certificate of Incorporation of the Borrower, together with all amendments thereto and as in effect on the Effective Date, or, in the alternative, certifying that the Certificate of Incorporation of the Borrower has not been amended or otherwise modified since November 10, 2009, (C) the attachment thereto of a true and correct copy of the Bylaws of the Borrower, as in effect on the Effective Date, or, in the alternative, certifying that the Bylaws of the Borrower have not been amended or otherwise modified since November 10, 2009, and (D) the attachment thereto of a true and accurate copy of the resolutions adopted by the Borrower for the purpose of authorizing the execution, delivery and performance by the Borrower of the Amendment Documents.

(4) The Administrative Agent shall have received an opinion of legal counsel to the Borrower, in form and substance satisfactory to the Administrative Agent, addressing such matters related to the Borrower and the Amendment Documents as the Administrative Agent shall specify (with the understanding that no opinions with respect to the enforceability of the Amendment Documents or the creation or perfection of any Liens or security interests of the Administrative Agent shall be required).

(5) The Administrative Agent shall have received all other documents it or the Lender may reasonably request relating to any matters relevant hereto, all in form and substance satisfactory to the Administrative Agent.

(6) The representations and warranties in Section 3 of this Amendment shall be true and correct on and as of the Effective Date with the same effect as if made on and as of the Effective Date.

(b) From and after the Effective Date, the Credit Agreement is amended as set forth herein. Except as expressly amended pursuant hereto, the Credit Agreement shall remain unchanged and in full force and effect and is hereby ratified and confirmed in all respects.

(c) The Administrative Agent will notify the Borrower of the occurrence of the Effective Date.

5. Post-Closing Covenant. By no later than the date occurring 30 days after the Effective Date, the Borrower shall deliver to the Administrative Agent, in form and substance reasonably satisfactory to it, any information necessary to update the disclosures made by the Borrower to the Administrative Agent pursuant to the Representations and Warranties Certificate.

6. Fees. The Borrower shall pay (through the Administrative Agent) to the Lender a non­refundable upfront fee equal to 0.25% of the Lender’s Revolving Credit Commitment as of the Effective Date (and after giving effect to the Amendments to the Credit Agreement contemplated hereby). Such upfront fee shall be fully-earned upon becoming due and payable, shall not be refundable for any reason whatsoever and shall be in addition to any fee, cost or expense otherwise payable by the Borrower pursuant to the Credit Agreement or this Amendment.

6

7. Miscellaneous.

(a) The Borrower acknowledges and agrees that the execution and delivery by the Administrative Agent and the Lender of this Amendment shall not be deemed to create a course of dealing or an obligation to execute similar amendments under the same or similar circumstances in the future.

(b) This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted by the Credit Agreement.

(c) THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(d) This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Amendment and the other Amendment Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4, this Amendment shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Amendment by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Amendment.

(e) This Amendment may not be amended except in accordance with the provisions of Section 10.01 of the Credit Agreement.

(f) If any provision of this Amendment or the other Amendment Documents is held to be illegal, invalid or unenforceable, (i) the legality, validity and enforceability of the remaining provisions of this Amendment and the other Amendment Documents and Loan Documents shall not be affected or impaired thereby and (ii) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

(g) The Borrower agrees to pay or reimburse all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), in connection with the preparation, negotiation, execution, delivery and administration of this Amendment and the other Amendment Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated).

(h) From and after the Effective Date, any Revolving Credit Note outstanding under the Credit Agreement immediately prior to the Effective Date shall be deemed to be superseded and replaced by the New Note delivered under this Amendment.

(i) This Amendment shall constitute a Loan Document.

[signature pages follow]

7

EXECUTION VERSION

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

EXPONENTIAL INTERACTIVE, INC.
By:	/s/ John R. Rettig
Name:	John R. Rettig
Title:	CFO

S-1

BANK OF AMERICA, N.A., as Administrative Agent and Lender

By:

Name:

Title:

S-2

EXECUTION VERSION

SCHEDULE 2.01

TO AMENDMENT AGREEMENT

SCHEDULE 2.01

COMMITMENTS

AND APPLICABLE PERCENTAGES

Lender	Revolving Credit Commitment	Revolving Credit Applicable Percentage
Bank of America, N.A.	$20,000,000	100.000000000%
Total	$20,000,000	100.000000000%

Schedule 2.01

EXECUTION VERSION

EXHIBIT C

TO AMENDMENT AGREEMENT

EXHIBIT C

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date:             

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of April 12, 2007 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms defined therein being used herein as therein defined), among Exponential Interactive, Inc., a Delaware corporation (the “Borrower”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent.

The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the                          of the Borrower, and that, as such, he/she is authorized to execute and deliver this Certificate to the Administrative Agent on the behalf of the Borrower, and that:

[Use following paragraph 1 for fiscal year-end financial statements]

1. The Borrower has delivered the year-end audited financial statements required by Section 6.01(a)[(i)][(ii)] of the Agreement for the fiscal year of the Borrower ended as of the above date, [together with the report and opinion of an independent certified public accountant required by such section].

[Use following paragraph 1 for fiscal quarter-end financial statements]

1. The Borrower has delivered the unaudited financial statements required by Section 6.0l(b) of the Agreement for the fiscal quarter of the Borrower ended as of the above date. Such financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Borrower and its Subsidiaries in accordance with GAAP as at such date and for such period, subject only to normal year-end audit adjustments and the absence of footnotes without regard to the impact (if any) of the application of Section 409A of the Code and the final regulations issued thereunder.

2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and condition (financial or otherwise) of the Borrower during the accounting period covered by such financial statements.

C-1

Form of Compliance Certificate

3. A review of the activities of the Borrower during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Borrower performed and observed all its Obligations under the Loan Documents, and

[select one:]

(to the best knowledge of the undersigned, during such fiscal period the Borrower performed and observed each covenant and condition of the Loan Documents applicable to it, and no Default has occurred and is continuing.]

-or-

[to the best knowledge of the undersigned, during such fiscal period the following covenants or conditions have not been performed or observed and the following is a list of each such Default and its nature and status:]

4. The representations and warranties of the Borrower contained in Article V of the Agreement, and any representations and warranties of any Loan Party that are contained in any document furnished at any time under or in connection with the Loan Documents, are true and correct in all material respects (except that any representation or warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (except that any representation or warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) as of such earlier date, and except that for purposes of this Compliance Certificate, the representations and warranties contained in subsections (a) and (b) of Section 5.05 of the Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 of the Agreement, including the statements in connection with which this Compliance Certificate is delivered.

5. The financial covenant analyses and information set forth on Schedules 1 and 2 attached hereto are true and accurate on and as of the date of this Certificate.

6. The list of Subsidiaries and the related information set forth on Schedule 3 attached hereto are true and accurate on and as of the date of this Certificate.

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of                     ,                     .

EXPONENTIAL INTERACTIVE, INC.

By:

Name:

Title:

C-2

Form of Compliance Certificate

For the Quarter/Year ended             (“Statement Date”)

SCHEDULE 1

to the Compliance Certificate

($ in 000’s)

I. Section 7.13(a)—Minimum TTM EBITDA.

A.	Consolidated EBITDA for four consecutive fiscal quarters ending on above date (“Subject Period”):
1.	Consolidated Net Income for Subject Period:	$
2.	Consolidated Interest Charges for Subject Period:	$
3.	Provision for income taxes for Subject Period:	$
4.	Depreciation expenses for Subject Period:	$
5.	Amortization expenses for Subject Period:	$
6.	Non-recurring non-cash reductions of Consolidated Net Income for Subject Period:	$
7.	Cash and non-cash charges relating to earnouts under the Transaction Documents for Subject Period:	$
8.	Non-cash charges or expenses related to equity plans or stock option awards for Subject Period:	$
9.	Payroll taxes on exercise of stock options for Subject Period:	$
10.	Non-cash additions to Consolidated Net Income for Subject Period:	$
11.	Income tax credits for Subject Period:	$
B.	TTM EBITDA for Subject Period (Lines II.A.l + 2 + 3 + 4 + 5 + 6 +7 +8+9 -10 -11):	$
Minimum required: $10,000,000
	Compliance		Yes/No

II. Section 7.13 (b)—Minimum Unrestricted Liquidity.

A.	Consolidated Funded Indebtedness for Subject Period:	$
B.	Unrestricted Liquidity for Subject Period:	$
C.	70% of net accounts receivables for Subject Period:	$
D.	Minimum Unrestricted Liquidity (Line II.A <Line II.B +Line II.C):		[    ] < [    ]
	Compliance		Yes/No

C-3

Form of Compliance Certificate

III. Consolidated Leverage Ratio.

A.	Consolidated Funded Indebtedness for Subject Period:	$
B.	TTM EBITDA (Line I.B):	$
C.			to 1
	Compliance		Yes/No

IV. Immaterial First Tier Foreign Subsidiaries.

Appearing below is a list of each First Tier Foreign Subsidiary in respect of which the actions specified in Section 6.12(b)(i) through (iii) of the Agreement have not been taken as of the date of this Compliance Certificate, together with a specification of (a) the percentage that the book value of the assets held by each such First Tier Foreign Subsidiary bears to Consolidated Total Assets, each measured as of the Financial Statement Date specified above, and (b) the percentage that the revenues generated by each such First Tier Foreign Subsidiary during the fiscal quarter ended on the Financial Statement Date specified above bears to Consolidated Revenues for the fiscal quarter ended on such Financial Statement Date.

Name of First Tier Foreign Subsidiary	Percentage of Consolidated Total Assets	Percentage of Consolidated Revenue
	[        ]%	[        ]%
	[        ]%	[        ]%
	[        ]%	[        ]%

If either the aggregate percentage of Consolidated Total Assets specified above exceeds 10% or the aggregate percentage of Consolidated Revenues specified above exceeds 10%, the Borrower is required to take the actions specified in Section 6.12(b) of the Agreement.

C-4

Form of Compliance Certificate

For the Quarter Year ended                      (“Statement Date”)

SCHEDULE 2

to the Compliance Certificate

($ in 000’s)

TTM EBITDA

(in accordance with the definition of Consolidated EBITDA

as set forth in the Agreement)

Consolidated EBITDA	Quarter Ended	Quarter Ended	Quarter Ended	Quarter Ended	Twelve Months Ended
Consolidated Net Income
+ Consolidated Interest Charges
+ income taxes
+ depreciation expense
+ amortization expense
+ non-recurring non-cash reductions
+ cash and non-cash earn-out charges under Transaction Documents
+ non-cash charges or expenses related to equity plans or stock option awards
+ payroll taxes on exercise of stock options
- income tax credits
- non-cash income
= Consolidated EBITDA

C-5

Form of Compliance Certificate

For the Quarter Year ended                      (“Statement Date”)

SCHEDULE 3

to the Compliance Certificate

SUBSIDIARIES AND

OTHER EQUITY INVESTMENTS

Part (a). Subsidiaries.

Status:

DS	=	Domestic Subsidiary
FTFS	=	First Tier Foreign Subsidiary
FS	=	Other Foreign Subsidiary

Name of Subsidiary Jurisdiction of Formation Name of Stockholder Equity
Interests
Outstanding % Owned by
Stockholder Status of
Subsidiary Tax ID or
Other ID
Number

C-6

Form of Compliance Certificate

EXHIBIT D

TO AMENDMENT AGREEMENT

FORM OF REVOLVING CREDIT NOTE

May 6, 2011

FOR VALUE RECEIVED, the undersigned (the “Borrower”), hereby promises to pay to Bank of America, N.A., or its registered assigns (the “Lender”), in accordance with the provisions of the Agreement (as hereinafter defined), the principal amount of each Revolving Credit Loan from time to time made by the Lender to the Borrower under that certain Credit Agreement, dated as of April 12, 2007 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, including as amended as of November 10, 2009, as further amended as of April 8, 2011, and as further amended as of May 6, 2011, the “Agreement;” the terms defined therein being used herein as therein defined), among the Borrower, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent.

The Borrower promises to pay interest on the unpaid principal amount of each Revolving Credit Loan from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement. All payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds at the Administrative Agent’s Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.

This Revolving Credit Note is one of the Revolving Credit Notes referred to in the Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. This Revolving Credit Note is also entitled to the benefits of any Guaranty and is secured by the Collateral. This Revolving Credit Note replaces and supersedes, without novation, each and every Revolving Credit Note previously delivered by the Borrower to the Lender under the Agreement. Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Revolving Credit Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement. Revolving Credit Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Revolving Credit Note and endorse thereon the date, amount and maturity of its Revolving Credit Loans and payments with respect thereto.

The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Revolving Credit Note.

(Remainder of page intentionally left blank; signature page follows)

D-1

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

EXPONENTIAL INTERACTIVE, INC.
By:	/s/ John Rettig
By:	John Rettig
By:	CFO

D-2

Form of Compliance Certificate

LOANS AND PAYMENTS WITH RESPECT THERETO

Date Type of Loan
Made Amount of Loan Made End of Interest Period Amount of
Principal or
Interest Paid
This Date Outstanding
Principal
Balance This
Date Notation Made By

D-3

Form of Compliance Certificate

EX-10.03

Exhibit 10.03

EXPONENTIAL INTERACTIVE, INC.

2000 EQUITY INCENTIVE PLAN

(as Amended and Restated effective November 17, 2008)

1. Purposes of the Plan. The purposes of this 2000 Equity Incentive Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees, Directors and Consultants of the Company and its Subsidiaries and to promote the success of the Company’s business. Options granted under the Plan may be Incentive Stock Options or Non-Qualified Stock Options, as determined by the Administrator at the time of grant of an option and subject to applicable provisions of Section 422 of the Code and the regulations promulgated thereunder. Restricted Stock Awards and Stock Bonuses may also be granted under the Plan.

2. Definitions. As used herein, the following definitions shall apply:

a. “Administrator” means the Board or any of the Committees appointed to administer the Plan.

b. “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 promulgated under the Exchange Act.

c. “Applicable Laws” means all applicable laws, rules or regulations, including, the applicable provisions of federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange or national market system, and the laws, rules and regulations of any jurisdiction where Awards are granted or Participants reside, as such laws, rules and regulations shall be in effect from time to time.

d. “Award” means any award under the Plan, including any Option, Restricted Stock or Stock Bonus.

e. “Board” means the Board of Directors of the Company.

f. “Cause” for termination of a Participant’s Continuous Status as an Employee, Director or Consultant will exist (unless another definition is provided in an applicable Option Agreement, Restricted Stock Purchase Agreement, employment agreement or other applicable written agreement) if the Participant is terminated for any of the following reasons: (i) Participant’s willful failure to perform his or her duties and responsibilities to the Company or Participant’s violation of any written Company policy; (ii) Participant’s commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in injury to the Company; (iii) Participant’s unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company; or (iv) Participant’s material breach of any of his or her obligations under any written agreement or covenant with the Company. The determination as to whether a Participant has been terminated for Cause shall be made in good faith by the Company and shall be final and binding on the Participant. The foregoing definition does not in any way limit the Company’s ability to terminate a Participant’s employment or consulting relationship at any time, and the term “Company” will be interpreted to include any Subsidiary, Parent, or any successor thereto, if appropriate.

g. “Code” means the Internal Revenue Code of 1986, as amended.

h. “Committee” means any committee appointed by the Board to administer the Plan.

i. “Common Stock” means the common stock of the Company.

j. “Company” means Exponential Interactive, Inc., a Delaware corporation.

k. “Consultant” means any person or entity, including an advisor, who is engaged by the Company, or any Parent or Subsidiary, to render consulting or advisory services (other than capital-raising services) and is compensated for such services.

l. “Continuing Directors” means members of the Board who either (i) have been Board members continuously for a period of at least thirty-six (36) months or (ii) have been Board members for less than thirty-six (36) months and were elected or nominated for election as Board members by at least a majority of the Board members described in clause (i) who were still in office at the time such election or nomination was approved by the Board.

m. “Continuous Status as an Employee, Director or Consultant” means that the employment, director or consulting relationship with the Company, any Parent, or Subsidiary, is not interrupted or terminated. Continuous Status as an Employee, Director or Consultant shall not be considered interrupted in the case of (i) any leave of absence approved in writing by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor. A leave of absence approved in writing by the Company shall include sick leave, military leave, or any other personal leave approved by an authorized representative of the Company. For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract.

n. “Corporate Transaction” means any of the following stockholder-approved transactions to which the Company is a party:

i) a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state in which the Company is incorporated;

ii) the sale, transfer or other disposition of all or substantially all of the assets of the Company (including the capital stock of the Company’s subsidiary corporations); or

iii) any reverse merger in which the Company is the surviving entity but 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 from those who held such securities immediately prior to such merger.

2

o. “Covered Employee” means an Employee who is a “covered employee” under Section 162(m)(3) of the Code.

p. “Director” means a member of the Board.

q. “Disability” means “disability” within the meaning of Section 22(e)(3) of the Code, or to the extent required by Applicable Laws, the inability of the Participant, in the opinion of a qualified physician acceptable to the Company, to perform the major duties of the Participant’s position with the Company or any Parent or Subsidiary because of the sickness of injury of the Participant.

r. “Employee” means any person, including an Officer or Director, who is an employee of the Company or any Parent or Subsidiary of the Company for purposes of Section 422 of the Code. The payment of a director’s fee by the Company shall not be sufficient to constitute “employment” by the Company.

s. “Exchange Act” means the Securities Exchange Act of 1934, as amended.

t. “Fair Market Value” means, as of any date, the fair market value of the Common Stock, as determined by the Administrator in good faith on such basis as it deems appropriate and applied consistently with respect to the Participants.

u. “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.

v. “Involuntary Termination” means (unless another definition is provided in the applicable Option Agreement, Restricted Stock Purchase Agreement, employment agreement or other applicable written agreement) the termination of a Participant’s Continuous Status as an Employee, Director or Consultant under the following circumstances: (i) termination other than for death or Disability or other than for Cause by the Company or a Subsidiary, Parent, or successor thereto, as appropriate; or (ii) termination by the participant within 12 months following a Corporate Transaction resulting in (A) a material reduction in the Participant’s job responsibilities, provided that neither a mere change in title alone nor reassignment to a position that is substantially similar to the position held immediately prior to such change shall constitute a material reduction in job responsibilities; (B) relocation by the Company or a Subsidiary, Parent, or successor thereto, as appropriate, of the Participant’s work site to a facility or location more than 50 miles from the Participant’s principal work site immediately prior to such change; or (C) a reduction in Participant’s then-current base salary by at least 20%, provided that an across-the-board reduction in the salary level of all other employees or consultants in positions substantially similar to the Participant’s by the same percentage amount as part of a general salary level reduction shall not constitute such a salary reduction.

w. “Non-Qualified Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

3

x. “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

y. “Option” means a stock option granted pursuant to the Plan.

z. “Option Agreement” means the written agreement evidencing the grant of an Option executed by the Company and the Optionee, including any amendments thereto and any documents attached to or incorporated into such Option Agreement, including, but not limited to, a notice of stock option grant and a form of exercise notice.

aa. “Option Exchange Program” means a program approved by the Administrator whereby outstanding Options (i) are exchanged, in full or in part, for Options with a lower exercise price, Restricted Stock or cash or (ii) are amended to decrease the exercise price as a result of a decline in the Fair Market Value of the Common Stock.

bb. “Optioned Stock” means the Common Stock subject to an Option or that were issued pursuant to the exercise of an Option.

cc. “Optionee” means an Employee, Director or Consultant who receives an Option under the Plan.

dd. “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, at the time of grant of the Award, each of the corporations other than the Company owns 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. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.

ee. “Participant” means any holder of one or more Awards or Shares issued pursuant to an Award.

ff. “Performance—Based Compensation” means compensation qualifying as “performance-based compensation” under Section 162(m) of the Code.

gg. “Performance Stock Bonus Agreement” means the written agreement, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of a Stock Bonus Award granted under the Plan and includes any documents attached to such agreement.

hh. “Plan” means this 2000 Equity Incentive Plan.

ii. “Restricted Stock Award” means an award of Shares pursuant to Section 13.

jj. “Restricted Stock Purchase Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of a Restricted Stock Award granted under the Plan and includes any documents attached to such agreement.

4

kk. “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor provision.

ll. “Securities Act” means the Securities Act of 1933, as amended.

mm. “Share” means a share of the Common Stock.

nn. “Stock Bonus” means an award of Shares, or cash in lieu of Shares, pursuant to Section 14.

oo. “Stock Bonus Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of a Stock Bonus Award granted under the Plan and includes any documents attached to such agreement.

pp. “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of grant of the Award, each of the corporations other than the last corporation in the unbroken chain owns 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. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

qq. “Transfer” means any sale, assignment, encumbrance, hypothecation, pledge, conveyance in trust, gift, transfer by bequest, devise or descent, or other transfer or disposition of any kind, including, but not limited to, transfers to receivers, levying creditors, trustees or receivers in bankruptcy proceedings or general assignees for the benefit of creditors, whether voluntary or by operation of law, directly or indirectly.

3. Stock Subject to the Plan.

a. Subject to the provisions of Section 11, below, the maximum aggregate number of Shares which may be issued under the Plan is 20,000,000 Shares and the maximum number of Shares that may be issued under the Plan pursuant to Incentive Stock Options is 20,000,000 Shares. The Shares may be authorized, but unissued, or reacquired Common Stock. (These share limits set forth in this Section 3(a) reflect the 10-for-1 forward stock split which became effective on November 1, 2005).

b. If an Option expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, such unissued or retained Shares shall become available for future grant under the Plan (unless the Plan has terminated). Shares that actually have been issued under the Plan shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that if unvested Shares are forfeited, or repurchased by the Company at their original purchase price, such Shares shall become available for future grant under the Plan.

5

4. Administration of the Plan.

a. Plan Administrator.

i) Administration with Respect to Directors and Officers. With respect to grants of Awards to Directors or Employees who are also Officers or Directors of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws and to permit such grants and related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, any such Committee shall continue to serve in its designated capacity until otherwise directed by the Board.

ii) Administration With Respect to Consultants and Other Employees. With respect to grants of Awards to Employees or Consultants who are neither Directors nor Officers of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws. Once appointed, any such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. The Board may authorize one or more Officers to grant such Awards within parameters specified by the Board.

iii) Administration With Respect to Covered Employees. Notwithstanding the foregoing, grants of Awards to any Covered Employee intended to qualify as Performance-Based Compensation shall be made only by a Committee (or subcommittee of a Committee) which is comprised solely of one or more Directors eligible to serve on a committee making Awards qualifying as Performance-Based Compensation. In the case of such Options granted to Covered Employees, references to the “Administrator” or to a “Committee” shall be deemed to be references to such Committee or subcommittee.

iv) Administration Errors. In the event an Award is granted in a manner inconsistent with the provisions of this subsection (a), such Award shall be presumptively valid as of its grant date to the extent permitted by the Applicable Laws.

b. Powers of the Administrator. Subject to Applicable Laws and the provisions of the Plan (including any other powers given to the Administrator hereunder), and except as otherwise provided by the Board, the Administrator shall have the authority, in its discretion:

i) to determine the Fair Market Value of the Common Stock, in accordance with Section 2(t) above, provided that such determination shall be applied consistently with respect to Participants under the Plan;

ii) to select the Employees, Directors and Consultants to whom Awards may be granted from time to time hereunder;

iii) to determine whether and to what extent Awards are granted hereunder;

6

iv) to determine the number of Shares to be covered by each Award granted hereunder;

v) to approve forms of Option Agreement and Restricted Stock Purchase Agreement for use under the Plan;

vi) to determine the terms and conditions of any Award granted hereunder;

vii) to establish additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable foreign jurisdictions and to afford Participants favorable treatment under such laws; provided, however, that no Award shall be granted under any such additional terms, conditions, rules or procedures with terms or conditions which are inconsistent with the provisions of the Plan unless granted pursuant to an addendum to the Plan that is approved by the Board pursuant to Section 20 of the Plan;

viii) to amend the terms of any outstanding Award granted under the Plan, including a reduction in the exercise price of any Option to reflect a reduction in the Fair Market Value of the Common Stock since the grant date of the Option, provided that any amendment that would adversely affect the Participant’s rights under an outstanding Award shall not be made without the Participant’s written consent;

ix) to implement an Option Exchange Program and establish the terms and conditions of such Option Exchange Program, provided that any amendment or adjustment to an Option that would adversely affect the Optionee’s rights under an outstanding Option shall not be made without the Optionee’s written consent;

x) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan; and

xi) to take such other action, not inconsistent with the terms of the Plan, as the Administrator deems appropriate.

c. Effect of Administrator’s Decision. All decisions, determinations and interpretations of the Administrator shall be conclusive and binding on all persons.

d. Indemnification. To the maximum extent permitted by Applicable Laws, each Administrator (including individual officers of the Company or members of the Board, if applicable), shall be indemnified and held harmless by the Company against and from (i) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or pursuant to the terms and conditions of any Award except for actions taken in bad faith or failures to act in bad faith, and (ii) any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided that such person shall give the Company an opportunity, at its own expense, to handle and defend any such claim, action, suit or proceeding before he or she undertakes to handle and defend it on his or her

7

own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Articles of Incorporation, Certificate of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any other power that the Company may have to indemnify or hold harmless each such person.

5. Eligibility. Non-Qualified Stock Options and Restricted Stock Awards may be granted to Employees, Directors and Consultants. Stock Bonuses may be awarded to any person or entity for services rendered to the Company or any Parent, Subsidiary, or Affiliate. Incentive Stock Options may be granted only to Employees. An Employee, Director or Consultant who has been granted an Award may, if otherwise eligible, be granted additional Awards. Awards may be granted to such Employees, Directors and Consultants who are residing in foreign jurisdictions as the Administrator may determine from time to time.

6. No Employment Rights. Neither the Plan nor any Award shall confer upon any Employee or Consultant any right with respect to continuation of an employment or consulting relationship with the Company (any Parent, Subsidiary or Affiliate), nor shall it interfere in any way with such Employee’s or Consultant’s right or the Company’s (Parent’s, Subsidiary’s or Affiliate’s) right to terminate his or her employment or consulting relationship at any time, with or without cause.

7. Terms and Conditions of Options.

a. Designation of Options. Each Option shall be designated as either an Incentive Stock Option or a Non-Qualified Stock Option in the applicable Option Agreement. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of Shares subject to options designated as incentive stock options which become exercisable for the first time by an Optionee during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess options, to the extent of the Shares covered thereby in excess of the foregoing limitation, shall be treated as Non-Qualified Stock Options. For this purpose, incentive stock options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined as of the date the option with respect to such Shares is granted.

b. Conditions of Option. Subject to the terms of the Plan, the Administrator shall determine the provisions, terms, and conditions of each Option including, but not limited to, the Option vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, and satisfaction of any performance criteria. The performance criteria established by the Administrator may be based on any one of, or combination of, increase in share price, earnings per share, total stockholder return, return on equity, return on assets, return on investment, net operating income, cash flow, revenue, economic value added, personal management objectives, or other measure of performance selected by the Administrator. Partial achievement of the specified criteria may result in vesting corresponding to the degree of achievement as specified in the Option Agreement.

8

c. Term of Option. The term of each Option shall be the term stated in the Option Agreement, provided, however, that the term of an Incentive Stock Option shall be no more than ten (10) years from the date of grant thereof. However, in the case of an Incentive Stock Option granted to an Optionee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Option shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Option Agreement.

d. Transferability of Options. Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee. The designation of a beneficiary by an Optionee will not constitute a transfer for purposes of this provision.

e. Time of Granting Options. The date of grant of an Option shall for all purposes, be the date on which the Administrator makes the determination to grant such Option, or such other date as is determined by the Administrator. Notice of the grant determination shall be given to each Employee, Director or Consultant to whom an Option is so granted within a reasonable time after the date of such grant.

8. Option Exercise Price, Consideration and Taxes.

a. Exercise Price. The per Share exercise price for the Shares to be issued pursuant to the exercise of an Option shall be such price as is determined by the Administrator and set forth in the Option Agreement, but shall be subject to the following:

i) In the case of an Incentive Stock Option:

(1) granted to an Employee who, at the time of the grant of such Incentive Stock Option owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be not less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant.

(2) granted to any Employee other than an Employee described in the preceding paragraph, the per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

ii) Except as provided in subsection (iii) below, in the case of a Non-Qualified Stock Option, the per Share exercise price shall be such price as determined by the Administrator, provided that, if the per Share exercise price is less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant, it shall comply with all Applicable Laws, including Section 409A of the Code.

iii) In the case of Options intended to qualify as Performance-Based Compensation, the per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

9

iv) Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above pursuant to a merger or other Corporate Transaction.

b. Consideration. Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon exercise of an Option including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option and to the extent required by Applicable laws, shall be determined at the time of grant) and may consist of the following:

i) cash;

ii) check;

iii) to the extent permitted under Applicable Laws, delivery of Optionee’s promissory note with such recourse, interest, security, and redemption provisions as the Administrator determines as appropriate;

iv) surrender of Shares (including withholding of Shares otherwise deliverable upon exercise of the Option) which have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised; provided that in the case of Shares acquired, directly or indirectly, from the Company, the Administrator may, in its sole discretion, require that Shares tendered for payment be previously held by the Participant for a minimum duration (e.g., to avoid financial accounting charges to the Company’s earnings);

v) delivery of a properly executed exercise notice together with such other documentation as the Administrator and a securities broker designated by the Administrator, if applicable, shall require to effect an exercise of the Option and delivery to the Company of the sale or loan proceeds required to pay the exercise price;

vi) such other consideration and method of payment permitted under Applicable Laws; or

vii) any combination of the foregoing methods of payment.

c. Taxes. No Shares shall be delivered under the Plan to any Optionee or other person until such Optionee or other person has made arrangements acceptable to the Administrator for the satisfaction of any foreign, federal, state, or local income and employment tax obligations and any other required deductions, including, without limitation, obligations incident to the grant, exercise or vesting of the Option, the receipt of Shares or the disposition of Shares received on exercise.

10

9. Exercise of Option.

a. Procedure for Exercise; Rights as a Stockholder.

i) Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator consistent with the terms of the Plan and specified in the Option Agreement.

ii) The Administrator shall have the discretion to determine whether and to what extent the vesting of Options shall be tolled during any leave of absence; provided, however, that in the absence of such determination, vesting of Options shall be tolled during any unpaid leave of absence (unless otherwise required by the Applicable Laws). In the event of military leave, vesting shall toll during any unpaid portion of such leave, provided that, upon a Optionee’s returning from military leave (under conditions that would entitle him or her to protection upon such return under the Uniform Services Employment and Reemployment Rights Act), he or she shall be given vesting credit with respect to Options to the same extent as would have applied had the Optionee continued to provide services to the Company (any Parent or Subsidiary, if applicable) throughout the leave on the same terms as he or she was providing services immediately prior to such leave.

iii) An Option shall be deemed to be exercised when written notice of such exercise has been received by the Company in accordance with the terms of the Option by the person entitled to exercise the Option, full payment for the Shares with respect to which the Option is exercised has been received by the Company and any applicable tax obligations have been satisfied. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to Optioned Stock, notwithstanding the exercise of an Option. The Company shall issue (or cause to be issued) such Shares upon exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in the Option Agreement or Section 11, below.

iv) An Option may not be exercised for a fraction of a Share. The Administrator may require that an Option be exercised as to a minimum number of Shares, provided that such requirement shall not prevent an Optionee from exercising the full number of Shares as to which the Option is then exercisable.

b. Exercise of Option following Termination of Employment, Director or Consulting Relationship.

i) Termination. Upon termination of an Optionee’s Continuous Status as an Employee, Director or Consultant, other than upon the Optionee’s death or Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement (which shall not be less than 30 days unless Optionee is terminated for Cause) to the extent that the Option is vested (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for three (3) months following the

11

Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise all or any portion of his or her Option within the time specified by the Administrator, such portion of the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

ii) Disability of Optionee. If an Optionee’s Continuous Status as an Employee, Director or Consultant terminates as a result of the Optionee’s Disability, the Optionee may exercise the Option to the extent the Option is vested, but only within twelve (12) months from the date of such termination (and in no event later than the expiration date of the term of such Option as set forth in the Option Agreement). If such Disability is not a “disability” as such term is defined in Section 22(e)(3) of the Code, in the case of an Incentive Stock Option such Incentive Stock Option shall automatically convert to a Non- Qualified Stock Option on the day three (3) months and one (1) day following such termination. If, on the date of termination the Optionee is not vested as to the entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, all or any portion of the Option is not exercised within the time specified herein, such portion of the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

iii) Death of Optionee. In the event of the death of an Optionee, the Option may be exercised at any time within twelve (12) months following the date of death (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement) to the extent vested on the date of death. If, at the time of death, the Optionee is not vested as to the entire Option, all Shares covered by the unvested portion of the Option shall revert to the Plan. The Option may be exercised by the executor or administrator of the Optionee’s estate or, if none, by the person(s) entitled to exercise the Option under the Optionee’s will or the laws of descent or distribution. If all or any portion of the Option is not so exercised within the time specified herein, such portion of the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

c. Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares, an Option previously granted, based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made.

10. Conditions Upon Issuance of Shares.

a. Shares shall not be issued pursuant to any Award and, if applicable the exercise thereof, unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all Applicable Laws, and shall be further subject to the approval of counsel for the Company with respect to such compliance.

b. As a condition to the exercise of an Option or the issuance of Shares pursuant to any Award, the Company may require the person exercising such Option or holding such Award to represent and warrant that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any Applicable Laws.

12

11. Adjustments Upon Changes in Capitalization. Subject to any required action by the stockholders of the Company, the number and class of Shares or other securities covered by each outstanding Award, and the number and class of Shares or other securities which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan, as well as the price per share of Common Stock covered by each such outstanding Award and any applicable repurchase price, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination, consolidation, recapitalization or reclassification of the Common Stock, subdivision of the Shares, dividend payable in other than Shares in an amount that has a material effect on the price of the Shares, a reorganization, merger, liquidation, spin-off, slit-up, distribution, exchange of Shares, repurchase of Shares, change in corporate structure, or any other similar event resulting in an increase or decrease in the number of issued shares of Common Stock. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason hereof shall be made with respect to, the number or price of Shares subject to an Option. If, by reason of an adjustment pursuant to this Section 11, a Participant’s Award shall cover additional or different shares of stock or securities, then such additional or different shares, and the Award in respect thereof, shall be subject to all of the terms, conditions and restrictions which were applicable to the Award and the Shares subject to the Award prior to such adjustment.

