S-1

As filed with the Securities and Exchange Commission on April 8, 2004

Registration No. 333-                    

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

CLARIA CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	7319	94-3303021
(State or other jurisdiction of incorporation or organization)	(Primary standard industrial classification code number)	(I.R.S. employer identification no.)

555 Broadway Street

Redwood City, CA 94063

(650) 980-1500

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

Jeffrey McFadden

Chief Executive Officer

555 Broadway Street

Redwood City, CA 94063

(650) 980-1500

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

Copies to:

Mark C. Stevens, Esq. Jeffrey R. Vetter, Esq. Fenwick & West LLP 801 California Street Mountain View, CA 94041 (650) 988-8500 John D. Wilson, Esq. Shearman & Sterling LLP 555 California Street San Francisco, CA 94104 (415) 616-1100

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.    ¨ __________

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

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price (1)	Amount of Registration Fee
Common Stock, $0.0001 par value per share	$150,000,000	$19,005

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

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

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is declared 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 state where the offer or sale is not permitted.

Subject to Completion, Dated April 8, 2004

             Shares

Common Stock

This is the initial public offering of Claria Corporation. We are offering          shares of our common stock. Selling stockholders are offering an additional          shares of our common stock. We will not receive any of the proceeds from the sale of shares by the selling stockholders. We anticipate that the initial public offering price will be between $         and $         per share. We have applied to list our common stock on the Nasdaq National Market under the symbol “CLRA.”

Investing in our common stock involves risks. See “ Risk Factors” beginning on page 6.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

	Per Share	Total
Public offering price	$	$
Underwriting discounts and commissions	$	$
Proceeds, before expenses, to Claria Corporation	$	$
Proceeds, before expenses, to the selling stockholders	$	$

The selling stockholders have granted the underwriters the right to purchase up to                      additional shares of common stock to cover over-allotments.

Deutsche Bank Securities

Piper Jaffray

SG Cowen

Thomas Weisel Partners LLC

The date of this prospectus is                     , 2004.

TABLE OF CONTENTS

	Page
Prospectus Summary	1
Risk Factors	6
Forward-looking Statements	21
Use of Proceeds	22
Dividend Policy	22
Capitalization	23
Dilution	24
Selected Consolidated Financial Data	26
Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Business	43
Management	61
Related Party Transactions	75
Principal and Selling Stockholders	77

	Page
Description of Capital Stock	79
Shares Eligible for Future Sale	83
Material United States Tax Considerations for Non-United States Holders	85
Underwriting	88
Notice to Canadian Residents	91
Legal Matters	92
Change in Independent Accountants	92
Experts	92
Where You Can Find More Information	93
Index to Consolidated Financial Statements	F-1

You should rely only on the information contained in this document. We have not authorized anyone to provide information that is different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where such offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock.

Dealer Prospectus Delivery Obligation

Until                     , 2004 (25 days after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.

PROSPECTUS SUMMARY

This summary highlights selected information contained in greater detail elsewhere in this prospectus. This summary does not contain all the information you should consider before investing in our common stock. You should read the entire prospectus carefully before making an investment decision, including “Risk Factors” and the consolidated financial statements and the related notes. References in this prospectus to “Claria,” “we,” “our” and “us” refer to Claria Corporation and our consolidated subsidiaries.

Our Business

We pioneered, developed and operate a leading online behavioral marketing platform that enables us to deliver, manage and analyze highly targeted online advertising campaigns. We target our advertisements to specific segments of our large, permission-based audience of users based on a broad range of anonymously identified behaviors exhibited across the Internet. These behaviors include a number of commercial behaviors and lifestyle indicators that suggest commercial interests and purchase intent and are therefore valuable to advertisers. Since the launch of our services in 2000, we have grown rapidly by attracting a large number of advertisers and users. Our audience currently consists of more than 43 million users worldwide, and our direct and indirect customers in 2003 included approximately 425 advertisers, including many leading online advertisers such as Cendant Corporation, FTD.com, Inc., Netflix, Inc. and Orbitz, Inc.

We display ads through our proprietary online advertising network, the GAIN Network. The GAIN Network offers advertisers anonymous consumer targeting, ad delivery, optimized delivery timing, campaign management, research and analytics. The GAIN Network also features SearchScout, an online service that displays paid search listings from Yahoo!’s Overture Services division.

We attract our audience by integrating our GAIN AdServer software with consumer software products that are offered free of charge to Internet users in exchange for permission to display our advertisements. Our GAIN Publishing unit publishes some of these software products, such as DashBar, Date Manager, Gator eWallet, Precision Time, WeatherScope and WebSecureAlert. We also enter into strategic relationships to include our AdServer software with free software products offered by third-party publishers, including DivXNetworks, Inc., iMesh and Sharman Networks Ltd., which publishes the KaZaA Media Desktop.

We market our services to advertisers primarily through our sales organization. We presently have sales operations located at our headquarters in Redwood City, California and in Austin, Chicago, Detroit, Los Angeles, London, New York and Tokyo. For the year ended December 31, 2003, we generated revenue of approximately $90.5 million, substantially all of which came from online advertising.

Our Industry

Marketing is one of the largest industries in the United States and globally, consisting of mass-media advertising channels, such as television, radio and print, as well as direct marketing channels, such as direct mail, telemarketing and catalogs. Despite the size and growth of the advertising and direct marketing industries, campaign effectiveness has been constrained by a number of factors. These factors include a limited ability to identify and isolate targeted consumers, optimize delivery timing and measure the effectiveness of ad spending.

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The Internet has emerged as a powerful mass medium and is beginning to have a profound impact on the marketing industry. Following two years of decline, online advertising represented an estimated $7.2 billion market in the United States in 2003 according to the Interactive Advertising Bureau, an industry trade group, in its Interactive Advertising Revenue Report. Forrester Research, a market research firm, projects that the online advertising market will grow at a 17.5% compound annual growth rate over the next five years to reach $15.6 billion during 2008. Key drivers of growth in the online advertising market include an increased share of the overall advertising market, increased Internet and broadband use and the proliferation of more targeted and effective online advertising, such as paid search and behavioral marketing.

The Internet differs from traditional advertising and direct marketing channels in two fundamental ways that could help enable highly-targeted online marketing on a large scale. First, the Internet is a two-way interactive medium, which offers the potential to help identify and target the commercial interests of an individual user. Second, the Internet is a mass medium for both viewing content and transacting commerce, which helps enable the delivery of marketing messages when consumers are actively shopping for a product or service. Much online advertising, however, still suffers from similar limitations as traditional mass media advertising and fails to take full advantage of the opportunities offered by the Internet for more targeted and effective advertising.

Our Solution

Our platform is designed to address the limitations of both traditional and many forms of online marketing by enabling advertisers to deliver highly-targeted and effective online advertising campaigns to our audience and to analyze and optimize the effectiveness of these campaigns. Key advantages of our platform and solution include:

• Ability to anonymously identify, gather and analyze a broad range of online behaviors across the Internet. Through our proprietary GAIN AdServer software, which is installed on users’ personal computers, we can anonymously identify a broad range of online consumer behaviors exhibited by our users across the Internet. Unlike server-based targeting approaches, our client-based approach is not limited to identifying only behaviors exhibited while viewing web pages displayed by a particular online media property or network. Further, we can identify a broad range of behaviors that suggest commercial interests and purchase intent and are therefore valuable to advertisers, including various commercial behaviors, such as researching sport utility vehicles, and lifestyle indicators, such as planning a wedding.

• Superior targeting capabilities. Anonymously identified behavioral data is gathered in a central database, analyzed by our proprietary software tools for key trends and indicators and used for ad-targeting purposes. As a result, we can target consumers that exhibit specific online behaviors and lifestyle indicators.

• Enhanced delivery timing. We can display advertisements at various points throughout a consumer’s purchase cycle, from initial research to time of purchase. This feature allows advertisers to enhance the timing of their message for purposes of influencing purchase decisions.

• Ability to measure, analyze and enhance campaign effectiveness. We can anonymously identify how our users respond to advertisements, including click-through and purchase conversion rate data, to measure, analyze and improve campaign effectiveness.

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• Network scale. With a current worldwide audience of over 43 million users, we enable advertisers to target even narrowly defined market segments, such as prospective new purchasers of sport utility vehicles, in significant numbers.

• Robust, proprietary technology. The key components of our online behavioral marketing platform are based on proprietary, internally-developed software.

• Consumer privacy. To protect our users’ privacy, we do not identify or collect any personally identifiable information, and all of the behaviors that we identify, collect and analyze are anonymous. We are sensitive to the privacy concerns expressed by consumers, government and consumer advocacy groups and believe we have established best practices designed to respect consumer privacy.

Our Strategy

Our goal is to leverage our online behavioral marketing platform to become one of the leading marketing service providers in the world. Key elements of our strategy include:

• increasing the number of behaviorally-targeted advertisements that we deliver by expanding our audience and increasing the range of online behaviors that we can anonymously identify;

• increasing our number of advertisers and revenue per advertiser;

• extending applications of our platform;

• expanding internationally; and

• continuing to increase awareness of behavioral marketing and our best practices and advocate the adoption of industry standards.

Risk Factors

Our business is subject to numerous uncertainties and risks, as described more fully under “Risk Factors” beginning on page 6. In particular, we are involved in litigation with multiple parties alleging that our display of advertisements violates trademark, copyright, unfair competition, unfair trade practice and other laws and could become subject to additional litigation in the future. The outcome of this litigation is uncertain. If it is determined adversely to us, we could be enjoined from displaying advertisements to our users or from engaging in other business practices fundamental to our business. In addition, a recently enacted statute in Utah will, upon coming into effect on May 3, 2004, prohibit us from providing our products and services in that state. Various other regulatory and legislative initiatives, litigation involving third parties and technological developments relating to online marketing could materially and adversely affect our ability to conduct our business and materially impair the value of our common stock. In addition, we are subject to other risks described under “Risk Factors,” and you should read and consider these risk factors carefully.

Our History and Contact Information

We were incorporated in Delaware in July 1998. The address of our principal executive office is 555 Broadway Street, Redwood City, CA 94063 and our telephone number is (650) 980-1500. Our website address is www.claria.com. The information that can be accessed through viewing our website is not part of this prospectus. Our trademarks include Claria^™, the Claria logo, DashBar^™, the DashBar logo, Date Manager^™, EntryPass^™, GAIN^®, the GAIN logo, Gator^®, Gator eyes logo, Gator eWallet^™, Precision Time^®, SearchScout^™, WeatherScope^® and WebSecureAlert^™. All other trademarks or service marks appearing in this prospectus are trademarks or service marks of the respective companies that use them.

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The Offering

Common stock offered          shares by us

         shares by the selling stockholders

Total offering          shares

Common stock to be outstanding after this offering          shares

Use of proceeds We anticipate that we will use the net proceeds of this offering for general corporate purposes, including working capital, and potential acquisitions. We will not receive any of the proceeds from the sale of shares of our common stock by the selling stockholders. See “Use of Proceeds.”

Proposed Nasdaq National Market symbol CLRA

Risk factors See “Risk Factors” beginning on page 6 for a discussion of factors that you should consider carefully before deciding to purchase our common stock.

In the table above, the number of shares to be outstanding after this offering is based on 33,294,571 shares outstanding as of December 31, 2003 and does not reflect:

• 4,344,722 shares issuable upon the exercise of outstanding stock options at a weighted average exercise price of $0.62 per share, as of December 31, 2003;

• 1,941,579 additional shares reserved for issuance under our 1999 Stock Plan, as of December 31, 2003;

•          additional shares reserved for issuance under our 2004 Equity Incentive Plan and 2004 Employee Stock Purchase Plan, to be effective upon the consummation of this offering; and

• 764,766 shares issuable upon the exercise of outstanding warrants and purchase rights at a weighted average exercise price of $2.41 per share, as of December 31, 2003, which do not expire upon the consummation of this offering.

Except as otherwise indicated, information in this prospectus is based on the following assumptions:

• the conversion of all outstanding shares of convertible preferred stock into an aggregate of 18,631,518 million shares of common stock, which will automatically occur upon the consummation of this offering;

• the exercise of warrants to purchase 183,631 shares of common stock at an exercise price of $1.55 per share which will occur prior to the consummation of this offering;

• the effectiveness of our amended and restated certificate of incorporation after the consummation of this offering; and

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

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Summary Consolidated Financial Data

(in thousands, except per share data)

The following tables provide summary consolidated financial data for the periods presented. This summary consolidated financial data should be read together with “Selected Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes appearing elsewhere in this prospectus. The pro forma balance sheet data gives effect upon the closing of this offering to the automatic conversion of all outstanding shares of convertible preferred stock into common stock as if it had occurred on December 31, 2003. The pro forma as adjusted balance sheet data gives further effect to the (1) application of the net proceeds from our sale of          shares of common stock in this offering at an assumed initial public offering price of $         per share, after deducting the estimated underwriting discounts and commission and estimated offering expenses, and (2) the exercise of warrants to purchase 183,631 shares of common stock at an exercise price of $1.55 per share, as if both had occurred on December 31, 2003. See “Use of Proceeds” and “Capitalization.”

	Years Ended December 31,
	1999			2000			2001			2002			2003
Consolidated Statement of Operations Data:
Revenue	$	—		$	3,801		$	14,678		$	40,587		$	90,480
Stock-based expense		8			121			16			2			3,969
Total operating expenses		7,370			31,955			30,970			39,181			63,962
Income (loss) from operations		(7,370	)		(28,154	)		(16,292	)		1,406			26,518
Benefit from (provision for) income taxes		—			(2	)		—			(14	)		8,572
Net income (loss)		(7,663	)		(27,328	)		(17,254	)		91			34,856
Net income (loss) per share:
Basic		(0.91	)		(2.66	)		(1.73	)		0.00			1.41
Diluted		(0.91	)		(2.66	)		(1.73	)		0.00			0.98
Weighted average common shares outstanding:
Basic		8,393			10,261			9,963			24,189			24,696
Diluted		8,393			10,261			9,963			30,069			35,433
Pro forma net income per share (unaudited):
Basic														1.41
Diluted														0.98
Pro forma weighted average common shares outstanding (unaudited):
Basic														24,696
Diluted														35,433

See Note 2 of the notes to our consolidated financial statements for a description of the method that we used to compute the net income (loss) per share amounts.

	December 31, 2003
	Actual			Pro Forma		Pro Forma As Adjusted
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	14,945		$	14,945	$
Short-term investments		10,924			10,924
Working capital		41,506			41,506
Total assets		71,675			71,675
Long-term liabilities		4,612			4,612		4,612
Convertible preferred stock, preferred stock warrants and purchase rights		63,196			—		—
Total stockholders’ equity (deficit)		(12,977	)		50,129

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors and all other information contained in this prospectus before purchasing our common stock. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties that we are unaware of, or that we currently deem immaterial, also may become important factors that affect us. If any of the following risks occur, our business, financial condition or results of operations could be materially and adversely affected. In that case, the trading price of our common stock could decline, and you may lose some or all of your investment.

Risks Related To Our Business

Our business model is unproven, which makes it difficult to evaluate our current business and future prospects.

Our business is substantially dependent upon our ability to generate revenue by displaying online advertisements to users who have installed on their personal computers software products that include our GAIN AdServer software. This is a relatively new industry and we began offering our services in 2000, which makes an evaluation of our current business and future prospects difficult. The revenue and income potential of our business and the online behavioral marketing market are unproven. In addition, because the market for online behavioral marketing is new and rapidly evolving, we have limited insight into trends that affect our business. You must consider our business and prospects in light of the risks and difficulties we may encounter as an early-stage company in a new and rapidly evolving market.

We have incurred losses in the past and may not be able to maintain profitability in the future.

We experienced operating losses in each quarterly and annual period from our inception through the second quarter of 2002. We may not be able to maintain our profitability in the future. In addition, as of December 31, 2003, we had an accumulated deficit of $17.5 million. We expect that our operating expenses will continue to increase. We cannot assure you that we will be able to generate sufficient revenue to maintain our profitability. You should not consider our recent quarterly performance or our performance for 2003 as necessarily being indicative of our future results. In particular, we cannot assure you that the growth rates for some of our operating results will remain at recent levels.

Our quarterly revenue and operating results are volatile and difficult to predict, and if we fail to meet the expectations of investors, the market price of our common stock would likely decline significantly.

Our revenue and operating results are likely to fluctuate significantly from quarter to quarter, due to a number of factors. These factors include:

• our ability to maintain the size of our user base and to generate large numbers of installations of software products that include our GAIN AdServer software by new users;

• our ability to form strategic relationships with third parties for the distribution of our GAIN AdServer software, and the level of costs that these arrangements entail;

• our ability to buy online advertising to promote software products that include our GAIN AdServer software, as well as the cost and effectiveness of such advertising;

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• costs or potential limitations on our business activities resulting from litigation and regulatory developments in our industry, which could be significant;

• our ability to obtain additional advertising customers or to derive additional revenue from our existing advertising customers;

• downward pricing pressures on online advertising rates;

• seasonal fluctuations in spending by our advertising customers;

• costs associated with any future acquisitions;

• our ability to respond to technological developments in our industry; and

• fluctuations in economic and market conditions, particularly those affecting the market for online advertising or the industries of our advertising customers, such as travel, retail and financial services.

Many of these factors are largely outside of our control, and there are many facets of all of these factors over which we have limited control. As a result of the factors above and the evolving nature of our business and industry, we may be unable to forecast our revenue accurately. We plan our expenses based on operating plans and estimates of future revenue. We may be unable to adjust our spending in a timely manner to compensate for any unexpected revenue shortfalls. Additionally, a failure to meet our revenue or expense projections would have an immediate and negative impact on our operating results. If this were to happen, the market price of our common stock would likely decline significantly.

We are subject to litigation that is unpredictable in outcome and, if determined adversely to us, could substantially harm our business and the value of your investment.

We are currently involved in litigation with The Hertz Corporation, L.L. Bean, Inc., Six Continent Hotels Inc. and Inter-Continental Hotels Corporation, TigerDirect, Inc., True Communication, Inc., Wells Fargo & Company, WFC Holdings Corporation and Quicken Loans Inc. These lawsuits have been consolidated into one proceeding for pre-trial purposes. The primary claims in these lawsuits allege that the display of our advertisements violates various federal laws related to trademarks, copyrights, unfair competition and unfair trade practices, as well as similar state laws. This litigation involves claims seeking the application and interpretation of well-developed bodies of law, as well as evolving and unsettled legal principles, in new factual circumstances. It is difficult to determine how these existing laws and legal principles will apply to our business, and it is difficult for us to predict the outcome of this litigation.

Other cases involving similar claims have also been filed against WhenU.com, one of our direct competitors in the online behavioral marketing industry, and against us by other parties in the past. In a proceeding based on similar claims, a federal district court granted a preliminary injunction, currently under appeal, against WhenU.com. Further, in a previously settled case, a preliminary injunction was granted against us. Although there have been some favorable rulings in other cases against WhenU.com involving similar claims, these are not binding on the federal courts in which the pending litigation against us is being heard. If our current pending litigation or any future litigation were determined adversely to us, we could be enjoined from displaying advertisements to our users or from engaging in other business practices that may be fundamental to our business. We could also be forced to pay substantial monetary damages. Any negative outcome against us or our competitors could substantially harm our business and the value of your investment could be significantly reduced.

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Even if there is an outcome that is favorable to us in the pending litigation, the existing plaintiffs or new parties could commence additional litigation against us, under similar or different theories, and in jurisdictions that would not necessarily be bound by any ruling in our current litigation. If we become subject to additional lawsuits, whether based on similar claims or new claims, this could require that we spend significant resources on our legal defense, divert the attention of senior management from the operation of our business, or require that we change our present and planned services, any of which could substantially harm our business.

We are subject to the laws and courts of foreign countries in which our ads are viewed. As a result, we face the prospect of defending lawsuits outside the United States. For example, an interim injunction has been granted by a court in Germany preventing us from delivering ads to users while they are viewing the www.hertz.de website.

Changes in legislation, regulation and standards relating to online marketing, particularly online behavioral marketing, and online distribution of software, could harm our business.

There is increasing awareness and concern among the general public and federal and state governments regarding marketing and privacy concerns, including those relating to online marketing and online distribution of software. Legislation has been introduced, and in one case enacted, that may limit our ability to distribute or operate some or all of our products and services. In particular, legislation or regulation preventing the display of contextual ads, which generally include ads that are displayed while a consumer is viewing the web pages of other businesses, or imposing regulations that apply to the online distribution of software, would severely restrict our ability to display ads using some or all of our services. For example, the legislature of the State of Utah recently enacted legislation that will become effective on May 3, 2004, that makes the delivery of contextual ads illegal and imposes substantial new requirements that apply to the online distribution of software such as our GAIN AdServer software. Unless this Utah legislation is overturned by the courts, we will be precluded from displaying some types of advertisements to our users in Utah and from engaging in other key business practices with regard to businesses and users in Utah. We may be subject to lawsuits under this Utah statute which allow private parties to bring enforcement actions. This could preclude us from offering most or all of our products and services in Utah, expose us to significant damages as well as additional costs and expenses, require substantial changes to our business, or otherwise cause substantial harm to our business. If we are unable to take sufficient measures to avoid violation of the Utah statute, litigation related to this statute may prevent us from continuing to offer our services even outside of Utah. If our ability to collect anonymous information from our users or to deliver contextual ads is restricted, we would likely have to use other technology or methods to provide our services or discontinue providing our services to users in some jurisdictions. We may be unable to develop this technology at all or in a timely fashion or on commercially reasonable terms.

Legislation has also been introduced in the U.S. Congress and some state legislatures that is designed to regulate “spyware,” which does not have a precise definition but is often defined as software installed on consumers’ computers without their informed consent that gathers and may disseminate information about the consumers, including personally identifiable information, without the consumers’ consent. Bills have been introduced in the U.S. Congress to prohibit the installation of software on a computer unless the user of the computer is notified and consents to the installation, such as the Safeguard Against Privacy Invasions Act in the House of Representatives and the SPY BLOCK Act in the Senate. The bill pending in the Senate would also require that reasonable procedures for uninstalling the software be provided. It is possible that this or any future legislation intended to regulate spyware could bring some or all

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of our services within its purview, which could prevent us from operating or distributing some or all of our services or which could require us to change our business practices.

In addition, foreign legislation has been enacted, and there is federal and state legislation pending that is aimed at regulating the collection and use of personal data from Internet users. For example, the European Union has adopted directives to address privacy and electronic data collection concerns, which limit the manner in which the personal data of Internet users may be collected and processed. Similar legislation, known as the Online Privacy Protection Act, was introduced in the U.S. Senate and is pending.

The regulatory environment with respect to online marketing practices is also evolving. The Federal Trade Commission, or FTC, has increasingly focused on issues affecting online marketing, particularly online privacy and security issues. For example, in April 2004, the FTC will host a one-day workshop that is open to the public to address the issues surrounding the distribution and effects of spyware. One of the key areas of focus for the FTC is the difference between spyware and ad-serving software, such as our GAIN AdServer software.

The enactment of new legislation, changes in the regulatory climate, or the expansion, enforcement or interpretation of existing laws could preclude us from offering some or all of our services or expose us to additional costs and expenses, require substantial changes to our business or otherwise substantially harm our business. Further, additional legislation or regulation could be proposed or enacted at any time in the future, which could materially and adversely affect our business.

Other litigation related to the online marketing industry could also harm our business.

Other forms of online advertising, such as paid search listings, have been, and are currently, the subject of litigation. Many of these lawsuits involve major Internet and Internet search businesses such as AOL, Google and Yahoo!. Although we are not currently a party to any such litigation, adverse decisions against other Internet or online media companies could cause these companies to limit or curtail this form of online advertising, which could harm our business. For example, for the year ended December 31, 2003, we derived approximately 39% of our revenue from advertising through our SearchScout service, a service that depends on paid search listings. In addition, we derived the majority of our revenue in 2003 from advertising services using our GAIN AdServer software, which depends in part on the use of keyword searches and web page addresses, or URLs. Any litigation that adversely affects the ability to use keyword searches or URLs could materially harm our business.

We experience a high rate of user turnover and if we cannot continue to add large numbers of users, the size of our user base will decline.

We experience a high rate of user turnover. We believe the first 30 days immediately following a new installation of a software product that includes our GAIN AdServer software is, in effect, a trial period, and we believe that, on average, only approximately one-half of these new installations will remain active after the initial 30-day period. New users can comprise a material percentage of our user base at any given time, particularly at times when we are actively trying to expand our user base, such as after we have introduced a new software product, launched a large marketing campaign or entered into a new distribution relationship with another software publisher. Software products that include our GAIN AdServer software are designed to be easy to uninstall and, even after the initial period of peak user turnover, each month many users uninstall the software product that includes our GAIN AdServer software.

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Further, many users replace their personal computers on which our GAIN AdServer software is installed. As a result, it is critical to our success that we continually add substantial numbers of new installations of products that include our GAIN AdServer software and any failure to do so could materially harm our business.

If we fail to sustain and expand the number of users who have installed our AdServer software, we may not be able to maintain or increase revenue.

The success of our business depends on our ability to offer our advertising customers access to a large audience, comprised of users who have downloaded software products that include our GAIN AdServer software. As a result, it is critical to our success that we continually add substantial numbers of new users. In addition, we must attract users who respond to our ads by clicking through to advertisers’ web pages or purchasing the advertisers’ products, because these click through and conversion rates are critical to our ability to maintain and grow our advertising rates. To date, we have attracted substantially all of our new users through methods over which we have limited control, primarily by buying online advertisements that offer Internet users the opportunity to install our free software products that include our GAIN AdServer software, and through distribution arrangements with third parties that include our GAIN AdServer software with their software products. We plan to continue to be substantially dependent on these methods for attracting new users for the foreseeable future. If fewer users download these software products, we would not be able to maintain or expand the number of active users.

Further, because our business depends on our ability to offer Internet users software products that include our GAIN AdServer software, we must develop these products internally, acquire other products or establish relationships with third parties that develop new software products that users find attractive. We have limited experience developing software products. If we fail to develop or introduce these products in a timely manner, this could reduce the size of our audience, which could cause our revenue to decline.

Changes in Microsoft’s software and other technological factors may erode our existing user base, curtail future growth of our user base and negatively impact our ability to deliver advertisements.

A number of existing technological factors and future technological developments may, individually or in combination, result in a significant reduction of the number of users who have software products that include our GAIN AdServer software installed on their personal computers and negatively impact our ability to deliver advertisements to those users, which would harm our business. These technological factors and developments include the following:

• Changes in Microsoft’s operating system and web browser may limit users’ ability or inclination to download a software product included with our GAIN AdServer software. We depend on the technology within the existing Microsoft Windows operating system and Microsoft’s Internet Explorer web browser that permits consumers to download software from the Internet to run on their personal computers. Microsoft continually modifies the technologies that comprise its Windows operating system and Internet Explorer web browser, which requires us to change our technology and practices in response. Modifications by Microsoft can substantially impair our ability to display advertisements, distribute products including our GAIN AdServer software, collect data, or otherwise adversely affect our business. We continually devote significant resources and time to attempt to modify our technology and practices in response to changes in Microsoft’s technology, and we may not be able to make required modifications in a cost effective manner or at all. If we cannot adapt our technology and practices adequately in

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response to changes in Microsoft’s technology, many aspects of our business, including our ability to display advertisements and to maintain and grow the size of our user base, will be substantially impaired.

• Replacements of personal computers may reduce our user base. Because of rapid technological developments in the personal computer industry, we expect that a substantial portion of our users will replace their personal computers within one to three years of purchase. If one of our users replaces the computer on which our GAIN AdServer software is installed, the user will no longer be part of our user base unless the user installs a software product that includes our GAIN AdServer software on the new computer. If a significant number of these users do not reinstall a software product included with our GAIN AdServer software on their new computers, the number of our users could decrease significantly.

• Third-party software, as well as our own technology, make it easy for consumers to remove the software products that are included with our GAIN AdServer software. Several software programs, sometimes marketed as ad-ware or “spyware” detectors, such as Ad-Aware and products marketed by McAfee, Symantec, AOL and Earthlink, notify consumers when software programs such as our GAIN AdServer software are installed on their personal computers and prompt consumers to uninstall such software. In addition, in many of our advertisements and in the program directory on our users’ computers, we provide instructions to uninstall the software products that include our GAIN AdServer software. If a significant number of our users uninstall the software products that include our GAIN AdServer software, this could significantly reduce the size of our user base.

• Technologies that block server-based pop-up ads may reduce our ability to display advertising to promote our software products to new users. We attract new users through our use of web advertisements that we buy from online media companies, including “pop-up” ads, which open a new window in the foreground of the user’s desktop, or “pop-under” ads, which open in the background of a user’s desktop. Many third parties offer technologies designed to prevent these types of advertisements from being displayed, which could prevent consumers from viewing the pop-up and pop-under advertisements we buy. For example, Google, Yahoo!, AOL, Microsoft, many Internet service providers, and many other companies offer software products that include pop-up blocking features for free or at a relatively low cost. If we were unable to use other forms of web advertisements to attract new users, our business could be harmed.

• Technologies could be developed in the future that hamper the operation of our GAIN AdServer software. It is possible that future technologies could be developed that prevent installation of our GAIN AdServer software or block delivery of advertisements, or that encourage uninstallation or facilitate removal of software products that include our GAIN AdServer software from users’ computers. This could prevent us from delivering ads or make it substantially more difficult to obtain additional users.

Our business depends on our relationships with Overture Services and Sharman Networks.

We derived 31% of our revenue in 2003 through our relationship with Overture Services. We expect to continue to be dependent on this relationship for our future revenue. The amount of revenue we receive under this agreement depends on the level of revenue Overture receives from its advertisers, as well as the number of advertisers using Overture. Accordingly, if these services do not continue to be successful, our revenue could be negatively impacted. Because Overture provides us with the paid search results for our SearchScout service, any developments

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negatively affecting the keyword search market, such as litigation concerning trademark issues, pricing declines or lack of market acceptance, could harm our business. Our agreement with Overture expires in September 2007, but Overture can terminate it earlier for a number of reasons, including our failure to achieve specified levels of performance, breach of the agreement and litigation.

In September 2003, we entered into an agreement with Sharman Networks under which our GAIN AdServer software is included with its file sharing software application known as the KaZaA Media Desktop. We currently acquire a substantial portion of our new users through downloads of the KaZaA Media Desktop. We expect that our relationship with Sharman Networks will continue to be responsible for a substantial portion of the new installations of our GAIN AdServer software in the future. We may be unable to maintain our existing user base and attract new users if there is a decline in the downloading or use of the KaZaA Media Desktop for any reason, including as a result of regulatory actions or litigation, such as the lawsuits brought by the Recording Industry Association of America against certain users of the KaZaA Media Desktop and other actions brought against Sharman Networks. Our agreement with Sharman Networks expires in September 2008. Starting in March 2005, Sharman can terminate this agreement if our payments to Sharman Networks do not reach specified levels and, starting in September 2006, Sharman can terminate this agreement for any reason upon 60 days notice. Because we make payments in advance under this agreement, in the event of a termination, we may be unable to recoup these payments.

If our agreements with Overture or Sharman Networks are terminated early, if we cannot renew these agreements or if we are unable to negotiate new agreements on terms that are favorable to us, we would need to find new sources of revenue and new means of attracting users. Any failure to do so would substantially harm our business.

We depend on a limited number of third parties for the distribution of our GAIN AdServer software.

We depend on agreements with a limited number of third parties, particularly Sharman Networks, for the distribution of our GAIN AdServer software, which is included with the downloadable software products offered to Internet users by these third parties. We must maintain our existing distribution relationships, while establishing new distribution relationships with other third parties, in order to expand our user base. If the third parties with whom we currently have distribution relationships reduce their commitment to us, terminate their relationships with us or pursue other partnerships or relationships, our business could be harmed. Our business could also be harmed if we do not enter into new distribution agreements on commercially reasonable terms with third parties.

Our success also depends, in part, on the success of these third parties. If their software products are not widely accepted, installed and used by consumers or if the third parties face other business or legal challenges to their business, consumers may choose not to install or retain their software products. This could result in a decrease in the number of new users installing the software products that include our GAIN AdServer software or an increase in the number of existing users uninstalling products that include our GAIN AdServer software, either of which could reduce our user base and harm our business, operating results and financial condition. Additionally, some of the third-party software products are delivered with software that performs other functions. To the extent users do not accept these additional third-party products or features, they could uninstall the third-party software products and consequently our GAIN AdServer software, which would reduce our user base.

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A number of third-party distributors provide alternative versions of their software products for a fee, including Sharman Network’s KaZaA Media Desktop, without our GAIN AdServer software. To the extent that the fees charged decrease, or other factors cause these alternative versions of these third-party software products to become more attractive to consumers than the versions offered with our GAIN AdServer software, our business could be harmed.

We depend on Internet advertising to promote our consumer software products that include our GAIN AdServer software.

We depend on the use of online advertisements to attract new users. We buy these advertisements from third parties to promote consumer software products that include our GAIN AdServer software and to offer Internet users the opportunity to install these products. We believe that our business will remain substantially dependent on this method for attracting our audience. If we are unable to purchase these advertisements on cost-effective terms, this could limit our ability to attract users cost-effectively. If online advertising become less effective or more expensive, this method may not remain a useful means of attracting new users. Additionally, some sellers of Internet advertising do not sell and others in the future may not be willing to sell online advertisements to us, whether as a result of competitive reasons, objections to our business model from the sellers or their business partners or otherwise. If we were unable to continue to obtain Internet advertising on a cost-effective basis, our ability to attract new users would be impaired, which could harm our business.

In order for our business to be successful, we must continue to attract advertisers.

The attractiveness of our services to advertisers depends heavily on our ability to offer advertisers access to a large and responsive audience and innovative and effective formats and vehicles for displaying advertisements to this audience. If we fail to deliver effective advertising campaigns for our advertising customers, this could reduce demand for our services or reduce revenue. Further, we intend to continue to offer our advertisers new features and services. For example, we are developing BehaviorLink, an advertising service that we expect will enable us to display behaviorally-targeted banner and other advertisements through partner sites. However, we may be unsuccessful in developing and marketing this or other new services. Our failure to effectively develop and market features and services that our advertisers desire could reduce demand for our services.

The agreements we have with our advertisers are typically for a short term. As a result, our advertisers are not obligated to purchase advertising from us in the future. If our major advertisers were to substantially reduce or stop using our services, our business would be harmed. In addition, a large portion of our advertising sales are to advertisers who target a limited number of industries. If there is any decrease in consumer demand in these industries, this could result in advertisers reducing their use of our services. For example, for 2003, approximately 16% of our revenue was generated by advertisers in the travel market. Consumer demand in this market is volatile and is particularly vulnerable to changes in economic conditions, including those caused by acts of terrorism.

Negative perceptions and adverse publicity concerning our business practices could damage our reputation and harm our business.

The online behavioral marketing industry in general, and our business in particular, is vulnerable to the negative public perception associated with other forms of downloadable software known as spyware. Negative perception of our business practices or press reports linking our GAIN AdServer software to spyware could damage our reputation, cause new users

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not to install or existing users to uninstall the software products that include our GAIN AdServer software or cause consumers to use technologies that impede our ability to deliver ads. Additionally, companies that distribute Spyware or adware software often do not follow the same types of practices that we follow such as those related to user permission and labeling of advertisements. The actions of these companies could further add to negative public perception of our industry. This negative perception could also lead to increased regulation of our industry or other regulations that adversely affect our business practices. Any of these events could reduce the demand for our services among advertisers and significantly harm our business.

Changes in legislation, regulations or standards applicable to the Internet could impair our ability to provide our services.

The legal and regulatory environment governing the Internet and Internet advertising is uncertain and may change. Legislation, regulations and standards applicable to Internet communications, commerce and advertising could be adopted or amended, which could reduce the use of the Internet as a medium for advertising or commerce. In addition, if the federal or state governments impose sales and use taxes on Internet sales, this could curtail the use of the Internet as a commerce channel. Also, due to the global nature of the Internet, it is possible that multiple federal, state or foreign jurisdictions might inconsistently regulate Internet activities. Any of these developments could harm our business.

The market for online behavioral marketing is very competitive, and we may not be able to compete successfully.

We face competition for our online behavioral marketing services from other online behavioral marketing companies, other online media and marketing technologies and services and traditional advertising and marketing service companies. In particular, we compete for advertisers’ budgets with:

• companies that offer online behavioral marketing services, such as WhenU.com;

• other online marketing technology and service providers, such as 24/7 Real Media, Advertising.com, aQuantive, DoubleClick, FindWhat, LookSmart and ValueClick;

• online search media companies such as AOL, Ask Jeeves, Google, MSN and Yahoo!; and

• traditional media companies, including television networks and newspaper and magazine publishers.

We expect this competition to continue. Because online behavioral marketing is an emerging industry, we expect that we will encounter additional competition from new sources as we expand our service offerings and as the industry develops.

Many of our existing and potential competitors have longer operating histories, greater name recognition, larger numbers of consumers using their services, and significantly greater financial, technical and marketing resources than we do. These factors could allow them to compete more effectively than we can, including having larger user bases, devoting greater resources to the research and development, promotion and sale of their services, undertaking more far-reaching marketing campaigns, adopting more aggressive pricing policies and making more attractive offers to existing and potential employees, strategic partners and advertising customers.

In addition, current and potential competitors have established or may establish cooperative relationships among themselves, with us or with third parties to increase their service offerings. Further, our competitors may seek to engage in their own strategic

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transactions with the third parties with whom we have relationships. It is possible that new competitors may emerge and rapidly acquire significant market share. Increased competition may result in price reductions and loss of market share.

Our services may not perform as expected, which could harm our business.

If our services fail to perform properly, our advertising customers may discontinue their use of our services. Despite our testing, our existing or future services may not perform as expected due to unforeseen problems. Any defects may cause us to incur significant expenses and divert the attention of our management and key personnel from other aspects of our business.

System failures could damage our reputation and harm our business.

Because we deliver our services using a central data center and servers located in three locations, sustained or repeated system failures could significantly impair our operations and reduce the effectiveness of our services. The continuous and uninterrupted performance of our systems is critical to our success. We must protect these systems against damage from fire, power loss, water damage, earthquakes, telecommunications failures, viruses, vandalism and other malicious acts, and similar unexpected adverse events. Our operations depend upon our ability to maintain and protect our computer systems, data centers and server locations. Our data center and two server locations are located in California, an area susceptible to earthquakes and possible power outages. Although our network infrastructure is designed to enable us to deliver our advertisements from any one of three server facilities, we cannot eliminate the risk of downtime caused by factors such as natural disasters and other events. Further, individuals may attempt to breach our network security, such as hackers, which could damage our network. The occurrence of any of these events could harm our business.

Our market may undergo rapid technological change, and our future success will depend on our ability to meet the changing needs of our industry.

If new industry standards and practices emerge in the Internet and online marketing industry, our existing services, technology and systems may become obsolete. We believe our future success will depend on our ability to:

• license or internally develop new services and technologies that address the increasingly sophisticated and varied needs of advertising customers and consumers;

• enhance our existing services; and

• respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis.

We cannot assure you that we will be able to address technological change in our industry in a timely fashion.

We depend on the development of Internet infrastructure for our future growth.

Because our business is based on providing behavioral marketing services using the Internet, our success depends on the continued acceptance and growth of the Internet as a commercial and business medium. The use of the Internet for commerce and business could be hindered due to concerns related to the security and privacy of information on the Internet. Further, for our business to succeed, Internet infrastructure must support a growth in the demand for our services by providing reliable access and services, including a reliable network backbone with the necessary speed, data capacity and security, and timely development of

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enabling products, such as high-speed modems and other devices offering high-speed Internet access. The Internet has experienced increased traffic, widespread computer viruses and outages of service, which have caused frequent periods of decreased performance. If Internet usage continues to grow rapidly or if outages occur, the Internet’s infrastructure may not be able to support these demands, and its performance and reliability may decline.

We may incur costs and encounter difficulties assimilating any future business acquisitions.

As part of our business strategy, we may seek to acquire or invest in businesses, services or technologies that we believe could complement or expand our services, enhance our technical capabilities or otherwise offer growth opportunities. Acquisitions could create risks for us, including:

• difficulties in assimilating acquired personnel, operations and technologies;

• unanticipated costs associated with the acquisition;

• diversion of management’s attention from other business concerns; and

• use of substantial portions of our available cash to consummate the acquisition.

We may be unable to complete acquisitions at all or on commercially reasonable terms, which could limit our future growth. Acquisitions could also result in potentially dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our operating results. In addition, if an acquired business fails to meet our expectations, our operating results may suffer.

Our executive officers and key personnel are critical to our success, and our failure to retain our key personnel in a competitive marketplace may impair our ability to grow our business.

Our future success depends on our ability to retain our management team. We must also attract, assimilate and retain other highly qualified employees, including engineering, technology, marketing, sales and support personnel. There is substantial competition for highly skilled employees. Our management and key employees are not bound by agreements that could prevent them from terminating their employment at any time. If we fail to attract and retain key employees, our business could be harmed.

Our growth could strain our personnel and infrastructure resources, which could prevent us from successfully implementing our business plan.

We are currently experiencing a period of rapid growth in our headcount and operations, which has placed, and will continue to place, a significant strain on our management, administrative, operational and financial infrastructure. We anticipate that further growth will be required to increase our user and advertiser base. Our success will depend in part upon the ability of our senior management to manage this growth effectively. To manage the expected growth of our operations and personnel, we will need to continue to improve our operational, financial and management controls and our reporting systems and procedures. If we fail to successfully manage our growth, we will be unable to execute our business plan.

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If we are unable to protect our intellectual property rights, third parties may gain access to these rights and harm our business.

Our success and ability to compete are substantially dependent upon our intellectual property. We rely on patent, trademark and copyright law, trade secret protection and confidentiality or license agreements with our employees, customers, strategic partners and others to protect our intellectual property rights. However, the steps we take to protect our intellectual property rights may be inadequate. We have filed patent applications and provisional patent applications covering some of the technology used to deliver our online behavioral marketing services. To date, none of these patents has been issued, and we cannot assure you that any patents will ever be issued. Further, even if any patents are issued, they may not protect our intellectual property rights, and third parties may challenge the validity or enforceability of issued patents. In addition, other parties may independently develop similar or competing technologies designed around any patents that may be issued to us.

We intend to enforce our intellectual property rights vigorously, and from time to time, we may initiate claims against third parties that we believe are infringing our intellectual property rights if we are unable to resolve matters satisfactorily through negotiation. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management and could result in the impairment or loss of portions of our intellectual property. Our failure to secure, protect and enforce our intellectual property rights could seriously harm our business.

We may be subject to intellectual property infringement claims, which could cause us to incur significant expenses, pay substantial damages and be prevented from providing our services.

Third parties may claim that our products or services infringe or violate their intellectual property rights. Any such claims could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages and prevent us from providing our services. Even if we were to prevail, any litigation regarding our intellectual property could be costly and time-consuming and divert the attention of our management and key personnel from our business operations. We may also be obligated to indemnify our business partners in any such litigation, which could further exhaust our resources. Furthermore, as a result of an intellectual property challenge, we may be prevented from providing some or all of our services unless we enter into royalty, license or other agreements. We may not be able to obtain such agreements at all or on terms acceptable to us, and as a result, we may be precluded from offering most or all of our products and services.

As we expand our services internationally, our business will be susceptible to additional risks associated with international operations.

We believe we must expand our services internationally and expect to commit significant resources to this expansion. As we increase our international activities, we will be exposed to additional challenges, including:

• fluctuations in currency exchange rates;

• seasonal fluctuations in purchasing patterns in other countries;

• different regulatory requirements;

• difficulties in collecting accounts receivable in other countries;

• the burdens of complying with a wide variety of foreign laws;

• challenges in staffing and managing foreign operations;

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• political and economic instability; and

• potentially adverse tax consequences, including those resulting from unexpected changes in tax laws.

We have limited experience operating outside the United States and with marketing our services globally. Our presence in global markets may require significant management attention and financial resources which may adversely affect our ability to effectively manage our business.

Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.

Accounting principles generally accepted in the United States are subject to interpretation by the Financial Accounting Standards Board, or FASB, the American Institute of Certified Public Accountants, the Securities and Exchange Commission, or SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results, and could affect the reporting of transactions completed before the announcement of a change.

For example, we currently are not required to record stock-based expense if the employee’s stock option exercise price is equal to or exceeds the deemed fair value of our common stock at the date of grant. However, several companies have recently elected to change their accounting policies and begun to record the fair value of stock options as an expense. In addition, the FASB has announced its support for recording expense for the fair value of stock options granted, although the standard has not been finalized and the timing of a final statement has not been set.

Risks Related To This Offering

The price of our common stock may fluctuate significantly, which could lead to losses for stockholders.

The trading prices of the stock of public companies can experience extreme price and volume fluctuations. These fluctuations often have been unrelated or out of proportion to the operating performance of these companies. We expect our stock price to be similarly volatile. These broad market fluctuations may continue and could harm our stock price. Any negative change in the public’s perception of the prospects of our company or companies in our market could also depress our stock price, regardless of our actual results.

Factors affecting the trading price of our common stock may include:

• variations in our operating results;

• announcements of technological innovations, new services or service enhancements, strategic alliances or significant agreements by us or by our competitors;

• recruitment or departure of key personnel;

• litigation, legislation, regulation or technological developments that adversely affect our business;

• changes in the estimates of our operating results or changes in recommendations by any securities analyst that elect to follow our common stock; and

• market conditions in our industry, the industries of our customers and the economy as a whole.

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If securities analysts do not publish research or reports about our business or if they downgrade our stock, the price of our stock could decline.

The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts. There are many large, well-established publicly traded companies active in our industry and market, which may mean it will be less likely that we receive widespread analyst coverage. Furthermore, if one or more of the analysts who do cover us downgrade our stock, our stock price would likely decline rapidly. If one or more of these analysts cease coverage of our company, we could lose visibility in the market, which in turn could cause our stock price to decline.

Substantial sales of our common stock by our stockholders could depress our stock price regardless of our operating results.

Sales of substantial amounts of our common stock in the public market after this offering could reduce the prevailing market prices for our common stock. Upon the completion of this offering, based on the number of shares outstanding as of December 31, 2003, we will have              shares of common stock outstanding, based on the assumptions described in “The Offering.” Of these, all of the shares sold in this offering will be freely tradable without restriction or further registration. Of the remaining shares of common stock outstanding immediately after this offering, approximately              shares will be available for sale in the public market 180 days after the date of this prospectus when the lock-up agreements described in “Underwriting” between the underwriters and the stockholders expire. However, some of those sales will be subject to the volume restrictions imposed by Rule 144 under the federal securities laws on our affiliates. The remaining outstanding shares will become tradable upon expiration of various holding periods under Rule 144, subject in some cases to the volume restrictions of that rule, or earlier and without restrictions if they are registered under the federal securities laws.

Our directors, executive officers and major stockholders will own approximately     % of our outstanding common stock after this offering, which could limit your ability to influence the outcome of key transactions, including changes of control.

After this offering, it is anticipated that, based on share ownership as of February 29, 2004 (including shares issuable upon exercise of outstanding options and warrants exercisable within 60 days of February 29, 2004), our directors, executive officers, and holders of 5% or more of our outstanding common stock, will, in the aggregate, own approximately     % of our outstanding common stock. As a result, these stockholders will be able to exert significant influence over all matters requiring approval by our stockholders, including the election of directors and the approval of significant corporate transactions. This concentration of ownership may also delay, deter or prevent a change in control of our company and will make some transactions more difficult or impossible without the support of these stockholders.

We have implemented anti-takeover provisions that could discourage or prevent a takeover, even if an acquisition would be beneficial in the opinion of our stockholders.

Provisions of our certificate of incorporation and bylaws could make it more difficult for a third party to acquire us, even if doing so would be beneficial in the opinion of our stockholders. These provisions include:

• authorizing the issuance of “blank check” preferred stock that could be issued by our board of directors to increase the number of outstanding shares and thwart a takeover attempt;

• establishing a classified board of directors, which could discourage a takeover attempt;

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• prohibiting cumulative voting in the election of directors, which would limit the ability of less than a majority of stockholders to elect director candidates;

• eliminating the ability of stockholders to call special meetings of stockholders;

• prohibiting stockholder action by written consent and requiring that all stockholder actions be taken at a meeting of our stockholders; and

• establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.

In addition, section 203 of the Delaware General Corporation Law may discourage, delay or prevent a change in our control. Generally, section 203 prohibits stockholders who, alone or together with their affiliates and associates, own more than 15% of the subject company from engaging in certain business combinations for a period of three years following the date that the stockholder became an interested stockholder with their subject company without approval of the board or two-thirds of the independent stockholders.

We have broad discretion to use the offering proceeds, and our investment of these proceeds may not yield a favorable, or any, return.

The net proceeds of this offering are not allocated for specific uses. As a result, our management has broad discretion over how the majority of these proceeds are used and could spend the proceeds in ways with which you may not agree. We cannot assure you that the proceeds will be invested in a way that yields a favorable, or any, return for us.

New investors in our common stock will experience immediate and substantial dilution.

The initial public offering price will be substantially higher than the pro forma net tangible book value per share of our outstanding common stock. Investors purchasing common stock in this offering will, therefore, incur immediate dilution of $             per share of common stock in net tangible book value, based on an assumed initial public offering price of $             per share, and new investors will own         % of our outstanding common stock. In addition, the exercise of outstanding options and warrants will, and future equity issuances may, result in further dilution to investors.

We will incur increased costs as a result of being a public company.

As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act of 2002, as well as new rules implemented by the SEC and the Nasdaq National Market, have required changes in corporate governance practices of public companies. We expect these new rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. In addition, we will incur additional costs associated with our public company reporting requirements. We also expect these new rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these new rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

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FORWARD-LOOKING STATEMENTS

This prospectus contains “forward-looking statements” that include information relating to future events, future financial performance, strategies, expectations, competitive environment, regulation and availability of resources. These forward-looking statements include, without limitation, statements regarding: proposed new services; our expectations concerning litigation, regulatory developments or other matters; statements concerning projections, predictions, expectations, estimates or forecasts for our business, financial and operating results and future economic performance; statements of management’s goals and objectives; and other similar expressions concerning matters that are not historical facts. Words such as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes” and “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements.

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to:

• our ability to maintain and expand our user base;

• failure on our part to maintain and expand our existing relationships with advertisers and develop new relationships with advertisers;

• the level of acceptance of online behavioral marketing;

• industry competition;

• our ability to continue to execute our growth strategies;

• litigation, legislation, regulation or technological developments affecting online marketing;

• general economic conditions; and

• other factors discussed under the headings “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.”

Forward-looking statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

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USE OF PROCEEDS

We estimate that the net proceeds to us from the sale of the shares of common stock offered by us will be approximately $             , or approximately $              if the underwriters’ over-allotment option is exercised in full, based on an assumed initial public offering price of $             per share and after deducting estimated underwriting discounts and commissions and estimated offering expenses. We will not receive any proceeds from the sale of shares to be offered by the selling stockholders. The principal purposes of this offering are to increase our working capital, to create a public market for our common stock and to facilitate future access to the public capital markets.

We have not made specific plans with respect to the proceeds of this offering and, therefore, cannot specify with certainty the particular uses for the net proceeds. Our management will have significant flexibility in applying the net proceeds. We may use a portion of the net proceeds to acquire or invest in complementary businesses or technologies, although we have no present commitments or agreements with respect to any material acquisition or investment. Pending the application of the net proceeds, we intend to invest those proceeds in short-term, interest-bearing, investment-grade securities.

DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock and do not anticipate paying any cash dividends in the future. We anticipate that we will retain all our future earnings for use in the development of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend on our financial condition and operating results.

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CAPITALIZATION

The following table sets forth our capitalization as of December 31, 2003:

• on an actual basis;

• on a pro forma basis to give effect on the closing of this offering to the automatic conversion of all outstanding shares of convertible preferred stock into common stock, as if it had occurred on December 31, 2003; and

• on a pro forma as adjusted basis to give further effect (1) to the application of the net proceeds from our sale of      shares of common stock in this offering at an assumed initial public offering price of $     per share, after deducting the estimated underwriting discounts and commission and estimated offering expenses and (2) the exercise of warrants to purchase 183,631 shares of common stock at an exercise price of $1.55 per share, as if both had occurred on December 31, 2003.

You should read this table together with “Selected Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes appearing elsewhere in this prospectus.

	December 31, 2003
	Actual			Pro Forma			Pro Forma As Adjusted
	(in thousands, except share and per share data)
Convertible preferred stock, $0.0001 par value; 21,679,500 shares authorized, 18,631,518 shares issued and outstanding, actual; no shares authorized, issued and outstanding, pro forma and pro forma as adjusted	$	60,197		$	—		$	—
Convertible preferred stock warrants and purchase rights		2,999			—			—
Stockholders’ equity (deficit):
Preferred stock, $0.0001 par value; no shares authorized, issued, or outstanding, actual and pro forma; 5,000,000 shares authorized, no shares issued and outstanding, pro forma as adjusted		—			—			—
Common stock, $0.0001 par value; 60,000,000 shares authorized, 14,479,422 shares issued and outstanding, actual; 60,000,000 authorized, 33,110,940 shares issued and outstanding, pro forma;              shares authorized,              shares issued and outstanding, pro forma as adjusted		1			3
Additional paid-in capital		13,080			76,274
Deferred stock-based expense		(8,509	)		(8,509	)		(8,509	)
Accumulated other comprehensive loss		(24	)		(24	)		(24	)
Accumulated deficit		(17,525	)		(17,525	)		(17,525	)
Total stockholders’ equity (deficit)		(12,977	)		50,219
Total capitalization	$	50,219		$	50,219		$

In the table above, the number of shares outstanding on a pro forma and pro forma as adjusted basis as of December 31, 2003 does not include:

• 4,344,722 shares issuable upon the exercise of outstanding stock options at a weighted average exercise price of $0.62 per share;

• 1,941,579 additional shares reserved for issuance under our 1999 stock plan, as of December 31, 2003; and

• 764,766 shares issuable upon the exercise of outstanding warrants and purchase rights at a weighted average exercise price of $2.41 per share, which do not expire upon the consummation of this offering.

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DILUTION

If you invest in our common stock, your interest will be diluted immediately to the extent of the difference between the public offering price per share of our common stock and the pro forma net tangible book value per share of our common stock after this offering. As of December 31, 2003, our pro forma net tangible book value was approximately $50.2 million, or $1.51 per share of common stock. Pro forma net tangible book value per share represents the amount of our total tangible assets less total liabilities, divided by shares of common stock outstanding after giving effect to (1) the automatic conversion of all outstanding shares of convertible preferred stock into common stock and (2) the exercise of warrants to purchase 183,631 shares of common stock at an exercise price of $1.55 per share, upon the consummation of this offering.

Dilution in pro forma net tangible book value per share represents the difference between the amount per share paid by buyers of shares of our common stock in this offering and the pro forma net tangible book value per share of our common stock immediately following this offering.

After giving effect to the receipt of the net proceeds from our sale of shares of common stock in this offering at an assumed initial public offering price of $             per share and after deducting estimated underwriting discounts and commissions and the estimated offering expenses, our pro forma net tangible book value as of December 31, 2003 would have been approximately $             million, or $             per share of common stock. This represents an immediate increase in pro forma net tangible book value of $             per share to existing stockholders and an immediate dilution of $             per share to new investors purchasing shares at the initial public offering price. The following table illustrates the per share dilution:

Assumed initial public offering price per share			$
Pro forma net tangible book value per share as of December 31, 2003	$	1.51
Increase in pro forma net tangible book value per share attributable to new investors
Pro forma net tangible book value per share after this offering
Dilution per share to new investors			$

The following table summarizes, as of December 31, 2003, on the pro forma basis described above, the number of shares of common stock purchased from us, the total consideration paid to us and the average price per share paid by existing stockholders and by new investors purchasing shares of common stock in this offering, before deducting estimated underwriting discounts and commissions and estimated offering expenses:

	Shares Purchased			Total Consideration				Average Price Per Share
	Number	Percent		Amount		Percent
Existing stockholders	33,294,571	%		$	61,722,696	%		$	1.85
New Investors
Total		100.0	%	$		100.0	%

If the underwriters’ over-allotment option is exercised in full, the following will occur:

• the number of shares of common stock held by existing stockholders will decrease to approximately             % of the total number of shares of our common stock outstanding after this offering; and

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• the number of shares held by new investors will be increased to             , or approximately              %, of the total number of our shares of our common stock outstanding after this offering.

The above discussion and tables assume no exercise of any stock options or warrants to purchase common stock outstanding as of December 31, 2003, other than warrants to purchase 183,631 shares of common stock at an exercise price of $1.55 per share prior to the closing of this offering. As of December 31, 2003, there were outstanding options to purchase 4,344,722 shares of common stock at a weighted average exercise price of $0.62 per share and outstanding warrants and purchase rights to purchase 764,766 shares of common stock at a weighted average exercise price of $2.41 per share, which do not expire upon the consummation of this offering. If any of these are exercised, there will be further dilution to new public investors.

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SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data should be read in conjunction with, and are qualified by reference to, our consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this prospectus. The statement of operations data for the years ended December 31, 2001, 2002 and 2003, and the balance sheet data at December 31, 2002 and 2003, are derived from, and are qualified by reference to, our consolidated financial statements that have been audited by PricewaterhouseCoopers LLP, independent accountants, which are included elsewhere in this prospectus. The statement of operations data for the year ended December 31, 2000 and the balance sheet data at December 31, 2000 and 2001 are derived from our audited financial statements not included in this prospectus. The statement of operations data for the year ended December 31, 1999 and the balance sheet data at December 31, 1999 are derived from our unaudited financial statements not included in this prospectus. The historical results presented below are not necessarily indicative of future results.

	Years Ended December 31,
	1999			2000			2001			2002			2003
Consolidated Statement of Operations Data:	(in thousands, except per share data)
Revenue	$	—		$	3,801		$	14,678		$	40,587		$	90,480
Operating expenses:
Cost of revenue		152			1,637			5,823			6,951			8,843
Product and technology development		1,739			5,134			4,841			3,294			3,533
Sales and marketing		4,800			21,652			16,918			21,560			36,922
General and administrative		671			3,411			3,372			7,374			10,695
Stock-based expense(1)		8			121			16			2			3,969
Total operating expenses		7,370			31,955			30,970			39,181			63,962
Income (loss) from operations		(7,370	)		(28,154	)		(16,292	)		1,406			26,518
Other income (expense):
Interest expense		(362	)		(1,249	)		(1,734	)		(1,354	)		(564	)
Interest and other income, net		69			2,077			772			53			330
Income (loss) before income taxes		(7,663	)		(27,326	)		(17,254	)		105			26,284
Benefit from (provision for) income taxes		—			(2	)		—			(14	)		8,572
Net income (loss)	$	(7,663	)	$	(27,328	)	$	(17,254	)	$	91		$	34,856
Per share data:
Net income (loss) per share(2):
Basic	$	(0.91	)	$	(2.66	)	$	(1.73	)	$	0.00		$	1.41
Diluted		(0.91	)		(2.66	)		(1.73	)		0.00			0.98
Weighted average common shares outstanding:
Basic		8,393			10,261			9,963			24,189			24,696
Diluted		8,393			10,261			9,963			30,069			35,433
Pro forma net income per share (unaudited):
Basic														1.41
Diluted														0.98
Pro forma weighted average common shares outstanding (unaudited):
Basic														24,696
Diluted														35,433
	December 31,
	1999			2000			2001			2002			2003
Consolidated Balance Sheet Data:	(in thousands)
Cash and cash equivalents	$	8,143		$	24,077		$	11,056		$	7,573		$	14,945
Short-term investments		—			7,008			—			—			10,924
Working capital		5,522			23,874			7,451			6,856			41,506
Total assets		9,615			39,752			19,813			23,717			71,675
Long-term liabilities		118			2,989			2,239			584			4,612
Convertible preferred stock, convertible preferred stock warrants and purchase rights		14,610			63,142			63,142			63,142			63,196
Total stockholders’ deficit		(7,857	)		(34,958	)		(52,143	)		(51,929	)		(12,977	)
(1)   Stock-based expense can be allocated to the following:
Cost of revenue	$	—		$	—		$	—		$	—		$	222
Product and technology development		—			1			3			—			778
Sales and marketing		8			—			5			2			1,955
General and administrative		—			120			8			—			1,014
Total stock-based expense	$	8		$	121		$	16		$	2		$	3,969

(2) See Note 2 of the notes to our consolidated financial statements for a description of the method that we used to compute the net income (loss) per share amounts.

26

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read together with our consolidated financial statements and related notes that appear elsewhere in this prospectus. The following 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. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in “Risk Factors.”

Overview

We pioneered, developed and operate a leading online behavioral marketing platform that enables us to deliver, manage and analyze highly targeted online advertising campaigns.

Sources of Revenue

We derive our revenue from the sale and delivery of online advertising through a variety of vehicles, including “pop-under” ads, which open in the background of a user’s desktop, “pop-up” ads, which open a new window in the foreground of the user’s desktop, “slider” ads, which emerge from the lower right corner of the desktop and close automatically, and our SearchScout service. Our SearchScout service delivers a pop-under page of search results, including paid listings advertisements, in response to commercial keyword searches. SearchScout can also display a pop-under page of search results when a consumer exhibits certain commercial behaviors, such as viewing a travel website.

We generally invoice our advertisers, or agencies representing multiple advertisers, on a monthly basis following the delivery of advertising impressions, which are displays of a particular advertisement. Our customers are generally billed based on a cost per thousand advertising impressions delivered and/or cost-per-click basis, which is measured when a user clicks through an online advertisement. Our advertising sales contracts are generally short-term in nature.

We launched our SearchScout service in 2002 and initially derived revenue for this service from agreements with several Internet search providers. Presently, Yahoo!’s Overture Services division provides us with all of our paid listings for SearchScout. Overture pays us an amount based on a specified percentage of the gross revenue generated by Overture when a user clicks on one of the SearchScout paid listings. Revenue from Overture accounted for 31% of revenue in 2003 and we expect it will account for a substantial portion of our revenue in the foreseeable future. For a further description of our agreement with Overture, please see “Business—Key Strategic Relationships.”

Revenue is recognized in the period the advertising services are delivered to the advertising customer, provided that there is persuasive evidence of an arrangement, the price to the advertising customer is fixed or determinable and collectibility is reasonably assured.

Our revenue growth in dollars in 2003 was fueled by an increase in the number of advertising impressions delivered and, to a lesser extent, increased advertising rates. The increase in advertising impressions was a result, in part, of the first full year of operation of our SearchScout service. We believe our future revenue growth will rely on increasing the number of advertising impressions we display and developing and expanding other applications for our platform. In 2003, we had approximately 425 advertising customers, compared to approximately 350 in 2002.

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Sales and Marketing

We expect that our future growth will continue to depend on our ability to attract and maintain a large audience of users to whom we can display advertisements and to attract advertisers. The responsiveness of our audience will also continue to affect our ability to generate revenue from our user base. We currently attract our audience by distributing software products that include our GAIN AdServer software using the following methods:

• web advertisements offering Internet users the opportunity to install our free software products; and

• distribution arrangements with third parties whose downloadable software products include our GAIN AdServer software, such as Sharman Networks’ KaZaA Media Desktop.