12. Corporate Transactions.

a. Accelerated Vesting. In the event of any Corporate Transaction, each Option which is at the time outstanding under the Plan automatically shall become fully vested and exercisable and be released from any restrictions on transfer and repurchase or forfeiture rights, immediately prior to the specified effective date of such Corporate Transaction, for all of the Shares at the time represented by such Option. However, an outstanding Option under the Plan shall not so fully vest and be exercisable and released from such limitations if and to the extent: (i) such Option is, in connection with the Corporate Transaction, either to be assumed by the successor corporation or parent thereof or to be replaced with a comparable option with respect to shares of the capital stock of the successor corporation or parent thereof, or (ii) such Option is to be replaced with a cash incentive program of the successor corporation which preserves the compensation element of such Option existing at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same vesting schedule applicable to such Option. The determination of option comparability under clause (i) above shall be made by the Administrator, and its determination shall be final, binding and conclusive.

b. Termination of Plan Options. Effective upon the consummation of the Corporate Transaction, all outstanding Options under the Plan shall terminate and cease to remain outstanding, except to the extent assumed by the successor company or its Parent.

c. Dissolution or Liquidation. In the event of the dissolution or liquidation of the Company, each Award will terminate immediately prior to the consummation of such action, unless otherwise determined by the Administrator.

13

13. Restricted Stock. A Restricted Stock Award is an offer by the Company to sell to an eligible person Shares that are subject to restrictions. The Administrator shall determine to whom an offer will be made, the number of Shares the person may purchase, the price to be paid (the “Purchase Price”), the restrictions to which the Shares shall be subject, and all other terms and conditions of the Restricted Stock Award, subject to the following:

a. Form of Restricted Stock Award. All purchases under a Restricted Stock Award made pursuant to the Plan shall be evidenced by a Restricted Stock Purchase Agreement. The offer of Restricted Stock shall be accepted by the Participant’s execution and delivery of the Restricted Stock Purchase Agreement and full payment for the shares to the Company within thirty (30) days from the date the Restricted Stock Purchase Agreement is delivered to the person. If such person does not execute and deliver the Restricted Stock Purchase Agreement along with full payment for the Shares to the Company within thirty (30) days, then the offer shall terminate, unless otherwise determined by the Administrator.

b. Purchase Price. The Purchase Price of Shares sold pursuant to a Restricted Stock Award shall be determined by the Administrator, subject to Applicable Laws. Payment of the Purchase Price may be made in accordance with Section 8(b) of the Plan.

c. Restrictions. Restricted Stock Awards shall be subject to such restrictions as the Administrator may impose. The Administrator may provide for the lapse of such restrictions in installments and may accelerate or waive such restrictions, in whole or in part, based on length of service, performance or such other factors or criteria as the Administrator may determine. Restricted Stock Awards which the Administrator intends to qualify under Code section 162(m) shall be subject to a performance-based goal. Restrictions on such stock shall lapse based on one or more of the following performance goals: stock price, market share, sales increases, earnings per share, return on equity, cost reductions, or any other similar performance measure established by the Administrator. Such performance measures shall be established by the Administrator, in writing, no later than the earlier of (a) ninety (90) days after the commencement of the performance period with respect to which the Restricted Stock award is made and (b) the date as of which twenty-five percent (25%) of such performance period has elapsed.

14. Stock Bonuses.

a. Awards of Stock Bonuses. A Stock Bonus is an award of Shares (which may consist of Restricted Stock) for services rendered to the Company or any Parent, Subsidiary or Affiliate. A Stock Bonus may be awarded for past services already rendered to the Company, or any Parent, Subsidiary or Affiliate pursuant to a Stock Bonus Agreement or upon satisfaction of such performance goals as are set out in advance in a Participant’s Performance Stock Bonus Agreement. Stock Bonuses may vary from Participant to Participant and between groups of Participants, and may be based upon such other criteria as the Administrator may determine.

b. Code Section 162(m). A Stock Bonus that the Administrator intends to qualify for the performance-based exception under Code section 162(m) shall only be awarded based upon the attainment of one or more of the following performance goals: stock price, market share, sales increases, earning per share, return on equity, cost reductions, or any other

14

similar performance measure established by the Administrator. Such performance measures shall be established by the Administrator, in writing, no later than the earlier of: (a) ninety (90) days after the commencement of the performance period with respect to which the Stock Bonus award is made; and (b) the date as of which twenty-five percent (25%) of such performance period has elapsed.

c. Terms of Stock Bonuses. The Administrator shall determine the number of Shares to be awarded to the Participant and whether such Shares shall be Restricted Stock. If the Stock Bonus is being earned upon the satisfaction of performance goals pursuant to a Performance Stock Bonus Agreement, then the Administrator shall determine: (a) the nature, length and starting date of any period during which performance is to be measured (the “Performance Period”) for each Stock Bonus; (b) the performance goals and criteria to be used to measure the performance, if any; (c) the number of Shares that may be awarded to the Participant; and (d) the extent to which such Stock Bonuses have been earned. Performance Periods may overlap and Participants may participate simultaneously with respect to Stock Bonuses that are subject to different Performance Periods and different performance goals and other criteria. The number of Shares may be fixed or may vary in accordance with such performance goals and criteria as may be determined by the Administrator. The Administrator may adjust the performance goals applicable to the Stock Bonuses to take into account changes in law and accounting or tax rules and to make such adjustments as the Administrator deems necessary or appropriate to reflect the impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships.

d. Form of Payment. Subject to Applicable Laws, the earned portion of a Stock Bonus may be paid currently or on a deferred basis with such interest or dividend equivalent, if any, as the Administrator may determine. Payment shall be made in the form of whole Shares, including Restricted Stock, either in a lump sum payment or in installments, all as the Administrator shall determine.

e. Termination During Performance Period. If a Participant is terminated during a Performance Period for any reason, then such Participant shall be entitled to payment with respect to the Stock Bonus only to the extent earned as of the date of termination in accordance with the Performance Stock Bonus Agreement, unless the Administrator shall determine otherwise.

15. Proxy; Voting Agreement; Stock Transfer Restriction.

a. Irrevocable Proxy. As a condition to receiving any Award under the Plan, Participants shall be required to appoint the Chairman of the Board or his or her designee (the “Proxyholder”), as such Participant’s true and lawful proxy and attorney, with the power to act alone and with full power of substitution, to vote or act by written consent with respect to all of such Participant’s Shares issued under the Plan in accordance with the provisions set forth in this Section 15, and to execute all appropriate instruments consistent with this Section 15 on behalf of such Participant. The proxy and power granted by Participant pursuant to this subsection (a) shall be coupled with an interest and given to secure the performance of such party’s duties under this Section 15. Each such proxy and power will be irrevocable until the time referenced in Section 15(e) below. The proxy and power will survive the death, incompetency, and disability of the Participant.

15

b. Voting Agreement On All Matters. Subject to Applicable Laws, with respect to all Shares issued pursuant to the Plan and held by any Participant, in the event that a majority of the members of the Board approves of any matter, action, ratification or other event for which approval of some or all of the Company’s stockholders is sought (either by vote or written consent) or upon which such stockholders are otherwise entitled to vote or consent, then Proxyholder shall vote (in person, by proxy, or by action by written consent, as applicable) all Shares issued pursuant to the Plan and held by any Participant and as to which Participant has beneficial ownership or otherwise exercises voting or dispositive authority in favor of approving such matter, action, ratification, or other event consistent with the vote of the majority of the members of the Board.

c. Stock Transfer Restriction. Subject to Applicable Laws, no Shares issued pursuant to the Plan and held by any Participant may be Transferred without the prior written consent of the Company.

d. Additional Covenants and Agreements.

i) Specific Enforcement. It is agreed and understood that monetary damages would not adequately compensate the Company for the violation of any of the provisions of this Section 15, that this Section 15 shall be specifically enforceable, and that any violation or threatened violation of this Section 15 shall be the proper subject of a temporary or permanent injunction or restraining order. Participants shall waive any claim or defense that there is an adequate remedy at law for such violation or threatened violation.

ii) Proxyholder’s Liability. The Proxyholder shall not be liable for any error of judgment nor for any act done or omitted, nor for any mistake of fact or law nor for anything which the Proxyholder may do or refrain from doing in good faith, nor shall the Proxyholder have any accountability hereunder, except for Proxyholder’s own bad faith, gross negligence, or willful misconduct. Furthermore, upon any judicial or other inquiry or investigation of or concerning the Proxyholder’s acts pursuant to Proxyholder’s rights and powers as described in this Section 15, such acts shall be deemed reasonable and in the best interests of Participants unless proved to the contrary by clear and convincing evidence.

e. Termination of Provisions. The provisions set forth in this Section 15 shall terminate upon the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act.

16. Term of Plan. The Plan shall become effective upon the earlier to occur of its adoption by the Board or its approval by the stockholders of the Company. It shall continue in effect for a term of ten (10) years unless sooner terminated.

17. Securities Law Compliance. If stock options issued under this Plan are intended to qualify for exemption from qualification under Section 25102(o) of the California General Corporation Law (“Section 25102(o)”), then (i) any options or stock issued pursuant to this Plan

16

shall be issued in compliance with Section 25102(o) and the rules and regulations of Title 10, California Code of Regulations and (ii) the requirements of Section 25102(o) and the rules and regulations promulgated thereunder are hereby incorporated by reference, as Section 25102(o) and such rules and regulations may be amended from time to time.

In compliance with Section 25102(o), the Company shall furnish summary financial information (audited or unaudited) of the Company’s financial condition and results of operations, consistent with the requirements of Applicable Laws, at least annually to each Participant whose Award is issued in reliance on Section 25102(o) during the period such Participant has one or more Awards outstanding, and in the case of an individual who acquired Shares pursuant to the Plan, during the period such Participant owns such Shares. Notwithstanding the foregoing, the Company shall not be required to provide such information if (i) the issuance is limited to key employees whose duties in connection with the Company assure their access to equivalent information or (ii) the Plan or any agreement complies with all conditions of Rule 701 of the Securities Act; provided that for purposes of determining such compliance, any registered domestic partner shall be considered a “family member” as that term is defined in Rule 701.

18. Amendment, Suspension or Termination of the Plan.

a. The Board may at any time amend, suspend or terminate the Plan. To the extent necessary to comply with Applicable Laws, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required.

b. No Option may be granted during any suspension of the Plan or after termination of the Plan.

c. Any amendment, suspension or termination of the Plan shall not adversely affect Awards already granted, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company.

19. Reservation of Shares.

a. The Company, during the term of the Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

b. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

20. Addenda. The Administrator may approve such addenda to the Plan as it may consider necessary or appropriate for the purpose of granting Awards to Employees, Consultants or Directors, which Awards may contain such terms and conditions as the Administrator deems necessary or appropriate to accommodate differences in local law, tax policy or custom, which, if so required under Applicable Laws, may deviate from the terms and conditions set forth in this Plan. The terms of any such addenda shall supersede the terms of the Plan to the extent necessary to accommodate such differences but shall not otherwise affect the terms of the Plan as in effect for any other purpose.

17

EXPONENTIAL INTERACTIVE, INC.

2000 EQUITY INCENTIVE PLAN

NOTICE OF STOCK OPTION GRANT

First Last

Street Address

City, State-Province Zip-Postal Code

You have been granted an option to purchase shares of Common Stock of Exponential Interactive, Inc., a Delaware corporation (the “Company”), as follows:

Date of Grant:	Date Granted
Grant Number:	ISO #Option Number
Exercise Price Per Share:	$Exercise Price Per Share
Total Number of Shares Granted:	Number of Shares
Total Exercise Price:	$Total Exercise Price
Type of Option:	_xxxxx__ Shares Incentive Stock Option ________ Shares Non-Qualified Stock Option
Term/Expiration Date:	Term Date
Vesting Commencement Date:	Vesting Commencement Date
Vesting Schedule:	So long as your Continuous Status as an Employee, Director or Consultant continues, the Shares underlying this Option shall vest and become exercisable in accordance with the following schedule: 25% of the total number of Shares subject to the Option shall vest and become exercisable on the 12 month anniversary of the Vesting Commencement Date and 1/48th of the total number of Shares subject to the Option shall vest and become exercisable on the same day of each month thereafter.

18

Termination Period:	This Option, to the extent vested, may only be exercised for 3 months after termination of your Continuous Status as an Employee, Director or Consultant, or such longer period as may be applicable upon death or Disability as provided in Section 5 of the Stock Option Agreement. You are responsible for keeping track of these exercise periods following your termination for any reason. The Company will not provide further notice of such periods.
[Alternate Language; Delete if Inapplicable:] Change of Control:	Notwithstanding the above, in the event of a Corporate Transaction, and you are Involuntarily Terminated by the successor corporation in connection with, or within twelve (12) months following consummation of, the transaction, then the number of Shares that would otherwise have vested and been exercisable as of the date twelve (12) months from the date of termination shall accelerate and vest, in each case assuming you remain in Continuous Status as an Employee, Director or Consultant for such twelve (12) month period. The acceleration of vesting provided for in the previous sentence shall occur immediately prior to the effective date of the termination of your Continuous Status as an Employee, Director or Consultant. All capitalized terms in this section not otherwise defined shall have the meanings given to them in the 2000 Equity Incentive Plan.
Transferability:	This Option may not be transferred.

By your signature and the signature of the Company’s representative below, you and the Company agree that this option is granted under and governed by the terms and conditions of the Exponential Interactive, Inc. 2000 Equity Incentive Plan and the Stock Option Agreement, both of which are attached to and made a part of this document.

In addition, you agree and acknowledge that your rights to any Shares underlying the Option will be earned only as you provide services to the Company over time, that the grant of the Option is not as consideration for services you rendered to the Company prior to your Vesting Commencement Date, and that nothing in this Notice or the attached documents confers upon you any right to continue your employment or consulting relationship with the Company for any period of time, nor does it interfere in any way with your right or the Company’s right to terminate that relationship at any time, for any reason, with or without cause.

19

Also, the Exercise Price Per Share has been set at the fair market value of the Shares on the Date of Grant in good faith compliance with the applicable guidance issued by the IRS under Section 409A of the Code in order to avoid the Option being treated as deferred compensation under Section 409A of the Code. However, there is no guarantee that the IRS will agree with the valuation and, by signing below, you agree and acknowledge that the Company shall not be held liable for any applicable costs, taxes, or penalties associated with the Option if, in fact, the IRS were to determine that the Option constitutes deferred compensation under Section 409A of the Code. You should consult with your own tax advisor concerning the tax consequences of such a determination by the IRS.

EXPONENTIAL INTERACTIVE, INC.
By:
	(Signature)
Name:	Dilip DaSilva
Title:	President & CEO
OPTIONEE: First Last
By:
	(Signature)

20

EXPONENTIAL INTERACTIVE, INC.

2000 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

1. Grant of Option. Exponential Interactive, Inc., a Delaware corporation (the “Company”), hereby grants to First Last (“Optionee”), an option (the “Option”) to purchase the total number of shares of Common Stock (the “Shares”) set forth in the Notice of Stock Option Grant (the “Notice”), at the exercise price per Share set forth in the Notice (the “Exercise Price”) subject to the terms, definitions and provisions of the Exponential Interactive, Inc. 2000 Equity Incentive Plan (the “Plan”) adopted by the Company, which is incorporated in this Agreement by reference. Unless otherwise defined in this Agreement, the terms used in this Agreement shall have the meanings defined in the Plan.

2. Designation of Option. This Option is intended to be an Incentive Stock Option as defined in Section 422 of the Code only to the extent so designated in the Notice, and to the extent it is not so designated or to the extent the Option does not qualify as an Incentive Stock Option, it is intended to be a Non-Qualified Stock Option.

Notwithstanding the above, if designated as an Incentive Stock Option, in the event that the Shares subject to this Option (and all other Incentive Stock Options granted to Optionee by the Company or any Parent or Subsidiary, including under other plans of the Company) that first become exercisable in any calendar year have an aggregate fair market value (determined for each Share as of the date of grant of the option covering such Share) in excess of $100,000, the Shares in excess of $100,000 shall be treated as subject to a Non-Qualified Stock Option.

3. Exercise of Option. This Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice and with the provisions of Section 9 of the Plan as follows:

(a) Right to Exercise.

(i) This Option may not be exercised for a fraction of a share.

(ii) In the event of Optionee’s death, Disability or other termination of Continuous Status as an Employee, Director or Consultant, the Option is governed by Section 5 below, subject to the limitations contained in this Section 3.

(iii) In no event may this Option be exercised after the Expiration Date of the Option as set forth in the Notice.

(b) Method of Exercise.

(i) This Option shall be exercisable by execution and delivery of an Exercise Notice attached hereto as Exhibit A (the “Exercise Agreement”) or of any other form of written notice approved for such purpose by the Company which shall state Optionee’s election

21

to exercise the Option, the number of Shares in respect of which the Option is being exercised, and such other representations and agreements as to the holder’s investment intent with respect to such Shares as may be required by the Company pursuant to the provisions of the Plan. Such written notice shall be signed by Optionee and shall be delivered to the Company by such means as are determined by the Plan Administrator in its discretion to constitute adequate delivery. The written notice shall be accompanied by payment of the Exercise Price. This Option shall be deemed to be exercised upon receipt by the Company of such written notice accompanied by the Exercise Price.

(ii) As a condition to the exercise of this Option and as further set forth in Section 8 of the Plan, Optionee agrees to make adequate provision for federal, state or other tax withholding obligations, if any, which arise upon the grant, vesting or exercise of the Option, or disposition of Shares, whether by withholding, direct payment to the Company, or otherwise.

(iii) The Company is not obligated, and will have no liability for failure, to issue or deliver any Shares upon exercise of the Option unless such issuance or delivery would comply with the Applicable Laws, with such compliance determined by the Company in consultation with its legal counsel. This Option may not be exercised until such time as the Plan has been approved by the stockholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any applicable federal or state securities or other law or regulation, including any rule under Part 221 of Title 12 of the Code of Federal Regulations as promulgated by the Federal Reserve Board. As a condition to the exercise of this Option, the Company may require Optionee to make any representation and warranty to the Company as may be required by the Applicable Laws. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to Optionee on the date on which the Option is exercised with respect to such Shares.

4. Method of Payment. Payment of the Exercise Price shall be by any of the following, or a combination of the following, at the election of Optionee:

(a) Cash;

(b) Check; or

(c) Commencing at such time as the Company’s Common Stock is registered under Section 12 of the Exchange Act, and the shares for which this Option is exercisable are eligible for public resale under Rule 701 of the Securities Act of 1933, as amended, or are registered under a Form S-8 registration statement (or any applicable successor form thereto), and the Company’s stock is publicly traded on a national securities exchange or the Nasdaq National Market System, by delivery (on a form prescribed by the Administrator) of an irrevocable direction to a securities broker to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price and, if applicable, the amount necessary to satisfy the Company’s tax withholding obligations at the minimum statutory withholding rates, including, but not limited to, U.S. federal and state income taxes, payroll taxes, and foreign taxes, if applicable.

22

5. Termination of Relationship. Following the date of termination of Optionee’s Continuous Status as an Employee, Director or Consultant for any reason (the “Termination Date”), Optionee may exercise the Option only as set forth in the Notice and this Section 5. To the extent that Optionee is not entitled to exercise this Option as of the Termination Date, or if Optionee does not exercise this Option within the Termination Period set forth in the Notice or the termination periods set forth below, the Option shall terminate in its entirety. In no event, may any Option be exercised after the Expiration Date of the Option as set forth in the Notice.

(a) Termination. In the event of termination of Optionee’s Continuous Status as an Employee, Director or Consultant other than as a result of Optionee’s Disability or death or for Cause, Optionee may, to the extent Optionee is vested in the Option Shares at the Termination Date, exercise this Option during the Termination Period set forth in the Notice.

(b) Other Terminations. In connection with any termination other than a termination covered by Section 5(a), Optionee may exercise the Option only as described below:

(i) Termination upon Disability of Optionee. In the event the Optionee’s Continuous Status as an Employee, Director or Consultant terminates as a result of Optionee’s Disability, Optionee may, but only within twelve (12) months from the Termination Date (and in no event later than the Expiration Date), exercise this Option to the extent Optionee was vested in the Option Shares as of such Termination Date.

(ii) Death of Optionee. In the event of the death of Optionee during the term of this Option and while an Employee or Consultant of the Company and having been in Continuous Status as an Employee, Director or Consultant since the date of grant of the Option, the Option may be exercised at any time within twelve (12) months following the date of death (and in no event later than the Expiration Date), by Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent Optionee was vested in the Option as of the Termination Date.

(iii) Termination for Cause. In the event Optionee’s Continuous Status as an Employee, Director or Consultant is terminated for Cause, the Option shall terminate immediately upon such termination for Cause. In the event Optionee’s employment or consulting relationship with the Company is suspended pending investigation of whether such relationship shall be terminated for Cause, all Optionee’s rights under the Option, including the right to exercise the Option, shall be suspended during the investigation period.

6. Non-Transferability of Option. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of the Optionee only by the Optionee.

7. Lock-Up Agreement. In connection with the initial public offering of the Company’s securities, Optionee agrees, upon the request of the Company and the underwriters managing such underwritten offering of the Company’s securities, not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Shares (other than those included in the registration) without the prior written consent of the Company and such underwriters, as the case may be, for such period of time, not to exceed fourteen (14) days before

23

and one hundred eighty (180) days, after the effective date of such registration as the underwriters may specify. The Company and underwriters may request such additional written agreements in furtherance of such standoff in the form reasonably satisfactory to the Company and such underwriter. The Company may also impose stop-transfer instructions with respect to the Shares subject to the foregoing restrictions until the end of said one hundred eighty (180) day period.

8. Effect of Agreement. Optionee acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof (and has had an opportunity to consult counsel regarding the Option terms), and hereby accepts this Option and agrees to be bound by its contractual terms as set forth herein and in the Plan. Optionee hereby agrees to accept as binding, conclusive and final all decisions and interpretations of the Plan Administrator regarding any questions relating to the Option. In the event of a conflict between the terms and provisions of the Plan and the terms and provisions of the Notice and this Agreement, the Plan terms and provisions shall prevail. The Option, including the Plan, constitutes the entire agreement between Optionee and the Company on the subject matter hereof and supersedes all proposals, written or oral, and all other communications between the parties relating to such subject matter.

[Signature Page Follows]

24

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one document.

EXPONENTIAL INTERACTIVE, INC.
By:
	(Signature)
Name:	Dilip DaSilva
Title:	President & CEO
OPTIONEE: First Last
By:
	(Signature)

25

EXHIBIT A

EXPONENTIAL INTERACTIVE, INC.

2000 EQUITY INCENTIVE PLAN

EXERCISE NOTICE

This Agreement (“Agreement”) is made as of _________________, by and between Exponential Interactive, Inc., a Delaware corporation (the “Company”), and __________________ (“Purchaser”). To the extent any capitalized terms used in this Agreement are not defined herein, they shall have the meaning ascribed to them in the Plan (as defined below).

1. Exercise of Option. Subject to the terms and conditions hereof, Purchaser hereby elects to exercise his or her option to purchase _____________ shares of the Common Stock (the “Shares”) of the Company under and pursuant to the Company’s 2000 Equity Incentive Plan (the “Plan”) and the Stock Option Agreement granted Date Granted (the “Option Agreement”). The purchase price for the Shares shall be $_______ per Share for a total purchase price of $            . The term “Shares” refers to the purchased Shares and all securities received in replacement of the Shares or as stock dividends or splits, all securities received in replacement of the Shares in a recapitalization, merger, reorganization, exchange or the like, and all new, substituted or additional securities or other properties to which Purchaser is entitled by reason of Purchaser’s ownership of the Shares.

2. Time and Place of Exercise. The purchase and sale of the Shares under this Agreement shall occur at the principal office of the Company simultaneously with the execution and delivery of this Agreement in accordance with the provisions of Section 3(b) of the Option Agreement. On such date, the Company will deliver to Purchaser a certificate representing the Shares purchased by Purchaser (which shall be issued in Purchaser’s name) against payment of the exercise price therefor by Purchaser by any method listed in Section 4 of the Option Agreement.

3. Limitations on Transfer. In addition to any other limitation on transfer created by applicable securities laws, Purchaser shall not assign, encumber or dispose of any interest in the Shares except in compliance with the provisions below and applicable securities laws.

(a) Right of First Refusal. Before any Shares held by Purchaser or any transferee of Purchaser (either being sometimes referred to herein as the “Holder”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section 3(a) (the “Right of First Refusal”).

(i) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee (“Proposed Transferee”); (iii) the number of Shares to be transferred to each

26

Proposed Transferee; and (iv) the terms and conditions of each proposed sale or transfer. The Holder shall offer the Shares at the same price (the “Offered Price”) and upon the same terms (or terms as similar as reasonably possible) to the Company or its assignee(s).

(ii) Exercise of Right of First Refusal. At any time within thirty (30) days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with subsection (iii) below.

(iii) Purchase Price. The purchase price (“Purchase Price”) for the Shares purchased by the Company or its assignee(s) under this Section 3(a) shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in good faith.

(iv) Payment. Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness, or by any combination thereof within 60 days after receipt of the Notice or in the manner and at the times set forth in the Notice.

(v) Holder’s Right to Transfer. If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section 3(a), then the Holder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within 90 days after the date of the Notice and provided further that any such sale or other transfer is effected in accordance with any applicable securities laws and the Proposed Transferee agrees in writing that the provisions of this Section 3 shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, or if the Holder proposes to change the price or other terms to make them more favorable to the Proposed Transferee, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred.

(vi) Exception for Certain Family Transfers. Anything to the contrary contained in this Section 3(a) notwithstanding, the transfer of any or all of the Shares during Purchaser’s lifetime or on Purchaser’s death by will or intestacy to Purchaser’s Immediate Family or a trust for the benefit of Purchaser’s Immediate Family shall be exempt from the provisions of this Section 3(a). “Immediate Family” as used herein shall mean spouse, lineal descendant or antecedent, father, mother, brother or sister. In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section, and there shall be no further transfer of such Shares except in accordance with the terms of this Section 3.

27

(b) Involuntary Transfer.

(i) Company’s Right to Purchase upon Involuntary Transfer. In the event, at any time after the date of this Agreement, of any transfer by operation of law or other involuntary transfer (including death or divorce, but excluding a transfer to Immediate Family as set forth in Section 3(a)(vi) above) of all or a portion of the Shares by the record holder thereof, the Company shall have an option to purchase all of the Shares transferred at the greater of the purchase price paid by Purchaser pursuant to this Agreement or the Fair Market Value of the Shares on the date of transfer. Upon such a transfer, the person acquiring the Shares shall promptly notify the Secretary of the Company of such transfer. The right to purchase such Shares shall be provided to the Company for a period of thirty (30) days following receipt by the Company of written notice by the person acquiring the Shares.

(ii) Price for Involuntary Transfer. With respect to any stock to be transferred pursuant to Section 3(b)(i), the price per Share shall be a price set by the Board of Directors of the Company that will reflect the current value of the stock in terms of present earnings and future prospects of the Company. The Company shall notify Purchaser or his or her executor of the price so determined within thirty (30) days after receipt by it of written notice of the transfer or proposed transfer of Shares. However, if the Purchaser does not agree with the valuation as determined by the Board of Directors of the Company, the Purchaser shall be entitled to have the valuation determined by an independent appraiser to be mutually agreed upon by the Company and the Purchaser and whose fees shall be borne equally by the Company and the Purchaser.

(c) Assignment. The right of the Company to purchase any part of the Shares may be assigned in whole or in part to any shareholder or shareholders of the Company or other persons or organizations.

(d) Restrictions Binding on Transferees. All transferees of Shares or any interest therein will receive and hold such Shares or interest subject to the provisions of this Agreement. Any sale or transfer of the Company’s Shares shall be void unless the provisions of this Agreement are satisfied.

(e) Termination of Rights. The right of first refusal granted the Company by Section 3(a) above and the option to repurchase the Shares in the event of an involuntary transfer granted the Company by Section 3(b) above shall terminate upon the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”). Upon termination of the right of first refusal described in Section 3(a) above, a new certificate or certificates representing the Shares not repurchased shall be issued, on request, without the legend referred to in Section 5(a)(ii) herein and delivered to Purchaser.

4. Investment and Taxation Representations. In connection with the purchase of the Shares, Purchaser represents to the Company the following:

28

(a) Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Shares. Purchaser is purchasing these securities for investment for his or her own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act or under any applicable provision of state law. Purchaser does not have any present intention to transfer the Shares to any person or entity.

(b) Purchaser understands that the Shares have not been registered under the Securities Act by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Purchaser’s investment intent as expressed herein.

(c) Purchaser further acknowledges and understands that the securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Purchaser further acknowledges and understands that the Company is under no obligation to register the securities. Purchaser understands that the certificate(s) evidencing the securities will be imprinted with a legend which prohibits the transfer of the securities unless they are registered or such registration is not required in the opinion of counsel for the Company.

(d) Purchaser is familiar with the provisions of Rules 144 and 701, each promulgated under the Securities Act, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly, from the issuer of the securities (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions. Purchaser understands that the Company provides no assurances as to whether he or she will be able to resell any or all of the Shares pursuant to Rule 144 or Rule 701, which rules require, among other things, that the Company be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, that resales of securities take place only after the holder of the Shares has held the Shares for certain specified time periods, and under certain circumstances, that resales of securities be limited in volume and take place only pursuant to brokered transactions. Notwithstanding this paragraph (d), Purchaser acknowledges and agrees to the restrictions set forth in paragraph (e) below.

(e) Purchaser further understands that in the event all of the applicable requirements of Rule 144 or 701 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 or 701 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk.

(f) Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted any tax consultants Purchaser deems advisable in connection with the

29

purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

5. Restrictive Legends and Stop-Transfer Orders.

(a) Legends. The certificate or certificates representing the Shares shall bear the following legends (as well as any legends required by applicable state and federal corporate and securities laws):

(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

(ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

(b) Stop-Transfer Notices. Purchaser agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

(c) Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

6. No Employment Rights. Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company, or a parent or subsidiary of the Company, to terminate Purchaser’s employment or consulting relationship, for any reason, with or without cause.

7. Lock-Up Agreement. In connection with the initial public offering of the Company’s securities, Optionee agrees, upon the request of the Company and the underwriters managing such underwritten offering of the Company’s securities, not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Shares (other than those included in the registration) without the prior written consent of the Company and such

30

underwriters, as the case may be, for such period of time, not to exceed fourteen (14) days before and one hundred eighty (180) days, after the effective date of such registration as the underwriters may specify. The Company and underwriters may request such additional written agreements in furtherance of such standoff in the form reasonably satisfactory to the Company and such underwriter. The Company may also impose stop-transfer instructions with respect to the Shares subject to the foregoing restrictions until the end of said one hundred eighty (180) day period.

8. Miscellaneous.

(a) Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.

(b) Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior discussions between them. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.

(c) Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

(d) Construction. This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.

(e) Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by telegram or fax or forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address as set forth below or as subsequently modified by written notice.

(f) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(g) Successors and Assigns. The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations of Purchaser under this Agreement may only be assigned with the prior written consent of the Company.

31

(h) California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

[Signature Page Follows]

32

The parties have executed this Exercise Notice and Restricted Stock Purchase Agreement as of the date first set forth above.

EXPONENTIAL INTERACTIVE, INC.
By:
	(Signature)
Name:
Title:
Address:
PURCHASER: PRINT NAME:
By:
	(Signature)
Address:

33

I, ______________________, spouse of ___________________, have read and hereby approve the foregoing Agreement. In consideration of the Company’s granting my spouse the right to purchase the Shares as set forth in the Agreement, I hereby agree to be irrevocably bound by the Agreement and further agree that any community property or other such interest shall hereby by similarly bound by the Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any amendment or exercise of any rights under the Agreement.

Spouse of First Last (if applicable)

34

RECEIPT

The undersigned hereby acknowledges receipt of Certificate No. _____ for __________ shares of Common Stock of Exponential Interactive, Inc., a Delaware corporation (the “Company”).

Dated:

OPTIONEE: First Last
By:
	(Signature)

35

RECEIPT

Exponential Interactive, Inc., a Delaware corporation (the “Company”), hereby acknowledges receipt of (check as applicable):

Cash in the amount of $____________

A check in the amount of $____________

Certificate No. _____ representing __________ shares of the Company’s

Common Stock with a fair market value of $___________

given by ___________________ as consideration for Certificate No. _____ for _________ shares of Common Stock of the Company.

Dated:

EXPONENTIAL INTERACTIVE, INC.
By:
	(Signature)
Name:
Title:

36

EX-10.04

Exhibit 10.04

EXPONENTIAL INTERACTIVE, INC.

2010 EQUITY INCENTIVE PLAN

(EFFECTIVE JUNE 24, 2010 AND AMENDED MARCH 2, 2012)

1. Purposes of the Plan. The purposes of this 2010 Equity Incentive Plan are to attract and retain the best available personnel for positions of substantial responsibility to provide additional incentive to Employees, Directors and Consultants of the Company and its Subsidiaries and to promote the success of the Company’s business Options granted under the Plan may be Incentive Stock Options or Non-Qualified Stock Options, as determined by the Administrator at the time of grant of an option and subject to applicable provisions of Section 422 of the Code and the regulations promulgated thereunder. Restricted Stock Awards, Restricted Stock Unit Awards, and Stock Bonuses may also be granted under the Plan.