The advertising fees paid to websites for the promotion of our own software products, the fees we pay to the third parties with whom we have distribution arrangements and costs to promote our services for advertisers are included in sales and marketing expenses and, in general, are expensed as incurred. One notable exception is our agreement with Sharman Networks, under which we made a refundable advance payment that is recoupable against future payments under the agreement. For a further description of our agreement with Sharman Networks, please see “Business—Key Strategic Relationships.”

Expenses related to these web advertisements and distribution arrangements were approximately $19.3 million for the year ended December 31, 2003, $8.2 million for the year ended December 31, 2002 and $6.6 million for the year ended December 31, 2001. We expect that these costs will continue to be an important component of our operating expenses in future periods because of the high turnover of our user base and our need to attract advertisers.

Litigation

We are involved in several lawsuits that relate to the display of our advertisements to our users while they are viewing web pages. These claims have been brought in state and federal courts and involve a variety of theories, including trademark and copyright infringement and unfair competition. Where we have been able to estimate the possible loss or range of loss associated with the resolution of these legal proceedings, we have recorded a liability. The outcome in any of these legal proceedings is uncertain, and a settlement amount or damages award in excess of the recorded liability, or an adverse change in the estimated loss may have a material adverse effect on our financial position, results of operations and cash flows. In addition, if any of our currently pending litigation or any future litigation were determined adversely to us, we could be enjoined from delivering advertisements to our users, or from engaging in other business practices fundamental to our business. For a further description of our current material litigation, please see “Business—Legal Proceedings.” Others may commence litigation against us in the future, and accordingly, we may incur additional litigation expenses in future periods.

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Results of Operations

The following table presents consolidated statement of operations data for each of the periods indicated as a percentage of revenue.

	Year Ended December 31,
	2001		2002		2003
Revenue	100.0	%	100.0	%	100.0	%
Operating expenses:
Cost of revenue	39.7		17.1		9.8
Product and technology development	33.0		8.1		3.9
Sales and marketing	115.3		53.1		40.8
General and administrative	23.0		18.2		11.8
Stock-based expense	0.1		0.0		4.4
Total operating expenses	211.1		96.5		70.7
Income (loss) from operations	(111.1	)	3.5		29.3
Other income (expense):
Interest expense	(11.8	)	(3.4	)	(0.6	)
Interest and other income, net	5.3		0.1		0.3
Income (loss) before income taxes	(117.6	)	0.2		29.0
Benefit from income taxes	0.0		0.0		9.5
Net income (loss)	(117.6	)%	0.2	%	38.5	%

Comparison of Years Ended December 31, 2003 and 2002

Revenue

	Years Ended December 31,				Percent Change
	2002		2003
	(in thousands)
Revenue	$	40,587	$	90,480	122.9	%

Our revenue growth in 2003 was largely attributed to an overall increase in the number of advertising impressions delivered and an increase in the average advertising rates. In particular, we experienced rapid growth in revenues from our SearchScout service, which contributed $35.1 million in revenue in 2003 as compared to $3.5 million in 2002. For 2003, Overture accounted for 31% of revenue, and for 2002, one customer, Avenue A accounted for 21% of revenue.

International revenue, which we define as revenue generated from our customers with billing addresses outside the United States, accounted for 15% of revenue for 2003 and 13% of revenue for 2002, increasing to $13.3 million from $5.2 million. No single international region accounted for more than 10% of revenue in 2003 or 2002. Substantially all of our revenue to date has been denominated in U.S. dollars, although in the future, as we continue our international expansion, some portion of revenue may be denominated in foreign currencies.

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Operating Expenses

Cost of revenue

	Years Ended December 31,				Percent Change
	2002		2003
	(in thousands)
Cost of revenue	$	6,951	$	8,843	27.2	%

Our cost of revenue consists of compensation and benefits for personnel in our network and data center operations and technical support, broadband fees, server and network equipment hosting services, consulting fees, depreciation and amortization expense for our server, storage and network equipment and certain internally-developed software costs. The increase in cost of revenue in 2003 was primarily due to an increase of $1.0 million in compensation and benefits expenses related to an increase in personnel, an increase of $467,000 in depreciation expense for server, storage and network equipment and an increase of $387,000 for bandwidth and hosting services related to our increased network traffic and the opening of our third hosting/disaster recovery site. As a percentage of revenue, cost of revenue declined in 2003 due primarily to economies of scale in our network infrastructure. We expect that our cost of revenue will continue to increase as we expand our operations.

Product and technology development

	Years Ended December 31,				Percent Change
	2002		2003
	(in thousands)
Product and technology development	$	3,294	$	3,533	7.3	%

Our product and technology development expenses consist primarily of compensation and benefits for our product and technology development personnel. These personnel develop new product offerings, reporting systems and advertising campaign management tools, and connect our software with the software products of our distribution partners. The increase in product and technology development expenses in 2003 was primarily attributable to an increase of $916,000 in compensation and benefits expenses related to an increase in development personnel, offset in part by a decrease of $491,000 in expenses as a result of a net increase in capitalization of software development costs and a decrease of $137,000 in overhead allocations. As a percentage of revenue, product and technology development expenses decreased in 2003 due primarily to our rapid revenue growth in 2003. We expect product and technology development expenses to continue to increase as we increase the number of our personnel to enhance our product offerings, reporting capabilities and campaign management tools.

Sales and marketing

	Years Ended December 31,				Percent Change
	2002		2003
	(in thousands)
Sales and marketing	$	21,560	$	36,922	71.3	%

Our sales and marketing expenses consist of compensation, benefits and travel expenses for personnel in sales, client services, marketing, business development and marketing analytics and advertising and distribution costs. The sales and marketing expenses are attributable both to our efforts to increase our advertising revenues and to maintain and expand our audience of users. The largest component of the increase in sales and marketing expense in 2003 was

30

attributable to an increase of $11.0 million in advertising and distribution costs, including costs related to the agreement we entered into with Sharman Networks in September 2003. An additional $3.0 million of the increase in sales and marketing expenses was for compensation and benefits due to increases in domestic sales and marketing personnel. We expect our sales and marketing expenses to increase in the future, as costs related to advertising and promoting our products and services increase and as we continue to expand our domestic and international sales and marketing operations. As a percentage of revenue, sales and marketing expenses decreased in 2003, as a result of our rapid revenue growth.

General and administrative

	Years Ended December 31,				Percent Change
	2002		2003
	(in thousands)
General and administrative	$	7,374	$	10,695	45.0	%

Our general and administrative expenses consist of compensation and benefits of general and administrative personnel and of legal, accounting and bad debt expense. The increase in general and administrative expenses in 2003 was primarily due to an increase of $2.0 million attributable to increased legal expenses and an increase of $945,000 in increased compensation and benefits related to increased general and administrative personnel. Legal expenses accounted for $6.7 million of general and administrative expenses in 2003, or 7.4% of revenue, compared to $4.7 million, or 11.6% of revenue, in 2002. We expect legal expenses to remain a major expense in the future, as it is uncertain when any of the pending litigation involving us will be settled or decided in the courts, or if new litigation or regulatory issues will arise. We expect that our non-legal general and administrative expenses will increase as we expand our operations and incur additional costs as a result of becoming a public company.

Stock-based expense

	Years Ended December 31,				Percent Change
	2002		2003
	(in thousands)
Stock-based expense	$	2	$	3,969	*

* Not meaningful.

We incurred stock-based expense of $4.0 million in 2003 and $2,000 for 2002 related to the grant of stock options. In connection with certain stock option grants to employees in 2003, we recorded approximately $12.3 million of deferred stock-based expense for the excess of the estimated fair value of the shares of common stock subject to such options over the exercise price of these options at the date of grant. We are amortizing deferred stock-based expense over the vesting periods of the individual options, using the accelerated option method. Outstanding options will continue to vest over the next four years. At December 31, 2003, we had $8.5 million in deferred stock-based expense on our balance sheet. Future compensation expense from options granted through December 31, 2003 is estimated to be $5.2 million in 2004, $2.4 million in 2005, $800,000 in 2006 and $80,000 for 2007. These amounts may decrease if stock options for which deferred stock-based expense has been recorded are forfeited through cancellation or repurchase prior to vesting.

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Interest expense

	Years Ended December 31,				Percent Change
	2002		2003
	(in thousands)
Interest expense	$	1,354	$	564	(58.3	)%

Interest expense consists of interest payments on our line of credit, equipment leases and loans, as well as amortization of a loan discount associated with the fair value of warrants issued in connection with our financing activities. The decrease was due to the elimination of interest expense and loan discount expense arising from the amortization of the apportioned fair market value of purchase rights associated with $5.0 million of subordinated debt.

Interest and other income, net

	Years Ended December 31,				Percent Change
	2002		2003
	(in thousands)
Interest and other income, net	$	53	$	330	522.6	%

Interest and other income, net consists primarily of interest income from cash balances and gains and losses relating to the disposition of assets and other miscellaneous items. The increase in interest and other income, net in 2003 was primarily due to a $250,000 favorable lawsuit settlement with one of our equipment vendors in 2003.

Benefit from (provision for) income taxes

	Years Ended December 31,					Percent Change
	2002			2003
	(in thousands)
Benefit from (provision for) income taxes	$	(14	)	$	8,572	*

* Not meaningful.

As of December 31, 2003, we determined that it was more likely than not that we would realize all of our available net deferred tax assets in the carryforward period. As a result, we determined that it was no longer necessary or appropriate to maintain a valuation allowance related to deferred tax assets, which had been established in each year from inception to 2002. Accordingly, we recorded an $8.6 million tax benefit in our statement of operations and an $11.7 million deferred tax asset on our balance sheet as of December 31, 2003. We incurred insignificant pre-tax income in 2002 and, therefore, recorded insignificant amounts of federal and state income taxes.

At December 31, 2003, we had federal and state net operating loss carryforwards of approximately $16.3 million and $41.6 million, respectively, available to offset future regular taxable income. If not utilized, the federal net operating losses will expire in 2021. The state net operating losses will expire between 2007 and 2012.

The Tax Reform Act of 1986 limits the use of net operating loss and tax credit carryforwards in certain situations where changes occur in the stock ownership. We have federal and state net operating losses of approximately $2.5 million that are subject to annual limitations of $38,000.

Benefit from income taxes was $8.6 million for fiscal year 2003. The effective tax rate for 2003 was 32.6%. Our future effective income tax rate depends on various factors, such as

32

pending tax law changes including the tax benefit from research and development credits, potential limitations on the use of state net operating losses and the geographic composition of our pre-tax income.

Comparison of Years ended December 31, 2002 and 2001

Revenue

	Years Ended December 31,				Percent Change
	2001		2002
	(in thousands)
Revenue	$	14,678	$	40,587	176.5	%

The increase in revenue in 2002 was due to an increase in the number of advertising impressions delivered, including $3.5 million of revenue from SearchScout, which was introduced in 2002. For 2002, one customer, Avenue A, accounted for 21% of revenues, and for 2001, Providian Financial Services accounted for 14% of revenue. In 2002, we had approximately 350 customers, compared to approximately 185 in 2001.

International revenue accounted for 13% and 10% of revenue for 2002 and 2001, respectively, increasing to $5.2 million in 2002 from $1.4 million in 2001. No single international region accounted for more than 10% of revenue in either 2002 or 2001.

Operating Expenses

Cost of revenue

	Years Ended December 31,				Percent Change
	2001		2002
	(in thousands)
Cost of revenue	$	5,823	$	6,951	19.4	%

The increase in cost of revenue in 2002 was primarily due to an increase of $368,000 in depreciation expense for server, storage and network equipment, an increase of $339,000 for bandwidth and hosting services related to our increased network traffic and the opening of our second hosting site and an increase of $166,000 in compensation and benefits expenses related to an increase in personnel. We were able to realize significant savings in 2002 by renegotiating our bandwidth and hosting services agreements. As a percentage of revenue, cost of revenue decreased in 2002 due primarily to economies of scale in our network infrastructure.

Product and technology development

	Years Ended December 31,				Percent Change
	2001		2002
	(in thousands)
Product and technology development	$	4,841	$	3,294	(32.0	)%

The decrease in product and technology development expenses in 2002 was primarily attributable to a decrease of $1.1 million in compensation and benefits expenses related to a reduction in development personnel and a decrease of $477,000 in overhead allocated to product and technology development expenses. As a percentage of revenue, product and technology development expenses decreased in 2002 primarily due to our rapid revenue growth and development personnel reductions in 2002.

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Sales and marketing

	Years Ended December 31,				Percent Change
	2001		2002
	(in thousands)
Sales and marketing	$	16,918	$	21,560	27.4	%

The increase in sales and marketing expenses in 2002 consisted primarily of an increase of $2.3 million in compensation and benefits expenses related to increases in sales and marketing personnel and an increase of $1.6 million in expenses related to advertising and distribution of our products. As a percentage of revenue, sales and marketing expenses decreased in 2002, as a result of our rapid growth in revenue.

General and administrative

	Years Ended December 31,				Percent Change
	2001		2002
	(in thousands)
General and administrative	$	3,372	$	7,374	118.7	%

The increase in general and administrative expense in 2002 was primarily attributable to an increase in legal expenses to $4.7 million in 2002 from $769,000 in 2001. General and administrative expense decreased as a percentage of revenue from in 2002 as a result of our rapid growth in revenue.

Interest expense

	Years Ended December 31,				Percent Change
	2001		2002
	(in thousands)
Interest expense	$	1,734	$	1,354	(21.9	)%

The decrease in interest expense in 2002 was due to lower principal balances on debt and equipment leases and reduced loan discount expense arising from the amortization of the apportioned fair market value of purchase rights associated with $5.0 million of subordinated debt.

Interest and other income, net

	Years Ended December 31,				Percent Change
	2001		2002
	(in thousands)
Interest and other income, net	$	772	$	53	(93.1	)%

The decrease in interest and other expense, net was due to a decrease in the average cash balances for the period and a decrease in the average interest rates.

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Selected Quarterly Consolidated Financial Data

The following tables present our unaudited consolidated quarterly statements of operations data for each of the last eight quarters in dollars and as a percentage of revenue. This information has been derived from our unaudited financial statements. The unaudited financial statements have been prepared, in our opinion, on substantially the same basis as the audited financial statements included elsewhere in this prospectus and include all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of this information. You should read this information together with our audited consolidated financial statements and related notes included elsewhere in this prospectus. We expect our quarterly operating results to vary significantly from quarter to quarter, and you should not draw any conclusions about our future results from the results of operations for any quarter.

	Three Months Ended
	Mar. 31, 2002			Jun. 30, 2002			Sep. 30, 2002			Dec. 31, 2002			Mar. 31, 2003			Jun. 30, 2003			Sep. 30, 2003			Dec. 31, 2003
	(unaudited)
	(in thousands)
Revenue	$	5,340		$	8,583		$	11,535		$	15,129		$	16,487		$	21,085		$	23,622		$	29,286
Operating expenses:
Cost of revenue		1,599			1,479			1,797			2,076			2,160			2,129			1,809			2,745
Product and technology development		834			797			831			832			830			889			835			979
Sales and marketing		4,090			5,173			5,456			6,841			7,184			7,443			8,526			13,769
General and administrative		605			976			2,021			3,772			2,031			2,522			2,793			3,349
Stock-based expense		—			1			1			—			50			1,144			1,458			1,317
Total operating expenses		7,128			8,426			10,106			13,521			12,255			14,127			15,421			22,159
Income (loss) from operations		(1,788	)		157			1,429			1,608			4,232			6,958			8,201			7,127
Other income (expense):
Interest expense		(381	)		(364	)		(353	)		(256	)		(106	)		(141	)		(170	)		(147	)
Interest and other income, net		23			16			8			6			11			8			284			27
Income (loss) before taxes		(2,146	)		(191	)		1,084			1,358			4,137			6,825			8,315			7,007
Benefit from (provision for) income taxes		—			—			—			(14	)		(572	)		(1,208	)		(1,278	)		11,630
Net income (loss)	$	(2,146	)	$	(191	)	$	1,084		$	1,344		$	3,565		$	5,617		$	7,037		$	18,637

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	Three Months Ended
	Mar. 31, 2002		Jun. 30, 2002		Sep. 30, 2002		Dec. 31, 2002		Mar. 31, 2003		Jun. 30, 2003		Sep. 30, 2003		Dec. 31, 2003
Revenue	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Operating expenses:
Cost of revenue	30.0		17.2		15.6		13.7		13.1		10.1		7.7		9.4
Product and technology development	15.6		9.3		7.2		5.5		5.0		4.2		3.5		3.3
Sales and marketing	76.6		60.3		47.3		45.2		43.6		35.3		36.1		47.0
General and administrative	11.3		11.4		17.5		25.0		12.3		12.0		11.8		11.5
Stock-based expense	0.0		0.0		0.0		0.0		0.3		5.4		6.2		4.5
Total operating expenses	133.5		98.2		87.6		89.4		74.3		67.0		65.3		75.7
Income (loss) from operations	(33.5	)	1.8		12.4		10.6		25.7		33.0		34.7		24.3
Other income (expense):
Interest expense	(7.1	)	(4.2	)	(3.1	)	(1.7	)	(0.7	)	(0.7	)	(0.7	)	(0.5	)
Interest and other income, net	0.4		0.2		0.1		0.1		0.1		0.0		1.2		0.1
Income (loss) before taxes	(40.2	)	(2.2	)	9.4		9.0		25.1		32.3		35.2		23.9
Benefit from (provision for) income taxes	0.0		0.0		0.0		(0.1	)	(3.5	)	(5.7	)	(5.4	)	39.7
Net income (loss)	(40.2	)%	(2.2	)%	9.4	%	8.9	%	21.6	%	26.6	%	29.8	%	63.6	%

Sales and marketing expenses increased to $13.8 million in the fourth quarter of 2003 from $8.5 million in the third quarter of 2003 primarily due to our entering into an agreement with Sharman Networks in September 2003 that included a refundable advance payment that is recoupable against future payments.

General and administrative expenses increased in the third quarter of 2002 and in subsequent quarters due primarily to increased legal expenses primarily as a result of our litigation as described under “Business—Legal Proceedings.”

Operating expenses as a percentage of revenue generally decreased as a result of economies of scale associated with the growth of revenue through 2002 and 2003.

We recorded an $11.6 million tax benefit for the quarter ended December 31, 2003, because as of December 31, 2003, we determined that it was more likely than not that we would realize all of our available net deferred tax assets in the carryforward period. As a result, we determined that it was no longer necessary or appropriate to maintain a valuation allowance related to deferred tax assets, which had been established in each year from inception to 2002.

Liquidity and Capital Resources

From our inception in June 1998 through 2002, we funded our operations primarily through four issuances of convertible preferred stock that provided us with an aggregate net proceeds of approximately $60.2 million. Since January 1, 2003, we have funded our operations primarily through cash generated by our operating activities of our business. In addition, from inception, we have received $12.8 million from various equipment financing facilities and a $5.0 million note in 2000, which note was fully repaid in 2002. Cash, cash equivalents and short-term marketable securities totaled $25.9 million at December 31, 2003.

Operating activities

Net cash provided by operating activities was $25.1 million during 2003 and $2.4 million during 2002, and net cash used by operating activities was $16.0 million during 2001. We

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generated operating cash flow in 2003, due to our net income and depreciation and amortization and other non-cash charges reflected in the statement of operations, offset by movements in working capital, primarily deferred tax assets.

Our primary source of operating cash flow is the collection of accounts receivable from our customers. We measure the effectiveness of our collections efforts by an analysis of the average number of days our accounts receivable are outstanding.

Net accounts receivable increased to $16.3 million at December 31, 2003 from $9.8 million at December 31, 2002. The average days of sales outstanding, or DSO, in net accounts receivable improved to 48 days at December 31, 2003 as compared to 58 days at December 31, 2002. Our net accounts receivable and DSO are primarily impacted by payment terms offered and collection performance. DSO improved year-over-year due to increased customer prepayments and increased collection success. We expect that collections of accounts receivable and related DSO will fluctuate in future periods due to the timing and amount of our customers’ future payments, payment terms on customer contracts and the effectiveness of our collection efforts.

Our operating cash flows will continue to be impacted in the future by the timing of payments to our vendors for accounts payable. We endeavor to pay our vendors and service providers in accordance with the invoice terms and conditions, which generally provide a 30-day payment term. The timing of cash payments in future periods may be impacted by the nature of accounts payable arrangements.

A number of non-cash items have been charged to expense and reduced our net income in 2003. These items include depreciation of property and equipment, amortization of unearned deferred stock-based expense and other stock-based charges and provision for doubtful accounts. To the extent these non-cash items increase or decrease in amount and increase or decrease our future operating results, there will be no corresponding impact on our cash flows.

Investing activities

Net cash used by investing activities was $13.9 million during 2003 and $3.3 million during 2002, and net cash provided by investing activities was $5.8 million during 2001. Cash used in investing activities typically related to the purchase of property and equipment, primarily for the acquisition of computer network and storage equipment, capitalized software development costs, and short-term investments in interest-bearing, investment-grade instruments. Cash proceeds typically are comprised of the sale of short-term investments. We primarily invest excess cash in money market funds and other highly liquid securities with maturities of less than 90 days.

Currently, we expect our 2004 capital expenditures to be approximately $6.7 million. In the future, our ability to make significant capital investments will depend on our ability to generate cash flow from operations and to obtain adequate financing.

Financing activities

Net cash used in financing activities was $3.9 million in 2003, $2.6 million in 2002 and $2.8 million in 2001. Net cash used in financing activities during 2003 related to $2.0 million for payments for capital leases and $2.0 million for repayment of our asset-based line of credit. Net cash used in financing activities in 2002 was related to $4.7 million for principal repayments for

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notes and capital leases offset by a $2.0 million drawdown on our asset-based line of credit. For 2001, cash used in financing activities was primarily for $2.9 million for principal repayments for notes and capital leases.

We receive cash from the exercise of stock options and warrants. While we expect to continue to receive these proceeds in future periods, the timing and amount of such proceeds is difficult to predict and is contingent on a number of factors including the price of our common stock, the number of employees participating in our stock option plans and general market conditions.

We do not have any special purpose entities, and we do not engage in off-balance sheet financing arrangements, other than the operating leases for office space and computer equipment, which are listed in the table below.

In April 2003, we entered into a new line of credit agreement with a financial institution. This agreement allows us to borrow up to 70% of the value of eligible accounts receivable, up to a gross amount of $5.0 million. This line of credit bears interest at the lender’s prime rate, subject to a minimum of 4.25% per annum, and is collateralized by all of our assets. As of December 31, 2003, we had no balance outstanding under the line of credit. The line of credit is scheduled to expire in April 2004 and we do not intend to renew it.

Our principal commitments consist of obligations under leases for office space, computer equipment and furniture and fixtures, together with purchase commitments for bandwidth and hosting services. At December 31, 2003, the future minimum payments under these commitments were as follows:

	Payments Due by Period
	Less than 1 year		1-3 Years		4-5 Years		More than 5 years		Total
Operating lease commitments	$	1,918	$	4,318	$	1,895	$	—	$	8,131
Capital lease commitments		4,051		4,800		—		—		8,851
Other purchase commitments		592		—		—		—		592
Total	$	6,561	$	9,118	$	1,895	$	—	$	17,574

In April 2003, we established a $2.0 million master equipment lease line of credit. Advances against the line cannot be made more than 12 months from date of agreement. As of December 31, 2003, we had $334,000 available on the line of credit.

We expect to experience significant growth in our operating costs for the foreseeable future in order to continue our efforts to extend our global operations, particularly in the areas of sales and marketing. As a result, we estimate that these operating costs will use a significant portion of our cash resources. In addition, we may use cash resources to fund acquisitions of complementary businesses. Although we are regularly involved in discussions regarding business combinations, we do not have any present commitments or understandings with respect to any material acquisitions. We believe that our existing cash and cash equivalents will be sufficient to meet our working capital needs for at least the next 12 months. Thereafter, we may find it necessary to obtain additional debt or equity financing. In the event that additional financing is required, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when required, our business, operations and results will likely suffer.

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Critical Accounting Policies, Judgments and Estimates

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. Accordingly, our actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are described in Note 2 of the notes to our consolidated financial statements, and of those policies, we believe that the following accounting policies involve the greatest degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.

Revenue recognition. We derive our revenue from the sale and delivery of online advertising impressions, through vehicles such as pop-under, pop-up and slider ads, and pop-under search results from our SearchScout service, to users within the GAIN Network. Revenue is recognized in the period the advertising services are delivered to the advertising customer provided there is persuasive evidence of arrangement, the price to the advertising customer is fixed or determinable and collectibility is reasonably assured. We generally recognize revenue during the period our services are rendered to our advertising customers, based on agreed upon rates as specified in the underlying agreements. In addition, we perform credit reviews to evaluate a customer’s ability to pay. If we determine that collectibility is not reasonably assured, revenue is recognized as cash is collected.

The majority of our agreements with our advertising customers rely on impression and click-through data from our systems for billing purposes. For some of our agreements, we rely on our customers to report campaign performance to us, particularly those where the billable rate is determined by a revenue share arrangement. For our other advertising agreements, we rely on third-party Internet reporting services.

Advertising and distribution expenses. Advertising and distribution expenses are included in sales and marketing expenses and consist primarily of advertising fees paid to websites for the promotion of our software products, fees paid to third parties who distribute their own software products with which our GAIN AdServer software is included and costs to promote our services to advertisers. In general, these costs are expensed as incurred. An exception is our agreement with Sharman Networks, under which we made an advance payment that is recoupable against future revenue sharing payments. The advance payment is capitalized on our balance sheet as a prepaid expense as of December 31, 2003.

Accounting for internally-developed software. We account for internally-developed software in accordance with American Institute of Certified Public Accountants Statement of Position 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use.” We capitalize internal computer software development costs incurred during the application development stage, which is characterized by software design and configuration activities, coding, testing and installation. Capitalization of software costs ceases when the software implementation is substantially complete and the software is ready for its intended use. At that point, the capitalized costs are amortized to cost of revenue, sales and marketing expense and/or general and administrative expense, based on usage, over the software’s estimated useful life (generally one year) using the straight-line method. Training costs and maintenance are expensed as incurred while upgrades and enhancements are capitalized if it is probable that

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such expenditures will result in additional functionality. The estimated useful life is based on technical and marketing management judgment as to the product or feature life cycle.

When events or circumstances indicate the carrying value of internal use software might not be recoverable, we assess the recoverability of these assets by determining whether the amortization of the asset balance over its remaining life can be recovered through undiscounted future operating cash flows. The amount of impairment, if any, is recognized to the extent that the carrying value exceeds the projected discounted future operating cash flows and is recognized as a write down of the asset. In addition, if it is no longer probable that computer software being developed will be placed in service, the asset will be adjusted to the lower of its carrying value or fair value, if any, less direct selling costs. Any such adjustment would result in an expense in the period recorded. Based on our assessment as of December 31, 2003, we determined that no such impairment of internal-use software existed.

Accounting for stock-based awards. Pursuant to Statement of Financial Accounting Standards, or SFAS, No. 123, “Accounting for Stock-Based Compensation,” we account for employee stock options under Accounting Principles Board Opinion, or APB, No. 25, “Accounting for Stock Issued to Employees,” and follow the disclosure-only provisions of SFAS No. 123. Under APB No. 25, compensation expense is based on the difference, if any, on the date of the grant, between the estimated fair value of our shares and the exercise price of options to purchase that stock. For the purposes of estimating the compensation cost of our option grants in accordance with SFAS No. 123, the fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Because there has been no public market for our stock, our board of directors has determined the fair value of our common stock based upon several factors, including, but not limited to, our operating and financial performance, private sales of our common and preferred stock between third parties, issuances of convertible preferred stock and third-party valuations. We amortize the deferred compensation charges on an accelerated basis by charges to operations over the vesting period of the options or restricted stock, consistent with the methods described in FASB Interpretation No. 28. As of December 31, 2003, we had an aggregate of $8.5 million of deferred stock-based expense remaining to be amortized. We currently expect this balance to be amortized as follows: $5.2 million in 2004; $2.4 million in 2005; $800,000 in 2006; and $80,000 in 2007. We have elected not to record stock-based expense when employee stock options are awarded at exercise prices equal to the estimated fair value of our common stock at the date of grant. The impact of expensing employee stock awards using the Black-Scholes option-pricing model is further described in Note 2 of the notes to our financial statements.

We award a limited number of stock options and warrants to non-employees. We account for non-cash stock-based expense issued to non-employees in accordance with the provisions of SFAS No. 123 and Emerging Issues Task Force Pronouncement No. 96-18, “Accounting for Equity Investments That Are Issued to Non-Employees for Acquiring, or in Conjunction with Selling, Goods or Services.” For these options and warrants, we recognize the stock-based expense over the service period of the underlying awards, based on an estimate of their fair value on the vesting dates using the Black-Scholes option-pricing model. As of December 31, 2003, we had recognized compensation expense on all options and warrants issued to non-employees.

Accounting for income taxes. In preparing our consolidated financial statements, we assess the likelihood that our deferred tax assets will be realized from future taxable income. We establish a valuation allowance if we determine that it is more likely than not that some portion or all of the net deferred tax assets will not be realized. Changes in the valuation allowance are included in our statement of operations as provision for (benefit from) income taxes. We

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exercise significant judgment in determining our provisions for income taxes, our deferred tax assets and liabilities and our future taxable income for purposes of assessing our ability to utilize any future tax benefit from our deferred tax assets.

In determining that it was more likely than not that we would realize our deferred tax assets in the carryforward period, we evaluated the following factors:

• our historical trends related to revenue growth;

• our expansion plans for international sales operations; and

• our net operating loss carryforwards.

As of December 31, 2002, we had recorded a full valuation allowance against our deferred tax assets, due to uncertainties related to our ability to utilize our deferred tax assets, primarily consisting of certain net operating losses carried forward, before they expire. As of December 31, 2003, we released our valuation allowance because, based upon our recurring level of profitability, we believe that it is more likely than not that we will be able to utilize our deferred tax assets before they expire. Accordingly, we reversed an $11.6 million valuation allowance in the quarter ended December 31, 2003, which resulted in an $8.6 million tax benefit in our consolidated statement of operations for the year ended December 31, 2003.

Although we believe it is more likely than not that we will realize our net deferred tax assets, there is no guarantee this will be the case as our ability to use the net operating losses is contingent upon our ability to generate sufficient taxable income in the carryforward period. Periodically, we will be required to reassess our ability to realize the benefit of our net deferred tax assets. If we were to conclude it is more likely than not that we would not realize the benefit of our net operating losses, we may have to re-establish the valuation allowance and may therefore record a significant charge to our results of operations.

Recent Accounting Pronouncements

In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement No. 133 on Derivative Instruments and Hedging Activities.” SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts. SFAS No. 149 clarifies under what circumstances a contract with an initial net investment meets the characteristic of a derivative, clarifies when a derivative contains a financing component, amends the definition of an underlying to conform it to language used in FASB Interpretation, or FIN, No. 45, and amends certain other existing pronouncements. SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. All provisions of the Statement, except those related to forward purchases or sales of “when-issued” securities, should be applied prospectively. We do not currently have any instruments that meet the definition of a derivative, and therefore, the adoption of this Statement has had no effect on our consolidated financial position or results of operations.

In May 2003, the FASB issued SFAS 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity and further requires that an issuer classify as a liability (or an asset in some circumstances) financial instruments that fall within its scope because these financial instruments embody an obligation of the issuer. Many of these instruments were previously classified as equity. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period

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beginning after June 15, 2003. The adoption of SFAS No. 150 standard did not have a material impact on our financial position or results of operations.

In December 2003, the SEC released Staff Accounting Bulletin, or SAB, No. 104, “Revenue Recognition.” SAB 104 revises or rescinds portions of the interpretative guidance related to revenue recognition included in Topic 13 of the codification of the staff accounting bulletins. We have assessed the impact of SAB 104 and concluded that our adoption of SAB 104 did not have a material impact on our financial position or results of operations.

In January 2003, the FASB issued FIN No. 46, “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51.” FIN 46 requires certain variable interest entities to be consolidated by the primary beneficiary of the entity, if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. In December 2003, the FASB issued FIN 46-R (revised December 2003), “Consolidation of Variable Interest Entities” to address certain FIN 46 implementation issues. The effective dates and impact of FIN 46 and FIN 46-R are as follows:

• Special-purpose entities, or SPEs, created prior to February 1, 2003. We must apply either the provisions of FIN 46 or early adopt the provisions of FIN 46-R at the end of the first interim or annual reporting period ending after December 15, 2003.

• Non-SPEs created prior to February 1, 2003. We are required to adopt FIN 46-R at the end of the first interim or annual reporting period ending after March 15, 2004.

• All entities, regardless of whether an SPE, created subsequent to January 31, 2003. The provisions of FIN 46 were applicable for variable interests in entities obtained after January 31, 2003.

The adoption of the provisions applicable to SPEs and all other variable interests obtained after January 31, 2003 did not have a material impact our consolidated financial position, consolidated results of operations, or liquidity. We believe that the adoption of FIN 46-R will not have a material impact on our financial position or results of operations.

Qualitative and Quantitative Disclosures about Market Risk

As of December 31, 2003, we had cash, cash equivalents and both fixed and variable interest rate short-term investments of $25.9 million, which we held solely for non-trading purposes. The fixed rate investments may be subject to fair value risk and could decrease in value if market interest rates increase. A hypothetical increase in market interest rates by 10% from the market interest rates at December 31, 2003, would not cause the fair value of these short-term investments to change by a material amount. The variable rate investments may be subject to interest rate risk and a hypothetical decrease in market interest rates by 10% from the market interest rates at December 31, 2003, would not cause the interest income generated by these short-term investments to change by a material amount. Declines in interest rates over time will, however, reduce our interest income.

Although payments for our services are in U.S. dollars, our financial results could be affected by factors such as changes in foreign currency rates or weak conditions in foreign markets. A strengthening of the dollar could make our services less competitive in foreign markets and therefore could reduce our revenue. In the future, some portion of our revenue and costs may be denominated in foreign currencies. To date, exchange rate fluctuations have had little impact on our operating results.

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BUSINESS

Overview

We pioneered, developed and operate a leading online behavioral marketing platform that enables us to deliver, manage and analyze highly targeted online advertising campaigns. We target our advertisements to specific segments of our large permission-based audience of users based on a broad range of anonymously identified behaviors exhibited across the Internet. These behaviors include a number of commercial behaviors and lifestyle indicators that suggest commercial interests and purchase intent and are therefore valuable to advertisers. Since the launch of our services in 2000, we have grown rapidly by attracting a large number of advertisers and users. Our audience currently consists of more than 43 million users worldwide, and in 2003 our direct and indirect customers included approximately 425 advertisers, including many leading online advertisers such as Cendant, FTD, Netflix and Orbitz. Our goal is to leverage our online behavioral marketing platform to become one of the leading marketing services providers in the world.

Marketing is one of the largest industries in the United States and globally, consisting of mass-media advertising channels, such as television, radio and print, as well as direct marketing channels, such as direct mail, telemarketing, and catalogs. Despite the size and growth of the advertising and direct marketing industries, campaign effectiveness has been constrained by a number of factors. These factors include a limited ability to identify and isolate target market consumers, optimize delivery timing and measure the effectiveness of ad spending.

The Internet has emerged as a powerful mass medium and is beginning to have a profound impact on the marketing industry. The Internet differs from traditional advertising and direct marketing channels in two fundamental ways that can help enable highly-targeted online marketing on a large scale. First, the Internet is a two-way interactive medium, which offers the potential to help identify and target the commercial interests of an individual user. Second, the Internet is a mass medium for both viewing content and transacting commerce, which helps enable the delivery of marketing messages when consumers are actively shopping for a product or service. However, much online advertising still suffers from similar limitations as traditional mass media advertising and fails to take full advantage of the opportunities offered by the Internet for more targeted and effective advertising.

Our platform is designed to address the limitations of both traditional and online marketing by enabling advertisers to deliver highly targeted and effective online advertising campaigns to our audience and to analyze and enhance the effectiveness of these campaigns. Key advantages of this platform and solution include the ability to anonymously identify, gather and analyze a broad range of online behaviors across the Internet, to target users based on their exhibited behaviors and to deliver advertisements to those users at an optimal time for influencing purchase decisions and to measure, analyze and enhance campaign effectiveness.

We display ads through our proprietary online advertising network, the GAIN Network, which reaches our large, permission-based online audience. We attract our audience by including our GAIN AdServer software with consumer software products that are offered free of charge to Internet users in exchange for permission to display our targeted advertisements. Our GAIN Publishing unit publishes some of these software products, such as DashBar, Date Manager, Gator eWallet, Precision Time, WeatherScope and WebSecureAlert. We also enter into strategic relationships to include our GAIN AdServer software with free software products offered by third-party publishers, including DivXNetworks, iMesh and Sharman Networks, which publishes the KaZaA Media Desktop. For the year ended December 31, 2003, we generated revenue of $90.5 million, substantially all of which came from the sale of online advertising.

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Industry Background

Advertising and Direct Marketing

The marketing industry includes mass-media advertising channels, such as television, radio and print, that generally enable broad dissemination of advertisements, as well as direct marketing channels, such as direct mail, telemarketing and catalogs, that typically attempt to target individual consumers with particular offers. The intent of direct marketing is to help advertisers identify and target individual consumers and influence their commercial behavior. Direct marketing has increased over the past several years as advertisers have attempted to enhance the focus, targeting and effectiveness of their advertising.

Challenges of Traditional Advertising and Direct Marketing

In traditional mass media advertising and direct marketing, campaign effectiveness has been limited by a number of factors, including:

Limited ability to identify and isolate target market consumers. Traditional advertising and direct marketing channels are largely dependent on demographic targeting. While advertisers can target desired demographics through traditional media advertising channels, demographics are generally an imprecise and inefficient means of targeting. For example, an auto manufacturer might run a television commercial for a new sport utility vehicle during a sporting event to target 25-34 year-old male viewers, a segment with relatively high statistical correlation to sport utility vehicle, or SUV, buyers. Ideally, however, an advertiser would prefer to advertise to consumers demonstrating an interest in purchasing an SUV.

Limited ability to optimize delivery timing and context. Traditional advertising and direct marketing channels generally do not enable advertisers to deliver their marketing messages at a time and in a context that is optimal for influencing purchase decisions and other commercial behavior. For example, a car insurance company might purchase a 30-second radio advertisement to market the benefits of that particular insurer. While many people in the radio audience are potential auto insurance customers, few people in the audience are actively shopping for auto insurance at that particular moment. Ideally, an advertiser would like to deliver its marketing message when a consumer is actively shopping for a related product or service.

Limited ability to measure effectiveness of ad spending. Television, radio and print represent one-way communication media, where content is distributed from the programmer or publisher to the audience. Consumer response rates to advertisements in these media are therefore difficult to accurately identify, measure and analyze. Relatively little commerce is conducted via these media, which exacerbates the challenge of tracking conversion rates from advertisements to purchase activity. For example, an airline that posts an ad on a highway billboard, places an ad in a magazine or airs a television commercial promoting its new non-stop service has little means to directly track the effectiveness of these advertisements.

Waste. Traditional advertisers generally need to display their advertisements to a much larger audience than the particular segment (such as business travelers) that is being targeted. Even among the targeted segment, a significant amount of advertisements are not viewed and a significant amount of direct marketing material goes to waste. For example, a credit card company might send out a demographically-targeted direct mailing campaign to attract new card members. While many people to whom the mailing is addressed may be potential credit card customers, a significant number of the addressees will never even open the mailing to see the ad. Similarly, a hotel company might purchase a full-page ad in the business section of a newspaper hoping to attract more business travelers to its hotels. Many of the newspaper’s

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readers, however, may not see the ad because they may not read that section of the newspaper where the ad is run.

Online Advertising Market

The Internet has emerged as a powerful mass medium for information, communications and commerce, with over 204 million Internet users in the United States alone as of February 2004, according to Nielsen/NetRatings, an industry research firm. Following two years of decline, online advertising represented an estimated $7.2 billion market in the United States in 2003 according to Interactive Advertising Bureau, an industry trade group, in its Interactive Advertising Revenue Report. Forrester Research, a market research firm, projects that the online advertising market will grow at a 17.5% compound annual growth rate over the next five years to reach $15.6 billion during 2008. Key drivers of growth in the online advertising market include increased share of the overall advertising market, increased Internet and broadband use, and the proliferation of more targeted and effective online advertising delivery vehicles and formats, such as paid search and behavioral marketing.

The Internet differs from traditional advertising and direct marketing channels in two fundamental ways that could help enable highly-targeted online marketing on a large scale. First, as opposed to largely passive media such as radio and television, where information is broadcast to consumers, the Internet is a two-way medium through which information is exchanged interactively between businesses and consumers. Even very basic interactions with consumers, such as noting which web pages a consumer views, offer the potential to help identify and target the commercial interests of that consumer. Second, as opposed to content-oriented media, such as print publications and television, the Internet is a mass medium for both viewing content and transacting commerce. This characteristic can enable the delivery of marketing messages at the optimal time and in the optimal context — when consumers are actively shopping for a product or service.

One of the key growth drivers in online advertising is the proliferation of more targeted, measurable and effective online advertising vehicles and formats. The most significant example of this to date is paid search, which enables the delivery of advertising to a consumer who demonstrates a commercial or other interest by entering a particular search keyword or phrase. The paid search market in the United States has increased from approximately $927.0 million in 2002 to approximately $2.0 billion in 2003, according to eMarketer, an industry research firm. The paid search market is projected to grow at a 24.0% compound annual growth rate over the next five years to reach an over $5.6 billion market in 2008, according to Forrester Research.

Challenges of Online Advertising

Despite the promise of the Internet for enabling highly-targeted marketing on a large scale, many forms of online advertising still suffer from similar limitations as traditional mass media advertising and fail to take full advantage of the opportunities offered by the Internet for more targeted and effective advertising. According to a study by DoubleClick, an online marketing technology business, the average click-through rate on non-rich media online advertisements across the Internet was approximately 0.3% during the third quarter of 2003. Average cost per impression, or CPM, rates for online advertising have fallen from approximately $2.60 in 2001 to approximately $1.93 in 2003, according to industry research firm Jupiter Research.

Existing means of online advertising face significant challenges, including:

Limited ability to identify and target consumer behavior. Portals and other online media networks employ server-based ad delivery software that relies on user identification tags known

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as “cookies” to track consumer behavior for ad-targeting purposes. Cookies can only identify consumer behavior within the context of a particular online media network, which is usually only a fraction of any particular consumer’s activity across the Internet. An Internet portal can only track the web pages that a consumer views across its network of websites, but cannot track the pages viewed and other behavior for that consumer across the rest of the Internet. Because much commercial activity on the Internet takes place through traditional e-commerce sites such as Amazon.com, eBay and Walmart.com, an online media network’s profile for each consumer generally has too little information to optimize ad targeting. Further, while paid search represents a targeted and effective form of advertising, a consumer’s activity at a particular search engine represents only a small fraction of that consumer’s overall Internet usage and indications of commercial interest. Consumers, particularly those who frequently make online purchases, often view a merchant’s website by entering the web address into the Internet browser software directly or by other non-search driven means.

Limited ability to optimize delivery timing and context. Portals and other online media networks are limited to delivering ads to consumers during the time a consumer is viewing web pages displayed by that network, which frequently may not be the optimal time for influencing commercial behavior and purchase decisions as consumers may not be actively searching or shopping for a product at that time.

Limited ability to measure conversion rates and effectiveness. The Internet enables online merchants to measure the effectiveness of their campaigns through both click-through rates, which measure the average number of consumer clicks on ads per hundred ad impressions, and conversion rates, which measure the percentage of consumers who take a desired action, such as purchasing, subscribing for or downloading products or services. However, portals and other online media networks generally can measure the effectiveness of an advertisement based only on click-through rates. Portals and online media networks have only a limited ability to track purchases resulting from advertisements sold and are generally unable to track purchases that were not completed immediately following a click on an advertisement. This limitation inhibits the ability of portals and other media networks to optimize the pricing of their advertising.

Privacy concerns. Consumers, regulators and other privacy advocates have expressed strong concerns about potential linkages of consumer online behavior with personally identifiable information such as a person’s name, address, email address, credit card number or telephone number. Personally identifiable information can be highly valuable to advertisers because it allows them to market across different channels or target an individual consumer with personalized, and consequently more effective, messages and offers. While the Internet represents a unique platform for gathering and employing personally identifiable information for marketing purposes, the collection of personally identifiable information raises potential privacy and data security issues.

Our Solution

We pioneered, developed and operate a leading online behavioral marketing platform that enables us to deliver, manage and analyze highly-targeted online advertising campaigns. We target our advertisements to specific segments of our large, permission-based audience of users based on a broad range of anonymously identified behaviors exhibited across the Internet. Specific advantages of our platform and solution include:

Ability to anonymously identify, gather and analyze a broad range of online behaviors across the Internet. Through our proprietary GAIN AdServer software which is included with software products installed on a user’s personal computer, we can anonymously identify a

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broad range of online consumer behaviors exhibited by our users across the Internet. Unlike server-based online marketing approaches that employ “cookies” to track consumer behaviors, our client-based approach is not limited to identifying those behaviors exhibited while viewing web pages within a particular online media property or network. We can identify a broad range of behaviors that are valuable to advertisers because they suggest commercial interests and purchase intent. These behaviors include commercial behaviors, such as a user researching and shopping online for a personal computer, and lifestyle indicators, such as a user viewing web pages about planning a wedding. Anonymously identified behavioral data is gathered in a central database, analyzed by our proprietary software tools for key trends and statistics and maintained to be used for ad targeting purposes.

Superior targeting capabilities. We can target consumers that exhibit specific online behaviors. For example, an electronics retailer may want to target consumers that have researched or shopped for a DVD player within the past month. We can also target on the basis of competitive data. For example, an online travel site advertising with us can target users that frequently purchase airline tickets through websites other than the advertiser’s. Superior targeting capabilities can result in higher click-through, conversion and advertising pricing rates.

Enhanced delivery timing. To maximize campaign effectiveness, we can display advertisements at various points throughout the purchase cycle, from initial research to time of purchase. For example, we can display advertisements for an online travel company offering Hawaiian vacation packages either when a consumer is viewing websites relating to Hawaiian tourism or comparison shopping for airfares to Hawaii through various online travel sites.

Ability to measure, analyze and enhance campaign effectiveness. Through our proprietary software, we can anonymously identify commercial behavior for the purpose of measuring, analyzing and improving campaign effectiveness. For example, when we have displayed ads from a mortgage lender to consumers shopping for a home loan, we can demonstrate to the advertiser the effectiveness of the campaign by providing anonymous click-through and conversion rate data for the campaign. We can also provide in-depth analyses with competitive comparison data. For example, we can provide a telecommunications company with an analysis that highlights that advertisers’ market penetration, market share, customer loyalty and purchase rates among our users compared to other telecommunications companies. We also work with advertisers to help manage and maximize the effectiveness of campaigns by leveraging the analysis provided by our platform.

Network scale. With a current worldwide audience of over 43 million users in the GAIN Network, we enable advertisers to target significant numbers of users even in narrowly defined segments, such as prospective new SUV purchasers.

Robust, proprietary technology. The key components of our online behavioral marketing platform are based on proprietary, internally-developed software. Examples include our GAIN AdServer software, advertising campaign management tools, marketing analytics tools, software distribution technology and other software products.

Consumer privacy. In order to protect our users’ privacy, we do not identify or collect any personally identifiable information of our users. All of the behaviors that we identify, collect and analyze are anonymous. Users are identified only by random identification numbers assigned by us and behaviors are ascribed and advertisements delivered based on these identification numbers. In addition, we have designed our GAIN AdServer software to not interfere with other applications on users’ computers. For those users who wish not to have our GAIN AdServer software installed on their computers, we have created procedures designed to enable easy

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uninstallation. We are sensitive to the privacy concerns expressed by consumers, government and consumer advocacy groups and believe we have established best practices designed to respect consumer privacy.

Our Strategy

Our goal is to leverage our online behavioral marketing platform to become one of the leading marketing services providers in the world. Key elements of our strategy for achieving this goal include:

Increase number of behaviorally-targeted advertisements delivered by expanding our audience and increasing the range of online behaviors that we can anonymously identify. We intend to maintain and expand our audience by providing new consumer software products that include our GAIN AdServer software through a combination of increased internal development activities, marketing and distribution partnerships and potential acquisitions. We also intend to broaden the range of commercial behaviors we can anonymously identify. We believe these two factors will be key drivers of our ability to increase the volume of behaviorally-targeted advertisements we deliver.

Increase number of advertisers and revenue per advertiser. We intend to continue to increase our advertiser base and capture more spending per advertiser through increasing investment in sales and marketing, penetration of new advertiser industry sectors, continuing to demonstrate and enhance the effectiveness of our advertisements and expanding the applications of our platform.

Extend applications of our platform. While we have built a leading online marketing business based primarily on revenue from the GAIN Network, we are focused on expanding and diversifying into other applications of our platform. For example, we are developing BehaviorLink, an advertising service that we expect will enable us to display behaviorally- targeted banner and other display ads to our users through existing advertising placements on the web pages of partner sites.

Expand internationally. In 2003, approximately 85% of our revenue was derived from the United States and 15% was derived internationally. While we expect to continue to derive the majority of our revenue from the United States, a key part of our strategy is to grow our business in key international markets where we have a sufficient concentration of users and advertisers. Consistent with this strategy, we recently established sales operations in London and Tokyo.

Continue to increase awareness of behavioral marketing and our best practices and advocate the adoption of industry standards. We are sensitive to the privacy and other concerns of consumers, government and consumer advocacy groups and believe we have established best practices designed to ensure that the anonymity, privacy and security of our users are respected. We are dedicated to educating and informing consumers, government agencies and other constituencies about behavioral marketing and best practices. We will continue to advocate the establishment and adoption of industry standards by online marketers for respecting the privacy and other concerns of consumers.

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Advertiser Services

We deliver online advertisements through the GAIN Network, which currently reaches an audience of over 43 million users enabled with our GAIN AdServer software. We offer the following advertiser services:

• Consumer targeting. Our proprietary technology allows us to anonymously identify consumers exhibiting specific commercial behaviors and lifestyle indicators and to display targeted advertising to these consumers. Our ability to target, based on historical and real-time behavior, allows advertisers to effectively display contextual messages to our user base.

• Ad delivery. We display online advertisements through a variety of vehicles, including “pop-under” ads, which open in the background of a user’s desktop, “pop-up” ads, which open in the foreground of a user’s desktop, and “slider” ads, which emerge from the lower right corner of the desktop and close automatically. Our online ads can include rich media formats, such as animation, video and sound.

• Enhanced delivery timing. Through our proprietary technology, we can display advertisements based upon real-time consumer behavior, which allows advertisers to target consumers at various points during their online purchase cycle, from the time of search until purchase. This ability to deliver targeted advertisements to consumers at any time allows advertisers to time marketing messages to influence purchase decisions.

• Advertising campaign management. Our sales and marketing teams partner with advertisers to develop comprehensive online advertising campaigns. We also proactively monitor and adjust the performance of various aspects of an advertiser’s campaign on an ongoing basis to optimize effectiveness.

• SearchScout. Our SearchScout service delivers a pop-under page of paid listings in response to commercial keyword searches. For example, if a user executes a search for “airline tickets” using a search engine, SearchScout delivers a pop-under page of paid listings for the same keyword. SearchScout can also deliver a pop-under page of paid listings when a consumer exhibits certain commercial behaviors, such as viewing a travel website. Presently, Overture is the provider of the paid listings delivered by our SearchScout service.

• Research and analytics. We provide cost-effective customized marketing research and anonymously aggregated web usage data to advertisers. In addition, we use proprietary tools to provide detailed analytics that enable advertisers to create more effective and efficient marketing campaigns. These analytics allow advertisers to plan tailored marketing campaigns focused upon maximizing their return on investment. Additionally, through our Feedback Research division, we provide detailed analysis on customer loyalty, insights into which consumers are responding to advertisements and optimal media placement locations for advertisers.

Our Audience

Our worldwide audience, which currently includes more than 43 million active users, is one of the largest permission-based advertising audiences on the Internet. Our active user count refers to the number of personal computers enabled with our GAIN AdServer software that have interacted with our network within the past 30 days. We have a high turnover rate in our audience. We believe the first 30 days immediately following a new installation of a software product that includes our GAIN AdServer software is, in effect, a trial period, and we believe that, on average, only approximately one-half of these new installations will remain active after the initial 30-day period. New users can comprise a material percentage of our user base at any

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given time, particularly at times when we are actively trying to expand our user base, such as after we have introduced a new software product, launched a large marketing campaign or entered into a new distribution relationship with another software publisher. Even after the initial period of peak user turnover, each month many users uninstall the software product that includes our GAIN AdServer software.

We and third-party software publishers offer free software products to Internet users in exchange for permission to display advertisements from the GAIN Network when those users are viewing web pages. The ads are displayed by our GAIN AdServer software, which is included with these software products.

GAIN Publishing

Our GAIN Publishing group develops and publishes software products designed to attract users to the GAIN Network. Our current roster of GAIN Publishing software products include the following:

Product	Description
DashBar	Enables users to conduct a search from their browser using a toolbar
Date Manager	Displays current date in the system tray of a user’s computer, provides one click access to a calendar, and allows user to quickly set reminder alerts
Gator eWallet	Enables users to store in a digital wallet on their computer log-in IDs, addresses, emails and related information for repeated usage
Precision Time	Synchronizes a user’s computer clock with the U.S. Atomic Clock
WeatherScope	Displays local temperatures in the system tray of a user’s computer
WebSecureAlert	Helps protect the privacy and security of user information, including purging web history files and notifying the user of certain changes to browser settings

We offer our GAIN Publishing software products to consumers free of charge when included with our GAIN AdServer software and recently we began offering consumers the option to purchase the software products without the display of advertising for a fee. When the free versions of our GAIN Publishing software products are downloaded, users grant us permission to install our GAIN AdServer software on their personal computers and to display advertisements based upon the web pages that users view and other indicia of our users’ interests in the products or services offered by our advertisers. To date, substantially all of those who install our GAIN Publishing software products have elected to receive the free ad-supported versions. GAIN Publishing continually seeks to identify, develop and/or acquire new software products that will attract additional users to the GAIN Network. We sell and market our GAIN Publishing software products primarily through web advertisements.

Third-Party Software Publishers

We have also entered into relationships with third parties that distribute our GAIN AdServer software with their own software, including DivXNetworks, iMesh and Sharman Networks, the publisher of the KaZaA Media Desktop.

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The third-party software publishers typically offer consumers free versions of their software products that include our GAIN AdServer software. When the free versions of these third-party software products are downloaded, users grant us permission to install our GAIN AdServer software on their personal computers and to display advertisements based upon the web pages that users view. Typically a third-party software publisher receives a portion of the advertising revenue attributable to users obtained through that publisher.

Uninstalling our GAIN AdServer Software

Our GAIN AdServer software is designed to remain installed on a user’s personal computer so long as one or more of the GAIN-supported software products remains installed. If all of the GAIN-supported software products are uninstalled from a personal computer, our GAIN AdServer software is designed to remove itself automatically from that personal computer.

User Consent, Privacy and Attribution Policies

We adhere to user consent, privacy and attribution policies that we believe are among the most stringent in the industry. Prior to installing the software product including our GAIN AdServer software, all of our users must explicitly grant us permission to display advertisements to them. We believe obtaining this permission is critical to creating a positive user experience and maintaining the quality of the GAIN Network. We inform our users when major updates of our software occur, particularly when the functionality of our software changes.

It is our policy to identify all of the ads we serve, making it easy for users to identify content originating from the GAIN Network. All of our pop-up ads and slider ads and many of our pop-under ads carry five unique identifiers:

• GAIN label on the Windows title bar;

• GAIN logo at the bottom of the web page or advertisement;

• information describing the origin of the advertisement appearing at the bottom of the advertisement;

• a link at the top of the advertisement that provides the user additional information about GAIN Network advertisements and software products on a separate pop-up screen; and

• a “more info” link on the bottom of all pop-up and slider advertisements.

For these ads, users can click on a link at the bottom of the advertisements to learn more about the source of the ad and to receive information regarding our software. If a user wishes to discontinue using our software, we provide a link in these ads and the Windows programs folder to information that guides the user through the uninstall process.

Protecting our users’ privacy is one of our key priorities. In accordance with our privacy policy, which we also incorporate into our user agreement, we do not collect any personally identifiable information such as a user’s name, address, email address, credit card number or telephone number.

Customers

During 2003, we generated the majority of our revenue from GAIN Network online advertising, including direct or indirect sales to approximately 425 advertisers from diverse industries including online travel, retail/e-commerce, financial services, telecommunications and

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online personals. The following is a list of our top vertical markets, other than the search market, in the U.S. and the top advertisers in each of these markets for 2003:

Travel	Retail	Personals
Cendant Corporation Orbitz, Inc. priceline.com Incorporated Travelocity.com LP	Buy.com Inc. FTD.com, Inc. Netflix, Inc. Shopping.com	AmericanSingles.com (Matchnet PLC) Date.com Inc. eHarmony.com Inc. Matchmaker (Lycos, Inc.)

Financial Services	Telecommunications
Amerix Mortgage Corporation ING Direct Securities Inc. LowerMyBills.com Inc. RateMyMortgage, Inc.	goZing.com inPhonic, Inc. Motorola, Inc. Sprint Corporation

For the year ended December 31, 2003, we derived approximately 31% of our revenue from Overture, which we consider part of the search market.

Sales and Marketing

We market our services to advertisers through our sales organization. As of December 31, 2003, we had 23 sales representatives. In the United States, we currently have sales operations located at our headquarters in Redwood City, California and in other cities, including Austin, Chicago, Detroit, Los Angeles and New York. Internationally, we have sales operations in London and Tokyo. We intend to expand both our domestic and international sales and marketing efforts.

We conduct comprehensive marketing programs to support our direct sales efforts, promote our GAIN Publishing software products and increase awareness of the Claria brand. These programs include targeted public relations, online advertisements, print advertisements, direct mail campaigns, industry seminars, trade shows, and ongoing customer communications programs.

Key Strategic Relationships

Overture Services

Beginning in March 2003, we entered into agreements with Overture, which was subsequently acquired by Yahoo!, under which Overture provides us with paid listings for our SearchScout service. We share the advertising revenue generated by Overture when a user clicks on one of these paid listings. These agreements expire in September 2007, and the parties may terminate the agreements prior to expiration under certain circumstances, including failure to achieve specified levels of performance, breach of the agreement and litigation. For 2003, we derived approximately 31% of our revenue from Overture.

Sharman Networks

In September 2003, we entered into an agreement with Sharman Networks Ltd., which publishes the KaZaA Media Desktop, a file sharing software program. Under the agreement, our GAIN AdServer software is included with the free version of the KaZaA Media Desktop. We share with Sharman Networks the revenue we generate by displaying advertisements to KaZaA users. Under the agreement, the percentage of advertising revenue we pay to Sharman

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Networks is netted against an initial prepayment we made and the monthly advance payments we make based on the preceding month’s performance report. The agreement expires in September 2008 and is renewable for successive two-year terms unless either party gives 60 days written notice before the end of the renewal term. Starting in March 2005, Sharman can terminate if our payments to them do not reach specified levels, and starting in September 2006, Sharman can terminate for any reason upon 60 days notice. The parties may terminate the agreement under other circumstances, including if payments do not reach certain specified levels or if the number of software downloads do not meet specified levels. We have certain rights of exclusivity under the agreement over Sharman Network’s distribution of, affiliation with or promotion of products that compete with our GAIN AdServer software. We acquire a significant portion of our new registered users through downloads of the KaZaA Media Desktop.

Technology and Infrastructure

GAIN AdServer Software

Our GAIN AdServer software is installed with GAIN-supported software applications, including those developed internally and by third party software publishers. AdServer anonymously identifies a user’s commercial behavior and lifestyle indicators, interfaces with our database and server-based analytics tools and employs a complex set of contextual rules to select and display targeted advertising.

Some of the key behaviors collected by GAIN AdServer software include navigation metrics, search behavior, advertising display data, click-through and conversion metrics and geographic data. This data is tracked on an anonymous basis and does not include any personally identifiable information. Using proprietary algorithms, data collection is designed to exclude certain irrelevant information, and this data is subsequently transmitted to our servers. Our GAIN AdServer software is designed to minimize consumption of the processing resources and communication bandwidth of a user’s personal computer.

Installation of GAIN AdServer software is initiated through installing software products from one of various distribution programs and requires acceptance of a user agreement incorporating our privacy policy. Our installation process is designed to minimize the impact on the user’s available bandwidth through a gradual installation process using our proprietary technology. After initial installation, GAIN AdServer software automatically detects and downloads any available upgrades. GAIN AdServer software is designed to remain installed on a personal computer so long as one or more GAIN-supported software products remain installed on the personal computer. Additionally, the software includes tools that allow users to see at any time the list of GAIN-supported products they have installed.

Campaign Management Tools

Our campaign management tools compile and manage the various elements of advertising campaigns, including targeted behavior, insertion orders, display rules and creative formats. These tools are used by our sales organization to service our advertising customers.

Marketing Analytics Tools

Our proprietary analytics and reporting tools enable us to analyze user behavior, measure and improve campaign effectiveness and analyze internal performance. For example, our sales team uses the detailed analysis provided by these tools to help customers understand user behavior across their competitive landscape and advertising effectiveness across many metrics. Using these tools, we can measure actual consumer conversion rates for many advertisers by tracking user

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behavior from the point a consumer views a GAIN advertisement through completion of a purchase. Our business development team uses our analytics tools to evaluate the effectiveness of the individual online advertising placements we buy in order to expand our audience.

Server and Database Infrastructure

Our network infrastructure and operations are designed to deliver high availability, performance, security and scalability. We operate co-located server farms in Sunnyvale and Santa Clara, California and Chicago, Illinois. Our network infrastructure is designed to enable us to operate our ad serving business from any one of these facilities should the others be unavailable.

We also operate a scalable, redundant data center with large-scale databases where we store over 60 terabytes of anonymous usage data. We use extensive reporting and monitoring systems to ensure the integrity and availability of our networking infrastructure.

Intellectual Property

We rely on a combination of patent, trademark, copyright, and trade secret laws in the United States and other jurisdictions to protect our intellectual property rights. We protect our trade secrets by requiring employees, customers and others with access to our proprietary information to execute confidentiality agreements.

We have filed U.S. patent applications, however to date no patents have issued. It is possible that no patents will be issued from our applications or that any future patents that may be issued may be found invalid or unenforceable or otherwise be successfully challenged. It is also possible that any patents issued to us may not provide us with any competitive advantages, that we may not develop future proprietary products or technologies that are patentable, and that the patents of others may seriously limit our ability to do business. We intend to continue to assess appropriate occasions for seeking patent protection for those aspects of our technology that we believe provide significant competitive advantages.