2. Definitions. As used herein, the following definitions shall apply:

a. “Administrator” means the Board or any of the Committees appointed to administer the Plan.

b. “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 promulgated under the Exchange Act.

c. “Applicable Laws” means all applicable laws, rules or regulations, including, the applicable provisions of federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange or national market system, and the laws, rules and regulations of any jurisdiction where Awards are granted or Participants reside, as such laws, rules and regulations shall be in effect from time to time.

d. “Award” means any award under the Plan, including any Option, Restricted Stock, Restricted Stock Unit or Stock Bonus.

e. “Board” means the Board of Directors of the Company.

f. “Cause” for termination of a Participant’s Continuous Status as an Employee, Director or Consultant will exist (unless another definition is provided in an applicable Option Agreement, Restricted Stock Purchase Agreement, RSU Agreement, employment agreement or other applicable written Agreement) if the Participant is terminated for any of the following reasons: (i) Participant’s willful failure to perform his or her duties and responsibilities to the Company or Participant’s violation of any written Company policy; (ii) Participant’s commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in injury to the Company; (iii) Participant’s unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company; or (iv) Participant’s material breach of any of his or her obligations under any written agreement or covenant with the Company. The determination as to whether a Participant has been terminated for Cause shall be made in good

faith by the Company and shall be final and binding on the Participant. The foregoing definition does not in any way limit the Company’s ability to terminate a Participant’s employment or consulting relationship at any time, and the term “Company” will be interpreted to include any Subsidiary, Parent, or any successor thereto, if appropriate.

g. “Code” means the Internal Revenue Code of 1986, as amended.

h. “Committee” means any committee appointed by the Board to administer the Plan.

i. “Common Stock” means the common stock of the Company.

j. “Company” means Exponential Interactive, Inc., a Delaware corporation.

k. “Consultant” means any person or entity, including an advisor, who is engaged by the Company, or any Parent or Subsidiary to render consulting or advisory services (other than capital-raising services) and is compensated for such services.

l. “Continuing Directors” means members of the Board who either (i) have been Board members continuously for a period of at least thirty-six (36) months or (ii) have been Board members for less than thirty-six (36) months and were elected or nominated for election as Board members by at least a majority of the Board members described in clause (i) who were still in office at the time such election of nomination was approved by the Board.

m. “Continuous Status as an Employee, Director or Consultant” means that the employment, director or consulting relationship with the Company, any Parent, or Subsidiary, is not interrupted or terminated. Continuous Status as an Employee, Director or Consultant shall not be considered interrupted in the case of (i) any leave of absence approved in writing by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor. A leave of absence approved in writing by the Company shall include sick leave, military leave, or any other personal leave approved by an authorized representative of the Company. For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days unless reemployment upon expiration of such leave is guaranteed by statute of contract.

n. “Corporate Transaction” means any of the following stockholder-approved transactions to which the Company is a party:

i) a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state in which the Company is incorporated;

ii) the sale, transfer or other disposition of all or substantially all of the assets of the Company (including the capital stock of the Company’s subsidiary corporations); or

iii) any reverse merger in which the Company is the surviving entity but 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 from those who held such securities immediately prior to such merger.

2

o. “Covered Employee” means an Employee who is a “covered employee” under Section 162(m)(3) of the Code.

p. “Director” means a member of the Board.

q. “Disability” means “disability” within the meaning of Section 22(e)(3) of the code, or to the extent required by Applicable Laws, the inability of the Participant, in the opinion of a qualified physician acceptable to the Company, to perform the major duties of the Participant’s position with the Company or any Parent or Subsidiary because of the sickness of injury of the Participant.

r. “Employee” means any person, including an Officer or Director, who is an employee of the Company or any Parent or Subsidiary of the Company for purposes of Section 422 of the Code. The payment of a director’s fee by the Company shall not be sufficient to constitute “employment” by the Company.

s. “Exchange Act” means the Securities Exchange Act of 1934, as amended.

t. “Fair Market Value” means, as of any date, the fair market value of the Common Stock, as determined by the Administrator in good faith on such basis as it deems appropriate and applied consistently with respect to the Participants.

u. “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.

v. “Involuntary Termination” means (unless another definition is provided in the applicable Option Agreement, Restricted Stock Purchase Agreement, employment agreement or other applicable written agreement) the termination of a Participant’s Continuous Status as an Employee, Director or Consultant under the following circumstances: (i) termination other than for death or Disability or other than for Cause by the Company or a Subsidiary, Parent, or successor thereto, as appropriate; or (ii) termination by the participant within 12 months following a Corporate Transaction resulting in (a) a material reduction in the Participant’s job responsibilities, provided that neither a mere change in title alone nor reassignment to a position that is substantially similar to the position held immediately prior to such change shall constitute a material reduction in job responsibilities; (B) relocation by the Company or a Subsidiary, Parent, or successor thereto, as appropriate, of the Participant’s work site to a facility or location more than 50 miles from the Participant’s principal work site immediately prior to such change; or (C) a reduction in Participant’s then-current base salary by at least 20% provided that an across-the-board reduction in the salary level of all other employees or consultants in positions substantially similar to the Participant’s by the same percentage amount as part of a general salary level reduction shall not constitute such a salary reduction.

w. “Non-Qualified Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

3

x. “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

y. “Option” means a stock option granted pursuant to the Plan.

z. “Option Agreement” means the written agreement evidencing the grant of an Option executed by the Company and the Optionee, including any amendments thereto and any documents attached to or incorporated into such Option Agreement, including, but not limited to, a notice of stock option grant and a form of exercise notice.

aa. “Option Exchange Program” means a program approved by the Administrator whereby outstanding Options (i) are exchanged, in full or in part, for Options with a lower exercise price, Restricted Stock or cash or (ii) are amended to decrease the exercise price as a result of a decline in the Fair Market Value of the Common Stock.

bb. “Optioned Stock” means the Common Stock subject to an Option or that were issued pursuant to the exercise of an Option.

cc. “Optionee” means an Employee, Director or Consultant who receives an Option under the Plan.

dd. “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, at the time of grant of the Award, each of the corporations other than the Company owns 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. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.

ee. “Participant” means any holder of one or more Awards or Shares issued pursuant to an Award.

ff. “Performance Based Compensation” means compensation qualifying as “performance-based compensation” under Section 162(m) of the Code.

gg. “Performance Stock Bonus Agreement” means the written agreement, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of a Stock Bonus Award granted under the Plan and includes any documents attached to such agreement.

hh. “Plan” means this 2010 Equity Incentive Plan.

ii. “Restricted Stock Award” means an award of Shares pursuant to Section 13.

jj. “Restricted Stock Purchase Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of a Restricted Stock Award granted under the Plan and includes any documents attached to such agreement.

4

kk. “Restricted Stock Unit” or “RSU” means an award made pursuant to Section 15.

ll. “RSU Agreement” means a written document reflecting the terms of an RSU.

mm. “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor provision.

nn. “Securities Act” means the Securities Act of 1933, as amended.

oo. “Share” means a share of the Common Stock.

pp. “Stock Bonus” means an award of Shares, or cash in lieu of Shares, pursuant to Section 14.

qq. “Stock Bonus Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administration, reflecting the terms of a Stock Bonus Award granted under the Plan and includes any documents attached to such agreement.

rr. “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the company if at the time of grant of the Award, each of the corporations other than the last corporation in the unbroken chain owns 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. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

ss. “Transfer” means any sale, assignment, encumbrance, hypothecation, pledge, conveyance in trust, gift, transfer by bequest, devise or descent, or other transfer or disposition of any kind, including, but not limited to, transfers to receivers, levying creditors, trustees or receivers in bankruptcy proceedings or general assignees for the benefit of creditors, whether voluntary or by operation of law, directly or indirectly, and including any short position, any “put equivalent position” or any “call equivalent position” (in each case, as defined in Rule 16a-1 promulgated under the Exchange Act).

3. Stock Subject to the Plan.

a. Subject to the provisions of Section 11, below, the maximum aggregate number of Shares which may be issued under the Plan is 16,000,000¹ Shares and the maximum number of Shares that may be issued under the Plan pursuant to Incentive Stock Options is 16,000,000 Shares. The Shares may be authorized, but unissued, or reacquired Common Stock.

¹  Includes share increases on May 31, 2011 and February         , 2012.

5

b. If an Option expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, such unissued or retained Shares shall become available for future grant under the Plan (unless the Plan has terminated). Shares that actually have been issued under the Plan shall not be returned to the Plan and shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that if unvested Shares are forfeited, or repurchased by the Company at their original purchase price, such Shares shall become available for future grant under the Plan.

4. Administration of the Plan.

a. Plan Administrator.

i) Administration with Respect to Directors and Officers. With respect to grants of Awards to Directors or Employees who are also Officers of Directors of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws and to permit such grants and related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, any such Committee shall continue to serve in its designated capacity until otherwise directed by the Board.

ii) Administration With Respect to Consultants and Other Employees. With respect to grants of Awards to Employees or Consultants who are neither Directors nor Officers of the Company, the Plan shall be administered by (a) the Board or (B) a Committee designated by the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws. Once appointed, any such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. The Board may authorize one or more Officers to grant such Awards within parameters specified by the Board.

iii) Administration with Respect to Covered Employees. Notwithstanding the foregoing, grants of Awards to any Covered Employee intended to qualify as Performance-Based Compensation shall be made only by a Committee (or subcommittee of a Committee) which is comprised solely of one or more Directors eligible to serve on a committee making Awards qualifying as Performance-Based Compensation. In the case of such Options granted to Covered Employees references to the “Administrator” or to a “Committee” shall be deemed to be references to such Committee or subcommittee.

iv) Administration Errors. In the event an Award is granted in a manner inconsistent with the provisions of this subsection (a), such Award shall be presumptively valid as of its grant date to the extent permitted by the Applicable Laws.

b. Powers of the Administrator. Subject to Applicable Laws and the provisions of the Plan (including any other powers given to the Administrator hereunder), and except as otherwise provided by the Board, the Administrator shall have the authority, in its discretion:

i) to determine the Fair Market Value of the Common Stock, in accordance with Section 2(t) above, provided that such determination shall be applied consistently with respect to Participants under the Plan;

6

ii) to select the Employees, Directors and Consultants to whom Awards may be granted from time to time hereunder;

iii) to determine whether and to what extent Awards are granted hereunder;

iv) to determine the number of Shares to be covered by each Award granted hereunder;

v) to approve forms of Option Agreement and Restricted Stock Purchase Agreement for use under the Plan;

vi) to determine the terms and conditions of any Award granted hereunder;

vii) to establish additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable foreign jurisdiction and to afford Participants favorable treatment under such laws; provided, however, that no Award shall be granted under any such additional terms, conditions, rules or procedures with terms or conditions which are inconsistent with the provisions of the Plan unless granted pursuant to an addendum to the Plan that is approved by the Board pursuant to Section 20 of the Plan;

viii) to amend the terms of any outstanding Award granted under the Plan, including a reduction in the exercise price of any Option to reflect a reduction in the air Market Value of the Common Stock since the grant date of the Option, provided that any amendment that would adversely affect the Participant’s rights under an outstanding Award shall not be made without the Participant’s written consent;

ix) to implement an Option Exchange Program and establish the terms and conditions of such Option Exchange Program, provided that any amendment or adjustment to an Option that would adversely affect the Optionee rights under an outstanding Option shall not be made without the Optionee’s written consent;

x) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan; and

xi) to take such other action, not inconsistent with the terms of the Plan, as the Administrator deems appropriate.

c. Effect of Administrator’s Decision. All decisions, determinations and interpretations of the Administrator shall be conclusive and binding on all persons.

d. Indemnification. To the maximum extent permitted by Applicable Laws, each Administrator (including individual officers of the Company or members of the Board, if applicable), shall be indemnified and held harmless by the Company against and from (i) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act

7

under the Plan or pursuant to the terms and conditions of any Award except for actions taken in bad faith or failures to act in bad faith, and (ii) any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided that such person shall give the Company an opportunity, at its own expense, to handle and defend any such claim, action, suit or proceeding before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Articles of Incorporation, Certificate of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any other power that the Company may have to indemnify or hold harmless, each such person.

5. Eligibility. Non-Qualified Stock Options and Restricted Stock Awards may be granted to Employees, Directors and Consultants. Stock Bonuses may be awarded to any person or entity for services rendered to the Company or any Parent, Subsidiary, or Affiliate. Incentive Stock Options may be granted only to Employees. An Employee, Director or Consultant who has been granted an Award may, if otherwise eligible, be granted additional Awards. Award may be granted to such Employees, Directors and Consultants who are residing in foreign jurisdictions as the Administrator may determine from time to time.

6. No Employment Rights. Neither the Plan or any Award shall confer upon any Employee or Consultant any right with respect to continuation of an employment or consulting relationship with the Company (any Parent, subsidiary or Affiliate), nor shall it interfere in any way with such Employee’s or consultant’s right or the company’s (Parent’s, Subsidiary’s or Affiliate’s) right to terminate his or her employment or consulting relationship at any time, with or without cause.

7. Terms and Conditions of Options.

a. Designation of Options. Each Option shall be designated as either an Incentive Stock Option or a Non-Qualified Stock Option in the applicable Option Agreement. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of Shares subject to options designated as incentive stock options which become exercisable for the first time by an Optionee during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess options, to the extent of the Shares covered thereby in excess of the foregoing limitation shall be treated as Non-Qualified Stock Options. For this purpose, incentive stock options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined as of the date the option with respect to such Shares is granted.

b. Conditions of Option. Subject to the terms of the Plan, the Administrator shall determine the provisions, terms, and conditions of each Option including, but not limited to, the Option vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, and satisfaction of any performance criteria. The performance criteria established by the Administrator may be based on any one of, or combination of, increase in share price, earnings per share, total stockholder return, return on equity, return on assets, return on investment, net operating income, cash flow, revenue, economic value added, personal management objectives, or other measure of performance selected by the Administrator. Partial achievement of the specified criteria may result in vesting corresponding to the degree of achievement as specified in the Option Agreement.

8

c. Term of Option. The term of each Option shall be the term stated in the Option Agreement, provided, however, that the term of an Incentive Stock Option shall be no more than ten (10) years from the date of grant thereof. However, in the case of an Incentive Stock Option granted to an Optionee who, at the time of the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Option shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Option Agreement.

d. Transferability of Options. Options may not be sold, pledged, assigned, hypothecated, Transferred, or disposed of in any manner other than by will or the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee. The designation of a beneficiary by an Optionee will not constitute a transfer for purposes of this provision.

e. Time of Granting Options. The date of grant of an Option shall for all purposes, be the date on which the Administrator makes the determination to grant such Option, or such other date as is determined by the Administrator. Notice of the grant determination shall be given to each Employee, Director or Consultant to whom an Option is so granted within a reasonable time after the date of such grant.

8. Option Exercise Price, Consideration and Taxes.

a. Exercise Price. The per Share exercise price for the Shares to be issued pursuant to the exercise of an Option shall be such price as is determined by the Administrator and set forth in the Option Agreement, but shall be subject to the following:

i) In the case of an Incentive Stock Option:

(1) granted to an Employee who, at the time of the grant of such Incentive Stock Option owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or subsidiary, the per Share exercise price shall be not less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant.

(2) granted to any Employee other than an Employee described in the preceding paragraph, the per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

ii) Except as provided in subsection (iii) below, in the case of a Non-Qualified Stock Option, the per Share exercise price shall be such price as determined by the administrator, provided that, if the per Share exercise price is less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant it shall comply with all Applicable Laws, including Section 409A of the Code.

9

iii) In the case of Options intended to qualify as Performance-Based Compensation, the per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

iv) Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above pursuant to a merger or other Corporate Transaction.

b. Consideration. Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon exercise of an Option including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option and to the extent required by Applicable laws, shall be determined at the time of grant) and may consist of the following:

i) cash;

ii) check;

iii) to the extent permitted under Applicable Laws, delivery of Optionee’s promissory note with such recourse, interest, security, and redemption provisions as the Administrator determines as appropriate;

iv) surrender of Shares (including withholding of Shares otherwise deliverable upon exercise of the Option) which have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the shares as to which said Option shall be exercised; provided that in the case of Shares acquired, directly or indirectly, from the Company, the Administrator may, in its sole discretion, require that Shares tendered for payment be previously held by the Participant for a minimum duration (e.g., to avoid financial accounting charges to the Company’s earnings);

v) delivery of a properly executed exercise notice together with such other documentation as the Administrator and a securities broker designated by the Administrator, if applicable, shall require to effect an exercise of the Option and delivery to the Company of the sale or loan proceeds required to pay the exercise price;

vi) such other consideration and method of payment permitted under Applicable Laws; or

vii) any combination of the foregoing methods of payment.

c. Taxes. No Shares shall be delivered under the Plan to any Optionee or other person until such Optionee or other person has made arrangements acceptable to the Administrator for the satisfaction of any foreign, federal, state, or local income and employment tax obligations and any other required deductions, including, without limitation, obligations incident to the grant, exercise or vesting of the Option, the receipt of Shares or the disposition of shares received on exercise.

10

9. Exercise of Option.

a. Procedure for Exercise; rights as a Stockholder.

i) Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator consistent with the terms of the Plan and specified in the Option Agreement.

ii) The Administrator shall have the discretion to determine whether and to what extent the vesting of Options shall be tolled during any leave of absence; provided, however, that in the absence of such determination, vesting of Options shall be tolled during any unpaid leave of absence (unless otherwise required by the Applicable Laws). In the event of military leave, vesting shall toll during any unpaid portion of such leave, provided that, upon a Optionee’s returning from military leave (under conditions that would entitle him or her to protection upon such return under the Uniform Services Employment and Reemployment Rights Act), he or she shall be given vesting credit with respect to Options to the same extent as would have applied had the Optionee continued to provide services to the Company (any Parent or Subsidiary, if applicable) throughout the leave on the same terms as he or she was providing services immediately prior to such leave.

iii) An Option shall be deemed to be exercised when written notice of such exercise has been received by the Company in accordance with the terms of the Option by the person entitled to exercise the Option, full payment for the shares with respect to which the Option is exercised has been received by the Company and any applicable tax obligations have been satisfied. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares upon exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in the Option Agreement or Section 11, below.

iv) An Option may not be exercised for a fraction of a Share. The Administrator may require that an Option be exercised as to a minimum number of Shares, provided that such requirement shall not prevent an Optionee from exercising the full number of Shares as to which the Option is then exercisable.

b. Exercise of Option following Termination of Employment, Director or Consulting Relationship.

i) Termination. Upon termination of an Optionee’s Continuous status as an Employee, Director or Consultant, other than upon the Optionee’s death or Disability, the Optionee may exercise his or her Option within such period of time as if specified in the Option Agreement (which shall not be less than 30 days unless Optionee is terminated for Cause) to the extent that the Option is vested (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for three (3) months following the Optionee’s termination. If, after termination, the Optionee does not exercise all or any portion of his or her Option within the time specified by the Administrator, such portion of the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

11

ii) Disability of Optionee. If an Optionee’s Continuous Status as an Employee, Director or Consultant terminates as a result of the Optionee’s Disability, the Optionee may exercise the Option to the extent the Option is vested, but only within twelve (12) months from the date of such termination (and in no event later than the expiration date of the term of such Option as set forth in the Option Agreement). If such Disability is not a “disability” as such term is defined in Section 22(e)(3) of the Code, in the case of an Incentive Stock Option such Incentive Stock Option shall automatically convert to a Non-Qualified Stock Option on the day three (3) months and one (1) day following such termination. If, after termination, all or any portion of the Option is not exercised within the time specified herein, such portion of the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

iii) Death of Optionee. In the event of the death of an Optionee, the Option may be exercised at any time within twelve (12) months following the date of death (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement) to the extent the Option is vested. The Option may be exercised by the executor or administrator of the Optionee’s estate or, if none, by the person(s) entitled to exercise the Option under the Optionee’s will or the laws of descent or distribution. If all or any portion of the Option is not so exercised within the time specified herein, such portion of the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

c. Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares, an Option previously granted, based on such terms and conditions as the Administration shall establish and communicate to the Optionee at the time that such offer is made.

10. Conditions Upon Issuance of Shares.

a. Shares shall not be issued pursuant to any Award and, if applicable the exercise thereof, unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all Applicable Laws, and shall be further subject to the approval or counsel for the Company with respect to such compliance.

b. As a condition to the exercise of an Option or the issuance of Shares pursuant to any Award, the Company may require the person exercising such Option or holding such Award to represent and warrant that the Shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any Applicable Laws.

11. Adjustments Upon Changes in Capitalization. Subject to any required action by the stockholders of the Company, the number and class of shares or other securities covered by each outstanding Award, and the number and class of Shares or other securities which have been authorized for issuance under the Plan but as to which no awards have yet been granted or which have been returned to the Plan, as well as the price per share of Common Stock covered by each outstanding award and any applicable repurchase price, shall be proportionately adjusted for any

12

increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination, consolidation, recapitalization or reclassification of the Common Stock, subdivision of the Shares, dividend payable in other than Shares in an amount that has a material effect on the price of the shares, a reorganization, merger, liquidation, spin-off, slit-up, distribution, exchange of Shares, repurchase of Shares, change in corporate structure, or any other similar event resulting in an increase or decrease in the number of issued shares of Common Stock. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason hereof shall be made with respect to, the number or price of Shares subject to an Option. If, by reason of an adjustment pursuant to this Section 11, a Participant’s Award shall cover additional or different shares of stock or securities, then such additional or different shares of stock or securities, then such additional or different shares, and the Award in respect thereof, shall be subject to all of the terms, conditions and restrictions which were applicable to the Award and the Shares subject to the Award prior to such adjustment.

12. Corporate Transactions.

a. Accelerated Vesting. In the event of any Corporate Transaction, each Option which is at the time outstanding under the Plan automatically shall become fully vested and exercisable and be released from any restrictions on transfer and repurchase or forfeiture rights, immediately prior to the specified effective date of such Corporate Transaction, for all of the Shares at the time represented by such Option. However, an outstanding Option under the Plan shall not so fully vest and be exercisable and released from such limitations if and to the extent: (i) such Option is, in connection with the Corporate Transaction, either to be assumed by the successor corporation or parent thereof or to be replaced with a comparable option with respect to shares of the capital stock of the successor corporation or parent thereof, or (ii) such Option is to be replaced with a cash incentive program of the successor corporation which preserves the compensation element of such Option existing at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same vesting schedule applicable to such Option. The determination of option comparability under clause (i) above shall be made by the Administrator, and its determination shall be final, binding and conclusive.

b. Termination of Plan Options. Effective upon the consummation of the Corporate Transaction, all outstanding Options under the Plan shall terminate and cease to remain outstanding, except to the extent assumed by the successor company of its Parent.

c. Dissolution or Liquidation. In the event of the dissolution or liquidation of the Company, each Award will terminate immediately prior to the consummation of such action, unless otherwise determined b the Administrator.

13. Restricted Stock. A Restricted Stock Award is an offer by the Company to sell to an eligible person Shares that are subject to restrictions. The Administrator shall determine to whom an offer will be made, the number of Shares the person may person, the price to be paid (the “Purchase Price”), the restrictions to which the Shares shall be subject, and all other terms and conditions of the Restricted Stock Award, subject to the following:

13

a. Form of Restricted Stock Award. All purchases under a Restricted Stock Award made pursuant to the Plan shall be evidenced by a Restricted Stock Purchase Agreement. The offer of Restricted Stock shall be accepted by the Participant’s execution and delivery of the Restricted Stock Purchase Agreement and full payment for the shares to the Company within thirty (30) days from the date the Restricted Stock Purchase Agreement is delivered to the person. If such person does not execute and deliver the Restricted Stock Purchase Agreement, along with full payment for the Shares to the Company within thirty (30) days, then the offer shall terminate, unless otherwise determined by the Administrator.

b. Purchase Price. The Purchase Price of Shares sold pursuant to a Restricted Stock Award shall be determined by the Administrator, subject to Applicable Laws. Payment of the Purchase Price may be made in accordance with Section 8(b) of the Plan.

c. Restrictions. Restricted Stock Awards shall be subject to such restrictions as the Administrator may impose. The Administrator may provide for the lapse of such restrictions in installments and may accelerate or waiver such restrictions, in whole or in part, based on length of service, performance or such other factors or criteria as the Administrator may determine. Restricted Stock Awards which the Administrator intends to qualify under Code section 162(m) shall be subject to a performance based goal. Restrictions on such stock shall lapse based on one or more of the following performance goals: stock price, market share, sales increases, earnings per share, return on equity, cost reductions, or any other similar performance measure established by the Administrator. Such performance measures shall be established by the Administrator, in writing, no later than the earlier of (a) ninety (90) days after the commencement of the performance period with respect to which the Restricted Stock award is made and (b) the date as of which twenty-five percent (25%) of such performance period has elapsed.

14. Stock Bonuses.

a. Awards of Stock Bonuses. A Stock Bonus is an award of Shares (which may consist of Restricted Stock) for services rendered to the Company or any Parent, Subsidiary or Affiliate. A Stock Bonus may be awarded for past services already rendered to the Company, or any Parent, Subsidiary or Affiliate pursuant to a Stock Bonus Agreement or upon satisfaction of such performance goals as are set out in advance in a Participant’s Performance Stock Bonus Agreement. Stock Bonuses may vary from Participant to Participant and between groups of Participants, and may be based upon such other criteria as the Administrator may determine.

b. Code Section 162(m). A Stock Bonus that the Administrator intends to qualify for the performance-based exception under Code section 162(m) shall only be awarded based upon the attainment of one or more of the following performance goals; stock price, market share, sales increases, earning per share, return on equity, cost reductions, or any other similar performance measure established by the Administrator. Such performance measures shall be established by the Administrator, in writing, no later than the earlier of: (a) ninety (90) days after the commencement of the performance period with respect to which the Stock Bonus award is made; and (b) the date as of which twenty-five percent (25%) of such performance period has elapsed.

14

c. Terms of Stock Bonuses. The Administrator shall determine the number of Shares to be awarded to the Participant and whether such Shares shall be Restricted Stock. If the Stock Bonus is being earned upon the satisfaction of performance goals pursuant to a Performance Stock Bonus Agreement, then the Administrator shall determine: (a) the nature, length and starting date of any period during which performance is to be measured (the “Performance Period”) for each Stock Bonus; (b) the performance goals and criteria to be used to measure the performance, if any; (c) the number of Shares that may be awarded to the Participant; and (d) the extent to which such Stock Bonuses have been earned. Performance Periods may overlap and Participants may participate simultaneously with respect to Stock Bonuses that are subject to different Performance Periods and different performance goals and other criteria. The number of Shares may be fixed or may vary in accordance with such performance goals and criteria as may be determined by the Administrator. The Administrator may adjust the performance goals applicable to the Stock Bonuses to take into account changes in law and accounting or tax rules and to make such adjustments as the Administrator deems necessary or appropriate to reflect the impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships.

d. Form of Payment. Subject to Applicable Laws, the earned portion of a Stock Bonus may be paid currently or on a deferred basis with such interest or dividend equivalent, if any, as the Administrator may determine. Payment shall be made in the form of whole Shares, including Restricted Stock, either in a lump sum payment or in installments, all as the Administrator shall determine.

e. Termination During Performance Period. If a Participant is terminated during a Performance Period for any reason, then such Participant shall be entitled to payment with respect to the Stock Bonus only to the extent earned as of the date of termination in accordance with the Performance Stock Bonus Agreement, unless the Administrator shall determine otherwise.

15. Restricted Stock Units.

a. Awards of Restricted Stock Units. A Restricted Stock Unit (“RSU”) is an Award covering a number of Shares that may be settled in cash, or by issuance of those Shares at a date in the future. No Purchase Price shall apply to an RSU settled in Shares. All grants of Restricted Stock Units will be evidenced by an RSU Agreement that will be in such form (which need not be the same for each Participant) as the Committee will from time to time approve, and will comply with and be subject to the terms and conditions of this Plan.

b. Form and Timing of Settlement. To the extent permissible under applicable law, the Board or Committee may permit a Participant to defer payment under a RSU to a date or dates after the RSU is earned, provided that the terms of the RSU and any deferral satisfy the requirements of Section 409A of the Code (or any successor) and any regulations or rulings promulgated thereunder. Payment may be made in the form of cash or whole Shares or a combination thereof, all as the Committee determines.

c. Restrictions. RSU Awards may be subject to the restrictions set forth in Section 16 hereof or such other restrictions not inconsistent with Section 25102(o) of the California Corporations Code.

15

16. Proxy; Voting Agreement; Stock Transfer Restriction.

a. Irrevocable Proxy. As a condition to receiving any Award under the Plan, Participants shall be required to appoint the Chairman of the Board or his or her designee (the “Proxyholder”), as such Participant’s true and lawful proxy and attorney, with the power to act alone and with full power of substitution, to vote or act by written consent with respect to all of such Participant’s Shares issued under the Plan in accordance with the provisions set forth in this Section 16, and to execute all appropriate instruments consistent with this Section 16 on behalf of such Participant. The proxy and power granted by Participant pursuant to this subsection (a) shall be coupled with an interest and given to secure the performance of such party’s duties under this Section 16. Each such proxy and power will be irrevocable until the time referenced in Section 16(e) below. The proxy and power will survive the death, incompetency, and disability of the Participant.

b. Voting Agreement On All Matters. Subject to Applicable Laws, with respect to all Shares issued pursuant to the Plan and held by any Participant, in the event that a majority of the members of the Board approves of any matter, action, ratification or other event for which approval of some or all of the Company’s stockholders is sought (either by vote or written consent) or upon which such stockholders are otherwise entitled to vote or consent, then Proxyholder shall vote (in person, by proxy, or by action by written consent, as applicable) all Shares issued pursuant to the Plan and held by any Participant and as to which Participant has beneficial ownership or otherwise exercises voting or dispositive authority in favor of approving such matter, action, ratification, or other event consistent with the vote of the majority of the members of the Board.

c. Stock Transfer Restriction. Subject to Applicable Laws, no Shares issued pursuant to the Plan and held by any Participant may be Transferred without the prior written consent of the Company.

d. Additional Covenants and Agreements.

i) Specific Enforcement. It is agreed and understood that monetary damages would not adequately compensate the Company for the violation of any of the provisions of this Section 16, that this Section 16 shall be specifically enforceable, and that any violation or threatened violation of this Section 16 shall be the proper subject of a temporary or permanent injunction or restraining order. Participants shall waive any claim or defense that there is an adequate remedy at law for such violation or threatened violation.

ii) Proxyholder’s Liability. The Proxyholder shall not be liable for any error of judgment nor for any act done or omitted, nor for any mistake of fact or law nor for anything which the Proxyholder may do or refrain from doing in good faith, nor shall the Proxyholder have any accountability hereunder, except for Proxyholder’s own bad faith, gross negligence, or willful misconduct. Furthermore, upon any judicial or other inquiry or investigation of or concerning the Proxyholder’s acts pursuant to Proxyholder’s rights and powers as described in this Section 16, such acts shall be deemed reasonable and in the best interests of Participants unless proved to the contrary by clear and convincing evidence.

16

e. Termination of Provisions. The provisions set forth in this Section 16 shall terminate upon the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act.

17. Term of Plan. The Plan shall become effective upon its adoption by the Board and shall continue in effect until June 23, 2020 unless sooner terminated pursuant to Section 19.

18. Securities Law Compliance. If stock options issued under this Plan are intended to qualify for exemption from qualification under Section 25102(o) of the California General Corporation Law (“Section 25102(o)”), then (i) any options or stock issued pursuant to this Plan shall be issued in compliance with Section 25102(o) and the rules and regulations of Title 10, California Code of Regulations and (ii) the requirements of Section 25102(o) and the rules and regulations promulgated thereunder are hereby incorporated by reference, as Section 25102(o) and such rules and regulations may be amended from time to time.

In compliance with Section 25102(o), the Company shall furnish summary financial information (audited or unaudited) of the Company’s financial condition and results of operations, consistent with the requirements of Applicable Laws, at least annually to each Participant whose Award is issued in reliance on Section 25102(o) during the period such Participant has one or more Awards outstanding, and in the case of an individual who acquired Shares pursuant to the Plan, during the period such Participant owns such Shares. Notwithstanding the foregoing, the Company shall not be required to provide such information if (i) the issuance is limited to key employees whose duties in connection with the Company assure their access to equivalent information or (ii) the Plan or any agreement complies with all conditions of Rule 701 of the Securities Act; provided that for purposes of determining such compliance, any registered domestic partner shall be considered a “family member” as that term is defined in Rule 701.

19. Amendment, Suspension or Termination of the Plan.

a. The Board may at any time amend, suspend or terminate the Plan. To the extent necessary to comply with Applicable Laws, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required.

b. No Option may be granted during any suspension of the Plan or after termination of the Plan.

c. Any amendment, suspension or termination of the Plan shall not adversely affect Awards already granted, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company.

17

20. Reservation of Shares.

a. The Company, during the term of the Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

b. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

21. Information to Optionees. If the Company is relying on the exemption from registration under Section 12(g) of the Exchange Act pursuant to Rule 12h-1(f)(1) promulgated under the Exchange Act, then the Company shall provide the Required Information (as defined below) in the manner required by Rule 12h-1(f)(1) to all optionees every six months until the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or is no longer relying on the exemption pursuant to Rule 12h-1(f)(1); provided, that, prior to receiving access to the Required Information the optionee must agree to keep the Required Information confidential pursuant to a written agreement in the form provided by the Company. For purposes of this Section 20, “Required Information” means the information described in Rules 701(e)(3), (4) and (5) under the Securities Act, with the financial statements being not more than 180 days old before the sale of securities to which it relates.

22. Addenda. The Administrator may approve such addenda to the Plan as it may consider necessary or appropriate for the purpose of granting Awards to Employees, Consultants or Directors, which Awards may contain such terms and conditions as the Administrator deems necessary or appropriate to accommodate differences in local law, tax policy or custom, which, if so required under Applicable Laws, may deviate from the terms and conditions set forth in this Plan. The terms of any such addenda shall supersede the terms of the Plan to the extent necessary to accommodate such differences but shall not otherwise affect the terms of the Plan as in effect for any other purpose.

18

EXPONENTIAL INTERACTIVE, INC.