Our U.S. registered trademarks include GAIN, Gator, the Gator eyes logo, Weatherscope and Precision Time. Our unregistered trademarks include Claria, the Claria logo, DashBar, the DashBar logo, Date Manager, EntryPass, the GAIN logo, Gator eWallet, SearchScout and WebSecureAlert. We also use other trademarks that have not been registered in the U.S.

Legal Proceedings

Between November 2001 and May 2003, we became a party to the disputes described below, almost all of which involve allegations that our delivery of online advertisements violates various trademark and copyright rights and constitutes unfair competition under United States federal and state law. The parties identified below who are adverse to us are referred to in this section as the Claimants.

• L.L. Bean, Inc.:  We filed two declaratory judgment actions against L.L. Bean. The first was filed in the U.S. District Court for the Northern District of California on March 19, 2001. The second was filed in the U.S. District Court for the District of Oregon on November 27, 2001 after jurisdictional challenges by L.L. Bean to the Northern California suit were sustained. That jurisdictional decision was subsequently reversed by the U.S. Court of Appeals for the Ninth Circuit in September 2003. On June 26, 2003, L.L. Bean filed an answer and counterclaims against us in one multidistrict litigation proceeding before the United States District Court for the Northern District of Georgia, which we refer to in this section as the MDL proceeding and which is described in detail below. Its counterclaims

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allege direct and contributory federal trademark infringement, federal unfair competition and false advertising, federal trademark dilution, state trademark infringement, state false advertising, direct and contributory copyright infringement, state unfair competition and deceptive trade practices, unjust enrichment, tortious interference with business relations, trespass to chattels, conversion, intentional interference with prospective economic advantage, computer trespass, enforcement of public right and interest.

• Six Continents Hotels Inc. and Inter-Continental Hotels Corporation:  On November 12, 2002, Six Continents Hotels and Inter-Continental Hotels filed an action against us in the U.S. District Court for the Northern District of Georgia. The complaint alleges federal false designation of origin and unfair competition, direct and contributory federal trademark infringement, federal and state trademark dilution, direct and contributory copyright infringement, deceptive trade practices, state unfair competition, computer trespass, unjust enrichment, and tortious interference with contractual relations and business relations.

• TigerDirect, Inc.:  On December 19, 2002, we filed a suit against TigerDirect in the U.S. District Court for the Northern District of California. On December 20, 2002, TigerDirect filed a separate suit against us in the U.S. District Court for the Southern District of Florida. After the suits were transferred to the MDL proceeding, TigerDirect served an amended complaint. The amended complaint alleges federal and state trademark infringement, federal unfair competition and false designation of origin, federal and state trademark dilution, interference with prospective economic advantage, unjust enrichment, state unfair competition, state deceptive and unfair trade practices, trespass to chattels, conversion, and copyright infringement. Both parties filed competing motions to dismiss, which were stayed pending a resolution of the MDL proceeding.

• The Hertz Corporation:  On January 31, 2003, Hertz filed an action against us in the U.S. District Court for the District of New Jersey. Hertz subsequently filed an amended complaint which alleges federal trademark infringement, federal false designation of origin, direct and contributory copyright infringement, tortious interference, and common law and computer trespass. Hertz filed a motion for a preliminary injunction with its initial complaint. The Court subsequently stayed the entire action pending transfer of it to the MDL proceeding. This action was then consolidated into the MDL proceeding, and Hertz did not renew its injunction motion in the MDL proceeding.

• True Communication, Inc.:  On April 15, 2003, True Communication, Inc. (doing business as Metrodate.com) filed a purported class action on behalf of itself and “all owners in the United States of commercial internet websites that have been obscured by unauthorized advertising placed by” us, in the Superior Court of California for the County of San Mateo. The complaint excludes from the class those entities that have been customers of ours. The complaint alleges unfair business practices under state law, unjust enrichment, trespass to chattels, intentional and negligent interference with prospective economic advantage, and intentional and negligent interference with contractual relations. We removed the action to the U.S. District Court for the Northern District of California on the basis that the claims pleaded were really copyright infringement claims, and the federal courts have exclusive jurisdiction over such claims, and the action was subsequently transferred to the MDL proceeding for consolidation with the other actions. True Communication moved to remand the case back to state court on the ground that the claims asserted in this action were different from those raised in the other cases in the MDL proceeding. The MDL judge presently has the motion for remand under submission for decision by him.

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• Wells Fargo & Company, WFC Holdings Corporation, Quicken Loans Inc.:  On May 27, 2003, these entities filed a suit against us in the U.S. District Court for the Eastern District of Michigan. The complaint alleges federal trademark infringement, federal unfair competition and false designation of origin, state unfair competition, violation of Michigan’s consumer protection act, federal trademark dilution, direct and contributory copyright infringement, tortious interference with prospective economic advantage, and trespass to chattels.

• Settled or Dismissed Cases:  Five other cases filed against us that became part of the MDL proceeding and that asserted similar claims against us are no longer pending. We settled claims filed by Extended Stay America, Inc., Pricegrabber.com, LendingTree, Inc., and United Parcel Service of America, Inc. Overstock.com voluntarily dismissed its claims against us.

In April 2003, a number of lawsuits that were then pending against us were consolidated for pre-trial purposes in the MDL proceeding. The Hertz, Wells Fargo, WFC Holdings, Quicken Loans, and True Communication actions were subsequently consolidated with the MDL proceeding. Extended Stay America, Overstock.com, Pricegrabber.com, LendingTree, and United Parcel Service of America actions were also transferred to the MDL proceeding, but were subsequently either settled or voluntarily dismissed. Currently, only the Six Continents Hotels, Inter-Continental Hotels, L.L. Bean, TigerDirect, Hertz, Wells Fargo, WFC Holdings, Quicken Loans and True Communication actions remain pending in the MDL proceeding. True Communication’s motion to remand its case to the California state courts remains pending, and certain of the other parties adverse to us in the MDL proceeding filed papers in support of True Communication’s request that its case be remanded. As stated above, that motion is under submission for decision. In the event that True Communication’s motion is granted, we would then be required to defend that action in California state court. There also is the potential for other, new actions in other jurisdictions, which could cause us to become subject to different or conflicting rulings on pre-trial motions, including preliminary injunctions and summary judgment motions.

The claims asserted by the various Claimants essentially allege that the display of our advertisements at the same time as our users are viewing the Claimants’ web pages and the means by which those advertisements are displayed violate federal laws relating to trademark, copyright and unfair competition, as well as similar state laws. Under the trademark infringement claims, the Claimants allege that our use of website addresses, or URLs, to trigger the display of advertisements, regardless of the form of the advertisement, is an unauthorized use of the Claimants’ trademarks to the extent those URLs also include the Claimants’ trademark terms, and also that the display of the advertisements is likely to cause confusion in the marketplace or that they constitute false advertising, resulting either in direct or contributory infringement and unfair competition by us. Many of the suits also allege dilution of the distinctiveness of the Claimants’ trademarks. The copyright infringement claims allege that our pop-up advertisements obscure and modify the appearance of the Claimants’ websites and thus infringe the Claimants’ copyrights in their websites, or copy some part of the Claimants’ websites or code making up their website displays. The balance of the non-trademark and non-copyright claims allege that the delivery of advertisements constitutes a variety of torts, including trespass on and conversion of the Claimants’ websites, unfair competition, interference with the Claimants’ actual and prospective business relationships, and, in a few of the actions, computer fraud. The claims are directed to all forms of advertisements that we sell (whether “pop-ups” or “pop-unders”). We have denied the claims and asserted various affirmative defenses, and are vigorously defending ourself against these claims.

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Discovery in the MDL proceeding is ongoing and is currently expected to be completed in June 2004. It is presently anticipated that the Claimants will file a consolidated summary judgment motion on the federal claims, and that we will file a cross-motion for summary judgment on the federal claims. The MDL court has stayed any litigation on the state law claims and on any damages claims. The current case schedule provides that cross-motions for summary judgment will be briefed by September 2004. We expect that a hearing will be held during the fourth quarter of 2004, and we do not presently expect a decision on the summary judgment motions to be rendered until at least the first quarter of 2005.

With the exception of the True Communications action, which is a purported class action, the other actions consolidated in the MDL proceeding seek preliminary and permanent injunctions prohibiting us from engaging in any action that would infringe, or would associate, or cause the public to associate, the advertisements delivered by us with, the trademarks and copyrighted websites of the respective named Claimants. The Claimants also variously seek the implementation of corrective advertising, unspecified damages, profits, attorneys’ fees, and delivery of infringing material for destruction. The True Communications action, which True Communication argues asserts claims only under state and common law, seeks injunctive and other relief on behalf of a purported nationwide class of owners and operators of Internet websites but which excludes from the class any entity that has used our advertising services.

In addition to these suits, an action was filed against us on June 25, 2002 in the U.S. District Court for the Eastern District of Virginia by WashingtonPost.Interactive Co., LLC, and others. That suit alleged that we had infringed the copyrights and trademarks of the sixteen named plaintiffs in that action. The plaintiffs simultaneously filed a motion seeking a preliminary injunction, which the court granted on July 16, 2002. The preliminary injunction enjoined us from, among other things, causing our pop-up advertisements to be displayed on any website owned by or affiliated with any of the named plaintiffs, altering or modifying or causing any other entity to alter or modify any part of a website owned by or affiliated with any of the named plaintiffs, infringing or causing any other entity to infringe the plaintiffs’ copyrights or trademarks, and from making any designation of origin that the named plaintiffs were the source or sponsor of our websites or advertising products. In January 2003, the parties entered into a confidential settlement of the lawsuit to the parties’ satisfaction. WhenU.com, one of our direct competitors, was recently similarly enjoined during the pendency of the case in a lawsuit based on similar claims by the U.S. District Court for the Southern District of New York. This decision is currently being appealed. However, there are two other recent decisions issued by federal courts favoring WhenU.com. The U.S. District Court for the Eastern District of Virginia, granted summary judgment in favor of WhenU.com, and the U.S. District Court for the Eastern District of Michigan that found in WhenU.com’s favor and denied the motion for preliminary injunction based upon the same type of claims.

Although we intend to vigorously defend these lawsuits, we are unable to predict the outcome of these lawsuits. Defending these claims has required us to incur significant legal fees and has diverted management’s time from other tasks related to operating the business. In addition, although the actions in the MDL proceeding each only seek relief with respect to the named plaintiffs (with the exception of the True Communication action which purports to speak on behalf of a class if a class is certified) any adverse decision will have a broad impact on our business.

We may not be successful in these lawsuits, and, if we are unsuccessful, we may be required to change our business practices that are currently critical to our ability to deliver contextual advertisements, such as being able to use a website address to trigger the delivery of an advertisement, and we could also be required to pay significant damages. In addition, we

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could be precluded from delivering some or all of our services. Further, if there were an outcome adverse to us in these proceedings, others could decide to pursue similar claims, which could subject us to litigation in additional courts throughout the United States. It then could be costly and difficult to defend these proceedings, particularly in light of adverse judicial decisions. Even if we are successful in this future litigation, defending the lawsuits may be expensive and may divert management’s attention from other business concerns and harm our business.

The Hertz Corporation recently obtained an interim injunction against us in Germany that prevents us from delivering advertisements while users are viewing the www.hertz.de website. This interim injunction was entered without our being provided an opportunity to contest the injunction. We could contest this injunction, however, we cannot assure you that we will be successful in doing so.

In the future, others could commence litigation related to our business practices in jurisdictions outside the United States. The laws of foreign jurisdictions with respect to these types of claims could differ significantly from United States federal or state law. Accordingly, even if there were a favorable outcome to the current litigation in the United States, this would not necessarily mean that we would be able to prevail in any litigation brought outside the United States.

In addition, we are also subject to various claims and legal actions that arise in the ordinary course of business.

Regulation

There is increasing awareness and concern among the general public and federal and state governments regarding marketing and privacy concerns, including those relating to online marketing. Legislation has been introduced, and in one case enacted, that may limit our ability to distribute or operate some or all of our products and services. In particular, legislation or regulation preventing the display of contextual ads, which generally include ads that are displayed while a consumer is viewing the website of other businesses, or imposing requirements applicable to the online distribution of software would severely restrict our ability to display ads using some or all of our services. For example, the legislature of the State of Utah recently enacted legislation that will become effective on May 3, 2004 that makes the delivery of contextual ads illegal and imposes substantial new requirements for online distribution of software such as our GAIN AdServer software. Unless this Utah legislation is overturned by the courts, we will be precluded from delivering some types of advertisements to our users in Utah. Until this legislation is overturned, we intend to take reasonable measures to ensure that our products and services will not be offered to users in Utah, for example we intend to require users of our GAIN AdServer software to affirm that they are not located in Utah. It may not be possible, however, to rely on such measures as a complete defense to violations of the Utah statute.

Legislation has also been introduced in the U.S. Congress and in some state legislatures that is designed to regulate “spyware,” which does not have a precise definition but is often defined as software installed on consumers’ computers without their informed consent and gathers and may disseminate information about the consumers, including personally identifiable information, without the consumers’ consent. Bills have been introduced in the U.S. Congress to prohibit the installation of software on a computer unless the user of the computer is notified and consents to the installation, such as the Safeguard Against Privacy Invasions Act in the House of Representatives and the SPY BLOCK Act in the Senate. The bill pending in the Senate would also require that reasonable procedures for uninstalling the software be provided. It is possible that this or any future legislation intended to regulate spyware could bring some or all of our services within its purview, which could prevent us from operating or distributing some or all of our services or which could require us to change our business practices.

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In addition, foreign legislation has been enacted, and further foreign legislation is pending, that is aimed at regulating the collection and use of personal data from Internet users. For example, the European Union has adopted directives to address privacy and electronic data collection concerns, which limit the manner in which the personal data of Internet users may be collected and processed. Similar legislation, known as the Online Privacy Protection Act, has been introduced in the U.S. Senate and is pending.

The regulatory environment with respect to online marketing practices is rapidly evolving. The Federal Trade Commission, or FTC, has increasingly focused on issues affecting online marketing, particularly online privacy and security issues. For example, on April 19, 2004, the FTC will host a one-day workshop that is open to the public to address the issues surrounding the distribution and effects of spyware. One of the key areas of focus for the FTC is the difference between spyware and ad-serving software, such as our GAIN AdServer software. The enactment of new legislation, changes in the regulatory climate, or the expansion, enforcement or interpretation of existing laws could preclude us from offering some of all of our services or expose us to additional costs and expenses, require substantial changes to our business or otherwise substantially harm our business. Further, additional legislation or regulation could be proposed or enacted at any time in the future, which could materially and adversely affect our business.

Competition

We face competition from other online behavioral marketing companies, other online media and marketing technologies and services companies and traditional advertising and marketing services companies. In particular, we compete for advertisers’ budgets with:

• companies that offer online behavioral marketing technologies and services, such as WhenU.com;

• other online marketing technology and service providers, such as 24/7 Real Media, Advertising.com, aQuantive, DoubleClick, FindWhat, LookSmart and ValueClick;

• online media companies, including AOL, Ask Jeeves, Google, MSN and Yahoo!; and

• traditional media companies, including television, radio and print.

Because online behavioral marketing is an emerging industry, we expect that we will encounter additional competition from existing and new sources as we expand our service offerings and as the industry develops.

We expect this competition to continue. We believe that our ability to compete depends on many factors both within and beyond our control, including the following:

• the features of services offered by us or our competitors;

• pricing of advertising services in our industry;

• our ability to adapt and scale our services, and to develop and introduce new services that respond to market needs;

• the different technological, marketing and distribution challenges faced in maintaining our existing user base while expanding this base with new registered consumers;

• our ability to adapt to evolving technology and industry standards;

• our sales and marketing efforts; and

• the relative impact of general economic and industry conditions on either us or our competitors.

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We believe that we compete favorably with our competitors on the basis of these factors. For a further discussion, please see “Risk Factors—The market for online behavioral marketing is very competitive, and we may not be able to compete successfully.”

Employees

As of February 29, 2004, we had 190 employees, of which 22 were in operations, 43 were in product and technology development, 95 were in sales and marketing and 30 were in general and administrative. None of our employees is represented by a labor union. We consider our relationship with our employees to be good.

Facilities

Our executive offices, including our principal administrative and marketing facilities, occupy approximately 65,000 square feet of space we have leased in Redwood City, California under a lease that expires in December 2009. We also have sales offices in various locations throughout the United States and in London. We believe that our existing facilities are adequate to meet our requirements for the foreseeable future. If we require additional space, we believe that we will be able to obtain such space on acceptable, commercially reasonable terms. We also operate three co-located server farms in Sunnyvale and Santa Clara, California and Chicago, Illinois.

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MANAGEMENT

Executive Officers and Directors

The following table sets forth the name, age and position of each of our executive officers and directors as of February 29, 2004.

Name	Age	Position Held
Jeffrey McFadden	50	President and Chief Executive Officer and Chairman of the Board of Directors
Scott Eagle	45	Senior Vice President and Chief Marketing Officer
Anthony Martin	40	Vice President, Software Engineering
Richard Mora	57	Senior Vice President and Chief Financial Officer
Scott VanDeVelde	35	Senior Vice President, Global Sales
Mitchell Weisman	34	Senior Vice President, Corporate Development and Business Development
David Burow (1)(3)	51	Director
Joseph Cutts (1)	40	Director
John Giuliani (2)	42	Director
David Lee (1)	37	Director
Magdalena Yesil (2)	45	Director
Philip Young (3)	64	Director

(1) Member of the Audit Committee

(2) Member of the Compensation Committee

(3) Member of the Nominating and Corporate Governance Committee

Jeffrey McFadden, one of our founders, has served as our President and Chief Executive Officer and as a director since December 1998 and Chairman of the Board of Directors since March 2004. From June 1997 to June 1998, Mr. McFadden served as Chief Executive Officer of Thunderbird Networks, an Internet advertising company. From March 1995 to June 1997, Mr. McFadden was the Vice President of Business Development at Excite, Inc., a web portal company. From August 1994 to March 1995, Mr. McFadden was a consultant. Before joining Excite, Mr. McFadden served as Director of Product Marketing for Sun Microsystems from January 1991 to August 1994. Mr. McFadden began his career as a software developer at General Motors. Mr. McFadden received a B.M.E degree from the General Motors Institute.

Scott Eagle has served in various positions with us since January 1999, including as our Vice President of Marketing and most recently as our Senior Vice President and Chief Marketing Officer. Prior to joining Claria, Mr. Eagle was the Vice President of Marketing at Concentric Network Corporation, a network services provider, from 1996 to 1998. Mr. Eagle received a B.S. degree from the University of Pennsylvania Wharton School of Business.

Anthony Martin has served as our Vice President, Software Engineering since February 1999. From January 1995 to February 1999, Mr. Martin served in various positions at Visioneer, now known as ScanSoft, a software company, most recently as Director of Software Development. Prior to working at Visioneer, Mr. Martin was a Senior Software Architect for the Hewlett-Packard Company, a technology solutions provider. Mr. Martin received a B.S. degree from California Polytechnic University, San Luis Obispo.

Richard Mora has served as our Senior Vice President and Chief Financial Officer since January 2004. From June 2003 to December 2003, Mr. Mora was a philanthropist with educational organizations. From April 2003 to May 2003, Mr. Mora was a Vice President of Synopsys, Incorporated, an automation software and engineering services company, assisting

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in the transition of the sale of Numerical Technologies, Inc. to Synopsys, Inc. From May 1999 to March 2003, Mr. Mora served as Chief Financial Officer of Numerical Technologies, Inc., a semiconductor software and intellectual property company. From October 2001 to March 2003, Mr. Mora served as Numerical’s Chief Operating Officer. From August 1994 to April 1999, Mr. Mora was Chief Financial Officer and Vice President of Finance at Mattson Technologies, Inc., a semiconductor equipment manufacturer. From June 1998 to May 1999, Mr. Mora was also Vice President and General Manager of the High Temp Products Division at Mattson. Mr. Mora received a B.S. degree from Santa Clara University and is a Certified Public Accountant.

Scott VanDeVelde has served in various positions with us since March 2000, most recently as our Senior Vice President, Global Sales. From 1994 to March 2000, Mr. VanDeVelde was employed by Catalina Marketing, a provider of database marketing and Internet services, most recently as Senior Vice President of Business Development. Mr. VanDeVelde received a B.S. degree from Marquette University.

Mitchell Weisman, our Senior Vice President of Corporate Development and Business Development, joined us in October 1999. From 2002 through February 2004 he also served as our Senior Vice President, Finance. From July 1994 through September 1999, Mr. Weisman served in various capacities with companies related to William Farley, including Farley Industries, Fruit of the Loom, and Farley West Ventures. Mr. Weisman was an investment professional with Starwood Capital Group in 1993, where he helped to build Starwood Hotels & Resorts by working on Starwood’s first several hotel-related investments. Mr. Weisman received a B.S. degree from the University of Pennsylvania’s Wharton School of Business.

David Burow has served as a director since February 1999. Since December 2002, Mr. Burow has served as Chief Executive Officer of Arithmatica Incorporated, an electronic design automation software and engineering services company. From December 1997 to March 2002, Mr. Burow served as Senior Vice President of Synopsys, Incorporated. Mr. Burow is also currently a director of Arithmatica Incorporated as well as another private company. Mr. Burow received a B.S. degree from Purdue University and an M.B.A. degree from the University of Chicago.

Joseph Cutts has served as a director since February 2004. Since March 1997, Mr. Cutts has served in various positions with Electronics For Imaging, Inc., a digital imaging and print management solutions company, most recently as Chief Financial Officer and Corporate Secretary since April 2000. Between January 1999 and April 2000, he served as Vice President of Finance, and from March 1997 to January 1999, he served as Director of Finance. Mr. Cutts received a B.S. degree from the Pennsylvania State University and an M.M. degree from Northwestern University.

John Giuliani has served as a director since May 2002. From July 2001 to the present, Mr. Giuliani has been a self-employed consultant. Mr. Giuliani has served in various positions with Catalina Marketing Services, a provider of database marketing and Internet services, most recently as a consultant for them through September 2002. Mr. Giuliani was President of North America for Catalina Marketing from July 1994 through March 2001. Mr. Giuliani is a director of CoolSavings Inc., an online direct marketing and media company. Mr. Giuliani received a B.S. degree from the University of Illinois and an M.B.A. degree from Northwestern University’s Kellogg Graduate School of Management.

David Lee has served as a director since March 2000. Since February 2000, Mr. Lee has served as a managing director at Investor Growth Capital Inc., an equity advisor for Investor AB,

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an industrial holding company. From April 1998 to January 2000, Mr. Lee served as a principal with Moore Capital Management, a private equity company. Mr. Lee is also currently a director of Stepstone ASA, an employment services provider, and a Norwegian listed company. Mr. Lee received a B.A. degree from Harvard University and an M.B.A. degree from Harvard Business School.

Magdalena Yesil has served as a director since November 1999. Ms. Yesil has been a venture capitalist at Presidio Management Group, Inc./U.S. Venture Partners since February 1998. From August 1996 to December 1997, Ms. Yesil founded MarketPay Associates, L.L.C., a software company, and served as its CEO and President. From 1994 to August 1996, Ms. Yesil co-founded Cybercash, Inc., a secure electronic payment company, and served as Vice President of Marketing and Technology. She currently serves on the boards of 3Ware, Inc., Aqueduct, Inc., Dotomi, Inc., Everypath, Inc. and Klockwork, Inc. Ms. Yesil received a B.S. degree and an M.S. degree from Stanford University.

Philip Young has served as a director since November 1999. Since April 1990, Mr. Young has served as a Managing Member of Presidio Management Group Inc./U.S. Venture Partners. Mr. Young is also currently a director of Zoran Corporation, Aerogen, Inc. and numerous private companies. Mr. Young received a B.M.E. degree from Cornell University, an M.S. degree from George Washington University and an M.B.A. degree from Harvard Business School.

Board Composition

Our board of directors currently consists of seven members. Each director was elected either at a meeting of stockholders or by written consent of the stockholders and serves until our next annual meeting or until his or her successor is duly elected and qualified.

Magdalena Yesil, Philip Young, David Lee and Jeffrey McFadden were elected to our board of directors pursuant to a vote of the holders of our stock in accordance with a voting agreement between us and certain of our stockholders. Upon the consummation of this offering, these board representation rights will terminate and no stockholders will have any contractual rights with respect to board representation.

Effective upon the consummation of this offering, our board of directors will be divided into three classes of directors, who will serve staggered three-year terms, as follows:

• the terms of the Class I directors will expire at the annual meeting of stockholders to be held in 2005;

• the terms of the Class II directors will expire at the annual meeting of stockholders to be held in 2006; and

• the terms of the Class III directors will expire at the annual meeting of stockholders to be held in 2007.

Effective upon the consummation of this offering, our amended and restated certificate of incorporation will provide that the authorized number of directors may be changed only by resolution of the board. 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 directors. At each annual meeting of 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. The division of our board into these three classes may delay or prevent a change of our management or a change in control.

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Board Committees

Upon the consummation of this offering, our board will have, among others, the following committees: an audit committee; a compensation committee; and a nominating and corporate governance committee. The composition and responsibilities of each committee are described below. Members serve on these committees until their resignations or until otherwise determined by our board of directors.

Audit Committee

Our audit committee oversees our corporate accounting and financial reporting process. Among other matters, the audit committee evaluates the independent auditors’ qualifications, independence and performance; determines the engagement of the independent auditors; reviews and approves the scope of the annual audit and the audit fee; discusses with management and the independent auditors the results of the annual audit and the review of our quarterly financial statements; approves the retention of the independent auditors to perform any proposed permissible non-audit services; monitors the rotation of partners of the independent auditors on our engagement team as required by law; reviews our critical accounting policies and estimates; oversees our internal audit function; and annually reviews the audit committee charter and the committee’s performance.

The current members of our audit committee are Mr. Cutts, who is the chair of the committee, Mr. Lee and Mr. Burow. All members of our audit committee meet the requirements for financial literacy under the applicable rules of the SEC and Nasdaq. Our board has determined that Mr. Cutts is an audit committee financial expert as defined under the applicable rules of the SEC and has the requisite financial sophistication as defined under the applicable rules of Nasdaq. We believe Mr. Cutts, Mr. Burow and Mr. Lee are independent directors as defined under the applicable rules of the SEC and Nasdaq. The audit committee operates under a written charter that satisfies the applicable standards of the SEC and Nasdaq.

Compensation Committee

Our compensation committee reviews and recommends policy relating to compensation and benefits of our officers and employees. The compensation committee reviews and approves corporate goals and objectives relevant to compensation of the Chief Executive Officer and other executive officers, evaluates the performance of these officers in light of those goals and objectives, and sets the compensation of these officers based on these evaluations. The compensation committee also administers the issuance of stock options and other awards under our stock plans. The compensation committee will review and evaluate, at least annually, the performance of the compensation committee and its members, including compliance of the compensation committee with its charter. The current members of our compensation committee are Ms. Yesil and Mr. Giuliani. Mr. Giuliani will cease serving as a member of the compensation committee upon the consummation of this offering.

Nominating and Corporate Governance Committee

The nominating and corporate governance committee is responsible for making recommendations to the board regarding candidates for directorships and the size and composition of the board. In addition, the nominating and corporate governance committee is responsible for overseeing our corporate governance guidelines and reporting and making recommendations to the board concerning governance matters. The current members of the nominating and governance committee are Mr. Young and Mr. Burow. We believe that both members of our nominating and governance committee are independent directors under the applicable rules of the SEC and Nasdaq.

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Compensation Committee Interlocks and Insider Participation

None of the members of the compensation committee has at any time since our formation been an officer or employee of ours. None of our executive officers currently serves or in the past 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 or compensation committee.

Director Compensation

Our directors do not receive cash compensation for their services as directors, other than Mr. Cutts who receives an annual retainer of $20,000 and payments of $1,500 for each board meeting and $1,000 for each board committee meeting he attends, but are reimbursed for their reasonable expenses incurred on our behalf or in attending meetings. In February 2004, in connection with his appointment to our board, we granted Mr. Cutts an option to purchase 60,000 shares of our common stock at an exercise price of $4.75 per share. In May 2002, in connection with his appointment to the board, we granted Mr. Giuliani an option to purchase 75,000 shares of our common stock at an exercise price of $0.25 per share. These options were granted under our 1999 Stock Plan.

Members of our board who are not our employees or employees of any of our parent or subsidiaries will be eligible to receive automatic option grants under our 2004 Equity Incentive Plan. The option grants under the plan are automatic and nondiscretionary, and the exercise price of the options will be the fair market value of the common stock on the date of grant.

Under our 2004 Equity Incentive Plan, each non-employee director who becomes a member of our board of directors on or after the effective date of the registration statement of which this prospectus forms a part will be granted an option to purchase shares of our common stock. Immediately following each annual meeting of our stockholders, each eligible director will automatically be granted an option to purchase shares of our common stock if the director is a member of our board and has served continuously as a member of our board for a period of at least 12 months since the date of the director’s last stock option grant. If the director has served for a period of less than 12 months, the director will automatically be granted an option to purchase a prorated number of shares of our common stock. The options will have 10-year terms. They will terminate three months following the date the director ceases to be a director or consultant or 12 months following the director’s termination due to death or disability. All options granted to non-employee directors will vest over a four-year period so long as the director continues as a member of the board or as a consultant. In the event of our dissolution or liquidation or a change in control transaction, options granted to directors under the plan will become 100% vested and exercisable in full.

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EXECUTIVE COMPENSATION

The following table presents information about compensation for our fiscal year ended December 31, 2003 paid to or accrued for our Chief Executive Officer and each of our four other most highly compensated executive officers who were serving as executive officers as of the end of 2003. The compensation includes long-term compensation awards granted in 2003. The compensation table excludes other compensation in the form of perquisites and other personal benefits that constituted less than 10% of the total annual salary and bonus for the executive officer in 2003.

Summary Compensation Table

	Annual Compensation							Long-Term Compensation Awards	All Other Compensation(2)
Name and Principal Positions	Salary		Bonus		Other Annual Compensation			Securities Underlying Options
Jeffrey McFadden	$	300,000	$	246,694	$	—		787,500	$	270
President and Chief Executive Officer
Scott VanDeVelde		200,000		917,716		66,000	(1)	225,000		210
Senior Vice President, Global Sales
Mitchell Weisman		210,000		224,663		—		375,000		204
Senior Vice President, Corporate Development and Business Development
Scott Eagle		220,000		151,225		—		225,000		222
Senior Vice President and Chief Marketing Officer
Anthony Martin		178,500		84,350		—		200,000		204
Vice President, Software Engineering

(1) Represents an annual housing allowance.

(2) Amounts under All Other Compensation column represent life insurance premium payments.

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Option Grants in 2003

The following table presents information regarding stock option grants during 2003 to the executive officers named in the summary compensation table above. No options were exercised by these individuals during 2003.

Name	Individual Grants						Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term
	Number of Securities Underlying Options Granted	Percent of Total Options Granted to Employees in 2003		Exercise Price Per Share		Expiration Date	5%		10%
Jeffrey McFadden	787,500	21.6	%	$	0.25	4/23/2013	$	123,814	$	313,768
Scott VanDeVelde	225,000	6.2			0.25	4/23/2013		35,375		89,648
Mitchell Weisman	375,000	10.3			0.25	4/23/2013		58,959		149,413
Scott Eagle	225,000	6.2			0.25	4/23/2013		35,375		89,648
Anthony Martin	200,000	5.5			0.25	4/23/2013		31,445		79,687

All of these options were granted under our 1999 Stock Plan. Each of these options was immediately exercisable subject to our right of repurchase of the underlying shares that are not yet vested upon termination of the optionee’s employment with us, except for an option grant to Mr. McFadden for 387,500 shares, which first became exercisable on January 1, 2004. These options generally vest as to 50% of the shares subject to the option on the second anniversary of the vesting commencement date and as to 1/48 of the shares subject to the option each month thereafter. If we complete this offering, the optionees will receive accelerated vesting of the shares on the date this offering closes such that they will vest as to 1/48 of the shares subject to the option for each month since the vesting commencement date. Vesting will then continue at a rate of 1/48 per month. These options expire 10 years from the date of grant. These options were granted at an exercise price equal to the fair market value of our common stock, as determined by our board, as of the date of grant. In 2003, we granted to our employees options to purchase a total of 3,643,250 shares of our common stock.

Potential realizable values are computed by:

• multiplying the number of shares of common stock subject to a given option by the exercise price per share;

• assuming that the aggregate stock value derived from that calculation compounds at the annual 5% or 10% rates shown in the table for the entire 10-year term of the option; and

• subtracting from that result the aggregate option exercise price.

The 5% and 10% assumed annual rates of stock price appreciation are required by the rules of the SEC and do not represent our estimate or projection of future common stock prices.

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Option Values at December 31, 2003

None of the executive officers named in the summary compensation table exercised options during 2003. The following table presents the number of shares of our common stock subject to exercisable and unexercisable stock options held as of December 31, 2003 by the executive officers named in the summary compensation table. Also presented are values of “in-the-money” options, which represent the positive difference between the exercise price of each outstanding stock option and an assumed initial public offering price of $             per share. Each of the options listed in the table below was immediately exercisable upon grant, except for an option grant to Mr. McFadden for 387,500 shares, which became exercisable on January 1, 2004. If any of these options is exercised, the shares of common stock received that are not yet vested will be subject to our right of repurchase upon termination of the optionee’s employment with us.

	Number of Securities Underlying Unexercised Options at December 31, 2003		Value of Unexercised In-the-Money Options at December 31, 2003
Name	Exercisable	Unexercisable	Exercisable	Unexercisable
Jeffrey McFadden	400,000	387,500	$
Scott VanDeVelde	225,000	—		—
Mitchell Weisman	375,000	—		—
Scott Eagle	225,000	—		—
Anthony Martin	200,000	—		—

In addition, the following table presents the number of shares, issued to these executive officers upon exercise of immediately exercisable options granted in years prior to 2003, that remained subject to our right of repurchase as of December 31, 2003:

Name	Number of Shares Subject to Right of Repurchase
Jeffrey McFadden	—
Scott VanDeVelde	151,563
Mitchell Weisman	105,658
Scott Eagle	118,750
Anthony Martin.	93,750

Employee Benefit Plans

1999 Stock Plan

As of December 31, 2003, options to purchase 4,344,722 shares of our common stock were outstanding under our 1999 Stock Plan and 1,941,579 shares of our common stock were reserved for future issuance under that plan. The options outstanding as of December 31, 2003 had a weighted average exercise price of $0.62 per share. Our 2004 Equity Incentive Plan will become effective upon the completion of this offering. As a result, no options will be granted under our 1999 Stock Plan after the consummation of this offering. However, any outstanding options under our 1999 Stock Plan will remain outstanding and subject to the terms of our 1999 Stock Plan and stock option agreements until they are exercised or until they terminate or expire in accordance with their terms.

2004 Equity Incentive Plan

Our 2004 Equity Incentive Plan will become effective on the date of the consummation of this offering and will serve as the successor to our 1999 Stock Plan. In addition, shares under

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our 1999 Stock Plan not issued or subject to outstanding grants on the date of this prospectus and any shares issued under the 1999 Stock Plan that are forfeited or repurchased by us or that are issuable upon exercise of options that expire or become unexercisable for any reason without having been exercised in full, will become available for grant and issuance under our 2004 Equity Incentive Plan. Shares will be available for grant and issuance under our 2004 Equity Incentive Plan that are subject to:

• issuance upon exercise of an option granted under our 2004 Equity Incentive Plan and that cease to be subject to the option for any reason other than exercise of the option;

• an award granted under our 2004 Equity Incentive Plan and that are subsequently forfeited or repurchased by us at the original issue price; or

• an award granted under our 2004 Equity Incentive Plan that otherwise terminates without shares being issued.

Our 2004 Equity Incentive Plan will terminate after 10 years from the date on which our board approved the plan, unless it is terminated earlier by our board. The plan will authorize the award of options, restricted stock awards and stock appreciation rights and stock units (which may include stock bonuses).

Our 2004 Equity Incentive Plan will be administered by our compensation committee, all of the members of which are independent directors under applicable federal securities laws and outside directors as defined under applicable federal tax laws. The compensation committee will have the authority to construe and interpret the plan, grant awards and make all other determinations necessary or advisable for the administration of the plan.

Our 2004 Equity Incentive Plan will provide for the grant of both incentive stock options that qualify under Section 422 of the Internal Revenue Code and nonqualified stock options. Incentive stock options may be granted only to employees of ours or any parent or subsidiary of ours. All awards other than incentive stock options may be granted to our employees, officers, directors, consultants, independent contractors and advisors of ours or any parent or subsidiary of ours, provided the consultants, independent contractors and advisors render services not in connection with the offer and sale of securities in a capital-raising transaction. 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. The exercise price of incentive stock options granted to 10% stockholders must be at least equal to 110% of that value. The exercise price of nonqualified stock options will be determined by our compensation committee when the options are granted.

In general, options will vest over a four-year period. The term of options granted under our 2004 Equity Incentive Plan may not exceed 10 years.

Awards granted under our 2004 Equity Incentive 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. Unless otherwise restricted by our compensation committee, nonqualified stock options may be exercised during the lifetime of the optionee only by the optionee, the optionee’s guardian or legal representative or a family member of the optionee who has acquired the option by a permitted transfer. Incentive stock options may be exercised during the lifetime of the optionee only by the optionee or the optionee’s guardian or legal representative. Options granted under our 2004 Equity Incentive Plan generally may be exercised for a period of three months after the termination of the optionee’s service with us or any parent or subsidiary of ours. Options will generally terminate immediately upon termination of employment for cause.

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The purchase price for restricted stock will be determined by our compensation committee at the time of grant. Stock bonuses may be issued for past services or may be awarded upon the completion of services or performance goals.

If we are dissolved or liquidated or are subject to a change in control transaction, all outstanding awards may be assumed or replaced with a substitute grant by the successor company, if any.

2004 Employee Stock Purchase Plan

Our 2004 Employee Stock Purchase Plan will become effective on the date of this prospectus. Our 2004 Employee Stock Purchase Plan will be administered by our compensation committee. Our compensation committee will have the authority to construe and interpret the plan, and its decisions will be final and binding.

Employees generally will be eligible to participate in our 2004 Employee Stock Purchase Plan if they are employed by us, or our parent or any of our subsidiaries that we designate, before the beginning of the applicable offering period. They must also be so employed for more than 20 hours per week and more than five months in a calendar year. To be eligible, employees cannot be, and must not become as a result of being granted an option under the plan, 5% stockholders. Participation in our 2004 Employee Stock Purchase Plan will end automatically upon termination of employment for any reason.

Under our 2004 Employee Stock Purchase Plan, eligible employees will be permitted to acquire shares of our common stock through payroll deductions. Eligible employees may select a rate of payroll deduction between 1% and 15% of their eligible compensation, subject to maximum purchase limitations.

Except for the first offering period, each offering period under our 2004 Employee Stock Purchase Plan will be for two years and consist of four six-month purchase periods. Offering periods and purchase periods will begin on February 1 and August 1 of each year. The first offering period is expected to begin on the date of this prospectus. However, because the first day on which price quotations for our common stock will be available on the Nasdaq National Market may not be February 1 or August 1, the length of the first offering period may be more or less than two years, and the length of the first purchase period may be more or less than six months.

Our 2004 Employee Stock Purchase Plan will provide that, in the event of our proposed dissolution or liquidation, each offering period that commenced prior to the dissolution or liquidation will terminate upon the dissolution or liquidation unless otherwise provided by our compensation committee. In the event of a sale of all or substantially all of our assets, or our merger with or into another company, the plan will continue with regard to offering periods that commenced prior to the closing of the proposed transaction and shares will be purchased based on the fair market value of the surviving corporation’s stock on each purchase date, unless otherwise provided by our compensation committee.

The purchase price for our common stock purchased under the plan will be 85% of the lesser of the fair market value of our common stock on the first day of the applicable offering period or the last day of the applicable purchase period. The compensation committee will have the power to change the offering dates, purchase dates and duration of offering periods or purchase periods without stockholder approval, if the change is announced prior to the affected date or the beginning of the offering period.

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Our 2004 Employee Stock Purchase Plan is intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code. The plan will terminate 10 years from the date the plan was adopted by our board, unless it is terminated earlier under the terms of the plan. Our board will have the authority to amend, terminate or extend the term of the plan, except that no action may adversely affect any outstanding right to purchase shares previously made under the plan.

Except for the automatic annual increase of shares described above, stockholder approval will be required to increase the number of shares that may be issued, extend the term of the plan or to change the terms of eligibility under our 2004 Employee Stock Purchase Plan. Our board will be able to make amendments to the plan as it determines to be advisable if the financial accounting treatment for the plan ceases to be the financial accounting treatment in effect on the date the plan was adopted by our board.

401(k) Plan

We sponsor a defined contribution plan intended to qualify under Section 401 of the Internal Revenue Code, or a 401(k) plan. Employees are generally eligible to participate and may enter the plan on the date that the employee meets the participation requirements. Participants may make pre-tax contributions to the plan of up to 92% of their eligible compensation, subject to a statutorily prescribed limit. Each participant is fully vested in his or her contributions and the income earned on the contributions. We are permitted to make discretionary profit sharing contributions to the 401(k) plan as well as matching contributions in an amount not to exceed the amount of each participant’s pre-tax contribution, subject to statutorily prescribed limits. Contributions to the plan, and the income earned on these contributions, are generally not taxable to the participants until withdrawn. Participant contributions are held in trust as required by law. Individual participants may direct the trustee to invest their accounts in authorized investment alternatives.

Employment Contracts and Change of Control Arrangements

Each of the executive officers named in the summary compensation table above has signed an offer letter or employment agreement that provides that he is an at-will employee. The offer letters or employment agreements provide for salary, in some instances an initial annual bonus that is based upon our financial performance and the successful completion of specified performance objectives, stock options, and participation in our employee benefit plans. The terms of the offer letters regarding initial annual bonuses are no longer in effect. Bonuses for these executive officers are currently determined on a case-by-case basis by the compensation committee based on a combination of company and individual performance objectives.

Jeffrey McFadden

In February 1999, we entered into an employment agreement with Mr. McFadden. This agreement establishes Mr. McFadden’s annual base salary and eligibility for benefits and bonuses. Under this agreement, Mr. McFadden was granted an immediately exercisable option to purchase 3,080,000 shares of common stock, at an exercise price of $0.02 per share. Our right of repurchase as to these shares has now lapsed. Mr. McFadden will be entitled to certain benefits upon termination of his employment as follows:

• Prior to any change of control of Claria, if his employment is terminated without cause by us, he will be entitled to an amount of severance equal to three months’ salary, plus an additional month’s salary for each full year he has served with us, up to a cumulative maximum of 12 months. He will also be entitled to acceleration of vesting as to 25% of all his unvested Claria securities.

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• After a change in control of Claria,

- if he terminates his employment voluntarily because of a material adverse change in his responsibilities, causing such position to be of materially reduced stature or responsibility, a reduction in his base compensation or because of a requirement that he relocate to a facility or location beyond San Mateo County and more than 35 miles from Hillsborough, he will be entitled to acceleration of vesting of all his unvested Claria securities; and

- if he terminates his employment voluntarily because he is required to relocate beyond San Mateo County but within 35 miles from Hillsborough, he will be entitled to acceleration of vesting of one-eighth of all of his unvested Claria securities.

In either case, he will be entitled to receive the severance amount described in the first bullet above.

Scott Eagle

In March 1999, we entered into an employment agreement with Mr. Eagle. This agreement sets Mr. Eagle’s annual base salary and eligibility for benefits and bonuses. Under this agreement, Mr. Eagle was granted an immediately exercisable option to purchase 316,950 shares of common stock, at an exercise price of $0.02 per share. Our right of repurchase as to these shares has now lapsed. Mr. Eagle will be entitled to certain benefits upon termination of his employment as follows:

• Prior to any change in control of Claria, if his employment is terminated without cause by us or voluntarily by him because of a material reduction in his title or responsibilities, or a reduction of more than 5% in his base compensation or he is required to relocate beyond 50 miles from the Company’s current headquarters in Redwood City, California, he will be entitled to six months’ salary, paid over six months, and acceleration of six months of vesting of his unvested Claria securities.

• After a change of control of Claria, if his employment is terminated without cause by us or voluntarily by him because of a material reduction in his title or responsibilities, or a reduction of more than 5% in his base compensation or he is required to relocate beyond 50 miles from the Company’s current headquarters in Redwood City, California, then he will be entitled to the severance amount described in the bullet above, paid upon termination, and acceleration of vesting of the greater of 50% or six month worth of his unvested Claria securities.

Anthony Martin

In March 1999, we entered into an employment agreement with Mr. Martin. This agreement sets Mr. Martin’s annual base salary and eligibility for benefits and bonuses. Under this agreement, Mr. Martin was granted an immediately exercisable option to purchase 343,363 shares of common stock, at an exercise price of $0.02 per share. Our right of repurchase as to these shares has now lapsed. Mr. Martin will be entitled to certain benefits upon termination of his employment as follows:

• Prior to any change in control of Claria, if his employment is terminated without cause by us, he will be entitled to an amount of severance equal to six months’ salary, paid over six months, and acceleration of six months of vesting of his unvested Claria securities.

• After a change of control of Claria, if his employment is terminated without cause by us or voluntarily by him because of a material reduction in his title or responsibilities, or a reduction of more than 5% in his base compensation or he is required to relocate beyond

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50 miles from the Company’s current headquarters in Redwood City, California, he will be entitled to the severance amount described in the paragraph above, paid upon termination, and acceleration of vesting as to 50% of his unvested Claria securities.

Scott VanDeVelde

We entered into a retention agreement with Mr. VanDeVelde in March 2000. Under this agreement and pursuant to subsequent board resolutions, Mr. VanDeVelde will be entitled to acceleration of vesting of his unvested Claria securities, as described below, if:

• there is a change of control of Claria; and

• within one year of that change in control his employment is terminated without cause by us or voluntarily by him because of a material reduction in his responsibilities, or any reduction in his total current compensation (unless the decrease is similar to that for others who are similarly situated) or he is required to relocate beyond 50 miles from Claria’s current headquarters in Redwood City, California.

With respect to 625,000 shares of Claria stock, Mr. VanDeVelde will be entitled to acceleration of the vesting as to 50% of the unvested securities. With respect to his remaining, unvested Claria securities, he will be entitled to acceleration as to 25%.

Mitchell Weisman

We entered into a retention agreement with Mr. Weisman in February 2001. Under this agreement, Mr. Weisman will be entitled to acceleration of vesting as to 25% of his unvested Claria securities if:

• there is a change of control of Claria; and

• within one year of that change in control his employment is terminated without cause by us or voluntarily by him because of a material reduction in his responsibilities, or a reduction of more than 5% in his total current compensation or he is required to relocate beyond 50 miles from Claria’s current headquarters in Redwood City, California.

Richard Mora

We entered into a retention agreement with Mr. Mora in January 2004. Under this agreement, Mr. Mora will be entitled to the vesting of all his unvested shares of common stock if:

• there is a change of control of Claria; and

• Mr. Mora’s employment is terminated by us or the successor corporation without cause or voluntarily by him because:

- Mr. Mora is not given a bona fide offer to become the Chief Financial Officer of the successor corporation within 90 days of the completion of the change of control; and

- within the 30-day period immediately following the foregoing, Mr. Mora elects to terminate his employment voluntarily, provided, however, such termination shall not be effective until 6 months following the completion of the transaction or such earlier date as is acceptable to the acquiring company.

Acceleration of Certain Options Upon Initial Public Offering

In April 2003, we granted options to Mr. McFadden, Mr. Eagle, Mr. Martin, Mr. VanDeVelde and Mr. Weisman. These options will vest as to 50% of the shares subject to the option upon the second anniversary of the vesting commencement date and as to 1/48 of the shares subject to

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the option each month thereafter. If we complete this offering, the optionees will receive accelerated vesting of shares on the date this offering is consummated such that they will vest as to 1/48 of the shares subject to the option for each month since the vesting commencement date. Vesting will then continue at a rate of 1/48 per month.

Indemnification of Directors and Executive Officers and Limitation of Liability

Our certificate of incorporation includes a provision that eliminates, to the fullest extent permitted by law, the personal liability of a director for monetary damages resulting from breach of his fiduciary duty as a director.

Our bylaws provide that:

• we are required to indemnify our directors and officers to the fullest extent permitted by the Delaware General Corporation Law, subject to very limited exceptions;

• we may indemnify our other employees and agents as provided in indemnification contracts entered into between us and our employees and agents;

• we are required to advance expenses, as incurred, to our 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.

In addition to the indemnification required in our certificate of incorporation and bylaws, we have entered into indemnity agreements with each of our current directors and officers before the closing of this offering. These agreements provide for the indemnification of our directors and officers for all reasonable expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were our agents. We have also obtained directors’ and officers’ insurance to cover our directors, officers and some of our employees for liabilities, including liabilities under securities laws. We believe that these indemnification provisions and agreements and this insurance are necessary to attract and retain qualified directors and officers.

A stockholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions. At present, there is no pending litigation or proceeding involving any of our directors, officers or employees regarding which indemnification by us is sought, nor are we aware of any threatened litigation that may result in claims for indemnification.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

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RELATED PARTY TRANSACTIONS

Other than the employment arrangements described above in “Executive Compensation” and the transactions described below, since January 1, 2001 there has not been, nor is there currently proposed, any transaction or series of similar transactions to which we were or will be a party:

• in which the amount involved exceeds $60,000; and

• in which any director, executive officer, holder of more than 5% of our common stock or any member of their immediate family had or will have a direct or indirect material interest.

In March 2001, we approved a voluntary stock repurchase and stock option exchange program pursuant to which we repurchased for $1.15 per share (our estimate of fair market value on March 16, 2001) common stock held by certain employees and consultants, which they had acquired upon exercise of stock options, and cancelled the promissory notes these employees had executed in our favor. Six months and one day after this repurchase, we granted these employees new options. The new options had an exercise price of $0.10 per share, the then fair market value, gave the optionee the right to purchase a number of shares equal to the number of shares repurchased in the program and were subject to the same vesting schedule as the shares repurchased. Pursuant to this program, we repurchased 190,522 shares of common stock held by Mr. Weisman and cancelled the promissory note pursuant to which Mr. Weisman owed us $219,101, which was paid off from the proceeds.

In April 2001, under the program described above, we repurchased 425,000 shares of common stock from Mr. VanDeVelde and cancelled a promissory note pursuant to which Mr. VanDeVelde owed us $361,000. We forgave the approximately $6,000 balance of accrued but unpaid interest. We granted options to purchase 425,000 shares, at an exercise price of $0.10 per share, the then fair market value, six months and one day after the repurchase, and in December 2001, we paid Mr. VanDeVelde a cash bonus of approximately $21,000 to partially offset tax liabilities associated with the transaction.

In October 2001, we entered into a consulting agreement with Mr. Giuliani. In return for his consulting services, we granted Mr. Giuliani an option to purchase 9,000 shares of common stock at an exercise price of $0.10 per share. In May 2002, we granted Mr. Giuliani an option to purchase 4,500 shares of common stock at an exercise price of $0.25 per share for his consulting services, and in 2003, we granted Mr. Giuliani options to purchase 35,500 shares at an exercise price of $0.40 per share for additional consulting services he provided to us.

In May 2002, we loaned $82,418 to Mr. VanDeVelde in connection with his exercise of an option to purchase shares of our common stock. Mr. VanDeVelde executed a Pledge and Security Agreement and a promissory note in favor of us that bears no interest and will mature nine months after the completion of this offering. The full principal amount of the loan was outstanding as of February 29, 2003.

In February 1999, we loaned $61,292 to Mr. McFadden in connection with his exercise of an option to purchase shares of our common stock. Mr. McFadden executed a Pledge and Security Agreement and a promissory note in favor of us that bore an annual interest rate of 4.71%. In May 2002, the promissory note was cancelled and a new note was issued for $71,181, representing the principal balance and accrued interest through April 2002 for the previous note. The new note bears no interest and will mature nine months after consummation of this offering.

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In November 1999, we loaned a total of $14,825 to Mr. Weisman in connection with his exercise of two options to purchase shares of our common stock. Mr. Weisman executed Pledge and Security Agreements and promissory notes in favor of us that bore an annual interest rate of 6.08%. In May 2002, the promissory notes were cancelled and a new note was issued for $17,183, representing the principal balance and accrued interest through April 2002 for the previous notes. In addition, in May 2002, we loaned Mr. Weisman $49,003 in connection with his exercise of an option to purchase shares of our common stock. Both of these notes bear no interest and will mature nine months after consummation of this offering.

Since June 1, 2002, we have not made any loans to our executive officers.

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PRINCIPAL AND SELLING STOCKHOLDERS

The following table presents information regarding the beneficial ownership of our common stock as of February 29, 2004 and as adjusted to reflect the sale of the common stock in this offering by:

• each of the executive officers listed in the summary compensation table;

• each of our directors;

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

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

• each of the selling stockholders.

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to 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 February 29, 2004 are deemed to be outstanding and to be beneficially owned by the person holding the options 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.

The information presented in this table is based on 33,322,704 shares of our common stock outstanding on February 29, 2004 and assumes the conversion of our preferred stock to common stock and the exercise of warrants to purchase 183,631 shares of our common stock upon the consummation of this offering; and the number of shares of common stock outstanding after this offering includes                  shares of common stock being offered for sale by us in this offering. Unless otherwise indicated, the address of each of the individuals and entities named below is c/o Claria Corporation, 555 Broadway Street, Redwood City, California 94063.

	Number of Shares Beneficially Owned Prior to Offering			Number of Shares Being Offered	Shares Beneficially Owned After Offering
Name of Beneficial Owner	Number	Percentage of Shares Outstanding			Number	Percentage of Shares Outstanding
Named Executive Officers and Directors:
Philip Young (1)	5,104,839	15.3	%			%
Jeffrey McFadden (2)	3,835,900	11.2
Mitchell Weisman (3)	1,551,371	4.6
Scott Eagle (4)	1,248,950	3.7
Scott VanDeVelde (5)	1,050,000	3.1
Anthony Martin (6)	864,363	2.6
David Burow	214,516	*
John Giuliani (7)	124,000	*
Joseph Cutts (8)	60,000	*
David Lee	—	*
Magdalena Yesil	—	*
All 12 directors and executive officers as a group (9)	14,553,939	40.6

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	Number of Shares Beneficially Owned Prior to Offering			Number of Shares Being Offered	Shares Beneficially Owned After Offering
Name of Beneficial Owner	Number	Percentage of Shares Outstanding			Number	Percentage of Shares Outstanding
5% Stockholders:
Entities affiliated with U.S. Venture Partners VI, L.P. (10)	5,104,839	15.3	%			%
2180 Sand Hill Road, Suite 300 Menlo Park, California 94025
Andy Bechtolsheim (11)	2,372,903	7.1
Denis Coleman	2,303,300	6.9
Other Selling Stockholders:

* Less than 1%

(1) Represents 4,670,928 shares held by U.S. Venture Partners VI, L.P., 214,403 shares held by USVP VI Affiliates Fund, L.P., 137,831 shares held by USVP Entrepreneur Partners VI, L.P., and 81,677 shares held by 2180 Associates Fund VI, L.P. The address of the USVP entities is 2180 Sand Hill Road, Suite 300 Menlo Park, California 94025. Mr. Young is a managing member of Presidio Management Group VI, L.L.C., which is the general partner of each of these four entities. Mr. Young, in his capacity as a managing member of Presidio Management Group VI, L.L.C., may be deemed to have shared voting or dispositive power over these shares. Mr. Young disclaims beneficial ownership of the shares held by these entities except to the extent of his pecuniary interest in them.

(2) Includes 600,000 shares held by Mr. McFadden as the trustee of trusts for his minor children and 787,500 shares subject to options that are currently exercisable.

(3) Includes 129,032 shares held of record by Farley West Ventures, LLC, 107,258 shares held of record by Fullerton Capital Partners, L.P., 93,750 shares held of record by Liam Fullerton Ventures, LLC, 31,250 shares held of record by Liam Fullerton Ventures II, LLC and 10,726 shares subject to a warrant held of record by Fullerton Capital Partners, L.P. Mr. Weisman may be deemed to have shared or dispositive power over the shares and warrants held by these entities. Mr. Weisman disclaims beneficial ownership of the shares and warrants held by these entities except to the extent of his pecuniary interest in them. Also includes 375,000 shares held by Mr. Weisman subject to options that are currently exercisable and 4,032 shares subject to a warrant that is currently exercisable. Of the shares held by Mr. Weisman, 68,750 shares will remain subject to our right of repurchase as of 60 days following February 29, 2004.

(4) Includes 100,000 shares held by the Scott G. Eagle 2003 Grantor Retained Annuity Trust, dated November 21, 2003, 100,000 shares held by the Deborah K. Eagle 2003 Grantor Retained Annuity Trust, dated November 21, 2003, and 225,000 shares subject to options that are currently exercisable. Of the shares held by Mr. Eagle, 87,084 will remain subject to our right of repurchase as of 60 days following February 29, 2004.

(5) Includes 556,249 shares held of record by the VanDeVelde Family Revocable Trust, dated December 12, 2003, 50,000 shares held of record by the Scott VanDeVelde 2003 Grantor Retained Annuity Trust, dated December 12, 2003, 50,000 shares held of record by the Virginia VanDeVelde 2003 Grantor Retained Annuity Trust and 225,000 shares subject to options that are currently exercisable. Of the shares held by Mr. VanDeVelde, 91,667 will remain subject to our right of repurchase as of 60 days following February 29, 2004.

(6) Includes 200,000 shares subject to options that are currently exercisable. Of the shares held by Mr. Martin, 68,750 will remain subject to our right of repurchase as of 60 days following February 29, 2004.

(7) Includes 115,000 shares subject to options that are currently exercisable.

(8) Represents 60,000 shares subject to options that are currently exercisable.

(9) Of the shares held by all officers and directors as a group, 14,758 shares are subject to warrants that are currently exercisable, 2,487,500 shares are subject to options that are currently exercisable and 316,251 shares will remain subject to our right of repurchase as of 60 days following February 29, 2004. Also includes options to purchase 500,000 shares held by our Chief Financial Officer that are immediately exercisable.

(10) Represents 4,670,928 shares held by U.S. Venture Partners VI, L.P., 214,403 shares held by USVP VI Affiliates Fund, L.P., 137,831 shares held by USVP Entrepreneur Partners VI, L.P., and 81,677 shares held by 2180 Associates Fund VI, L.P.

(11) Includes 63,226 shares subject to a warrant that is currently exercisable.

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DESCRIPTION OF CAPITAL STOCK

Immediately following the closing of this offering, our authorized capital stock will consist of:

• 100,000,000 shares of common stock, $0.0001 par value per share; and

• 5,000,000 shares of preferred stock, $0.0001 par value per share.

As of February 29, 2004, and assuming the conversion of all outstanding convertible preferred stock into common stock, there were outstanding:

• 33,139,073 shares of our common stock held by approximately 270 stockholders, of which 1,346,473 shares were subject to our right of repurchase;

• 6,027,247 shares issuable upon exercise of outstanding stock options; and

• 916,139 shares issuable upon exercise of outstanding warrants or purchase rights.

Common Stock

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 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 certificate of incorporation, which means that the holders of a majority of the shares voted can elect all of the directors then standing for election.

No Preemptive or Similar Rights

Holders of our common stock do not have preemptive rights, and our common stock is not convertible or redeemable.

Right to Receive Liquidation Distributions

Upon our dissolution, liquidation or winding-up, the assets legally available for distribution to our stockholders are distributable ratably among the holders of our common stock, subject to the preferential rights and payment of liquidation preferences, if any, on any outstanding shares of convertible preferred stock.

Preferred Stock

Upon the closing of this offering, each outstanding share of convertible preferred stock will be converted into common stock.

Following this offering, we 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. Our board can also increase or decrease the number of shares of any series, but not below the number of

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shares of that series then outstanding, by the affirmative vote of the holders of a majority of our capital stock entitled to vote, unless a vote of any other holders is required by the certificate of designation establishing the series. Our board 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 control of Claria and may adversely affect the market price of our common stock and the voting and other rights of the holders of common stock. We have no current plan to issue any shares of preferred stock.

Warrants and Purchase Rights

There are outstanding warrants exercisable to purchase 16,667 shares of Series B convertible preferred stock which expire on June 14, 2004, 170,728 shares of Series C convertible preferred stock and 37,500 shares of Series D convertible preferred stock at an exercise price of $0.60 per share, $1.55 per share and $8.00 per share, respectively, subject to adjustment upon the occurrence of certain events including stock splits or mergers. Of these warrants, warrants to purchase 151,373 shares of Series C convertible preferred stock will expire upon the closing of an initial public offering unless they are exercised before the closing. A warrant to purchase 19,355 shares will expire two years after the closing of this offering, a warrant to purchase 18,750 shares will expire on October 11, 2010 and a warrant to purchase 18,750 shares will expire on April 7, 2013.

In addition, there are outstanding rights to purchase 691,244 shares of Series C convertible preferred stock at an exercise price of $2.17 per share. The purchase rights will terminate 45 days from receipt by the holder of notice that our board has completed an initial public offering. We have also granted a purchase right to another entity with respect to up to $1,000,000 of securities issued in any future private equity financings that we complete.

The warrants and purchase rights to purchase preferred stock that are not exercised prior to the consummation of this offering will become exercisable for common stock.

Registration Rights

Following this offering, the holders of approximately 18,663,776 shares of our common stock issued upon conversion of our convertible preferred stock will be entitled to rights with respect to the registration of these shares under the Securities Act, as described below.

Demand Registration Rights

At any time beginning six months after the consummation of this offering, the holders of at least a majority of the shares having registration rights can request that we register all or a portion of their shares, as long as the total offering price of the shares to the public would exceed $10.0 million. We will only be required to file two registration statements upon exercise of these demand registration rights. We may postpone the filing of a registration statement for up to 120 days once in a 12-month period if we determine that the filing would be seriously detrimental to us and our stockholders.

Piggyback Registration Rights

If we register any of our securities for public sale, the stockholders with registration rights will have the right to include their shares in the registration statement. However, this right does not apply to a registration relating to any of our employee benefit plans or a corporate

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reorganization. The managing underwriter of any underwritten offering will have the right to limit, due to marketing reasons, the number of shares registered by these holders to 20% of the total shares covered by the registration statement.

Form S-3 Registration Rights

Stockholders with registration rights can request that we register their shares on Form S-3 if we are eligible to file a registration statement on Form S-3 and if the aggregate price to the public of the shares offered is at least $1.0 million. The stockholders may only require us to file two registration statements on Form S-3 per calendar year. We may postpone the filing of a registration statement on Form S-3 for up to 120 days once in a 12-month period if we determine that the filing would be seriously detrimental to us and our stockholders. However, we may not postpone the filing of a registration statement on Form S-3 if we have postponed the filing under the demand registration rights described above in the 12-month period prior to the Form S-3 request.

We will pay all expenses incurred in connection with the registrations described above, except for underwriters’ and brokers’ discounts and commissions, which will be paid by the selling stockholders.