2010 EQUITY INCENTIVE PLAN

NOTICE OF STOCK OPTION GRANT

[NAME]

Address:

You have been granted an option to purchase shares of Common Stock of Exponential Interactive, Inc., a Delaware corporation (the “Company”), as follows:

Date of Grant:	________________
Grant Number:	________________
Exercise Price Per Share:	$_______________
Total Number of Shares Granted:	________________
Total Exercise Price:	$_______________
Type of Option:	________ Shares Incentive Stock Option
	________ Shares Non-Qualified Stock Option
Term/Expiration Date:	________________
Vesting Commencement Date:	________________
Vesting Schedule:	So long as your Continuous Status as an Employee, Director or Consultant continues, the Shares underlying this Option shall vest and become exercisable in accordance with the following schedule: [25% of the total number of Shares subject to the Option shall vest and become exercisable on the 12 month anniversary of the Vesting Commencement Date and 1/48th of the total number of Shares subject to the Option shall vest and become exercisable on the same day of each month thereafter.] (assumes 4-year vesting period)

Termination Period:	This Option, to the extent vested, may only be exercised for 3 months after termination of your Continuous Status as an Employee, Director or Consultant, or such longer period as may be applicable upon death or Disability as provided in Section 5 of the Stock Option Agreement. You are responsible for keeping track of these exercise periods following your termination for any reason. The Company will not provide further notice of such periods.
[Alternate Language: Delete Where Inapplicable:] Change of Control:	Notwithstanding the above, in the event of a Corporate Transaction, and you are Involuntarily Terminated by the successor corporation in connection with, or within twelve (12) months following consummation of, the transaction, then the number of Shares that would otherwise have vested and been exercisable as of the date twelve (12) months from the date of termination shall accelerate and vest, in each case assuming you remain in Continuous Status as an Employee, Director or Consultant for such twelve (12) month period. The acceleration of vesting provided for in the previous sentence shall occur immediately prior to the effective date of the termination of your Continuous Status as an Employee, Director or Consultant. All capitalized terms in this section not otherwise defined shall have the meanings given to them in the 2010 Equity Incentive Plan.
Transferability:	This Option may not be transferred.

By your signature and the signature of the Company’s representative below, you and the Company agree that this Option is granted under and governed by the terms and conditions of the Exponential Interactive, Inc. 2010 Equity Incentive Plan and the Stock Option Agreement, both of which are attached to and made a part of this document.

In addition, you agree and acknowledge that your rights to any Shares underlying the Option will be earned only as you provide services to the Company or any parent, subsidiary or affiliate of the Company over time, that the grant of the Option is not as consideration for services you rendered to the Company or any parent, subsidiary or affiliate of the Company prior to your Vesting Commencement Date, and that nothing in this Notice or the attached documents confers upon you any right to continue your employment or consulting relationship with the Company or any parent, subsidiary or affiliate of the Company for any period of time, nor does it interfere in any way with your right or the Company’s right to terminate that relationship at any time, for any reason, with or without cause.

20

Also, the Exercise Price Per Share has been set at the fair market value of the Shares on the Date of Grant in good faith compliance with the applicable guidance issued by the IRS under Section 409A of the Code in order to avoid the Option being treated as deferred compensation under Section 409A of the Code. However, there is no guarantee that the IRS will agree with the valuation and, by signing below, you agree and acknowledge that the Company shall not be held liable for any applicable costs, taxes, or penalties associated with the Option if, in fact, the IRS were to determine that the Option constitutes deferred compensation under Section 409A of the Code. You should consult with your own tax advisor concerning the tax consequences of such a determination by the IRS.

EXPONENTIAL INTERACTIVE, INC.
By:
	(Signature)
Name:
Title:
OPTIONEE:
By:
	(Signature)

21

EXPONENTIAL INTERACTIVE, INC.

2010 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

1. Grant of Option. Exponential Interactive, Inc., a Delaware corporation (the “Company”), hereby grants to ___________________ (“Optionee”), an option (the “Option”) to purchase the total number of shares of Common Stock (the “Shares”) set forth in the Notice of Stock Option Grant (the “Notice”), at the exercise price per Share set forth in the Notice (the “Exercise Price”) subject to the terms, definitions and provisions of the Exponential Interactive, Inc. 2010 Equity Incentive Plan (the “Plan”) adopted by the Company, which is incorporated in this agreement (the “Agreement”) by reference. Unless otherwise defined in this Agreement, the terms used in this Agreement shall have the meanings defined in the Plan.

2. Designation of Option. This Option is intended to be an Incentive Stock Option as defined in Section 422 of the Code only to the extent so designated in the Notice, and to the extent it is not so designated or to the extent the Option does not qualify as an Incentive Stock Option, it is intended to be a Non-Qualified Stock Option.

Notwithstanding the above, if designated as an Incentive Stock Option, in the event that the Shares subject to this Option (and all other incentive stock options granted to Optionee by the Company or any Parent or Subsidiary, including under other plans) that first become exercisable in any calendar year have an aggregate fair market value (determined for each Share as of the date of grant of the option covering such Share) in excess of $100,000, the Shares in excess of $100,000 shall be treated as subject to a Non-Qualified Stock Option.

3. Exercise of Option. This Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice, with the provisions of Section 9 of the Plan and as follows:

(a) Right to Exercise.

(i) This Option may not be exercised for a fraction of a share.

(ii) In the event of Optionee’s death, Disability or other termination of Continuous Status as an Employee, Director or consultant, the exercisability of this Option is governed by Section 5 below, subject to the limitations contained in this Section 3.

(iii) In no event may this Option be exercised after the Expiration Date of the Option as set forth in the Notice.

(b) Method of Exercise.

(i) This Option shall be exercisable by execution and delivery of an Exercise Notice attached hereto as Exhibit A (the “Exercise Agreement”) or of any other form of written notice approved for such purpose by the Company which shall state Optionee’s election

to exercise the Option, the number of Shares in respect of which the Option is being exercised, and such other representations and agreements as to the holder’s investment intent with respect to such Shares as may be required by the Company pursuant to the provisions of the Plan. Such written notice shall be signed by Optionee and shall be delivered to the Company by such means as are determined by the Plan Administrator in its discretion to constitute adequate delivery. The written notice shall be accompanied by payment of the Exercise Price. This Option shall be deemed to be exercised upon receipt by the Company of such written notice accompanied by the Exercise Price.

(ii) As a condition to the exercise of this Option and as further set forth in Section 8 of the Plan, Optionee agrees to make arrangements satisfactory to the Company for satisfaction of all applicable taxes, withholding obligations and any other required deductions, if any, which arise upon the grant, vesting or exercise of the Option, or disposition of Shares, whether by withholding, direct payment to the Company, or otherwise.

(iii) The Company is not obligated, and will have no liability for failure, to issue or deliver any Shares upon exercise of the Option unless such issuance or delivery would comply with the Applicable Laws, with such compliance determined by the Company in consultation with its legal counsel. This Option may not be exercised until such time as the Plan has been approved by the stockholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such Shares would constitute a violation of any Applicable Laws, including any applicable U.S. federal or state securities laws or any other law or regulation, including any rule under Part 221 of Title 12 of the Code of Federal Regulations as promulgated by the Federal Reserve Board. As a condition to the exercise of this Option, the Company may require Optionee to make any representation and warranty to the Company as may be required by the Applicable Laws. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to Optionee on the date on which the Option is exercised with respect to such Shares.

4. Method of Payment. Payment of the Exercise Price shall be by any of the following, or a combination of the following, at the election of Optionee:

(a) Cash;

(b) Check; or

(c) Pursuant to a program approved by the Administrator in which payment of the Exercise Price or tax obligations may be satisfied, in whole or in part, with Shares subject to the Option, including by delivery of an irrevocable direction to a securities broker (on a form prescribed by the Administrator) to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price and, if applicable, the amount necessary to satisfy the Company’s tax withholding obligations at the minimum statutory withholding rates, including, but not limited to, U.S. federal and state income taxes, payroll taxes, and foreign taxes, if applicable.

5. Termination of Relationship. Following the date of termination of Optionee’s Continuous Status as an Employee, Director or Consultant for any reason (the “Termination

23

Date”), Optionee may exercise the Option only as set forth in the Notice and this Section 5. If Optionee does not exercise this Option within the Termination Period set forth in the Notice or the termination periods set forth below, the Option shall terminate in its entirety. In no event, may any Option be exercised after the Expiration Date of the Option as set forth in the Notice.

(a) Termination. In the event of termination of Optionee’s Continuous Status as an Employee, Director or Consultant other than as a result of Optionee’s Disability or death or for Cause, Optionee may, to the extent Optionee is vested in the Option Shares, exercise this Option during the Termination Period set forth in the Notice.

(b) Other Terminations. In connection with any termination other than a termination covered by Section 5(a), Optionee may exercise the Option only as described below:

(i) Termination upon Disability of Optionee. In the event the Optionee’s Continuous Status as an Employee, Director or Consultant terminates as a result of Optionee’s Disability, Optionee may, but only within twelve (12) months from the Termination Date (and in no event later than the Expiration Date), exercise this Option to the extent Optionee is vested in the Option Shares.

(ii) Death of Optionee. In the event of the death of Optionee during the term of this Option and while an Employee, Consultant or Director and having been in Continuous Status as an Employee, Director or Consultant since the date of grant of the Option, the Option may be exercised at any time within twelve (12) months following the date of death (and in no event later than the Expiration Date), by Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent Optionee is vested in the Option.

(iii) Termination for Cause. In the event Optionee’s Continuous Status as an Employee, Director or Consultant is terminated for Cause, the Option shall terminate immediately upon first notification to Optionee of such termination for Cause. In the event Optionee’s employment or consulting relationship with the Company is suspended pending investigation of whether such relationship shall be terminated for Cause, all Optionee’s rights under the Option, including the right to exercise the Option, shall be suspended during the investigation period.

6. Non-Transferability of Option. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of the Optionee only by the Optionee.

7. Lock-Up Agreement. In connection with the initial public offering of the Company’s securities and upon request of the Company or the underwriters managing any underwritten offering of the Company’s securities, Optionee hereby agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company however and whenever acquired (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed one hundred eighty (180) days) from the effective date of such registration as may be requested by the Company or such managing underwriters and to execute

24

an agreement reflecting the foregoing as may be requested by the underwriters at the time of the public offering; provided however that, if during the last seventeen (17) days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the sixteen (16)-day period beginning on the last day of the restricted period, then, upon the request of the managing underwriter, to the extent required by any FINRA rules, the restrictions imposed by this Section shall continue to apply until the end of the third trading day following the expiration of the fifteen (15)-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event will the restricted period extend beyond two hundred sixteen (216) days after the effective date of the registration statement.

8. Effect of Agreement. Optionee acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof (and has had an opportunity to consult counsel regarding the Option terms), and hereby accepts this Option and agrees to be bound by its contractual terms as set forth herein and in the Plan, including, but not limited to, the proxy designation, voting and transfer restrictions, and related provisions as set forth in Section 15 of the Plan. Optionee hereby agrees to accept as binding, conclusive and final all decisions and interpretations of the Plan Administrator regarding any questions relating to the Option. In the event of a conflict between the terms and provisions of the Plan and the terms and provisions of the Notice and this Agreement, the Plan terms and provisions shall prevail.

9. Miscellaneous.

(a) Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.

(b) Entire Agreement; Enforcement of Rights. This Agreement, together with the Plan, sets forth the entire agreement and understanding of the parties relating to the subject matter herein and therein and merges all prior discussions between the parties. Except as contemplated under the Plan, no modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.

(c) Severability. If one or more provisions of this Agreement are held to be unenforceable under Applicable Laws, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of this Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of this Agreement shall be enforceable in accordance with its terms.

(d) Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by telegram or fax or

25

forty-eight (48) hours after being deposited in the mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address as set forth below or as subsequently modified by written notice.

(e) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(f) Successors and Assigns. The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations of Optionee under this Agreement may not be assigned without the prior written consent of the Company.

[Signature Page Follows]

26

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one document.

EXPONENTIAL INTERACTIVE, INC.
By:
	(Signature)
Name:
Title:
OPTIONEE: [NAME]
By:
	(Signature)

27

EXHIBIT A

EXPONENTIAL INTERACTIVE, INC.

2010 EQUITY INCENTIVE PLAN

EXERCISE NOTICE

This Exercise Notice (“Agreement”) is made as of _________________, by and between Exponential Interactive, Inc., a Delaware corporation (the “Company”), and __________________ (“Purchaser”). To the extent any capitalized terms used in this Agreement are not defined herein, they shall have the meaning ascribed to them in the Plan (as defined below).

1. Exercise of Option. Subject to the terms and conditions hereof, Purchaser hereby elects to exercise his or her option to purchase _____________ shares of the Common Stock (the “Shares”) of the Company under and pursuant to the Company’s 2010 Equity Incentive Plan (the “Plan”) and the Stock Option Agreement granted «GrantDate» (the “Option Agreement”). The purchase price for the Shares shall be $_______ per Share for a total purchase price of $            . The term “Shares” refers to the purchased Shares and all securities received in connection with the Shares pursuant to stock dividends or splits, all securities received in replacement of the Shares in a recapitalization, merger, reorganization, exchange or the like, and all new, substituted or additional securities or other property to which Purchaser is entitled by reason of Purchaser’s ownership of the Shares.

2. Time and Place of Exercise. The purchase and sale of the Shares under this Agreement shall occur at the principal office of the Company simultaneously with the execution and delivery of this Agreement in accordance with the provisions of Section 3(b) of the Option Agreement. On such date, the Company will issue the Shares to Purchaser in Purchaser’s name in the books and records of the Company or, if applicable, a duly authorized transfer agent of the Company, against payment of the exercise price therefor by Purchaser by any method listed in Section 4 of the Option Agreement. If applicable, the Company will deliver to Purchaser a certificate representing the Shares as soon as practicable following such date.

3. Limitations on Transfer. In addition to any other limitation on transfer created by applicable securities laws, Purchaser shall not assign, encumber or dispose of any interest in the Shares except in compliance with the provisions below and applicable securities laws.

(a) Stock Transfer Restriction/Right of First Refusal. Subject to Applicable Laws, no Shares held by Purchaser or any transferee of Purchaser (either being sometimes referred to herein as the “Holder”) may be Transferred without the prior written consent of the Company.

(i) Notice of Proposed Transfer. If the Holder of the Shares would like to transfer any Shares, the Holder shall deliver to the Company a written notice (the “Notice”) stating: (i) the Holder’s desire to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee (“Proposed Transferee”); (iii) the number of

Shares to be transferred to each Proposed Transferee; and (iv) the terms and conditions of each proposed sale or transfer.

(ii) Company Notice. At any time within thirty (30) days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, deny or approve such request to Transfer all or any portion of the Shares proposed to be transferred or may elect to purchase some or all of the Shares proposed to be transferred, at the purchase price determined in accordance with subsection (iii) below.

(iii) Purchase Price. The purchase price (“Purchase Price”) for the Shares purchased by the Company or its assignee(s) under this Section 3(a) shall be the Fair Market Value of the Shares.

(iv) Payment. Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness, or by any combination thereof within 90 days after receipt of the Notice.

(v) Exception for Certain Family Transfers. Anything to the contrary contained in this Section 3(a) notwithstanding, the transfer of any or all of the Shares during Purchaser’s lifetime or on Purchaser’s death by will or intestacy to Purchaser’s Immediate Family or a trust for the benefit of Purchaser’s Immediate Family shall be exempt from the provisions of this Section 3(a). “Immediate Family” as used herein shall mean spouse, lineal descendant or antecedent, father, mother, brother or sister. In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section, and there shall be no further transfer of such Shares except in accordance with the terms of this Section 3.

(b) Involuntary Transfer.

(i) Company’s Right to Purchase upon Involuntary Transfer. Subject to Applicable Laws, in the event, at any time after the date of this Agreement, of any attempted transfer by operation of law or other attempted involuntary transfer (including death or divorce, but excluding a transfer to Immediate Family as set forth in Section 3(a)(v) above) of all or a portion of the Shares by the record holder thereof, the Company may deny or approve such Transfer or may purchase all or any portion of the Shares transferred at the Fair Market Value of the Shares on the date of transfer. Upon any such attempted transfer, the person acquiring the Shares shall promptly notify the Secretary of the Company of such transfer. If the Company elects to purchase all or any portion of the Shares subject to the attempted transfer, such purchase shall be completed within 90 days of the attempted transfer.

(c) Assignment. The right of the Company to purchase all or any part of the Shares may be assigned in whole or in part to any shareholder or shareholders of the Company or other persons or organizations.

(d) Restrictions Binding on Transferees. All transferees of Shares or any interest therein will receive and hold such Shares or interest subject to the provisions of this

29

Agreement. Any sale or transfer of the Company’s Shares shall be void unless the provisions of this Agreement are satisfied.

(e) Termination of Rights. The stock transfer restriction/right of first refusal set forth in Section 3(a) above and the option to repurchase the Shares in the event of an involuntary transfer granted the Company by Section 3(b) above shall terminate upon the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”). Upon termination of the stock transfer restriction/right of first refusal described in Section 3(a) above, the Company shall remove any stop-transfer notices referred to in Section 5(b) below that are related to the restrictions in this Section 3, and, if certificates are issued, a new certificate or certificates representing the Shares not repurchased shall be issued, on request, without the legend referred to in Section 5(a)(ii) herein and delivered to Purchaser.

4. Investment and Taxation Representations. In connection with the purchase of the Shares, Purchaser represents to the Company the following:

(a) Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Shares. Purchaser is purchasing these securities for investment for his or her own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act or under any applicable provision of state law. Purchaser does not have any present intention to transfer the Shares to any person or entity.

(b) Purchaser understands that the Shares have not been registered under the Securities Act by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Purchaser’s investment intent as expressed herein.

(c) Purchaser further acknowledges and understands that the securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Purchaser further acknowledges and understands that the Company is under no obligation to register the securities. Purchaser understands that the Shares will be subject to stop-transfer notices pursuant to Section 5(b) below, or, if certificates evidencing the securities are issued, such certificate(s) will be imprinted with a legend which prohibits the transfer of the securities unless they are registered or such registration is not required in the opinion of counsel for the Company.

(d) Purchaser is familiar with the provisions of Rules 144 and 701, each promulgated under the Securities Act, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly, from the issuer of the securities (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions. Purchaser understands that the Company provides no assurances as to whether he or she will be able to resell any or all of the Shares pursuant to Rule 144 or Rule 701, which rules require, among other things, that the Company be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, that resales of securities take place only after the holder of

30

the Shares has held the Shares for certain specified time periods, and under certain circumstances, that resales of securities be limited in volume and take place only pursuant to brokered transactions. Notwithstanding this paragraph (d), Purchaser acknowledges and agrees to the restrictions set forth in paragraph (e) below.

(e) Purchaser further understands that in the event all of the applicable requirements of Rule 144 or 701 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 or 701 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk.

(f) Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

5. Restrictive Legends and Stop-Transfer Orders.

(a) Legends. If any certificate(s) are issued representing the Shares, such certificate(s) shall bear the following legends (as well as any legends required by applicable state and federal corporate and securities laws):

(i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

(ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. SUCH AGREEMENT MAY RESTRICT THE STOCKHOLDER’S RIGHT TO TRANSFER ITS ENTIRE INTEREST IN THE SHARES.

31

(iii) THE SHARES EVIDENCED HEREBY ARE SUBJECT TO VOTING RESTRICTIONS WHICH POTENTIALLY RESTRICT THE STOCKHOLDER’S RIGHT TO VOTE ITS ENTIRE INTEREST IN THE SHARES EVIDENCED HEREBY, AND BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL SUCH VOTING RESTRICTIONS.

(b) Stop-Transfer Notices. Purchaser agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

(c) Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

6. No Employment Rights. Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company, or a parent, subsidiary or affiliate of the Company, to terminate Purchaser’s employment or consulting relationship, for any reason, with or without cause.

7. Lock-Up Agreement. In connection with the initial public offering of the Company’s securities and upon request of the Company or the underwriters managing any underwritten offering of the Company’s securities, Optionee hereby agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company however and whenever acquired (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed one hundred eighty (180) days) from the effective date of such registration as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the public offering; provided however that, if during the last seventeen (17) days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the sixteen (16)-day period beginning on the last day of the restricted period, then, upon the request of the managing underwriter, to the extent required by any FINRA rules, the restrictions imposed by this Section shall continue to apply until the end of the third trading day following the expiration of the fifteen (15)-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event will the restricted period extend beyond two hundred sixteen (216) days after the effective date of the registration statement.

32

8. Proxy; Voting Agreement.

(a) Irrevocable Proxy. By signing below, Purchaser hereby appoints the Chairman of the Board or his or her designee (the “Proxyholder”), as Purchaser’s true and lawful proxy and attorney, with the power to act alone and with full power of substitution, to vote or act by written consent with respect to all of the Shares in accordance with the provisions set forth in this Section 8, and to execute all appropriate instruments consistent with this Section 8 on behalf of Purchaser. The proxy and power granted by Purchaser pursuant to this subsection (a) is hereby coupled with an interest and given to secure the performance of Proxyholder’s duties under this Section 8.

(b) Voting Agreement On All Matters. Subject to Applicable Laws, in the event that a majority of the members of the Board approves of any matter, action, ratification or other event for which approval of some or all of the Company’s stockholders is sought (either by vote or written consent) or upon which such stockholders are otherwise entitled to vote or consent, Purchaser hereby acknowledges and agrees that Proxyholder shall vote (in person, by proxy, or by action by written consent, as applicable) all of the Shares in favor of approving such matter, action, ratification or other event consistent with the vote of the majority of the members of the Board.

(c) Termination of Provisions. The provisions set forth in this Section 8 shall terminate upon the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act.

9. Miscellaneous.

(a) Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.

(b) Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior discussions between them. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.

(c) Severability. If one or more provisions of this Agreement are held to be unenforceable under Applicable Laws, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

(d) Construction. This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly,

33

this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.

(e) Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by telegram or fax or forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address as set forth below or as subsequently modified by written notice.

(f) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(g) Successors and Assigns. The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations of Purchaser under this Agreement may only be assigned with the prior written consent of the Company.

(h) California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

[Signature Page Follows]

34

The parties have executed this Exercise Notice as of the date first set forth above.

EXPONENTIAL INTERACTIVE, INC.

By:

(Signature)

Name:

Title:

Address:

PURCHASER:

[NAME]

By:

(Signature)

Address:

35

I, ______________________, spouse of ___________________, have read and hereby approve the foregoing Agreement. In consideration of the Company’s granting my spouse the right to purchase the Shares as set forth in the Agreement, I hereby agree to be irrevocably bound by the Agreement and further agree that any community property or other such interest shall hereby by similarly bound by the Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any amendment or exercise of any rights under the Agreement.

Spouse of                           (if applicable)

36

EX-10.07

Exhibit 10.07

WATERGATE OFFICE TOWERS

EMERYVILLE TOWER II

EMERYVILLE, CALIFORNIA

OFFICE LEASE AGREEMENT

BETWEEN

CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, A Delaware Limited

Partnership (“LANDLORD”)

AND

EXPONENTIAL INTERACTIVE, INC. a California Corporation

(“TENANT”)

OFFICE LEASE AGREEMENT

THIS OFFICE LEASE AGREEMENT (the “Lease”) is made and entered into as of July 26^th, 2006, by and between, CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and EXPONENTIAL INTERACTIVE, INC. a California corporation (“Tenant”). The following exhibits and attachments are incorporated into and made a part of the Lease: Exhibit A (Outline and Location of Premises), Exhibit B (Expenses and Taxes), Exhibit C (Work Letter), Exhibit D (Commencement Letter), Exhibit E (Building Rules and Regulations), Exhibit F (Additional Provisions), Exhibit G (Parking Agreement) and Exhibit H (Asbestos Notification).

1. Basic Lease Information.

1.01 “Building” shall mean the building located at 2200 Powell Street, Emeryville, California, commonly known as Emeryville Tower II. “Rentable Square Footage of the Building” is deemed to be 229,040 square feet.

1.02 “Premises” shall mean the area shown on Exhibit A to this Lease. The Premises is located on the 6th floor and known as suite 600. If the Premises include one or more floors in their entirety, all corridors and restroom facilities located on such full floor(s) shall be considered part of the Premises. The “Rentable Square Footage of the Premises” is deemed to be 19,779 square feet. Landlord and Tenant stipulate and agree that the Rentable Square Footage of the Building and the Rentable Square Footage of the Premises are correct. Tenant is currently a subtenant under the terms of that certain sublease agreement between Tenant and GEAC Enterprise Solutions, Inc. (as successor to Extensity, Inc.) dated as of July 2, 2002, as amended from time to time (the “Sublease”) for 9,271 rentable square feet of the Premises (the “Existing 6th Floor Sublease Premises”). During the period commencing with the full and final execution of this Lease by Landlord and Tenant, delivery of the Security Deposit and all prepaid rental, if any, required under this Lease, and delivery of all insurance certificates for the Premises as required hereunder (“Full Lease Execution”), and ending as of the day prior to the Rent Commencement Date, Tenant shall have no obligation to pay Base Rent as provided in Section 1.03 below with regard to the either the Existing 6th Floor Sublease Premises or the Premises. While the Landlord Work (as defined in Section 1.14 below) is being performed in the northern portion of the Premises. Tenant shall occupy the southern portion of the Premises, and when the northern portion of the Premises is Substantially Complete, Tenant shall occupy the northern portion of the Premises while the Landlord Work is being performed in the southern portion of the Premises. Landlord and Tenant shall work together to define the boundaries of the southern and northern portions of the Premises that Tenant shall occupy during the performance of the Landlord Work. As of the Rent Commencement Date, Tenant shall pay Base Rent as provided in Section 1.03 below with regard to the Premises.

1.03 “Base Rent”:

Period	Annual Rate Per Square Foot		Monthly Base Rent
Full Lease Execution —One Day Prior to the Rent Commencement Date	$	0.00	$	0.00
Rent Commencement Date—Month 12 thereafter	$	25.80	$	42,524.85
Months 13-24	$	26.57	$	43,794.00
Months 25-36	$	27.37	$	45,112.60
Months 37-48	$	28.19	$	46,464.17
Months 49-60	$	29.04	$	47,865.18

1.04 “Tenant’s Pro Rata Share”: 8.6356%.

1.05 “Base Year” for Taxes (defined in Exhibit B): 2007; “Base Year” for Expenses (defined in Exhibit B): 2007.

2

1.06 “Term”: The period necessary for completion of the Landlord Work, plus a period of 60 months. The Term shall commence on the date of Full Lease Execution and, unless terminated early in accordance with this Lease, end on the date that is 60 months after the date of Substantial Completion, as defined in Section 3.01 below (the “Termination Date”). Rent shall commence on the Substantial Completion date, currently anticipated to be November 1, 2006 (the “Rent Commencement Date”).

1.07 Allowance(s): None.

1.08 “Security Deposit”: $128,000.00, as more fully described in Section 6.

1.09 “Guarantor(s)”: As of the date of this Lease, there are no Guarantors.

1.10 “Broker(s)”: NAI BT Commercial Real Estate.

1.11 “Permitted Use”: General office use; provided that in no event shall the Premises, or any portion of the Premises, be used for the operation of (i) a quick printing business; (ii) a retail travel agency, and (iii) a full table service, sit-down restaurant selling Mexican food and/or South American style food.

1.12 “Notice Address(es)”:

Landlord:                                                                                               Tenant:

CA-Emeryville Properties Limited                                                      At the Premises

Partnership

c/o Equity Office Management, L.L.C.

One Market, Spear Tower

Suite 600

San Francisco, California 94105

Attn: Property Manager

A copy of any notices to Landlord shall be sent to Equity Office, One Market, 600 Spear Tower, San Francisco, CA 94105, Attn: Managing Counsel—San Francisco Region.

1.13 “Business Day(s)” are Monday through Friday of each week, exclusive of New Year’s Day, Presidents Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day (“Holidays”). Landlord may designate additional Holidays that are commonly recognized by other office buildings in the area where the Building is located. “Building Service Hours” are 8:00 a.m. to 6:00 p.m. on Business Days.

1.14 “Landlord Work” means the work, if any, that Landlord is obligated to perform in the Premises pursuant to a separate agreement (the “Work Letter”), if any, attached to this Lease as Exhibit C.

1.15 “Property” means the Building and the parcel(s) of land on which it is located and, at Landlord’s discretion, the parking facilities and other improvements, if any, serving the Building and the parcel(s) of land on which they are located.

2. Lease Grant.

The Premises are hereby leased to Tenant from Landlord, together with the right to use any portions of the Property that are designated by Landlord for the common use of tenants and others (the “Common Areas”).

3. Possession; Substantial Completion.

3.01 Landlord is required to perform Landlord Work prior to the Rent Commencement Date. Accordingly: (a) the date set forth in Section 1.06 as the Rent Commencement Date shall instead be defined as the “Target Rent Commencement Date”; (b) the actual Rent Commencement Date shall be the date on which the Landlord Work is Substantially Complete (defined below); and (c) the Termination Date will be the last day of the Term as determined

3

based upon the actual Rent Commencement Date. Landlord’s failure to Substantially Complete the Landlord Work by the Target Rent Commencement Date shall not be a default by Landlord or otherwise render Landlord liable for damages. Promptly after the determination of the Rent Commencement Date, Landlord and Tenant shall enter into a commencement letter agreement in the form attached as Exhibit D. Tenant’s failure to execute and return the commencement letter, or to provide written objection to the statements contained in the letter, within 30 days after the date of the letter shall be deemed an approval by Tenant of the statements contained therein. The Landlord Work shall be deemed to be “Substantially Complete” (also referred to herein as the date of “Substantial Completion”) on the later of (i) the date that all Landlord Work has been performed, other than any details of construction, mechanical adjustment or any other similar matter, the non-completion of which does not materially interfere with Tenant’s use of the Premises; and (ii) the date Landlord receives from the appropriate governmental authorities, with respect to the Landlord Work performed by Landlord or its contractors in the Premises, all approvals necessary for the occupancy of the Premises. Landlord shall use reasonable efforts to provide Tenant with advance notice (which may be given orally) of the estimated Rent Commencement Date at least 1 week prior to such estimated Rent Commencement Date, but Landlord’s failure to accurately estimate the Rent Commencement Date shall in no manner affect the Rent Commencement Date or any other obligations of Landlord or Tenant hereunder. Tenant’s acceptance of the Premises shall be subject to Landlord’s obligation to correct portions of the Landlord Work as set forth on a construction punch list prepared by Landlord and Tenant in accordance with the terms hereof. Within 15 days after Substantial Completion of the Landlord Work, Landlord and Tenant shall together conduct an inspection of the Premises and prepare a “punch list” setting forth any portions of the Landlord Work that are not in conformity with the Landlord Work as required by the terms of this Lease. Notwithstanding the foregoing, at the request of Landlord, such construction punch list shall be mutually prepared by Landlord and Tenant prior to the date on which Tenant first begins to move its furniture, equipment or other personal property into the Premises. Landlord, as part of the Landlord Work, shall use good faith efforts to correct all such items within a reasonable time following the completion of the punch list. If Landlord is delayed in the performance of the Landlord Work as a result of the acts or omissions of Tenant, the Tenant Related Parties (defined in Section 13) or their respective contractors or vendors, including, without limitation, changes requested by Tenant to approved plans, Tenant’s failure to comply with any of its obligations under this Lease, or the specification of any materials or equipment with long lead times (a “Tenant Delay”), the Landlord Work shall be deemed to be Substantially Complete on the date that Landlord could reasonably have been expected to Substantially Complete the Landlord Work absent any Tenant Delay. Notwithstanding anything contained herein to the contrary, Tenant shall have twelve months from the completion of Landlord Work in which to discover and notify Landlord of any latent defects in Landlord’s Work. Landlord shall be responsible for the correction of any latent defects with respect to which it received timely notice from Tenant.

3.02 The Tenant is currently in possession of the Existing Sublease Premises pursuant to the Sublease. Accordingly, subject to Landlord’s obligation to perform the Landlord Work, the Existing Sublease Premises are accepted by Tenant in “as is” condition and configuration without any representations or warranties by Landlord. Tenant agrees that the Existing Sublease Premises are in good order and satisfactory condition. Subject to Landlord’s obligation to perform Landlord Work, and subject to latent defects, as provided in Section 3.01 above, the remainder of the Premises are accepted by Tenant in “as is” condition and configuration without any representations or warranties by Landlord. By taking possession of the remainder of the Premises, Tenant agrees that the remainder of the Premises is in good order and satisfactory condition. Landlord shall not be liable for a failure to deliver possession of the Premises or any other space due to the holdover or unlawful possession of such space by another party, however Landlord shall use reasonable efforts to obtain possession of the space. The Rent Commencement Date for the space, in such event, shall be postponed until the date Landlord delivers possession of the Premises to Tenant free from occupancy by any party. If Tenant takes possession of the Premises before the Substantial Completion date, such possession shall be subject to the terms and conditions of this Lease and Tenant shall pay Rent (defined in Section 4.01) to Landlord for each day of possession before the Substantial Completion date. However, except for the cost of services requested by Tenant (e.g. freight elevator usage), Tenant shall not be required to pay Rent for any days of possession before the Substantial Completion date during which Tenant, with the approval of Landlord, is in possession of the Premises for the sole purpose of performing improvements or installing furniture, equipment or other personal property. Rent for the Premises shall commence on the date of Substantial Completion. If the

4

Termination Date does not fall on the last day of a calendar month, Landlord and Tenant may elect to adjust the Termination Date to the last day of the calendar month in which the Termination Date occurs by the mutual execution of a commencement letter agreement setting forth such adjusted date. Notwithstanding anything to the contrary herein, the period of time commencing on Full Lease Execution and ending on the Rent Commencement Date is considered to be a part of the Term hereof, and Tenant’s occupancy of the Existing Sublease Premises during such time period is subject to all of the terms and conditions of this Lease, provided, however, that this time period shall not be included in the calculation of the Termination Date, which shall in all events be 60 months after the actual Rent Commencement Date, as provided in Section 3.01 above.