The registration rights described above will expire, with respect to any stockholder that then owns less than 1% of our outstanding capital stock, at such time as the stockholder can sell all of its shares under Rule 144 of the Securities Act during a three-month period without registration. In any event, the registration rights described above will expire on the earlier of five years after this offering is completed and specified merger or other consolidation transactions.

In addition, a warrant holder has the right to request that we register the shares issued upon exercise of its warrants to purchase 37,500 shares of Series D preferred stock, which will represent a warrant to purchase an equivalent number of shares of common stock after the consummation of this offering, within 120 days of the exercise of these warrants.

Substantially all of the holders of these registration rights have signed agreements with the underwriters prohibiting the exercise of their registration rights for 180 days following the date of this prospectus.

Anti-takeover Provisions

The provisions of Delaware law, our certificate of incorporation and our bylaws may have the effect of delaying, deferring or discouraging another person from acquiring control of Claria.

Delaware Law

We will be subject to the provisions of Section 203 of the Delaware General Corporation Law regulating corporate takeovers. This section prevents some Delaware corporations from engaging, under some circumstances, in a business combination, which includes a merger with or sale of at least 10% of the corporation’s assets to any interested stockholder, meaning a stockholder 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 the corporation’s outstanding voting stock, unless:

• the transaction is approved by the board of directors prior to the time that the interested stockholder became an interested stockholder;

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• upon the closing of the transaction that resulted in the stockholder’s becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or

• at or subsequent to the time that the stockholder became an interested stockholder, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders by at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.

A Delaware corporation may “opt out” of these provisions with an express provision in its original certificate of incorporation or an express provision in its certificate of incorporation or bylaws resulting from a stockholders’ amendment approved by at least a majority of the outstanding voting shares. We have not “opted out” of these provisions. The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire us.

Charter and Bylaw Provisions

Our certificate of incorporation and bylaws provide that:

• following the consummation of this offering, no action shall be taken by our stockholders except at an annual or special meeting of our stockholders called in accordance with our bylaws and our stockholders may not act by written consent;

• following the consummation of this offering, the approval of two-thirds of the shares entitled to vote shall be required for stockholders to adopt, amend or repeal our bylaws;

• our stockholders may not call special meetings of our stockholders or fill vacancies on our board;

• upon the consummation of this offering, our board will be divided into three classes, each serving staggered three-year terms, which means that only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective terms; and

• we will indemnify directors and officers against losses that they may incur in investigations and legal proceedings resulting from their services to us, which may include services in connection with takeover defense measures.

These provisions of our certificate of incorporation and bylaws may have the effect of delaying, deferring or discouraging another person or entity from acquiring control of us.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Mellon Investor Services.

Listing

We have applied to list our common stock on the Nasdaq National Market under the trading symbol “CLRA.”

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our common stock, and 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. Sales of substantial amounts of our common stock, including shares issued upon exercise of outstanding warrants or 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, 2003, we will have              shares of common stock outstanding, assuming no exercise of the underwriters’ over-allotment option and no exercise of outstanding options or warrants. Of the 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              shares of common stock will be deemed restricted securities as defined under Rule 144. Restricted securities may be sold in the public market only if they are registered or they qualify for an exemption from registration under Rule 144, 144(k) or 701 promulgated under the Securities Act, which rules are summarized below. Subject to the lock-up agreements described below, all of these restricted securities will be available for sale in the public market 180 days after the date of this prospectus under Rule 144 (subject in some cases to volume limitations), Rule 144(k) or Rule 701 (subject in some cases to our right of repurchase).

Lock-up Agreements. All of our directors and officers and substantially all of our stockholders have signed lock-up agreements under which they have agreed not to sell, transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock without the prior written consent of Deutsche Bank Securities Inc. for a period of 180 days after the date of this prospectus. These agreements are described below under “Underwriting.”

Rule 144. In general, under Rule 144 as currently in effect, a person, or group of persons whose shares are required to be aggregated, who has beneficially owned shares that are restricted securities as defined in Rule 144 for at least one year is entitled to sell, within any three-month period commencing 90 days after the date of this prospectus, a number of shares that does not exceed the greater of:

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

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

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

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Rule 701. In general, under Rule 701 of the Securities Act, any of our employees, directors, officers, consultants or advisors who purchased shares from us in connection with a compensatory stock or option plan or other written agreement is eligible to resell those shares in reliance on Rule 144, but without compliance with certain restrictions, including the holding period contained in Rule 144. However, all shares issued under Rule 701 are subject to lock-up agreements and will only become eligible for sale at the expiration of such agreements.

Registration Rights. On the date 180 days after the date of this prospectus, the holders of 18,663,776 shares of our common stock, or their transferees, will be entitled to certain rights with respect to the registration of those shares under the Securities Act. For a description of these registration rights, please see “Description of Capital Stock—Registration Rights.” After these shares are registered, they will be freely tradable without restriction under the Securities Act.

Stock Options. As of December 31, 2003, options to purchase a total of 4,344,722 shares of our common stock were outstanding. We intend to file a registration statement on Form S-8 under the Securities Act to register all shares of our common stock subject to outstanding options, all shares of our common stock issued upon exercise of stock options and all shares of our common stock issuable under our stock option and employee stock purchase plans. Accordingly, shares of our common stock issued under these plans will be eligible for sale in the public markets, subject to vesting restrictions and the lock-up agreements described above.

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MATERIAL UNITED STATES TAX CONSIDERATIONS

FOR NON-UNITED STATES HOLDERS

The following is a general discussion of the material United States federal income and estate tax consequences as of the date of this prospectus of the ownership and disposition of our common stock applicable to Non-United States Holders who purchase our common stock. A “Non-United States Holder” is any holder that for United States federal income tax purposes is not a “United States person.” The term “United States person” means: (i) a citizen or resident of the United States; (ii) a corporation or other entity taxable as a corporation created or organized in the United States or under the laws of the United States or of any political subdivision of the United States; (iii) an estate the income of which is included in gross income for United States federal income tax purposes regardless of its source; or (iv) a trust if its administration is subject to the primary supervision of a United States court and one or more United States persons have the authority to control all substantial decisions of the trust or if the trust has made a valid election to be treated as a “United States person.” If a partnership holds our common stock, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. If a Non-United States Holder is a partner of a partnership holding our common stock, that Non-United States Holder should consult its tax advisor.

This discussion does not address all aspects of United States federal income and estate taxation that may be relevant in light of a Non-United States Holder’s particular facts and circumstances, including 1) the special tax rules that apply to a United States expatriate, 2) the special tax rules that may apply to some Non-United States Holders, including banks, tax-exempt organizations, insurance companies, dealers in securities and traders in securities who elect to apply a mark-to-market method of accounting or 3) the special tax rules that may apply to a Non-United States Holder that holds our common stock as part of a “straddle,” “hedge” or “conversion transaction.” In addition, this discussion does not address the tax consequences for the stockholders or beneficiaries of a Non-United States Holder or any tax consequences arising under the laws of any state, local or non-United States taxing jurisdiction. This discussion only addresses investors who purchase our common stock pursuant to this offering and who hold that common stock as a capital asset (generally for investment). Furthermore, the following discussion is based on current provisions of the United States Internal Revenue Code of 1986 as amended (the “Code”), applicable United States Treasury regulations and administrative and judicial interpretations of the Code, all as in effect as of the date of this prospectus, and all of which are subject to change, possibly with retroactive effect.

We have not and will not seek a ruling from the Internal Revenue Service (the “IRS”) with respect to the United States federal income and estate tax consequences described below, and as a result, there can be no assurance that the IRS will not disagree with or challenge any of the conclusions set forth in this discussion.

Dividends

We have never paid, and do not anticipate that we will pay, cash dividends on our common stock. Should we ever pay a cash dividend, any dividend paid to a Non-United States Holder of common stock generally would be subject to United States withholding tax of 30% of the gross amount of the dividend or a lower rate as may be specified by an applicable income tax treaty (provided appropriate certification requirements are complied with in order to claim such lower rate and the Non-United States Holder is entitled to benefits under that treaty). Dividends received by a Non-United States Holder that are effectively connected with a United States trade or business conducted by that Non-United States Holder or, if a tax treaty applies, attributable

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to a permanent establishment or a “fixed base” in the United States (which we refer to as United States trade or business income) would be exempt from the withholding tax. The Non-United States Holder must comply with applicable certification and disclosure requirements in these situations. However, any United States trade or business income, net of deductions and credits, would be taxed at the same graduated U.S. federal income tax rates that apply to United States persons. Any United States trade or business income received by a Non-United States Holder that is a corporation may also be subject to an additional “branch profits tax” at a 30% rate or a lower rate as specified by an applicable income tax treaty.

Dividends may be subject to backup withholding at the current rate of 28% of the gross amount unless the Non-United States Holder certifies to required information or otherwise establishes an exemption as specified in applicable United States Treasury regulations. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will generally be allowed as a refund or a credit against the United States federal income tax liability of the Non-United States Holder, if any, provided the required information is furnished to the IRS.

Generally, we must report annually to the IRS the amount of dividends paid, the name and address of the recipient, and the amount, if any, of tax withheld. A similar report is sent to the holder. Under tax treaties or other agreements, the IRS may make those reports available to tax authorities in the recipient’s country of residence. Investors should consult their own tax advisors concerning information reporting requirements and backup withholding on dividends paid on our common stock and their qualification, if any, for an exemption from backup withholding.

Gain on Disposition of Common Stock

A Non-United States Holder generally will not be subject to United States federal income tax on any gain realized upon the sale or other disposition of its common stock unless: (i) that gain is United States trade or business income referred to above under “Dividends,” in which case all or a portion of that gain will be subject to regular graduated United States federal income tax rates, and, in the case of a corporate Non-United States Holder, may also be subject to the branch profits tax at the rate of 30% or lower treaty rate, if applicable; (ii) the Non-United States Holder is an individual who is present in the United States for a period or periods aggregating 183 days or more during the taxable year in which the sale or disposition occurs and other conditions are met; or (iii) we are or have been a “United States real property holding corporation” for United States federal income tax purposes at any time within the shorter of the five-year period preceding the disposition or that Non-United States Holder’s holding period of its common stock. We have determined that we are not and do not believe that we are likely to become a “United States real property holding corporation” for United States federal income tax purposes. However, no assurance can be provided that we will not become a United States real property holding corporation. If we were to become a United States real property holding corporation, gains realized by a Non-United States Holder that did not directly or indirectly own more than 5% of our common stock at any time during the shorter of the five-year period preceding the disposition or that Holder’s holding period generally would not be subject to United States federal income tax as a result of the status of our company as a United States real property holding corporation, provided that our common stock was regularly traded on an established securities market.

The payment of the proceeds of a sale of common stock to or through the United States office of a broker is currently subject to both information reporting and backup withholding at the rate of 28% of the gross amount unless the Non-United States Holder certifies its non-United

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States status under penalties of perjury or otherwise establishes an exemption. Generally, the payment of proceeds of a disposition by a Non-United States Holder of common stock outside the United States to or through a foreign office of a broker will not be subject to backup withholding. However, those payments will be subject to information reporting if the broker has certain connections to the United States, unless certain other conditions are met or the Non-United States Holder establishes an exemption as specified in the United States Treasury regulations regarding backup withholding and information reporting.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will generally be allowed as a refund or a credit against the United States federal income tax liability of the Non-United States Holder, if any, provided the required information is furnished to the IRS.

Investors should consult their own tax advisors concerning information reporting requirements and backup withholding on a sale of their common stock and their qualification, if any, for an exemption from backup withholding.

Estate Tax

Common stock owned or treated as owned at the time of death by an individual who is not a citizen or resident of the United States for federal estate tax purposes will be included in that individual’s estate for United States federal estate tax purposes, unless an applicable estate tax or other treaty provides otherwise, and therefore may be subject to United States federal estate tax.

The foregoing discussion is a general summary of the principal United States federal income and estate tax consequences of the ownership, sale or other disposition of our common stock by Non-United States Holders and does not address all the tax consequences that may be relevant to Non-United States Holders in their particular circumstances. Accordingly, investors are urged to consult their own tax advisors with respect to the income and estate tax consequences to them in their particular circumstances.

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UNDERWRITING

Subject to the terms and conditions of the underwriting agreement, the underwriters named below, through their representatives Deutsche Bank Securities Inc., Piper Jaffray & Co., SG Cowen Securities Corporation and Thomas Weisel Partners LLC, have severally agreed to purchase from us and the selling stockholders the following respective numbers of shares of common stock at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus:

Underwriters	Number of Shares
Deutsche Bank Securities Inc.
Piper Jaffray & Co.
SG Cowen Securities Corporation
Thomas Weisel Partners LLC
Total

The underwriting agreement provides that the obligations of the several underwriters to purchase the shares of common stock offered hereby are subject to certain conditions precedent and that the underwriters will purchase all of the shares of common stock offered by this prospectus, other than those covered by the over-allotment option described below, if any of these shares are purchased.

We have been advised by the representatives of the underwriters that the underwriters propose to offer the shares of common stock to the public at the public offering price set forth on the cover page of this prospectus and to dealers at a price that represents a concession not in excess of $             per share under the public offering price. The underwriters may allow, and these dealers may re-allow, a concession of not more than $             per share to other dealers. After the initial public offering, representatives of the underwriters may change the offering price and other selling terms.

The selling stockholders have granted to the underwriters an option, exercisable not later than 30 days after the date of this prospectus, to purchase up to                      additional shares of common stock at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus. The underwriters may exercise this option only to cover over-allotments made in connection with the sale of the common stock offered by this prospectus. To the extent that the underwriters exercise this option, each of the underwriters will become obligated, subject to conditions, to purchase approximately the same percentage of these additional shares of common stock as the number of shares of common stock to be purchased by it in the above table bears to the total number of shares of common stock offered by this prospectus. The selling stockholders will be obligated, pursuant to the option, to sell these additional shares of common stock to the underwriters to the extent the option is exercised. If any additional shares of common stock are purchased, the underwriters will offer the additional shares on the same terms as those on which the                      shares are being offered.

The underwriting discounts and commissions per share are equal to the public offering price per share of common stock less the amount paid by the underwriters to us per share of common stock. The underwriting discounts and commissions are         % of the initial public

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offering price. We have agreed to pay the underwriters the following discounts and commissions, assuming either no exercise or full exercise by the underwriters of the underwriters’ over-allotment option:

		Total Fees
	Fee per Share	Without Exercise of Over-Allotment Option	With Full Exercise of Over-Allotment Option
Discounts and commissions paid by us	$	$	$
Discounts and commissions paid by the selling stockholders	$	$	$

In addition, we estimate that our share of the total expenses of this offering, excluding underwriting discounts and commissions, will be approximately $            .

We and the selling stockholders have agreed to indemnify the underwriters against some specified types of liabilities, including liabilities under the Securities Act, and to contribute to payments the underwriters may be required to make in respect of any of these liabilities.

Each of our officers and directors, and substantially all of our stockholders and holders of options and warrants to purchase our stock, have agreed not to offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or enter into any transaction that is designed to, or could be expected to, result in the disposition of any shares of our common stock or other securities convertible into or exchangeable or exercisable for shares of our common stock or derivatives of our common stock owned by these persons prior to this offering or common stock issuable upon exercise of options or warrants held by these persons, without the prior written consent of Deutsche Bank Securities Inc, which consent may be given at any time without public notice, for a period of 180 days after the effective date of the registration statement of which this prospectus is a part other than:

• bona fide gifts or dispositions by will or intestacy to the officer’s, director’s or stockholder’s immediate family or to a trust the beneficiaries of which are exclusively the officer, director or stockholder and/or a member or members of their immediate family and/or a charity, that do not involve a disposition for value;

• distributions to limited partners, members of limited liability companies or stockholders of the stockholder, provided that in each case the transferee agrees to be bound in writing by the terms of the same lock-up restrictions and that transfer does not involve a disposition for value; or;

• transactions in shares acquired in open-market transactions following the closing of this offering.

We have entered into a similar agreement with the representatives of the underwriters pursuant to which we have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the SEC a registration statement under the Securities Act of 1933, as amended, relating to, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, or publicly disclose the intention to make any such offer, sale, pledge, disposition or filing, without the prior written consent of Deutsche Bank Securities Inc. for a period of 180 days after the effective date of the registration statement of which this prospectus is a part, other than:

• grants of stock options or restricted stock to employees, consultants, or directors pursuant to the terms of an employee benefit plan in effect on the date hereof and disclosed in this Prospectus; and

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• issuances of securities pursuant to the exercise of any employee stock options, warrants or purchase rights outstanding as of the date of this Prospectus.

There are no agreements between the representatives and any of our stockholders or affiliates releasing them from these lock-up agreements prior to the expiration of the 180-day period.

The representatives of the underwriters have advised us that the underwriters do not intend to confirm sales to any account over which they exercise discretionary authority.

In connection with the offering, the underwriters may purchase and sell shares of our common stock in the open market. These transactions may include short sales, purchases to cover positions created by short sales and stabilizing transactions.

Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering. Covered short sales are sales made in an amount not greater than the underwriters’ option to purchase additional shares of common stock from the selling stockholders in the offering. The underwriters may close out any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option.

Naked short sales are any sales in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if underwriters are concerned that there may be downward pressure on the price of the shares in the open market prior to the completion of the offering.

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NOTICE TO CANADIAN RESIDENTS

Resale Restrictions

The distribution of the common stock in Canada is being made only on a private placement basis exempt from the requirement that we and the selling stockholders prepare and file a prospectus with the securities regulatory authorities in each province where trades of common stock are made. Any resale of the common stock in Canada must be made under applicable securities laws, which will vary depending on the relevant jurisdiction and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the common stock.

Representations of Purchasers

By purchasing common stock in Canada and accepting a purchase confirmation, a purchaser is representing to us, the selling stockholders and the dealer from whom the purchase confirmation is received that:

• the purchaser is entitled under applicable provincial securities laws to purchase the without the benefit of a prospectus qualified under those securities laws;

• where required by law, that the purchaser is purchasing as principal and not as agent; and

• the purchaser has reviewed the text above under “Resale Restrictions.”

Rights of Action—Ontario Purchasers Only

Under Ontario securities legislation, a purchaser who purchases a security offered by this prospectus during the period of distribution will have a statutory right of action for damages, or while still the owner of the common stock, for rescission against us and the selling stockholders in the event that this prospectus contains a misrepresentation. A purchaser will be deemed to have relied on the misrepresentation. The right of action for damages is exercisable not later than the earlier of 180 days from the date the purchaser first had knowledge of the facts giving rise to the cause of action and three years from the date on which payment is made for the common stock. The right of action for rescission is exercisable not later than 180 days from the date on which payment is made for the common stock. If a purchaser elects to exercise the right of action for rescission, the purchaser will have no right of action for damages against us or the selling stockholders. In no case will the amount recoverable in any action exceed the price at which the common stock was offered to the purchaser, and if the purchaser is shown to have purchased the securities with knowledge of the misrepresentation, we and the selling stockholders, will have no liability. In the case of an action for damages, we and the selling stockholders will not be liable for all or any portion of the damages that are proven not to represent the depreciation in value of the common stock as a result of the misrepresentation relied upon. These rights are in addition to, and without derogation from, any other rights or remedies available at law to an Ontario purchaser. The foregoing is a summary of the rights available to an Ontario purchaser. Ontario purchasers should refer to the complete text of the relevant statutory provisions.

Enforcement of Legal Rights

All of our directors and officers as well as the experts named herein and the selling stockholders may be located outside of Canada and, as a result, it may not be possible for

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Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.

Taxation and Eligibility for Investment

Canadian purchasers of common stock should consult their own legal and tax advisors with respect to the tax consequences of an investment in the common stock in their particular circumstances and about the eligibility of the common stock for investment by the purchaser under relevant Canadian legislation.

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 for us. Certain legal matters in connection with this offering will be passed upon for the underwriters by Shearman & Sterling LLP, San Francisco, California.

CHANGE IN INDEPENDENT ACCOUNTANTS

Effective April 2002, our board of directors engaged PricewaterhouseCoopers LLP as our new independent accountants. Prior to April 2002, we did not consult with PricewaterhouseCoopers LLP regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on our financial statements, and neither a written report was provided to us or oral advice was provided that PricewaterhouseCoopers LLP concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement, as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions, or a reportable event, as that term is defined in Item 304(a)(1)(v) of Regulation S-K. Arthur Andersen LLP served as our independent auditors from inception until the dismissal of Arthur Andersen effective April 2002, which was approved by our board. Prior to the dismissal of Arthur Andersen, there were no disagreements between Arthur Andersen and us on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedure which, if not resolved to the satisfaction of Arthur Andersen, would have caused Arthur Andersen to make reference to the subject matter of such disagreements in connection with its report.

EXPERTS

The consolidated financial statements of Claria Corporation as of December 31, 2002 and 2003 and for each of the three years in the period ended December 31, 2003, included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.

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WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1, including the related exhibits, and amendments under the Securities Act with respect to the common stock to be sold in this offering. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement. 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 referenced for the complete contents of these contracts and documents. A copy of the registration statement, including the exhibits and the consolidated financial statements and notes filed as a part of the registration statement, may be inspected without charge at the public reference facilities maintained by the SEC in Room 1024, 450 Fifth Street, N.W., 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 Commission. These periodic reports, proxy statements and other information will be available for inspection and copying at the Commission’s public reference facilities and the website of the SEC referred to above.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Auditors	F-2
Consolidated Balance Sheets as of December 31, 2002 and 2003	F-3
Consolidated Statements of Operations for the three-year period ended December 31, 2003	F-4
Consolidated Statements of Convertible Preferred Stock and Stockholders’ Deficit for the three-year period ended December 31, 2003	F-5
Consolidated Statements of Cash Flows for the three-year period ended December 31, 2003	F-6
Notes to Consolidated Financial Statements	F-7

F-1

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholders

of Claria Corporation

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of convertible preferred stock and stockholders’ deficit, and of cash flows present fairly, in all material respects, the financial position of Claria Corporation (formerly The Gator Corporation) (the “Company”) and its subsidiaries at December 31, 2002 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America. 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 of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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.

/s/    PricewaterhouseCoopers LLP

San Jose, California

March 26, 2004, except for

Note 11 as to which

the date is April 7, 2004

F-2

CLARIA CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	December 31,						Pro Forma Convertible Preferred Stock and Stockholders’ Equity at December 31, 2003
	2002			2003
							(unaudited)
							(Note 2)
ASSETS
Current assets:
Cash and cash equivalents	$	7,573		$	14,945
Short-term investments		—			10,924
Accounts receivable, net		9,845			16,259
Prepaid expenses and other current assets		1,358			6,057
Deferred income taxes		—			10,165
Total current assets		18,776			58,350
Property and equipment, net		4,592			10,782
Restricted cash		120			533
Other assets		229			428
Deferred income taxes		—			1,582
Total assets	$	23,717		$	71,675
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Line of credit	$	2,010		$	—
Current portion of capital lease obligations		1,382			3,394
Accounts payable		2,102			2,301
Accrued liabilities		6,259			10,650
Deferred revenue		167			499
Total current liabilities		11,920			16,844
Capital lease obligations, net of current portion		368			4,365
Deferred rent		216			247
Total liabilities		12,504			21,456
Commitments and contingencies (Note 5)
Convertible preferred stock, $0.0001 par value; 21,680 shares authorized; 18,581 and 18,632 shares issued and outstanding at December 31, 2002 and 2003, respectively, and no shares on a pro forma basis (unaudited) (Liquidation preference at December 31, 2003: $60,452)		60,142			60,197		$	—
Convertible preferred stock warrants and purchase rights		3,000			2,999			—
		63,142			63,196			—
Stockholders’ equity (deficit):
Preferred stock, $0.0001 par value; no shares authorized, issued or outstanding, actual and pro forma; 5,000,000 shares authorized, no shares issued and outstanding, pro forma as adjusted		—			—			—
Common stock, $0.0001 par value; 60,000 shares authorized; 14,018 and 14,479 shares issued and outstanding at December 31, 2002 and 2003, respectively, and 33,111 shares on a pro forma basis (unaudited)		1			1			3
Additional paid-in capital		451			13,080			76,274
Deferred stock-based expense		—			(8,509	)		(8,509	)
Accumulated other comprehensive loss		—			(24	)		(24	)
Accumulated deficit		(52,381	)		(17,525	)		(17,525	)
Total stockholders’ equity (deficit)		(51,929	)		(12,977	)	$	50,219
Total liabilities, convertible preferred stock and stockholders’ deficit	$	23,717		$	71,675

The accompanying notes are an integral part of these consolidated financial statements.

F-3

CLARIA CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

	Years Ended December 31,
	2001			2002			2003
Revenue	$	14,678		$	40,587		$	90,480
Operating expenses:
Cost of revenue		5,823			6,951			8,843
Product and technology development		4,841			3,294			3,533
Sales and marketing		16,918			21,560			36,922
General and administrative		3,372			7,374			10,695
Stock-based expense		16			2			3,969
Total operating expenses		30,970			39,181			63,962
Income (loss) from operations		(16,292	)		1,406			26,518
Other income (expense):
Interest expense		(1,734	)		(1,354	)		(564	)
Interest and other income, net		772			53			330
Income (loss) before income taxes		(17,254	)		105			26,284
Benefit from (provision for) income taxes		—			(14	)		8,572
Net income (loss)	$	(17,254	)	$	91		$	34,856
Net income (loss) per share
Basic	$	(1.73	)	$	0.00		$	1.41
Diluted	$	(1.73	)	$	0.00		$	0.98
Weighted average common shares outstanding
Basic		9,963			24,189			24,696
Diluted		9,963			30,069			35,433
Pro forma net income per share (unaudited)
Basic							$	1.41
Diluted							$	0.98
Pro forma weighted average common shares outstanding (unaudited)
Basic								24,696
Diluted								35,433
Stock-based expense can be allocated to the following:
Cost of revenue	$	—		$	—		$	222
Product and technology development		3			—			778
Sales and marketing		5			2			1,955
General and administrative		8			—			1,014
Total stock-based expense	$	16		$	2		$	3,969

The accompanying notes are an integral part of these consolidated financial statements.

F-4

CLARIA CORPORATION

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

(in thousands)

	Convertible Preferred Stock			Convertible Preferred Stock Warrants			Common Stock				Additional Paid-In Capital			Stock- holders’ Notes Receivable			Deferred Stock- based Compen- sation			Accum- ulated Other Compre- hensive Loss			Accum- ulated Deficit			Total Stock- holders’ Deficit			Total Compre- hensive Income (Loss)
	Shares	Amount					Shares		Amount
Balances at December 31, 2000	18,581	$	60,142	$	3,000		11,570		$	1	$	2,618		$	(2,359	)	$	—		$	—		$	(35,218	)	$	(34,958	)	$
Exercise of stock options and stock purchase rights in exchange for cash	—		—		—		116			—		11			—			—			—			—			11
Exercise of stock options in exchange for notes receivable	—		—		—		231			—		297			(297	)		—			—			—			—
Repurchase of common stock upon termination of employees	—		—		—		(485	)		—		(354	)		354			—			—			—			—
Repurchase of common stock for cancellation of notes receivable	—		—		—		(1,936	)		—		(2,100	)		2,052			—			—			—			(48	)
Repurchase of common stock for cash	—		—		—		(13	)		—		(9	)		—			—			—			—			(9	)
Issuance of options in exchange for services	—		—		—		—			—		16			—			—			—			—			16
Repayment of stockholder notes receivable	—		—		—		—			—		—			6			—			—			—			6
Forgiveness of stockholder notes receivable	—		—		—		—			—		—			93			—			—			—			93
Net loss	—		—		—		—			—		—			—			—			—			(17,254	)		(17,254	)	$	(17,254	)
Balances at December 31, 2001	18,581		60,142		3,000		9,483			1		479			(151	)		—			—			(52,472	)		(52,143	)
Exercise of stock options in exchange for cash	—		—		—		1,261			—		129			—			—			—			—			129
Reclassification of common stock subject to repurchase to accrued liabilities	—		—		—		—			—		(7	)		—			—			—			—			(7	)
Issuance of stock in exchange for non-recourse notes receivable	—		—		—		3,297			—		—			—			—			—			—			—
Repurchase of common stock for cancellation of notes receivable	—		—		—		—			—		(151	)		151			—			—			—			—
Repurchase of common stock for cash	—		—		—		(23	)		—		(1	)		—			—			—			—			(1	)
Issuance of stock options in exchange for services	—		—		—		—			—		2			—			—			—			—			2
Net income	—		—		—		—			—		—			—			—			—			91			91		$	91
Balances at December 31, 2002	18,581		60,142		3,000		14,018			1		451			—			—			—			(52,381	)		(51,929	)
Exercise of stock options and warrants in exchange for cash	51		55		(34	)	519			—		166			—			—			—			—			166
Reclassification of common stock subject to repurchase to accrued liabilities	—		—		—		—			—		(92	)		—			—			—			—			(92	)
Deferred stock-based compensation	—		—		—		—			—		12,283			—			(12,283	)		—			—			—
Amortization of deferred stock-based compensation	—		—		—		—			—		—			—			3,718			—			—			3,718
Forfeiture of unvested stock options	—		—		—		—			—		(74	)		—			56			—			—			(18	)
Repurchase of common stock for cash	—		—		—		(58	)		—		(7	)		—			—			—			—			(7	)
Issuance of preferred stock warrants in exchange for services	—		—		117		—			—		—			—			—			—			—			—
Issuance of stock options in exchange for services	—		—		—		—			—		269			—			—			—			—			269
Expiration of preferred stock warrants	—		—		(84	)	—			—		84			—			—			—			—			84
Net income	—		—		—		—			—		—			—			—			—			34,856			34,856		$	34,856
Unrealized loss on investments	—		—		—		—			—		—			—			—			(24	)		—			(24	)		(24	)
Balances at December 31, 2003	18,632	$	60,197	$	2,999		14,479		$	1	$	13,080		$	—		$	(8,509	)	$	(24	)	$	(17,525	)	$	(12,977	)	$	34,832

The accompanying notes are an integral part of these consolidated financial statements.

F-5

CLARIA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Years Ended December 31,
	2001			2002			2003
Cash flows from operating activities:
Net income (loss)	$	(17,254	)	$	91		$	34,856
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		3,868			4,338			4,296
Allowance for doubtful accounts		308			230			243
Amortization of deferred interest expense		901			972			66
Amortization of deferred stock-based expense		—			—			3,700
Issuance of common stock options in exchange for services		16			2			269
Forgiveness of stockholders’ notes receivable and accrued interest		120			—			—
Loss or disposal of property and equipment		—			—			13
Changes in assets and liabilities:
Accounts receivable		(1,665	)		(7,854	)		(6,657	)
Prepaid expenses and other current assets		(320	)		(239	)		(4,914	)
Deferred income taxes		—			—			(11,747	)
Other long-term assets		—			—			65
Accounts payable and accrued liabilities		(1,792	)		4,837			4,590
Deferred rent		165			51			31
Deferred revenue		(314	)		(4	)		332
Net cash provided by (used in) operating activities		(15,967	)		2,424			25,143
Cash flows from investing activities:
Proceeds from maturities of short-term investments		7,008			—			12,276
Purchase of short-term investments		—			—			(23,224	)
Purchases of property and equipment		(100	)		(2,186	)		(862	)
Internally developed software costs		(1,036	)		(913	)		(1,404	)
Restricted cash		(23	)		28			(413	)
Other assets		(71	)		(270	)		(264	)
Net cash provided by (used in) investing activities		5,778			(3,341	)		(13,891	)
Cash flows from financing activities:
Principal payments under capital lease obligations		(1,080	)		(1,456	)		(1,958	)
Repayment of notes payable		(1,759	)		(3,241	)		—
Proceeds from line of credit		—			2,010			—
Repayment of borrowing under line of credit		—			—			(2,010	)
Proceeds from repayment of stockholder notes receivable		6			—			—
Proceeds from issuance of common stock		11			122			40
Proceeds from exercise of preferred warrants		—			—			55
Repurchase of common stock		(9	)		(1	)		(7	)
Net cash used in financing activities		(2,831	)		(2,566	)		(3,880	)
Net increase (decrease) in cash and cash equivalents		(13,020	)		(3,483	)		7,372
Cash and cash equivalents at beginning of year		24,076			11,056			7,573
Cash and cash equivalents at end of year	$	11,056		$	7,573		$	14,945
Supplemental disclosure of cash flow information:
Cash paid for interest	$	833		$	487		$	486
Cash paid for income taxes	$	—		$	—		$	1,851
Supplemental disclosure of non-cash investing and financing activities:
Equipment acquired under capital lease obligations	$	1,127		$	521		$	8,233
Issuance of common stock in exchange for notes receivable	$	297		$	—		$	—
Repurchase of common stock in exchange for cancellation of notes	$	2,052		$	151		$	—
Deferred stock-based expense	$	—		$	—		$	12,283

The accompanying notes are an integral part of these consolidated financial statements.

F-6

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Organization and Description of the Company:

Claria Corporation (the “Company”) was originally incorporated in California as Galboka, Inc. on June 1, 1998. On July 16, 1998, Galboka, Inc. merged with and reincorporated as eGuard, Inc., a Delaware corporation. The Company changed its name to Gator.com Corporation on April 15, 1999 and then to The Gator Corporation on June 26, 2001. On October 22, 2003, the Company changed its name to Claria Corporation. The Company is an online marketing company that displays advertisements through its online advertising network, the GAIN Network, to an online audience of users. It attracts this audience by including its GAIN AdServer software with consumer software products that are offered free of charge by the Company or third-party publishers to internet users in exchange for permission to display the Company’s advertisements.

Note 2—Summary of Significant Accounting Policies:

Principles of consolidation and basis of presentation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Claria Corporation Limited, which was incorporated in the United Kingdom, and GAIN Publishing, Ltd., which was incorporated in the Republic of Ireland. All significant intercompany transactions and account balances between the Company and the subsidiaries have been eliminated.

Reclassifications

Certain amounts previously reported have been reclassified to conform to the current period presentation, but those reclassifications did not have an effect on the prior periods’ net income (loss) or total stockholders’ deficit.

Foreign currency translation

The functional currency of the Company’s subsidiaries is the U.S. Dollar. Transactions and balances originally denominated in U.S. Dollars are presented at their original amounts. Transactions and balances of the subsidiaries in currencies other than the U.S. Dollar are remeasured into U.S. Dollars, in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 52, “Foreign Currency Translation.” All translation gains and losses from remeasurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the consolidated statement of operations as other income (expense). For the years ended December 31, 2001, 2002 and 2003, such amounts were not material.

Foreign currency transaction gains and losses, which to date have not been material, are included in the Company’s consolidated statement of operations.

Unaudited pro forma stockholders’ equity

If the offering contemplated by this prospectus is consummated, all outstanding convertible preferred stock, warrants to purchase convertible preferred stock and rights to purchase convertible preferred stock will automatically convert into 18,631,518 shares of common stock, warrants to purchase 257,153 shares of common stock and rights to purchase 691,244 shares of

F-7

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

common stock, based on the shares of convertible preferred stock, warrants and purchase rights outstanding at December 31, 2003. Unaudited pro forma stockholders’ equity, as adjusted for the assumed conversion of the convertible preferred stock, warrants and purchase rights is set forth on the consolidated balance sheet.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

Cash and cash equivalents

The Company considers all highly-liquid investments with an original maturity of three months or less to be cash equivalents. As of December 31, 2002 and 2003, the Company held all cash and cash equivalents in checking accounts, short-term money market accounts, and certificates of deposit with two financial institutions.

Restricted cash

As of December 31, 2002 and 2003, the Company has restricted cash related to deposits for the Company’s facilities leases totalling approximately $120,000 and $533,000, respectively. The restricted cash consisted of certificates of deposit held by a bank and is included within other assets on the consolidated balance sheet.

Short-term investments

The Company’s short-term investments consist of marketable securities that are classified as available-for-sale and are reported at fair value, with unrealized gains and losses, net of tax, recorded in other comprehensive income (loss). Realized gains or losses and declines in value judged to be other than temporary, if any, on available-for-sale securities are reported in other income. In computing realized gains and losses on available-for-sale securities, the Company determines cost based on amounts paid, including direct costs such as commissions, to acquire the security using the specific identification method.

Fair value of financial instruments

Carrying amounts of certain of the Company’s financial instruments including cash and cash equivalents, short-term investments, accounts receivable and accounts payable approximate fair value due to their short maturities. The amount shown for borrowings under the accounts receivable line of credit also approximates fair value based on current interest rates offered to the Company for debt of similar maturities.

F-8

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Risks and uncertainties

The Company operates in a single business segment, which is characterized by rapid technological advances, changes in customer requirements and evolving industry standards. Any failure by the Company to anticipate or to respond adequately to technological developments in its industry, changes in customer requirements or changes in industry standards could have a material adverse effect on the Company’s business and operating results.

Concentration of credit risk and significant customers

Financial instruments, which potentially subject the Company to concentration of credit risk, consist principally of cash, cash equivalents, short-term investments in marketable securities and accounts receivable. The Company’s cash and cash equivalents are deposited with two financial institutions and, at times, may exceed federally insured limits. As of December 31, 2003, the Company has not experienced any losses on these deposits.

Accounts receivable include amounts due from customers in a variety of industries. The Company performs ongoing customer credit evaluations of its customers, does not require collateral and maintains allowances for potential credit losses when deemed necessary. To date, such losses have been within management’s expectations.

Receivables due from significant customers as a percentage of total accounts receivable were as follows:

	December 31,
	2002		2003
Company A	20	%	4	%
Company B	15	%	0	%
Company C	14	%	19	%

Revenue from significant customers as a percentage of revenue were as follows:

	Years Ended December 31,
	2001		2002		2003
Company A	7	%	21	%	8	%
Company C	—		4	%	31	%
Company D	14	%	2	%	—

Property and equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the related assets ranging from 30 months to 7 years. Leasehold improvements are amortized over the shorter of the asset lives or the term of the lease ranging from 3 to 4 years. Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is reflected in the consolidated statement of operations in the period realized.

F-9

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Capitalized software development costs

In accordance with Statement of Position (“SOP”) No. 98-1, “Accounting for the Cost of Computer Software Developed or Obtained for Internal Use,” the Company capitalizes internal computer software development costs incurred during the application development stage. The application development stage is characterized by software design and configuration activities, coding, testing and installation. Training costs and maintenance are expensed as incurred while upgrades and enhancements are capitalized if it is probable that such expenditures will result in additional functionality. The Company is amortizing such amounts using the straight-line method over the estimated useful life of one year. Amortization of capitalized software development costs is included within the operating expense category according to the use of the software product.

Long-lived assets

The Company accounts for long-lived assets in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” Under this standard, the Company will record an impairment charge on long-lived assets when it determines that the carrying value of the long-lived assets may not be recoverable. Factors considered important that could trigger an impairment, include, but are not limited to:

• significant under performance relative to expected historical or projected future operating results;

• significant changes in the manner of the Company’s use of the assets or the strategy for its overall business;

• significant negative industry or economic trends; and

• significant decline in the fair market value of the Company’s stock for a sustained period.

Based upon the existence of one or more of the above indicators of impairment, the Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by the Company’s management to be commensurate with the risk inherent in the Company’s current business model.

Revenue recognition

The Company derives its revenue from the sale and delivery of online advertising impressions, through vehicles such as pop-under, pop-up and slider ads, and pop-under search results from its SearchScout service, to users within the GAIN Network. Revenue is recognized in the period the advertising services are delivered provided there is persuasive evidence of an arrangement, service has been provided to the customer, the price to the customer is fixed or determinable and collectibility is reasonably assured. In addition, the Company performs credit reviews to evaluate a customer’s ability to pay. If the Company determines that collectibility is not reasonably assured, revenue is recognized as cash is collected.

Amounts billed or received in advance of service delivery are initially deferred and subsequently recognized upon delivery of the service.

F-10

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Cost of revenue

Cost of revenue comprises operating and customer support expenses. These expenses include salaries, Internet bandwidth, amortization of certain internally developed software and depreciation and maintenance expenses associated with server, network and storage equipment used in the maintenance and development of analytical databases and servers and network equipment used to deliver advertising campaigns to users.

Product and technology development

Costs incurred in connection with the research and development of the Company’s products and technologies, other than those accounted for under SOP 98-1, are expensed as incurred.

Advertising and distribution expenses

Advertising and distribution expenses consist primarily of advertising fees paid to websites for the promotion of the Company’s own software applications, fees paid by the Company to the third parties with whom it has distribution arrangements and costs to promote the Company’s services for advertisers. These expenses are charged to sales and marketing expense and generally expensed as incurred. Advertising and distribution expenses for the years ended December 31, 2001, 2002 and 2003 were approximately $6,582,000, $8,229,000 and $19,269,000, respectively.

Refundable amounts paid in advance to distribution partners are recorded within prepaid expenses and other current assets and are expensed as the actual costs are incurred.

Stock-based expense

Pursuant to SFAS No. 123, “Accounting for Stock-Based Compensation,” the Company accounts for employee stock options under Accounting Principles Board Opinion (“APB”) No. 25, “Accounting for Stock Issued to Employees,” and FASB Interpretation No. 44 or “FIN 44,” “Accounting for Certain Transactions Involving Stock Compensation, an Interpretation of APB 25,” and follows the disclosure-only provisions of SFAS No. 123. Under APB No. 25, compensation expense is based on the difference, if any, on the date of the grant, between the estimated fair value of the Company’s common stock and the exercise price of options to purchase that stock. This unearned stock-based expense is amortized using the accelerated method over the remaining vesting periods of the related options, which is generally four years. For purposes of estimating the compensation cost of the Company’s option grants in accordance with SFAS No. 123, the fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model.

In December 2002, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 148, “Accounting for Stock-Based Compensation, Transition and Disclosure.” SFAS No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee expense. SFAS No. 148 also requires that disclosures of the pro forma effect of using the fair value method of accounting for stock-based employee expense be displayed prominently and in a tabular format.

F-11

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Had compensation cost been recognized based on the fair value at the date of grant for options granted during 2001, 2002 and 2003, the pro forma amounts of the Company’s net income (loss) would have been as follows (in thousands):

		Years Ended December 31,
		2001			2002			2003
Net income (loss) as reported		$	(17,254	)	$	91		$	34,856
Add:	Employee stock-based expense included in reported net income (loss), net of related tax effects		—			—			3,695
Deduct:	Total employee stock-based expense determined under a fair value based method, net of related tax effects		(47	)		(31	)		(3,792	)
Pro forma net income (loss)		$	(17,301	)	$	60		$	34,759
Basic net income (loss) per share:
As reported		$	(1.73	)	$	0.00		$	1.41
Pro forma		$	(1.74	)	$	0.00		$	1.41
Diluted net income (loss) per share:
As reported		$	(1.73	)	$	0.00		$	0.98
Pro forma		$	(1.74	)	$	0.00		$	0.98

See Note 7 for a summary of the assumptions used to estimate the fair value of equity instruments granted to employees.

The Company accounts for non-cash stock-based expense issued to non-employees in accordance with the provisions of SFAS No. 123 and Emerging Issues Task Force Pronouncement No. (“EITF”) 96-18, “Accounting for Equity Investments That Are Issued to Non-Employees for Acquiring, or in Conjunction with Selling, Goods or Services.”

Income taxes

The Company accounts for income taxes in accordance with the liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities and net operating loss and credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.

Segment reporting

The FASB issued SFAS No. 131, “Disclosures About Segments of an Enterprise and Related Information,” which establishes annual and interim reporting standards for an enterprise’s business segments and related disclosures about its products, services, geographic areas and major customers. The method of determining what information to report is based on the way management organizes the operating segments within the Company for making operating decisions and assessing financial performance.

F-12

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company’s chief operating decision-maker is considered to be the Chief Executive Officer (“CEO”). The CEO reviews financial information for purposes of making operational decisions and assessing financial performance. This financial information is consistent with the information presented in the accompanying statements of operations. The Company operates in one segment, online marketing.

Net income (loss) per share

Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of shares of common stock and participating convertible preferred stock outstanding during the period. The calculation of diluted net income (loss) per share is computed by giving effect to all dilutive potential common shares, but excludes potential common shares if the effect is antidilutive. Potential common shares are comprised of common stock subject to repurchase rights, shares of common and preferred stock issuable upon the exercise of stock options, warrants and purchase rights and shares of common stock issuable upon conversion of convertible preferred stock.

Pro forma net income (loss) per share (unaudited)

The pro forma net income per share for the year ended December 31, 2003 is computed using the weighted average number of shares of common stock outstanding, on a basic and diluted basis, including the pro forma effects of the automatic conversion of the Company’s convertible preferred stock into shares of common stock effective upon the closing of the Company’s initial public offering, as if such conversion occurred on January 1, 2003 or at the date of original issuance, if later.

F-13

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table sets forth the computation of basic and diluted net income (loss) per share and pro forma net income per share for the periods indicated (in thousands, except per share amounts):

	Years Ended December 31,									Pro Forma Year Ended December 31, 2003
	2001			2002			2003
										(unaudited)
Net income (loss)	$	(17,254	)	$	91		$	34,856		$	34,856
Weighted average common shares outstanding		9,963			10,255			14,208			32,807
Plus:  Weighted average participating convertible preferred stock		—			18,581			18,599			—
Less:  Weighted average common shares subject to repurchase		—			(38	)		(205	)		(205	)
Less:  Weighted average common shares subject to non-recourse notes receivable (see Note 7)		—			(4,609	)		(7,906	)		(7,906	)
Weighted average common shares used to compute basic net income (loss) per share		9,963			24,189			24,696			24,696
Effects of dilutive securities
Weighted average common stock options		—			1,153			2,121			2,121
Weighted average convertible preferred stock warrants and purchase rights		—			—			798			798
Weighted average common stock issued in exchange for non-recourse notes receivable (see Note 7)		—			4,727			7,818			7,818
Weighted average shares used to compute diluted net income (loss) per share		9,963			30,069			35,433			35,433
Net income (loss) per share
Basic	$	(1.73	)	$	0.00		$	1.41		$	1.41
Diluted	$	(1.73	)	$	0.00		$	0.98		$	0.98

F-14

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table sets forth potential shares of common stock at year-end that are not included in the diluted net loss per share calculation above because to do so would be antidilutive for the periods indicated (in thousands):

	December 31,			Pro Forma December 31, 2003
	2001	2002	2003
				(unaudited)
Convertible preferred stock	18,581	—	—	—
Warrants and rights to purchase convertible preferred stock	1,205	1,205	38	—
Options and warrants to purchase common stock	5,113	730	489	527
	24,899	1,935	527	527

Comprehensive income (loss)

Comprehensive income (loss) consists of net income (loss) and unrealized gains on available-for-sale investments, and is presented in the consolidated statements of stockholders’ equity (deficit). The component of accumulated other comprehensive loss is as follows (in thousands):

	Years Ended December 31,
	2001		2002		2003
Unrealized loss on available-for-sale investments, net of income taxes	$	—	$	—	$	24

Recent accounting pronouncements

In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement No. 133 on Derivative Instruments and Hedging Activities.” SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts. SFAS No. 149 clarifies under what circumstances a contract with an initial net investment meets the characteristic of a derivative, clarifies when a derivative contains a financing component, amends the definition of an underlying to conform it to language used in FASB Interpretation No. 45, and amends certain other existing pronouncements. SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. All provisions of the Statement, except those related to forward purchases or sales of “when-issued” securities, should be applied prospectively. The Company does not currently have any instruments that meet the definition of a derivative, and therefore the adoption of SFAS No. 149 has had no effect on the Company’s consolidated financial position or results of operations.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity.” SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity and further requires that an issuer classify as a liability (or an asset in some

F-15

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

circumstances) financial instruments that fall within its scope because these financial instruments embody an obligation of the issuer. Many of these instruments were previously classified as equity. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of SFAS No. 150 did not have a material impact on the Company’s financial position or results of operations.

In December 2003, the Securities and Exchange Commission released Staff Accounting Bulletin No. 104, “Revenue Recognition” (“SAB 104”). SAB 104 revises or rescinds portions of the interpretative guidance related to revenue recognition included in Topic 13 of the codification of the staff accounting bulletins. The Company has assessed the impact of SAB 104 and concluded that the adoption of SAB 104 did not have a material impact on the Company’s financial position or results of operations.

In January 2003, the FASB issued FASB Interpretation No. 46 (“FIN 46”), “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51.” FIN 46 requires certain variable interest entities to be consolidated by the primary beneficiary of the entity, if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. In December 2003, the FASB issued FIN 46 (revised December 2003), Consolidation of Variable Interest Entities (“FIN 46-R”) to address certain FIN 46 implementation issues. The effective dates and impact of FIN 46 and FIN 46-R are as follows:

• Special-purpose entities (“SPEs”) created prior to February 1, 2003. The Company must apply either the provisions of FIN 46 or early adopt the provisions of FIN 46-R at the end of the first interim or annual reporting period ending after December 15, 2003.

• Non-SPEs created prior to February 1, 2003. The Company is required to adopt FIN 46-R at the end of the first interim or annual reporting period ending after March 15, 2004.

• All entities, regardless of whether an SPE, created subsequent to January 31, 2003. The provisions of FIN 46 were applicable for variable interests in entities obtained after January 31, 2003.

The adoption of the provisions applicable to SPEs and all other variable interests obtained after January 31, 2003 did not have a material impact on the Company’s consolidated financial position, consolidated results of operations, or liquidity. The Company believes that the adoption of FIN 46-R will not have a material impact on its financial position or results of operations.

Note 3—Balance Sheet Components:

Accounts receivable

	December 31,
	2002			2003
Accounts receivable	$	10,115		$	16,417
Less: allowance for doubtful accounts		(270	)		(158	)
	$	9,845		$	16,259

F-16

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The activity in the allowance for the doubtful accounts is summarized as follows (in thousands):

	2001			2002			2003
Allowance balance at January 1	$	43		$	124		$	270
Amounts charged to expense		308			230			243
Amounts written off		(227	)		(84	)		(355	)
Allowance balance at December 31	$	124		$	270		$	158

Prepaid expenses and other current assets

Prepaid expenses and other current assets at December 31, 2002 and 2003 consisted of the following (in thousands):

	December 31,
	2002		2003
Refundable payments to distribution partners	$	258	$	4,101
Other prepaid expenses and current assets		1,100		1,956
	$	1,358	$	6,057

Property and equipment

Property and equipment at December 31, 2002 and 2003 consisted of the following (in thousands):

	December 31,
	2002			2003
Internally developed software	$	3,019		$	4,423
Computer and office equipment		8,051			13,653
Furniture and fixtures		482			546
Software and licenses		1,217			2,112
Leasehold improvements		1,201			1,295
		13,970			22,029
Less: Accumulated depreciation and amortization		(9,378	)		(11,247	)
Property and equipment, net	$	4,592		$	10,782

Depreciation and amortization expense for the years ended December 31, 2001, 2002 and 2003 was approximately $3,868,000, $4,338,000 and $4,296,000, respectively.

Equipment acquired under capital lease obligations included in property and equipment comprised of the following (in thousands):

	December 31,
	2002			2003
Computer and office equipment	$	3,522		$	11,755
Less: Accumulated depreciation and amortization		(2,778	)		(4,358	)
	$	744		$	7,397

F-17

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Accrued liabilities

Accrued liabilities consisted of the following (in thousands):

	December 31,
	2002		2003
Accrued advertising and distribution expenses	$	1,764	$	3,763
Accrued wages and benefits		1,974		3,356
Accrued legal fees		1,175		1,488
Accrued litigation costs		900		393
State taxes payable		15		1,310
Other accrued liabilities		431		340
	$	6,259	$	10,650

Note 4—Borrowings:

Subordinated loan agreement

In February 2000, the Company entered into a subordinated loan agreement with a leasing company. The agreement provided for borrowings of up to $5,000,000 at an interest rate of 10% per annum. The outstanding principal balance and accrued interest on the loan was fully repaid in November 2002.

In connection with this agreement, the Company granted rights to the leasing company to purchase up to 691,244 shares of the Company’s Series C convertible preferred stock at an exercise price of $2.17 per share. The purchase rights expire 45 days after an initial public offering or merger. The fair value of the purchase rights was estimated using the Black-Scholes model with the following assumptions: dividend yield of 0%, volatility of 70%, risk-free interest rate of 6.52% and an expected life of three years. The proceeds from the loan were allocated between the fair value of the purchase rights and the fair value of the loan, which approximately face value, due to market interest rates for notes with similar terms. The apportioned value of the purchase rights of $2,472,000 was recorded as a debt discount and amortized using the effective interest method to interest expense over the term of the agreement. The Company recorded $824,000 and $893,000 in non-cash interest expense related to the debt discount for the years ended December 31, 2001 and 2002, respectively. The value of the purchase rights was fully amortized at December 31, 2002.

Line of credit agreement

In March 2002, the Company entered into a one-year line of credit agreement with a financial institution. This agreement allowed the Company to borrow up to 80% of eligible accounts receivable, up to a gross amount of $2,500,000. Borrowings under this line of credit were collateralized by all of the Company’s assets. This line of credit bore interest at the lender’s prime rate plus 3%. At December 31, 2002, the Company had $2,010,000 outstanding on this line of credit, which was fully repaid in 2003. This line of credit was not renewed in March 2003.

In April 2003, the Company entered into a one-year line of credit agreement with a financial institution. This agreement allows the Company to borrow up to 70% of eligible accounts receivable, up to a gross amount of $5,000,000. This line of credit bears interest at the lender’s

F-18

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Prime Rate, subject to a minimum 4.25% per annum, and is collateralized by all of the Company’s assets. As of December 31, 2003, the Company did not have any borrowings under the line of credit.

Note 5—Commitments and Contingencies:

Operating leases

The Company leases its facilities and certain equipment under non-cancellable operating lease agreements. These leases expire on various dates through 2009. Future minimum lease payments under these leases as of December 31, 2003 were as follows (in thousands):

Years Ending December 31,
2004	$	1,918
2005		2,080
2006		1,103
2007		1,135
2008		1,035
2009		860
	$	8,131

Total rent expense for the years ended December 31, 2001, 2002 and 2003 was approximately $1,332,000, $1,196,000 and $1,247,000, respectively.

Capital leases

The Company leases certain equipment under various capital lease agreements that expire on various dates through 2007. Future minimum lease payments on capital leases are as follows (in thousands):

Years Ending December 31,	Capital Leases
2004	$	4,051
2005		3,729
2006		1,069
2007		2
Total minimum lease payments		8,851
Less: Amount representing interest		(1,004	)
Present value of minimum lease payments		7,847
Less: Unamortized discount		(88	)
Less: Current portion of capital lease obligations		(3,394	)
Long-term portion of capital lease obligations	$	4,365

Purchase Commitments

As of December 31, 2003, the company had purchase commitments for bandwidth and hosting services totaling $592,000 to be paid in 2004.

F-19

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Litigation

The Company is party to several disputes, almost all of which involve allegations that its delivery of online advertisements violates various trademark rights and copyrights and constitutes unfair competition under United States federal and state law. In April 2003, a number of lawsuits were consolidated for pre-trial purposes in one multidistrict litigation proceeding before the United States District Court for the Northern District of Georgia, which is referred to as the MDL proceeding. The Company has denied the claims and asserted various affirmative defenses, and is vigorously defending itself against these claims.

Discovery in the MDL proceeding is ongoing and is currently expected to be completed in June 2004. It is presently anticipated that the claimants will file a consolidated summary judgment motion on the federal claims, and that the Company will file a cross-motion for summary judgment on the federal claims. The MDL court has stayed any litigation on the state law claims and on any damages claims. The current case schedule provides that cross-motions will be briefed by September 2004. The Company expects that a hearing will be held during the fourth quarter of 2004, and does not presently expect a decision on the summary judgment motions to be rendered until at least the first quarter of 2005.

Where the Company can make an estimate of the possible loss or range of loss associated with the resolution of these legal proceedings, it records a liability. The ultimate outcome in any of these legal proceedings is uncertain, and a settlement amount or damages award in excess of the recorded liability or an adverse change in the estimated loss may have a material adverse effect on the Company’s financial position, results of operations and cash flows.

Indemnifications

Certain of the Company’s distribution agreements contain general indemnification provisions. In these agreements, the Company generally states that it will indemnify and hold harmless third parties against damages incurred by the distributor relating to infringements by the Company’s products of certain property rights. The Company has not received any claims under this indemnification and does not know of any instances in which such a claim may be brought against the Company in the future.

Note 6—Convertible Preferred Stock:

The following summarizes the Company’s convertible preferred stock.

As of December 31, 2003, convertible preferred stock consisted of (in thousands):

Series	Authorized	Issued and Outstanding	Shares of Common Stock Reserved for Conversion	Liquidation Value		Carrying Value
A	1,125	1,125	1,125	$	225	$	216
B	4,401	4,160	4,401		2,496		2,438
C	8,591	7,604	8,591		11,786		11,704
D	7,313	5,743	7,313		45,945		45,839
Undesignated	250	—	250		—		—
	21,680	18,632	21,680	$	60,452	$	60,197

F-20

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The rights, restrictions and preferences of the Series A, B, C and D convertible preferred stock (“Series A,” “Series B,” “Series C,” and “Series D,” respectively) are as follows:

Dividends

The holders of Series A, B, C and D are entitled to receive annual, noncumulative dividends of $0.016, $0.048, $0.124 and $0.64 per share, respectively, as declared by the Board of Directors, in preference to the holders of the common stock. As of December 31, 2003, no dividends had been declared or paid.

Liquidation

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, including a merger, or sale or transfer of substantially all assets of the Company, or consolidation where the beneficial owners of the Company’s common stock and preferred stock own less than 50% of the resulting voting power of the surviving entity, the holders of Series A, B, C and D are entitled to receive proceeds equal to $0.20, $0.60, $1.55 and $8.00 per share, respectively, plus any declared but unpaid dividends prior to any distribution to the holders of common stock. Upon completion of the above distributions, the remaining assets available to the stockholders will be distributed ratably between the Series A, B, C and D and common stock holders based on the number of shares of common stock held by each, on an as if converted basis. Maximum distributions to preferred stockholders are as follows: $0.30 per share for Series A, $0.90 per share for Series B, $2.325 per share for Series C and $12.00 per share for Series D. Any remaining proceeds will be distributed among common stockholders pro rata based on the number of shares of common stock held by each.

Redemption

Outside certain preferences granted upon liquidation, the holders of preferred stock have no redemption rights.

Conversion

Each share of convertible preferred stock is convertible into a number of common shares determined by dividing $0.20 by the conversion price applicable to such share for Series A, $0.60 per share for Series B, $1.55 per share for Series C and $8.00 per share for Series D. The initial conversion price shall be $0.20 per share of Series A, $0.60 per share of Series B, $1.55 per share of Series C and $8.00 per share of Series D. Each series of preferred stock is currently convertible into common stock on a one-for-one basis.

The preferred stock will automatically convert into common stock, at the then applicable conversion price, immediately upon the earlier of (a) the Company’s sale of its common stock in a firm commitment underwritten public offering pursuant to a registration statement under the Securities Act of 1933, as amended, in which the public offering price is at least $11.50 per share and the cash proceeds are at least $25,000,000 or (b) upon the written consent of 60% of the preferred stockholders.

F-21

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Voting

The holders of preferred stock are entitled to vote on all matters and have a number of votes equal to the number of shares of common stock into which the preferred stock could be converted pursuant to the conversion rights. Except as otherwise required by law, the holders of preferred stock have voting rights equal to those of the common stock holders.

Warrants and Purchase Rights

In connection with certain financing arrangements, the Company issued warrants and rights to purchase shares of the Company’s convertible preferred stock. The following warrants and purchase rights were outstanding as of December 31, 2003:

	Number Issued	Number Cancelled		Number Exercised		Number Outstanding and Exercisable	Exercise Price		Fiscal Year of Expiration
Series B	266,667	(225,000	)	(25,000	)	16,667	$	0.60	2004
Series C	209,438	—		(25,807	)	183,631	$	1.55	Earlier of IPO, merger or 2004
Series C	19,355	—		—		19,355	$	1.55	Earlier of two years after IPO or 2007
Series C	691,244	—		—		691,244	$	2.17	45 days after IPO or merger
Series D	37,500	—		—		37,500	$	8.00	2010 to 2013

In December 1998, the Company issued warrants to investors to purchase 250,000 shares of Series B preferred stock at $0.60 per share in connection with the receipt of funds pursuant to bridge loans. The warrants were exercisable immediately and expired on the earlier of December 2003, the closing of an initial public offering with proceeds of at least $7.5 million or the sale of the Company in which at least 50% of the voting power is dispersed. The fair value of the warrants at the date of issuance was determined to be approximately $93,000 and was estimated using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 5.3%; contractual life of 5 years; and expected volatility of 70%. This amount was amortized to as interest expense over the term of the bridge loans, which converted into Series B preferred stock in 1999.

In May 2003, an investor exercised a warrant to purchase 25,000 shares of Series B at an exercise price of $0.60 per share for total cash proceeds of $15,000, and in December 2003, warrants to purchase 225,000 shares of Series B expired unexercised.

In June 1999, the Company issued a warrant to a lessor to purchase up to 16,667 shares of Series B preferred stock at $0.60 per share in connection with an equipment lease line. The warrant is exercisable immediately and expires in June 2004. The fair value of the warrant on the date of issuance was determined to be approximately $6,000 using the Black-Scholes option pricing model with the following assumptions: risk-free interest rate 5.7%; contractual life of five years; and expected volatility of 70%. This amount was amortized to interest expense over the term of the lease line. Amortization for the years ended December 31, 2001 and 2002 was approximately $2,000 and $1,000, respectively. The value of the warrant was fully amortized at December 31, 2002.

F-22

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In August and October 1999, the Company issued warrants to investors to purchase 209,438 shares of Series C at an exercise price of $1.55 per share in connection with a bridge loan. The warrants were exercisable immediately and expire on the earlier of August or October 2004, respectively, the closing of an initial public offering with proceeds of at least $7.5 million or the sale of the Company in which at least 50% of the voting power is transferred. The apportioned fair value of the warrant at the date of issuance was determined to be approximately $205,000 using the Black-Scholes option pricing model with the following assumptions: risk-free interest rate of 6.1%; contractual life of 5 years; and expected volatility of 70%. This amount was recognized as additional interest expense upon conversion of the bridge loans into Series C preferred stock in 1999.

In December 2003, an investor exercised warrants to purchase 25,807 shares of Series C at an exercise price of $1.55 per share for total cash proceeds of $40,000.

In February 2000, the Company issued a warrant to a lessor to purchase up to 19,355 shares of Series C at $1.55 per share in connection with an equipment lease line. The warrant is exercisable immediately and expires on the earlier of February 2007 or two years after an initial public offering by the Company. The fair value of the warrant at the date of issuance was determined to be approximately $103,000 using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 6.5%; contractual life of seven years; and expected volatility of 70%. This amount was amortized to interest expense over the term of the lease line. Amortization for the years ended December 31, 2001 and 2002 was $35,000 and $38,000, respectively. The value of the warrant was fully amortized at December 31, 2002.

In February 2000, the Company granted rights to purchase up to 691,244 shares of Series C in connection with a subordinated loan (see Note 4).