4. Rent.

4.01 Tenant shall pay Landlord, without any setoff or deduction, unless expressly set forth in this Lease, all Base Rent and Additional Rent due for the Term (collectively referred to as “Rent”). “Additional Rent” means all sums (exclusive of Base Rent) that Tenant is required to pay Landlord under this Lease. Tenant shall pay and be liable for all rental, sales and use taxes (but excluding income taxes), if any, imposed upon or measured by Rent. Base Rent and recurring monthly charges of Additional Rent shall be due and payable in advance on the first day of each calendar month without notice or demand, provided that the installment of Base Rent for the first full calendar month of the Term, and the first monthly installment of Additional Rent for Expenses and Taxes, shall be payable upon the execution of this Lease by Tenant. All other items of Rent shall be due and payable by Tenant on or before 30 days after billing by Landlord. Rent shall be made payable to the entity, and sent to the address, Landlord designates and shall be made by good and sufficient check or by other means acceptable to Landlord. Tenant shall pay Landlord an administration fee equal to 5% of all past due Rent, provided that Tenant shall be entitled to a grace period of 5 days for the first 2 late payments of Rent in a calendar year. In addition, past due Rent shall accrue interest at 12% per annum. Landlord’s acceptance of less than the correct amount of Rent shall be considered a payment on account of the earliest Rent due. Rent for any partial month during the Term shall be prorated. No endorsement or statement on a check or letter accompanying payment shall be considered an accord and satisfaction. Tenant’s covenant to pay Rent is independent of every other covenant in this Lease.

4.02 Tenant shall pay Tenant’s Pro Rata Share of Taxes and Expenses in accordance with Exhibit B of this Lease.

5. Compliance with Laws; Use.

The Premises shall be used for the Permitted Use and for no other use whatsoever. Tenant shall comply with all statutes, codes, ordinances, orders, rules and regulations of any municipal or governmental entity whether in effect now or later, including the Americans with Disabilities Act (“Law(s)”), regarding the operation of Tenant’s business and the use, condition, configuration and occupancy of the Premises. In addition, Tenant shall, at its sole cost and expense, promptly comply with any Laws that relate to the “Base Building” (defined below), but only to the extent such obligations are triggered by Tenant’s use of the Premises, other than for general office use, or Alterations or improvements in the Premises performed or requested by Tenant. Landlord shall comply with all Laws relating to the Base Building, provided that compliance with such Laws is not the responsibility of Tenant under this Lease, and provided further that Landlord’s failure to comply therewith would prohibit Tenant from obtaining or maintaining a certificate of occupancy (or its legal equivalent) for the Premises, or would unreasonably and materially affect the safety of Tenant’s employees or create a significant health hazard for Tenant’s employees. “Base Building” shall include the structural portions of the Building, the public restrooms and the Building mechanical, electrical and plumbing systems and equipment located in the internal core of the Building on the floor or floors on which the Premises are located. Tenant shall promptly provide Landlord with copies of any notices it receives regarding an alleged violation of Law. As of the date hereof, Landlord has not received notice from any governmental agencies that the Building is in violation of Title III of the Americans with Disabilities Act. Landlord, at its sole cost and expense (except to the extent properly included in Expenses), shall be responsible for correcting any violations of Title Ill of the Americans with Disabilities Act with respect to the Premises and the Common Areas of the Building, provided that Landlord’s obligation with respect to the Premises shall be limited to violations that arise out of the Landlord Work and/or the condition of the Premises prior to the installation of any furniture, equipment and other personal property of Tenant. Notwithstanding

5

the foregoing, Landlord shall have the right to contest any alleged violation in good faith, including, without limitation, the right to apply for and obtain a waiver or deferment of compliance, the right to assert any and all defenses allowed by Law and the right to appeal any decisions, judgments or rulings to the fullest extent permitted by Law. Landlord, after the exhaustion of any and all rights to appeal or contest, will make all repairs, additions, alterations or improvements necessary to comply with the terms of any final order or judgment. Notwithstanding the foregoing, Tenant, not Landlord, shall be responsible for the correction of any violations that arise out of or in connection with any claims brought under any provision of the Americans with Disabilities Act other than Title Ill, the specific nature of Tenant’s business in the Premises (other than general office use), the acts or omissions of Tenant, its agents, employees or contractors, Tenant’s arrangement of any furniture, equipment or other property in the Premises, any repairs, alterations, additions or improvements performed by or on behalf of Tenant (other than the Landlord Work) and any design or configuration of the Premises specifically requested by Tenant after being informed that such design or configuration may not be in strict compliance with the ADA. Tenant shall comply with the rules and regulations of the Building attached as Exhibit E and such other reasonable rules and regulations adopted by Landlord from time to time, including rules and regulations for the performance of Alterations (defined in Section 9).

6. Security Deposit.

The Security Deposit shall be delivered to Landlord upon the execution of this Lease by Tenant and held by Landlord without liability for interest (unless required by Law) as security for the performance of Tenant’s obligations. The Security Deposit is not an advance payment of Rent or a measure of damages. Landlord may use all or a portion of the Security Deposit to satisfy past due Rent or to cure any Default (defined in Section 18) by Tenant, or to satisfy any other loss or damage resulting from Tenant’s Default as provided in Section 19. If Landlord uses any portion of the Security Deposit, Tenant shall, within 5 days after demand, restore the Security Deposit to its original amount. Landlord shall return any unapplied portion of the Security Deposit to Tenant within 45 days after the later to occur of: (a) determination of the final Rent due from Tenant; or (b) the later to occur of the Termination Date or the date Tenant surrenders the Premises to Landlord in compliance with Section 25. Landlord may assign the Security Deposit to a successor or transferee and, following the assignment, Landlord shall have no further liability for the return of the Security Deposit. Landlord shall not be required to keep the Security Deposit separate from its other accounts. Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code, or any similar or successor Laws now or hereinafter in effect.

7. Building Services.

7.01 Landlord shall furnish Tenant with the following services: (a) water for use in the Base Building lavatories; (b) customary heat and air conditioning in season during Building Service Hours, although Tenant shall have the right to receive HVAC service during hours other than Building Service Hours by paying Landlord’s then standard charge for additional HVAC service and providing such prior notice as is reasonably specified by Landlord; (c) standard janitorial service on Business Days; (d) elevator service; (e) electricity in accordance with the terms and conditions in Section 7.02; (f) access to the Building for Tenant and its employees 24 hours per day/7 days per week, subject to the terms of this Lease and such protective services or monitoring systems, if any, as Landlord may reasonably impose, including, without limitation, sign-in procedures and/or presentation of identification cards; and (g) such other services as Landlord reasonably determines are necessary or appropriate for the Property.

7.02 Electricity used by Tenant in the Premises shall by paid for by Tenant through inclusion in Expenses (except as provided for excess usage). Without the consent of Landlord, Tenant’s use of electrical service shall not exceed, either in voltage, rated capacity, use beyond Building Service Hours or overall load, that which Landlord reasonably deems to be standard for the Building. Landlord shall have the right to measure electrical usage by commonly accepted methods, including the installation of measuring devices such as submeters and check meters. If it is determined that Tenant is using excess electricity, Tenant shall pay Landlord Additional Rent for the cost of such excess electrical usage and for the cost of purchasing and installing the measuring device(s).

6

7.03 Landlord’s failure to furnish, or any interruption, diminishment or termination of services due to the application of Laws, the failure of any equipment, the performance of repairs, improvements or alterations, utility interruptions or the occurrence of an event of Force Majeure (defined in Section 26.03) (collectively a “Service Failure”) shall not render Landlord liable to Tenant, constitute a constructive eviction of Tenant, give rise to an abatement of Rent, nor relieve Tenant from the obligation to fulfill any covenant or agreement. However, if the Premises, or a material portion of the Premises, are made untenantable for a period in excess of 3 consecutive Business Days as a result of a Service Failure that is reasonably within the control of Landlord to correct, then Tenant, as its sole remedy, shall be entitled to receive an abatement of Rent payable hereunder during the period beginning on the 4th consecutive Business Day of the Service Failure and ending on the day the service has been restored. If the entire Premises have not been rendered untenantable by the Service Failure, the amount of abatement shall be equitably prorated.

8. Leasehold Improvements.

All improvements in and to the Premises, including any Alterations (defined in Section 9.03) (collectively, “Leasehold Improvements”) shall remain upon the Premises at the end of the Term without compensation to Tenant, provided that Tenant, at its expense, in compliance with the National Electric Code or other applicable Law, shall remove any Cable (defined in Section 9.01 below). In addition, Landlord, by written notice to Tenant at least 30 days prior to the Termination Date, may require Tenant, at its expense, to remove any Alterations (but not any portion of the Landlord Work) that, in Landlord’s reasonable judgment, are of a nature that would require removal and repair costs that are materially in excess of the removal and repair costs associated with standard office improvements (the Cable and such other items collectively are referred to as “Required Removables”). Required Removables shall include, without limitation, internal stairways, raised floors, personal baths and showers, vaults, rolling file systems and structural alterations and modifications. The Required Removables shall be removed by Tenant before the Termination Date. Tenant shall repair damage caused by the installation or removal of Required Removables. If Tenant fails to perform its obligations in a timely manner, Landlord may perform such work at Tenant’s expense. Tenant, at the time it requests approval for a proposed Alteration, may request in writing that Landlord advise Tenant whether the Alteration, or any portion thereof, is a Required Removable. Within 10 days after receipt of Tenant’s request, Landlord shall advise Tenant in writing as to which portions of the alteration or other improvements are Required Removables.

9. Repairs and Alterations.

9.01 Tenant shall periodically inspect the Premises to identify any conditions that are dangerous or in need of maintenance or repair. Tenant shall promptly provide Landlord with notice of any such conditions. Tenant shall, at its sole cost and expense, perform all maintenance and repairs to the Premises that are not Landlord’s express responsibility under this Lease, and keep the Premises in good condition and repair, reasonable wear and tear excepted. Tenant’s repair and maintenance obligations include, without limitation, repairs to: (a) floor covering; (b) interior partitions; (c) doors; (d) the interior side of demising walls; (e) electronic, fiber, phone and data cabling and related equipment that is installed by or for the exclusive benefit of Tenant (collectively, “Cable”); (f) supplemental air conditioning units, kitchens, including hot water heaters, plumbing, and similar facilities exclusively serving Tenant; and (g) Alterations. Subject to the terms of Section 15 below, to the extent Landlord is not reimbursed by insurance proceeds, Tenant shall reimburse Landlord for the cost of repairing damage to the Building caused by the acts of Tenant, Tenant Related Parties and their respective contractors and vendors. If Tenant fails to make any repairs to the Premises for more than 30 days after notice from Landlord (although notice shall not be required in an emergency), Landlord may make the repairs, and Tenant shall pay the reasonable cost of the repairs, together with an administrative charge in an amount equal to 5% of the cost of the repairs.

9.02 Landlord shall keep and maintain in good repair and working order and perform maintenance upon the: (a) structural elements of the Building; (b) mechanical (including HVAC), electrical, plumbing and fire/life safety systems serving the Building in general; (c) Common Areas; (d) roof of the Building; (e) exterior windows of the Building; and (f) elevators serving the Building. Landlord shall promptly make repairs for which Landlord is responsible. Tenant hereby waives any and all rights under and benefits of subsection 1 of Section 1932, and Sections 1941 and 1942 of the California Civil Code, or any similar or successor Laws now or hereinafter in effect.

7

9.03 Tenant shall not make alterations, repairs, additions or improvements or install any Cable (collectively referred to as “Alterations”) without first obtaining the written consent of Landlord in each instance, which consent shall not be unreasonably withheld or delayed. However, Landlord’s consent shall not be required for any Alteration that satisfies all of the following criteria (a “Cosmetic Alteration”): (a) is of a cosmetic nature such as painting, wallpapering, hanging pictures and installing carpeting; (b) is not visible from the exterior of the Premises or Building; (c) will not affect the Base Building; and (d) does not require work to be performed inside the walls or above the ceiling of the Premises. Cosmetic Alterations shall be subject to all the other provisions of this Section 9.03. Prior to starting work, Tenant shall furnish Landlord with plans and specifications; names of contractors reasonably acceptable to Landlord (provided that Landlord may designate specific contractors with respect to Base Building); required permits and approvals; evidence of contractor’s and subcontractor’s insurance in amounts reasonably required by Landlord and naming Landlord as an additional insured; and any security for performance in amounts reasonably required by Landlord. Material changes to the plans and specifications must also be submitted to Landlord for its approval. Alterations shall be constructed in a good and workmanlike manner using materials of a quality reasonably approved by Landlord. Tenant shall reimburse Landlord for any sums paid by Landlord for third party examination of Tenant’s plans for non-Cosmetic Alterations. In addition, Tenant shall pay Landlord a fee for Landlord’s oversight and coordination of any non- Cosmetic Alterations equal to 5% of the cost of the non-Cosmetic Alterations. Upon completion, Tenant shall furnish “as-built” plans for non-Cosmetic Alterations, completion affidavits and full and final waivers of lien. Landlord’s approval of an Alteration shall not be deemed a representation by Landlord that the Alteration complies with Law.

10. Entry by Landlord.

Landlord may enter the Premises to inspect, show or clean the Premises or to perform or facilitate the performance of repairs, alterations or additions to the Premises or any portion of the Building. Except in emergencies or to provide Building services, Landlord shall use reasonable efforts to provide Tenant with at least 24 hours prior verbal notice of entry and shall use reasonable efforts to minimize any interference with Tenant’s use of the Premises. If reasonably necessary, Landlord may temporarily close all or a portion of the Premises to perform repairs, alterations and additions. However, except in emergencies, Landlord will not close the Premises if the work can reasonably be completed on weekends and after Building Service Hours. Entry by Landlord shall not constitute a constructive eviction or entitle Tenant to an abatement or reduction of Rent. Notwithstanding the foregoing, except in emergency situations as determined by Landlord, Landlord shall exercise reasonable efforts to minimize any interference with the conduct of the business of Tenant in the Premises. However, the foregoing shall not require Landlord to perform work after Normal Business Hours unless Tenant agrees to reimburse Landlord for the extra cost incurred in connection with such work which exceeds the cost for such work which would have been incurred had it been performed during Normal Business Hours.

11. Assignment and Subletting.

11.01 Except in connection with a Business Transfer (defined in Section 11.04), Tenant shall not assign, sublease, transfer or encumber any interest in this Lease or allow any third party to use any portion of the Premises (collectively or individually, a “Transfer”) without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed if Landlord does not exercise its recapture rights under Section 11.02. Without limitation, it is agreed that Landlord’s consent shall not be considered unreasonably withheld if the proposed transferee is an occupant of the Building or is the proposed transferee, whether or not an occupant of the Building, is in discussions with Landlord regarding the leasing of space within the Building. If the entity(ies) which directly or indirectly controls the voting shares/rights of Tenant changes at any time, such change of ownership or control shall constitute a Transfer unless Tenant is an entity whose outstanding stock is listed on a recognized securities exchange or if at least 80% of its voting stock is owned by another entity, the voting stock of which is so listed. Tenant hereby waives the provisions of Section 1995.310 of the California Civil Code, or any similar or successor Laws, now or hereinafter in effect, and all other remedies, including, without limitation, any right at law or equity to terminate this Lease, on its

8

own behalf and, to the extent permitted under all applicable Laws, on behalf of the proposed transferee. Any Transfer in violation of this Section shall, at Landlord’s option, be deemed a Default by Tenant as described in Section 18, and shall be voidable by Landlord. In no event shall any Transfer, including a Business Transfer, release or relieve Tenant from any obligation under this Lease, and Tenant shall remain primarily liable for the performance of the tenant’s obligations under this Lease, as amended from time to time.

11.02 Tenant shall provide Landlord with financial statements for the proposed transferee, a fully executed copy of the proposed assignment, sublease or other Transfer documentation and such other information as Landlord may reasonably request. Within 15 Business Days after receipt of the required information and documentation, Landlord shall either: (a) consent to the Transfer by execution of a consent agreement in a form reasonably designated by Landlord; (b) reasonably refuse to consent to the Transfer in writing; or (c) in the event of an assignment of this Lease or subletting of more than 30% of the Rentable Square Footage of the Premises for more than 50% of the remaining Term (excluding unexercised options), recapture the portion of the Premises that Tenant is proposing to Transfer. If Landlord exercises its right to recapture, this Lease shall automatically be amended (or terminated if the entire Premises is being assigned or sublet) to delete the applicable portion of the Premises effective on proposed effective date of the Transfer, although Landlord may require Tenant to execute a reasonable amendment or other document reflecting such reduction or termination. Tenant shall pay Landlord a review fee of $1,500.00 for Landlord’s review of any requested Transfer.

11.03 Tenant shall pay Landlord 50% of all rent and other consideration which Tenant receives as a result of a Transfer that is in excess of the Rent payable to Landlord for the portion of the Premises and Term covered by the Transfer. Tenant shall pay Landlord for Landlord’s share of the excess within 30 days after Tenant’s receipt of the excess. Tenant may deduct from the excess, on a straight-line basis, all reasonable and customary expenses directly incurred by Tenant attributable to the Transfer. If Tenant is in Default, Landlord may require that all sublease payments be made directly to Landlord, in which case Tenant shall receive a credit against Rent in the amount of Tenant’s share of payments received by Landlord.

11.04 Tenant may assign this Lease to a successor to Tenant by merger, consolidation or the purchase of substantially all of Tenant’s assets, or assign this Lease or sublet all or a portion of the Premises to an Affiliate (defined below), without the consent of Landlord, provided that all of the following conditions are satisfied (a “Business Transfer”): (a) Tenant must not be in Default; (b) Tenant must give Landlord written notice at least 15 Business Days before such Transfer, and (c) if such Transfer will result from a merger or consolidation of Tenant with another entity, then the Credit Requirement (defined below) must be satisfied. Tenant’s notice to Landlord shall include information and documentation evidencing the Business Transfer and showing that each of the above conditions has been satisfied. If requested by Landlord, Tenant’s successor shall sign a commercially reasonable form of assumption agreement. “Affiliate” shall mean an entity controlled by, controlling or under common control with Tenant. The “Credit Requirement” shall be deemed satisfied if, as of the date immediately preceding the date of the Transfer, the financial strength of the entity with which Tenant is to merge or consolidate is not less than that of Tenant, as determined (x) based on credit ratings of such entity and Tenant by both Moody’s and Standard & Poor’s (or by either such agency alone, if applicable ratings by the other agency do not exist), or (y) if such credit ratings do not exist, then in accordance with Moody’s KMV RiskCalc (i.e., the on-line software tool offered by Moody’s for analyzing credit risk) based on CFO-certified financial statements for such entity and Tenant covering their last two fiscal years ending before the Transfer.

12. Liens.

Tenant shall not permit mechanics’ or other liens to be placed upon the Property, Premises or Tenant’s leasehold interest in connection with any work or service done or purportedly done by or for the benefit of Tenant or its transferees. Tenant shall give Landlord notice at least 15 days prior to the commencement of any work in the Premises to afford Landlord the opportunity, where applicable, to post and record notices of non-responsibility. Tenant, within 10 days of notice from Landlord, shall fully discharge any lien by settlement, by bonding or by insuring over the lien in the manner prescribed by the applicable lien Law and, if Tenant fails to do so, Tenant shall be deemed in Default under this Lease and, in addition to any other remedies available to Landlord as a result of such Default by Tenant. Landlord, at its option, may bond, insure over or otherwise discharge the lien. Tenant shall reimburse Landlord for any amount paid by Landlord, including, without limitation, reasonable attorneys’ fees.

9

13. Indemnity and Waiver of Claims.

Except to the extent caused by the negligence or willful misconduct of Landlord or any Landlord Related Parties (defined below), Tenant shall indemnify, defend and hold Landlord and Landlord Related Parties harmless against and from all liabilities, obligations, damages, penalties, claims, actions, costs, charges and expenses, including, without limitation, reasonable attorneys’ fees and other professional fees (if and to the extent permitted by Law) (collectively referred to as “Losses”), which may be imposed upon, incurred by or asserted against Landlord or any of the Landlord Related Parties by any third party and arising out of or in connection with any damage or injury occurring in the Premises or any acts or omissions (including violations of Law) of Tenant, the Tenant Related Parties (defined below) or any of Tenant’s transferees, contractors or licensees. Except to the extent caused by the negligence or willful misconduct of Tenant or any Tenant Related Parties, Landlord shall indemnify, defend and hold Tenant, its trustees, members, principals, beneficiaries, partners, officers, directors, employees and agents (“Tenant Related Parties”) harmless against and from all Losses which may be imposed upon, incurred by or asserted against Tenant or any of the Tenant Related Parties by any third party and arising out of or in connection with the acts or omissions (including violations of Law) of Landlord or the Landlord Related Parties. Tenant hereby waives all claims against and releases Landlord and its trustees, members, principals, beneficiaries, partners, officers, directors, employees, Mortgagees (defined in Section 23) and agents (the “Landlord Related Parties”) from all claims for any injury to or death of persons, damage to property or business loss in any manner related to (a) Force Majeure, (b) acts of third parties, (c) the bursting or leaking of any tank, water closet, drain or other pipe, (d) the inadequacy or failure of any security or protective services, personnel or equipment, or (e) any matter not within the reasonable control of Landlord.

14. Insurance.

Tenant shall maintain the following insurance (“Tenant’s Insurance”): (a) Commercial General Liability Insurance applicable to the Premises and its appurtenances providing, on an occurrence basis, a minimum combined single limit of $2,000,000.00; (b) Property/Business Interruption Insurance written on an All Risk or Special Cause of Loss Form, including earthquake sprinkler leakage, at replacement cost value and with a replacement cost endorsement covering all of Tenant’s business and trade fixtures, equipment, movable partitions, furniture, merchandise and other personal property within the Premises (“Tenant’s Property”) and any Leasehold Improvements performed by or for the benefit of Tenant; (c) Workers’ Compensation Insurance in amounts required by Law; and (d) Employers Liability Coverage of at least $1,000,000.00 per occurrence. Any company writing Tenant’s insurance shall have an A.M. Best rating of not less than AVIII. All Commercial General Liability Insurance policies shall name as additional insureds Landlord (or its successors and assignees), the managing agent for the Building (or any successor), EOP Operating Limited Partnership, Equity Office Properties Trust and their respective members, principals, beneficiaries, partners, officers, directors, employees, and agents, and other designees of Landlord and its successors as the interest of such designees shall appear. In addition, Landlord shall be named as a loss payee with respect to Property/Business Interruption Insurance on the Leasehold Improvements. All policies of Tenant’s Insurance shall contain endorsements that the insurer(s) shall give Landlord and its designees at least 30 days’ advance written notice of any cancellation, termination, material change or lapse of insurance. Tenant shall provide Landlord with a certificate of insurance evidencing Tenant’s insurance prior to the earlier to occur of the date of Full Lease Execution or the date Tenant is provided with possession of the Premises, and thereafter as necessary to assure that Landlord always has current certificates evidencing Tenant’s Insurance. So long as the same is available at commercially reasonable rates, Landlord shall maintain so called All Risk property insurance on the Building at replacement cost value as reasonably estimated by Landlord, together with such other insurance coverage as Landlord, in its reasonable judgment, may elect to maintain.

15. Subrogation.

Landlord and Tenant hereby waive and shall cause their respective insurance carriers to waive any and all rights of recovery, claims, actions or causes of action against the other for any

10

loss or damage with respect to Tenant’s Property, Leasehold Improvements, the Building, the Premises, or any contents thereof, including rights, claims, actions and causes of action based on negligence, which loss or damage is (or would have been, had the insurance required by this Lease been carried) covered by insurance. For the purposes of this waiver, any deductible with respect to a party’s insurance shall be deemed covered by and recoverable by such party under valid and collectable policies of insurance.

16. Casualty Damage.

16.01 If all or any portion of the Premises becomes untenantable by fire or other casualty to the Premises (collectively a “Casualty”), Landlord, with reasonable promptness, shall cause a general contractor selected by Landlord to provide Landlord and Tenant with a written estimate of the amount of time required using standard working methods to Substantially Complete the repair and restoration of the Premises and any Common Areas necessary to provide access to the Premises (“Completion Estimate”). If the Completion Estimate Indicates that the Premises or any Common Areas necessary to provide access to the Premises cannot be made tenantable within 270 days from the date the repair is started, then either party shall have the right to terminate this Lease upon written notice to the other within 10 days after receipt of the Completion Estimate. Tenant, however, shall not have the right to terminate this Lease if the Casualty was caused by the negligence or intentional misconduct of Tenant or any Tenant Related Parties. In addition, Landlord, by notice to Tenant within 90 days after the date of the Casualty, shall have the right to terminate this Lease if: (1) the Premises have been materially damaged and there is less than 2 years of the Term remaining on the date of the Casualty; (2) any Mortgagee requires that the insurance proceeds be applied to the payment of the mortgage debt; or (3) a material uninsured loss to the Building or Premises occurs.

16.02 If this Lease is not terminated, Landlord shall promptly and diligently, subject to reasonable delays for insurance adjustment or other matters beyond Landlord’s reasonable control, restore the Premises and Common Areas. Such restoration shall be to substantially the same condition that existed prior to the Casualty, except for modifications required by Law or any other modifications to the Common Areas deemed desirable by Landlord. Upon notice from Landlord, Tenant shall assign or endorse over to Landlord (or to any party designated by Landlord) all property insurance proceeds payable to Tenant under Tenant’s Insurance with respect to any Leasehold Improvements performed by or for the benefit of Tenant; provided if the estimated cost to repair such Leasehold Improvements exceeds the amount of insurance proceeds received by Landlord from Tenant’s Insurance carrier, Landlord shall give Tenant notice as to the excess cost of such repairs, and Tenant shall have 3 Business Days in which to determine and to notify Landlord whether it will (i) fund such excess costs, or (ii) will provide Landlord with revised plans to complete the repairs using only the amount of insurance proceeds received by Landlord from Tenant’s insurance carrier. Any excess costs required shall be paid by Tenant to Landlord prior to Landlord’s commencement of repairs. Within 15 days of demand, Tenant shall also pay Landlord for any additional excess costs that are determined during the performance of the repairs. In no event shall Landlord be required to spend more for the restoration than the proceeds received by Landlord, whether insurance proceeds or proceeds from Tenant. Landlord shall not be liable for any inconvenience to Tenant, or injury to Tenant’s business resulting in any way from the Casualty or the repair thereof. Provided that Tenant is not in Default, during any period of time that all or a material portion of the Premises is rendered untenantable as a result of a Casualty, the Rent shall abate for the portion of the Premises that is untenantable and not used by Tenant.

16.03 The provisions of this Lease, including this Section 16, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises or the Property, and any Laws, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage or destruction in the absence of an express agreement between the parties, and any similar or successor Laws now or hereinafter in effect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises or the Property.

17. Condemnation.

Either party may terminate this Lease if any material part of the Premises is taken or condemned for any public or quasi-public use under Law, by eminent domain or private

11

purchase in lieu thereof (a “Taking”). Landlord shall also have the right to terminate this Lease if there is a Taking of any portion of the Building or Property which would have a material adverse effect on Landlord’s ability to profitably operate the remainder of the Building. The terminating party shall provide written notice of termination to the other party within 45 days after it first receives notice of the Taking. The termination shall be effective as of the effective date of any order granting possession to, or vesting legal title in, the condemning authority. If this Lease is not terminated, Base Rent and Tenant’s Pro Rata Share shall be appropriately adjusted to account for any reduction in the square footage of the Building or Premises. All compensation awarded for a Taking shall be the property of Landlord. The right to receive compensation or proceeds are expressly waived by Tenant, however, Tenant may file a separate claim for Tenant’s Property and Tenant’s reasonable relocation expenses, provided the filing of the claim does not diminish the amount of Landlord’s award. If only a part of the Premises is subject to a Taking and this Lease is not terminated, Landlord, with reasonable diligence, will restore the remaining portion of the Premises as nearly as practicable to the condition immediately prior to the Taking. Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of the California Code of Civil Procedure, or any similar or successor Laws.

18. Events of Default.

In addition to any other default specifically described in this Lease, each of the following occurrences shall be a “Default”: (a) Tenant’s failure to pay any portion of Rent when due, if the failure continues for 3 days after written notice to Tenant (“Monetary Default”); (b) Tenant’s failure (other than a Monetary Default) to comply with any term, provision, condition or covenant of this Lease, if the failure is not cured within 30 days after written notice to Tenant provided, however, if Tenant’s failure to comply cannot reasonably be cured within 10 days, Tenant shall be allowed additional time (not to exceed 90 days) as is reasonably necessary to cure the failure so long as Tenant begins the cure within 30 days and diligently pursues the cure to completion; (c) Tenant permits a Transfer without Landlord’s required approval or otherwise in violation of Section 11 of this Lease; (d) Tenant or any Guarantor becomes insolvent, makes a the transfer in fraud of creditors, makes an assignment for the benefit of creditors, admits in writing its inability to pay its debts when due or forfeits or loses its right to conduct business; (e) the leasehold estate is taken by process or operation of Law; (f) in the case of any ground floor or retail Tenant, Tenant does not take possession of or abandons or vacates all or any portion of the Premises; or (g) Tenant is in default beyond any notice and cure period under any other lease or agreement with Landlord at the Building or Property. If Landlord provides Tenant with notice of Tenant’s failure to comply with any specific provision of this Lease on 3 separate occasions during any 12 month period, Tenant’s subsequent violation of such provision shall, at Landlord’s option, be an incurable Default by Tenant. All notices sent under this Section shall be in satisfaction of, and not in addition to, notice required by Law.

19. Remedies.

19.01 Upon the occurrence of any Default under this Lease, whether enumerated in Section 18 or not, Landlord shall have the option to pursue any one or more of the following remedies without any notice (except as expressly prescribed herein) or demand whatsoever (and without limiting the generality of the foregoing, Tenant hereby specifically waives notice and demand for payment of Rent or other obligations, except for those notices specifically required pursuant to the terms of Section 18 or this Section 19, and waives any and all other notices or demand requirements imposed by applicable law):

(a) Terminate this Lease and Tenant’s right to possession of the Premises and recover from Tenant an award of damages equal to the sum of the following:

(i) The Worth at the Time of Award of the unpaid Rent which had been earned at the time of termination;

(ii) 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 Rent loss that Tenant proves could have been reasonably avoided;

12

(iii) 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 Rent loss that Tenant proves could be reasonably avoided;

(iv) Any other amount necessary to compensate Landlord for all the detriment either 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; and

(v) All such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time under applicable law.

The “Worth at the Time of Award” of the amounts referred to in parts (i) and (ii) above, shall be computed by allowing interest at the lesser of a per annum rate equal to: (A) the greatest per annum rate of interest permitted from time to time under applicable law, or (B) the Prime Rate plus 5%. For purposes hereof, the “Prime Rate” shall be the per annum interest rate publicly announced as its prime or base rate by a federally insured bank selected by Landlord in the State of California. The “Worth at the Time of Award” of the amount referred to in part (iii), above, shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus 1%;

(b) Employ the remedy described in California Civil Code § 1951.4 (Landlord may continue this Lease in effect after Tenant’s breach and abandonment and recover Rent as it becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations); or

(c) Notwithstanding Landlord’s exercise of the remedy described in California Civil Code § 1951.4 in respect of an event or events of default, at such time thereafter as Landlord may elect in writing, to terminate this Lease and Tenant’s right to possession of the Premises and recover an award of damages as provided above in Paragraph 19.01(a).

19.02 The subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of 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. No waiver by Landlord of any breach hereof shall be effective unless such waiver is in writing and signed by Landlord.

19.03 TENANT HEREBY WAIVES ANY AND ALL RIGHTS CONFERRED BY SECTION 3275 OF THE CIVIL CODE OF CALIFORNIA AND BY SECTIONS 1174 (c) AND 1179 OF THE CODE OF CIVIL PROCEDURE OF CALIFORNIA AND ANY AND ALL OTHER LAWS AND RULES OF LAW FROM TIME TO TIME IN EFFECT DURING THE LEASE TERM PROVIDING THAT TENANT SHALL HAVE ANY RIGHT TO REDEEM, REINSTATE OR RESTORE THIS LEASE FOLLOWING ITS TERMINATION BY REASON OF TENANT’S BREACH. TENANT ALSO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS LEASE.

19.04 No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy, and each and every right and remedy shall be cumulative and in addition to any other right or remedy given hereunder or now or hereafter existing by agreement, applicable law or in equity. In addition to other remedies provided in this Lease, Landlord shall be entitled, to the extent permitted by applicable law, to injunctive relief, or to a decree compelling performance of any of the covenants, agreements, conditions or provisions of this Lease, or to any other remedy allowed to Landlord at law or in equity. Forbearance by Landlord to enforce one or more of the remedies herein provided upon an event of default shall not be deemed or construed to constitute a waiver of such default.

19.05 If Tenant is in Default of any of its non-monetary obligations under the Lease, Landlord shall have the right to perform such obligations. Tenant shall reimburse Landlord for the cost of such performance upon demand together with an administrative charge equal to 10% of the cost of the work performed by Landlord.

13

19.06 This Section 19 shall be enforceable to the maximum extent such enforcement is not prohibited by applicable law, and the unenforceability of any portion thereof shall not thereby render unenforceable any other portion.

20. Limitation of Liability.

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE. THE LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) SHALL BE LIMITED TO THE LESSER OF (A) THE INTEREST OF LANDLORD IN THE PROPERTY, OR (B) THE EQUITY INTEREST LANDLORD WOULD HAVE IN THE PROPERTY IF THE PROPERTY WERE ENCUMBERED BY THIRD PARTY DEBT IN AN AMOUNT EQUAL TO 70% OF THE VALUE OF THE PROPERTY. TENANT SHALL LOOK SOLELY TO LANDLORD’S INTEREST IN THE PROPERTY FOR THE RECOVERY OF ANY JUDGMENT OR AWARD AGAINST LANDLORD OR ANY LANDLORD RELATED PARTY. NEITHER LANDLORD NOR ANY LANDLORD RELATED PARTY SHALL BE PERSONALLY LIABLE FOR ANY JUDGMENT OR DEFICIENCY, AND IN NO EVENT SHALL LANDLORD OR ANY LANDLORD RELATED PARTY BE LIABLE TO TENANT FOR ANY LOST PROFIT, DAMAGE TO OR LOSS OF BUSINESS OR ANY FORM OF SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGE. BEFORE FILING SUIT FOR AN ALLEGED DEFAULT BY LANDLORD, TENANT SHALL GIVE LANDLORD AND THE MORTGAGEE(S) WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES (DEFINED IN SECTION 23 BELOW), NOTICE AND REASONABLE TIME TO CURE THE ALLEGED DEFAULT.