In October 2000, the Company issued a warrant to a lessor to purchase 18,750 shares of Series D at $8.00 per share in connection with an equipment lease line. The warrant is exercisable immediately and expires in October 2010. The fair value of the warrants at the date of issuance was determined to be approximately $121,000 using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 6%; contractual life of 10 years; and expected volatility of 70%. This amount was amortized to interest expense over the term of the lease line. Amortization for the years ended December 31, 2001, 2002 and 2003 was approximately $40,000, $40,000 and $37,000, respectively. The value of the warrant was fully amortized at December 31, 2003.

In April 2003, the Company issued a warrant to a lessor to purchase 18,750 shares of Series D at $8.00 per share in connection with an equipment lease line. The warrant is exercisable immediately and expires in April 2013. The fair value of the warrants at the date of issuance was determined to be approximately $117,000 using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 3.89%; contractual life of 10 years; and expected volatility of 70%. This amount is being amortized to interest expense over the term of the lease line. Amortization for the year ended December 31, 2003 was approximately $29,000.

The warrants and purchase rights to purchase preferred stock that are not exercised prior to the consummation of this offering will become exercisable for common stock.

F-23

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 7—Stockholders’ Equity (Deficit):

Common Stock

The Company’s Certificate of Incorporation authorizes the Company to issue 60,000,000 shares of common stock. Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors, subject to the prior rights of the preferred stockholders.

Stock Option Plan

In 1999, the Company adopted the 1999 Stock Plan (the “Plan”) under which incentive stock options, nonstatutory stock options and stock purchase rights may be granted to employees and consultants. The exercise price for incentive stock options must be at least 100% of the fair market value on the date of the grant for employees owning less than 10% of the voting power of all classes of stock and at least 110% of the fair market value on the date of grant for employees owning at least 10% of the voting power of all classes of stock. Options generally expire in 10 years and vest over periods determined by the directors, generally four years. However, options granted under the Plan generally become exercisable immediately, with the common stock purchased under these options subject to the Company’s right to repurchase, which lapses over a maximum period of four years at such times and under such conditions as determined by the Board of Directors. Upon termination of employment, unvested shares may be repurchased by the Company for the original purchase price.

Option and stock purchase right activity under the Plan was as follows (in thousands):

			Options Outstanding
	Options Available for Grant		Shares		Weighted Average Exercise Price
Balances, December 31, 2000	2,103		607		$	1.29
Authorized	3,700
Granted	(5,213	)	5,213			0.10
Exercised	—		(347	)		0.91
Cancelled	360		(360	)		1.28
Balances, December 31, 2001	950		5,113			0.10
Granted	(1,160	)	1,160			0.19
Exercised	—		(4,558	)		0.10
Cancelled	437		(437	)		0.11
Balances, December 31, 2002	227		1,278			0.20
Authorized	5,300
Granted	(3,683	)	3,683			0.72
Exercised	—		(519	)		0.26
Cancelled	97		(97	)		0.46
Balances, December 31, 2003	1,941		4,345			0.62

F-24

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At December 31, 2001, 2002 and 2003, 803,904, 2,467,839 and 1,545,093 shares of common stock, respectively, issued under the Plan remained subject to repurchase rights due to the early exercise of stock options. For options granted after March 21, 2002 and subsequently exercised, the Company recorded the portion subject to repurchase as a liability in accordance with EITF 00-23, “Issues Related to the Accounting for Stock Compensation under APB 25 and FIN 44.” At December 31, 2002 and 2003, the liability relating to common stock still subject to repurchase was approximately $7,000 and $100,000, respectively. The exercise of these options has been included in the option activity table above.

The options outstanding, exercisable and vested by range of exercises price as of December 31, 2003 were as follows (options in thousands):

	Options Outstanding and Exercisable				Options Vested
Range of Exercise   Prices	Number Outstanding	Weighted Average Remaining Contractual Life (in Years)	Weighted Average Exercise Price		Number Outstanding	Weighted Average Exercise Price
$0.10	461	7.82	$	0.10	315	$	0.10
$0.25	3,269	9.20		0.25	219		0.25
$0.40—$1.30	126	9.22		0.56	50		0.59
$2.50	202	9.64		2.50	—		—
$3.25—$4.25	103	9.79		3.85	—		—
$4.75	184	9.94		4.75	—		—
$0.10—$4.75	4,345	9.12		0.62	584		0.25

As of December 31, 2001 and 2002, 1,294,259 and 301,503 options, respectively, were vested.

The weighted average fair value of options granted during the years ended December 31, 2001, 2002 and 2003 was $0.01, $0.02 and $3.46, respectively, as of the grant date.

The Company calculated the fair value of each option on the date of grant during 2001, 2002 and 2003 using the minimum value model as prescribed by SFAS No. 123 and using the following assumptions:

	Years Ended December 31,
	2001		2002		2003
Risk-free interest rate	4.4	%	3.4	%	3.0	%
Expected lives (in years)	2.71		3.45		3.52
Dividend yield	0.0	%	0.0	%	0.0	%

Changes in the subjective input assumptions can materially affect the fair value estimate. In management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.

Stock-based expense

In connection with certain stock option grants to employees during the year ended December 31, 2003, the Company recognized approximately $12,283,000 of deferred stock-

F-25

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

based compensation for the excess of the estimated fair value of the shares of common stock subject to such options over the exercise price of these options at the date of grant. Such amounts are included as a reduction of stockholders’ equity and are being amortized using the accelerated method over the vesting period of the related options, which is generally four years. Amortization expense for the year ended December 31, 2003, net of cancellations, was approximately $3,700,000.

Stock-based expense related to equity investments granted to consultants is recognized as earned. At each reporting date, the Company re-values any unvested equity investments using the Black-Scholes option pricing model. As a result, the stock-based expense will fluctuate as the fair market value of the Company’s common stock fluctuates. During the years ended December 31, 2001, 2002 and 2003, the Company granted fully vested options to purchase 200,171, 18,000 and 39,500 shares of common stock, respectively, to consultants in exchange for services. In connection with these grants, the Company recorded compensation expense of $16,000, $2,000 and $269,000 during 2001, 2002 and 2003, respectively.

Stockholders’ notes receivable and stock repurchase program

From 1999 to 2001, certain employees exercised common stock options in exchange for full recourse promissory notes. These notes accrued interest at 5.0% to 6.3% per annum. Certain notes matured three years from the date of issuance and the remaining notes matured at the earlier of five years from the date of issuance or nine months after an initial public offering.

On March 1, 2001, the Company announced a voluntary stock repurchase and stock option exchange program (the “Program”) for the Company’s employees and consultants. Under the Program, the Company offered to (i) purchase from employees and consultants certain shares of the Company’s common stock acquired through the exercise of stock options in exchange for promissory notes or (ii) cancel outstanding stock options, where the exercise price was equal to or greater than $1.00 per share. Those who elected to participate were to be granted an equal number of new stock options at a future date (at least six months and a day later) with an exercise price equal to the then fair market value of the Company’s common stock. In the event that the total repurchase price was not sufficient to fully cancel the employee’s or consultant’s indebtedness, the Company forgave the remaining balance.

As part of the Program, on March 16, 2001, the Company repurchased a total of 1,511,893 shares of common stock at $1.15 per share (management’s estimate of fair value on March 16, 2001) for total consideration of approximately $1,739,000 in exchange for notes and interest receivable totalling approximately $1,712,000 and $27,000, respectively, and forgave the remaining balance of notes and interest receivable of approximately $93,000 and $21,000, respectively. The Company also cancelled 305,500 outstanding options. On October 12, 2001, at a meeting of the Company’s board of directors, new stock options were granted at the then fair market value of $0.10 per share, and on December 28, 2001, a cash bonus totalling approximately $94,000 was paid to employees and consultants to offset tax liabilities arising from the Program.

The forgiveness of notes and interest receivable and the total cash bonuses were recorded as compensation expense. The Company recorded $8,000 and $1,000, respectively, as cost of

F-26

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

revenue and recorded the remaining amounts of $122,000 and $93,000, respectively, in general and administrative expenses.

As part of the Program, on April 20, 2001, the Company repurchased 425,000 shares of common stock from one of its executive officers at $0.85 per share (management’s estimate of fair value on April 20, 2001), for total consideration of approximately $361,000 in exchange for notes and interest receivable totalling approximately $340,000 and $21,000, respectively. The Company forgave the balance of accrued interest associated with these notes of approximately $6,000. On October 21, 2001, new stock options were granted to this individual at the then fair market value of $0.10 per share, and on December 28, 2001, a cash bonus of approximately $21,000 was paid to the executive officer to partially offset tax liabilities associated with the transaction. The forgiveness of interest receivable and cash bonus were recorded as compensation expense within general and administrative expenses.

Following the Program, at December 31, 2001, the Company had stockholder notes receivable totalling approximately $151,000, relating to the exercise of 4,609,017 common stock options at exercise prices ranging from $0.02 to $0.20 per share. In 2002, these notes, plus accrued interest totalling approximately $25,000, were replaced with new interest free notes, which mature at the earlier of four years from the date of issuance or nine months after an initial public offering. These notes are collateralized by certain common stock of the Company.

Between January 2002 and June 2002, employees exercised options to purchase 3,296,949 shares of common stock at an exercise price of $0.10 per share and executed interest free promissory notes in favor of the Company. These notes mature at the earlier of five years from the date of issuance or nine months after an initial public offering. The notes outstanding, totalling approximately $330,000 at each of December 31, 2002 and 2003, are collateralized by certain common stock of the Company.

In accordance with the guidance in Issue 34 of EITF 00-23, as the Company established a history of previously forgiving full-recourse promissory notes with its 2001 Program, the stockholder notes issued in 2002 and 2003 have been accounted for as non-recourse in nature. As a result, the exercise of the options to purchase 4,609,017 shares of common stock continues to be a stock option award for accounting purposes and is not accounted for as an exercised stock option award in accordance with EITF 00-23, and the stockholder notes relating to these options, totalling $151,000, were eliminated.

In addition, also in accordance with EITF 00-23, the exercise of the options to purchase 3,296,949 shares of common stock, described above, continues to be a stock option award for accounting purposes and is not accounted for as an exercised stock option award.

For the purposes of the stock option and purchase right activity table above, the options to purchase 4,609,017 shares and 3,296,949 shares of common stock have been treated as exercised, as this table is prepared using the legal form of the exercise, rather than the accounting in accordance with EITF 00-23.

F-27

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Note 8—Income Taxes:

The components of the provision for income taxes are as follows (in thousands):

	Year Ended December 31,
	2001		2002		2003
Current:
Federal	$	—	$	—	$	629
State		—		14		2,544
Foreign		—		—		2
		—		14		3,175
Deferred:
Federal		—		—		(9,091	)
State		—		—		(2,656	)
		—		—		(11,747	)
Total provision for (benefit from) income taxes	$	—	$	14	$	(8,572	)

The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes consisted of:

	Years Ended December 31,
	2001	2002	2003
Federal statutory rate	(35.0)%	35.0 %	35.0 %
State taxes and credits, net of federal benefit	(6.4)	(327.0)	8.7
Tax credits	(1.0)	(282.8)	(0.1)
Stock-based expense	—	—	4.9
Permanent items and other	(0.2)	534.3	2.2
Change in valuation allowance	42.6	53.8	(83.3)
Total provision for (benefit from) income taxes	0.0 %	13.3 %	(32.6)%

The components of the net deferred income tax assets as of December 31, 2002 and 2003, were as follows (in thousands):

	December 31,
	2002			2003
Deferred income tax assets:
Net operating loss carryforwards	$	18,171		$	7,332
Research and development credits		1,672			776
Reserves and accruals		1,051			2,977
Depreciation		1,000			662
Gross deferred income tax assets		21,894			11,747
Valuation allowance		(21,894	)		—
Net deferred income tax assets	$	—		$	11,747

F-28

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Management evaluates the recoverability of the deferred income tax assets and recognizes the tax benefit only if reassessment demonstrates that they are realizable. At such time, if it is determined that it is more likely than not that the deferred income tax assets are realizable, the valuation allowance will be adjusted. At December 31, 2002, the Company provided a valuation allowance against its deferred income tax assets due to the uncertainty regarding their realizability. As of December 31, 2003, the Company has released the valuation allowance because it believes that it is more likely than not that all deferred income tax assets will be realized in the foreseeable future.

At December 31, 2003, the Company had federal and state net operating loss carryforwards of approximately $16,310,000 and $41,605,000, respectively, available to offset future regular taxable income. If not utilized, the federal net operating losses will expire in 2021. The state net operating losses will expire between 2007 and 2012.

At December 31, 2003, the Company had federal research and development credit carryforwards of approximately $147,000, which will expire between 2018 and 2023.

The Tax Reform Act of 1986 limits the use of net operating loss and tax credit carryforwards in certain situations where changes occur in the stock ownership. The Company has federal and state net operating losses of approximately $2,468,000 that are subject to annual limitations of $38,000.

Note 9—Segment Reporting:

The following table presents revenue by geographical location, defined by customers’ billing addresses (in thousands):

	Years Ended December 31,
	2001		2002		2003
United States	$	13,260	$	35,402	$	77,193
International		1,418		5,185		13,287
	$	14,678	$	40,587	$	90,480

Note 10—401(k) Plan:

In January 1999, the Company adopted a 401(k) plan (the “401(k)”). Participation in the 401(k) plan is available to all eligible employees, who contribute amounts not to exceed the statutory limit as prescribed by the Internal Revenue Code. The Company may make profit sharing and or matching contributions to the 401(k) plan. To date, no contributions have been made by the Company.

Note 11—Subsequent Events:

Subsequent to December 31, 2003, the Company relocated its headquarters to a different facility, also located in Redwood City. The Company expects to incur lease payments under the new facility lease of approximately $496,000 in 2004, $764,000 in 2005, $787,000 in 2006, $810,000 in 2007, $835,000 in 2008 and $860,000 in 2009. The lease on the vacated property

F-29

CLARIA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

expires in 2005 and the Company expects to incur a restructuring charge of approximately $2.4 million in the quarter ending March 31, 2004. The Company also entered into two cash commitments totaling $9.0 million to be paid in 2004, which cash commitments will be amortized to operating expense in future periods. The Company’s Board of Directors and stockholders also approved the reservation of an additional 2,000,000 shares of common stock for future issuance under the Plan and issued options to purchase 1,810,725 shares of common stock at exercise prices of $4.75 and $8.88 per share to employees. The Company also agreed to issue a warrant to purchase 750,000 shares of its common stock at an exercise price of $10.44 per share. The warrant is exercisable immediately and has a three year term. The fair value of the warrant will be amortized to operating expense in future periods.

F-30

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 Claria in connection with the sale of the shares of common stock being registered hereby. All amounts are estimates except for the SEC registration fee, the NASD filing fee and the Nasdaq National Market filing fee.

SEC registration fee	$	19,005
NASD filing fee		15,500
Nasdaq National Market initial filing fee		5,000
Printing and engraving		*
Legal fees and expenses		*
Accounting fees and expenses		*
Directors and officers liability insurance		*
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 permitted by the Delaware General Corporation Law, the Registrant’s certificate of incorporation includes a provision that eliminates, to the fullest extent permitted by law, the personal liability of a director for monetary damages resulting from breach of his fiduciary duty as a director.

As permitted by the Delaware General Corporation Law, the Registrant’s bylaws 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 certain very limited exceptions;

• the Registrant may indemnify its other employees and agents as provided in indemnification contracts entered into between the Registrant and its employees and agents;

• 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 certain very limited exceptions; and

• the rights conferred in the bylaws are not exclusive.

II-1

In addition, the Registrant has entered into indemnity agreements with each of its current directors and officers. These agreements provide for the indemnification of directors and officers for all reasonable expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were agents of the Registrant.

The Registrant currently carries liability insurance for its directors and officers.

The Underwriting Agreement filed as Exhibit 1.01 to this Registration Statement provides for indemnification by the underwriters of the Registrant and its directors and officers for certain liabilities under the Securities Act of 1933, or otherwise.

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	*
Amended and Restated Certificate of Incorporation of the Registrant	3.01
Form of Amended and Restated Certificate of Incorporation of the Registrant, to be filed following the consummation of this offering	3.05	*
Bylaws of the Registrant	3.06
Form of Amended and Restated Bylaws of the Registrant, to be effective following the closing of this offering	3.07	*
Form of Indemnity Agreement	10.14	*

*        To be filed by amendment.

ITEM 15.    Recent Sales of Unregistered Securities.

Since March 1, 2001, the Registrant has issued and sold the following securities:

1. Through March 1, 2004, we granted direct issuances or stock options to purchase 11,738,773 shares of our common stock at exercise prices ranging from $0.10 to $4.75 per share to our employees, consultants, directors and other service providers under our 1999 Stock Plan.

2. Through March 1, 2004, we issued and sold an aggregate of 5,189,903 shares of our common stock to employees, consultants, directors and other service providers at prices ranging from $0.10 to $2.50 per share under direct issuances or exercises of options granted under our 1999 Stock Plan.

3. In April 2003, we issued warrants to purchase 18,750 shares of Series D preferred stock to an equipment lessor at an exercise price of $8.00.

4. In April 2003, we granted a purchase right to Pentech Financial Services, Inc. with respect to up to $1,000,000 in any future private equity financings that we complete.

5. In May 2003, an individual investor exercised a warrant to purchase 25,000 shares of Series B preferred stock at an exercise price of $0.60 per share.

6. In December 2003, Capital M Group, LLC exercised warrants to purchase 25,807 shares of Series C preferred stock at an exercise price of $1.55 per share.

7. In January 2004, Internet Ventures III exercised a warrant to purchase 32,258 shares of Series C preferred stock at an exercise price of $1.55 per share.

II-2

Upon the completion of this offering, each outstanding share of Series A preferred stock, Series B preferred stock, Series C preferred stock and Series D preferred stock will convert into one share of common stock.

All sales of common stock made pursuant to the exercise of stock options were made in reliance on Rule 701 under the Securities Act or on Section 4(2) of the Securities Act.

All other sales were made in reliance on Section 4(2) of the Securities Act and/or Regulation D promulgated under the Securities Act. These sales were made without general solicitation or advertising. Each purchaser was a sophisticated investor with access to all relevant information necessary to evaluate the investment and represented to the Registrant that the shares were being acquired for investment.

II-3

ITEM 16.    Exhibits and Financial Statement Schedules.

(a) The following exhibits are filed herewith:

Exhibit Number	Exhibit Title
1.01*	Form of Underwriting Agreement.
3.01	Amended and Restated Certificate of Incorporation of the Registrant filed on March 28, 2000 with the Delaware Secretary of State.
3.02	Certificate of Amendment to Amended and Restated Certificate of Incorporation filed on June 26, 2001 with the Delaware Secretary of State.
3.03	Certificate of Amendment to Amended and Restated Certificate of Incorporation filed on July 5, 2001 with the Delaware Secretary of State.
3.04	Certificate of Amendment to Amended and Restated Certificate of Incorporation filed on October 22, 2003 and made effective as of October 29, 2003 with the Delaware Secretary of State.
3.05*	Form of Amended and Restated Certificate of Incorporation of the Registrant, to be filed upon closing of this offering with the Delaware Secretary of State.
3.06	Bylaws of the Registrant.
3.07*	Form of Amended and Restated Bylaws of the Registrant, to be effective upon 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	1999 Stock Plan.
10.02*	2004 Equity Incentive Plan.
10.03*	2004 Employee Stock Purchase Plan.
10.04	Lease dated December 15, 2003 between the Registrant and MPTP Holding, LLC.
10.05	Employment Agreement dated as of February 26, 1999 between Registrant and Jeffrey McFadden.
10.06	Employment Agreement dated as of March 19, 1999 between Registrant and Anthony Martin.
10.07	Employment Agreement dated as of February 3, 1999 between Registrant and Scott Eagle.
10.08	Offer Letter dated November 16, 1999 from Registrant to Mitchell Weisman.
10.09	Key Employee Retention Agreement effective February 7, 2001 between Registrant and Mitchell Weisman.
10.10	Offer Letter dated March 23, 2000 from Registrant to Scott VanDeVelde.
10.11	Key Employee Retention Agreement effective March 24, 2000 between Registrant and Scott VanDeVelde.
10.12	Offer Letter dated February 4, 2003 from Registrant to Joseph Cutts.
10.13	Second Amended and Restated Investors’ Rights Agreement by and between the Registrant and certain investors of the Registrant dated March 28, 2000.
10.14*	Form of Indemnity Agreement between the Registrant and each of its directors and executive officers.

II-4

Exhibit Number	Exhibit Title
10.15 (a)	Search Services Agreement effective March 28, 2003 between Registrant and Overture Services, Inc.
10.16 (a)	Amendment #1 to Search Services Agreement effective September 12, 2003 between Registrant and Overture Services, Inc.
10.17 (a)	Amendment #2 to Search Services Agreement effective October 1, 2003 between Registrant and Overture Services, Inc.
10.18 (a)	Contextual Search Agreement effective September 16, 2003 between Registrant and Overture Services, Inc.
10.19 (a)	Amendment #1 to Contextual Search Agreement effective December 17, 2003 between Registrant and Overture Services, Inc.
10.20 (a)	Distribution Agreement dated September 9, 2003 between Gain Publishing, Ltd. and Sharman Networks Ltd.
10.21	Consulting Agreement dated October 11, 2001 between Registrant and John Giuliani.
10.22	General Terms Agreement dated May 29, 2002 between Registrant and Avenue A, Inc.
10.23	Offer Letter dated January 26, 2004 from Registrant to Richard Mora.
10.24	Key Employee Retention Agreement dated January 27, 2004 between Registrant and Richard Mora.
21.01	List of Registrant’s Subsidiaries.
23.01*	Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02	Consent of PricewaterhouseCoopers LLP, independent accountants.
24.01	Power of Attorney (see page II-7).

* To be filed by amendment.

(a) Confidential treatment has been requested for a portion of this exhibit.

(b) Financial Statement Schedules

Schedules not listed above have been omitted because the information required to be set forth therein is not applicable or is shown in the consolidated financial statements or notes thereto.

ITEM 17.    Undertakings.

The undersigned Registrant hereby undertakes to provide to the Underwriters at the closing specified in the Underwriting Agreement certificates in such denominations and registered in such names as required by the Underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described under 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.

II-5

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-6

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 Redwood City, State of California, on April 7, 2004.

CLARIA CORPORATION
By:	/s/    JEFF MCFADDEN
	Jeffrey McFadden President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints Jeffrey McFadden and Richard Mora, 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
Principal Executive Officer:
/s/    JEFF MCFADDEN         Jeffrey McFadden	President, Chief Executive Officer and Director	April 1, 2004
Principal Financial Officer and Principal Accounting Officer:
/s/    RICHARD MORA         Richard Mora	Chief Financial Officer	April 7, 2004
Additional Directors:
/s/    DAVID BUROW         David Burow	Director	April 7, 2004
/s/    JOSEPH CUTTS         Joseph Cutts	Director	April 7, 2004

II-7

Name	Title	Date
/s/    JOHN GIULIANI         John Giuliani	Director	April 2, 2004
/s/    DAVID LEE         David Lee	Director	April 7, 2004
/s/    MAGDALENA YESIL         Magdalena Yesil	Director	April 7, 2004
/s/    PHILIP YOUNG         Philip Young	Director	April 7, 2004

II-8

EXHIBIT INDEX

Exhibit Number	Exhibit Title
1.01*	Form of Underwriting Agreement.
3.01	Amended and Restated Certificate of Incorporation of the Registrant filed on March 28, 2000 with the Delaware Secretary of State.
3.02	Certificate of Amendment to Amended and Restated Certificate of Incorporation filed on June 26, 2001 with the Delaware Secretary of State.
3.03	Certificate of Amendment to Amended and Restated Certificate of Incorporation filed on July 5, 2001 with the Delaware Secretary of State.
3.04	Certificate of Amendment to Amended and Restated Certificate of Incorporation filed on October 22, 2003 and made effective as of October 29, 2003 with the Delaware Secretary of State.
3.05*	Form of Amended and Restated Certificate of Incorporation of the Registrant, to be filed upon closing of this offering with the Delaware Secretary of State.
3.06	Bylaws of the Registrant.
3.07*	Form of Amended and Restated Bylaws of the Registrant, to be effective upon 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	1999 Stock Plan.
10.02*	2004 Equity Incentive Plan.
10.03*	2004 Employee Stock Purchase Plan.
10.04	Lease dated December 15, 2003 between the Registrant and MPTP Holding, LLC.
10.05	Employment Agreement dated as of February 26, 1999 between Registrant and Jeffrey McFadden.
10.06	Employment Agreement dated as of March 19, 1999 between Registrant and Anthony Martin.
10.07	Employment Agreement dated as of February 3, 1999 between Registrant and Scott Eagle.
10.08	Offer Letter dated November 16, 1999 from Registrant to Mitchell Weisman.
10.09	Key Employee Retention Agreement effective February 7, 2001 between Registrant and Mitchell Weisman.
10.10	Offer Letter dated March 23, 2000 from Registrant to Scott VanDeVelde.
10.11	Key Employee Retention Agreement effective March 24, 2000 between Registrant and Scott VanDeVelde.
10.12	Offer Letter dated February 4, 2003 from Registrant to Joseph Cutts.
10.13	Second Amended and Restated Investors’ Rights Agreement by and between the Registrant and certain investors of the Registrant dated March 28, 2000.
10.14*	Form of Indemnity Agreement between the Registrant and each of its directors and executive officers.
10.15 (a)	Search Services Agreement effective March 28, 2003 between Registrant and Overture Services, Inc.

Exhibit Number	Exhibit Title
10.16 (a)	Amendment #1 to Search Services Agreement effective September 12, 2003 between Registrant and Overture Services, Inc.
10.17 (a)	Amendment #2 to Search Services Agreement effective October 1, 2003 between Registrant and Overture Services, Inc.
10.18 (a)	Contextual Search Agreement effective September 16, 2003 between Registrant and Overture Services, Inc.
10.19 (a)	Amendment #1 to Contextual Search Agreement effective December 17, 2003 between Registrant and Overture Services, Inc.
10.20 (a)	Distribution Agreement dated September 9, 2003 between Gain Publishing, Ltd. and Sharman Networks Ltd.
10.21	Consulting Agreement dated October 11, 2001 between Registrant and John Giuliani.
10.22	General Terms Agreement dated May 29, 2002 between Registrant and Avenue A, Inc.
10.23	Offer Letter dated January 26, 2004 from Registrant to Richard Mora.
10.24	Key Employee Retention Agreement dated January 27, 2004 between Registrant and Richard Mora.
21.01	List of Registrant’s Subsidiaries.
23.01*	Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02	Consent of PricewaterhouseCoopers LLP, independent accountants.
24.01	Power of Attorney (see page II-7).

* To be filed by amendment.

(a) Confidential treatment has been requested for a portion of this exhibit.

EX-3.01

Exhibit 3.01

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

Gator.com Corporation

The undersigned, Jeffrey McFadden, hereby certifies that:

1. He is the duly elected and acting President and Chief Executive Officer of Gator.com Corporation, a Delaware corporation.

2. The Certificate of Incorporation of this corporation was originally filed with the Secretary of State of Delaware under the name “eGuard, Inc.” on July 17, 1998.

3. The Certificate of Incorporation of this corporation shall be amended and restated to read in full as follows:

ARTICLE I

The name of this corporation is Gator.com Corporation (the “Corporation”).

ARTICLE II

The address of the Corporation’s registered office in the State of Delaware is 1013 Centre Road, in the City of Wilmington, County of New Castle. The name of its 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 Delaware General Corporation Law.

ARTICLE IV

(A) Classes of Stock. The Corporation is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Corporation is authorized to issue is Sixty Million Five Hundred Seventeen Thousand Three Hundred Forty Six (60,517,346) shares, each with a par value of $0.0001 per share. Forty Million (40,000,000) shares shall be Common Stock and Twenty Million Five Hundred Seventeen Thousand Three Hundred Forty Six (20,517,346) shares shall be Preferred Stock.

(B) Rights, Preferences and Restrictions of Preferred Stock. The Preferred Stock authorized by this Certificate of Incorporation may be issued from time to time in one or more series. The first series of Preferred Stock shall be designated “Series A Preferred Stock” and shall consist of One Million One Hundred Twenty Five Thousand (1,125,000) shares. The second series of Preferred Stock shall be designated “Series B Preferred Stock” and shall consist

of Four Million Four Hundred One Thousand One Hundred and One (4,401,101) shares. The third series of Preferred Stock shall be designated “Series C Preferred Stock” and shall consist of Eight Million Five Hundred Ninety One Thousand Two Hundred Forty Five (8,591,245) shares. The fourth series of Preferred Stock shall be designated “Series D Preferred Stock” and shall consist of Seven Million Three Hundred Twelve Thousand Five Hundred (7,312,500) shares. The rights, preferences, privileges, and restrictions granted to and imposed on the Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock are as set forth below in this Article IV(B).

1. Dividend Provisions. Subject to the rights of series of Preferred Stock which may from time to time come into existence, the holders of shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock shall be entitled pari passu to receive dividends, out of any assets legally available therefor, prior and in preference to any declaration or payment of any dividend (payable other than in Common Stock or other securities and rights convertible into or entitling the holder thereof to receive, directly or indirectly, additional shares of Common Stock of the Corporation) on the Common Stock of the Corporation, at the rate of $0.016 per share per annum on each outstanding share of Series A Preferred Stock, $0.048 per share per annum on each outstanding share of Series B Preferred Stock, $0.124 per share per annum on each outstanding share of Series C Preferred Stock and $0.64 per share per annum on each outstanding share of Series D Preferred Stock, payable quarterly when, as and if declared by the Board of Directors. Such dividends shall not be cumulative.

2. Liquidation.

(a) Preference. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, and subject to the rights of series of Preferred Stock that may from time to time come into existence, the holders of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Corporation to the holders of Common Stock by reason of their ownership thereof, an amount per share equal to (i) $0.20 per share for each share of Series A Preferred Stock then held by them; (ii) $0.60 per share for each share of Series B Preferred Stock then held by them, (iii) $1.55 per share for each share of Series C Preferred Stock then held by them, and (iv) $8.00 per share for each share of Series D Preferred Stock then held by them, plus declared but unpaid dividends. If, upon the occurrence of such event, the assets and funds thus distributed among the holders of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then, subject to the rights of series of Preferred Stock that may from time to time come into existence, the entire assets and funds of the Corporation legally available for distribution shall be distributed ratably among the holders of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock in proportion to the preferential amount each such holder is otherwise entitled to receive.

(b) Remaining Assets. Upon the completion of the distribution required by Section 2(a) above and any other distribution that may be required with respect to

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series of Preferred Stock that may from time to time come into existence, the remaining assets of the Corporation available for distribution to stockholders shall be distributed among the holders of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock and the Common Stock pro rata based on the number of shares of Common Stock held by each (assuming conversion of all such Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock) until (i) with respect to the holders of Series A Preferred Stock, such holders shall have received an aggregate of $0.30 per share of Series A Preferred Stock (including amounts paid pursuant to Section 2(a) above), (ii) with respect to the holders of Series B Preferred Stock, such holders shall have received an aggregate of $0.90 per share of Series B Preferred Stock (including amounts paid pursuant to Section 2(a) above), (iii) with respect to the holders of Series C Preferred Stock, such holders shall have received an aggregate of $2.325 per share of Series C Preferred Stock (including amounts paid pursuant to Section 2(a) above) and (iv) with respect to the holders of Series D Preferred Stock, such holders shall have received an aggregate of $12.00 per share of Series D Preferred Stock (including amounts paid pursuant to Section 2(a) above); thereafter, subject to the rights of series of Preferred Stock that may from time to time come into existence, if assets remain in the Corporation, the holders of the Common Stock of the Corporation shall receive all of the remaining assets of the Corporation pro rata based on the number of shares of Common Stock held by each.

(c) Certain Acquisitions.

(i) Deemed Liquidation. For purposes of this Section 2, a liquidation, dissolution or winding up of the Corporation shall be deemed to occur if the Corporation shall sell, convey, or otherwise dispose of or encumber all or substantially all of its property or business or merge into or consolidate with any other corporation (other than a wholly-owned subsidiary corporation) or effect any other transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Corporation is disposed of, provided that this Section 2(c)(i) shall not apply to a merger effected exclusively for the purpose of changing the domicile of the Corporation.

(ii) Valuation of Consideration. In the event of a deemed liquidation as described in Section 2(c)(i) above, if the consideration received by the Corporation or its stockholders is other than cash, its value will be deemed its fair market value. Any securities shall be valued as follows:

(A) Securities not subject to investment letter or other similar restrictions on free marketability:

(1) If traded on a securities exchange or The Nasdaq Stock Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the thirty-day period ending three (3) days prior to the closing;

(2) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty-day period ending three (3) days prior to the closing; and

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(3) If there is no active public market, the value shall be the fair market value thereof, as mutually determined by the Corporation and the holders of at least a majority of the voting power of all then outstanding shares of Preferred Stock.

(B) The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder’s status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in Section 2(c)(ii)(A) to reflect the approximate fair market value thereof, as mutually determined by the Corporation and the holders of at least a majority of the voting power of all then outstanding shares of Preferred Stock.

(iii) Notice of Transaction. The Corporation shall give each holder of record of Preferred Stock written notice of such impending transaction not later than ten (10) days prior to the stockholders’ meeting called to approve such transaction, or ten (10) days prior to the closing of such transaction, whichever is earlier, and shall also notify such holders in writing of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending transaction and the provisions of this Section 2, and the Corporation shall thereafter give such holders prompt notice of any material changes. The transaction shall in no event take place sooner than ten (10) days after the Corporation has given the first notice provided for herein or sooner than ten (10) days after the Corporation has given notice of any material changes provided for herein; provided, however, that such periods may be shortened upon the written consent of the holders of Preferred Stock that are entitled to such notice rights or similar notice rights and that represent at least a majority of the voting power of all then outstanding shares of such Preferred Stock.

(iv) Effect of Noncompliance. In the event the requirements of this Section 2(c) are not complied with, the Corporation shall forthwith either cause the closing of the transaction to be postponed until such requirements have been complied with, or cancel such transaction, in which event the rights, preferences and privileges of the holders of Preferred Stock shall revert to and be the same as such rights, preferences and privileges existing immediately prior to the date of the first notice referred to in Section 2(c)(iii) hereof.

3. Redemption. The Preferred Stock is not redeemable.

4. Conversion. The holders of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock shall have conversion rights as follows (the “Conversion Rights”):

(a) Right to Convert. Subject to Section 4(c), each share of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, at the office of the Corporation or any transfer agent for such stock, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing: (i) $0.20 by the Conversion Price applicable to such share for Series A Preferred Stock, (ii) $0.60 by the Conversion Price applicable to such share for Series B Preferred Stock, (iii) $1.55 by the

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Conversion Price applicable to such share for Series C Preferred Stock and (iv) $8.00 by the Conversion Price applicable to such share for Series D Preferred Stock, determined as hereafter provided, in effect on the date the certificate is surrendered for conversion. The initial Conversion Price per share of Series A Preferred Stock shall be $0.20, the per share of Series B Preferred Stock shall be $0.60, the per share of Series C Preferred Stock shall be $1.55 and the per share of Series D Preferred Stock shall be $8.00. Such initial Conversion Prices shall be subject to adjustment as set forth in Section 4(d).

(b) Automatic Conversion.

(i) Series A-C Conversion. Each share of Series A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock shall automatically be converted into shares of Common Stock at the Conversion Price at the time in effect for such share immediately upon the earlier of (i) except as provided below in Section 4(c), the Corporation’s sale of its Common Stock in a firm commitment underwritten public offering pursuant to a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), the public offering price of which is not less than $11.50 per share (appropriately adjusted for any stock split, dividend, combination or other recapitalization) and which results in aggregate cash proceeds (net of underwriting discounts and commissions) of $25,000,000 or (ii) the date specified by written consent or agreement of the holders of at least a majority of the then-outstanding shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, voting together as a class.

(ii) Series D Conversion Each share of Series D Preferred Stock shall automatically be converted into shares of Common Stock at the Conversion Price at the time in effect for such share immediately upon the earlier of (i) except as provided below in Section 4(c), the Corporation’s sale of its Common Stock in a firm commitment underwritten public offering pursuant to a registration statement under the Securities Act of 1933, as amended (the “Securities Act”), the public offering price of which is not less than $11.50 per share (appropriately adjusted for any stock split, dividend, combination or other recapitalization) and which results in aggregate cash proceeds (net of underwriting discounts and commissions) of $25,000,000 or (ii) the date specified by written consent or agreement of the holders of at least a majority of the then-outstanding shares of Series D Preferred Stock, voting separately as a class.

(c) Mechanics of Conversion. Before any holder of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock shall be entitled to convert the same into shares of Common Stock, he shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for such series of Preferred Stock, and shall give written notice to the Corporation at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Preferred Stock, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of such series of Preferred Stock to be

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converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such date. If the conversion is in connection with an underwritten offering of securities registered pursuant to the Securities Act the conversion may, at the option of any holder tendering such Preferred Stock for conversion, be conditioned upon the closing with the underwriters of the sale of securities pursuant to such offering, in which event the person(s) entitled to receive Common Stock upon conversion of such Preferred Stock shall not be deemed to have converted such Preferred Stock until immediately prior to the closing of such sale of securities.

(d) Conversion Price Adjustments of Preferred Stock for Certain Dilutive Issuances, Splits and Combinations. The Conversion Price of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, respectively, shall be subject to adjustment from time to time as follows:

(i) Issuance of Additional Stock below Purchase Price . If the Corporation shall issue, after the date upon which any shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock were first issued (the “Purchase Date” with respect to each series), any Additional Stock (as defined below) without consideration or for a consideration per share less than the Conversion Price for such series in effect immediately prior to the issuance of such Additional Stock, the Conversion Price for such series in effect immediately prior to each such issuance shall automatically be adjusted as set forth in this Section 4(d)(i), unless otherwise provided in this Section 4(d)(i).

(A) Adjustment Formula. Whenever the Conversion Price is adjusted pursuant to this Section (4)(d)(i), the new Conversion Price shall be determined by multiplying the Conversion Price then in effect by a fraction, (x) the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such issuance (the “Outstanding Common”) plus the number of shares of Common Stock that the aggregate consideration received by the Corporation for such issuance would purchase at such Conversion Price; and (y) the denominator of which shall be the number of shares of Outstanding Common plus the number of shares of such Additional Stock. For purposes of the foregoing calculation, the term “Outstanding Common” shall include shares of Common Stock deemed issued pursuant to Section 4(d)(i)(E) below.

(B) Definition of “Additional Stock”. For purposes of this Section 4(d)(i), “Additional Stock” shall mean any shares of Common Stock issued (or deemed to have been issued pursuant to Section 4(d)(i)(E)) by the Corporation after the Purchase Date) other than

(1) Common Stock issued pursuant to a transaction described in Section 4(d)(ii) hereof,

(2) Shares of Common Stock issuable or issued to employees, consultants or directors of the Corporation directly or pursuant to a stock option plan or restricted stock plan approved by the Board of Directors of the Corporation,

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(3) Capital stock, or options or warrants to purchase capital stock, issued to financial institutions or lessors in connection with commercial credit arrangements, equipment financings or similar transactions,

(4) Shares of Common Stock or Preferred Stock issuable upon exercise of warrants and notes outstanding as of the date of this Certificate of Incorporation,

(5) Capital stock or warrants or options to purchase capital stock issued in connection with bona fide acquisitions, mergers or similar transactions, the terms of which are approved by the Board of Directors of the Corporation,

(6) Shares of Common Stock issued or issuable upon conversion of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, and

(7) Shares of Common Stock issued or issuable in a public offering prior to or in connection with which all outstanding shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock will be converted to Common Stock.

(C) No Fractional Adjustments. No adjustment of the Conversion Price for the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock shall be made in an amount less than one cent per share, provided that any adjustments which are not required to be made by reason of this sentence shall be carried forward and shall be either taken into account in any subsequent adjustment made prior to three years from the date of the event giving rise to the adjustment being carried forward, or shall be made at the end of three years from the date of the event giving rise to the adjustment being carried forward.

(D) Determination of Consideration. In the case of the issuance of Common Stock for cash, the consideration shall be deemed to be the amount of cash paid therefor before deducting any reasonable discounts, commissions or other expenses allowed, paid or incurred by the Corporation for any underwriting or otherwise in connection with the issuance and sale thereof. In the case of the issuance of the Common Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair value thereof as determined by the Board of Directors irrespective of any accounting treatment.

(E) Deemed Issuances of Common Stock. In the case of the issuance (whether before, on or after the applicable Purchase Date) of options to purchase or rights to subscribe for Common Stock, securities by their terms convertible into or exchangeable for Common Stock or options to purchase or rights to subscribe for such convertible or exchangeable securities, the following provisions shall apply for all purposes of this Section 4(d)(i):

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(1) The aggregate maximum number of shares of Common Stock deliverable upon exercise (assuming the satisfaction of any conditions to exercisability, including without limitation, the passage of time, but without taking into account potential antidilution adjustments) of such options to purchase or rights to subscribe for Common Stock shall be deemed to have been issued at the time such options or rights were issued and for a consideration equal to the consideration (determined in the manner provided in Section 4(d)(i)(D)), if any, received by the Corporation upon the issuance of such options or rights plus the minimum exercise price provided in such options or rights (without taking into account potential antidilution adjustments) for the Common Stock covered thereby.

(2) The aggregate maximum number of shares of Common Stock deliverable upon conversion of or in exchange (assuming the satisfaction of any conditions to convertibility or exchangeability, including, without limitation, the passage of time, but without taking into account potential antidilution adjustments) for any such convertible or exchangeable securities or upon the exercise of options to purchase or rights to subscribe for such convertible or exchangeable securities and subsequent conversion or exchange thereof shall be deemed to have been issued at the time such securities were issued or such options or rights were issued and for a consideration equal to the consideration, if any, received by the Corporation for any such securities and related options or rights (excluding any cash received on account of accrued interest or accrued dividends), plus the minimum additional consideration, if any, to be received by the Corporation (without taking into account potential antidilution adjustments) upon the conversion or exchange of such securities or the exercise of any related options or rights (the consideration in each case to be determined in the manner provided in Section 4(d)(i)(D)).

(3) In the event of any change in the number of shares of Common Stock deliverable or in the consideration payable to the Corporation upon exercise of such options or rights or upon conversion of or in exchange for such convertible or exchangeable securities, including, but not limited to, a change resulting from the antidilution provisions thereof, the Conversion Price of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, respectively, to the extent in any way affected by or computed using such options, rights or securities, shall be recomputed to reflect such change, but no further adjustment shall be made for the actual issuance of Common Stock or any payment of such consideration upon the exercise of any such options or rights or the conversion or exchange of such securities.

(4) Upon the expiration of any such options or rights, the termination of any such rights to convert or exchange or the expiration of any options or rights related to such convertible or exchangeable securities, the Conversion Price of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, respectively, to the extent in any way affected by or computed using such options, rights or securities or options or rights related to such securities, shall be recomputed to reflect the issuance of only the number of shares of Common Stock (and convertible or exchangeable securities which remain in effect) actually issued upon the exercise of such options or rights, upon the conversion or exchange of such securities or upon the exercise of the options or rights related to such securities.

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(5) The number of shares of Common Stock deemed issued and the consideration deemed paid therefor pursuant to Sections 4(d)(i)(E)(1) and 4(d)(i)(E)(2) shall be appropriately adjusted to reflect any change, termination or expiration of the type described in either Section 4(d)(i)(E)(3) or 4(d)(i)(E)(4).

(F) No Increased Conversion Price. Notwithstanding any other provisions of this Section (4)(d)(i), except to the limited extent provided for in Sections 4(d)(i)(E)(3) and 4(d)(i)(E)(4), no adjustment of the Conversion Price pursuant to this Section 4(d)(i) shall have the effect of increasing the Conversion Price above the Conversion Price in effect immediately prior to such adjustment.

(ii) Stock Splits and Dividends. In the event the Corporation should at any time or from time to time after the Purchase Date fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter referred to as “Common Stock Equivalents”) without payment of any consideration by such holder for the additional shares of Common Stock or the Common Stock Equivalents (including the additional shares of Common Stock issuable upon conversion or exercise thereof), then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the Conversion Price of the Series APreferred Stock, Series B Preferred Stock, Series C Preferred Stock and the Series D Preferred Stock shall be appropriately decreased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase of the aggregate of shares of Common Stock outstanding and those issuable with respect to such Common Stock Equivalents with the number of shares issuable with respect to Common Stock Equivalents determined from time to time in the manner provided for deemed issuances in Section 4(d)(i)(E).

(iii) Reverse Stock Splits. If the number of shares of Common Stock outstanding at any time after the Purchase Date is decreased by a combination of the outstanding shares of Common Stock, then, following the record date of such combination, the Conversion Price for the Series APreferred Stock, the Series B Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock shall be appropriately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in outstanding shares.

(e) Other Distributions. In the event the Corporation shall declare a distribution payable in securities of other persons, evidences of indebtedness issued by the Corporation or other persons, assets (excluding cash dividends) or options or rights not referred to in Section 4(d)(ii), then, in each such case for the purpose of this Section 4(e), the holders of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock shall be entitled to a proportionate share of any such distribution as though they were the holders of the number of shares of Common Stock of the Corporation into which their shares of Preferred Stock are convertible as of the record date fixed for the determination of the holders of Common Stock of the Corporation entitled to receive such distribution.

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(f) Recapitalizations. If at any time or from time to time there shall be a recapitalization of the Common Stock (other than a subdivision, combination or merger or sale of assets transaction provided for elsewhere in this Section 4 or Section 2) provision shall be made so that the holders of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock shall thereafter be entitled to receive upon conversion of such Preferred Stock the number of shares of stock or other securities or property of the Corporation or otherwise, to which a holder of Common Stock deliverable upon conversion would have been entitled on such recapitalization. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 4 with respect to the rights of the holders of such Preferred Stock after the recapitalization to the end that the provisions of this Section 4 (including adjustment of the Conversion Price then in effect and the number of shares purchasable upon conversion of such Preferred Stock) shall be applicable after that event and be as nearly equivalent as practicable.

(g) No Impairment. The Corporation will not, by amendment of its Certificate of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Section 4 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of Preferred Stock against impairment.

(h) No Fractional Shares and Certificate as to Adjustments.

(i) No fractional shares shall be issued upon the conversion of any share or shares of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock, and the number of shares of Common Stock to be issued shall be rounded to the nearest whole share. The number of shares issuable upon such conversion shall be determined on the basis of the total number of shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock that the holder is at the time converting into Common Stock and the number of shares of Common Stock issuable upon such aggregate conversion.

(ii) Upon the occurrence of each adjustment or readjustment of the Conversion Price of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock pursuant to this Section 4, the Corporation, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of such Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (A) such adjustment and readjustment, (B) the Conversion Price for the Series A Preferred Stock, Series B Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock, respectively, at the time in effect, and (C) the number of shares of Common Stock and the

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amount, if any, of other property which at the time would be received upon the conversion of a share of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and the Series D Preferred Stock.

(i) Notices of Record Date. Upon (i) any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or (ii) any Deemed Liquidation as defined in Article IV, (B), 2, (c), the Company shall mail to each holder of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock at least ten (10) days prior to the date specified therein a notice specifying (A) the date on which any such record is to be taken for the purpose of such dividend or distribution and a description of such dividend or distribution, (B) the date on which any Deemed Liquidation is expected to become effective and (C) the date, if any, that is to be fixed as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities) for securities or other property deliverable upon such Deemed Liquidation.

(j) Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of such series of Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of such series of Preferred Stock, in addition to such other remedies as shall be available to the holder of such Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Certificate of Incorporation.

(k) Notices. Any notice required by the provisions of this Section 4 to be given to the holders of shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his address appearing on the books of the Corporation.

5. Voting Rights. The holder of each share of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock shall have the right to one vote for each share of Common Stock into which such Preferred Stock could then be converted, and with respect to such vote, such holder shall have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, and shall be entitled, notwithstanding any provision hereof, to notice of any stockholders’ meeting in accordance with the bylaws of the Corporation, and shall be entitled to vote, together with holders of Common Stock, with respect to any question upon which holders of Common Stock have the right to vote. Fractional votes shall not, however, be permitted and any fractional voting rights available on an as-converted basis (after aggregating all shares into which shares of Series A Preferred Stock,

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Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock held by each holder could be converted) shall be rounded to the nearest whole number (with one-half being rounded upward).

6. Protective Provisions.

(a) Class Vote. Subject to the rights of series of Preferred Stock which may from time to time come into existence, so long as any share of Preferred Stock are outstanding (as adjusted for stock splits, stock dividends or recapitalizations), the Corporation shall not without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at a majority of the then outstanding shares of Preferred Stock, voting together as a class:

(i) effect a transaction described in Section 2(c)(i) above;

(ii) alter or change the rights, preferences or privileges of the shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock so as to affect adversely the shares of such series, respectively;

(iii) increase or decrease (other than by redemption or conversion) the total number of authorized shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock;

(iv) authorize or issue, or obligate itself to issue, any other equity security, including any other security convertible into or exercisable for any equity security, having a preference over, or being on a parity with, the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock with respect to voting, dividends, conversion or upon liquidation;

(v) effect a reclassification or recapitalization of the outstanding capital of the Company; or

(vi) amend the Certificate or Bylaws of the Company in a manner which materially adversely affects the holders of the Series A, B, C or D Preferred.

(b) Series D Vote. Subject to the rights of series of Preferred Stock which may from time to time come into existence, so long as any share of Preferred Stock are outstanding (as adjusted for stock splits, stock dividends or recapitalizations), the Corporation shall not without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at a majority of the then outstanding shares of Series D Preferred Stock

(i) alter or change the rights, preferences or privileges of the shares of Series D Preferred Stock so as to affect adversely the shares of such series in a manner differently than any other series of Preferred Stock;

(ii) repurchase or redeem any shares of Series A, B, C Preferred Stock; and

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(iii) amend the Certificate or Bylaws of the Company in a manner which materially adversely affect the holders of Series D Preferred Stock in a manner differently than the other series of Preferred Stock.

7. Status of Converted Stock. In the event any shares of Preferred Stock shall be converted pursuant to Section 4 hereof, the shares so converted shall be cancelled and shall not be issuable by the Corporation. The Certificate of Incorporation of the Corporation shall be appropriately amended to effect the corresponding reduction in the Corporation’s authorized capital stock.

(C) Common Stock.

1. Dividend Rights. Subject to the prior rights of holders of all classes of stock at the time outstanding having prior rights as to dividends, the holders of the Common Stock shall be entitled to receive, when and as declared by the Board of Directors, out of any assets of the Corporation legally available therefor, such dividends as may be declared from time to time by the Board of Directors.

2. Liquidation Rights. Upon the liquidation, dissolution or winding up of the Corporation, the assets of the Corporation shall be distributed as provided in Section 2 of Article IV(B).

3. Redemption. The Common Stock is not redeemable.

4. Voting Rights. The holder of each share of Common Stock shall have the right to one vote, and shall be entitled to notice of any stockholders’ meeting in accordance with the bylaws of the Corporation, and shall be entitled to vote upon such matters and in such manner as may be provided by law.

ARTICLE V

The Board of Directors of the Corporation is expressly authorized to make, alter or repeal Bylaws of the Corporation.

ARTICLE VI

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.

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(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.

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 this 28th day of March, 2000.

/s/    JEFF MCFADDEN

Jeffrey McFadden, President and CEO

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EX-3.02

Exhibit 3.02

CERTIFICATE OF AMENDMENT OF

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF

GATOR.COM CORPORATION

The undersigned hereby certifies that:

1. He is the duly elected and acting President and Chief Executive Officer of Gator.com Corporation, a Delaware corporation.

2. The Certificate of Incorporation of this corporation was originally filed with the Secretary of State of Delaware under the name “eGuard, Inc.” on July 17, 1998.

3. Pursuant to Section 242 of the General Corporation Law of the State of Delaware, this Certificate of Amendment of Certificate of Incorporation amends Article I of this corporation’s Certificate of Incorporation to read in its entirety as follows:

“The name of the corporation is The Gator Corporation (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 this 25th day of June, 2001.

/s/    JEFF MCFADDEN

Jeffrey McFadden, President and CEO

EX-3.03

Exhibit 3.03

CERTIFICATE OF AMENDMENT OF

CERTIFICATE OF INCORPORATION

OF

THE GATOR CORPORATION

The undersigned hereby certifies that:

1. He is the duly elected and acting President of The Gator Corporation, a Delaware corporation.

2. The Certificate of Incorporation of this corporation was originally filed with the Secretary of State of Delaware on July 17, 1998 under the name eGuard, Inc.

3. Pursuant to Section 242 of the General Corporation Law of the State of Delaware, this Certificate of Amendment of Certificate of Incorporation amends Section IV(A) of this corporation’s Certificate of Incorporation to read in its entirety as follows:

“(A) Classes of Stock. The Corporation is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares which the Corporation is authorized to issue is Eighty One Million Six Hundred Seventy Nine Thousand Five Hundred (81,679,500) shares, each with a par value of $0.0001 per share. Sixty Million (60,000,000) shares shall be Common Stock and Twenty One Million Six Hundred Seventy Nine Thousand Five Hundred (21,679,500) shares shall be Preferred Stock.”

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 Section 242 of the General Corporation Law of the State of Delaware.

Executed at Redwood City, California, June 25, 2001.

/s/    JEFF MCFADDEN

Jeffrey McFadden, President & Chief Executive Officer

EX-3.04

Exhibit 3.04

CERTIFICATE OF AMENDMENT OF

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF

THE GATOR CORPORATION

The undersigned hereby certifies that:

1. He is the duly elected and acting President and Chief Executive Officer of The Gator Corporation, a Delaware corporation.

2. The Certificate of Incorporation of this corporation was originally filed with the Secretary of State of Delaware under the name “eGuard, Inc.” on July 17, 1998.

3. Pursuant to Section 242 of the General Corporation Law of the State of Delaware, this Certificate of Amendment of Certificate of Incorporation amends Article I of this corporation’s Certificate of Incorporation to read in its entirety as follows:

“The name of the corporation is Claria Corporation (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.

5. That pursuant to Section 103 (d) of the Delaware General Corporation Law, this Certificate of Amendment shall be become effective on October 29, 2003.

Executed this 17th day of October, 2003.

JEFF MCFADDEN

Jeffrey McFadden, President and Chief Executive Officer

EX-3.06

Exhibit 3.06

BYLAWS

OF

EGUARD, INC.

(now known as The Gator Corporation)

As Amended:

February 26, 1999

March 29, 1999

November 30, 1999

October 12, 2001

TABLE OF CONTENTS

	Page
ARTICLE I—CORPORATE OFFICES	1
1.1 Registered Office	1
1.2 Other Offices	1
ARTICLE II—MEETINGS OF STOCKHOLDERS	1
2.1 Place Of Meetings	1
2.2 Annual Meeting	1
2.3 Special Meeting	1
2.4 Notice Of Stockholders’ Meetings	2
2.5 Manner Of Giving Notice; Affidavit Of Notice	2
2.6 Quorum	2
2.7 Adjourned Meeting; Notice	2
2.8 Conduct Of Business	3
2.9 Voting	3
2.10 Waiver Of Notice	3
2.11 Stockholder Action By Written Consent Without A Meeting	3
2.12 Record Date For Stockholder Notice; Voting; Giving Consents	4
2.13 Proxies	4
ARTICLE III—DIRECTORS	5
3.1 Powers	5
3.2 Number Of Directors	5
3.3 Election, Qualification And Term Of Office Of Directors	5
3.4 Resignation And Vacancies	5
3.5 Place Of Meetings; Meetings By Telephone	6
3.6 Regular Meetings	6
3.7 Special Meetings; Notice	6
3.8 Quorum	7
3.9 Waiver Of Notice	7
3.10 Board Action By Written Consent Without A Meeting	8
3.11 Fees And Compensation Of Directors	8
3.12 Approval Of Loans To Officers	8
3.13 Removal Of Directors	8
3.14 Chairman Of The Board Of Directors	8
ARTICLE IV—COMMITTEES	9
4.1 Committees Of Directors	9
4.2 Committee Minutes	9
4.3 Meetings And Action Of Committees	9

TABLE OF CONTENTS

(continued)

	Page
ARTICLE V—OFFICERS	10
5.1 Officers	10
5.2 Appointment Of Officers	10
5.3 Subordinate Officers	10
5.4 Removal And Resignation Of Officers	10
5.5 Vacancies In Offices	10
5.6 Chief Executive Officer	11
5.7 President	11
5.8 Vice Presidents	11
5.9 Secretary	11
5.10 Chief Financial Officer	12
5.11 Representation Of Shares Of Other Corporations	12
5.12 Authority And Duties Of Officers	12
ARTICLE VI—INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, AND OTHER AGENTS	13
6.1 Indemnification Of Directors And Officers	13
6.2 Indemnification Of Others	13
6.3 Payment Of Expenses In Advance	13
6.4 Indemnity Not Exclusive	13
6.5 Insurance	14
6.6 Conflicts	14
ARTICLE VII—RECORDS AND REPORTS	14
7.1 Maintenance And Inspection Of Records	14
7.2 Inspection By Directors	15
7.3 Annual Statement To Stockholders	15
ARTICLE VIII—GENERAL MATTERS	15
8.1 Checks	15
8.2 Execution Of Corporate Contracts And Instruments	15
8.3 Stock Certificates; Partly Paid Shares	15
8.4 Special Designation On Certificates	16
8.5 Lost Certificates	16
8.6 Construction; Definitions	17
8.7 Dividends	17
8.8 Fiscal Year	17
8.9 Seal	17
8.10 Transfer Of Stock	17
8.11 Stock Transfer Agreements	17
8.12 Registered Stockholders	18
ARTICLE IX—AMENDMENTS	18

BYLAWS

OF

EGUARD, INC.

ARTICLE I

CORPORATE OFFICES

1.1 Registered Office.

The registered office of the corporation shall be in the City of Wilmington, County of New Castle, State of Delaware. The name of the registered agent of the corporation at such location is Corporation Service Company.

1.2 Other Offices.

The Board of Directors may at any time establish other offices at any place or places where the corporation is qualified to do business.

ARTICLE II

MEETINGS OF STOCKHOLDERS

2.1 Place Of Meetings.

Meetings of stockholders shall be held at any place, within or outside the State of Delaware, designated by the Board of Directors. In the absence of any such designation, stockholders’ meetings shall be held at the registered office of the corporation.

2.2 Annual Meeting.

The annual meeting of stockholders shall be held on such date, time and place, either within or without the State of Delaware, as may be designated by resolution of the Board of Directors each year. At the meeting, directors shall be elected and any other proper business may be transacted.

2.3 Special Meeting.

A special meeting of the stockholders may be called at any time by the Board of Directors, the chairman of the board, the president or by one or more stockholders holding shares in the aggregate entitled to cast not less than ten percent of the votes at that meeting.

If a special meeting is called by any person or persons other than the Board of Directors, the president or the chairman of the board, the request shall be in writing, specifying the time of such meeting 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. No business may be transacted at such special meeting otherwise than specified in such notice. The officer receiving the request shall cause notice to be promptly given to the stockholders entitled to vote, in accordance with the provisions of Sections 2.4 and 2.5 of this Article II, that a meeting will be held at the time requested by the person or persons calling the meeting, not less than thirty-five (35) nor more than sixty (60) days after the receipt of the request. If the notice is not given within twenty (20) days after the receipt of the request, the person or persons requesting the meeting may give the notice. Nothing contained in this paragraph of this Section 2.3 shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board of Directors may be held.

2.4 Notice Of Stockholders’ Meetings.

All notices of meetings with stockholders shall be in writing and shall be sent or otherwise given in accordance with Section 2.5 of these Bylaws not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting. The notice 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.

2.5 Manner Of Giving Notice; Affidavit Of Notice.

Written notice of any meeting of stockholders, if mailed, is given when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the corporation. 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.

2.6 Quorum.

The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum is not present or represented at any meeting of the stockholders, then either (a) the chairman of the meeting or (b) the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present or represented. At such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the meeting as originally noticed.

2.7 Adjourned Meeting; Notice.

When a meeting is adjourned to another time or place, unless these Bylaws otherwise require, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business that might have been transacted at the original meeting. If

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the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

2.8 Conduct Of Business.

The chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including the manner of voting and the conduct of business.

2.9 Voting.

The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 2.12 of these Bylaws, subject to the provisions of Sections 217 and 218 of the General Corporation Law of Delaware (relating to voting rights of fiduciaries, pledgors and joint owners of stock and to voting trusts and other voting agreements).

Except as may be otherwise provided in the certificate of incorporation, each stockholder shall be entitled to one vote for each share of capital stock held by such stockholder.

2.10 Waiver Of Notice.

Whenever notice is required to be given under any provision of the General Corporation Law of Delaware or of the certificate of incorporation or these Bylaws, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice unless so required by the certificate of incorporation or these Bylaws.

2.11 Stockholder Action By Written Consent Without A Meeting.

Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action that may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

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. If the action which is consented to is such as would have required the filing of a certificate under any section of the General Corporation Law of Delaware if such action had been

3

voted on by stockholders at a meeting thereof, then the certificate filed under such section shall state, in lieu of any statement required by such section concerning any vote of stockholders, that written notice and written consent have been given as provided in Section 228 of the General Corporation Law of Delaware.

2.12 Record Date For Stockholder Notice; Voting; 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 in writing 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, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action.

If the Board of Directors does not so fix a record date:

(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 consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is delivered to the corporation.

(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.

2.13 Proxies.

Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by a written proxy, signed by the stockholder and filed with the secretary of the corporation, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A proxy shall be deemed signed if the stockholder’s name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission or otherwise) by the stockholder or the stockholder’s attorney-in-fact. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212(e) of the General Corporation Law of Delaware.

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ARTICLE III

DIRECTORS

3.1 Powers.

Subject to the provisions of the General Corporation Law of Delaware and any limitations in the certificate of incorporation or these Bylaws relating to action required to be approved by the stockholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board of Directors.

3.2 Number Of Directors.

Upon the adoption of these bylaws, the number of directors constituting the entire Board of Directors shall be seven (7). Thereafter, this number may be changed by a resolution of the Board of Directors or of the stockholders, subject to Section 3.4 of these Bylaws. No reduction of the authorized number of directors shall have the effect of removing any director before such director’s term of office expires.

3.3 Election, Qualification And Term Of Office Of Directors.

Except as provided in Section 3.4 of these Bylaws, directors shall be elected at each annual meeting of stockholders to hold office until the next annual meeting. Directors need not be stockholders unless so required by the certificate of incorporation or these Bylaws, wherein other qualifications for directors may be prescribed. Each director, including a director elected to fill a vacancy, shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal.

Elections of directors need not be by written ballot.

3.4 Resignation And Vacancies.

Any director may resign at any time upon written notice to the attention of the Secretary of the corporation. When one or more directors so resigns and the resignation is effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in this section in the filling of other vacancies.

Unless otherwise provided in the certificate of incorporation or these Bylaws:

(a) Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

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(b) Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the certificate of incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected.