21. Intentionally Omitted.

22. Holding Over.

If Tenant fails to surrender all or any part of the Premises at the termination of this Lease, occupancy of the Premises after termination shall be that of a tenancy at sufferance. Tenant’s occupancy shall be subject to all the terms and provisions of this Lease, and Tenant shall pay an amount (on a per month basis without reduction for partial months during the holdover) equal to 150% of the sum of the Base Rent and 100% of the Additional Rent due for the period immediately preceding the holdover. No holdover by Tenant or payment by Tenant after the termination of this Lease shall be construed to extend the Term or prevent Landlord from immediate recovery of possession of the Premises by summary proceedings or otherwise. If Landlord is unable to deliver possession of the Premises to a new tenant or to perform improvements for a new tenant as a result of Tenant’s holdover and Tenant fails to vacate the Premises within 15 days after notice from Landlord, Tenant shall be liable for all damages that Landlord suffers from the holdover.

23. Subordination to Mortgages; Estoppel Certificate.

Tenant accepts this Lease subject and subordinate to any mortgage(s), deed(s) of trust, ground lease(s) or other lien(s) now or subsequently arising upon the Premises, the Building or the Property, and to renewals, modifications, refinancings and extensions thereof (collectively referred to as a “Mortgage”). The party having the benefit of a Mortgage shall be referred to as a “Mortgagee”. This clause shall be self-operative, but upon request from a Mortgagee, Tenant shall execute a commercially reasonable subordination agreement in favor of the Mortgagee. As an alternative, a Mortgagee shall have the right at any time to subordinate its Mortgage to this Lease. Upon request, Tenant, without charge, shall attorn to any successor to Landlord’s interest in this Lease. Landlord and Tenant shall each, within 10 days after receipt of a written request from the other, execute and deliver a commercially reasonable estoppel certificate to those parties as are reasonably requested by the other (including a Mortgagee or prospective purchaser). Without limitation, such estoppel certificate may include a certification as to the status of this Lease, the existence of any defaults and the amount of Rent that is due and payable. Notwithstanding the foregoing, upon written request by Tenant, Landlord will use reasonable efforts to obtain a non-disturbance, subordination and attornment agreement from Landlord’s then current Mortgagee on such Mortgagee’s then current standard form of agreement. “Reasonable efforts” of Landlord shall not require Landlord to incur any cost, expense or

14

liability to obtain such agreement, it being agreed that Tenant shall be responsible for any fee or review costs charged by the Mortgagee. Upon request of Landlord, Tenant will execute the Mortgagee’s form of non-disturbance, subordination and attornment agreement and return the same to Landlord for execution by the Mortgagee. Landlord’s failure to obtain a non-disturbance, subordination and attornment agreement for Tenant shall have no effect on the rights, obligations and liabilities of Landlord and Tenant or be considered to be a default by Landlord hereunder.

24. Notice.

All demands, approvals, consents or notices (collectively referred to as a “notice”) shall be in writing and delivered by hand or sent by registered or certified mail with return receipt requested or sent by overnight or same day courier service at the party’s respective Notice Address(es) set forth in Section 1. Each notice shall be deemed to have been received on the earlier to occur of actual delivery or the date on which delivery is refused, or, if Tenant has vacated the Premises or any other Notice Address of Tenant without providing a new Notice Address, 3 days after notice is deposited in the U.S. mail or with a courier service in the manner described above. Either party may, at any time, change its Notice Address (other than to a post office box address) by giving the other party written notice of the new address.

25. Surrender of Premises.

At the termination of this Lease or Tenant’s right of possession, Tenant shall remove Tenant’s Property from the Premises, and quit and surrender the Premises to Landlord, broom clean, and in good order, condition and repair, ordinary wear and tear, or damage which Landlord is obligated to repair hereunder excepted. If Tenant fails to remove any of Tenant’s Property within 2 days after termination of this Lease or Tenant’s right to possession, Landlord, at Tenant’s sole cost and expense, shall be entitled (but not obligated) to remove and store Tenant’s Property. Landlord shall not be responsible for the value, preservation or safekeeping of Tenant’s Property. Tenant shall pay Landlord, upon demand, the expenses and storage charges incurred. If Tenant fails to remove Tenant’s Property from the Premises or storage, within 30 days after notice, Landlord may deem all or any part of Tenant’s Property to be abandoned and title to Tenant’s Property shall vest in Landlord.

26. Miscellaneous.

26.01 This Lease shall be interpreted and enforced in accordance with the Laws of the state or commonwealth in which the Building is located and Landlord and Tenant hereby irrevocably consent to the jurisdiction and proper venue of such state or commonwealth, If any term or provision of this Lease shall to any extent be void or unenforceable, the remainder of this Lease shall not be affected. If there is more than one Tenant or if Tenant is comprised of more than one party or entity, the obligations imposed upon Tenant shall be joint and several obligations of all the parties and entities, and requests or demands from any one person or entity comprising Tenant shall be deemed to have been made by all such persons or entities. Notices to any one person or entity shall be deemed to have been given to all persons and entities. Tenant represents and warrants to Landlord that each individual executing this Lease on behalf of Tenant is authorized to do so on behalf of Tenant and that Tenant is not, and the entities or individuals constituting Tenant or which may own or control Tenant or which may be owned or controlled by Tenant are not, (i) in violation of any laws relating to terrorism or money laundering, or (ii) among the individuals or entities identified on any list compiled pursuant to Executive Order 13224 for the purpose of identifying suspected terrorists or on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, http://wvvw.treas.gov/ofacitllsdn.pdf or any replacement website or other replacement official publication of such list.

26.02 If either party institutes a suit against the other for violation of or to enforce any covenant, term or condition of this Lease, the prevailing party shall be entitled to reimbursement of all of its costs and expenses, including, without limitation, reasonable attorneys’ fees. Landlord and Tenant hereby waive any right to trial by jury in any proceeding based upon a breach of this Lease. No failure by either party to declare a default immediately upon its occurrence, nor any delay by either party in taking action for a default, nor Landlord’s acceptance of Rent with knowledge of a default by Tenant, shall constitute a waiver of the default, nor shall it constitute an estoppel.

15

26.03 Whenever a period of time is prescribed for the taking of an action by Landlord or Tenant (other than the payment of the Security Deposit or Rent), the period of time for the performance of such action shall be extended by the number of days that the performance is actually delayed due to strikes, acts of God, shortages of labor or materials, war, terrorist acts, civil disturbances and other causes beyond the reasonable control of the performing party (“Force Majeure”).

26.04 Landlord shall have the right to transfer and assign, in whole or in part, all of its rights and obligations under this Lease and in the Building and Property. Upon transfer Landlord shall be released from any further obligations hereunder and Tenant agrees to look solely to the successor in interest of Landlord for the performance of such obligations, provided that, any successor pursuant to a voluntary, third party transfer (but not as part of an involuntary transfer resulting from a foreclosure or deed in lieu thereof) shall have assumed Landlord’s obligations under this Lease.

26.05 Landlord has delivered a copy of this Lease to Tenant for Tenant’s review only and the delivery of it does not constitute an offer to Tenant or an option. Tenant represents that it has dealt directly with and only with the Broker as a broker in connection with this Lease. Tenant shall indemnify and hold Landlord and the Landlord Related Parties harmless from all claims of any other brokers claiming to have represented Tenant in connection with this Lease. Landlord shall indemnify and hold Tenant and the Tenant Related Parties harmless from all claims of any brokers claiming to have represented Landlord in connection with this Lease. Equity Office Properties Management Corp. (“EOPMC”) is an affiliate of Landlord and represents only the Landlord in this transaction. Any assistance rendered by any agent or employee of EOPMC in connection with this Lease or any subsequent amendment or modification hereto has been or will be made as an accommodation to Tenant solely in furtherance of consummating the transaction on behalf of Landlord, and not as agent for Tenant.

26.06 Time is of the essence with respect to Tenant’s exercise of any expansion, renewal or extension rights granted to Tenant. The expiration of the Term, whether by lapse of time, termination or otherwise, shall not relieve either party of any obligations which accrued prior to or which may continue to accrue after the expiration or termination of this Lease.

26.07 Tenant may peacefully have, hold and enjoy the Premises, subject to the terms of this Lease, provided Tenant pays the Rent and fully performs all of its covenants and agreements This covenant shall be binding upon Landlord and its successors only during its or their respective periods of ownership of the Building.

26.08 This Lease does not grant any rights to light or air over or about the Building. Landlord excepts and reserves exclusively to itself any and all rights not specifically granted to Tenant under this Lease. This Lease constitutes the entire agreement between the parties and supersedes all prior agreements and understandings related to the Premises, including all lease proposals, letters of intent and other documents. Neither party is relying upon any warranty, statement or representation not contained in this Lease. This Lease may be modified only by a written agreement signed by an authorized representative of Landlord and Tenant.

16

Landlord and Tenant have executed this Lease as of the day and year first above written.

LANDLORD:

CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership

By:	EOM GP, L.L.C., a Delaware limited liability company, its general partner
	By:	Equity Office Management, L.L.C., a Delaware limited liability company, its non-member manager
		By:	/s/ Kenneth J. Churich
		Name:	Kenneth J. Churich
		Title:	Vice President-Leasing

TENANT:

EXPONENTIAL INTERACTIVE, INC. a California corporation
By:	/s/ John R. Rettig
Name:	John R. Rettig
Title:	CFO

By:

Name:

Title:

Tenant’s Tax ID Number (SSN or FEIN):

94-3370688

The individuals signing above hereby represent and warrant that at least one of the individuals signing above is one of the following: (x) the chairman of the board, the president, or a vice president of the tenant entity; and that the other individual is one of the following: (y) the secretary, assistant secretary, the chief financial officer, or assistant treasurer of the tenant entity; provided, however, that a single individual signing alone for such corporate entity represents and warrants that such individual holds at least two corporate offices with one office in each of the two categories listed above (i.e., subsections (x) and (y) above).ssss

17

EXHIBIT A

OUTLINE AND LOCATION OF PREMISES

This Exhibit is attached to and made a part of the Lease by and between CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and EXPONENTIAL INTERACTIVE, INC. a California corporation (“Tenant”) for space in the Building located at 2200 Powell Street, Emeryville, California, commonly known as Emeryville Tower II.

18

EXHIBIT A-1

OUTLINE AND LOCATION OF SUITE 350

19

EXHIBIT B

EXPENSES AND TAXES

This Exhibit is attached to and made a part of the Lease by and between CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and EXPONENTIAL INTERACTIVE, INC. a California corporation (“Tenant”) for space in the Building located at 2200 Powell Street, Emeryville, California, commonly known as Emeryville Tower II.

1. Payments.

1.01 Tenant shall pay Tenant’s Pro Rata Share of the amount, if any, by which Expenses (defined below) for each calendar year during the Term exceed Expenses for the Base Year (the “Expense Excess”) and also the amount, if any, by which Taxes (defined below) for each calendar year during the Term exceed Taxes for the Base Year (the “Tax Excess”). If Expenses or Taxes in any calendar year decrease below the amount of Expenses or Taxes for the Base Year, Tenant’s Pro Rata Share of Expenses or Taxes, as the case may be, for that calendar year shall be $0. Landlord shall provide Tenant with a good faith estimate of the Expense Excess and of the Tax Excess for each calendar year during the Term. On or before the first day of each month, Tenant shall pay to Landlord a monthly installment equal to one- twelfth of Tenant’s Pro Rata Share of Landlord’s estimate of both the Expense Excess and Tax Excess. After its receipt of the revised estimate, Tenant’s monthly payments shall be based upon the revised estimate. If Landlord does not provide Tenant with an estimate of the Expense Excess or the Tax Excess by January 1 of a calendar year, Tenant shall continue to pay monthly installments based on the previous year’s estimate(s) until Landlord provides Tenant with the new estimate.

1.02 As soon as is practical following the end of each calendar year, Landlord shall furnish Tenant with a statement of the actual Expenses and Expense Excess and the actual Taxes and Tax Excess for the prior calendar year. If the estimated Expense Excess or estimated Tax Excess for the prior calendar year is more than the actual Expense Excess or actual Tax Excess, as the case may be, for the prior calendar year, Landlord shall either provide Tenant with a refund or apply any overpayment by Tenant against Additional Rent due or next becoming due, provided if the Term expires before the determination of the overpayment, Landlord shall refund any overpayment to Tenant after first deducting the amount of Rent due. If the estimated Expense Excess or estimated Tax Excess for the prior calendar year is less than the actual Expense Excess or actual Tax Excess, as the case may be, for such prior year, Tenant shall pay Landlord, within 30 days after its receipt of the statement of Expenses or Taxes, any underpayment for the prior calendar year.

2. Expenses.

2.01 “Expenses” means all costs and expenses incurred in each calendar year in connection with operating, maintaining, repairing, and managing the Building and the Property. Expenses include, without limitation: (a) all labor and labor related costs, including wages, salaries, bonuses, taxes, insurance, uniforms, training, retirement plans, pension plans and other employee benefits; (b) management fees; (c) the cost of equipping, staffing and operating an on-site and/or off-site management office for the Building, provided if the management office services one or more other buildings or properties, the shared costs and expenses of equipping. staffing and operating such management office(s) shall be equitably prorated and apportioned between the Building and the other buildings or properties; (d) accounting costs; (e) the cost of services; (f) rental and purchase cost of parts, supplies, tools and equipment; (g) insurance premiums and deductibles; (h) electricity, gas and other utility costs; and (i) the amortized cost of capital improvements (as distinguished from replacement parts or components installed in the ordinary course of business) made subsequent to the Base Year which are: (1) performed primarily to reduce current or future operating expense costs, upgrade Building security or otherwise improve the operating efficiency of the Property; or (2) required to comply with any Laws that are enacted, or first interpreted to apply to the Property, after the date of this Lease. The cost of capital improvements shall be amortized by Landlord over the lesser of the Payback Period (defined below) or the useful life of the capital improvement as reasonably determined by Landlord. The amortized cost of capital improvements may, at Landlord’s option, include actual or imputed interest at the rate that Landlord would reasonably be required to pay to finance the

20

cost of the capital improvement. “Payback Period” means the reasonably estimated period of time that it takes for the cost savings resulting from a capital improvement to equal the total cost of the capital improvement. Landlord, by itself or through an affiliate, shall have the right to directly perform, provide and be compensated for any services under this Lease (including management services). However, in no event shall the management fees for the Building (expressed as a percentage of gross receipts for the Building) exceed the prevailing market management fees (expressed as a percentage of gross receipts), plus 1% of such fees, for comparable third party management companies offering comparable management services in office buildings similar to the Building in class, size, age and location. If Landlord incurs Expenses for the Building or Property together with one or more other buildings or properties, whether pursuant to a reciprocal easement agreement, common area agreement or otherwise, the shared costs and expenses shall be equitably prorated and apportioned between the Building and Property and the other buildings or properties.

2.02 Expenses shall not include: the cost of capital improvements (except as set forth above); depreciation; principal payments of mortgage and other non-operating debts of Landlord; amortization (except as set forth above); the cost of repairs or other work to the extent Landlord is reimbursed by insurance (or would have been reimbursed by insurance had Landlord carried the insurance required to be carried by Landlord under this Lease) or condemnation proceeds; costs in connection with leasing space in the Building, including brochures and marketing supplies, legal fees in negotiating and preparing lease documents, and construction, improvement and decorating costs in preparing space for initial occupancy by a specific tenant, brokerage commissions; lease concessions, rental abatements and construction allowances granted to specific tenants; costs incurred in connection with the sale, financing or refinancing of the Building, including brokerage commissions, attorneys’ and accountants’ fees, closing costs, title insurance premiums, transfer taxes and interest charges; fines, interest and penalties incurred due to the late payment of Taxes or Expenses; organizational expenses associated with the creation and operation of the entity which constitutes Landlord; or any penalties or damages that Landlord pays to Tenant under this Lease or to other tenants in the Building under their respective leases.

The following items are also excluded from Expenses:

(a) Sums (other than management fees, it being agreed that the management fees included in Expenses are as described above) paid to subsidiaries or other affiliates of Landlord for services on or to the Property, Building and/or Premises, but only to the extent that the costs of such services exceed the competitive cost for such services rendered by persons or entities of similar skill, competence and experience.

(b) Any fines, penalties or interest resulting from the negligence or willful misconduct of the Landlord or its agents, contractors, or employees.

(c) Advertising and promotional expenditures.

(d) Landlord’s charitable and political contributions.

(e) Ground lease rental.

(f) Attorney’s fees and other expenses incurred in connection with negotiations or disputes with prospective tenants or tenants or other occupants of the Building.

(g) The cost or expense of any services or benefits provided generally to other tenants in the Building and not provided or available to Tenant.

(h) All costs of purchasing or leasing major sculptures, paintings or other major works or objects of art (as opposed to decorations purchased or leased by Landlord for display in the Common Areas of the Building).

(i) Any expenses for which Landlord has received actual reimbursement (other than through Expenses).

(j) Costs incurred by Landlord in connection with the correction of defects in design and original construction of the Building or Property.

21

(k) Expenses for the replacement of any item covered under warranty, unless Landlord has not received payment under such warranty and it would not be fiscally prudent to pursue legal action to collect on such warranty.

(l) Fines or penalties incurred as a result of violation by Landlord of any applicable Laws.

(m) Costs of abating or removing asbestos.

2.03 If at any time during a calendar year the Building is not at least 95% occupied or Landlord is not supplying services to at least 95% of the total Rentable Square Footage of the Building, Expenses shall be determined as if the Building had been 95% occupied and Landlord had been supplying services to 95% of the Rentable Square Footage of the Building. If Expenses for a calendar year are determined as provided in the prior sentence, Expenses for the Base Year shall also be determined in such manner. Notwithstanding the foregoing, Landlord may calculate the extrapolation of Expenses under this Section based on 100% occupancy and service so long as such percentage is used consistently for each year of the Term. The extrapolation of Expenses under this Section shall be performed in accordance with the methodology specified by the Building Owners and Managers Association. In no event shall Landlord be entitled to a reimbursement from tenants for Expenses and Taxes in excess of 100% of the costs actually paid or incurred by Landlord in any applicable calendar year.

3. “Taxes” shall mean: (a) all real property taxes and other assessments on the Building and/or Property, including, but not limited to, gross receipts taxes, assessments for special improvement districts and building improvement districts, governmental charges, fees and assessments for police, fire, traffic mitigation or other governmental service of purported benefit to the Property, taxes and assessments levied in substitution or supplementation in whole or in part of any such taxes and assessments and the Property’s share of any real estate taxes and assessments under any reciprocal easement agreement, common area agreement or similar agreement as to the Property; (b) all personal property taxes for property that is owned by Landlord and used in connection with the operation, maintenance and repair of the Property; and (c) all costs and fees incurred in connection with seeking reductions in any tax liabilities described in (a) and (b), including, without limitation, any costs incurred by Landlord for compliance, review and appeal of tax liabilities. Without limitation, Taxes shall not include any income, capital levy, transfer, capital stock, gift, estate or inheritance tax. If a change in Taxes is obtained for any year of the Term during which Tenant paid Tenant’s Pro Rata Share of any Tax Excess, then Taxes for that year will be retroactively adjusted and Landlord shall provide Tenant with a credit, if any, based on the adjustment. Likewise, if a change is obtained for Taxes for the Base Year, Taxes for the Base Year shall be restated and the Tax Excess for all subsequent years shall be recomputed. Tenant shall pay Landlord the amount of Tenant’s Pro Rata Share of any such increase in the Tax Excess within 30 days after Tenant’s receipt of a statement from Landlord.

4. Audit Rights. Tenant, within 365 days after receiving Landlord’s statement of Expenses, may give Landlord written notice (“Review Notice”) that Tenant intends to review Landlord’s records of the Expenses for the calendar year to which the statement applies. Within a reasonable time after receipt of the Review Notice, Landlord shall make all pertinent records available for inspection that are reasonably necessary for Tenant to conduct its review. If any records are maintained at a location other than the management office for the Building, Tenant may either inspect the records at such other location or pay for the reasonable cost of copying and shipping the records. If Tenant retains an agent to review Landlord’s records, the agent must be with a CPA firm licensed to do business in the state or commonwealth where the Property is located. Tenant shall be solely responsible for all costs, expenses and fees incurred for the audit. Within 90 days after the records are made available to Tenant, Tenant shall have the right to give Landlord written notice (an “Objection Notice”) stating in reasonable detail any objection to Landlord’s statement of Expenses for that year. If Tenant fails to give Landlord an Objection Notice within the 90 day period or fails to provide Landlord with a Review Notice within the 365 day period described above, Tenant shall be deemed to have approved Landlord’s statement of Expenses and shall be barred from raising any claims regarding the Expenses for that year. If Tenant provides Landlord with a timely Objection Notice, Landlord and Tenant shall work together in good faith to resolve any issues raised in Tenant’s Objection Notice. If Landlord and Tenant determine that Expenses for the calendar year are less than reported, Landlord shall provide Tenant with a credit against the next installment of Rent in the amount of the

22

overpayment by Tenant. Likewise, if Landlord and Tenant determine that Expenses for the calendar year are greater than reported, Tenant shall pay Landlord the amount of any underpayment within 30 days. The records obtained by Tenant shall be treated as confidential. In no event shall Tenant be permitted to examine Landlord’s records or to dispute any statement of Expenses unless Tenant has paid and continues to pay all Rent when due.

23

EXHIBIT C

WORK LETTER

This Exhibit is attached to and made a part of the Lease by and between CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and EXPONENTIAL INTERACTIVE, INC. a California corporation (“Tenant”) for space in the Building located at 2200 Powell Street, Emeryville, California, commonly known as Emeryville Tower II.

As used in this Work Letter, the “Premises” shall be deemed to mean the Premises, as initially defined in the attached Lease.

1. Landlord shall perform improvements to the Premises in accordance with Space Plan Revision No. 5 prepared by Brereton Architects, dated May 18, 2006, and priced by Peacock Construction in the budget dated June 7, 2006 (collectively, the “Plans”). The improvements to be performed by Landlord in accordance with the Plans are hereinafter referred to as the “Landlord Work.” It is agreed that construction of the Landlord Work will be completed at Landlord’s sole cost and expense (subject to the terms of Section 2 below) using Building standard methods, materials and finishes and shall be performed and completed in a good and workmanlike manner. In addition, Landlord shall have the right to select and/or approve of any subcontractors used in connection with the Landlord Work, provided that Landlord or its general contractor shall competitively bid the major trade items for the Landlord Work (as determined by Landlord in Landlord’s reasonable discretion) to at least 3 subcontractors, and the subcontractor with the lowest bid that commits to Landlord’s scheduling requirements (after adjustment for inconsistent qualifications, clarifications and exclusions) shall be selected. Where it is not practical and/or reasonable to bid any element of the Landlord Work (as determined by Landlord in Landlord’s reasonable discretion), then Landlord shall select a subcontractor in its reasonable discretion. Landlord’s supervision or performance of any work for or on behalf of Tenant shall not be deemed a representation by Landlord that such Plans or the revisions thereto comply with applicable insurance requirements, building codes, ordinances, laws or regulations, or that the improvements constructed in accordance with the Plans and any revisions thereto will be adequate for Tenant’s use, it being agreed that Tenant shall be responsible for all elements of the design of Tenant’s plans (including, without limitation, compliance with law, functionality of design, the structural integrity of the design, the configuration of the premises and the placement of Tenant’s furniture, appliances and equipment).

2. If Tenant shall request any revisions to the Plans, Landlord shall have such revisions prepared at Tenant’s sole cost and expense and Tenant shall reimburse Landlord for the cost of preparing any such revisions to the Plans, plus any applicable state sales or use tax thereon, upon demand. Promptly upon completion of the revisions, Landlord shall notify Tenant in writing of the increased cost in the Landlord Work, if any, resulting from such revisions to the Plans. Tenant, within three Business Days, shall notify Landlord in writing whether it desires to proceed with such revisions. In the absence of such written authorization, Landlord shall have the option to continue work on the Premises disregarding the requested revision. Tenant shall be responsible for any Tenant Delay in completion of the Premises resulting from any revision to the Plans. If such revisions result in an increase in the cost of Landlord Work, such increased costs, plus any applicable state sales or use tax thereon, shall be payable by Tenant upon demand. Notwithstanding anything herein to the contrary, all revisions to the Plans shall be subject to the approval of Landlord.

3. Tenant acknowledges that the Landlord Work will be performed by Landlord in the Premises during Building Service Hours subsequent to the date of Full Lease Execution. Landlord and Tenant agree to cooperate with each other in order to enable the Landlord Work to be performed in a timely manner and with as little inconvenience to the operation of Tenant’s business as is reasonably possible. Notwithstanding anything herein to the contrary, any delay in the completion of the Landlord Work or inconvenience suffered by Tenant during the performance of the Landlord Work shall not delay the Rent Commencement Date nor shall it subject Landlord to any liability for any loss or damage resulting therefrom or entitle Tenant to any credit, abatement or adjustment of Rent or other sums payable under the Lease.

4. This Exhibit shall not be deemed applicable to any additional space added to the Premises at any time or from time to time, whether by any options under the Lease or otherwise, or to any

24

portion of the original Premises or any additions to the Premises in the event of a renewal or extension of the original Term of the Lease, whether by any options under the Lease or otherwise, unless expressly so provided in the Lease or any amendment or supplement to the Lease.

25

EXHIBIT D

COMMENCEMENT LETTER

This Exhibit is attached to and made a part of the Lease by and between CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and EXPONENTIAL INTERACTIVE, INC. a California corporation (“Tenant”) for space in the Building located at 2200 Powell Street, Emeryville, California, commonly known as Emeryville Tower II.

(EXAMPLE)

Date
Tenant	Exponential Interactive, Inc.
Address

Re: Commencement Letter with respect to that certain Lease dated as of the              day of                             , 2006, by and between CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership, as Landlord, and EXPONENTIAL INTERACTIVE, INC. a California corporation, as Tenant, for 19,779 rentable square feet on the 6th floor of the Building located at 2200 Powell Street, Emeryville, California, commonly known as Emeryville Tower II.

Lease Id:                                                                            

Business Unit Number:                                                                                        

Dear                                                                          :

In accordance with the terms and conditions of the above referenced Lease, Tenant accepts possession of the Premises and agrees:

1. The Full Lease Execution Date of the Lease is                                                                            ;

2. The Rent Commencement Date of the Lease is                                                                                                               ; and

3. The Termination Date of the Lease is                                                                                                   .

Please acknowledge your acceptance of possession and agreement to the terms set forth above by signing all 3 counterparts of this Commencement Letter in the space provided and returning 2 fully executed counterparts to my attention. Tenant’s failure to execute and return this letter, or to provide written objection to the statements contained in this letter, within 30 days after the date of this letter shall be deemed an approval by Tenant of the statements contained herein.

Sincerely,

Authorized Signatory

Agreed and Accepted:

Tenant: Exponential Interactive, Inc.

By:                                                                           

Name:                                                                      

Title:                                                                        

Date:                                                                        

cc: EOP Lease Administration

EOP Leasing AA

EOP Legal

26

EXHIBIT E

BUILDING RULES AND REGULATIONS

This Exhibit is attached to and made a part of the Lease by and between CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and EXPONENTIAL INTERACTIVE, INC. a California corporation (“Tenant”) for space in the Building located at 2200 Powell Street, Emeryville, California, commonly known as Emeryville Tower II.

The following rules and regulations shall apply, where applicable, to the Premises, the Building, the parking facilities, the Property and the appurtenances. In the event of a conflict between the following rules and regulations and the remainder of the terms of the Lease, the remainder of the terms of the Lease shall control. Capitalized terms have the same meaning as defined in the Lease.

1. Sidewalks, doorways, vestibules, halls, stairways and other similar areas shall not be obstructed by Tenant or used by Tenant for any purpose other than ingress and egress to and from the Premises. No rubbish, litter, trash, or material shall be placed, emptied, or thrown in those areas. At no time shall Tenant permit Tenant’s employees to loiter in Common Areas or elsewhere about the Building or Property.

2. Plumbing fixtures and appliances shall be used only for the purposes for which designed and no sweepings, rubbish, rags or other unsuitable material shall be thrown or placed in the fixtures or appliances.

3. No signs, advertisements or notices shall be painted or affixed to windows, doors or other parts of the Building, except those of such color, size, style and in such places as are first approved in writing by Landlord. The initial set of tenant identification and suite numbers at the entrance to the Premises and on the wall of the elevator lobbies on the 6th floor of the Building shall be installed by Landlord, at Landlord’s cost and expense, using the standard graphics for the Building. Except in connection with the hanging of lightweight pictures and wall decorations, no nails, hooks or screws shall be inserted into any part of the Premises or Building except by the Building maintenance personnel without Landlord’s prior approval, which approval shall not be unreasonably withheld.

4. Landlord may provide and maintain in the first floor (main lobby) of the Building an alphabetical directory board or other directory device listing tenants and no other directory shall be permitted unless previously consented to by Landlord in writing.

5. Tenant shall not place any lock(s) on any door in the Premises or Building without Landlord’s prior written consent, which consent shall not be unreasonably withheld, and Landlord shall have the right at all times to retain and use keys or other access codes or devices to all locks within and into the Premises. A reasonable number of keys to the locks on the entry doors in the Premises shall be furnished by Landlord to Tenant at Tenant’s cost and Tenant shall not make any duplicate keys. All keys shall be returned to Landlord at the expiration or early termination of the Lease.

6. All contractors, contractor’s representatives and installation technicians performing work in the Building shall be subject to Landlord’s prior approval, which approval shall not be unreasonably withheld, and shall be required to comply with Landlord’s standard rules, regulations, policies and procedures, which may be revised from time to time.

7. Movement in or out of the Building of furniture or office equipment, or dispatch or receipt by Tenant of merchandise or materials requiring the use of elevators, stairways, lobby areas or loading dock areas, shall be restricted to hours reasonably designated by Landlord. Tenant shall obtain Landlord’s prior approval by providing a detailed listing of the activity, which approval shall not be unreasonably withheld. If approved by Landlord, the activity shall be under the supervision of Landlord and performed in the manner required by Landlord. Tenant shall assume all risk for damage to articles moved and injury to any persons resulting from the activity. If equipment, property, or personnel of Landlord or of any other party is damaged or injured as a result of or in connection with the activity, Tenant shall be solely liable for any resulting damage, loss or injury.

27

8. Landlord shall have the right to approve the weight, size, or location of heavy equipment or articles in and about the Premises, which approval shall not be unreasonably withheld. Damage to the Building by the installation, maintenance, operation, existence or removal of Tenant’s Property shall be repaired at Tenant’s sole expense.

9. Corridor doors, when not in use, shall be kept closed.

10. Tenant shall not: (1) make or permit any improper, objectionable or unpleasant noises or odors in the Building, or otherwise interfere in any way with other tenants or persons having business with them; (2) solicit business or distribute or cause to be distributed, in any portion of the Building, handbills, promotional materials or other advertising; or (3) conduct or permit other activities in the Building that might, in Landlord’s sole opinion, constitute a nuisance.

11. No animals, except those assisting handicapped persons, shall be brought into the Building or kept in or about the Premises.

12. No inflammable, explosive or dangerous fluids or substances shall be used or kept by Tenant in the Premises, Building or about the Property, except for those substances as are typically found in similar premises used for general office purposes and are being used by Tenant in a safe manner and in accordance with all applicable Laws. Tenant shall not, without Landlord’s prior written consent, use, store, install, spill, remove, release or dispose of, within or about the Premises or any other portion of the Property, any asbestos-containing materials or any solid, liquid or gaseous material now or subsequently considered toxic or hazardous under the provisions of 42 U.S.C. Section 9601 et seq. or any other applicable environmental Law which may now or later be in effect. Tenant shall comply with all Laws pertaining to and governing the use of these materials by Tenant and shall remain solely liable for the costs of abatement and removal.

13. Tenant shall not use or occupy the Premises in any manner or for any purpose which might injure the reputation or impair the present or future value of the Premises or the Building. Tenant shall not use, or permit any part of the Premises to be used for lodging, sleeping or for any illegal purpose.

14. Tenant shall not take any action which would violate Landlord’s labor contracts or which would cause a work stoppage, picketing, labor disruption or dispute or interfere with Landlord’s or any other tenant’s or occupant’s business or with the rights and privileges of any person lawfully in the Building (“Labor Disruption”). Tenant shall take the actions necessary to resolve the Labor Disruption, and shall have pickets removed and, at the request of Landlord, immediately terminate any work in the Premises that gave rise to the Labor Disruption, until Landlord gives its written consent for the work to resume. Tenant shall have no claim for damages against Landlord or any of the Landlord Related Parties nor shall the Rent Commencement Date of the Term be extended as a result of the above actions.

15. Tenant shall not install, operate or maintain in the Premises or in any other area of the Building, electrical equipment that would overload the electrical system beyond its capacity for proper, efficient and safe operation as determined solely by Landlord. Tenant shall not furnish cooling or heating to the Premises, including, without limitation, the use of electric or gas heating devices, without Landlord’s prior written consent. Tenant shall not use more than its proportionate share of telephone lines and other telecommunication facilities available to service the Building.

16. Tenant shall not operate or permit to be operated a coin or token operated vending machine or similar device (including, without limitation, telephones, lockers, toilets, scales, amusement devices and machines for sale of beverages, foods, candy, cigarettes and other goods), except for machines for the exclusive use of Tenant’s employees and invitees.

17. Bicycles and other vehicles are not permitted inside the Building or on the walkways outside the Building, except in areas designated by Landlord.

18. Landlord may from time to time adopt systems and procedures for the security and safety of the Building and Property, its occupants, entry, use and contents. Tenant, its agents, employees, contractors, guests and invitees shall comply with Landlord’s systems and procedures.

28

19. Landlord shall have the right to prohibit the use of the name of the Building or any other publicity by Tenant that in Landlord’s sole opinion may impair the reputation of the Building or its desirability. Upon written notice from Landlord, Tenant shall refrain from and discontinue such publicity immediately.

20. Neither Tenant nor its agents, employees, contractors, guests or invitees shall smoke or permit smoking in the Common Areas, unless a portion of the Common Areas have been declared a designated smoking area by Landlord, nor shall the above parties allow smoke from the Premises to emanate into the Common Areas or any other part of the Building. Landlord shall have the right to designate the Building (including the Premises) as a non-smoking building.

21. Landlord shall have the right to designate and approve standard window coverings for the Premises and to establish rules to assure that the Building presents a uniform exterior appearance. Tenant shall ensure, to the extent reasonably practicable, that window coverings are closed on windows in the Premises while they are exposed to the direct rays of the sun.

22. Deliveries to and from the Premises shall be made only at the times in the areas and through the entrances and exits reasonably designated by Landlord. Tenant shall not make deliveries to or from the Premises in a manner that might interfere with the use by any other tenant of its premises or of the Common Areas, any pedestrian use, or any use which is inconsistent with good business practice.

23. The work of cleaning personnel shall not be hindered by Tenant after 5:30 P.M., and cleaning work may be done at any time when the offices are vacant. Windows, doors and fixtures may be cleaned at any time. Tenant shall provide adequate waste and rubbish receptacles to prevent unreasonable hardship to the cleaning service.

29

EXHIBIT F

ADDITIONAL PROVISIONS

This Exhibit is attached to and made a part of the Lease by and between CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and EXPONENTIAL INTERACTIVE, INC. a California corporation (“Tenant”) for space in the Building located at 2200 Powell Street, Emeryville, California, commonly known as Emeryville Tower II.

1. Asbestos Notification. Tenant acknowledges that Tenant has received the asbestos notification letter attached to this Lease as Exhibit H hereto, disclosing the existence of asbestos in the Building. As part of Tenant’s obligations under this Lease, Tenant agrees to comply with the California “Connelly Act” and other applicable Laws, including providing copies of Landlord’s asbestos notification letter to all of Tenant’s “employees” and “owners”, as those terms are defined in the Connelly Act and other applicable Laws.

2. Renewal Option.

A. Grant of Option; Conditions. Tenant shall have the right to extend the Term (the “Renewal Option”) for one additional period of 5 years commencing on the day following the Termination Date of the initial Term and ending on the 5th anniversary of the Termination Date (the “Renewal Term”), if:

1. Landlord receives notice of exercise (“Initial Renewal Notice”) not less than 12 full calendar months prior to the expiration of the initial Term and not more than 15 full calendar months prior to the expiration of the initial Term; and

2. Tenant is not in default under the Lease beyond any applicable cure periods at the time that Tenant delivers its Initial Renewal Notice or at the time Tenant delivers its Binding Notice (as defined below); and

3. No more than 20% of the Premises is sublet (other than pursuant to a Business Transfer, as defined in Section 11 of the Lease) at the time that Tenant delivers its Initial Renewal Notice or at the time Tenant delivers its Binding Notice; and

4. The Lease has not been assigned (other than pursuant to a Permitted Transfer, as defined in Section 11 of the Lease) prior to the date that Tenant delivers its Initial Renewal Notice or prior to the date Tenant delivers its Binding Notice.

B. Terms Applicable to Premises During Renewal Term.

1. The initial Base Rent rate per rentable square foot for the Premises during the Renewal Term shall equal the Prevailing Market (hereinafter defined) rate per rentable square foot for the Premises. Base Rent during the Renewal Term shall increase, if at all, in accordance with the increases assumed in the determination of Prevailing Market rate. Base Rent attributable to the Premises shall be payable in monthly installments in accordance with the terms and conditions of Section 4 of the Lease.

2. Tenant shall pay Additional Rent (i.e. Taxes and Expenses) for the Premises during the Renewal Term in accordance with Section 4 of the Lease, and the manner and method in which Tenant reimburses Landlord for Tenant’s share of Taxes and Expenses and the Base Year, if any, or whether such Base Year is reset for the Renewal Term, applicable to such matter, shall, without limitation, be some of the factors considered in determining the Prevailing Market rate for the Renewal Term.

C. Initial Procedure for Determining Prevailing Market. Within 30 days after receipt of Tenant’s Initial Renewal Notice, Landlord shall advise Tenant of the applicable Base Rent rate for the Premises for the Renewal Term. Tenant, within 15 days

30

after the date on which Landlord advises Tenant of the applicable Base Rent rate for the Renewal Term, shall either (i) give Landlord final binding written notice (“Binding Notice”) of Tenant’s exercise of its Renewal Option, or (ii) if Tenant disagrees with Landlord’s determination, provide Landlord with written notice of rejection (the “Rejection Notice”). If Tenant fails to provide Landlord with either a Binding Notice or Rejection Notice within such 15 day period, Tenant’s Renewal Option shall be null and void and of no further force and effect. If Tenant provides Landlord with a Binding Notice, Landlord and Tenant shall enter into the Renewal Amendment (as defined below) upon the terms and conditions set forth herein. If Tenant provides Landlord with a Rejection Notice, Landlord and Tenant shall work together in good faith to agree upon the Prevailing Market rate for the Premises during the Renewal Term. When Landlord and Tenant have agreed upon the Prevailing Market rate for the Premises, such agreement shall be reflected in a written agreement between Landlord and Tenant, whether in a letter or otherwise, and Landlord and Tenant shall enter into the Renewal Amendment in accordance with the terms and conditions hereof. Notwithstanding the foregoing, if Landlord and Tenant are unable to agree upon the Prevailing Market rate for the Premises within 30 days after the date Tenant provides Landlord with the Rejection Notice, Tenant, by written notice to Landlord (the “Arbitration Notice”) within 5 days after the expiration of such 30 day period, shall have the right to have the Prevailing Market rate determined in accordance with the arbitration procedures described in Section D below. If Landlord and Tenant are unable to agree upon the Prevailing Market rate for the Premises within the 30 day period described and Tenant fails to timely exercise its right to arbitrate, Tenant’s Renewal Option shall be deemed to be null and void and of no force and effect.

D. Arbitration Procedure.

1. If Tenant provides Landlord with an Arbitration Notice, Landlord and Tenant, within 5 days after the date of the Arbitration Notice, shall each simultaneously submit to the other, in a sealed envelope, its good faith estimate of the Prevailing Market rate for the Premises during the Renewal Term (collectively referred to as the “Estimates”). If the higher of such Estimates is not more than 105% of the lower of such Estimates, then Prevailing Market rate shall be the average of the two Estimates. If the Prevailing Market rate is not resolved by the exchange of Estimates, then, within 7 days after the exchange of Estimates, Landlord and Tenant shall each select an appraiser to determine which of the two Estimates most closely reflects the Prevailing Market rate for the Premises during the Renewal Term. Each appraiser so selected shall be certified as an MAI appraiser or as an ASA appraiser and shall have had at least 5 years experience within the previous 10 years as a real estate appraiser working in Emeryville, California, with working knowledge of current rental rates and practices. For purposes hereof, an “MAI” appraiser means an individual who holds an MAI designation conferred by, and is an independent member of, the American Institute of Real Estate Appraisers (or its successor organization, or in the event there is no successor organization, the organization and designation most similar), and an “ASA” appraiser means an individual who holds the Senior Member designation conferred by, and is an independent member of, the American Society of Appraisers (or its successor organization, or, in the event there is no successor organization, the organization and designation most similar).

2. Upon selection, Landlord’s and Tenant’s appraisers shall work together in good faith to agree upon which of the two Estimates most closely reflects the Prevailing Market rate for the Premises. The Estimate chosen by such appraisers shall be binding on both Landlord and Tenant as the Base Rent rate for the Premises during the Renewal Term. If either Landlord or Tenant fails to appoint an appraiser within the 7 day period referred to above, the appraiser appointed by the other party shall be the sole appraiser for the purposes hereof. If the two appraisers cannot agree upon

31

which of the two Estimates most closely reflects the Prevailing Market within 20 days after their appointment, then, within 10 days after the expiration of such 20 day period, the two appraisers shall select a third appraiser meeting the aforementioned criteria. Once the third appraiser (i.e. arbitrator) has been selected as provided for above, then, as soon thereafter as practicable but in any case within 14 days, the arbitrator shall make his determination of which of the two Estimates most closely reflects the Prevailing Market rate and such Estimate shall be binding on both Landlord and Tenant as the Base Rent rate for the Premises. If the arbitrator believes that expert advice would materially assist him, he may retain one or more qualified persons to provide such expert advice. The parties shall share equally in the costs of the arbitrator and of any experts retained by the arbitrator. Any fees of any appraiser, counsel or experts engaged directly by Landlord or Tenant, however, shall be borne by the party retaining such appraiser, counsel or expert.

3. If the Prevailing Market rate has not been determined by the commencement date of the Renewal Term, Tenant shall pay Base Rent upon the terms and conditions in effect during the last month of the initial Term for the Premises until such time as the Prevailing Market rate has been determined. Upon such determination, the Base Rent for the Premises shall be retroactively adjusted to the commencement of the Renewal Term for the Premises. If such adjustment results in an underpayment of Base Rent by Tenant, Tenant shall pay Landlord the amount of such underpayment within 30 days after the determination thereof. If such adjustment results in an overpayment of Base Rent by Tenant, Landlord shall credit such overpayment against the next installment of Base Rent due under the Lease and, to the extent necessary, any subsequent installments, until the entire amount of such overpayment has been credited against Base Rent.

E. Renewal Amendment. If Tenant is entitled to and properly exercises its Renewal Option, Landlord shall prepare an amendment (the “Renewal Amendment”) to reflect changes in the Base Rent, Term, Termination Date and other appropriate terms. The Renewal Amendment shall be sent to Tenant within a reasonable time after Landlord’s receipt of the Binding Notice or other written agreement by Landlord and Tenant regarding the Prevailing Market rate, and Tenant shall execute and return the Renewal Amendment to Landlord within 15 days after Tenant’s receipt of same, but, upon final determination of the Prevailing Market rate applicable during the Renewal Term as described herein, an otherwise valid exercise of the Renewal Option shall be fully effective whether or not the Renewal Amendment is executed.

F. Definition of Prevailing Market. For purposes of this Renewal Option, “Prevailing Market” shall mean the arms length fair market annual rental rate per rentable square foot under renewal leases and amendments entered into on or about the date on which the Prevailing Market is being determined hereunder for space comparable to the Premises in the Building and office buildings comparable to the Building in the Emeryville, California area. The determination of Prevailing Market shall take into account any material economic differences between the terms of this Lease and any comparison lease or amendment, such as rent abatements, construction costs and other concessions and the manner, if any, in which the landlord under any such lease is reimbursed for operating expenses and taxes. The determination of Prevailing Market shall also take into consideration any reasonably anticipated changes in the Prevailing Market rate from the time such Prevailing Market rate is being determined and the time such Prevailing Market rate will become effective under this Lease. The intent of this provision is the Tenant will obtain the same rent and other economic benefits that Landlord would otherwise give in comparable renewal lease transactions and that Landlord will make and receive the same economic payments and concessions that Landlord would otherwise make and receive in comparable renewal lease transactions.

32

3. Suite 350.

A. Tenant is a sub-subtenant under a sublease agreement dated December 5, 2005 between Tenant and Groundwork Open Source Solutions, as sublandlord, and GEAC Enterprise Solutions, Inc., as master tenant (the “Suite 350 Sublease”), of approximately 7,910 rentable square feet of space known as Suite No. 350 located on the 3rd floor of the Building as shown on Exhibit A-1 of this Lease (“Suite 350”). The expiration date of the Suite 350 Sublease is August 31, 2006. Tenant shall occupy Suite 350 until such date under the terms and conditions of the Suite 350 Sublease. During the period beginning on the day following the expiration date of the Suite 350 Sublease (the “Suite 350 Commencement Date”), assuming that this Lease has been fully executed by Landlord and Tenant, that Tenant has delivered the Security Deposit and all prepaid rental, if any, required under this Lease, and has delivered all initial certificates of insurance required by this Lease (which certificates of insurance shall, as of the Suite 350 Commencement Date, specifically cover both Suite 350 during the Suite 350 Term, as hereinafter defined, and the Premises), and ending on the date which is 10 days after Substantial Completion of the Landlord Work in the Premises (such period being referred to herein as the “Suite 350 Term”), Landlord shall allow Tenant to continue to use Suite 350 under the terms and conditions of this Lease for the Permitted Use. During the Suite 350 Term, Suite 350 shall be deemed part of the “Premises”. Suite 350 is accepted by Tenant in its “as-is” condition and configuration, it being agreed that Landlord shall be under no obligation to perform any work in Suite 350 or to incur any costs in connection with Tenant’s move in, move out or occupancy of Suite 350, Tenant acknowledges that it shall be entitled to use and occupy Suite 350 during the Suite 350 Term at its sole cost, expense and risk. Tenant shall not construct any improvements or make any alterations of any type to Suite 350 without the prior written consent of Landlord.

B. During the Suite 350 Term, Suite 350 shall be subject to all the terms and conditions of the Lease except as expressly modified herein, provided that Base Rent for Suite 350 during the Suite 350 Term shall be $4,285.71 each month, payable in accordance with the Lease, with the first installment due on the Suite 350 Commencement Date. If the Suite 350 Term commences on other than the first day of a calendar month or ends on other than the last day of a calendar month, then the monthly Base Rent payable for Suite 350 for any such partial month shall be prorated to reflect the actual number of days of such partial month falling within the Suite 350 Term. Tenant shall not be required to pay Tenant’s Pro Rata Share of Expenses and Taxes for Suite 350 during the Suite 350 Term. Tenant shall not be entitled to receive any allowances, abatement or other financial concession in connection with Suite 350 which were granted with respect to the Premises unless such concessions are expressly provided for herein with respect to Suite 350, and Suite 350 shall not be subject to any renewal or expansion rights of Tenant under the Lease.

C. Upon termination of the Suite 350 Term, Tenant shall have 10 days in which to vacate Suite 350 and deliver the same to Landlord in the condition that Tenant was to surrender Suite 350 as described in the Suite 350 Sublease (as defined above), it being agreed that Tenant’s surrender obligations, including any obligation of Tenant to repair or restore Suite 350 or to remove any improvements therefrom, described in the Suite 350 Sublease with respect to Suite 350 shall survive the termination of the Suite 350 Sublease and shall be applicable in connection with Tenant’s surrender of Suite 350 to Landlord pursuant to this Section. At the expiration or earlier termination of the Suite 350 Term, Tenant shall remove all debris, all items of Tenant’s personalty, and any trade fixtures of Tenant from Suite 350. Tenant shall be fully liable for all damage Tenant or Tenant’s agents, employees, contractors, or subcontractors cause to Suite 350.

D. Tenant shall have no right to hold over or otherwise occupy Suite 350 at any time following the expiration or earlier termination of the Suite 350 Term, and in the event of such holdover, Landlord shall immediately be entitled to institute dispossessory proceedings to recover possession of Suite 350, without first providing notice thereof to Tenant. In the event of holding over by Tenant after

33

expiration or termination of the Suite 350 Term without the written authorization of Landlord, Tenant shall pay, for such holding over. 200% of the monthly Base Rent due for Suite 350 at the rate in effect immediately preceding the expiration of the Suite 350 Term for each month or partial month of holdover, plus all consequential damages that Landlord incurs as a result of the Tenant’s hold over. During any such holdover, Tenant’s occupancy of Suite 350 shall be deemed that of a tenant at sufferance, and in no event, either during the Suite 350 Term or during any holdover by Tenant, shall Tenant be determined to be a tenant-at-will under applicable law. While Tenant is occupying Suite 350, whether before or after the Suite 350 Commencement Date, Landlord or Landlord’s authorized agents shall be entitled to enter Suite 350, upon reasonable notice, to display Suite 350 to prospective tenants.

34

4. Environmental Issues.

A Landlord represents to its knowledge, based solely upon that certain Assessment of Environmental Conditions prepared by Golder Associates dated June 16, 1997, that the Premises are free of Hazardous Materials (as defined below) in amounts and conditions which are in violation of applicable environmental laws.

B. Tenant shall not use, generate, manufacture, store or dispose of, on or about the Premises or Property, or transport to or from the Premises, Building or Property, any Hazardous Materials. Notwithstanding the provisions of this Section 4, Tenant and Landlord shall have the right to use, generate and store on the Premises and the Building, and transport to and from the Premises and the Building, those Hazardous Materials which are generally used in the ordinary course in first class office buildings; provided, however, that Tenant’s and Landlord’s use, generation, storage and transport thereof is in compliance with all applicable federal, state and local laws, regulations and ordinances.

C. As used in this Lease, “Hazardous Materials” shall mean any material or substance that is now or hereafter defined or regulated by any statute, regulation, ordinance, or governmental authority thereunder, as radioactive, toxic, hazardous, or waste, or a chemical known to the state of California to cause cancer or reproductive toxicity, including but not limited to (i) petroleum and any of its constituents or byproducts, (ii) radioactive materials, (iii) asbestos in any form or condition, and (iv) substances or materials regulated by any of the following, as amended from time to time, and any rules promulgated thereunder: the Comprehensive Environmental Response Compensation and Liability Act of 1980, 42 U.S.C. §§9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. §§6901, et seq.; the Toxic Substances Control Act, 15 U.SC. §§2601, et seq.; the Clean Water Act, 33 U.S.C. §§1251 et seq; the Clean Air Act, 42 U.S.C. §§7401 et seq., The California Health and Safety Code; The California Water Code; The California Labor Code; The California Public Resources Code; and The California Fish and Game Code.

35

EXHIBIT G

PARKING AGREEMENT

This Exhibit (the “Parking Agreement”) is attached to and made a part of the Lease by and between CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and EXPONENTIAL INTERACTIVE, INC. a California corporation (“Tenant”) for space in the Building located at 2200 Powell Street, Emeryville, California, commonly known as Emeryville Tower II.

1. During the initial Term, Tenant agrees to lease from Landlord and Landlord agrees to lease to Tenant a total of up to 59 non-reserved parking spaces and 0 reserved parking spaces in the parking facility servicing the Building (“Parking Facility”). During the initial Term, Tenant shall pay in advance, concurrent with Tenant’s payment of monthly Base Rent, the prevailing monthly charges established from time to time for parking in the Parking Facility. Such charges shall be payable to Landlord or such other entity as designated by Landlord, and shall be sent to the address Landlord designates from time to time. The initial charge for such parking spaces is $65.00 per non-reserved parking pass, per month. Except as otherwise set forth herein below, no deductions from the monthly charge shall be made for days on which the Parking Facility is not used by Tenant. Tenant may, from time to time request additional parking spaces, and if Landlord shall provide the same, such parking spaces shall be provided and used on a month-to-month basis, and otherwise on the following terms and provisions, and at such prevailing monthly parking charges as shall be established from time to time.

2. Tenant shall at all times comply with all applicable ordinances, rules, regulations, codes, laws, statutes and requirements of all federal, state, county and municipal governmental bodies or their subdivisions respecting the use of the Parking Facility. Landlord reserves the right to adopt, modify and enforce reasonable rules (“Rules”) governing the use of the Parking Facility from time to time including any key-card, sticker or other identification or entrance system and hours of operation. Landlord may refuse to permit any person who violates such Rules to park in the Parking Facility, and any violation of the Rules shall subject the car to removal from the Parking Facility. Tenant shall comply with and cause its employees to comply with all the Rules as well as all reasonable additions and amendments thereto.

3. Unless specified to the contrary above, the parking spaces hereunder shall be provided on a non-designated “first-come, first-served” basis. Subject to Tenant’s rights to the reserved spaces set forth above, if any, Landlord reserves the right to assign other specific parking spaces, and to reserve other parking spaces for visitors, small cars, handicapped persons and for other tenants, guests of tenants or other parties, which assignment and reservation or spaces may be relocated as determined by Landlord from time to time, and Tenant and persons designated by Tenant hereunder shall not park in any such location designated for such assigned or reserved parking spaces. Tenant acknowledges that the Parking Facility may be closed entirely or in part in order to make repairs or perform maintenance services, or to alter, modify, re-stripe or renovate the Parking Facility, or if required by casualty, strike, condemnation, act of God, governmental law or requirement or other reason beyond the operator’s reasonable control; and in such events, Landlord shall refund any prepaid parking fee hereunder, prorated on a per diem basis.

36

4. Tenant shall not store or permit its employees to store any automobiles in the Parking Facility without the prior written consent of the operator. Except for emergency repairs, Tenant and its employees shall not perform any work on any automobiles while located in the Parking Facility, or on the Property. If it is necessary for Tenant or its employees to leave an automobile in the Parking Facility overnight, Tenant shall provide the operator with prior notice thereof designating the license plate number and model of such automobile.

5. LANDLORD SHALL NOT BE LIABLE FOR ANY LOSS, INJURY OR DAMAGE TO PERSONS USING THE PARKING FACILITY OR AUTOMOBILES OR OTHER PROPERTY THEREIN, IT BEING AGREED THAT, TO THE FULLEST EXTENT PERMITTED BY LAW, THE USE OF THE SPACES SHALL BE AT THE SOLE RISK OF TENANT AND ITS EMPLOYEES. WITHOUT LIMITING THE FOREGOING, TENANT HEREBY VOLUNTARILY RELEASES, DISCHARGES, WAIVES AND RELINQUISHES ANY AND ALL ACTIONS OR CAUSES OF ACTION FOR PERSONAL INJURY OR PROPERTY DAMAGE OCCURRING TO TENANT ARISING AS A RESULT OF PARKING IN THE PARKING FACILITY, OR ANY ACTIVITIES INCIDENTAL THERETO, WHEREVER OR HOWEVER THE SAME MAY OCCUR, AND FURTHER AGREES THAT TENANT WILL NOT PROSECUTE ANY CLAIM FOR PERSONAL INJURY OR PROPERTY DAMAGE AGAINST LANDLORD OR ANY OF THE LANDLORD RELATED PARTIES FOR ANY SAID CAUSES OF ACTION. IN ALL EVENTS, TENANT AGREES TO LOOK FIRST TO ITS INSURANCE CARRIER AND TO REQUIRE THAT TENANT’S EMPLOYEES LOOK FIRST TO THEIR RESPECTIVE INSURANCE CARRIERS FOR PAYMENT OF ANY LOSSES SUSTAINED IN CONNECTION WITH ANY USE OF THE PARKING FACILITY. TENANT HEREBY WAIVES ON BEHALF OF ITS INSURANCE CARRIERS ALL RIGHTS OF SUBROGATION AGAINST LANDLORD OR LANDLORD RELATED PARTIES. Notwithstanding the foregoing, but except as provided in Section 15 of the Lease (Subrogation) and Section 20 of the Lease (Limitation of Liability) to the contrary, Tenant shall not be required to waive any claims against Landlord (other than for loss or damage to Tenant’s business) where such loss or damage is due to the negligence or willful misconduct of Landlord or any Landlord Related Parties.

6. Tenant shall not assign its rights under this Parking Agreement or sublease any of the parking spaces without the consent of Landlord. Landlord shall have the right to terminate this Parking Agreement with respect to any parking spaces that Tenant desires to sublet or assign its rights thereto.

7. Landlord hereby reserves the right to enter into a management agreement or lease with another entity for the operation of the Parking Facility (“Operator”). In such event, Tenant, upon request of Landlord, shall enter into a parking agreement upon substantially the same terms hereunder with the Operator and pay the Operator the monthly charge

37

established hereunder, and Landlord shall have no liability for claims arising through acts or omissions of the Operator II is understood and agreed that the identity of the Operator may change from time to time during the Term. In connection therewith, any parking lease or agreement entered into between Tenant and any Operator shall be freely assignable by such Operator or any successors thereto.

38

EXHIBIT H

ASBESTOS NOTIFICATION

This Exhibit (the “Exhibit”) is attached to and made a part of the Lease by and between CA-EMERYVILLE PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and EXPONENTIAL INTERACTIVE, INC. a California corporation (“Tenant”) for space in the Building located at 2200 Powell Street, Emeryville, California, commonly known as Emeryville Tower II.

Asbestos-containing materials (“ACMs”) were historically commonly used in the construction of commercial buildings across the country. ACMs were commonly used because of their beneficial qualities; ACMs are fire-resistant and provide good noise and temperature insulation.

Some common types of ACMs include surfacing materials (such as spray-on fireproofing, stucco, plaster and textured paint), flooring materials (such as vinyl floor tile and vinyl floor sheeting) and their associated mastics, carpet mastic, thermal system insulation (such as pipe or duct wrap, boiler wrap and cooling tower insulation), roofing materials, drywall, drywall joint tape and drywall joint compound, acoustic ceiling tiles, transite board, base cove and associated mastic, caulking, window glazing and fire doors. These materials are not required under law to be removed from any building (except prior to demolition and certain renovation projects). Moreover, ACMs generally are not thought to present a threat to human health unless they cause a release of asbestos fibers into the air, which does not typically occur unless (1) the ACMs are in a deteriorated condition, or (2) the ACMs have been significantly disturbed (such as through abrasive cleaning, or maintenance or renovation activities).

It is possible that some of the various types of ACMs noted above (or other types) are present at various locations in the Building. Anyone who finds any such materials in the Building should assume them to contain asbestos unless those materials are properly tested and found to be otherwise. In addition, under applicable law, certain of these materials are required to be presumed to contain asbestos in the Building because the Building was built prior to 1981 (these materials are typically referred to as “Presumed Asbestos Containing Materials” or “PACM”). PACM consists of thermal system insulation and surfacing material found in buildings constructed prior to 1981, and asphalt or vinyl flooring installed prior to 1981. If any thermal system insulation, asphalt or vinyl flooring or surfacing materials are found to be present in the Building, such materials must be considered PACM unless properly tested and found otherwise. In addition, Landlord has identified the presence of certain ACMs in the Building. For information about the specific types and locations of these identified ACMs, please contact the Building manager. The Building Manager maintains records of the Building’s asbestos information including any Building asbestos surveys, sampling and abatement reports. This information is maintained as part of Landlord’s asbestos Operations and Maintenance Plan (“O&M Plan”).

The O&M Plan is designed to minimize the potential of any harmful asbestos exposure to any person in the Building. Because Landlord is not a physician, scientist or industrial hygienist, Landlord has no special knowledge of the health impact of exposure to asbestos. Therefore,

39

Landlord hired an independent environmental consulting firm to prepare the Building’s O&M Plan. The O&M Plan includes a schedule of actions to be taken in order to (1) maintain any building ACMs in good condition, and (2) to prevent any significant disturbance of such ACMs. Appropriate Landlord personnel receive regular periodic training on how to properly administer the O&M Plan.

The O&M Plan describes the risks associated with asbestos exposure and how to prevent such exposure. The O&M Plan describes those risks, in general, as follows: asbestos is not a significant health concern unless asbestos fibers are released and inhaled. If inhaled, asbestos fibers can accumulate in the lungs and, as exposure increases, the risk of disease (such as asbestosis and cancer) increases. However, measures taken to minimize exposure and consequently minimize the accumulation of fibers, can reduce the risk of adverse health effects.

The O&M Plan also describes a number of activities which should be avoided in order to prevent a release of asbestos fibers. In particular, some of the activities which may present a health risk (because those activities may cause an airborne release of asbestos fibers) include moving, drilling, boring or otherwise disturbing ACMs. Consequently, such activities should not be attempted by any person not qualified to handle ACMs. In other words, the approval of Building management must be obtained prior to engaging in any such activities. Please contact the Building manager for more information in this regard. A copy of the written O&M Plan for the Building is located in the Building Management Office and, upon your request, will be made available to tenants for you to review and copy during regular business hours.

Because of the presence of ACM in the Building, we are also providing the following warning, which is commonly known as a California Proposition 65 warning:

WARNING: This building contains asbestos, a chemical known to the State of California to cause cancer.

Please contact the Building manager with any questions regarding the contents of this Exhibit H.

40

FIRST AMENDMENT TO OFFICE LEASE AGREEMENT

This FIRST AMENDMENT TO OFFICE LEASE AGREEMENT (“Amendment”) is dated for references purposes only as of this 29 day of August, 2011, and is entered into by and between EMERYVILLE OFFICE, L.L.C., a Delaware limited liability company (“Landlord”), and EXPONENTIAL INTERACTIVE, INC., a Delaware corporation (“Tenant”), with reference to the facts set forth in the Recitals below.

R E C I T A L S :

A. Landlord (as successor to CA-Emeryville Properties Limited Partnership) and Tenant are parties to that certain Office Lease Agreement dated July 26, 2006 the (“Lease”).

B. Pursuant to the Lease, Tenant currently leases from Landlord those certain premises commonly known as Suite 600 containing approximately 19,779 rentable square feet of space (the “Premises”) within that certain building located at 2200 Powell Street, Emeryville, California (the “Building”).

C. Capitalized terms which are used in this Amendment without definition have the meanings given to them in the Lease.

D. The Term of the Lease is scheduled to expire by its terms on January 31, 2012. Landlord and Tenant desire to amend the Lease in order to extend the Term and further amend the terms of the Lease, all upon and subject to the terms set forth below.

A G R E E M E N T :

NOW, THEREFORE, in consideration of the above Recitals and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant agree as follows:

1. New Term. Landlord and Tenant agree that the Term of the Lease is hereby amended such that the Term shall now expire on January 31, 2017 (the “New Term Expiration Date”). The period commencing on September 1, 2011 (the “New Term Commencement Date”) and ending on the New Term Expiration Date, consisting of sixty-five (65) months, shall hereafter be referred to as the “New Term.” No such extension shall operate to release Tenant from liability for any amounts owed or defaults which exist under the Lease as amended hereby (the “Amended Lease”) prior to the New Term Commencement Date.

-1-

2. Base Rent. Notwithstanding anything to the contrary in the Lease, effective as of the New Term Commencement Date, monthly installments of Base Rent for the Premises shall be payable by Tenant in accordance with the following schedule:

Period of New Term	Monthly Installments of Base Rent
9/1/2011 — 8/31/2012	$	46,480.65	*
9/1/2012 — 8/31/2013	$	47,865.18
9/1/2013 — 8/31/2014	$	49,249.71
9/1/2014 — 8/31/2015	$	50,832.03
9/1/2015 — 1/31/2017	$	52,414.35

* Provided Tenant is not in default under the Amended Lease, Landlord hereby agrees to abate Tenant’s obligation to pay all of the monthly installments of Base Rent due during the first (18) through eighth (8th) months of the New Term (i.e., September 1, 2011 through April 30, 2012) (the “Abatement Months”) (such amount of abated Base Rent being hereinafter collectively referred to as the “Abated Amount”). During such Abatement Months, Tenant will still be responsible for the payment of all other monetary obligations due under the Amended Lease during such Abatement Months, if any. Tenant acknowledges that any default by Tenant under the Amended Lease will cause Landlord to incur costs not contemplated hereunder, the exact amount of such costs being extremely difficult and impracticable to ascertain. Therefore, should Tenant at any time during the New Term be in default after having been given notice and opportunity to cure, then, in addition to all of Landlord’s other rights and remedies, the total unamortized sum of such Abated Amount and the Forgiven Rent and the Abated Parking Charges (amortized on a straight line basis over the New Term) so conditionally excused shall become immediately due and payable by Tenant to Landlord; provided, however, Tenant acknowledges and agrees that nothing in this Section 2 is intended to limit any other remedies available to Landlord at law or in equity under applicable law (including, without limitation, the remedies under Civil Code Section 1951.2 and/or 1951.4 and any successor statutes or similar laws), in the event Tenant defaults under the Amended Lease beyond any applicable notice and cure period.

3. Expenses and Taxes; Base Year. For the period commencing with the New Term Commencement Date and continuing through the New Term, Tenant shall pay for Tenant’s Pro Rata Share of Expenses and Taxes applicable to the Premises in accordance with the terms of the Amended Lease, provided, however, during the New Term, the Base Year for purposes of calculating Tenant’s Pro Rata Share of Expenses and Taxes shall be calendar year 2011. As 2011 is the Base Year, Tenant shall have no obligation to pay its Pro Rata Share of Expenses and Taxes for the period from September 1, 2011 through December 31, 2011.

4. Condition of Premises. So long as Tenant is not in default under the Amended Lease, Landlord shall (i) provide to Tenant a separate allowance of $20,000.00 (the “Allowance”) which shall be used by Tenant to pay solely for costs of furniture, fixtures, equipment and completing IT infrastructure work for the Premises using Building standard materials and finishes, subject to Article 9 of the Lease (the “Tenant Work”) and (ii) complete on a turn-key basis the Tenant Improvements (as that term is defined in the Work Letter attached hereto as Exhibit A) for the Premises in accordance with the terms and conditions of the Work Letter (“Landlord’s Work”). The Allowance shall be paid to Tenant within thirty (30) days after Tenant has provided to Landlord the following: (i) an application for payment together with invoices, contracts, or other supporting data evidencing Tenant’s Work and payment of same by Tenant as Landlord may reasonably require. Any and all costs in excess of the Allowance shall be at Tenant’s sole cost and expense. Tenant acknowledges that if Tenant fails to apply the entire Allowance towards allowable Tenant Work within one (1) year after the date of this Amendment, Tenant shall have no further rights to any then remaining portion of the Allowance. Tenant shall have no right to apply any portion of the Allowance to any other costs other than Tenant Work as defined herein and shall not have any right to apply any unused portion of the Allowance to rent or any other monetary obligations of Tenant under this Lease. Landlord will, consistent with its obligation to other tenants in the Building, if appropriate and necessary, make the freight/construction elevator reasonably available to Tenant in connection with Tenant’s Work. Tenant agrees to pay for any after-hours staffing of the freight/construction elevator, if needed. Any and all changes to the Tenant Improvements and/or Landlord’s approved specifications described in the Work Letter shall be subject to Landlord’s prior written approval and shall be at Tenant’s sole cost and expense. Landlord’s Work will take place in the Premises while Tenant is in occupancy thereof and paying rent under the Amended Lease. Tenant agrees to cooperate with Landlord and to make the Premises reasonably available to Landlord and its contractors for the performance of Landlord’s Work. Tenant acknowledges that some interruptions and/or interference with Tenant’s business may occur during the course of Landlord’s Work, but agrees that

-2-

subject to Section 5 below, no interruptions or inconveniences to Tenant or its business suffered as a result of Landlord’s Work shall constitute an eviction of Tenant from the Premises, whether constructive or otherwise, and Tenant shall in no event be excused from paying any rent that it is scheduled to pay pursuant to the Amended Lease. Landlord and Tenant shall cooperate and cause their respective employees, agents and contractors to cooperate with the other to expedite completion of Landlord’s Work as well as to minimize any interference with Tenant’s business operations in the Premises. Such cooperation by Tenant shall include, without limitation, moving, packing, and/or other temporary relocation of furniture and fixtures within the Premises at Tenant’s expense. In addition to Landlord’s Work, Landlord shall upgrade the restrooms on the sixth (66) floor of the Building on a turn-key basis, at Landlord’s sole cost and expense, using Building standard materials, finishes in accordance with the Restroom Plan attached hereto as Exhibit B. Tenant is currently in possession of the Premises and acknowledges and agrees that except as expressly provided in this Amendment and/or the Work Letter, Landlord shall not be obligated to refurbish or improve the Premises or to otherwise fund improvements for the Premises in any manner whatsoever in conjunction with the New Term, and Tenant hereby accepts the Premises in its “AS-IS” condition.