If at any time, by reason of death or resignation or other cause, the corporation should have no directors in office, then any officer or any stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like responsibility for the person or estate of a stockholder, may call a special meeting of stockholders in accordance with the provisions of the certificate of incorporation or these Bylaws, or may apply to the Court of Chancery for a decree summarily ordering an election as provided in Section 211 of the General Corporation Law of Delaware.

If, at the time of filling any vacancy or any newly created directorship, the directors then in office constitute less than a majority of the whole board (as constituted immediately prior to any such increase), then the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten (10) percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office as aforesaid, which election shall be governed by the provisions of Section 211 of the General Corporation Law of Delaware as far as applicable.

3.5 Place Of Meetings; Meetings By Telephone.

The Board of Directors of the corporation may hold meetings, both regular and special, either within or outside the State of Delaware.

Unless otherwise restricted by the certificate of incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

3.6 Regular Meetings.

Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

3.7 Special Meetings; Notice.

Special meetings of the Board of Directors for any purpose or purposes may be called at any time by the chairman of the board, the president, any vice president, the secretary or any two directors.

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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. If 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. If the notice is delivered personally or by telephone or by 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 by 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 or the place of the meeting, if the meeting is to be held at the principal executive office of the corporation.

3.8 Quorum.

At all meetings of the Board of Directors, a majority of the authorized 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 may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum is not present at any meeting of the Board of Directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is 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.

3.9 Waiver Of Notice.

Whenever notice is required to be given under any provision of the General Corporation Law of Delaware or of the certificate of incorporation or these Bylaws, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors, or members of a committee of directors, need be specified in any written waiver of notice unless so required by the certificate of incorporation or these Bylaws.

3.10 Board Action By Written Consent Without A Meeting.

Unless otherwise restricted by the certificate of incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the board or 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. 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.

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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.

3.11 Fees And Compensation Of Directors.

Unless otherwise restricted by the certificate of incorporation or these Bylaws, the Board of Directors shall have the authority to fix the compensation of directors. No such compensation shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.

3.12 Approval Of Loans To Officers.

The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this section contained shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute.

3.13 Removal Of Directors.

Unless otherwise restricted by statute, by the certificate of incorporation or by these Bylaws, any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors; provided, however, that if the stockholders of the corporation are entitled to cumulative voting, if less than the entire Board of Directors is to be removed, no director may be removed without cause if the votes cast against his removal would be sufficient to elect him if then cumulatively voted at an election of the entire Board of Directors.

No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director’s term of office.

3.14 Chairman Of The Board Of Directors.

The corporation may also have, at the discretion of the Board of Directors, a chairman of the Board of Directors who shall not be considered an officer of the corporation.

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ARTICLE IV

COMMITTEES

4.1 Committees Of Directors.

The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board may designate 1 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 present at any meeting and not disqualified from voting, whether or not such member or members 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 such committee, to the extent provided in the resolution of the Board of Directors, or in these Bylaws, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by this chapter to be submitted to stockholders for approval or (ii) adopting, amending or repealing any Bylaw of the corporation.

4.2 Committee Minutes.

Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

4.3 Meetings And Action Of Committees.

Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of Section 3.5 (place of meetings and meetings by telephone), Section 3.6 (regular meetings), Section 3.7 (special meetings and notice), Section 3.8 (quorum), Section 3.9 (waiver of notice), and Section 3.10 (action without a meeting) of these Bylaws, with such changes in the context of such provisions as are necessary to substitute the committee and its members for the Board of Directors and its members; provided, however, 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, that special meetings of committees may also be called by resolution of the Board of Directors and that 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.

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ARTICLE V

OFFICERS

5.1 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 chief executive officer, one or more vice presidents, one or more assistant secretaries, one or more assistant treasurers, and any such other officers as may be appointed in accordance with the provisions of Section 5.3 of these Bylaws. Any number of offices may be held by the same person.

5.2 Appointment Of Officers.

The officers of the corporation, except such officers as may be appointed in accordance with the provisions of Sections 5.3 or 5.5 of these Bylaws, shall be appointed by the Board of Directors, subject to the rights, if any, of an officer under any contract of employment.

5.3 Subordinate Officers.

The Board of Directors may appoint, or empower the chief executive officer or the president to appoint, such other officers and agents 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 these Bylaws or as the Board of Directors may from time to time determine.

5.4 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 an affirmative vote of the majority of the Board of Directors at any regular or special meeting of the board or, except in the 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 attention of the Secretary of 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.

5.5 Vacancies In Offices.

Any vacancy occurring in any office of the corporation shall be filled by the Board of Directors.

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5.6 Chief Executive Officer.

Subject to such supervisory powers, if any, as may be given by the Board of Directors to the chairman of the board, if any, the chief executive officer of the corporation (if such an officer is appointed) 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 or she shall preside at all meetings of the stockholders and, in the absence or nonexistence of a chairman of the board, at all meetings of the Board of Directors and shall have the general powers and duties of management usually vested in the office of chief executive officer of a corporation and shall have such other powers and duties as may be prescribed by the Board of Directors or these bylaws.

5.7 President.

Subject to such supervisory powers, if any, as may be given by the Board of Directors to the chairman of the board (if any) or the chief executive officer, the president shall have general supervision, direction, and control of the business and other officers of the corporation. He or she shall have the general powers and duties of management usually vested in the office of president of a corporation and such other powers and duties as may be prescribed by the Board of Directors or these Bylaws.

5.8 Vice Presidents.

In the absence or disability of the chief executive officer and 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, these Bylaws, the president or the chairman of the board.

5.9 Secretary.

The secretary shall keep or cause to be kept, at the principal executive office of the corporation or such other place as the Board of Directors may direct, a book of minutes of all meetings and actions of directors, committees of directors, and stockholders. The minutes shall show the time and place of each meeting, the names of those present at directors’ meetings or committee meetings, the number of shares present or represented at stockholders’ meetings, and the proceedings thereof.

The secretary shall keep, or cause to be kept, at the principal executive office of the corporation 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 evidencing such shares, and the number and date of cancellation of every certificate surrendered for cancellation.

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The secretary shall give, or cause to be given, notice of all meetings of the stockholders and of the Board of Directors required to be given by law or by these Bylaws. He or she 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 be prescribed by the Board of Directors or by these Bylaws.

5.10 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 moneys 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 or she shall disburse the funds of the corporation as may be ordered by the Board of Directors, shall render to the president, the chief executive officer, or the directors, upon request, an account of all his or her 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.

5.11 Representation Of Shares Of Other Corporations.

The chairman of the board, the chief executive officer, the president, any vice president, the chief financial officer, the secretary or assistant secretary of this corporation, or any other person authorized by the Board of Directors or the chief executive officer or the president or a vice president, is authorized to vote, represent, and exercise on behalf of this corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this corporation. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by the person having such authority.

5.12 Authority And Duties Of Officers.

In addition to the foregoing authority and duties, all officers of the corporation shall respectively have such authority and perform such duties in the management of the business of the corporation as may be designated from time to time by the Board of Directors or the stockholders.

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ARTICLE VI

INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, AND OTHER AGENTS

6.1 Indemnification Of Directors And Officers.

The corporation shall, to the maximum extent and in the manner permitted by the General Corporation Law of Delaware, indemnify each of its directors and officers against expenses (including attorneys’ fees), judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding, arising by reason of the fact that such person is or was an agent of the corporation. For purposes of this Section 6.1, a “director” or “officer” of the corporation includes any person (a) who is or was a director or officer of the corporation, (b) who is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, or (c) who was a director or officer of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation.

6.2 Indemnification Of Others.

The corporation shall have the power, to the maximum extent and in the manner permitted by the General Corporation Law of Delaware, to indemnify each of its employees and agents (other than directors and officers) against expenses (including attorneys’ fees), judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding, arising by reason of the fact that such person is or was an agent of the corporation. For purposes of this Section 6.2, an “employee” or “agent” of the corporation (other than a director or officer) includes any person (a) who is or was an employee or agent of the corporation, (b) who is or was serving at the request of the corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or (c) who was an employee or agent of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation.

6.3 Payment Of Expenses In Advance.

Expenses incurred in defending any action or proceeding for which indemnification is required pursuant to Section 6.1 or for which indemnification is permitted pursuant to Section 6.2 following authorization thereof by the Board of Directors shall be paid by the corporation in advance of the final disposition of such action or proceeding upon receipt of an undertaking by or on behalf of the indemnified party to repay such amount if it shall ultimately be determined that the indemnified party is not entitled to be indemnified as authorized in this Article VI.

6.4 Indemnity Not Exclusive.

The indemnification provided by this Article VI shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in an

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official capacity and as to action in another capacity while holding such office, to the extent that such additional rights to indemnification are authorized in the certificate of incorporation.

6.5 Insurance.

The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify him or her against such liability under the provisions of the General Corporation Law of Delaware.

6.6 Conflicts.

No indemnification or advance shall be made under this Article VI, except where such indemnification or advance is mandated by law or the order, judgment or decree of any court of competent jurisdiction, in any circumstance where it appears:

(a) That it would be inconsistent with a provision of the certificate of incorporation, these Bylaws, a resolution of the stockholders or an agreement in effect at the time of the accrual of the alleged cause of the action asserted in the proceeding in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or

(b) That it would be inconsistent with any condition expressly imposed by a court in approving a settlement.

ARTICLE VII

RECORDS AND REPORTS

7.1 Maintenance And Inspection Of Records.

The corporation shall, either at its principal executive offices or at such place or places as designated by the Board of Directors, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these Bylaws as amended to date, accounting books, and other records.

Any stockholder of record, 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 its 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 is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under

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oath shall be directed to the corporation at its registered office in Delaware or at its principal place of business.

7.2 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 or her position as a director. The Court of Chancery is hereby vested with the exclusive jurisdiction to determine whether a director is entitled to the inspection sought. The Court may summarily order the corporation to permit the director to inspect any and all books and records, the stock ledger, and the stock list and to make copies or extracts therefrom. The Court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other and further relief as the Court may deem just and proper.

7.3 Annual Statement To Stockholders.

The Board of Directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation.

ARTICLE VIII

GENERAL MATTERS

8.1 Checks.

From time to time, the Board of Directors shall determine by resolution which person or persons may sign or endorse all checks, drafts, other orders for payment of money, notes or other evidences of indebtedness that are issued in the name of or payable to the corporation, and only the persons so authorized shall sign or endorse those instruments.

8.2 Execution Of Corporate Contracts And Instruments.

The Board of Directors, except as otherwise provided in these Bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation; such authority may be general or confined to specific instances. Unless so authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.

8.3 Stock Certificates; Partly Paid Shares.

The shares of a corporation shall be represented by certificates, provided that the Board of Directors of the corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the

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corporation. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock represented by certificates and upon request every holder of uncertificated shares 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, or the president or vice-president, and by the chief financial officer or an assistant treasurer, or the secretary or an assistant secretary of such corporation representing the number of shares registered in certificate form. Any or all of 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 has 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 he or she were such officer, transfer agent or registrar at the date of issue.

The corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, 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.

8.4 Special Designation On Certificates.

If the corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the corporation shall issue to represent such class or series of stock; provided, however, that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate that the corporation shall issue to represent such class or series of stock a statement that the corporation will furnish without charge to each stockholder who so requests the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

8.5 Lost Certificates.

Except as provided in this Section 8.5, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the corporation and cancelled at the same time. The corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate previously issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or the owner’s legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.

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8.6 Construction; Definitions.

Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the Delaware General Corporation Law 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.

8.7 Dividends.

The directors of the corporation, subject to any restrictions contained in (a) the General Corporation Law of Delaware or (b) the certificate of incorporation, may declare and pay dividends upon the shares of its capital stock. Dividends may be paid in cash, in property, or in shares of the corporation’s capital stock.

The directors of the corporation may set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of the corporation, and meeting contingencies.

8.8 Fiscal Year.

The fiscal year of the corporation shall be fixed by resolution of the Board of Directors and may be changed by the Board of Directors.

8.9 Seal.

The corporation may adopt a corporate seal, which may be altered at pleasure, and may use the same by causing it or a facsimile thereof, to be impressed or affixed or in any other manner reproduced.

8.10 Transfer Of Stock.

Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction in its books.

8.11 Stock Transfer Agreements.

The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the corporation to restrict the

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transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not prohibited by the General Corporation Law of Delaware.

8.12 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, shall be entitled to hold liable for calls and assessments the 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 another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

ARTICLE IX

AMENDMENTS

The Bylaws of the corporation may be adopted, amended or repealed by the stockholders entitled to vote; provided, however, that the corporation may, in its certificate of incorporation, confer the power to adopt, amend or repeal Bylaws upon the directors. The fact that such power has been so conferred upon the directors shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal Bylaws.

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CERTIFICATE OF ADOPTION OF BYLAWS

OF

EGUARD, INC.

ADOPTION BY INCORPORATOR

The undersigned person appointed in the certificate of incorporation to act as the Incorporator of eGuard, Inc. hereby adopts the foregoing bylaws as the Bylaws of the corporation.

Executed this              day of July 1998.

David Eu, Incorporator

CERTIFICATE BY SECRETARY OF ADOPTION BY INCORPORATOR

The undersigned hereby certifies that the undersigned is the duly elected, qualified, and acting Secretary of eGuard, Inc., and that the foregoing Bylaws were adopted as the Bylaws of the corporation on July             , 1998, by the person appointed in the certificate of incorporation to act as the Incorporator of the corporation.

Executed this              day of July 1998.

Jeffery Y. Suto, Secretary

Amended and Restated Section 3.10 of The Gator Corporation Bylaws:

3.10 Board Action By Written Consent Without A Meeting.

Unless otherwise restricted by the certificate of incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the board or 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. 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.

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.

EX-10.01

Exhibit 10.01

THE GATOR CORPORATION

1999 STOCK PLAN

(as amended March 23, 2004)

1. Purposes of the Plan. The purposes of this 1999 Stock Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees 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 (as defined under Section 422 of the Code) or Nonstatutory Stock Options, as determined by the Administrator at the time of grant of an Option and subject to the applicable provisions of Section 422 of the Code, as amended, and the regulations promulgated thereunder. Stock Purchase Rights may also be granted under the Plan.

2. Definitions. As used herein, the following definitions shall apply:

(a) “Administrator” means the Board or its Committee appointed pursuant to Section 4 of the Plan.

(b) “Affiliate” means an entity other than a Subsidiary in which the Company owns an equity interest or which, together with the Company, is under common control of a third person or entity.

(c) “Applicable Laws” means the legal requirements relating to the administration of stock option plans under applicable U.S. state corporate laws, U.S. federal and applicable state securities laws, the Code, any Stock Exchange rules or regulations and the applicable laws of any other country or jurisdiction where Options or Stock Purchase Rights are granted under the Plan, as such laws, rules, regulations and requirements shall be in place from time to time.

(d) “Board” means the Board of Directors of the Company.

(e) “Change of Control” means a sale of all or substantially all of the Company’s assets, or any merger or consolidation of the Company with or into another corporation; other than a merger or consolidation in which the holders of more than 50% of the shares of capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by the voting securities remaining outstanding or by their being converted into voting securities of the surviving entity) more than 50% of the total voting power represented by the voting securities of the Company, or such surviving entity, outstanding immediately after such transaction.

(f) “Code” means the Internal Revenue Code of 1986, as amended.

(g) “Committee” means one or more committees or subcommittees of the Board appointed by the Board to administer the Plan in accordance with Section 4 below.

(h) “Common Stock” means the Common Stock of the Company.

(i) “Company” means The Gator Corporation, a Delaware corporation.

(j) “Consultant” means any person, including an advisor, who renders services to the Company, or any Parent, Subsidiary or Affiliate, and is compensated for such services, and any director of the Company whether compensated for such services or not.

(k) “Continuous Service Status” means the absence of any interruption or termination of service as an Employee or Consultant to the Company or a Parent, Subsidiary or Affiliate. Continuous Service Status shall not be considered interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the Administrator, provided that such leave is for a period of not more than 90 days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to Company policy adopted from time to time; or (iv) in the case of transfers between locations of the Company or between the Company, its Parents, Subsidiaries or Affiliates or their respective successors. Unless otherwise determined by the Administrator, a change in status from an Employee to a Consultant or from a Consultant to an Employee will not constitute an interruption of Continuous Service Status.

(l) “Corporate Transaction” means a sale of all or substantially all of the Company’s assets, or a merger, consolidation or other capital reorganization of the Company with or into another corporation.

(m) “Director” means a member of the Board.

(n) “Employee” means any person, including officers and Directors, employed by the Company or any Parent, Subsidiary or Affiliate of the Company. The payment by the Company of a director’s fee to a Director shall not be sufficient to constitute “employment” of such Director by the Company.

(o) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(p) “Fair Market Value” means, as of any date, the fair market value of Common Stock determined as follows:

(i) If the Common Stock is listed on any established stock exchange or a national market system including without limitation the National Market of the National Association of Securities Dealers, Inc. Automated Quotation (“Nasdaq”) System, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported), as quoted on such system or exchange on the date of determination, or if no trading occurred on the date of determination, on the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

(ii) If the Common Stock is quoted on the Nasdaq System (but not on the National Market thereof) or regularly quoted by a recognized securities dealer but selling

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prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices for the Common Stock for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

(iii) In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Administrator.

(q) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code, as designated in the applicable Option Agreement.

(r) “Listed Security” means any security of the Company that is listed or approved for listing on a national securities exchange or designated or approved for designation as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc.

(s) “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option, as designated in the applicable Option Agreement.

(t) “Option” means a stock option granted pursuant to the Plan.

(u) “Option Agreement” means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of an Option granted under the Plan and includes 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.

(v) “Option Exchange Program” means a program approved by the Administrator whereby outstanding Options are exchanged for Options with a lower exercise price.

(w) “Optioned Stock” means the Common Stock subject to an Option or a Stock Purchase Right.

(x) “Optionee” means an Employee or Consultant who receives an Option.

(y) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code, or any successor provision.

(z) “Participant” means any holder of one or more Options or Stock Purchase Rights, or of the Shares issuable or issued upon exercise of such awards, under the Plan.

(aa) “Plan” means this 1999 Stock Plan.

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(bb) “Reporting Person” means an officer, Director, or greater than 10% stockholder of the Company within the meaning of Rule 16a-2 under the Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the Exchange Act.

(cc) “Restricted Stock” means shares of Common Stock acquired pursuant to a grant of a Stock Purchase Right under Section 10 below.

(dd) “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 Stock Purchase Right granted under the Plan and includes any documents attached to such agreement.

(ee) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as the same may be amended from time to time, or any successor provision.

(ff) “Share” means a share of the Common Stock, as adjusted in accordance with Section 12 of the Plan.

(gg) “Stock Exchange” means any stock exchange or consolidated stock price reporting system on which prices for the Common Stock are quoted at any given time.

(hh) “Stock Purchase Right” means the right to purchase Common Stock pursuant to Section 10 below.

(ii) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code, or any successor provision.

(jj) “Ten Percent Holder” means a person who owns stock representing more than 10% of the voting power of all classes of stock of the Company or any Parent or Subsidiary.

3. Stock Subject to the Plan. Subject to the provisions of Section 12 of the Plan, the maximum aggregate number of Shares that may be sold under the Plan is 19,081,052 Shares of Common Stock. The Shares may be authorized, but unissued, or reacquired Common Stock. If an Option expires or becomes unexercisable for any reason without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Shares that were subject thereto shall, unless the Plan shall have been terminated, become available for future grant under the Plan. In addition, any Shares of Common Stock that are retained by the Company upon exercise of an Option or Stock Purchase Right in order to satisfy the exercise or purchase price for such Option or Stock Purchase Right or any withholding taxes due with respect to such exercise shall be treated as not issued and shall continue to be available under the Plan. Shares issued under the Plan and later repurchased by the Company pursuant to any repurchase right that the Company may have shall not be available for future grant under the Plan.

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4. Administration of the Plan.

(a) General. The Plan shall be administered by the Board or a Committee, or a combination thereof, as determined by the Board. The Plan may be administered by different administrative bodies with respect to different classes of Optionees and, if permitted by the Applicable Laws, the Board may authorize one or more officers to grant Options or Stock Purchase Rights under the Plan.

(b) Administration with Respect to Reporting Persons. With respect to Options granted to Reporting Persons and Named Executives, the Plan may (but need not) be administered so as to permit such Options to qualify for the exemption set forth in Rule 16b-3 and to qualify as performance-based compensation under Section 162(m) of the Code.

(c) Committee Composition. If a Committee has been appointed pursuant to this Section 4, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. From time to time the Board may increase the size of any Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies (however caused) and remove all members of a Committee and thereafter directly administer the Plan, all to the extent permitted by the Applicable Laws and, in the case of a Committee administering the Plan pursuant to Section 4(b) above, to the extent permitted or required by Rule 16b-3 and Section 162(m) of the Code.

(d) Powers of the Administrator. Subject to the provisions of the Plan and in the case of a Committee, the specific duties delegated by the Board to such Committee, and subject to the approval of any relevant authorities, including the approval, if required, of any Stock Exchange, 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(p) of the Plan;

(ii) to select the Consultants and Employees to whom Options and Stock Purchase Rights or any combination thereof may from time to time be granted;

(iii) to determine whether and to what extent Options and Stock Purchase Rights or any combination thereof are granted;

(iv) to determine the number of Shares of Common Stock to be covered by each such award granted hereunder;

(v) to approve forms of agreement for use under the Plan;

(vi) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any award granted hereunder, which terms and conditions include but are not limited to the exercise or purchase price, the time or times when Options or Stock Purchase Rights may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Option,

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Optioned Stock, Stock Purchase Right or Restricted Stock, based in each case on such factors as the Administrator, in its sole discretion, shall determine;

(vii) to determine whether and under what circumstances an Option may be settled in cash under Section 9(f) instead of Common Stock;

(viii) to reduce the exercise price of any Option to the then current Fair Market Value if the Fair Market Value of the Common Stock covered by such Option shall have declined since the date the Option was granted and to make any other amendments or adjustments to any Option that the Administrator determines, in its discretion and under the authority granted to it under the Plan, to be necessary or advisable, provided however that no amendment or adjustment to an Option that would materially and adversely affect the rights of any Optionee shall be made without the prior written consent of the Optionee;

(ix) to determine the terms and restrictions applicable to Stock Purchase Rights and the Restricted Stock purchased by exercising such Stock Purchase Rights;

(x) to initiate an Option Exchange Program;

(xi) to construe and interpret the terms of the Plan and awards granted under the Plan; and

(xii) in order to fulfill the purposes of the Plan and without amending the Plan, to modify grants of Options or Stock Purchase Rights to Participants who are foreign nationals or employed outside of the United States in order to recognize differences in local law, tax policies or customs.

(e) Effect of Administrator’s Decision. All decisions, determinations and interpretations of the Administrator shall be final and binding on all Participants.

5. Eligibility.

(a) Recipients of Grants. Nonstatutory Stock Options and Stock Purchase Rights may be granted to Employees and Consultants. Incentive Stock Options may be granted only to Employees; provided however that Employees of Affiliates shall not be eligible to receive Incentive Stock Options. An Employee or Consultant who has been granted an Option or Stock Purchase Right may, if he or she is otherwise eligible, be granted additional Options or Stock Purchase Rights.

(b) Type of Option. Each Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designations, to the extent that the aggregate Fair Market Value of Shares with respect to which Options designated as Incentive Stock Options are exercisable for the first time by any Optionee during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 5(b), Incentive Stock Options shall be taken into account

6

in the order in which they were granted, and the Fair Market Value of the Shares subject to an Incentive Stock Option shall be determined as of the date of grant of such Option.

(c) At-Will Relationship. The Plan shall not confer upon any Participant any right with respect to continuation of employment or consulting relationship with the Company, nor shall it interfere in any way with such holder’s right or the Company’s right to terminate his or her employment or consulting relationship at any time, with or without cause.

6. Term of Plan. The Plan shall become effective upon its adoption by the Board. It shall continue in effect for a term of ten years unless sooner terminated under Section 15 of the Plan.

7. Term of Option. The term of each Option shall be the term stated in the Option Agreement; provided, however, that the term shall be no more than ten years from the date of grant thereof or such shorter term as may be provided in the Option Agreement. However, in the case of an Incentive Stock Option granted to an Optionee who, at the time the Option is granted, is a Ten Percent Holder, the term of such Option shall be five years from the date of grant thereof or such shorter term as may be provided in the Option Agreement.

8. Option Exercise Price and Consideration.

(a) The per Share exercise price for the Shares to be issued pursuant to 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 that is:

(A) granted to an Employee who at the time of grant is a Ten Percent Holder, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant.

(B) granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

(ii) In the case of a Nonstatutory Stock Option that is:

(A) granted prior to the date, if any, on which the Common Stock becomes a Listed Security to a person who at the time of grant is a Ten Percent Holder, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of the grant if required by the Applicable Laws and, if not so required, shall be such price as is determined by the Administrator.

(B) granted prior to the date, if any, on which the Common Stock becomes a Listed Security to any other eligible person, the per Share exercise price shall be no less than 85% of the Fair Market Value per Share on the date of grant if required by the Applicable Laws and, if not so required, shall be such price as is determined by the Administrator.

7

(iii) 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) 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, shall be determined at the time of grant) and may consist entirely of (1) cash; (2) check; (3) delivery of Optionee’s promissory note with such recourse, interest, security and redemption provisions as the Administrator determines to be appropriate (subject to the provisions of Section 153 of the Delaware General Corporation Law); (4) cancellation of indebtedness; (5) other Shares that (x) in the case of Shares acquired upon exercise of an Option, either have been owned by the Optionee for more than six months on the date of surrender or such other period as may be required to avoid a charge to the Company’s earnings or were not acquired, directly or indirectly, from the Company, and (y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised; (6) authorization for the Company to retain from the total number of Shares as to which the Option is exercised that number of Shares having a Fair Market Value on the date of exercise equal to the exercise price for the total number of Shares as to which the Option is exercised; (7) delivery of a properly executed exercise notice together with such other documentation as the Administrator and the broker, if applicable, shall require to effect exercise of the Option and prompt delivery to the Company of the sale or loan proceeds required to pay the exercise price and any applicable withholding taxes; (8) any combination of the foregoing methods of payment; or (9) such other consideration and method of payment for the issuance of Shares to the extent permitted under the Applicable Laws. In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company, and the Administrator may refuse to accept a particular form of consideration at the time of any Option exercise if, in its sole discretion, acceptance of such form of consideration is not in the best interests of the Company at such time.

9. Exercise of Option.

(a) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator, consistent with the term of the Plan and reflected in the Option Agreement, including vesting requirements and/or performance criteria with respect to the Company and/or the Optionee; provided however, that, if required by the Applicable Laws, any Option granted prior to the date, if any, upon which the Common Stock becomes a Listed Security shall become exercisable at the rate of at least 20% per year over five years from the date the Option is granted. In the event that any of the Shares issued upon exercise of an Option (which exercise occurs prior to the date, if any, upon which the Common Stock becomes a Listed Security) should be subject to a right of repurchase in the Company’s favor, such repurchase right shall, if required by the Applicable Laws, lapse at the rate of at least 20% per year over five years from the date the Option is granted. Notwithstanding the above, in the case of an Option granted to an officer, Director or Consultant of the Company or any Parent, Subsidiary or Affiliate of the Company, the Option may become fully exercisable, or a repurchase right, if any, in favor of the Company

8

shall lapse, at any time or during any period established by the Administrator. 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.

An Option may not be exercised for a fraction of a Share.

An Option shall be deemed exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to exercise the Option and the Company has received full payment for the Shares with respect to which the Option is exercised. Full payment may, as authorized by the Administrator, consist of any consideration and method of payment allowable under Section 8(b) of the Plan. 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 stock certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, not withstanding the exercise of the Option. The Company shall issue (or cause to be issued) such stock certificate promptly 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 stock certificate is issued, except as provided in Section 12 of the Plan.

Exercise of an Option in any manner shall result in a decrease in the number of Shares that thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

(b) Termination of Employment or Consulting Relationship. In the event of termination of an Optionee’s Continuous Service Status with the Company, such Optionee may, but only within three months (or such other period of time, not less than 30 days, as is determined by the Administrator, with such determination in the case of an Incentive Stock Option being made at the time of grant of the Option) after the date of such termination (but in no event later than the expiration date of the term of such Option as set forth in the Option Agreement), exercise his or her Option to the extent that the Optionee was entitled to exercise it at the date of such termination. To the extent that the Optionee was not entitled to exercise the Option at the date of such termination, or if the Optionee does not exercise the Option to the extent so entitled within the time specified above, the Option shall terminate and the Optioned Stock underlying the unexercised portion of the Option shall revert to the Plan. Unless otherwise determined by the Administrator, no termination shall be deemed to occur and this Section 9(b) shall not apply if (i) the Optionee is a Consultant who becomes an Employee, or (ii) the Optionee is an Employee who becomes a Consultant.

(c) Disability of Optionee.

(i) Notwithstanding Section 9(b) above, in the event of termination of an Optionee’s Continuous Service Status as a result of his or her total and permanent disability (within the meaning of Section 22(e)(3) of the Code), such Optionee may, but only within twelve months (or such other period of time as is determined by the Administrator, with such determination in the case of an Incentive Stock Option made at the time of grant of the Option) from the date of such termination (but in no event later than the expiration date of the term of

9

such Option as set forth in the Option Agreement), exercise the Option to the extent otherwise entitled to exercise it at the date of such termination. To the extent that the Optionee was not entitled to exercise the Option at the date of termination, or if the Optionee does not exercise such Option to the extent so entitled within the time specified above, the Option shall terminate and the Optioned Stock underlying the unexercised portion of the Option shall revert to the Plan.

(ii) In the event of termination of an Optionee’s Continuous Service Status as a result of a disability which does not fall within the meaning of total and permanent disability (as set forth in Section 22(e)(3) of the Code), such Optionee may, but only within twelve months (or such other period of time as is determined by the Administrator, with such determination in the case of an Incentive Stock Option made at the time of grant of the Option) from the date of such termination (but in no event later than the expiration date of the term of such Option as set forth in the Option Agreement), exercise the Option to the extent otherwise entitled to exercise it at the date of such termination. However, to the extent that such Optionee fails to exercise an Option that is an Incentive Stock Option (within the meaning of Section 422 of the Code) within three months of the date of such termination, the Option will not qualify for Incentive Stock Option treatment under the Code. To the extent that the Optionee was not entitled to exercise the Option at the date of termination, or if the Optionee does not exercise such Option to the extent so entitled within the time period specified above, the Option shall terminate and the Optioned Stock underlying the unexercised portion of the Option shall revert to the Plan.

(d) Death of Optionee. In the event of the death of an Optionee during the period of Continuous Service Status since the date of grant of the Option, or within 30 days following termination of the Optionee’s Continuous Service Status, the Option may be exercised, at any time within twelve months following the date of death (but in no event later than the expiration date of the term of such Option as set forth in the Option Agreement), by such Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent of the right to exercise that had accrued at the date of death or, if earlier, the date of termination of the Optionee’s Continuous Service Status. To the extent that the Optionee was not entitled to exercise the Option at the date of death or termination, as the case may be, or if the Optionee does not exercise such Option to the extent so entitled within the time specified above, the Option shall terminate and the Optioned Stock underlying the unexercised portion of the Option shall revert to the Plan.

(e) Extension of Exercise Period. The Administrator shall have full power and authority to extend the period of time for which an Option is to remain exercisable following termination of an Optionee’s Continuous Status as an Employee or Consultant from the periods set forth in Sections 9(b), 9(c) and 9(d) above or in the Option Agreement to such greater time as the Board shall deem appropriate, provided, that in no event shall such Option be exercisable later than the date of expiration of the term of such Option as set forth in the Option Agreement.

(f) Buy-Out Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares an Option previously granted under the Plan based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time such offer is made.

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10. Stock Purchase Rights.

(a) Rights to Purchase. Stock Purchase Rights may be issued either alone, in addition to, or in tandem with other awards granted under the Plan and/or cash awards made outside of the Plan. After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing of the terms, conditions and restrictions related to the offer, including the number of Shares that such person shall be entitled to purchase, the price to be paid, and the time within which such person must accept such offer, which shall in no event exceed 30 days from the date upon which the Administrator made the determination to grant the Stock Purchase Right. If required by the Applicable Laws, the purchase price of Shares subject to Stock Purchase Rights shall not be less than 85% of the Fair Market Value of the Shares as of the date of the offer, or, in the case of a person owning stock representing more than 10% of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the price shall not be less than 100% of the Fair Market Value of the Shares as of the date of the offer. If the Applicable Laws do not impose restrictions on the purchase price, the purchase price of Shares subject to Stock Purchase Rights shall be as determined by the Administrator. The offer to purchase Shares subject to Stock Purchase Rights shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator.

(b) Repurchase Option. Unless the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable upon the voluntary or involuntary termination of the purchaser’s employment with the Company for any reason (including death or disability). The purchase price for Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be the original purchase price paid by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall lapse at such rate as the Administrator may determine; provided, however, that with respect to a purchaser who is not an officer, Director or Consultant of the Company or of any Parent or Subsidiary of the Company, it shall lapse at a minimum rate of 20% per year if required by the Applicable Laws.

(c) Other Provisions. The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. In addition, the provisions of Restricted Stock Purchase Agreements need not be the same with respect to each purchaser.

(d) Rights as a Stockholder. Once the Stock Purchase Right is exercised, the purchaser shall have the rights equivalent to those of a stockholder, and shall be a stockholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 12 of the Plan.

11

11. Tax Withholding; Stock Withholding to Satisfy Withholding Tax Obligations.

(a) Tax Withholding. To the extent required by the Applicable Laws, transactions under the Plan shall be subject to tax withholding by the Company, and the Administrator may condition the delivery of any Shares under the Plan on satisfaction of applicable withholding tax obligations. The Administrator, in its discretion and subject to such requirements as the Administrator may impose prior to the occurrence of such withholding, may permit tax withholding obligations under the Plan to be satisfied by one or some combination of the following methods: (i) by cash or check payment, (ii) out of the Participant’s current compensation, (iii) if permitted by the Administrator, in its discretion, by surrendering to the Company Shares that (A) in the case of Shares previously acquired from the Company, have been owned by the Participant for more than six months on the date of surrender, and (B) have a Fair Market Value determined as of the applicable Tax Date (as defined in Section 11(c) below) on the date of surrender equal to the minimum statutory amounts required to be withheld, or (iv) by electing to have the Company withhold from the Shares to be issued upon exercise of the Option, or the Shares to be issued in connection with the Stock Purchase Right, if any, that number of Shares having a Fair Market Value determined as of the applicable Tax Date equal to the minimum statutory amounts required to be withheld.

(b) Stock Withholding to Satisfy Withholding Tax Obligations. In the event an Administrator allows a Participant to satisfy his or her tax withholding obligations as provided for in Section 11(a)(iii) or (iv) above, such satisfaction must comply with the requirements of this Section 11(b) and the Applicable Laws. Any surrender by a Reporting Person of previously owned Shares to satisfy tax withholding obligations arising upon exercise of an Option or Stock Purchase Right must comply with the applicable provisions of Rule 16b-3.

All elections by a Participant to have Shares withheld to satisfy tax withholding obligations shall be made in writing in a form acceptable to the Administrator and shall be subject to the following restrictions:

(i) the election must be made on or prior to the applicable Tax Date (as defined in Section 11(c) below);

(ii) once made, the election shall be irrevocable as to the particular Shares of the Option or Stock Purchase Right as to which the election is made; and

(iii) all elections shall be subject to the consent or disapproval of the Administrator.

In the event the election to have Shares withheld is made by a Participant and the Tax Date is deferred under Section 83 of the Code because no election is filed under Section 83(b) of the Code, the Participant shall receive the full number of Shares with respect to which the Option or Stock Purchase Right is exercised but such Participant shall be unconditionally obligated to tender back to the Company the proper number of Shares on the Tax Date.

(c) Definitions. For purposes of this Section 11, the Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is determined under the Applicable Laws (the “Tax Date”).

12

12. Non-Transferability of Options and Stock Purchase Rights. Options and Stock Purchase Rights 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; provided however that, after the date, if any, upon which the Common Stock becomes a Listed Security, the Administrator may in its discretion grant transferable Nonstatutory Stock Options pursuant to Option Agreements specifying (i) the manner in which such Nonstatutory Stock Options are transferable and (ii) that any such transfer shall be subject to the Applicable Laws. The designation of a beneficiary by an Optionee will not constitute a transfer. An Option or Stock Purchase Right may be exercised, during the lifetime of the holder of the Option or Stock Purchase Right, only by such holder or a transferee permitted by this Section 12.

13. Adjustments Upon Changes in Capitalization, Corporate Transactions and Certain Other Transactions.

(a) Changes in Capitalization. Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by each outstanding Option or Stock Purchase Right, and the number of shares of Common Stock that have been authorized for issuance under the Plan but as to which no Options or Stock Purchase Rights have yet been granted or that have been returned to the Plan upon cancellation or expiration of an Option or Stock Purchase Right, as well as the price per Share of Common Stock covered by each such outstanding Option or Stock Purchase Right, 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, recapitalization or reclassification of the Common Stock (including any change in the number of Shares of Common Stock effected in connection with a change of domicile of the Company), or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Administrator, whose determination in that respect shall be final, binding and conclusive. 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 thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option or Stock Purchase Right.

(b) Dissolution or Liquidation. In the event of the dissolution or liquidation of the Company, each outstanding Option or Stock Purchase Right shall terminate immediately prior to the consummation of such action, unless otherwise provided by the Administrator.

(c) Corporate Transactions. In the event of a Corporate Transaction, each outstanding Option and Stock Purchase Right shall be assumed or an equivalent option or right shall be substituted by the successor corporation or a Parent or Subsidiary of such successor corporation, unless such successor corporation does not agree to assume the outstanding Options or Stock Purchase Rights or to substitute equivalent options or rights, in which case such Options or Stock Purchase Rights shall terminate upon the consummation of the transaction.

13

For purposes of this Section 13(c), an Option or a Stock Purchase Right shall be considered assumed, without limitation, if, at the time of issuance of the stock or other consideration upon a Corporate Transaction each holder of an Option or Stock Purchase Right would be entitled to receive upon exercise of the Option or Stock Purchase Right the same number and kind of shares of stock or the same amount of property, cash or securities as such holder would have been entitled to receive upon the occurrence of the transaction if the holder had been, immediately prior to such transaction, the holder of the number of Shares of Common Stock covered by the Option or the Stock Purchase Right at such time (after giving effect to any adjustments in the number of Shares covered by the Option or Stock Purchase Right as provided for in this Section 13); provided however that if such consideration received in the transaction is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon exercise of the Option or Stock Purchase Right to be solely common stock of the successor corporation or its Parent equal to the Fair Market Value of the per Share consideration received by holders of Common Stock in the transaction.

(d) Certain Distributions. In the event of any distribution to the Company’s stockholders of securities of any other entity or other assets (other than dividends payable in cash or stock of the Company) without receipt of consideration by the Company, the Administrator may, in its discretion, appropriately adjust the price per Share of Common Stock covered by each outstanding Option or Stock Purchase Right to reflect the effect of such distribution.

14. Time of Granting Options and Stock Purchase Rights. The date of grant of an Option or Stock Purchase Right shall, for all purposes, be the date on which the Administrator makes the determination granting such Option or Stock Purchase Right, or such other date as is determined by the Administrator; provided, however, that in the case of any Incentive Stock Option, the grant date shall be the later of the date on which the Administrator makes the determination granting such Incentive Stock Option or the date of commencement of the Optionee’s employment relationship with the Company. Notice of the determination shall be given to each Employee or Consultant to whom an Option or Stock Purchase Right is so granted within a reasonable time after the date of such grant.

15. Amendment and Termination of the Plan.

(a) Authority to Amend or Terminate. The Board may at any time amend, alter, suspend, discontinue or terminate the Plan, but no amendment, alteration, suspension, discontinuation or termination (other than an adjustment made pursuant to Section 13 above) shall be made that would materially and adversely affect the rights of any Optionee or holder of Stock Purchase Rights under any outstanding grant, without his or her consent. In addition, to the extent necessary and desirable to comply with the Applicable Laws, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required.

(b) Effect of Amendment or Termination. No amendment or termination of the Plan shall materially and adversely affect Options already granted, unless mutually agreed

14

otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company.

16. Conditions Upon Issuance of Shares. Notwithstanding any other provision of the Plan or any agreement entered into by the Company pursuant to the Plan, the Company shall not be obligated, and shall have no liability for, failure to issue or deliver any Shares under the Plan unless such issuance or delivery would comply with the Applicable Laws, with such compliance determined by the Company in consultation with its legal counsel.

As a condition to the exercise of an Option or Stock Purchase Right, the Company may require the person exercising such Option or Stock Purchase Right to represent and warrant at the time of any such exercise 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 law.

17. Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

18. Agreements. Options and Stock Purchase Rights shall be evidenced by Option Agreements and Restricted Stock Purchase Agreements, respectively, in such form(s) as the Administrator shall from time to time approve.

19. Stockholder Approval. If required by the Applicable Laws, continuance of the Plan shall be subject to approval by the stockholders of the Company within twelve months before or after the date the Plan is adopted. Such stockholder approval shall be obtained in the degree and manner required under the Applicable Laws.

20. Information and Documents to Optionees and Purchasers. Prior to the date, if any, upon which the Common Stock becomes a Listed Security and if required by the Applicable Laws, the Company shall provide financial statements at least annually to each Optionee and to each individual who acquired Shares pursuant to the Plan, during the period such Optionee or purchaser has one or more Options or Stock Purchase Rights outstanding, and in the case of an individual who acquired Shares pursuant to the Plan, during the period such individual owns such Shares. The Company shall not be required to provide such information if the issuance of Options or Stock Purchase Rights under the Plan is limited to key employees whose duties in connection with the Company assure their access to equivalent information. In addition, at the time of issuance of any securities under the Plan, the Company shall provide to the Optionee or the purchaser a copy of the Plan and any agreement(s) pursuant to which securities granted under the Plan are issued.

15

EX-10.04

Exhibit 10.04

LEASE

by and between

MPTP HOLDING, LLC

“Landlord”

and

CLARIA CORPORATION

doing business in California as

Delaware Claria Corporation

“Tenant”

For the approximately 64,727 square foot premises at

555 Broadway, Redwood City, California 94063

TABLE OF CONTENTS

			Page
1.	Parties		1
2.	Premises		1
	A.	Initial Premises	1
	B.	Right of First Refusal	1
	C.	Expansion Option	3
	D.	Adjustment to Premises	4
3.	Definitions		5
	A.	Alterations	5
	B.	Commencement Date	5
	C.	Common Area	5
	D.	Common Area Maintenance Costs	5
	E.	Consumer Price Index	7
	F.	HVAC	7
	G.	Impositions	7
	H.	Interest Rate	8
	I.	Landlord’s Agents	8
	J.	Major Alterations	8
	K.	Minor Alterations	8
	L.	Monthly Rent	8
	M.	Parking Area	8
	N.	Project	8
	O.	Real Property Taxes	9
	P.	Rent	9
	Q.	Rent Commencement Date	9
	R.	Rentable Area	9
	S.	Security Deposit	9
	T.	Sublet	9
	U.	Subrent	10
	V.	Subtenant	10
	W.	Tenant Improvements	10
	X.	Tenant’s Building Share	10
	Y.	Tenant’s Percentage Share	10
	Z.	Tenant’s Personal Property	11
	AA.	Term	11
	BB.	Work Letter	11
4.	Lease Term		11
	A.	Term	11
	B.	Option to Extend	12

i

5.	Rent and Additional Charges		14
	A.	Monthly Rent	14
	B.	Management Fee	14
	C.	Common Area Maintenance Costs	15
	D.	Additional Rent	16
	E.	Prorations	16
	F.	Interest	16
6.	Late Payment Charges		16
7.	Security Deposit		17
	A.	Application of Security Deposit	17
	B.	Letter of Credit Provisions	17
	C.	Independent Contract	18
	D.	Transfer of the Letter of Credit	18
8.	Holding Over		19
9.	Tenant Improvements		19
10.	Condition of Premises		19
11.	Use of the Premises and Common Area		20
	A.	Tenant’s Use	20
	B.	Hazardous Materials	20
	D.	Use and Maintenance of Common Area	25
12.	Quiet Enjoyment		26
13.	Alterations to Premises		26
	A.	Landlord Consent; Procedure	26
	B.	General Requirements	26
	C.	Landlord’s Right to Inspect	28
	D.	Tenant’s Obligations Upon Completion	28
	E.	Repairs	28
	F.	Ownership and Removal of Alterations	28
	G.	Landlord’s Fee	29
	H.	Minor Alterations	29
14.	Surrender of the Premises		29
15.	Impositions and Real Property Taxes		30
	A.	Payment by Tenant	30
	B.	Taxes on Tenant Improvements and Personal Property	31
	C.	Proration	31
16.	Utilities and Services		31

ii

17.	Repair and Maintenance		31
	A.	Landlord’s Obligations	31
	B.	Tenant’s Obligations	33
	C.	Conditions Applicable to Repairs	33
	D.	Landlord’s Rights	33
	E.	Compliance with Governmental Regulations	34
18.	Liens		34
19.	Landlord’s Right to Enter the Premises		34
20.	Signs		35
21.	Insurance		36
	A.	Indemnification	36
	B.	Tenant’s Insurance	37
	C.	Premises Insurance	37
	D.	Increased Coverage	38
	E.	Failure to Maintain	38
	F.	Insurance Requirements	38
	G.	Landlord’s Disclaimer	39
22.	Waiver of Subrogation		39
23.	Damage or Destruction		39
	A.	Landlord’s Obligation to Rebuild	39
	B.	Right to Terminate	39
	C.	Limited Obligation to Repair	40
	D.	Abatement of Rent	40
	E.	Damage Near End of Term	41
24.	Condemnation		41
25.	Assignment and Subletting		42
	A.	Landlord’s Consent	42
	B.	Tenant’s Notice	42
	C.	Information to be Furnished	42
	D.	Landlord’s Alternatives	42
	E.	Proration	43
	F.	Parameters of Landlord’s Consent	43
	G.	Permitted Transfers	43
26.	Default		43
	A.	Tenant’s Default	43
	B.	Remedies	44
	C.	Landlord’s Default	45
27.	Subordination		47

iii

28.	Notices		48
29.	Attorneys’ Fees		48
30.	Estoppel Certificates		48
31.	Transfer of the Premises by Landlord		49
32.	Landlord’s Right to Perform Tenant’s Covenants		49
33.	Tenant’s Remedy		49
34.	Mortgagee Protection		49
35.	Brokers		50
36.	Acceptance		50
37.	Parking		50
38.	General		50
	A.	Captions	50
	B.	Executed Copy	50
	C.	Time	50
	D.	Severability	50
	E.	Choice of Law	51
	F.	Gender; Singular, Plural	51
	G.	Binding Effect	51
	H.	Waiver	51
	I.	Entire Agreement	51
	J.	Authority	51
	K.	Exhibits	51
	L.	Lease Summary	51
	M.	Force Majeure	51
	N.	Consent	52
39.	Opening to Existing Slide		52

EXHIBITS
EXHIBIT A-1		FLOOR PLAN OF PREMISES
EXHIBIT A-2		FLOOR PLAN OF EXPANSION PREMISES
EXHIBIT B	-	SITE PLAN OF PROJECT
EXHIBIT C	-	TENANT IMPROVEMENT AGREEMENT
EXHIBIT D	-	SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
EXHIBIT E	-	COMMENCEMENT MEMORANDUM
EXHIBIT F	-	FLOOR PLAN OF DATA CENTER ACCESS SPACE

iv

LEASE SUMMARY

Lease Date:	December 15, 2003
Landlord:	MPTP Holding, LLC A Delaware limited liability company
Address of Landlord:	100 Bush Street, 26th Floor San Francisco, California 94104
Tenant:	Claria Corporation A Delaware corporation (doing business in California as Delaware Claria Corporation)
Address of Tenant:	2000 Bridge Parkway Redwood City, California 94065
Contact:	555 Broadway Redwood City, California 94063 Attention: Dennis Jang
Telephone:	(650) 232-0349
Building Addresses:	555 Broadway Redwood City, California 94063
Total Premises Square Footage:	Approximately 64,727 square feet
Target Commencement Date:	January 1, 2004
Rent Commencement Date:	The date which is ninety (90) days after the Commencement Date
Term:	Approximately six (6) years
Monthly Rent:	As more fully set forth in Paragraph 5.A,

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	Period of Time		Amount
	Rent Commencement Date to first anniversary of Commencement Date		$61,490.65
	First anniversary of Commencement Date to second anniversary of Commencement Date		$63,335.37
	Second anniversary of Commencement Date to third anniversary of Commencement Date		$65,235.43
	Third anniversary of Commencement Date to fourth anniversary of Commencement Date		$67,192.49
	Fourth anniversary of Commencement Date to fifth anniversary of Commencement Date		$69,208.27
	Fifth anniversary of Commencement Date to December 31, 2009		$71,284.52
	Option Term	Fair market rent as determined pursuant to Paragraph 4.B
Security Deposit:	$360,000.00, subject to reduction pursuant to Section 7(E)

Exhibit A-1:	Floor Plan of Premises
Exhibit A-2	Floor Plan of Expansion Premises
Exhibit B:	Site Plan of Midpoint Technology Park
Exhibit C:	Tenant Improvement Agreement
Exhibit D:	Subordination, Non-Disturbance and Attornment Agreement
Exhibit E:	Commencement Memorandum
Exhibit F:	Floor Plan of Data Center Access Space

The Lease Summary is incorporated into and made a part of the Lease. Each reference in the Lease to any information in the Lease Summary shall mean the applicable information set forth above. In the event of any conflict between an item in the Lease Summary and the Lease, the Lease shall control.

vi

LEASE

1. Parties.

THIS LEASE (the “Lease”), dated as of December 15, 2003, is entered into by and between MPTP HOLDING, LLC, a Delaware limited liability company (“Landlord”), whose address is 100 Bush Street, 26^th Floor, San Francisco, California 94104, and CLARIA CORPORATION, a Delaware corporation (doing business in California as Delaware Clara Corporation) (“Tenant”), whose address is 2000 Bridge Parkway, Redwood City, California 94065.

2. Premises.

A. Initial Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord those certain premises consisting of a total area of approximately Sixty Four Thousand Seven Hundred Twenty Seven (64,727) square feet of Rentable Area, located in that certain building, commonly known as 555 Broadway (the “Building”), in the City of Redwood City, County of San Mateo, State of California, comprised of approximately Thirty Two Thousand (32,000) square feet of “high-bay” single-story space located on the first floor of the Building, approximately Twenty Eight Thousand Four Hundred Forty Two (28,442) square feet of open office space located on the second floor of the Building and approximately Four Thousand Two Hundred Eighty Five (4,285) square feet of data center space located on the first floor of the two-story portion of the Building, as more particularly shown on Exhibit A-1 (the “Premises”). The Premises also includes the appurtenant right to use in common with other tenants of the Project (as defined below) the Common Area (as defined below) of the Project.

B. Right of First Refusal

(i) Expansion Premises; Exercise. Following the second (2nd) anniversary of the Commencement Date, Tenant shall have an ongoing right of first refusal (a “First Refusal Right”), to lease all of the remaining portion of the first floor of the two-story portion of the Building comprised of approximately Twenty Three Thousand Four Hundred Ninety Four (23,494) square feet of Rentable Area and shown on Exhibit A-2 attached hereto (the “Expansion Premises”). Tenant’s First Refusal Right shall be triggered by Landlord’s receipt of a bona fide offer to lease all of the Expansion Premises. Upon receipt of such offer, Landlord shall provide notice (“Landlord’s Notice”) to Tenant of such receipt. Tenant shall have five (5) business days after Tenant’s receipt of Landlord’s Notice to exercise its First Refusal Right. If Tenant provides notice to Landlord during such five (5) day period that it is exercising its First Refusal Right, the Expansion Premises shall be part of the Premises under this Lease (so that the term “Premises” in this Lease shall refer to the space in the original Premises plus the Expansion Premises) continuing for the balance of the Term (including the Option Term). Landlord shall lease the Expansion Premises on all of the same terms and conditions of this Lease, except that: (a) the Monthly Rent and rent increases due for the Expansion Premises shall be the same Monthly Rent per square foot as is payable by Tenant for the original Premises as increased in accordance with the same increases per square foot set forth in the Lease Summary as is payable by Tenant for the original Premises; (b) any other matters dependent on the size of the Premises, such as Tenant’s Percentage Share, shall be adjusted to account for the increased

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size of the Premises; (c) Tenant shall commence payment of Monthly Rent and any Additional Rent for the Expansion Premises on the date Landlord delivers possession thereof to Tenant; and (d) the Expansion Premises shall be delivered in its then existing “as is” condition with Building Systems (as defined in Paragraph 13.B) servicing the Expansion Premises in good working condition, without obligation on the part of Landlord to make any repairs or construct any improvements to the Expansion Premises in connection with Tenant’s contemplated use, or to demolish existing improvements therein, and Tenant shall be responsible for the construction and installation in accordance with the provisions of Paragraph 13 of any tenant improvements Tenant desires to install within the Expansion Premises, at Tenant’s sole cost and expense, provided, however, that within thirty (30) days following the date Landlord delivers possession of the Expansion Premises to Tenant, Landlord shall furnish Tenant with an additional tenant improvement allowance equal to the product of Six Dollars ($6.00) per square foot of Rentable Area in the Expansion Premises multiplied by a fraction, the numerator of which is the number of calendar months remaining in the Initial Term from and after the date Landlord delivers possession thereof to Tenant and the denominator of which is seventy-two (72). The terms and conditions for payment of the additional tenant improvement allowance shall mirror the terms and conditions for the payment of the Construction Allowance as set forth in the Work Letter. Landlord shall promptly prepare and Landlord and Tenant shall promptly execute an amendment to this Lease reflecting the addition of the Expansion Premises. If Tenant does not deliver its notice of intent to lease the Expansion Premises within five (5) business days after Tenant’s receipt of Landlord’s Notice or fails to execute and deliver said lease amendment to Landlord within five (5) business days following receipt thereof by Tenant, then Tenant’s First Refusal Right will lapse and be of no further force and effect and Landlord may lease the Expansion Premises to the third party on the same or any other terms and conditions. If Landlord leases the Expansion Premises to a third party, Landlord shall cause a demising wall to be constructed to separate the Expansion Premises from the Premises. Tenant acknowledges that such construction may create noise and dust in the Premises. Tenant agrees that such construction shall in no way constitute a constructive eviction. If Landlord does not enter into a lease with such third party within six (6) months after delivery of Landlord’s Notice, then Tenant shall retain the rights under this Paragraph 2.B with respect to the Expansion Premises. Time is of the essence with respect to the provisions of this Paragraph 2.B.

(ii) Conditions to Exercise. Notwithstanding anything to the contrary set forth herein, if Tenant is in default under this Lease at the time Landlord’s Notice would otherwise be required to be sent under this Paragraph 2.B, or at any other time following Tenant’s exercise of its right to lease the Expansion Premises and prior to the date upon which possession of the Expansion Premises is to be delivered to Tenant, Landlord shall have, in addition to any other remedies, the right (but not the obligation) to terminate Tenant’s rights under this Paragraph 2.B, and in such event Landlord shall not be required to deliver Landlord’s Notice or to deliver possession of the Expansion Premises to Tenant. If not earlier terminated, the rights of Tenant pursuant to this Paragraph 2.B shall automatically terminate upon the Termination Date.

(iii) Rights Personal to Tenant. Tenant’s right to lease the Expansion Premises pursuant to this Paragraph 2.B is personal to, and may be exercised only by, the original named Tenant under this Lease. If Tenant shall assign this Lease or sublet all or any portion of the Premises, then immediately upon such assignment or subletting, Tenant’s right to

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lease the Expansion Premises pursuant to this Paragraph 2.B shall simultaneously terminate and be of no further force or effect. No assignee or subtenant shall have any right to lease the Expansion Premises pursuant to this Paragraph 2.B.

C. Expansion Option.

(i) Exercise. During the period before the second anniversary of the Commencement Date, Tenant shall have the right (the “Expansion Option”) to lease the Expansion Premises, subject to, and in accordance with, the terms and conditions set forth in this Paragraph 2C. Tenant may exercise the Expansion Option from time to time during the period before the second anniversary of the Commencement Date, time being of the essence, by giving irrevocable written notice of such exercise (“Expansion Notice”) to Landlord.

(ii) Terms and Conditions. If Tenant timely and validly exercises its Expansion Option, then, commencing upon delivery of such Expansion Premises to Tenant and continuing for the balance of the Term (including the Option Term), the Expansion Premises shall be part of the Premises under this Lease (so that the term “Premises” in this Lease shall refer to the space in the original Premises plus the Expansion Premises). Tenant’s lease of the Expansion Premises shall be on the same terms and conditions as affect the original Premises from time to time, except that (a) the Monthly Rent for the Expansion Premises during the Initial Term shall equal Monthly Rent per square footage then payable for the original Premises (the Monthly Rent during the Option Term shall be calculated pursuant to Paragraph 4.B); (b) Tenant’s Percentage Share shall be adjusted to reflect the addition of the Expansion Premises; (c) Tenant shall commence payment of Monthly Rent and any Additional Rent for the Expansion Premises on the date Landlord delivers possession thereof to Tenant; and (d) the Expansion Premises shall be delivered in its then existing “as is” condition with Building Systems servicing the Expansion Premises in good working condition, without obligation on the part of Landlord to make any repairs or construct any improvements to the Expansion Premises in connection with Tenant’s contemplated use, or to demolish existing improvements therein, and Tenant shall be responsible for the construction and installation in accordance with the provisions of Paragraph 13 of any tenant improvements Tenant desires to install within the Expansion Premises, at Tenant’s sole cost and expense, provided, however, within thirty (30) days following the date Landlord delivers possession of the Expansion Premises to Tenant, Landlord shall furnish Tenant with an additional tenant improvement allowance equal to the product of Six Dollars ($6.00) per square foot of Rentable Area in the Expansion Premises multiplied by a fraction, the numerator of which is the number of calendar months remaining in the Initial Term from and after the date Landlord delivers possession thereof to Tenant and the denominator of which is seventy-two (72). Landlord shall deliver the Expansion Premises to Tenant as soon as practicable following Landlord’s receipt of the Expansion Notice, in its then existing “as is” condition with Building Systems servicing the Expansion Premises in good working condition. The terms and conditions for payment of the additional tenant improvement allowance shall mirror the terms and conditions for the payment of the Construction Allowance as set forth in the Work Letter. Landlord shall promptly prepare and Landlord and Tenant shall promptly execute an amendment to this Lease reflecting the addition of the Expansion Premises.

(iii) Conditions to Exercise. Notwithstanding anything to the contrary set forth herein, if Tenant is in default under this Lease at the time Landlord’s Notice would

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otherwise be required to be sent under this Paragraph 2.C, or at any other time following Tenant’s exercise of its Expansion Option and prior to the date upon which possession of the Expansion Premises is to be delivered to Tenant, Landlord shall have, in addition to any other remedies, the right (but not the obligation) to terminate Tenant’s rights under this Paragraph 2.C, and in such event Landlord shall not be required to deliver possession of the Expansion Premises to Tenant. If not earlier terminated, the rights of Tenant pursuant to this Paragraph 2.C shall automatically terminate upon the Termination Date. Nothing contained in this Paragraph 2.C shall be deemed to impose any obligation on Landlord to refrain from negotiating any lease of the Expansion Premises, to withhold the Expansion Premises from the market, or to take any other action or omit to take any other action in order to make the Expansion Premises available to Tenant at any time during the period prior to the second anniversary of the Commencement Date so long as the term of any such lease entered into by Landlord shall not extend beyond the second anniversary of the Commencement Date.

(iv) Rights Personal to Tenant. Tenant’s right to lease the Expansion Premises pursuant to this Paragraph 2.C is personal to, and may be exercised only by, the original named Tenant under this Lease. If Tenant shall assign this Lease or sublet all or any portion of the Premises, then immediately upon such assignment or subletting, Tenant’s right to lease the Expansion Premises pursuant to this Paragraph 2.C shall simultaneously terminate and be of no further force or effect. No assignee or subtenant shall have any right to lease the Expansion Premises pursuant to this Paragraph 2.C.

D. Adjustment to Premises. If following the second anniversary of the Commencement Date, Tenant has not exercised either of its options under Paragraph 2.B or Paragraph 2.C and Landlord leases all or part of the Expansion Premises to a third party, Tenant shall be obligated to lease additional space within the Expansion Premises in the location crossed-hatched on Exhibit F and identified as the “Data Center Access Space” to permit access to the data center comprising part of the Premises. Landlord shall construct, at its sole cost and expense, the demising wall separating the Data Center Access Space from the balance of the Expansion Premises and the corridor surrounding the elevator, restrooms and exterior doors currently located within the Expansion Premises. The corridor shall become part of the Common Area providing access to Tenant and other tenants of the Building to such elevators, restrooms and exterior doors. The demising wall and corridor shall be constructed in the locations depicted on Exhibit F, pursuant to plans and specification approved by Landlord, in such a manner that provides adequate insulation from noise, and within thirty (30) days after delivery of Landlord’s notice to Tenant of the demise of the Expansion Premises pursuant to this Paragraph 2.D. Landlord shall promptly prepare and Landlord and Tenant shall promptly execute an amendment to this Lease reflecting the addition of the Data Center Access Space which amendment shall include (a) an increase in the Monthly Rent for the Data Center Access Space and an allocation of the corridor space during the Initial Term equal to a Monthly Rent per square footage then payable for the original Premises (the Monthly Rent during the Option Term shall be calculated pursuant to Paragraph 4.B); (b) an adjustment to Tenant’s Percentage Share to reflect the addition of the Data Center Access Space to the Premises; (c) commencement of the payment of Monthly Rent and any Additional Rent for the Data Center Access Space and allocation of corridor space on the date that is thirty (30) days after delivery of Landlord’s notice to Tenant of the demise of the Expansion Premises pursuant to this Paragraph 2D; and (d) the delivery of the Data Center Access Space in its “as is” condition.

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3. Definitions.

The following terms shall have the following meanings in this Lease:

A. Alterations. Any alterations, additions or improvements made in, on or about the Premises after the Commencement Date, including, but not limited to, lighting, heating, ventilating, air conditioning, electrical, partitioning, drapery and carpentry installations.

B. Commencement Date. The date upon which Landlord delivers possession of the Premises in the condition required under this Lease.

C. Common Area. All areas and facilities within the Project not appropriated to the exclusive occupancy of tenants, including the Parking Area, sidewalks, pedestrian ways, driveways, signs, service delivery facilities, common storage areas, common utility facilities and all other areas in the Project established by Landlord for non-exclusive use. The Common Area may increase and/or decrease from time to time during the Term, since Landlord may elect in its sole discretion to make changes to the buildings situated in the Project, and/or to subdivide, sell, exchange, dispose of, transfer, or change the configuration of all or any portion of the Common Area from time to time, so long as Landlord neither unreasonably interferes with Tenant’s use of the Premises, Tenant’s rights under this Lease or Tenant’s ingress to or egress from the Building, nor reduces the number of parking spaces available for Tenant’s use below the minimum requirements set forth in Paragraph 37.