5. Temporary Space. Landlord and Tenant hereby acknowledge and agree that from Landlord’s commencement of Landlord’s Work, and continuing until the Tenant Improvements in the Premises are substantially completed (as defined in the Work Letter) (herein, the “Temporary Space Period”), Landlord shall provide Tenant use of other available vacant space within the Building, or, if no suitable space is available within the Building, then Landlord shall provide Tenant use of other available vacant space within, the building located at 2000 Powell Street, or the building located at 1900 Powell Street. The space provided by Landlord to Tenant for the Temporary Space Period shall be reasonably comparable to the Premises as determined by Landlord in its sole and absolute discretion (“Temporary Space”), on an “as-is” and “with all faults” basis, and Landlord shall have no obligation to provide furnishings or pay for any telecommunications costs or other costs required for Tenant to conduct business from any such Temporary Space. All terms of the Amended Lease shall apply to Tenant’s use and occupancy of the Temporary Space with equal force as applicable to the Premises, except that Tenant shall not be obligated to pay any Rent for the Temporary Space during the Temporary Space Period. Notwithstanding the foregoing, Landlord and Tenant hereby acknowledge and agree that Landlord shall have the right to actively market and show any such Temporary Space to prospective tenants during the Temporary Space Period upon at least twelve (12) hours’ prior notice to Tenant. Upon expiration of the Temporary Space Period, Tenant shall promptly surrender the Temporary Space in the condition received and if Tenant shall fail to do so, Tenant shall pay rent for the Temporary Space on a daily basis in an amount equal to 150% of the then rate for such space as stated in Landlord’s offering materials for such space until such time as Tenant shall vacate and surrender the Temporary Space as provided herein.

6. Security Deposit. Effective as of the New Term Commencement Date, Landlord shall reduce the Security Deposit under the Lease by $75,585.65 (the “Deposit Surplus”), from $128,000 to $52,414.35. Accordingly, Landlord shall return to Tenant the entire amount of the Deposit Surplus within thirty (30) days of the full execution and delivery of this Amendment.

7. Parking. During the New Term or until earlier termination of the Lease, Tenant shall have the right to continue to utilize up to fifty-nine (59) non-reserved parking spaces. During the New Term, Tenant shall pay Landlord the prevailing monthly charges established from time to time for parking in the Parking Facility. The current charges for such parking spaces are: $75.00 per non-reserved parking pass per month. Subject to availability, Tenant shall have the right during the New Term to lease additional non-reserved parking spaces on a month-to-month basis upon prior written notice to Landlord at the prevailing monthly charges established from time to time for parking in the Parking Facility. No deductions from such monthly charges shall be made for days on which the Parking Facility is not used by Tenant. Provided Tenant is not in default under the Amended Lease, Landlord hereby agrees to abate

-3-

Tenant’s obligation to pay for the first fifty-nine (59) non-reserved parking spaces utilized by Tenant during the Abatement Months (such amount of abated parking charges being hereinafter collectively referred to as the “Abated Parking Charges”).

8. Options. Landlord hereby grants to Tenant an Extension Option as further provided in Rider No. 1 and Rider No. 2 attached hereto and made a part hereof. Tenant acknowledges and agrees that except as otherwise expressly provided herein, Tenant has no options and/or rights to lease additional space, terminate the Lease early, or extend the Term. Accordingly, all such options previously granted to Tenant, including, without limitation, Tenant’s existing Renewal Option granted pursuant to Section 1 of Exhibit F to the Lease is hereby deleted and rendered of no further force and effect.

9. Broker. Tenant warrants that it has had no dealings with any real estate broker or agent in connection with the negotiation of this Amendment other than Cassidy Turley BT Commercial representing Tenant, and that it knows of no other real estate broker or agent who is or might be entitled to a commission in connection with this Amendment other than Landlord’s broker. If Tenant has dealt with any person or real estate broker with respect to this Amendment, then Tenant shall be solely responsible for the payment of any fee due said person, broker or firm and Tenant shall indemnify and hold Landlord free and harmless from and against any and all claims, losses, damages, costs, expenses, actions or causes of action, liability, or judgments with respect thereto, including attorneys’ fees and court costs.

10. Representations and Warranties. Tenant hereby represents, warrants, and agrees that: (1) there exists no breach, default, or event of default by Landlord under the Lease, or any event or condition which, with notice or passage of time or both, would constitute a breach, default, or event of default by Landlord under the Lease; (2) the Lease continues to be a legal, valid, and binding agreement and obligation of Tenant; and (3) Tenant has no current offset or defense to its performance or obligations under the Lease. Tenant hereby waives and releases all demands, charges, claims, accounts, or causes of action of any nature whatsoever against Landlord or Landlord’s members, officers, employees or agents, including without limitation, both known and unknown demands, charges, claims, accounts, and causes of action that have previously arisen out of or in connection with the Lease.

11. Authority. Each signatory of this Amendment on behalf of Tenant represents hereby that he or she has the authority to execute and deliver the same on behalf of the party hereto for which such signatory is acting.

12. Tenant Name. Landlord and Tenant hereby acknowledge and agree that due to a scrivener’s error, the Lease shows the defined term “Tenant” therein to mean “EXPONENTIAL INTERACTIVE, INC., a California corporation” rather than “EXPONENTIAL INTERACTIVE, INC., a Delaware corporation”. Accordingly, Landlord and Tenant hereby acknowledge and agree that the Lease is hereby retroactively revised to provide that all references to the defined term “Tenant” therein shall mean “EXPONENTIAL INTERACTIVE, INC., a Delaware corporation”.

13. No Other Modification. Landlord and Tenant agree that except as otherwise specifically modified in this Amendment, the Lease has not been modified, supplemented, amended, or otherwise changed in any way and the Lease remains in full force and effect between the parties hereto as modified by this Amendment. To the extent of any inconsistency between the terms and conditions of the Lease and the terms and conditions of this Amendment, the terms and conditions of this Amendment shall apply and govern the parties. This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same Amendment.

[REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURES FOLLOW]

-4-

IN WITNESS WHEREOF, the parties have each executed this Amendment as of the date first set forth above.

TENANT:

EXPONENTIAL INTERACTIVE, INC.,

a Delaware corporation

By:	/s/ John Rettig
Title:	CFO
Date:	9/1/2011

[SIGNATURE CONTINUED ON FOLLOWING PAGE]

-5-

LANDLORD:

EMERYVILLE OFFICE, L.L.C.,

a Delaware limited liability company

By:	EMERYVILLE OFFICE HOLDINGS, L.L.C, a Delaware limited liability company, its Sole Member and Manager
	By:	LBA RIV-Company III, LLC, a Delaware limited liability company, its Operating Member
		By:	LBA REIT IV, LLC, a Delaware limited liability company its sole Member and Manager
			By:	LBA Realty Fund IV, L.P., a Delaware limited partnership, its Sole Manager
				By:	LBA Management Company IV, LLC, a Delaware limited liability company, its General Partner
					By:	LBA Realty LLC, a Delaware limited liability company, its Manager
						By:	LBA Inc., a California corporation, its Managing Member
							By:	/s/ Brad Neglia
							Name:	Brad Neglia
							Title:	Authorized Signatory

For LBA Office Use Only: Prepared & Reviewed by:                                                              

-6-

EXHIBIT A

WORK LETTER

(Turn Key)

1. TENANT IMPROVEMENTS. Landlord shall construct and, except as provided below to the contrary, pay for the entire cost of constructing the tenant improvements (“Tenant Improvements”) described by the plans and specifications identified in Schedule “1” attached hereto (the “Plans”) including all shown Alternates with exception of Alternate #9. Tenant may request changes to the Plans provided that (a) the changes shall not be of a lesser quality than Landlord’s standard specifications for tenant improvements for the Building, as the same may be changed from time to time by Landlord (the “Standards”); (b) the changes conform to applicable governmental regulations and necessary governmental permits and approvals can be secured; (c) the changes do not require building service beyond the levels normally provided to other tenants in the Building; (d) the changes do not have any adverse affect on the structural integrity or systems of the Building; (e) the changes will not, in Landlord’s opinion, unreasonably delay construction of the Tenant Improvements; and (f) Landlord has determined in its sole discretion that the changes are of a nature and quality consistent with the overall objectives of Landlord for the Building. If Landlord approves a change requested by Tenant, then, as a condition to the effectiveness of Landlord’s approval, Tenant shall pay to Landlord upon demand by Landlord the increased cost attributable to such change, as reasonably determined by Landlord. To the extent any such change results in a delay of completion of construction of the Tenant Improvements, then such delay shall constitute a delay caused by Tenant as described below.

2. CONSTRUCTION OF TENANT IMPROVEMENTS. Upon Tenant’s payment to Landlord of the total amount of the cost of any changes to the Plans, if any, Landlord’s contractor shall commence and diligently proceed with the construction of the Tenant Improvements, subject to Tenant Delays (as described in Section 4 below) and Force Majeure Delays (as described in Section 5 below). Promptly upon the commencement of the Tenant Improvements, Landlord shall furnish Tenant with a construction schedule letter setting forth the projected completion dates therefor and showing the deadlines for any actions required to be taken by Tenant during such construction, and Landlord may from time to time during construction of the Tenant Improvements modify such schedule.

3. SUBSTANTIAL COMPLETION. The Tenant Improvements shall be deemed to be “substantially completed” when Landlord: (a) has substantially completed the Tenant Improvements in accordance with the Plans, other than decoration and minor “punch-list” type items and adjustments which do not materially interfere with Tenant’s access to or use of the Premises; and (b) has obtained a temporary certificate of occupancy or other required equivalent approval from the local governmental authority permitting occupancy of the Premises. Within ten (10) days after such substantial completion, Tenant shall conduct a walk-through inspection of the Premises with Landlord and provide to Landlord a written punch-list specifying those decoration and other punch-list items which require completion, which items Landlord shall thereafter diligently complete; provided, however, that Tenant shall be responsible, at Tenant’s sole cost and expense, for the remediation of any items on the punch-list caused by Tenant’s acts or omissions.

4. TENANT DELAYS. For purposes of this Work Letter, “Tenant Delays” shall mean any delay in the completion of the Tenant Improvements resulting from any or all of the following: (a) Tenant’s failure to timely perform any of its obligations pursuant to this Work Letter, including any failure to complete, on or before the due date therefor, any action item which is Tenant’s responsibility pursuant to the Work Schedule or any schedule delivered by Landlord to Tenant pursuant to this Work Letter, (b) Tenant’s changes to the Plans; (c) Tenant’s request for materials, finishes, or installations which are not readily available or which are incompatible with the Standards; (d) any delay of Tenant in making

-1-

payment to Landlord for Tenant’s share of any costs in excess of the cost of the Tenant Improvements as described in the Plans; or (e) any other act or failure to act by Tenant, Tenant’s employees, agents, architects, independent contractors, consultants and/or any other person performing or required to perform services on behalf of Tenant.

5. FORCE MAJEURE DELAYS. For purposes of this Work Letter, “Force Majeure Delays” shall mean any actual delay beyond the reasonable control of Landlord in the construction of the Tenant Improvements, which is not a Tenant Delay and which is caused by any of the causes described in Section 26.03 of the Lease.

EXHIBIT A

-2-

Schedule “1”

Plans And Specifications

[TO BE ATTACHED]

EXHIBIT A

-3-

EXHIBIT B

RESTROOM PLAN

EXHIBIT B

-1-

EXTENSION OPTION RIDER

RIDER NO. 1

This Rider No. 1 is made and entered into by and between EMERYVILLE OFFICE, L.L.C., a Delaware limited liability company (“Landlord”), and EXPONENTIAL INTERACTIVE, INC., a Delaware corporation (“Tenant”), as of the day and year of the Amendment between Landlord and Tenant to which this Rider is attached. All capitalized terms not defined in this Rider shall have the same meaning as set forth in the Amendment. Landlord and Tenant hereby agree that, notwithstanding anything contained in the Amended Lease to the contrary, the provisions set forth below shall be deemed to be part of the Amended Lease and shall supersede any inconsistent provisions of the Amended Lease. All references in the Amended Lease and in this Rider to the “Amended Lease” shall be construed to mean the Amended Lease (and all exhibits and Riders attached thereto), as amended and supplemented by this Rider.

1. Landlord hereby grants to Tenant one (1) option (the “Extension Option”) to extend the New Term of the Amended Lease for an additional period of five (5) years (the “Option Term”), on the same terms, covenants and conditions as provided for in the Amended Lease during the New Term, except for the monthly Base Rent, which shall initially be equal to the “fair market rental rate” for the Premises for the Option Term as defined and determined in accordance with the provisions of the Fair Market Rental Rate Rider attached as Rider No. 2, subject to fair market annual rent adjustments during the Option Term.

2. The Extension Option must be exercised, if at all, by written notice (“Extension Notice”) delivered by Tenant to Landlord no sooner than that date which is twelve (12) months and no later than that date which is nine (9) months prior to the expiration of the New Term. Provided Tenant has properly and timely exercised the Extension Option, the New Term shall be extended by the Option Term, and all terms, covenants and conditions of the Amended Lease shall remain unmodified and in full force and effect, except that the monthly Base Rent shall be as set forth above and in Rider No. 2, and except that there shall be no remaining Extension Options.

3. The Extension Option is personal to the original Tenant executing this Amendment and may be exercised only by the original Tenant executing this Amendment while occupying and leasing the entire Premises and without having assigned the Amended Lease or sublet any portion of the Premises, and/or without the intent of thereafter assigning the Amended Lease or subletting the Premises, and may not be exercised or be assigned, voluntarily or involuntarily, by any person or entity other than the original Tenant executing this Amendment. The Extension Option is not assignable separate and apart from the Amended Lease, nor may said Extension Option be separated from the Amended Lease in any manner, either by reservation or otherwise. The Extension Option is subject to all expansion and extension rights and other rights to lease, as applicable, which Landlord has granted to other tenants prior to the date of the Amendment. Tenant will have no right to exercise the Extension Option, notwithstanding any provision of the grant of option to the contrary, and Tenant’s exercise of the Extension Option may be nullified by Landlord and deemed of no further force or effect, if (i) Tenant is in default of any monetary obligation or material non-monetary obligation under the terms of the Amended Lease (or if Tenant would be in such default under the Amended Lease but for the passage of time or the giving of notice, or both) as of Tenant’s exercise of the Extension Option or at any time after the exercise of the Extension Option and prior to the commencement of the Option Term, or (ii) Landlord has given Tenant two (2) or more notices of default, whether or not such defaults are subsequently cured, during any twelve (12) consecutive month period of the Amended Lease. The Extension Option is hereby deemed an economic term which Landlord, in its sole and absolute discretion, may or may not offer in conjunction with any future extensions of the New Term.

RIDER NO. 1

-1-

FAIR MARKET RENTAL RATE RIDER

RIDER NO. 2 TO LEASE

This Rider No. 2 is made and entered into by and between EMERYVILLE OFFICE, L.L.C., a Delaware limited liability company (“Landlord”), and EXPONENTIAL INTERACTIVE, INC., a Delaware corporation (“Tenant”), as of the day and year of the Amendment between Landlord and Tenant to which this Rider is attached. All capitalized terms not defined in this Rider shall have the same meaning as set forth in the Amendment. Landlord and Tenant hereby agree that, notwithstanding anything contained in the Lease to the contrary, the provisions set forth below shall be deemed to be part of the Amended Lease and shall supersede any inconsistent provisions of the Amended Lease. All references in the Amended Lease and in this Rider to the “Amended Lease” shall be construed to mean the Amended Lease (and all exhibits and Riders attached thereto), as amended and supplemented by this Rider.

1. The term “fair market rental rate” as used in Rider No. 1 shall mean the annual amount per square foot, projected during the Option Term (including annual adjustments), that a willing, non- equity renewal tenant (excluding sublease and assignment transactions) would pay, and a willing, institutional landlord of a comparable quality office building located in the Emeryville, California area would accept, in an arm’s length transaction (what Landlord is accepting in then current transactions for the Building may be used for purposes of projecting rent for the Option Term), for space of comparable size, quality and floor height as the Premises, taking into account the age, quality and layout of the existing improvements in the Premises, and taking into account items that professional real estate brokers or professional real estate appraisers customarily consider, including, but not limited to, rental rates, space availability, tenant size, tenant improvement allowances, parking charges and any other lease considerations, if any, then being charged or granted by Landlord or the lessors of such similar office buildings. All economic terms other than monthly Base Rent, such as tenant improvement allowance amounts, if any, operating expense allowances, parking charges, etc., will be established by Landlord and will be factored into the determination of the fair market rental rate for the Option Term. Accordingly, the fair market rental rate will be an effective rate, not specifically including, but accounting for, the appropriate economic considerations described above.

2. In the event where a determination of fair market rental rate is required under the Amended Lease, Landlord shall provide written notice of Landlord’s determination of the fair market rental rate not later than ninety (90) days after the last day upon which Tenant may timely exercise the right giving rise to the necessity for such fair market rental rate determination. Tenant shall have ten (10) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of the fair market rental rate within which to accept such fair market rental rate or to reasonably object thereto in writing. Failure of Tenant to so object to the fair market rental rate submitted by Landlord in writing within Tenant’s Review Period shall conclusively be deemed Tenant’s approval and acceptance thereof. If within Tenant’s Review Period Tenant reasonably objects to or is deemed to have disapproved the fair market rental rate submitted by Landlord, Landlord and Tenant will meet together with their respective legal counsel to present and discuss their individual determinations of the fair market rental rate for the Premises under the parameters set forth in Section 1 above and shall diligently and in good faith attempt to negotiate a rental rate on the basis of such individual determinations. Such meeting shall occur no later than ten (10) days after the expiration of Tenant’s Review Period. The parties shall each provide the other with such supporting information and documentation as they deem appropriate. At such meeting if Landlord and Tenant are unable to agree upon the fair market rental rate, they shall each submit to the other their respective best and final offer as to the fair market rental rate. If Landlord and Tenant fail to reach agreement on such fair market rental rate within five (5) business days following such a meeting (the “Outside Agreement Date”), Tenant’s Extension Option will be deemed null and void unless Tenant demands appraisal within five (5) business days thereof, in which event each party’s determination shall be submitted to appraisal in accordance with the provisions of Section 3 below.

-1-

3. (a) Landlord and Tenant shall each appoint one (1) independent appraiser who shall by profession be an M.A.I. certified real estate appraiser who shall have been active over the five (5) year period ending on the date of such appointment in the leasing of commercial (including office) properties in the Emeryville, California area. The determination of the appraisers shall be limited solely to the issue of whether Landlord’s or Tenant’s last proposed (as of the Outside Agreement Date) best and final fair market rental rate for the Premises is the closest to the actual fair market rental rate for the Premises as determined by the appraisers, taking into account the requirements specified in Section 1 above. Each such appraiser shall be appointed within fifteen (15) days after the Outside Agreement Date.

(b) The two (2) appraisers so appointed shall within fifteen (15) days of the date of the appointment of the last appointed appraiser agree upon and appoint a third appraiser who shall be qualified under the same criteria set forth hereinabove for qualification of the initial two (2) appraisers.

(c) The three (3) appraisers shall within thirty (30) days of the appointment of the third appraiser reach a decision as to whether the parties shall use Landlord’s or Tenant’s submitted best and final fair market rental rate, and shall notify Landlord and Tenant thereof. During such thirty (30) day period, Landlord and Tenant may submit to the appraisers such information and documentation to support their respective positions as they shall deem reasonably relevant and Landlord and Tenant may each appear before the appraisers jointly to question and respond to questions from the appraisers.

(d) The decision of the majority of the three (3) appraisers shall be binding upon Landlord and Tenant and neither party shall have the right to reject the decision or to undo the exercise of the applicable Option. If either Landlord or Tenant fails to appoint an appraiser within the time period specified in Section 3(a) hereinabove, the appraiser appointed by one of them shall within thirty (30) days following the date on which the party failing to appoint an appraiser could have last appointed such appraiser reach a decision based upon the same procedures as set forth above (i.e., by selecting either Landlord’s or Tenant’s submitted best and final fair market rental rate), and shall notify Landlord and Tenant thereof, and such appraiser’s decision shall be binding upon Landlord and Tenant and neither party shall have the right to reject the decision or to undo the exercise of the applicable Option.

(e) If the two (2) appraisers fail to agree upon and appoint a third appraiser, either party, upon ten (10) days written notice to the other party, can apply to the Presiding Judge of the Superior Court of Alameda County to appoint a third appraiser meeting the qualifications set forth herein. The third appraiser, however, selected shall be a person who has not previously acted in any capacity for ether party.

(f) The cost of each party’s appraiser shall be the responsibility of the party selecting such appraiser, and the cost of the third appraiser (or arbitration, if necessary) shall be shared equally by Landlord and Tenant.

(g) If the process described hereinabove has not resulted in a selection of either Landlord’s or Tenant’s submitted best and final fair market rental rate by the commencement of the applicable lease term, then the fair market rental rate estimated by Landlord will be used until the appraiser(s) reach a decision, with an appropriate rental credit and other adjustments for any overpayments of monthly Base Rent or other amounts if the appraisers select Tenant’s submitted best and final estimate of the fair market rental rate. The parties shall enter into an amendment to the Lease confirming the terms of the decision.

RIDER NO. 2

-2-

EX-10.08

Exhibit 10.08

TRIBAL FUSION, INC.

EMPLOYMENT AGREEMENT

THIS AGREEMENT is made and entered into effective as of May 9, 2005 (the “Effective Date”), by and between TRIBAL FUSION, INC., a Delaware corporation (hereinafter the “Corporation”), and John R. Rettig (hereinafter “Employee”).

RECITALS

Whereas, the Corporation runs an online ad network and site representation business.

Whereas, in order to develop and grow its business, the Corporation requires Employee’s services in overseeing all operational issues associated with running and managing the Corporation;

Whereas, the Corporation desires to employ Employee as Chief Financial Officer, and Employee desires to accept such employment, on the terms and subject to the conditions set forth herein.

AGREEMENT

NOW, THEREFORE, the parties hereto agree as follows:

1.        Employment Duties.

a.        General. The Corporation hereby agrees to employ Employee, and Employee hereby agrees to accept employment with the Corporation, on the terms and conditions hereinafter set forth.

b.        Corporation Duties. The Corporation shall allow Employee to, and Employee shall, perform responsibilities normally incident to his/her position as Chief Financial Officer of this Corporation, commensurate with his/her background, education, experience and professional standing. The Corporation shall provide Employee with a workstation, computer, telephone, administrative support, office equipment, supplies, customary services and cooperation suitable for and as the Corporation deems necessary for the performance of his/her duties.

c.        Employee’s Duties. Unless otherwise mutually agreed to in writing by the parties, Employee shall serve as Chief Financial Officer for the Corporation. Duties to be performed include, but are not limited to, planning and directing all aspects of the Corporation’s Finance, Human Resource, and Administration functions. Employee shall devote his/her full productive time, attention, energy, and skill to the business of the Corporation, and shall not become engaged to render similar services on behalf of any other entity or person while employed hereunder, without the Corporation’s consent. Employee hereby agrees to undertake the duties and responsibilities inherent in this position and such other duties and responsibilities as the Corporation shall from time to time reasonably assign to him/her. Employee shall report directly to the Corporation’s President and CEO.

Exhibit 10.08

2.        Term. This Agreement is for “at-will” employment and this agreement shall commence on May 9, 2005 (“Commencement Date”). Employment with the Corporation is for no specified term. Subject to the terms and conditions contained in Section 5 of this Agreement, Employee may terminate his/her employment with the Corporation at any time, for any reason or no reason, and with or without notice to the Corporation. The Corporation may terminate the employment of the Employee at any time, for any reason or no reason, and with or without notice.

3.        Compensation. Employee shall be compensated as follows:

a.        Base Salary and Bonus. The Corporation shall pay Employee a base salary of Dollars 150,000 per year for his/her services, payable in equal installments on a bi-weekly basis. All salaries are subject to all applicable state, federal and local employee and income tax withholding. The Corporation may, at any time or from time to time, increase Employee’s salary in light of the Corporation’s performance and Employee’s contribution thereto, and any other factors which the Corporation may deem relevant. Employee shall also be eligible to participate in bonus incentive plans which the Corporation may adopt from time to time. Your bonus will be based on a combination of revenue, goals, and management objectives. Your total quarterly bonus potential will be $18,750. You will be guaranteed the full bonus for the first four quarters of employment. You will also receive a sign on bonus of $25,000 with your first paycheck.

b.        Stock Options. Employee shall be permitted to participate in the Corporation’s stock option plan and shall be awarded a stock option grant to purchase 60,000 shares of Tribal Fusion, Inc. common stock at an exercise price of $.05 per share, subject to such terms and conditions as contained in the Stock Option Agreement, as administered under the Corporation’s Equity Incentive Plan. If a conflict arises between this Agreement and the Stock Option Agreement or Plan, the Stock Option Agreement and Plan shall govern. If there should be a merger or acquisition of the Corporation, and you should lose your position involuntarily during the first year after the event, then your stock option vesting schedule will accelerate and your options will be vested according to the Accelerated Vesting Schedule set forth in your Stock Option Agreement.

c.        Paid Time-Off. Employee will be entitled to fifteen (15) days of Paid Time Off (PTO) annually with full compensation and benefits during PTO periods. PTO includes both vacation and sick time and can be taken in  ¹/2 day increments. Employee may take PTO at such time or times as employee and the Corporation mutually agree in writing. Employee’s PTO time will accrue at a rate of 1.25 days per month of service. If Employee needs to take off more time than Employee has accrued, then the additional time will be unpaid. The Corporation encourages Employee to use all earned PTO each year. As a result, Employee may only accumulate a maximum of two times the PTO that Employee is eligible to accrue. Once Employee has accrued the maximum, Employee will cease accruing additional PTO until previously accrued PTO time is taken so that the accrual amount has been brought below the maximum.

d.        Benefits. Employee and his/her dependents shall be entitled to participate in any group plans or programs maintained by the Corporation for any employees relating to

2

Exhibit 10.08

group health, disability, life insurance and other related benefits as in effect from time to time. The Corporation pays for 100% of Employee medical benefit premiums, and 50% for that of said Employee’s dependents.

4.        Expenses. The Corporation shall reimburse Employee for his/her normal and reasonable expenses incurred for travel, entertainment, continuing education and similar items in promoting and carrying out the business of the Corporation. Provided such expenses are incurred and approved in accordance with written Corporation policies, or in the absence of written policies, established Corporation preactices. As a condition of reimbursement, Employee agrees to provide the Corporation with copies of all available invoices and receipts, and otherwise account to the Corporation in sufficient detail to allow the Corporation to claim an income tax deduction for such paid item, if such item is deductible. Reimbursements shall be made on a monthly, or more frequent, basis.

5.        Termination.

a.        General. Employee may voluntarily terminate his/her employment hereunder any time for any reason upon 30 days advance written notice to the Corporation. In such an event, the Corporation reserves the right to require Employee not to report to work during the notice period; however, Employee will be paid for the notice period. If Employee terminates this Agreement, the Corporation shall have no further obligations to Employee whatsoever under this Agreement or otherwise.

b.        Termination for Cause. The Corporation may terminate Employee pursuant to the terms of this Agreement at any time for “cause” by giving written notice of termination. Such termination will become effective upon the giving of such notice, except that termination based upon clauses (iv) and (v) below shall not become effective unless the Employee fails to correct such breach within thirty (30) days of receipt of written notice. “Cause” shall mean: (i) the Employee is convicted of a felony which is related to the Employee’s employment or the business of the Corporation; (ii) the Employee, in carrying out his/her duties hereunder, has been found in a civil action to have committed gross negligence, willful gross misconduct, misappropriated Corporation funds or otherwise defrauded the Corporation, in any case, resulting in material harm to the Corporation; (iii) exhibiting unfitness or unavailability for service (other than disability, as provided for in this Agreement), material misconduct or dishonesty related to the Employee’s employment of the business of the Corporation; (iv) the Employee materially breaches any provision of any confidentiality, proprietary rights, non-competition or similar agreement between Employee and the Corporation; and (v) Employee is in material breach of any provision of this Agreement.

c.        Termination Upon Death or Disability. This Agreement shall automatically terminate upon Employee’s death. In addition, if any disability or incapacity of Employee to perform his/her duties as the result of any injury, sickness, or physical, mental or emotional condition continues for a period of 180 business days (excluding any accrued vacation) out of any calendar year period, the Corporation may terminate Employee’s employment upon written notice and no further compensation shall be paid to Employee upon such termination.

3

Exhibit 10.08

d.        Severance. Should the Corporation terminate this Agreement for a reason other than cause, Employee will be eligible for three (3) months of severance pay upon date of written notice of termination of Agreement.

6.      Miscellaneous.

a.        Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties with respect to the subject matters herein, and supersedes and replaces any prior agreements and understandings, whether oral or written between them with respect to such matters. The provisions of this Agreement may be waived, altered, amended or repealed in whole or in part only upon the written consent of both parties to this Agreement.

b.        No Implied Waivers. The failure of either party at any time to require performance by the other party of any provision hereof shall not affect in any way the right to require such performance at any time thereafter, nor shall the waiver by either party of a breach of any provision hereof be taken or held to be a waiver of any subsequent breach of the same provision or any other provision.

c.        Personal Services. It is understood that the services to be performed by Employee hereunder are personal in nature and the obligations to perform such services and the conditions and covenants of this Agreement cannot be assigned by Employee. Subject to the foregoing, and except as otherwise provided herein, this Agreement shall inure to the benefit of and bind the successors and assigns of the Corporation.

d.        Severability. If for any reason any provision of this Agreement shall be determined to be invalid or inoperative, the validity and effect of the other provisions thereof shall not be affected thereby, provided that no such severability shall be effective if it causes a material detriment to any party.

e.        Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, applicable to contracts between California residents entered into and to be performed entirely within the State of California. Venue for any and all claims or actions arising out of this Agreement shall be the County of Alameda, State of California.

f.        Notices. All notices, requests, demands, instructions or other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given upon delivery, if delivered personally, or if given by prepaid telegram, or mailed first-class, postage prepaid, registered or certified mail, return receipt requested, shall be deemed to have been given seventy-two (72) hours after such delivery, if addressed to the other party at the addresses as set forth on the signature page below. Either party hereto may change the address to which such communications are to be directed by giving written notice to the other party hereto of such change in the manner above provided.

g.        Merger, Transfer of Assets, or Dissolution of the Corporation. This Agreement shall not be terminated by any dissolution of the Corporation resulting from either merger or consolidation in which the Corporation is not the consolidated or surviving corporation or a transfer of all or substantially all of the assets of the Corporation. In such event, the rights, benefits and obligations herein shall automatically be assigned to the surviving or resulting corporation or to the transferee of the assets.

4

Exhibit 10.08

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

EMPLOYEE		TRIBAL FUSION, INC.
By:	/s/ John R. Rettig	By:	/s/ Dilip DaSilva
	(Signature)		(Signature)
John R. Rettig		Dilip DaSilva, President & CEO
[personally identifiable information withheld]		[personally identifiable information withheld]

5

Exhibit 10.08

[Exponential Letterhead]

January 1, 2008

Amendment #1 to Offer Letter Dated May 9, 2005

John Rettig

[personally identifiable information withheld]

Dear John:

Please be advised that the offer letter dated May 9, 2005 by and between Tribal Fusion (“Company”), now known as Exponential Interactive, Inc. and you (the “Offer Letter”) is amended effective January 1, 2008 (the “Amendment #1 Effective Date”) to reflect the following:

• Section 5, d of your agreement is modified to read: should the Corporation terminate your agreement for a reason other than cause, you will be eligible for six (6) months of severance pay upon date of written notice of termination of Agreement.

Except as modified herein, all other terms in the Offer Letter shall be unaffected and shall remain in full force and effect.

If the above terms are agreeable to you, please sign below and return this letter to me so that we can proceed.

We look forward to your continued contributions and providing you with professional opportunities.

Thank you.

Sincerely yours,

Dilip DaSilva

CEO

AGREED, ACKNOWLEDGED AND ACCEPTED:

/s/ John Rettig	Date:
John Rettig

EX-21.01

Exhibit 21.01

Subsidiaries of Exponential Interactive, Inc.

Name of Subsidiary	Jurisdiction
New Wave Media Inc. (d/b/a AdoTube)	Delaware
Tribal Fusion R&D Private Limited	India
Tribal Fusion India Private Limited	India
Tribal Fusion France	France
Tribal Fusion Deutschland GMBH	Germany
Tribal Fusion Spain, S.L.	Spain
Tribal Fusion Australia	Australia
Tribal Fusion UK Limited	United Kingdom
Tribal Fusion Singapore PTE. LTD.	Singapore

EX-23.02

Exhibit 23.02

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the reference to our firm under the caption “Experts” and to the use of our report dated March 16, 2012, in the Registration Statement (Form S-1) and related Prospectus of Exponential Interactive, Inc. for the registration of shares of its common stock.

/s/    Ernst & Young LLP

San Francisco, California

March 16, 2012

EX-23.03

Exhibit 23.03

Consent of Independent Registered Public Accounting Firm

New Wave Media, Inc.

New York, New York

We hereby consent to the use in the Prospectus constituting a part of this Registration Statement of our report dated March 15, 2012, relating to the consolidated financial statements of New Wave Media, Inc., which is contained in that Prospectus.

We also consent to the reference to us under the caption “Experts” in the Prospectus.

/s/ BDO USA, LLP

New York, New York

March 15, 2012