D. Common Area Maintenance Costs. As limited in the balance of this Paragraph 3.D, the total of all costs and expenses paid or incurred by Landlord in connection with the operation, maintenance, and repair of the Common Area, the Building, and the performance of Landlord’s obligations under Paragraph 17.A. Without limiting the generality of the foregoing, Common Area Maintenance Costs include all costs of and expenses for: (i) maintenance and repairs of the Common Area; (ii) resurfacing, resealing, remarking, painting, repainting, striping or restriping the Parking Area; (iii) maintenance and repair of all public or common facilities; (iv) maintenance, repair and replacement of sidewalks, curbs, paving, walkways, Parking Area, Project signs, landscaping, planting and irrigation systems, trash facilities, loading and delivery areas, lighting, drainage and common utility facilities, directional or other signs, markers and bumpers, and any fixtures, equipment and personal property located on the Common Area; (v) wages, salaries, benefits, payroll burden fees and charges of personnel employed by Landlord (excluding personnel having a grade of Vice President or above) and the charges of all independent contractors retained by Landlord (to the extent that such personnel and contractors are utilized by Landlord) for the maintenance, repair, management and/or supervision of the Project, and of any security personnel retained by Landlord in connection with the operation and maintenance of the Common Area (although Landlord shall not be required to obtain security services); (vi) maintenance, repair and replacement of security systems and alarms; (vii) premiums for Comprehensive General Liability Insurance or Commercial General Liability Insurance, casualty insurance, workers compensation insurance or other insurance on the Common Area, the Project, the buildings located at the Project, or any portion thereof or interest therein, all in such amounts as Landlord determines to be appropriate, and the costs incurred in repairing an insured casualty to the extent of the deductible amount (not in excess of Twenty Five Thousand Dollars ($25,000.00) per calendar year) under the applicable insurance

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policy; (viii) all personal property or real property taxes and assessments levied or assessed on the Project, or any portion thereof or interest therein, including without limitation Tenant’s Percentage Share of the Real Property Taxes for the Project, if applicable under Paragraph 15.A; (ix) cleaning, collection, storage and removal of trash, rubbish, dirt and debris, and sweeping and cleaning the Common Area; (x) any alterations, additions or improvements required to be made to the Common Area in order to comply with applicable governmental laws, ordinances, rules, regulations and orders that become effective after the date of this Lease; (xi) legal, accounting and other professional services for the Project, including costs, fees and expenses of contesting the validity or applicability of any law, ordinance, rule, regulation or order relating to the Building, and of contesting, appealing or otherwise attempting to reduce any Real Property Taxes assessed against the Project; (xii) all costs and expenses incurred by Landlord in performing its obligations under Paragraph 17.A, including without limitation all costs and expenses incurred in performing any alterations, additions or improvements required to be made to the Building in order to comply with applicable laws, ordinances, rules, regulations and orders that become effective after the date of this Lease, and all capital improvements required to be made in connection with the operation, maintenance and repair of the Building, provided that the cost of any such alterations, additions, improvements or capital improvements shall be amortized over the useful life thereof as reasonably determined by Landlord, together with interest on the unamortized balance at a rate per annum equal to ten percent (10%) or, if applicable, the rate paid by Landlord on funds borrowed for the purpose of constructing or acquiring such capital improvements but in either case not more than the maximum rate permitted by law at the time such capital improvements are constructed or acquired (the “Amortization Rate”); (xiii) any other cost or expense which this Lease expressly characterizes as a Common Area Maintenance Cost; (xiv) any and all payments due and owing on behalf of the Project or any portion thereof with respect to any covenants, conditions, and restrictions encumbering the Project, including without limitation any and all assessments and association dues; and (xv) all costs and expenses of providing, creating, maintaining, repairing, managing, operating, and supervising a fitness center and/or cafeteria, servicing the Project, which may include without limitation fair market rent subsidies granted and fair market rent charged by Landlord for the space occupied by such amenity center (such fitness center and/or cafeteria may be located on property adjacent to the Project which together with the Project is depicted on Exhibit B and commonly referred to as “Midpoint Technology Park”). However, notwithstanding the foregoing, Common Area Maintenance Costs shall not include the cost of or expenses for the following: (A) leasing commissions, attorneys’ fees or other costs or expenses incurred in connection with negotiations or disputes with other tenants of the Project; (B) depreciation of buildings and improvements in the Project; (C) payments of principal, interest, late fees, prepayment fees or other charges on any debt secured by a mortgage covering the Project, or rental payments under any ground lease or underlying lease; (D) any penalties incurred due to Landlord’s violation of any governmental rule or authority (but not excluding the cost of compliance therewith, if such cost is chargeable to Tenant pursuant to this Lease); (E) any Real Property Taxes or costs for which Landlord is separately and directly reimbursed by Tenant or any other tenant of the Project which are assessed against the Premises or the premises leased by such other tenant; (F) items for which Landlord is reimbursed by insurance; (G) any Common Area Maintenance Costs representing an amount paid to a related or affiliated person or entity of Landlord which is in excess of the amount which would be paid in the absence of such relationship; (H) costs and expenses incurred by Landlord in performing its obligations under Paragraph 17.A, to the extent but only to the

6

extent that such costs and expenses are incurred in performing any alterations, additions or improvements required to be made to the Building in order to comply with applicable underwriter’s requirements, with applicable covenants, conditions or restrictions, or with applicable laws, ordinances, rules, regulations and orders that are in effect as of the date of this Lease; (I) costs and expenses arising from any refinancing of the Project; (J) costs associated with the operation of the business of the partnership or limited liability company which constitutes Landlord, as the same are distinguished from the costs of operation of the Building, including accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of Tenant may be the issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of Landlord’s interest in the Building, costs (including attorneys’ fees and costs of settlement, judgments and payments in lieu thereof) arising from claims, disputes or potential disputes in connection with potential or actual claims, litigation or arbitrations respecting Landlord and/or the Building and/or the Project; (K) costs of removal or remediation of Hazardous Materials (as defined in Paragraph 11.B) required in order to comply with any laws applicable to the Building, including the Premises, unless caused by Tenant or any of Tenant’s Parties; and (L) any costs in excess of $.14 per square foot per month with respect to the maintenance of the cafeteria and the fitness center (the “Cafeteria/Fitness Center CAM Cap”). On each anniversary of the Commencement Date (each, an “Adjustment Date”), the Cafeteria/Fitness Center CAM Cap shall be adjusted by multiplying the amount of the Cafeteria/Fitness Center CAM Cap by a fraction, the numerator of which shall be the Consumer Price Index for the month two months prior to the applicable Adjustment Date, and the denominator of which shall be the Consumer Price Index for the same month immediately prior to the Commencement Date, provided that in no event shall the Cafeteria/Fitness Center CAM Cap be decreased as a result of such computation. If the Consumer Price Index is not published for the specified month, the Consumer Price Index for the next succeeding month shall be substituted. In addition, Common Area Maintenance Costs allocable to the Parking Area shall be reduced (but not below zero (0)) by any and all net income received by Landlord during the applicable year from the ownership or operation of the Parking Area.

E. Consumer Price Index. The United States Department of Labor, Bureau of Labor Statistics (“Bureau”), Consumer Price Index (All Urban Consumers, All Items, 1982-1984 = 100) for the Metropolitan Area of which San Francisco, California, is a part. If the Consumer Price Index is discontinued or revised, the Consumer Price Index shall mean the index designated as the successor or substitute index by the Bureau, or its successor agency, and if none is designated, a comparable index as determined by Landlord in its sole discretion, which would likely achieve a comparable result to that achieved by the use of the Consumer Price Index. If the Base Year of the Consumer Price Index is changed, then the conversion factor specified by the Bureau, or successor agency, shall be utilized to determine the Consumer Price Index.

F. HVAC. Heating, ventilating and air conditioning.

G. Impositions. Taxes, assessments, charges, excises and levies, business taxes, license, permit, inspection and other authorization fees, transit development fees, assessments or charges for housing funds, service payments in lieu of taxes and any other fees or charges of any kind at any time levied, assessed, charged or imposed by any federal, state or local entity, (i) upon, measured by or reasonably attributable to the cost or value of Tenant’s

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equipment, furniture, fixtures or other personal property located in the Premises, or the cost or value of any Alterations; (ii) upon, or measured by, any Rent payable hereunder, including any gross receipts tax; (iii) upon, with respect to or by reason of the development, possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or any portion thereof; or (iv) upon this Lease transaction, or any document to which Tenant is a party creating or transferring any interest or estate in the Premises. Impositions do not include franchise, transfer, inheritance or capital stock taxes, or income taxes measured by the net income of Landlord from all sources, unless any such taxes are levied or assessed against Landlord as a substitute for, in whole or in part, any Imposition.

H. Interest Rate. Ten percent (10%).

I. Landlord’s Agents. Landlord’s authorized agents, representatives, members, partners, subsidiaries, directors, officers, and employees.

J. Major Alterations. Alterations which (i) may affect the structural portions of any portion of the Project, (ii) may affect or interfere with the Building roof, walls, elevators, heating, ventilating, air conditioning, electrical, plumbing, telecommunications, security, life-safety or other utility systems serving the Premises, the Building, or the Project, (iii) may affect the use and enjoyment by other tenants or occupants of the Project of their premises, (iv) may be visible from outside the Premises, (v) utilize materials or equipment which are inconsistent with Landlord’s standard building materials and equipment for the Project, (vi) result in the imposition on Landlord of any requirement to make any alterations or improvements to any portion of the Project (including handicap access and life safety requirements) in order to comply with law, or (vii) increase the cost to clean, maintain or repair, or increase the cost to relet, the Premises.

K. Minor Alterations. Alterations (i) that are not Major Alterations, (ii) that do not require the issuance of a building or other governmental permit, authorization or approval, (iii) that do not require work to be performed outside the Premises in order to comply with applicable laws, and (iv) the cost of which does not exceed Fifty Thousand Dollars ($50,000.00) in any one instance.

L. Monthly Rent. The rent payable pursuant to Paragraph 5.A.

M. Parking Area. All Common Area (except sidewalks and service delivery facilities) now or hereafter designated by Landlord for the parking or access of motor vehicles, including roads, traffic lanes, vehicular parking spaces, landscaped areas and walkways. The Parking Area may increase and/or decrease from time to time during the Term, since Landlord may elect in its sole discretion to make changes to the buildings situated in the Project, and/or to subdivide, sell, exchange, dispose of, transfer, or change the configuration of all or any portion of the Parking Area from time to time; provided, however, that Landlord shall not reduce the number of parking spaces available for Tenant’s use below the minimum requirements set forth in Paragraph 37.

N. Project. That certain real property described in Exhibit B consisting of approximately 27.47 acres, upon which are located the Building and four (4) other buildings,

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consisting of a total building square footage of approximately Four Hundred Twelve Thousand Two Hundred Ninety Seven (412,297) square feet. The Project may increase and/or decrease from time to time during the Term, since Landlord may elect in its sole discretion to make changes to the real property and/or buildings situated in the Project, and/or to subdivide, sell, exchange, dispose of, transfer, or change the configuration of all or any portion of the Project from time to time

O. Real Property Taxes. Any form of assessment, license, fee, rent tax, levy, penalty (if a result of Tenant’s delinquency), or tax (other than net income, estate, succession, inheritance, transfer or franchise taxes), imposed by any authority having the direct or indirect power to tax, or by any city, county, state or federal government or any improvement or other district or division thereof, whether such tax is: (i) determined by the area of the Premises or any part thereof or the rent and other sums payable hereunder by Tenant or by other tenants, including, but not limited to, any gross income or excise tax levied by any of the foregoing authorities with respect to receipt of such rent or other sums due under this Lease, (ii) upon any legal or equitable interest of Landlord in the Premises or any part thereof; (iii) upon this transaction or any document to which Tenant is a party creating or transferring any interest in the Premises; (iv) levied or assessed in lieu of, in substitution for, or in addition to, existing or additional taxes against the Premises whether or not now customary or within the contemplation of the parties; or (v) surcharged against the Parking Area. To the extent that Landlord receives during any calendar year any rebate or refund of Real Property Taxes assessed against the Project, the Real Property Taxes for such year shall be reduced by the amount of such rebate or refund received by Landlord. Real Property Taxes shall not include any penalties, interest or late charges caused by Landlord’s failure to timely pay any Real Property Taxes so long as Tenant timely pays to its share of Real Property Taxes pursuant to Paragraph 15. Notwithstanding anything to the contrary herein, “Real Property Taxes” shall not include and Tenant shall not be required to pay any tax or assessment expense or any increase therein (i) levied on Landlord’s rental income, unless such tax or assessment expense is imposed in lieu of real property taxes; (ii) in excess of the amount which would be payable if such tax or assessment expense were paid in installments over the longest possible term; or (iii) imposed on land and improvements other than the Project.

P. Rent. Monthly Rent plus the Additional Rent defined in Paragraph 5.D.

Q. Rent Commencement Date. The date which is three (3) months after the Commencement Date.

R. Rentable Area. The aggregate square footage in any one or more buildings in the Project, as appropriate, as reasonably determined by Landlord from time to time.

S. Security Deposit. That amount of the letter of credit delivered by Tenant pursuant to Paragraph 7.

T. Sublet. Any transfer, sublet, assignment, license or concession agreement, or hypothecation of this Lease or the Tenant’s interest in the Lease or in and to all or a portion of the Premises. As used herein, a Sublet includes the following: (i) if Tenant is a partnership or a limited liability company, a transfer, voluntary or involuntary, of all or any part of any interest in

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such partnership or limited liability company, or the dissolution of the partnership or limited liability company, whether voluntary or involuntary; (ii) if Tenant is a corporation, any dissolution of Tenant, or the transfer, either by a single transaction or in a series of transactions, of a controlling percentage of the stock of Tenant, unless any such corporate change results from the trading of shares listed on a recognized public stock exchange and such trading is not for the purposes of acquiring effective control of Tenant; (iii) if Tenant is a trust, the transfer, voluntarily or involuntarily, of all or any part of the controlling interest in such trust; and (iv) if Tenant is any other form of entity, a transfer, voluntary or involuntary, of all or any part of any interest in such entity. As used herein, the phrases “controlling percentage” and “controlling interest” mean the ownership of, and/or the right to vote, stock, partnership interests, membership interests, or other indicia of ownership possessing at least fifty-one percent (51%) of either the total combined interests in Tenant, or the voting power of all classes of Tenant’s capital stock, partnership interests, membership interests, or other indicia of ownership, that have been issued, outstanding, and (if applicable) are entitled to vote. Notwithstanding anything in this Lease to the contrary, any public offering of stock of Tenant, pursuant to a registration statement filed with the U. S. Securities and Exchange Commission, shall not constitute a Sublet hereunder.

U. Subrent. Any consideration of any kind received, or to be received, by Tenant from a Subtenant if such sums are directly related to Tenant’s interest in this Lease or in the Premises, including without limitation bonus money and payments (in excess of book value) for Tenant’s assets, including without limitation its trade fixtures, equipment and other personal property, goodwill, general intangibles, and any capital stock or other equity ownership of Tenant.

V. Subtenant. The person or entity with whom a Sublet agreement is proposed to be or is made.

W. Tenant Improvements. Those certain improvements to the Premises to be constructed pursuant to the Tenant Improvement Agreement attached to this Lease as Exhibit C.

X. Tenant’s Building Share. The ratio (expressed as a percentage) of the total Rentable Area of the Premises to the total Rentable Area of the Building as determined by Landlord from time to time, which as of the Commencement Date shall equal Seventy Three 93/100ths percent (73.93%). Tenant’s Building Share shall be recalculated any time that the amount of Rentable Area contained in Premises is adjusted, or there is a change in the total Rentable Area of the Building.

Y. Tenant’s Percentage Share. The ratio (expressed as a percentage) of the total Rentable Area of the Premises to the total Rentable Area of all of the buildings at the Project, each as of the first (1st) day of the calendar month in question, as reasonably determined by Landlord. The parties acknowledge and agree that the total Rentable Area of all of the buildings in the Project may increase and/or decrease from time to time during the Term, since Landlord may elect in its sole discretion to make changes to the buildings situated in the Project (so long as Landlord neither unreasonably interferes with ingress to or egress from the Building, nor reduces the number of parking spaces available for Tenant’s use below the minimum requirements set forth in Paragraph 37). For the purposes of example only and not by way of

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limitation, if as of the Commencement Date (x) Landlord determines that the Premises consists of Sixty-Four Thousand Seven Hundred Twenty Seven (64,727) square feet of Rentable Area in the Building, and (y) the total Rentable Area of all of the buildings in the Project equals Four Hundred Twelve Thousand Two Hundred Ninety Seven (412,297) square feet of Rentable Area, then Tenant’s Percentage Share as of the Commencement Date shall equal Fifteen and 70/100ths percent (15.70%).

Z. Tenant’s Personal Property. Tenant’s trade fixtures, furniture, equipment and other personal property in the Premises.

AA. Term. The term of this Lease set forth in Paragraph 4.A. (the “Initial Term”) as it may be extended hereunder pursuant to the option set forth in Paragraph 4.B

BB. Work Letter. The Tenant Improvement Agreement attached to this Lease as Exhibit C.

4. Lease Term.

A. Term. The Term shall commence on the Commencement Date and shall terminate on December 31, 2009 (the “Expiration Date”). On the Commencement Date, Landlord and Tenant shall together execute a commencement memorandum in the form attached as Exhibit E, appropriately completed. Landlord shall have no obligation to deliver possession, nor shall Tenant be entitled to take occupancy, of the Premises until such commencement memorandum has been executed, and Tenant’s obligation to pay Monthly Rent and Additional Rent shall not be excused or delayed because of Tenant’s failure to execute such commencement memorandum. If Landlord, for any reason whatsoever, cannot deliver the Premises to Tenant on or before January 1, 2004 through no fault of Landlord, this Lease shall not be void or voidable but Tenant shall not be liable for any Rent until the time when Landlord can deliver possession of the Premises to Tenant, except in the case of Tenant Delay. If Landlord is delayed in delivering the Premises to Tenant (except in the case of a Tenant Delay), the Commencement Date and the Rent Commencement Date shall be delayed by the number of days of such delay. Landlord shall not be in default or liable to Tenant for any loss or damage resulting from such delay, but Landlord shall remain obligated to deliver the Premises to Tenant in accordance with this Paragraph 4.A as soon thereafter as reasonably possible, provided, however, that if possession of the Premises has not been delivered by June 1, 2004 (the “Outside Delivery Date”), Tenant, as its sole remedy, shall have the right to terminate this Lease by delivering written notice of termination to Landlord, whereupon this lease shall terminate unless Landlord delivers possession of the Premises within ten (10) days following the date such notice is given. For purposes of this Paragraph 4.A, the phrase “Tenant Delay” shall mean any delay resulting from: (a) Tenant’s failure to agree to plans and specifications; (b) Tenant’s change in any plans or specifications; (c) performance or completion by a party employed by Tenant; or (d) any other act or omission by Tenant or any of Tenant’s Parties. If Landlord is delayed in delivering the Premises to Tenant as a result of any Tenant Delay, the Commencement Date and the Rent Commencement Date shall be accelerated by the number of days of such delay. The Outside Delivery Date shall not be extended if Landlord is delayed in delivering the Premises to Tenant as a result of a Force Majeure Event.

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B. Option to Extend.

(i) Grant of Option. Landlord hereby grants to Tenant one (1) option (the “Option”) to extend the Initial Term of this Lease, for an additional term of three (3) years (the “Option Term”), which shall commence upon the expiration of the Initial Term. The Option is expressly conditioned upon Tenant’s not being in default under any term or condition of this Lease, either at the time the option is exercised or at the time the Option Term would commence. The Option shall be personal to the Tenant originally named in this Lease or any successor to Tenant’s interest in this Lease pursuant to a Permitted Transfer (as defined in Paragraph 25.G), and shall not be assigned, sold, conveyed or otherwise transferred to any other party (including without limitation any assignee or sublessee of such Tenant) without Landlord’s consent. Under no circumstances shall Landlord be required to pay any real estate commission to any party with respect to Tenant’s exercise of the Option.

(ii) Manner of Exercise. Tenant may exercise the Option only by giving Landlord written notice not less than six (6) months prior to the expiration of the Initial Term. If Tenant fails to exercise its Option prior to such six (6) month period, then the Option automatically shall lapse and thereafter Tenant shall have no right to exercise the Option.

(iii) Terms and Rent. If the Option is exercised, then the Monthly Rent for the Premises for the Option Term shall be equal to one hundred percent (100%) of the fair market rent, as determined below, for the Premises as of the commencement of the Option Term, but in no event shall the Monthly Rent be reduced below One and 13/100 Dollars ($1.13) per square foot for the first year of the Option Term. The fair market rent for the Premises shall mean the rental being charged for office space comparable to the Premises in office and research development complexes comparable to the Project located in the vicinity of the Project taking into account all relevant factors, including without limitation the fact that the Premises are being leased in turn-key condition. Landlord shall not under any circumstances be required to construct or pay for any additional interior improvements to the Premises. All other terms and conditions of the Lease, as amended from time to time by the parties in accordance with the provisions of the Lease, shall remain in full force and effect and shall apply during the Option Term provided, however, that notwithstanding the foregoing, neither the Option, nor Landlord’s obligations under the Work Letter, shall be of any force or effect during the Option Term.

(iv) Determination of Rent. The fair market rent for the purposes of calculating the Monthly Rent for the Option Term shall be determined by mutual agreement of the parties or, if the parties are unable to agree within thirty (30) days after Tenant’s exercise of the option, then fair market rent shall be determined pursuant to the procedure set forth in Paragraphs 4.D.(v) and 4.D.(vi).

(v) Landlord’s Initial Determination. If the parties are unable mutually to agree upon the fair market rent pursuant to Paragraph 4.D.(iv), then the fair market rent initially shall be determined by Landlord by written notice (“Landlord’s Notice”) given to Tenant promptly following the expiration of the 30-day period set forth in Paragraph 4.D.(iv). If Tenant disputes the amount of fair market rent set forth in Landlord’s Notice, then, within thirty (30) days after delivery of Landlord’s Notice, Tenant shall send Landlord a written notice (“Tenant’s Notice”) which specifically (a) disputes the fair market rent set forth in Landlord’s

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Notice, (b) demands arbitration pursuant to Paragraph 4.D.(vi), and (c) states the name and address of the person who shall act as arbitrator on Tenant’s behalf. Tenant’s Notice shall be deemed defective, and not given to Landlord, if it fails strictly to comply with the requirements and time period set forth above. If Tenant does not send Tenant’s Notice within thirty (30) days after the date of Landlord’s Notice, or if Tenant’s Notice fails to contain all of the required information, then the Monthly Rent for the Option Term shall equal one hundred percent (100%) of the fair market rent specified in Landlord’s Notice. If the arbitration is not concluded prior to the commencement of the Option Term, then for the ninety (90) day period commencing with the date that the Option Term commences, Tenant shall pay Monthly Rent equal to the Monthly Rent that would have been applicable if the Term had continued during such ninety (90) day period, except that the date the Option Term commences shall be treated as an “Adjustment Date” (as defined in Paragraph 5.B), and the Monthly Rent shall be adjusted in accordance with Paragraph 5.B effective as of the date the Option Term commences. If the arbitration is not concluded prior to the expiration of such ninety (90) day period, then from and after the expiration of such ninety (90) day period, Tenant shall pay Monthly Rent equal to one hundred percent (100%) of the Monthly Rent payable immediately prior to the commencement of the Option Term. If the fair market rent determined by arbitration differs from that paid by Tenant pending the results of arbitration, then any adjustment required to adjust the amount previously paid shall be made by payment by the appropriate party within ten (10) days after the determination of fair market rent.

(vi) Arbitration. The arbitration shall be conducted in the City of San Francisco in accordance with the then prevailing rules of the American Arbitration Association (or its successor) for the arbitration of commercial disputes, except that the procedures mandated by such rules shall be modified as follows:

(a) Each arbitrator must be a real estate appraiser with at least five (5) years of full-time commercial appraisal experience who is familiar with the fair market rent of office and research and development complexes located in the vicinity of the Premises. Within ten (10) business days after receipt of Tenant’s Notice, Landlord shall notify Tenant of the name and address of the person designated by Landlord to act as arbitrator on Landlord’s behalf.

(b) The two arbitrators chosen pursuant to Paragraph 4.D.(vi)(a) shall meet within ten (10) business days after the second arbitrator is appointed and shall either agree upon the fair market rent or appoint a third arbitrator possessing the qualifications set forth in Paragraph 4.D.(vi)(a). If the two arbitrators agree upon the fair market rent within such ten (10) business day period, the Monthly Rent for the Option Term shall equal one hundred percent (100%) of such fair market rent. If the two arbitrators are unable to agree upon the fair market rent and are unable to agree upon the third arbitrator within five (5) business days after the expiration of such ten (10) business day period, the third arbitrator shall be selected by the parties themselves. If the parties do not agree on the third arbitrator within five (5) business days after the expiration of such five (5) business day period, then either party, on behalf of both, may request appointment of the third arbitrator by the Association of South Bay Brokers. The three arbitrators shall decide the dispute, if it has not been previously resolved, by following the procedures set forth in Paragraph 4.D.(vi)(c). Each party shall pay the

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fees and expenses of its respective arbitrator and both shall share the fees and expenses of the third arbitrator. Each party shall pay its own attorneys’ fees and costs of witnesses.

(c) The three arbitrators shall determine the fair market rent in accordance with the following procedures. Each of Landlord’s arbitrator and Tenant’s arbitrator shall state, in writing, his or her determination of the fair market rent, supported by the reasons therefor, and shall make counterpart copies for the other arbitrators. All of the arbitrators shall arrange for a simultaneous exchange of the proposed resolutions within twenty (20) days after appointment of the third arbitrator. If any arbitrator fails to deliver his or her own determination to the other arbitrators within such twenty-day period, then the fair market rent shall equal the average of the resolutions submitted by the other arbitrators. If all three (3) arbitrators deliver their determinations to the other arbitrators within such twenty (20) day period, then the two (2) closest determinations of the arbitrators shall be averaged, and the resulting quotient shall be the fair market rent, and the Monthly Rent for the Option Term shall equal one hundred percent (100%) of such fair market rent; provided, however, that if the determination of one (1) of the arbitrators (the “Average Determination”) is equal to the average of the determinations of the other two (2) arbitrators, then the Average Determination shall be the fair market rent. However, the arbitrators shall not attempt to reach a mutual agreement of the fair market rent; each arbitrator shall independently arrive at his or her proposed resolution.

(d) The arbitrators shall have the right to consult experts and competent authorities for factual information or evidence pertaining to a determination of fair market rent, but any such consultation shall be made in the presence of both parties with full right on their part to cross-examine. The arbitrators shall render the decision and award in writing with counterpart copies to each party. The arbitrators shall have no power to modify the provisions of this Lease. In the event of a failure, refusal or inability of any arbitrator to act, his or her successor shall be appointed by him or her, but in the case of the third arbitrator, his or her successor shall be appointed in the same manner as that set forth herein with respect to the appointment of the original third arbitrator.

5. Rent and Additional Charges.

A. Monthly Rent. Tenant shall pay to Landlord, in lawful money of the United States, Monthly Rent in the amount set forth in the Lease Summary. Monthly Rent shall be paid in advance, on the first day of each calendar month, without abatement, deduction, claim, offset, prior notice or demand, except as otherwise set forth herein. Additionally, Tenant shall pay, as and with the Monthly Rent, the management fee described in Paragraph 5.B, Tenant’s share of Common Area Maintenance Costs pursuant to Paragraph 5.C, the Real Property Taxes and Impositions payable by Tenant pursuant to Paragraph 15, and the monthly cost of insurance premiums required pursuant to Paragraph 21.C. On the full execution of the Lease, Tenant shall pay to Landlord the sum of Sixty One Thousand Four Hundred Ninety and 65/100 Dollars ($61,490.65) to be applied by Landlord to the first month’s payment of Monthly Rent.

B. Management Fee. Tenant shall pay to Landlord monthly, as Additional Rent, a management fee equal to three percent (3%) of the Monthly Rent then in effect.

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C. Common Area Maintenance Costs.

(i) Estimated Payments. Commencing on the Commencement Date and continuing throughout the entire Term, Tenant shall pay Tenant’s Percentage Share of all other Common Area Maintenance Costs paid or payable by Landlord in each year; provided, however, that Tenant shall pay Tenant’s Building Share of those Common Area Maintenance Costs arising from Landlord’s performance of its obligations under Paragraph 17.A. Before commencement of the Term and during December of each calendar year or as soon thereafter as practicable, Landlord shall give Tenant notice of its estimate of amounts payable under this Paragraph 5.C.(i) for the ensuing calendar year. Such notice shall show in reasonable detail the basis on which the estimate was determined. On or before the first day of each month during the ensuing calendar year, Tenant shall pay to Landlord one-twelfth (1/12th) of such estimated amounts, provided that if such notice is not given in December, Tenant shall continue to pay on the basis of the prior year’s estimate until the month after such notice is given. If at any time or times it appears to Landlord, in its reasonable judgment, that the amounts payable under this Paragraph 5.C.(i) for the current calendar year will vary from its then current estimate by more than five percent (5%), Landlord shall by notice to Tenant, showing in reasonable detail the basis for such variance, revise its estimate for such year, in which case subsequent payments by Tenant for such year shall be based upon such revised estimate.

(ii) Adjustment. Within ninety (90) days after the close of each calendar year (or as soon after such 90-day period as reasonably practicable provided that Landlord is using reasonable efforts and due diligence to endeavor to deliver the statement), Landlord shall deliver to Tenant a reasonably detailed statement of Common Area Maintenance Costs for such calendar year, certified by Landlord or its property manager as correct, subject to Tenant’s right to inspect as hereinafter provided. At that time, Landlord shall also deliver to Tenant a statement, certified as correct by Landlord, of the adjustments to be made pursuant to Paragraph 5.C.(i) above. If Landlord’s statement shows that Tenant owes an amount that is less than the estimated payments for such calendar year previously made by Tenant, Tenant may offset such overpayment against Rent due or remaining due under this Lease, or if no Rent remains due, Landlord shall refund such excess to Tenant within thirty (30) days after delivery of the statement. If such statement shows that Tenant owes an amount that is more than the estimated payments for such calendar year previously made by Tenant, Tenant shall pay the deficiency to Landlord within thirty (30) days after delivery of the statement.

(iii) Last Year. If this Lease shall terminate on a day other than the last day of a calendar year, the adjustment in Rent applicable to the calendar year in which such termination shall occur shall be prorated on the basis which the number of days from the commencement of such calendar year to and including such termination date bears to three hundred sixty (360). The termination of this Lease shall not affect the obligations of Landlord and Tenant pursuant to Paragraph 5.C.(ii) to be performed after such termination.

(iv) Inspection. Within one hundred twenty (120) days after receipt of Landlord’s statement of Common Area Maintenance Costs as provided in Paragraph 5.C.(ii), Tenant or its certified public accountant, on not less than five (5) days’ prior written notice to Landlord, shall have the right to, at Tenant’s sole cost and expense, inspect Landlord’s books and records with respect to the Common Area Maintenance Costs for the calendar year pertaining to

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the year for which the Landlord’s statement pertains. Landlord shall make such books and records available to Tenant at a location within the San Francisco Bay Area. The results of any such inspection shall be kept strictly confidential by Tenant and its certified public accountant, and Tenant and its certified public accountant must agree in their contract for such services, to such confidentiality restrictions and shall specifically agree that the results shall not be made available to any other tenant of the Project. Unless Tenant sends to Landlord any written exception to Landlord’s statement of Common Area Maintenance Costs within said one hundred twenty (120) day period, such statement shall be deemed final and accepted by Tenant. Landlord shall cooperate with Tenant in any such inspection of its books and records and shall equitably adjust any discrepancies.

D. Additional Rent. All monies required to be paid by Tenant under this Lease, including, without limitation, the management fee described in Paragraph 5.B, Tenant’s share of Common Area Maintenance Costs pursuant to Paragraph 5.C, Real Property Taxes and Impositions pursuant to Paragraph 15, and the monthly cost of insurance premiums required pursuant to Paragraph 21.C shall be deemed Additional Rent.

E. Prorations. If the Rent Commencement Date is not the first (1st) day of a month, or if the termination date of this Lease is not the last day of a month, a prorated installment of Monthly Rent based on a 30-day month shall be paid for the fractional month during which such date occurs or the Lease terminates

F. Interest. Any amount of Rent or other charges provided for under this Lease due and payable to Landlord which is not paid when due shall bear interest at the Interest Rate from the date that is (i) five (5) days after the date such Rent is due until such Rent is paid, or (ii) ten (10) days after Tenant receives written notice from Landlord that any other charge provided for under this Lease (other than Rent) is due and payable, until such other charge is paid.

6. Late Payment Charges.

Tenant acknowledges that late payment by Tenant to Landlord of Rent and other charges provided for under this Lease will cause Landlord to incur costs not contemplated by this Lease, the exact amount of such costs being extremely difficult or impracticable to fix. Therefore, if any installment of Rent or any other charge due from Tenant is not received by Landlord within five (5) days after the date such Rent or other charge is due, Tenant shall pay to Landlord an additional sum equal to three percent (3%) of the amount overdue as a late charge for every month or portion thereof that the Rent or other charges remain unpaid.

Initials:
/s/ BE	/s/ JM
Landlord	Tenant

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7. Security Deposit.

A. Application of Security Deposit. Tenant shall deposit with Landlord within one (1) day after Landlord returns to Tenant a fully-executed original counterpart of this Lease, an irrevocable standby letter of credit (the “Letter of Credit”) in the amount of Three Hundred Sixty Thousand and 00/100 Dollars ($360,000.00) complying with the terms of Paragraph 7.B as the “Security Deposit” upon the execution of this Lease by Tenant. The Security Deposit shall be held by Landlord as security for the performance by Tenant of all its obligations under this Lease. If Tenant fails to pay any Rent due hereunder, or otherwise commits a default with respect to any provision of this Lease, Landlord may use, apply or retain all or any portion of the Security Deposit for the payment of any such Rent or for the payment of any other amounts expended or incurred by Landlord by reason of Tenant’s default, or to compensate Landlord for any loss or damage which Landlord may incur thereby (and in this regard Tenant hereby waives the provisions of California Civil Code Section 1950.7 and any similar or successor statute providing that Landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of Rent, to repair damage caused by Tenant, or to clean the Premises, it being agreed that Landlord may, in addition, claim those sums reasonably necessary to compensate Landlord for any other loss or damage, foreseeable or unforeseeable, caused by the act or omission of Tenant or any officer, employee, agent or invitee of Tenant.). Exercise by Landlord of its rights hereunder shall not constitute a waiver of, or relieve Tenant from any liability for, any default. If any portion of the Letter of Credit posted as the Security Deposit is drawn upon by Landlord for such purposes, Tenant shall within ten (10) days after written demand therefor deposit a replacement Letter of Credit with Landlord in the amount of the original Letter of Credit. If Tenant performs all of Tenant’s obligations hereunder, the Letter of Credit shall be returned to Tenant (or, at Landlord’s option, to the last assignee, if any, of Tenant’s interest under this Lease) within thirty (30) days after the later of (i) the date of expiration or earlier termination of this Lease, or (ii) vacation of the Premises by Tenant if the Premises has been left in the condition specified by this Lease. Upon termination of the original Landlord’s (or any successor owner’s) interest in the Premises, the original Landlord (or such successor) shall be released from further liability with respect to the Security Deposit upon the original Landlord’s (or such successor’s) delivery of the Letter of Credit to the successor landlord and compliance with California Civil Code Section 1950.7(d), or successor statute.

B. Letter of Credit Provisions. The Letter of Credit deposited as a Security Deposit shall be issued by a money-center bank (a bank which accepts deposits, which maintains accounts, which has a local Bay Area office which will negotiate a letter of credit and whose deposits are insured by the FDIC) whose financial strength shall be sufficient to meet liquidity demands with respect to issued letters of credit (such as Bank of America or Wells Fargo Bank) and which is otherwise acceptable to Landlord. The Letter of Credit shall be issued for a term of at least twelve (12) months and shall be in a form and with such content reasonably acceptable to Landlord. Tenant shall either replace the expiring Letter of Credit with another Letter of Credit in an amount equal to the original Letter of Credit or renew the expiring Letter of Credit, in any event no later than thirty (30) days prior to the expiration of the term of the Letter of Credit then in effect. If Tenant fails to deposit a replacement Letter of Credit or renew the expiring Letter of Credit, Landlord shall have the right to draw upon the expiring Letter of Credit for the full amount thereof and hold the funds drawn as the Security Deposit. Any Letter of Credit deposited with Landlord during the final Lease Year of the Term must have an expiry date no

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earlier than the date which is thirty (30) days after the Expiration Date of the Term of this Lease. If Landlord notifies Tenant in writing that the bank which issued the Letter of Credit has become financially unacceptable (e.g., the bank is under investigation by governmental authorities, the bank no longer has the financial strength equivalent to Bank of America or Wells Fargo Bank or has filed bankruptcy or reorganization proceedings), then Tenant shall have thirty (30) days to provide Landlord with a substitute Letter of Credit complying with all of the requirements hereof. If Tenant does not so provide Landlord with a substitute Letter of Credit within such time period, then Landlord shall have the right to draw upon the current Letter of Credit and hold the funds drawn as the Security Deposit. The premium or purchase price of, or any other bank fees (including transfer or assignment fees) associated with, such Letter of Credit shall be paid by Tenant. The Letter of Credit shall be transferable, irrevocable and unconditional, so that Landlord, or its successor(s) in interest, may at any time draw on the Letter of Credit against sight drafts presented by Landlord, accompanied by Landlord’s statement, made under penalty of perjury, that said drawing is in accordance with the terms and conditions of this Lease; no other document or certification from Landlord shall be required to negotiate the Letter of Credit and the Landlord may draw on any portion of the then uncalled upon amount thereof without regard to and without the issuing bank inquiring as to the right or lack of right of the holder of said Letter of Credit to effect such draws or the existence or lack of existence of any defenses by Tenant with respect thereto. The Letter of Credit shall not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the prior written consent of Landlord. The use, application or retention of the Letter of Credit, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by law, it being intended that Landlord shall not first be required to proceed against the Letter of Credit, and such use, application or retention shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled.

C. Independent Contract. Tenant acknowledges and agrees that the Letter of Credit constitutes a separate and independent contract between Landlord and the issuing bank, that Tenant is not a third party beneficiary of such contract, and that Landlord’s claim under the Letter of Credit for the full amount due and owing thereunder shall not be, in any way, restricted, limited, altered or impaired by virtue of any provision of the Bankruptcy Code, including, but not limited to, Section 502(b)(6) of the Bankruptcy Code.

D. Transfer of the Letter of Credit. The Letter of Credit shall be transferable to any of the following parties: (i) any secured or unsecured lender of Landlord, (ii) any assignee, successor, transferee or other purchaser of all or any portion of the Building, or any interest in the Building, (iii) any partner, shareholder, member or other direct or indirect beneficial owner in Landlord (to the extent of their interest in the Lease). Further, in the event of any sale, assignment or transfer by the Landlord of its interest in the Premises or the Lease, Landlord shall have the right to assign or transfer the Letter of Credit to its grantee, assignee or transferee; and in the event of any sale, assignment or transfer, the landlord so assigning or transferring the Letter of Credit shall have no liability to the Tenant for the return of the Letter of Credit, and Tenant shall look solely to such grantee, assignee or transferee for such return, so long as such grantee, assignee or transferee assumes in writing all of Landlord’s obligations with respect to the Letter of Credit. The terms of the Letter of Credit shall be governed by ISP98 (International Standby Practices, 1998 version) or shall permit multiple transfers of the Letter of Credit. Tenant shall use best efforts to cooperate with Landlord and the bank to effect the transfer(s) of

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the Letter of Credit and Tenant shall be responsible for all costs of the bank associated with the first transfer of the Letter of Credit. The costs of the bank associated with any subsequent transfers of the Letter of Credit shall be the responsibility of Landlord or its transferee.

E. Reduction of Letter of Credit. The Security Deposit shall be reduced to One Hundred Eighty Thousand and 00/100 Dollars ($180,000) following the second (2nd) anniversary of the Commencement Date (the “Reduction Date”) provided that no default has occurred under the Lease prior to the Reduction Date for which Tenant has received notice thereof from Landlord. Tenant shall provide to Landlord a written request for the reduction of the Security Deposit which request shall be accompanied by an amendment to the Letter of Credit (a “Reduction Amendment”) reducing the Letter of Credit to One Hundred Eighty Thousand and 00/100 Dollars ($180,000). Provided that the conditions for such reduction have been satisfied, Landlord shall execute and return the Reduction Amendment, and any other documents reasonably necessary to effect the reduction, within thirty (30) days after receipt.

8. Holding Over.

If Tenant remains in possession of all or any part of the Premises after the expiration of the Term, with the express or implied consent of Landlord, such tenancy shall be month-to-month only and shall not constitute a renewal or extension for any further term. If Tenant remains in possession either with or without Landlord’s consent, Monthly Rent shall be increased to an amount equal to one hundred fifty percent (150%) of the Monthly Rent payable during the last month of the Term, and any other sums due under this Lease shall be payable in the amount and at the times specified in this Lease. Such month-to-month tenancy shall be subject to every other term, condition, and covenant contained herein.

9. Tenant Improvements.

Landlord and Tenant agree to construct the Tenant Improvements pursuant to the terms of the Work Letter.

10. Condition of Premises.

By taking possession of the Premises, Tenant shall be deemed to have accepted the Premises in good, clean and completed condition and repair, subject to all applicable laws, codes and ordinances. Any damage to the Premises caused by Tenant’s move-in shall be repaired or corrected by Tenant, at its sole cost and expense. Tenant acknowledges that neither Landlord nor Landlord’s Agents have made any representations or warranties as to the suitability or fitness of the Premises for the conduct of Tenant’s business or for any other purpose, nor has Landlord or Landlord’s Agents agreed to undertake any Alterations or construct any Improvements to the Premises except as expressly provided in this Lease and the Work Letter. Landlord agrees that in the event Tenant notifies Landlord within sixty (60) days after the Commencement Date that (i) the Premises are not in good and clean operating condition and repair, (ii) the electrical, mechanical, HVAC, plumbing, sewer, elevator and other systems serving the Premises are not in good operating condition and repair, or (iii) the roof of the Building is not in good condition or water tight, Landlord shall, promptly after receipt of such notice from Tenant, repair the items identified in Tenant’s notice at Landlord’s sole cost and expense. After such sixty (60) day

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period, the responsibility for and costs associated with such repairs shall be governed by Paragraph 17.

11. Use of the Premises and Common Area.

A. Tenant’s Use. Tenant shall use the Premises only for general office, administration, research and development, and such other purposes as shall be specifically and formally approved by the City of Redwood City. Tenant shall not use the Premises or suffer or permit anything to be done in or about the Premises which will in any way conflict with any law, statute, zoning restriction, ordinance or governmental law, rule, regulation or requirement of public authorities now in force or which may hereafter be in force, relating to or affecting the condition, use or occupancy of the Premises. Tenant shall not commit any public or private nuisance or any other act or thing which might or would disturb the quiet enjoyment of any other tenant of Landlord or any occupant of nearby property. Tenant shall place no loads upon the floors, walls or ceilings in excess of the maximum designed load determined by a licensed structural engineer or which endanger the structure; nor place any harmful liquids in the drainage systems; nor dump or store waste materials or refuse or allow waste materials or refuse to remain outside the Building proper, except in the enclosed trash areas provided. Tenant shall not store or permit to be stored or otherwise placed any other material of any nature whatsoever outside the Building, except on a temporary basis.

B. Hazardous Materials.

(i) Hazardous Materials Defined. As used herein, the term “Hazardous Materials” shall mean any wastes, materials or substances (whether in the form of liquids, solids or gases, and whether or not air-borne), which are or are deemed to be (a) pollutants or contaminants, or which are or are deemed to be hazardous, toxic, ignitable, reactive, corrosive, dangerous, harmful or injurious, or which present a risk to public health or to the environment, or which are or may become regulated by or under the authority of any applicable local, state or federal laws, judgments, ordinances, orders, rules, regulations, codes or other governmental restrictions, guidelines or requirements, any amendments or successor(s) thereto, replacements thereof or publications promulgated pursuant thereto, including, without limitation, any such items or substances which are or may become regulated by any of the Environmental Laws (as hereinafter defined); (b) listed as a chemical known to the State of California to cause cancer or reproductive toxicity pursuant to Section 25249.8 of the California Health and Safety Code, Division 20, Chapter 6.6 (Safe Drinking Water and Toxic Enforcement Act of 1986); or (c) a pesticide, petroleum, including crude oil or any fraction thereof, asbestos or any asbestos-containing material, a polychlorinated biphenyl, radioactive material, or urea formaldehyde.

(ii) Environmental Laws Defined. In addition to the laws referred to in Paragraph 11.B.(i) above, the term “Environmental Laws” shall be deemed to include, without limitation, 33 U.S.C. Section 1251 et seq., 42-U.S.C. Section 6901 et seq., 42 U.S.C. Section 7401 et seq., 42 U.S.C. Section 9601 et seq., and California Health and Safety Code Sections 25100 et seq., and 25300 et seq., California Water Code, Section 13020 et seq., or any successor(s) thereto, all local, state and federal laws, judgments, ordinances, orders, rules, regulations, codes and other governmental restrictions, guidelines and requirements, any

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amendments and successors thereto, replacements thereof and publications promulgated pursuant thereto, which deal with or otherwise in any manner relate to, air or water quality, air emissions, soil or ground conditions or other environmental matters of any kind.

(iii) Use of Hazardous Materials. Tenant agrees that during the Term of this Lease, Tenant shall not use, or permit the use of, nor store, generate, treat, manufacture or dispose of Hazardous Materials on, from or under the Premises (individually and collectively, “Hazardous Use”) except to the extent that, and in accordance with such conditions as, Landlord may have previously approved in writing in its sole and absolute discretion. Notwithstanding the foregoing, Tenant shall be entitled to use and store only those Hazardous Materials which are (a) of the types and in amounts customary in ordinary office and janitorial use, (b) necessary for Tenant’s business, and (c) in full compliance with Environmental Laws, and all judicial and administrative decisions pertaining thereto. All Hazardous Materials approved in writing by Landlord or used in accordance with the preceding sentence shall collectively be referred to as the “Approved Hazardous Materials.” Tenant shall not be entitled to install any tanks under, on or about the Premises for the storage of Hazardous Materials without the express written consent of Landlord, which may be given or withheld in Landlord’s sole discretion. For the purposes of this Paragraph 11.B.(iii), the term “Hazardous Use” shall include Hazardous Use(s) on, from or under the Premises by Tenant, any Subtenant occupying all or any portion of the Premises during the Term, or any of their directors, officers; employees, shareholders, partners, invitees, agents, contractors or occupants (collectively, “Tenant’s Parties”; provided, however, that if Tenant’s stock is publicly traded, the term “Tenant’s Parties” shall not include any shareholder of Tenant who owns less than ten percent (10%) of Tenant’s common stock), whether known or unknown to Tenant, occurring during the Term of this Lease. The term “Tenant’s Parties” shall not include any tenants of the Project other than Tenant, except that the term “Tenant’s Parties” shall include any Subtenant occupying all or any portion of the Premises during the Term.

(iv) Hazardous Materials Report; When Required. Tenant shall submit to Landlord a written report with respect to Hazardous Materials (“Report”) in the form prescribed in Paragraph 11.B.(v) below on the following dates:

(a) At any time within ten (10) days after written request by Landlord, and

(b) At any time when there has been a violation of any Environmental Law, or for an increase in the intensity of usage or storage of any Approved Hazardous Materials.

(v) Hazardous Materials Report; Contents. The Report shall contain, without limitation, the following information:

(a) Whether on the date of the Report and (if applicable) during the period since the last Report there has been any Hazardous Use on, from or under the Premises, other than the use of Approved Hazardous Materials.

(b) If there was such Hazardous Use, the exact identity of the Hazardous Materials (other than the Approved Hazardous Materials), the dates upon which such

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materials were brought upon the Premises, the dates upon which such Hazardous Materials were removed therefrom, and the quantity, location, use and purpose thereof.

(c) If there was such Hazardous Use, any governmental permits maintained by Tenant with respect to such Hazardous Materials, the issuing agency, original date of issue, renewal dates (if any) and expiration date. Copies of any such permits and applications therefor shall be attached.

(d) If there was such Hazardous Use, any governmental reporting or inspection requirements with respect to such Hazardous Materials, the governmental agency to which reports are made and/or which conducts inspections, and the dates of all such reports and/or inspections (if applicable) since the last Report. Copies of any such Reports shall be attached.

(e) If there was such Hazardous Use, identification of any operation or business plan prepared for any government agency with respect to Hazardous Use.

(f) Any liability insurance carried by Tenant with respect to Hazardous Materials, if any, the insurer, policy number, date of issue, coverage amounts, and date of expiration. Copies of any such policies or certificates of coverage shall be attached.

(g) Any notices of violation of Environmental Laws, written or oral, received by Tenant from any governmental agency since the last Report, the date, name of agency, and description of violation. Copies of any such written notices shall be attached.

(h) Any knowledge, information or communication which Tenant has acquired or received relating to (x) any enforcement, cleanup, removal or other governmental or regulatory action threatened or commenced against Tenant or with respect to the Premises pursuant to any Environmental Laws; (y) any claim made or threatened by any person or entity against Tenant or the Premises on account of any alleged loss or injury claimed to result from any alleged Hazardous Use on or about the Premises; or (z) any report, notice or complaint made to or filed with any governmental agency concerning any Hazardous Use on or about the Premises. The Report shall be accompanied by copies of any such claim, report, complaint, notice, warning or other communication that is in the possession of or is available to Tenant.

(i) Such other pertinent information or documents as are reasonably requested by Landlord in writing.

(vi) Release of Hazardous Materials; Notification and Cleanup.

(a) At any time during the Term, if Tenant knows or believes that any release of any Hazardous Materials has come or will come to be located upon, about or beneath the Premises, then Tenant shall immediately, either prior to the release or following the discovery thereof by Tenant, give verbal and follow-up written notice of that condition to Landlord.

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(b) At its sole cost and expense, Tenant covenants to investigate, clean up and otherwise remediate any release of Hazardous Materials which has occurred during the Term to the extent arising from any act or failure to act of Tenant or any of Tenant’s Parties. Such investigation, clean-up and remediation shall be performed only after Tenant has obtained, if practicable, Landlord’s written consent, which shall not be unreasonably withheld; provided, however, that Tenant shall be entitled to respond immediately to an emergency without first obtaining Landlord’s written consent. All clean-up and remediation shall be done in compliance with Environmental Laws and to the reasonable satisfaction of Landlord.

(c) Notwithstanding the foregoing, Landlord shall have the right, but not the obligation, in Landlord’s sole and absolute discretion, exercisable by written notice to Tenant, to undertake within or outside the Premises all or any portion of any reasonable investigation, clean-up or remediation with respect to any Hazardous Use of such Hazardous Materials by Tenant or any of Tenant’s Parties (or, once having undertaken any of such work, to cease same, in which case Tenant shall perform the work), all at Tenant’s sole cost and expense, which shall be paid by Tenant as Additional Rent within ten (10) days after receipt of written request therefor by Landlord (and which Landlord may require to be paid prior to commencement of any work by Landlord); provided, however, that Tenant’s obligation to pay for such work shall only be applicable if Tenant fails to perform its obligations under this Paragraph 11 (including without limitation the obligations described in Paragraph, 11.B.(vi)(b)). No such work by Landlord shall create any liability on the part of Landlord to Tenant or any other party in connection with such Hazardous Use by Tenant or any of Tenant’s Parties or constitute an admission by Landlord of any responsibility with respect to such Hazardous Use or Hazardous Materials.

(d) It is the express intention of the parties hereto that Tenant shall be liable under this Paragraph 11.B.(vi) for any and all conditions covered hereby which were or are caused or created by Tenant or any of Tenant’s Parties, whether occurring prior to, on, or after the Commencement Date. Tenant shall not enter into any settlement agreement, consent decree or other compromise with respect to any claims relating to any Hazardous Materials in any way connected to the Premises without first (x) notifying Landlord of Tenant’s intention to do so and affording Landlord the opportunity to participate in any such proceedings, and (y) obtaining Landlord’s written consent, which shall not be unreasonably withheld.

(vii) Inspection and Testing by Landlord. At any time when there has been a violation or suspected violation of any Environmental Law, Landlord shall have the right to (a) inspect the Premises, as well as such of Tenant’s books and records pertaining to the Premises and the conduct of Tenant’s business therein, and to (b) conduct tests and investigations to determine whether Tenant is in compliance with the provisions of this Paragraph 11.B. Except in case of emergency, Landlord shall give reasonable notice to Tenant in accordance with Paragraph 19 before conducting any inspections, tests, or investigations, shall provide Tenant with a work plan describing any testing that shall be performed at the Premises, and shall use reasonable efforts to minimize interference with the conduct of Tenant’s business at the Premises caused by any such inspections, tests, or investigations. If it is determined that Tenant or any of Tenant’s Parties has violated any Environmental Law, the cost of all such inspections, tests and investigations shall be borne by Tenant. Neither any action nor inaction on

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the part of Landlord pursuant to this Paragraph 11.B.(vii) shall be deemed in any way to release Tenant from, or in any way modify or alter, Tenant’s responsibilities, obligations, and liabilities incurred pursuant to Paragraph 11.B hereof.

(viii) Tenant’s Indemnity. Except to the extent due to Landlord’s negligence or willful misconduct, Tenant shall indemnify, defend, protect, hold harmless, and, at Landlord’s option (with such attorneys as Landlord may approve in advance and in writing), defend Landlord, Landlord’s Agents, and Landlord’s officers, directors, shareholders, partners, employees, contractors, property managers, agents and mortgagees and other lien holders, from and against any and all Losses (as defined below) whenever such Losses arise, from or related to: (a) any violation or alleged violation by Tenant or any of Tenant’s Parties of any of the requirements, ordinances, statutes, regulations or other laws referred to in this Paragraph 11.B, including, without limitation, the Environmental Laws, whether such violation or alleged violation occurred on, or after the Commencement Date; (b) any breach of the provisions of this Paragraph 11.B by Tenant or any of Tenant’s Parties; or (c) any Hazardous Use on, about or from the Premises by Tenant or any of Tenant’s Parties of any Hazardous Materials (whether or not approved by Landlord under this Lease), whether such Hazardous Use occurred prior to, on, or after the Commencement Date. The term “Losses” shall mean all claims, demands, expenses, actions, judgments, damages (whether consequential, direct or indirect, known or unknown, foreseen or unforeseen), penalties, fines, liabilities, losses of every kind and nature (including, without limitation, property damage, diminution in value of Landlord’s interest in the Premises, damages for the loss of restriction on use of any space or amenity within the Premises, damages arising from any adverse impact on marketing space in the Premises, sums paid in settlement of claims and any costs and expenses associated with injury, illness or death to or of any person), suits, administrative proceedings, costs and fees, including, but not limited to, reasonable attorneys’ and consultants’ fees and expenses, and the costs of cleanup, remediation, removal and restoration, that are in any way related to any matter covered by the foregoing indemnity.

(ix) Landlord’s Indemnity. Except to the extent due to Tenant’s negligence or willful misconduct, Landlord shall indemnify, defend, protect, hold harmless, and, at Tenant’s option (with such attorneys as Tenant may approve in advance and in writing), defend Tenant, Tenant’s agents, and Tenant’s officers, directors, shareholders, partners, employees, contractors, property managers, agents and mortgagees and other lien holders, from and against any and all Tenant Losses (as defined below) arising during the Term from or related to the presence of Hazardous Materials brought onto the Project by Landlord or Landlord’s Agents or the presence of Hazardous Materials occurring prior to the Commencement Date. The term “Tenant Losses” shall mean all claims, demands, expenses, actions, judgments, damages (whether consequential, direct or indirect, known or unknown, foreseen or unforeseen), penalties, fines, liabilities, losses of every kind and nature (including, without limitation, property damage, sums paid in settlement of claims and any costs and expenses associated with injury, illness or death to or of any person), suits, administrative proceedings, costs and fees, including, but not limited to, reasonable attorneys’ and consultants’ fees and expenses, and the costs of cleanup, remediation, removal and restoration, that are in any way related to any matter covered by the foregoing indemnity.

(x) Survival. The provisions of this Paragraph 11.B shall survive the expiration or earlier termination of this Lease.

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C. Special Provisions Relating to The Americans With Disabilities Act of 1990.

(i) Allocation of Responsibility to Landlord. As between Landlord and Tenant, Landlord shall be responsible that the Common Area complies with the requirements of Title III of the Americans with Disabilities Act of 1990 (42 U.S.C. 32181, et seq., The Provisions Governing Public Accommodations and Services Operated by Private Entities), and all regulations promulgated thereunder, and all amendments, revisions or modifications thereto now or hereafter adopted or in effect in connection therewith (hereinafter collectively referred to as the “ADA”), and to take such actions and make such alterations and improvements as are necessary for such compliance; provided, however, that to the extent such requirements arise from the construction of any tenant improvements or any Alterations to the Premises made by or on behalf of Tenant, then as between Landlord and Tenant, Tenant shall be responsible that the Common Area complies with the requirements of the ADA, and to take such actions and make such alterations and improvements as are necessary for such compliance.

(ii) Allocation of Responsibility to Tenant. As between Landlord and Tenant, Tenant, at its sole cost and expense, shall be responsible that the Premises (and all modifications made by Tenant of access to the Premises from the street), and all alterations and improvements in the Premises, and Tenant’s use and occupancy of the Premises, and Tenant’s performance of its obligations under this Lease, comply with the requirements of the ADA, and to take such actions and make such alterations and improvements as are necessary for such compliance, to the extent such requirements arise from Tenant’s specific use of the Premises, or the construction and use of any tenant improvements or any Alterations to the Premises made by or on behalf of Tenant; provided, however, that Tenant shall not make any such alterations or improvements except upon Landlord’s prior written consent (which shall not be unreasonably withheld) pursuant to the terms and conditions of this Lease. If Tenant fails diligently to take such actions or make such alterations or improvements as are necessary for such compliance, Landlord may, but shall not be obligated to, take such actions and make such alterations and improvements and may recover all of the costs and expenses of such actions, alterations and improvements from Tenant as Additional Rent.

(iii) General. Notwithstanding anything in this Lease contained to the contrary, no act or omission of either party, including any approval, consent or acceptance by it or its agents, employees or other representatives, shall be deemed an agreement, acknowledgment, warranty, or other representation by it that the other party has complied with the ADA as provided under Paragraphs 11.C.(i) or 11.C.(ii) or that any action, alteration or improvement by it complies or will comply with the ADA as provided under Paragraphs 11.C.(i) or 11.C.(ii) or constitutes a waiver by it of the other party’s obligations to comply with the ADA under Paragraphs 11.C.(i) or 11.C.(ii) of this Lease or otherwise. Any failure of either party to comply with its obligations of the ADA under Paragraphs 11.C.(i) or 11.C.(ii) shall not relieve such party from any obligations under this Lease or in the case of Landlord’s failure to comply under Paragraph 11.C.(i), constitute or be construed as a constructive or other eviction of Tenant or disturbance of Tenant’s use and possession of the Premises.

D. Use and Maintenance of Common Area. Tenant and its employees and invitees shall have the non-exclusive right to use the Common Area in common with other

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persons during the Term of this Lease, subject to such reasonable rules and regulations as may from time to time be deemed necessary or advisable in Landlord’s reasonable discretion for the proper and efficient operation and maintenance of the Common Area. Such rules and regulations may include, among other things, the hours during which the Common Area shall be open for use. Access to the Common Areas will generally be available on a twenty-four hour basis. Landlord shall have the right from time to time to adopt such policies, procedures and programs as it shall, in Landlord’s sole discretion, deem necessary or appropriate for the security, maintenance and repair of the Common Area, and Tenant shall cooperate with Landlord in the enforcement of, and shall comply with, the policies, procedures and programs adopted by Landlord insofar as the same pertain to Tenant and Tenant’s Parties. Landlord shall maintain and operate the Common Area in good condition, provided that any damage thereto, other than normal wear and tear, occasioned by the act of Tenant or any of Tenant’s Parties shall be paid by Tenant upon demand by Landlord. Notwithstanding anything to the contrary herein, Tenant shall not be required to comply with any rule or regulation unless the same applies non-discriminatorily to all occupants of the Project, does not unreasonably interfere in any material manner with Tenant’s use of the Premises or Tenant’s parking rights and does not materially increase the obligations or materially decrease the rights of Tenant under the Lease.

12. Quiet Enjoyment.

Landlord covenants that Tenant, upon performing the terms, conditions and covenants of this Lease, shall have quiet and peaceful possession of the Premises as against any person claiming the same by, through or under Landlord.

13. Alterations to Premises.

All Alterations shall be made in accordance with all applicable laws and the provisions of this Paragraph 13.

A. Landlord Consent; Procedure. Tenant shall not make or permit to be made any Alterations without Landlord’s prior written consent, which as to any Major Alterations may be given or withheld in Landlord’s sole discretion.

B. General Requirements.

(i) Except as otherwise provided in the Work Letter with respect to the initial Tenant Improvements to the Premises, all Alterations shall be designed and performed by Tenant at Tenant’s cost and expense; provided, however, that if any Alterations require work to be performed outside Premises, Landlord may elect to perform such work at Tenant’s expense.

(ii) All Alterations shall be performed only by contractors, engineers or architects approved by Landlord, and shall be made in accordance with complete and detailed architectural, mechanical and engineering plans and specifications approved in writing by Landlord. Landlord shall not unreasonably withhold or delay its approval of any such contractors, engineers, architects, plans or specifications; provided, however, that Landlord may, in its sole discretion, (a) specify contractors, engineers or architects to perform work affecting the structural portions of the Project or the heating, ventilating, air conditioning, electrical, plumbing, telecommunications, security, life-safety or other utility systems serving the Building

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(collectively the “Building Systems”), and (b) withhold its approval of any such plans and specifications if the same shall affect the structural portions of the Project or the Building Systems.

(iii) Prior to commencement of the Alterations, Tenant shall deliver to Landlord (a) any building or other permit required by applicable laws in connection with the Alterations; (b) a copy of executed construction contract(s); and (c) written acknowledgments from all materialmen, contractors, artisans, mechanics, laborers and any other persons furnishing to Tenant with respect to the Premises any labor, services, materials, supplies or equipment in excess of Five Thousand Dollars ($5,000.00) in the aggregate that they will look exclusively to Tenant for payment of any sums in connection therewith and that Landlord shall have no liability for such costs. In addition, Tenant shall require its general contractor to carry and maintain the following insurance at no expense to Landlord, and Tenant shall furnish Landlord with satisfactory evidence thereof prior to the commencement of construction of the Alterations: (A) commercial general liability insurance with limits of not less than $2,000,000 combined single limit for bodily injury and property damage, including personal injury and death, and contractor’s protective liability, and products and completed operations coverage in an amount not less than $500,000 per incident, $1,000,000 in the aggregate; (B) comprehensive automobile liability insurance with a policy limit of not less than $1,000,000 each accident for bodily injury and property damage, providing coverage at least as broad as the Insurance Services Office (ISO) Business Auto Coverage form covering Automobile Liability, code 1 “any auto”, and insuring against all loss in connection with the ownership, maintenance and operation of automotive equipment that is owned, hired or non-owned; (C) worker’s compensation with statutory limits and employer’s liability insurance with limits of not less than $100,000 per accident, $500,000 aggregate disease coverage and $100,000 disease coverage per employee; and (D) except in the case of Minor Alterations, “Builder’s All Risk” insurance in an amount approved by Landlord covering the Alterations, including such extended coverage endorsements as may be reasonably required by Landlord. All such insurance policies (except workers’ compensation insurance) shall be endorsed to add Landlord, any Encumbrancer and Landlord’s designated agents as additional insureds with respect to liability arising out of work performed by or for Tenant’s general contractor, to specify that such insurance is primary and that any insurance or self-insurance maintained by Landlord shall not contribute with it, and to provide that coverage shall not be reduced, terminated, cancelled or materially modified except after thirty (30) days prior written notice has been given to Landlord. Landlord may inspect the original policies of such insurance coverage at any time. Upon Landlord’s request, Tenant shall deliver complete certified copies of such policies. Tenant’s general contractor shall furnish Landlord evidence of insurance for its subcontractors as may be reasonably required by Landlord.

(iv) Tenant shall give Landlord at least twenty (20) days’ prior written notice of the date of commencement of any construction on the Premises to afford Landlord the opportunity of posting and recording appropriate notices of non-responsibility. Tenant shall comply with the requirements of Section 3110.5 of the California Civil Code as the contracting owner, to the extent applicable, and prior to commencement of construction, Tenant shall provide Landlord with evidence of compliance with said statute. Tenant acknowledges that the contractual waiver of the benefits of California Civil Code Section 3110.5 is expressly declared to be against public policy.

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(v) Tenant shall promptly commence construction of Alterations, cause such Alterations to be constructed in a good and workmanlike manner and in such a manner and at such times so that any such work shall not disrupt or interfere with the use, occupancy or operations of other tenants or occupants of the Complex, and complete the same with due diligence as soon as possible after commencement. All trash which may accumulate in connection with Tenant’s construction activities shall be removed by Tenant at its own expense from the Premises and the Complex.

(vi) In addition to the foregoing, as a condition of its consent to Alterations hereunder, Landlord may impose any requirements that Landlord, in its sole discretion, considers desirable, including a requirement that Tenant provide Landlord with a surety bond, a letter of credit, or other financial assurance that the cost of the Alterations will be paid when due.

C. Landlord’s Right to Inspect. Landlord shall have the right (but not the obligation) to inspect the construction of Alterations, and to require corrections of faulty construction or any material deviation from the plans for such Alterations as approved by Landlord; provided, however, that no such inspection shall (i) be deemed to create any liability on the part of Landlord, or (ii) constitute a representation by Landlord that the work so inspected conforms with such plans or complies with any applicable laws, or (iii) give rise to a waiver of, or estoppel with respect to, Landlord’s continuing right at any time or from time to time to require the correction of any faulty work or any material deviation from such plans. In addition, under no circumstances shall Landlord be liable to Tenant for any damage, loss, cost or expense incurred by Tenant on account of Tenant’s plans and specifications, Tenant’s contractors, mechanics or engineers, design or construction of any Alteration, or delay in completion of any Alteration.

D. Tenant’s Obligations Upon Completion. Promptly following completion of any Alterations, Tenant shall (i) furnish to Landlord “as-built” drawings and specifications in CAD format showing the Alterations as made and constructed in the Premises, (ii) cause a timely notice of completion to be recorded in the Office of the Recorder of the County of San Mateo in accordance with Civil Code Section 3093 or any successor statute, and (iii) deliver to Landlord evidence of full payment and unconditional final waivers of all liens for labor, services, or materials in excess of Five Thousand Dollars ($5,000.00) in the aggregate.

E. Repairs. If any part of the Building Systems shall be damaged during the performance of Alterations, Tenant shall promptly notify Landlord, and Landlord may elect to repair such damage at Tenant’s expense. Alternatively, Landlord may require Tenant to repair such damage at Tenant’s sole expense using contractors approved by Landlord in Landlord’s sole discretion.

F. Ownership and Removal of Alterations.

(i) All Alterations shall become a part of the Complex and immediately belong to Landlord without compensation to Tenant, unless Landlord consents otherwise in writing; provided, however, that equipment, trade fixtures and movable furniture shall remain the property of Tenant.

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(ii) If required by Landlord, Tenant, prior to the expiration of the Term or termination of this Lease, shall, at Tenant’s sole cost and expense, (i) remove any or all Alterations designated for removal by Landlord at the time Landlord approves such Alterations or Minor Alterations if Tenant has not sought Landlord’s approval of such Alterations, (ii) restore the Premises (including the storefront, if the storefront shall have been affected by such Alterations) to the condition existing prior to the installation of such Alterations, and (iii) repair all damage to the Premises or Complex caused by the removal of such Alterations. Tenant shall use a contractor designated by Landlord for such removal and repair. If Tenant fails to remove, restore and repair under this Paragraph, then Landlord may remove such Alterations and perform such restoration and repair, and Tenant shall reimburse Landlord for costs and expenses incurred by Landlord in performing such removal, restoration and repair. Subject to the foregoing provisions regarding removal, all Alterations shall be Landlord’s property and at the expiration of the Term or termination of this Lease shall remain on the Premises without compensation to Tenant.

G. Landlord’s Fee. In connection with installing or removing Alterations, Tenant shall pay Landlord’s actual, out-of-pocket costs and fees for the review of Tenant’s plans, specifications and working drawings, and the administration of the construction, installation or removal of Alterations, and restoration of the Premises to their previous condition. Tenant shall pay the amount of such fees and costs within fifteen (15) days after receipt from Landlord of a statement or invoice therefor.

H. Minor Alterations. Notwithstanding any provision in the foregoing to the contrary, Tenant may construct Minor Alterations in the Premises without Landlord’s prior written consent but with prior notification to Landlord. Before commencing construction of Minor Alterations, Tenant shall submit to Landlord such documentation as Landlord may reasonably require to determine whether Tenant’s proposed Alterations qualify as Minor Alterations. Except to the extent inconsistent with this Paragraph 13.H, Minor Alterations shall otherwise comply with the provisions of this Paragraph 13. All references in this Lease to “Alterations” shall mean and include Minor Alterations, unless specified to the contrary.

14. Surrender of the Premises.

Upon the expiration or earlier termination of the Term, Tenant shall surrender to Landlord the Premises, normal wear and tear, fire or other casualty and Hazardous Material not released by Tenant excepted, with all interior walls of the Premises repaired if damaged, all broken, marred or nonconforming acoustical ceiling tiles of the Premises replaced, all windows washed, the plumbing and electrical systems, and lighting in good order and repair, including replacement of any burned out or broken light bulbs or ballasts, the HVAC equipment serviced and repaired by a reputable and licensed service firm, and all floors cleaned, all to the reasonable satisfaction of Landlord; provided, however, that if Landlord elects to demolish the Building at the expiration of the Term, Tenant shall not be required to repair or restore the Premises as otherwise provided herein. Tenant shall remove from the Premises all of Tenant’s Alterations required to be removed pursuant to Paragraph 13, and all Tenant’s Personal Property, and repair any damage and perform any restoration work caused by such removal. If Tenant fails to remove such Alterations and Tenant’s Personal Property, and such failure continues after the expiration or earlier termination of this Lease, Landlord may retain such Alterations and Tenant’s Property as provided under applicable law or Landlord may place all or any portion of such Alterations and Tenant’s Property in public storage for Tenant’s account. Tenant shall be liable to Landlord for costs of removal of any such Alterations and

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Tenant’s Personal Property and storage and transportation costs of same, and the cost of repairing and restoring the Premises, together with interest at the Interest Rate from the date of expenditure by Landlord. If the Premises are not so surrendered at the expiration or earlier termination of this Lease, Tenant shall indemnify Landlord and Landlord’s Agents against all loss or liability, including reasonable attorneys’ fees and costs, resulting from delay by Tenant in so surrendering the Premises. Normal wear and tear, for the purposes of this Lease, shall be construed to mean wear and tear caused to the Premises by a natural aging process which occurs in spite of prudent application of reasonable standards for maintenance, repair and janitorial practices. It is not intended, nor shall it be construed, to include items of neglected or deferred maintenance which would have or should have been attended to during the Term of the Lease if reasonable standards had been applied to properly maintain and keep the Premises at all times in good condition and repair.

15. Impositions and Real Property Taxes.

A. Payment by Tenant. Tenant shall pay all Impositions prior to delinquency. If billed directly, Tenant shall pay such Impositions and concurrently present to Landlord satisfactory evidence of such payments. If any Impositions are billed to Landlord or included in bills to Landlord for Real Property Taxes, then Tenant shall pay to Landlord all such amounts within fifteen (15) days after receipt of Landlord’s invoice therefor. If applicable law prohibits Tenant from reimbursing Landlord for an Imposition, but Landlord may lawfully increase the Monthly Rent to account for Landlord’s payment of such Imposition, the Monthly Rent payable to Landlord shall be increased so that the amount of such increased Monthly Rent, together with any accompanying increases in the Real Property Taxes payable by Tenant with respect to such Imposition, are sufficient to net to Landlord the same return without reimbursement of such Imposition as would have been received by Landlord with reimbursement of such Imposition. In addition, on or before April 10 and December 10 of each year of the Term, Tenant shall pay directly to the San Mateo County assessor the Real Property Taxes for the Premises as set forth on the assessor’s tax bill for the Premises. If, however, the Premises are not a separate parcel for tax purposes but constitute a portion of a larger tax parcel or parcels, the Real Property Taxes payable by Tenant under this Lease shall be a percentage of the Real Property Taxes payable for such parcel or parcels, which percentage shall be determined by dividing the Rentable Area of the Premises by the total Rentable Area of all buildings on such parcel or parcels and multiplying the result by 100, which Real Property Taxes shall be payable by Tenant to Landlord monthly as part of the Common Area Maintenance Costs. Promptly following payment of the Real Property Taxes, Tenant shall provide Landlord with copies of paid receipts or other documentary evidence that the Real Property Taxes have been paid by Tenant. If Tenant fails to pay the Real Property Taxes on or before April 10 and December 10, respectively, or if Tenant fails to pay its share of Real Property Taxes as part of the Common Area Maintenance Costs, Tenant shall pay to Landlord any penalty incurred by such late payment. In addition, Tenant shall pay any Real Property Tax not included within the county tax assessor’s tax bill within ten (10) days after being billed for same by Landlord. The foregoing dates are based on the dates established by the county as the dates on which Real Property Taxes become delinquent if not paid. If such delinquency dates change, the dates on which Tenant must pay the Real Property Taxes for the Premises shall be at least ten (10) days prior to the new delinquency dates. Assessments, taxes,

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fees, levies and charges may be imposed by governmental agencies for such purposes as fire protection, street, sidewalk, road, utility construction and maintenance, refuse removal and for other governmental services which may formerly have been provided without charge to property owners or occupants. It is the intention of the parties that all new and increased assessments, taxes, fees, levies and charges are to be included within the definition of Real Property Taxes for the purposes of this Lease.

B. Taxes on Tenant Improvements and Personal Property. Tenant shall pay any increase in Real Property Taxes resulting from any and all Alterations and tenant improvements of any kind whatsoever placed in, on or about the Premises for the benefit of, at the request of, or by Tenant. Tenant shall pay prior to delinquency all taxes assessed or levied against Tenant’s Personal Property in, on or about the Premises or elsewhere. When possible, Tenant shall cause its Personal Property to be assessed and billed separately from the Premises and the real property or Personal Property of Landlord.

C. Proration. Tenant’s liability to pay Real Property Taxes shall be prorated on the basis of a 360-day year to account for any fractional portion of a fiscal tax year included at the commencement or expiration of the Term. With respect to any assessments which may be levied against or upon the Premises or on all or any portion of the Project, or which under the laws then in force may be evidenced by improvements or other bonds or may be paid in annual installments, only the amount of such annual installment (with appropriate proration for any partial year) and interest due thereon shall be included within the computation of the annual Real Property Taxes levied against the Premises or such portion of the Project, as applicable.

16. Utilities and Services.

Tenant shall be responsible for and shall pay promptly all charges for water, gas, electricity, telephone, refuse pick-up, janitorial service and all other utilities, materials and services furnished directly to or used by Tenant in, on or about the Premises during the Term, together with any taxes thereon. If any utility, material or service is not separately charged or metered to any portion of the Premises, Tenant shall pay to Landlord, within ten (10) days after written demand therefor as Additional Rent, Tenant’s pro rata share of the total cost thereof as may be determined by Landlord. Landlord shall not be liable in damages or otherwise for any failure or interruption of any utility service or other service furnished to the Premises, except as provided in Paragraph 26.C(ii).

17. Repair and Maintenance.

A. Landlord’s Obligations. Landlord shall keep in good order, condition and repair the structural parts of the Building, which structural parts include only the foundation, subflooring, exterior walls (excluding the interior of all walls and the exterior and interior of all windows, doors, ceilings, and plate glass), and the roof structure of the Building (but not the roof membrane), all unexposed plumbing and electrical facilities, and all gutters and downspouts, except for any damage thereto caused (i) by the negligence or willful acts or omissions of Tenant or of Tenant’s agents, employees or invitees, or (ii) by reason of the failure of Tenant to perform or comply with any terms of this Lease, or (iii) by Alterations made by Tenant or by Tenant’s agents, employees or contractors. Landlord shall be responsible for the costs to maintain and

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repair such structural parts of the Building except the costs to repair the damage resulting from the causes described in clauses (i), (ii) or (iii) in the preceding sentence for which Tenant shall be responsible. In addition, Landlord shall perform any alterations, additions or improvements required to be made to the Building in order to comply with applicable laws, ordinances, rules, regulations and orders that become effective after the date of this Lease, and all capital improvements required to be made in connection with the operation, maintenance and repair of the Building; provided, however, in accordance with Paragraph 5.C, any and all costs and expenses incurred by Landlord in performing any such alterations, additions, improvements or capital improvements, together with interest at the Interest Rate, shall be amortized over the useful life, as reasonably determined by Landlord, of the alteration, addition, improvement or capital improvement in question and included in Common Area Maintenance Costs for each year over which such costs are amortized. It is an express condition precedent to all obligations of Landlord to repair and maintain that Tenant shall have notified Landlord of the need for such repairs or maintenance. Tenant waives the provisions of Sections 1941 and 1942 of the California Civil Code and any similar or successor law regarding Tenant’s right to make repairs and deduct the expenses of such repairs from the Rent due under this Lease.

Landlord shall keep in good order, condition, repair and maintenance the Building’s HVAC system, any HVAC system exclusively serving any part of the Premises and the roof, and shall maintain an HVAC system preventive maintenance service contract from a qualified vendor for the purpose of maintaining the Building’s HVAC system and any HVAC system exclusively serving any part of the Premises, and a roof maintenance service contract from a qualified vendor for the purpose of maintaining the Building’s roof. Landlord shall determine in its sole reasonable discretion whether any such vendor is qualified. Any and all costs of any maintenance or minor repair of the Building’s HVAC system or the roof (including without limitation the cost of maintaining Building’s HVAC system preventative maintenance contracts and roof maintenance service contracts) shall be included in the Common Area Maintenance Costs for the year in which such cost is incurred. Any and all costs of any maintenance or minor repair of any HVAC system exclusively serving any part of the Premises shall be payable solely by Tenant for the year in which such cost is incurred. Any and all costs of any replacement or major repair of the Building’s HVAC system or the roof, together with interest at the Amortization Rate, shall be amortized on a straight-line basis over the useful life of the item replaced or repaired (as determined by Landlord in its reasonable discretion), and the entire amount of such amortized costs and interest allocable to each month, multiplied by Tenant’s Building Share, shall be included in the monthly Common Area Maintenance Costs payable during the entire period over which such costs are amortized, until Tenant has paid to Landlord that proportion of the total amount of such amortized costs equal to (a) the number of months remaining during the Term as of the date such replacement or major repair was completed, divided by (b) the number of months of the useful life, multiplied by (c) Tenant’s Building Share; provided that in no event shall such proportion exceed one hundred percent (100%). Any and all costs of any replacement or major repair of any HVAC system exclusively serving any part of the Premises shall be payable solely by Tenant in accordance with the foregoing. Repairs to the Building’s HVAC system or the roof shall be deemed to be “minor” if the total aggregate cost of such repairs is less than or equal to Ten Thousand Dollars ($10,000.00), and shall be deemed to be “major” if the total aggregate cost of such repairs exceeds Ten Thousand Dollars ($10,000.00). For the purposes of example only and not by way of limitation, if a replacement of part of the Building’s HVAC system is completed twenty-five (25) months before the end of the

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Term, at a cost of Twenty Thousand Dollars ($20,000.00), and the useful life of such replaced part of the HVAC system is fifty (50) months, then (a) the cost of such replacement shall be amortized at the rate of Four Hundred Dollars ($400.00) per month, with interest at the Amortization Rate, and (b) the amount to be included in the monthly Common Area Maintenance Costs payable solely by Tenant for the balance of the Term shall equal Four Hundred Dollars ($400.00), with interest at the Interest Rate, until Tenant has paid to Landlord a total aggregate amount of Three Thousand Dollars ($3,000.00), together with interest at the Interest Rate, towards such amortized costs (i.e., Twenty Thousand Dollars ($20,000.00) multiplied by [Twenty-Five (25) Months divided by Fifty (50) Months], multiplied by Tenant’s Building Share). Tenant shall pay any and all costs of any maintenance or repair of any HVAC system exclusively serving any part of the Premises (including without limitation an equitable portion of the HVAC system preventative maintenance contracts) directly to Landlord within ten (10) days of receipt from Landlord of an invoice of such costs as Additional Rent.

It is the express intent of the parties that except as specifically set forth in this Paragraph 17.A, Landlord shall have no obligation whatsoever to incur any costs or expenses whatsoever with respect to the repair, operation, and maintenance of the Building, and that Tenant shall be responsible for Tenant’s Building Share of all costs and expenses arising from the repair, operation, and maintenance of the Building except those costs and expenses specifically described in this Paragraph 17.A. or exclusively the costs and expense of Tenant as described in this Paragraph 17.A.

B. Tenant’s Obligations. Tenant shall at all times and at its sole cost and expense clean, keep and maintain in good order, condition and repair (and replace, if necessary) every part of the Premises which is not within Landlord’s obligation pursuant to Paragraph 17.A. Tenant’s repair and maintenance obligations shall include without limitation all exposed plumbing and electrical facilities within the Premises, fixtures, interior walls and ceiling, floors, windows, window frames, doors, entrances, plate glass, showcases, skylights, all lighting fixtures, lamps, fans and any exhaust equipment and systems, all mechanical systems (but not the HVAC system), all security systems and alarms, all electrical motors and all other appliances and equipment of every kind and nature located in, upon or about the Building or the Premises. Tenant shall also be responsible for all pest control within the Premises.

C. Conditions Applicable to Repairs. All repairs, replacements and reconstruction made by or on behalf of Tenant or any person claiming through or under Tenant shall be made and performed (i) at Tenant’s sole cost and expense, in a good and workmanlike manner and at such time and in such manner as Landlord may reasonably designate, (ii) by contractors approved in advance by Landlord, (iii) so that the repairs, replacements or reconstruction shall be at least equal in quality, value and utility to the original work or installation, (iv) in accordance with such reasonable requirements as Landlord may impose with respect to insurance and bonds to be obtained by Tenant in connection with the proposed work, and (v) in accordance with any reasonable, non-discriminatory rules and regulations for the Project as may be adopted by Landlord from time to time and in accordance with all applicable laws and regulations of governmental authorities having jurisdiction over the Premises.

D. Landlord’s Rights. If Tenant fails to perform Tenant’s obligations under Paragraph 17.B, Landlord may in its sole discretion give Tenant notice of such work as is

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reasonably required to fulfill such obligations. If Tenant fails to commence the work within thirty (30) days after receipt of such notice and diligently prosecute the work to completion, then Landlord shall have the right (but not the obligation) to do such acts or expend such funds at the expense of Tenant as are reasonably required to perform such work. Any amount so expended by Landlord shall be paid by Tenant to Landlord promptly after demand with interest at the Interest Rate. Landlord shall have no liability to Tenant for any damage to, or interference with Tenant’s use of, the Premises, or inconvenience to Tenant as a result of performing any such work.

E. Compliance with Governmental Regulations. Tenant shall, at its sole cost and expense, comply with, including the making by Tenant of any Alteration to the Premises, all present and future regulations, rules, laws, ordinances, and requirements of all governmental authorities (including, without limitation state, municipal, county and federal governments and their departments, bureaus, boards and officials) arising from Tenant’s specific use or occupancy of, or applicable to, the Premises, or in connection with Tenant’s enjoyment of the Premises, or the construction and use of any tenant improvements or any Alterations to the Premises made by or on behalf of Tenant. Notwithstanding the foregoing, Landlord, and not Tenant, shall be obligated to make any Alterations to the structural parts of the Building maintained by Landlord pursuant to Paragraph 17.A that are required to comply with any present and future regulations, rules, laws, ordinances, and governmental requirements unless such Alterations to the structural parts of the Building are required solely as a result of any other Alterations to the Building made by Tenant during the Term of this Lease, in which case Tenant shall reimburse Landlord for the cost of any such Alterations to the structural parts of the Building that are required to comply with regulations, rules, laws, ordinances and governmental requirements.

18. Liens.

Tenant shall keep the Building and the Premises free from any liens arising out of any work performed, materials furnished or obligations incurred by or on behalf of Tenant and hereby agrees to indemnify, defend, protect and hold Landlord and Landlord’s Agents harmless from and against any and all loss, claim, damage, liability, cost and expense, including attorneys’ fees and costs, in connection with or arising out of any such lien or claim of lien. Tenant shall cause any such lien imposed to be released of record by payment or posting of a proper bond acceptable to Landlord within ten (10) days after written request by Landlord. Tenant shall give Landlord written notice of Tenant’s intention to perform work on the Premises which might result in any claim of lien at least ten (10) days prior to the commencement of such work to enable Landlord to post and record a Notice of Nonresponsibility or any such other notice(s) as Landlord may deem appropriate. If Tenant fails to so remove any such lien within the prescribed ten 10-day period, then Landlord may do so at Tenant’s expense and Tenant shall reimburse Landlord for such amounts upon demand. Such reimbursement shall include all costs incurred by Landlord including Landlord’s reasonable attorneys’ fees with interest thereon at the Interest Rate.

19. Landlord’s Right to Enter the Premises.

A. Entry of Premises. Landlord and its authorized agents, employees, and contractors may enter the Premises at any time and from time to time during normal business

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hours or at any time in the event of an emergency to: (i) inspect the same; (ii) determine Tenant’s compliance with its obligations hereunder; (iii) exhibit the same to prospective purchasers, lenders or tenants; (iv) supply any services to be provided by Landlord hereunder; (v) post notices of nonresponsibility or other notices permitted or required by law; (vi) make repairs, improvements or alterations, or perform maintenance in or to, the Premises or any other portion of the Project, including the Building Systems; and (vii) perform such other functions as Landlord deems reasonably necessary or desirable. Landlord may also grant access to the Premises to government or utility representatives and bring and use on or about the Premises such equipment as Landlord deems reasonably necessary to accomplish the purposes of Landlord’s entry under this Paragraph 19.A. Landlord shall have and retain keys with which to unlock all of the doors in or to the Premises, and Landlord shall have the right to use any and all means which Landlord may deem proper in an emergency in order to obtain entry to the Premises, including secure areas.

B. Waiver of Claims. Tenant acknowledges that Landlord, in connection with Landlord’s activities under this Paragraph 19, may, among other things, erect scaffolding or other necessary structures in the Premises and/or the Project, limit or eliminate access to portions of the Project, including portions of the Common Areas, or perform work in the Premises and/or the Project, which work may create noise, dust, vibration, odors or leave debris in the Premises and/or the Project. Tenant hereby agrees that Landlord’s activities under this Paragraph 19 shall in no way constitute a constructive eviction of Tenant nor entitle Tenant to any abatement of Rent. Landlord shall not be liable to Tenant for any direct or indirect injury to or interference with Tenant’s business arising from Landlord’s activities under this Paragraph 19 or the performance of Landlord’s obligations under this Lease, nor shall Tenant be entitled to any compensation or damages from Landlord for loss of the use of the whole or any part of the Premises or of Tenant’s personal property or improvements resulting from Landlord’s activities hereunder, or for any inconvenience or annoyance occasioned by such activities.

20. Signs.

Subject to Tenant obtaining all necessary approvals from the City of Redwood City and subject to Landlord’s review and approval of plans and specifications for any proposed signage, which approval may be withheld in Landlord’s sole discretion, Tenant shall have the right to install identification signage with its corporate name and logo on (a) the Broadway monument sign, (b) the lobby-entry door to the Premises and (c) the lobby directory located in the lower level of the Building, so long as such signage, in each case, complies with Landlord’s project sign program. Tenant shall have no right to maintain any Tenant identification sign in any other location in, on or about the Building or the Premises and shall not display or erect any other Tenant identification sign, display or other advertising material that is visible from the exterior of the Building. Any changes to the size, design, color or other physical aspects of Tenant’s identification sign(s) shall be subject to the Landlord’s prior written approval, which may be withheld in Landlord’s sole discretion, and any appropriate municipal or other governmental approvals. The cost of Tenant’s sign(s) and their installation, maintenance and removal shall be Tenant’s sole cost and expense. If Tenant fails to maintain its sign(s), or, if Tenant fails to remove its sign(s) upon termination of this Lease, Landlord may do so at Tenant’s expense and the amounts expended by Landlord in doing so shall be payable by Tenant to Landlord as

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Additional Rent within ten (10) days after Landlord has delivered written notice to Tenant demanding payment of such amount.

21. Insurance.

A. Indemnification.

(i) Tenant hereby agrees to defend, indemnify, protect and hold harmless Landlord and Landlord’s Agents from and against any and all damage, loss, cost, claim, liability or expense including reasonable attorneys’ fees and legal costs, suffered directly or by reason of any claim, suit or judgment brought by or in favor of any person or persons for damage, loss or expense due to, but not limited to, bodily injury and property damage sustained by such person or persons which arises out of, is occasioned by or is in any way attributable to the use or occupancy of the Premises or any part thereof and adjacent areas by Tenant, the acts or omissions of the Tenant, its agents, employees or any contractors brought onto the Premises by Tenant, except to the extent caused by the negligence or willful misconduct of Landlord or Landlord’s Agents. Tenant agrees that the obligations assumed herein shall survive this Lease. Tenant’s obligations under this Paragraph 21.A.(i) are subject to the following conditions: (i) Tenant is promptly notified in writing of any such claim (s); (ii) Tenant shall have the right to control the defense of such claim(s) and any settlement negotiations, provided, however, that no action may be taken by Tenant which may materially and adversely affect Landlord’s rights or obligations without Landlord’s consent; and (iii) Landlord shall cooperate with Tenant in the defense and/or settlement of such claim(s). Notwithstanding the foregoing, Landlord shall have the right, in its reasonable discretion, but without being required to do so, to defend, adjust, settle or compromise any claim, obligation, debt, demand, suit or judgment against Landlord arising out of or in connection with the matters covered by the foregoing indemnity and, in such event, Tenant shall reimburse Landlord for all reasonable charges and expenses incurred by Landlord in connection therewith, including reasonable attorneys’ fees; provided, however, that Landlord shall not undertake any unilateral action or settlement so long as Tenant or an insurance company, at its or their sole expense, is contesting in good faith, diligently and with continuity such claim, action, obligation, demand or suit, and so long as such claim, action, obligation, demand or suit does not have or threaten to have a material adverse impact on Landlord’s assets, reputation or business affairs.

(ii) Landlord hereby agrees to defend, indemnify, protect and hold harmless Tenant from and against any and all damage, loss, cost, claim, liability or expense, including reasonable attorneys’ fees and legal costs, suffered directly or by reason of any claim, suit or judgment brought by or in favor of any person or persons for damage, loss or expense due to, but not limited to, bodily injury and property damage sustained by such person or persons which arises out of, is occasioned by or is in any way attributable to the acts or omissions of Landlord, Landlord’s Agents, or any contractors brought onto the Premises by Landlord, except to the extent caused by the negligence or willful misconduct of Tenant, its agents, employees or contractors. Landlord agrees that the obligations assumed herein shall survive this Lease. Landlord’s obligations under this Paragraph 21.A.(ii) are subject to the following conditions: (i) Landlord is promptly notified in writing of any such claim(s); (ii) Landlord shall have the right to control the defense of such claim(s) and any settlement negotiations, provided, however, that no action may be taken by Landlord which may materially and adversely affect Tenant’s

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rights or obligations without Tenant’s consent; and (iii) Tenant shall cooperate with Landlord in the defense and/or settlement of such claim(s). Notwithstanding the foregoing, Tenant shall have the right, in its sole discretion, but without being required to do so, to defend, adjust, settle or compromise any claim, obligation, debt, demand, suit or judgment against Tenant arising out of or in connection with the matters covered by the foregoing indemnity and, in such event, Landlord shall reimburse Tenant for all reasonable charges and expenses incurred by Tenant in connection therewith, including reasonable attorneys’ fees; provided, however, that Tenant shall not undertake any unilateral action or settlement so long as Landlord or an insurance company, at its or their sole expense, is contesting in good faith, diligently and with continuity such claim, action, obligation, demand or suit, and so long as such claim, action, obligation, demand or suit does not have or threaten to have a material adverse impact on Tenant’s assets, reputation or business affairs.

B. Tenant’s Insurance. Tenant agrees to maintain in full force and effect at all times during the Term, at its sole cost and expense, for the protection of Tenant and Landlord, as their interests may appear, policies of insurance issued by a responsible carrier or carriers acceptable to Landlord which afford the following coverages:

(i) Commercial general liability insurance in an amount not less than Three Million and 00/100 Dollars ($3,000,000.00) combined single limit for both bodily injury and property damage which includes blanket contractual liability broad form property damage, personal injury, completed operations, and products liability, which policy shall name Landlord and Landlord’s Agents as additional insureds and shall contain a provision that “the insurance provided Landlord hereunder shall be primary and non-contributing with any other insurance available to Landlord with respect to any damage, loss, liability or expense covered by Tenant’s indemnity obligations under Paragraph 21.A.(i) of the Lease.”

(ii) Causes of loss special form property insurance (including, without limitation, vandalism, malicious mischief, inflation endorsement, and sprinkler leakage endorsement) on Tenant’s Personal Property located on or in the Premises. Such insurance shall be in the full amount of the replacement cost, as the same may from time to time increase as a result of inflation or otherwise. As long as this Lease is in effect, the proceeds of such policy shall be used for the repair and replacement of such items so insured. Landlord shall have no interest in the insurance proceeds on Tenant’s Personal Property. Notwithstanding the foregoing, Tenant shall have the right, at its election, to self-insure with respect to any loss or damage to Tenant’s Personal Property.

(iii) Boiler and machinery insurance, including steam pipes, pressure pipes, condensation return pipes and other pressure vessels and HVAC equipment, including miscellaneous electrical apparatus, in an amount satisfactory to Landlord.

C. Premises Insurance. During the Term Landlord shall maintain causes of loss-special form property insurance (including inflation endorsement, sprinkler leakage endorsement, and, at Landlord’s option, earthquake and flood coverage) on the Building, excluding coverage of all Tenant’s Personal Property located on or in the Premises. Such insurance shall also include insurance against loss of rents, including, at Landlord’s option, coverage for earthquake and flood, in an amount equal to the Monthly Rent and Additional Rent,

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and any other sums payable under the Lease, for a period of at least twelve (12) months commencing on the date of loss. The amount of coverage of Landlord’s insurance hereunder shall be determined by Landlord from time to time in its reasonable discretion but the property insurance shall not be less than 100% of full replacement value of the Building. Such insurance shall name Landlord and Landlord’s Agents as named insureds and include a lender’s loss payable endorsement in favor of Landlord’s lender (Form 438 BFU Endorsement). Tenant shall reimburse Landlord monthly, as Additional Rent, for Tenant’s Building Share of one-twelfth (12th) of the annual cost of such insurance on the first day of each calendar month of the Term, prorated for any partial month, or on such other periodic basis as Landlord shall elect. If the insurance premiums are increased after the Commencement Date for any reason, including without limitation due to an increase in the value of the Building or its replacement cost, or due to Tenant’s use of the Premises or any improvements installed by Tenant, Tenant shall pay for Tenant’s Building Share of such increase within ten (10) days of notice of such increase. Landlord may, in its sole discretion, maintain the insurance coverage described in this Paragraph 21.C as part of an umbrella insurance policy covering other properties owned by Landlord.

D. Increased Coverage. Upon thirty (30) days prior written notice, Tenant shall provide Landlord, at Tenant’s expense, with such reasonable increased amount of existing insurance, and such other insurance as Landlord or Landlord’s lender may reasonably require to afford Landlord and Landlord’s lender adequate protection; provided, however, that Tenant shall not be required under this Paragraph 21.D to increase the amount of its existing insurance more frequently than once during each calendar year, and shall not be required under this Paragraph 21.D to provide additional insurance coverage more frequently than once during each calendar year.

E. Failure to Maintain. If Tenant fails to maintain any insurance coverage that Tenant is required to maintain under this Paragraph 21, and Landlord incurs any liability to its insurance carrier arising out of Tenant’s failure to so maintain such insurance coverage, then any and all loss or damage Landlord shall sustain by reason thereof, including attorneys’ fees and costs, shall be borne by Tenant and shall be immediately paid by Tenant upon its receipt of a bill therefor and evidence of such loss. Nothing contained in this Paragraph 21.E shall be deemed to limit or affect any other remedies or rights available to Landlord under this Lease that arise from Tenant’s failure to so maintain such insurance coverage.

F. Insurance Requirements. All insurance shall be in a form satisfactory to Landlord and shall be carried in companies that have a general policy holder’s rating of not less than “A” and a financial rating of not less than Class “X” in the most current edition of Best’s Insurance Reports; and shall provide that such policies shall not be subject to material alteration or cancellation except after at least thirty (30) days prior written notice to Landlord. The policy or policies, or duly executed certificates for them, together with satisfactory evidence of payment of the premiums thereon shall be deposited with Landlord prior to the Commencement Date, and upon renewal of such policies, not less than ten (10) days prior to the expiration of the term of such coverage. The insurance required to be carried by Tenant may be effected by blanket or umbrella policies issued to Tenant covering the Premises and other properties owned or leased by Tenant, provided that such policies otherwise comply with the provisions of this Lease and allocate to the Premises the specified coverage, without possibility of deduction or co-insurance by reason of, or damage to, any other premises named therein. If any insurance coverages

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required by this Lease are provided by blanket or umbrella policies, Tenant shall furnish Landlord with certificates of insurance showing the insurance afforded by such policies applicable to the Premises, endorsed to include Landlord and any mortgagees, property managers and other parties as Landlord may specify from time to time, as the case may be, as additional insureds. If Tenant fails to procure and maintain the insurance it is required to maintain under this Paragraph 21, Landlord may, but shall not be required to, order such insurance at Tenant’s expense and Tenant shall reimburse Landlord therefor. Such reimbursement shall include all costs incurred by Landlord in obtaining such insurance including Landlord’s reasonable attorneys’ fees, with interest thereon at the Interest Rate.

G. Landlord’s Disclaimer. Landlord and Landlord’s Agents shall not be liable for any loss or damage to persons or property resulting from fire, explosion, falling plaster, glass, tile or sheetrock, steam, gas, electricity, water or rain which may leak from any part of the Building or from the pipes, appliances or plumbing works therein or from the roof, street or subsurface, or from any other cause whatsoever, including loss or reduction in utilities, except to the extent caused by the negligence or willful misconduct of Landlord. Landlord and Landlord’s Agents shall not be liable for any latent defect in the Premises. Tenant shall give prompt written notice to Landlord in case of a casualty or accident occurring, or any repair needed, in the Premises.

22. Waiver of Subrogation.

Landlord and Tenant each hereby waive all rights of recovery against the other on account of loss or damage occasioned by such waiving party to its property or the property of others under its control, to the extent that such loss or damage would be covered by any causes of loss-special form policy of insurance or its equivalent. Tenant and Landlord shall, upon obtaining policies of insurance required hereunder, give notice to the insurance carrier that the foregoing mutual waiver of subrogation is contained in this Lease and Tenant and Landlord shall cause each insurance policy obtained by such party to provide that the insurance company waives all right of recovery by way of subrogation against either Landlord or Tenant in connection with any damage covered by such policy.

23. Damage or Destruction.

A. Landlord’s Obligation to Rebuild. If all or any part of the Building is damaged or destroyed, Landlord shall promptly and diligently repair the same unless it has the right to terminate this Lease as provided herein and it elects to so terminate.

B. Right to Terminate. Landlord shall have the right to terminate this Lease in the event any of the following events occur:

(i) Insurance proceeds from the insurance Landlord is required to carry pursuant to Paragraph 21.C are not available to pay one hundred percent (100%) of the cost of such repair, excluding the deductible for which Tenant shall be responsible;

(ii) The Building cannot, with reasonable diligence, be fully repaired by Landlord within one hundred eighty (180) days after the date of the damage or destruction; or

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(iii) The Building cannot be safely repaired because of the presence of hazardous factors, including, but not limited to, earthquake faults, radiation, Hazardous Materials and other similar dangers.

If Landlord elects to terminate this Lease, Landlord may give Tenant written notice of its election to terminate within thirty (30) days after such damage or destruction, and this Lease shall terminate fifteen (15) days after the date Tenant receives such notice and both Landlord and Tenant shall be released of all further liability under this Lease (except to the extent any provision of this Lease expressly survives termination). If Landlord elects not to terminate the Lease, subject to Tenant’s termination right set forth below, Landlord shall promptly commence the process of obtaining necessary permits and approvals and repair of the Building as soon as practicable, and this Lease will continue in full force and affect. All insurance proceeds from insurance under Paragraph 21, excluding proceeds for Tenant’s Personal Property, shall be disbursed and paid to Landlord. Tenant shall be required to pay to Landlord the amount of any deductibles payable in connection with any insured casualties, unless the casualty was caused by the sole negligence or willful misconduct of Landlord.

Tenant shall have the right to terminate this Lease if the Building cannot, with reasonable diligence, be fully repaired within two hundred seventy (270) days from the date of damage or destruction. The determination of the estimated repair periods in this Paragraph 23 shall be made by an independent, licensed contractor or engineer within thirty (30) days after such damage or destruction. Landlord shall deliver written notice of the repair period to Tenant after such determination has been made and Tenant shall exercise its right to terminate this Lease, if at all, within ten (10) business days of receipt of such notice from Landlord. Upon such termination both Landlord and Tenant shall be released of all further liability under this Lease (except to the extent any provision of this Lease expressly survives termination).

C. Limited Obligation to Repair. Landlord’s obligation, should it elect or be obligated to repair or rebuild, shall be limited to the basic Building and shall not include any Alterations made by Tenant.

D. Abatement of Rent. Rent shall be temporarily abated proportionately, during any period when, by reason of such damage or destruction there is substantial interference with Tenant’s use of the Premises, having regard to the extent to which Tenant may be required to discontinue Tenant’s use of the Premises. Such abatement of Rent shall be proportional to the extent of such interference with Tenant’s use of the Premises reasonably attributable to such damage or destruction (with the extent of such interference to be reasonably determined by the mutual agreement of Landlord and Tenant), and shall commence upon such damage or destruction and end upon substantial completion by Landlord of the repair or reconstruction which Landlord is obligated or undertakes to perform. Tenant shall not be entitled to any compensation or damages from Landlord for loss of the use of the Premises, damage to Tenant’s Personal Property or any inconvenience occasioned by such damage, repair or restoration. Tenant hereby waives the provisions of Section 1932, Subdivision 2, and Section 1933, Subdivision 4, of the California Civil Code, and the provisions of any similar law hereinafter enacted.

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E. Damage Near End of Term. Anything herein to the contrary notwithstanding, if the Building is destroyed or materially damaged during the last twelve (12) months of the Term, then either Landlord or Tenant may, at its option, cancel and terminate this Lease as of the date of the occurrence of such damage, by delivery of written notice to the other party and, in such event, upon such termination both Landlord and Tenant shall be released of all further liability under this Lease (except to the extent any provision of this Lease expressly survives termination). If neither Landlord nor Tenant elects to terminate this Lease, the repair of such damage shall be governed by Paragraphs 23.A and 23.B.

24. Condemnation.

If title to all of the Premises is taken for any public or quasi-public use under any statute or by right of eminent domain, or so much thereof is so taken so that reconstruction of the Premises will not, in Landlord’s reasonable discretion, result in the Premises being reasonably suitable for Tenant’s continued occupancy for the uses and purposes permitted by this Lease, this Lease shall terminate as of the date that possession of the Premises or part thereof is taken, and upon such termination both Landlord and Tenant shall be released of all further liability under this Lease (except to the extent any provision of this Lease expressly survives termination). A sale by Landlord to any authority having the power of eminent domain, either under threat of condemnation or while condemnation proceedings are pending, shall be deemed a taking under the power of eminent domain for all purposes of this Paragraph 24.

If any part of the Premises is taken and the remaining part is reasonably suitable for Tenant’s continued occupancy for the purposes and uses permitted by this Lease, this Lease shall, as to the part so taken, terminate as of the date that possession of such part of the Premises is taken, and upon such termination both Landlord and Tenant shall be released of all further liability under this Lease with respect to that portion of the Premises that is taken (except to the extent any provision of this Lease expressly survives termination). The Rent and other sums payable hereunder shall be reduced in the same proportion that Tenant’s use and occupancy of the Premises is reduced. If any portion of the Common Area is taken, Tenant’s Rent shall be reduced only if such taking materially interferes with Tenant’s use of the Common Area and then only to the extent that the fair market rental value of the Premises is diminished by such partial taking. If the parties disagree as to the amount of Rent reduction, the matter shall be resolved by arbitration and such arbitration shall comply with and be governed by the California Arbitration Act, Sections 1280 through 1294.2 of the California Code of Civil Procedure. Each party hereby waives the provisions of Section 1265.130 of the California Code of Civil Procedure allowing either party to petition the Superior Court to terminate this Lease in the event of a partial taking of the Premises.

All compensation or damages awarded or paid for any taking hereunder shall belong to and be the property of Landlord, whether such compensation or damages are awarded or paid as compensation for diminution in value of the leasehold, the fee or otherwise, except that Tenant shall be entitled to any award allowed to Tenant for the taking of Tenant’s Personal Property, for the interruption of Tenant’s business, for its moving costs, or for the loss of its good will. Except for the foregoing allocation, no award for any partial or entire taking of the Premises shall be apportioned between Landlord and Tenant, and Tenant assigns to Landlord its interest in the

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balance of any award which may be made for the taking or condemnation of the Premises, together with any and all rights of Tenant arising in or to the same or any part thereof.

25. Assignment and Subletting.

A. Landlord’s Consent. Tenant shall not enter into a Sublet without Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Any attempted or purported Sublet without Landlord’s prior written consent shall be void and confer no rights upon any third person and, at Landlord’s election, shall terminate this Lease. Each Subtenant shall agree in writing, for the benefit of Landlord, to assume, to be bound by, and to perform the terms, conditions and covenants of this Lease to be performed by Tenant, as such terms, conditions and covenants apply to the Sublet premises. Notwithstanding anything contained herein, Tenant shall not be released from liability for the performance of each term, condition and covenant of this Lease by reason of Landlord’s consent to a Sublet unless Landlord specifically grants such release in writing.

B. Tenant’s Notice. If Tenant desires at any time to Sublet all or any portion of the Premises, Tenant shall first notify Landlord in writing of its desire to do so. Within twenty (20) days after Landlord’s receipt of Tenant’s notice, Landlord may elect to terminate this Lease with respect to that portion of the Premises that Tenant proposes to Sublet. In such event, Landlord and Tenant shall negotiate in good faith the effective date of such termination and Tenant shall be released of all further liability under this Lease with respect to the portion of the Premises for which this Lease is terminated (except to the extent any provision of this Lease expressly survives termination).

C. Information to be Furnished. If Landlord elects not to terminate this Lease with respect to the portion of the Premises that Tenant desires to Sublet, then Tenant shall submit in writing to Landlord: (i) the name of the proposed Subtenant; (ii) the nature of the proposed Subtenant’s business to be carried on in the Premises; (iii) the terms and provisions of the proposed Sublet and a copy of the proposed form of Sublet agreement containing a description of the subject premises; and (iv) such financial information, including financial statements, as Landlord may reasonably request concerning the proposed Subtenant.

D. Landlord’s Alternatives. At any time within ten (10) days after Landlord’s receipt of the information specified in Paragraph 25.D., Landlord may, by written notice to Tenant, elect: (i) to consent to the Sublet by Tenant; or (ii) to withhold its consent to the Sublease provided that such consent is not unreasonably withheld, conditioned or delayed. If Landlord consents to the Sublet, Tenant may thereafter enter into a valid Sublet of the Premises or applicable portion thereof, upon the terms and conditions and with the proposed Subtenant set forth in the information furnished by Tenant to Landlord, subject, however, at Landlord’s election, to the condition that fifty percent (50%) of any excess of the Subrent over the Rent required to be paid by Tenant under this Lease (or, if only a portion of the Premises is Sublet, the pro rata share of the Rent attributable to the portion of the Premises being Sublet) less reasonable attorneys’ fees, leasing commissions, and other reasonable subletting costs (but not including the cost of any interior improvements) paid by Tenant on the Sublet, shall be paid to Landlord.

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E. Proration. If a portion of the Premises is Sublet, the pro rata share of the Rent attributable to such partial area of the Premises shall be determined by Landlord by dividing the Rent payable by Tenant hereunder by the total square footage of the Premises and multiplying the resulting quotient (the per square foot rent) by the number of square feet of the Premises which are Sublet.

F. Parameters of Landlord’s Consent. Landlord shall have the right to base its consent to any Sublet hereunder upon such factors and considerations as Landlord reasonably deems relevant or material to the proposed Sublet and the best interest of the Project’s operations. Without limiting the generality of the foregoing, Tenant acknowledges that it shall be reasonable for Landlord to withhold its consent to any Sublet hereunder if Tenant has not demonstrated that (i) the proposed Subtenant is financially responsible, with sufficient net worth and net current assets, to properly and successfully operate its business in the Premises and meet the financial and other obligations of this Lease; (ii) the proposed Subtenant possesses sound and good business judgment, reputation and experience, and proven management skills in the operation of a business or businesses substantially similar to the uses permitted in the Premises under Paragraph 11.A; and (iii) the use of the Premises proposed by such Subtenant conforms to the permitted uses specified under Paragraph 11.A, and involves either no Hazardous Use or only such Hazardous Use as shall be acceptable to Landlord in its sole discretion.

G. Permitted Transfers. Notwithstanding the provisions of Paragraph 25.A above, Tenant shall have the right to assign its entire interest under this Lease, and Landlord shall not withhold its consent thereto (provided that all of the conditions set forth in clauses (A) and (B) below shall be met), if such assignment is one of the following “Permitted Transfers”: (i) an assignment to a corporation that is controlled by, controls, or is under common control with Tenant; or (ii) an assignment in connection with the non-bankruptcy reorganization or merger of the corporate entity constituting the Tenant under this Lease, where either (x) the shareholders of the Tenant originally named in this Lease control (i.e., own fifty-one percent (51%) or more of the voting stock of) the reorganized or surviving entity, or (y) as of the effective date of such assignment, the reorganized or surviving entity has a net worth equal to or greater than the net worth the Tenant originally named under this Lease had as of the date of this Lease or has prior to the date of the Permitted Transfer, whichever is greater. However, the foregoing Permitted Transfers shall be exempt from the requirement of Landlord’s consent only if all of the following conditions shall be met: (A) there shall be no change in the use or operation of the Premises; and (B) Tenant shall have provided to Landlord all information to allow Landlord to determine, and Landlord shall have determined, that the proposed transfer is a Permitted Transfer which is exempt from the requirement of Landlord’s consent. No transfer of the type described in this Paragraph 25.G, or any other transfer, shall release Tenant of its obligations under this Lease.

26. Default.

A. Tenant’s Default. A default under this Lease by Tenant shall exist if any of the following occurs:

(i) If Tenant fails to pay when due any Rent or any other sum required to be paid hereunder within five (5) days from the date of Landlord’s written notice to Tenant

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(which notice shall constitute the notice required under California Code of Civil Procedure Section 1161) that such Rent or other sum is due; or

(ii) If Tenant fails to perform any term, covenant or condition of this Lease except those requiring the payment of money, and Tenant fails to cure such breach within thirty (30) days after written notice from Landlord where such breach could reasonably be cured within such 30-day period; provided, however, that where such failure could not reasonably be cured within the 30-day period, that Tenant shall not be in default if it commences such performance within the 30-day period and diligently thereafter prosecutes the same to completion; or

(iii) If Tenant assigns its assets for the benefit of its creditors; or

(iv) If the sequestration or attachment of or execution on any material part of Tenant’s Personal Property essential to the conduct of Tenant’s business occurs, and Tenant fails to obtain a return or release of such Tenant’s Personal Property within thirty (30) days thereafter, or prior to sale pursuant to such sequestration, attachment or levy, whichever is earlier; or

(v) If Tenant abandons the Premises as determined under applicable California law; or

(vi) If a court makes or enters any decree or order other than under the bankruptcy laws of the United States adjudging Tenant to be insolvent; or approving as properly filed a petition seeking reorganization of Tenant; or directing the winding up or liquidation of Tenant and such decree or order shall have continued for a period of sixty (60) days.

B. Remedies. Upon a default, Landlord shall have the following remedies, in addition to all other rights and remedies provided by law or otherwise provided in this Lease, to which Landlord may resort cumulatively or in the alternative:

(i) Landlord may continue this Lease in full force and effect, and this Lease shall continue in full force and effect as long as Landlord does not terminate this Lease, and Landlord shall have the right to collect Rent when due.

(ii) Landlord may terminate Tenant’s right to possession of the Premises at any time by giving written notice to that effect, and relet the Premises or any part thereof. Tenant shall be liable immediately to Landlord for all costs Landlord incurs in reletting the Premises or any part thereof, including, without limitation, broker’s commissions, expenses of cleaning and redecorating the Premises required by the reletting and like costs. Reletting may be for a period shorter or longer than the remaining term of this Lease. No act by Landlord other than giving written notice of termination to Tenant shall terminate this Lease. Neither acts of maintenance, nor efforts to relet the Premises, nor the appointment of a receiver on Landlord’s initiative to protect Landlord’s interest under this Lease shall constitute a termination of Tenant’s right to possession. On termination, Landlord has the right to remove all Tenant’s Personal Property and store the same at Tenant’s sole cost and expense and to recover from Tenant as damages:

(a) The worth at the time of award of the unpaid Rent and other sums due and payable which had been earned at the time of termination; plus

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(b) The worth at the time of award of the amount by which the unpaid Rent and other sums due and payable which would have been payable after termination until the time of award exceeds the amount of such Rent loss that Tenant proves could have been reasonably avoided; plus

(c) The worth at the time of award of the amount by which the unpaid rent and other sums due and payable 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; plus

(d) Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to perform Tenant’s obligations under this Lease, or which, in the ordinary course of things, would be likely to result therefrom, including, without limitation, any costs or expenses incurred by Landlord: (i) in retaking possession of the Premises; (ii) in maintaining, repairing, preserving, restoring, replacing, cleaning, altering or rehabilitating the Premises or any portion thereof, including such acts for reletting to a new tenant or tenants; (iii) for leasing commissions; or (iv) for any other costs necessary or appropriate to relet the Premises; plus

(e) At Landlord’s election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by the laws of the State of California.

The “worth at the time of award” of the amounts referred to in Paragraphs 26.B.(ii)(a) and 26.B.(ii)(b) is computed by allowing interest at the Interest Rate on the unpaid rent and other sums due and payable from the termination date through the date of award. The “worth at the time of award” of the amount referred to in Paragraph 26.B.(ii)(c) is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%). Tenant waives redemption or relief from forfeiture under California Code of Civil Procedure Sections 1174 and 1179, or under any other present or future law, in the event Tenant is evicted or Landlord takes possession of the Premises by reason of any default of Tenant hereunder.

(iii) Landlord may, with or without terminating this Lease, re-enter the Premises and remove all persons and property from the Premises, so long as Landlord gives Tenant advance written notice of its intent to so re-enter the Premises; such property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Tenant. No reentry or taking possession of the Premises by Landlord pursuant to this Paragraph 26.B.(iii) shall be construed as an election to terminate this Lease unless a written notice of such intention is given to Tenant.

C. Landlord’s Default.

(i) Notice and Cure Right. Subject to Paragraphs 26.C(ii) and (iii), Landlord shall not be deemed to be in default in the performance of any obligation required to be performed by it hereunder unless and until it has failed to perform such obligation within thirty

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(30) days after receipt of written notice by Tenant to Landlord specifying the nature of such default; provided, however, that if the nature of Landlord’s obligation is such that more than thirty (30) days are required for its performance, then Landlord shall not be deemed to be in default if it shall commence such performance within such 30-day period and thereafter diligently prosecute the same to completion.

(ii) Abatement Condition. If solely as a result of Landlord’s gross negligence or willful misconduct, Landlord fails to provide an Essential Service (as hereinafter defined) which Landlord is required to provide to the Premises pursuant to the terms of this Lease (an “Abatement Condition”), which prevents Tenant from occupying all or a material portion of the Premises (the “Abatement Space”), then Tenant may elect, by notice to Landlord, to have Monthly Rent and Tenant’s Percentage Share of Common Area Maintenance Costs abate, subject to the following additional conditions having been satisfied in each instance:

(a) With respect to the Abatement Condition in question, Tenant shall have given notice to Landlord of the occurrence thereof, which notice shall designate the cause or suspected cause of the Abatement Condition, if known to Tenant, and the portion of the Premises which is not usable by Tenant, and the Abatement Condition in question shall have continued after Tenant has given such notice for a period of not less than seven (7) consecutive days; and

(b) Tenant, solely because of the occurrence of the Abatement Condition, shall have actually vacated the Abatement Space for not less than seven (7) consecutive days after giving its notice to Landlord of the Abatement Condition.

If, with respect to the Abatement Condition in question, the conditions of this Paragraph 26.C(ii) are fulfilled, then Monthly Rent and Tenant’s Percentage Share of Common Area Maintenance shall abate, in the proportion that the Rentable Area of the Abatement Space actually vacated bears to the rentable square foot area of the Premises, for a period equal to the lesser of (A) the period during which Tenant has actually vacated the Abatement Space, or (B) the period of time between Tenant’s having vacated the Abatement Space and the date Tenant receives notice from Landlord that the Abatement Condition has been cured, provided that such time periods shall not commence to run until the day after Tenant gives Landlord notice of the Abatement Condition as required above. For purposes of this Paragraph 26.C(ii), vacation of the Abatement Space shall not require Tenant to remove furniture, fixtures or equipment. Tenant shall be deemed to have vacated the Abatement Space if, due to the Abatement Condition, the Abatement Space is not occupiable by Tenant, and Tenant does not in fact conduct any business in or use the Abatement Space. Tenant agrees that furnishing Landlord with notice of the Abatement Condition shall be an election of remedies, and Tenant shall be deemed to have waived any other rights against Landlord at law or in equity, including, but not limited to, an action for money damages in connection with the Abatement Condition in question. For purposes hereof, an “Essential Service” shall mean the standard services to be provided by the heating, ventilation and air conditioning systems, life safety systems, mechanical systems, plumbing and waste disposal systems and electrical systems to the extent Landlord is required to provide such services to the Premises pursuant to the terms of this Lease

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(iii) Failure to Pay Construction Allowance. If (a) Tenant shall have properly submitted a request for disbursement of the Construction Allowance or Fixturing Allowance pursuant to the terms of the Work or tenant improvement allowance pursuant to Paragraphs 2.B(i) or 2.C(ii) (the “Expansion Allowance”), (b) Landlord shall not have sent written notice within thirty (30) days after receipt of Tenant’s disbursement request disputing Tenant’s right to receive all or any portion of the Construction Allowance, Fixturing Allowance or Expansion Allowance so requested, including the reasons for such dispute; (c) Landlord shall have failed to pay all or any portion of the Construction Allowance, Fixturing Allowance or Expansion Allowance requested within sixty (60) days after Tenant’s request for disbursement, and (d) such failure shall have continued for an additional period of ten (10) days after written notice of Landlord’s failure to pay within such sixty-day period, Tenant shall have the right to deduct the amount of any unpaid Construction Allowance, Fixturing Allowance or Expansion Allowance from Monthly Rent thereafter becoming due and payable under the Lease.

27. Subordination.

This Lease is or may become subject and subordinate to underlying leases, mortgages and deeds of trust (collectively, “Encumbrances”) which may now affect the Premises, and to all renewals, modifications, consolidations, replacements and extensions thereof; provided, however, if the holder or holders of any such Encumbrance (collectively, “Holder”) shall require that this Lease be prior and superior thereto, within fifteen (15) days of written request of Landlord to Tenant, Tenant shall execute, have acknowledged and deliver any and all documents or instruments, in the form presented to Tenant, which Landlord or Holder deems reasonably necessary or desirable for such purposes. Landlord shall have the right to cause this Lease to be and become and remain subject and subordinate to any and all Encumbrances which are now or may hereafter be executed covering the Premises or any renewals, modifications, consolidations, replacements or extensions thereof, for the full amount of all advances made or to be made thereunder and without regard to the time or character of such advances, together with interest thereon and subject to all the terms and provisions thereof; provided only, that in the event of termination of any such lease or upon the foreclosure of any such mortgage or deed of trust, so long as Tenant is not in default beyond applicable notice and cure periods, Holder agrees to recognize Tenant’s rights under this Lease as long as Tenant shall pay the Rent and observe and perform all the provisions of this Lease to be observed and performed by Tenant. Within fifteen (15) days after Landlord’s written request, Tenant shall execute any and all documents required by Landlord or the Holder to make this Lease subordinate to any lien of the Encumbrance, including without limitation a Subordination, Non-Disturbance and Attornment Agreement substantially in the form attached hereto as Exhibit D. If Tenant fails to do so, it shall be deemed that this Lease is subordinated to such Encumbrance.

Notwithstanding anything to the contrary set forth in this Paragraph 27, Tenant hereby attorns and agrees to attorn to any entity purchasing or otherwise acquiring the Premises at any sale or other proceeding or pursuant to the exercise of any other rights, powers or remedies under such Encumbrance provided that the purchaser recognizes Tenant’s rights under this Lease as long as Tenant shall pay the Rent and observe and perform all the provisions of this Lease to be observed and performed by Tenant.

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28. Notices.

Any notice or demand required or desired to be given under this Lease shall be in writing and shall be personally served or in lieu of personal service may be given by certified mail, facsimile, or overnight courier service. All notices or demands under this Lease shall be deemed given, received, made or communicated on the date personal delivery is effected; or, if sent by certified mail, on the delivery date or attempted delivery date shown on the return receipt; or, if sent by facsimile, on the date sent by the sender; or, if sent by overnight courier service, on the delivery date or attempted delivery date shown on such service’s records. At the date of execution of this Lease, the addresses of Landlord and Tenant are as set forth in Paragraph 1. After the Commencement Date, the address of Tenant shall be the address of the Premises. Either party may change its address by giving notice of same in accordance with this Paragraph 28.

29. Attorneys’ Fees.

If either party brings any action or legal proceeding for damages for an alleged breach of any provision of this Lease, to recover Rent, or other sums due, to terminate the tenancy of the Premises or to enforce, protect or establish any term, condition or covenant of this Lease or right of either party, the prevailing party shall be entitled to recover as a part of such action or proceedings, or in a separate action brought for that purpose, reasonable attorneys’ fees and costs, including without limitation any and all costs and expenses arising from (i) collection efforts, (ii) any appellate proceedings, and (iii) any bankruptcy, insolvency or arbitration proceedings.

30. Estoppel Certificates.

Tenant shall within fifteen (15) days following written request by Landlord:

(i) Execute and deliver to Landlord any documents, including estoppel certificates, in the form prepared by Landlord (a) certifying that this Lease is unmodified and in full force and effect or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect and the date to which the Rent and other charges are paid in advance, if any, and (b) acknowledging that there are not, to Tenant’s knowledge, any uncured defaults on the part of Landlord, or, if there are uncured defaults on the part of the Landlord, stating the nature of such uncured defaults, (c) evidencing the status of the Lease as may be required either by a lender making a loan to Landlord to be secured by deed of trust or mortgage covering the Premises or a purchaser of the Premises from Landlord, and (d) stating such other matters as may be reasonably requested by Landlord. Tenant’s failure to deliver an estoppel certificate within fifteen (15) days after delivery of Landlord’s written request therefor shall be conclusive upon Tenant (a) that this Lease is in full force and effect, without modification except as may be represented by Landlord, (b) that there are now no uncured defaults in Landlord’s performance, and (c) that no Rent has been paid in advance.

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If Tenant fails to so deliver a requested estoppel certificate within the prescribed time it shall be conclusively presumed that this Lease is unmodified and in full force and effect except as represented by Landlord.

(ii) Not more often than one (1) time in each consecutive twelve (12) month period, deliver to Landlord the current financial statements of Tenant, and financial statements of the two (2) years prior to the current financial statement’s year, with an opinion of a certified public accountant, including a balance sheet and profit and loss statement for the most recent prior year, all prepared in accordance with generally accepted accounting principles consistently applied.

31. Transfer of the Premises by Landlord.

In the event of any conveyance of the Premises and assignment by Landlord of this Lease, Landlord shall be and is hereby entirely released from all liability under any and all of its covenants and obligations contained in or derived from this Lease arising from events occurring after the date of such conveyance and assignment, and Tenant agrees to attorn to such transferee provided such transferee assumes in writing Landlord’s obligations under this Lease.

32. Landlord’s Right to Perform Tenant’s Covenants.

If Tenant shall at any time fail to make any payment or perform any other act on its part to be made or performed under this Lease, and such failure shall continue after the expiration of any applicable notice and grace or cure periods provided in this Lease, Landlord may, but shall not be obligated to (and without waiving or releasing Tenant from any obligation of Tenant under this Lease), make such payment or perform such other act to the extent Landlord may deem desirable, and in connection therewith, pay expenses and employ counsel. All reasonable sums so paid by Landlord and all penalties, interest, expenses and costs in connection therewith shall be due and payable by Tenant on the next day after any such payment by Landlord, together with interest thereon at the Interest Rate from such date to the date of payment by Tenant to Landlord, plus collection costs and attorneys’ fees. Landlord shall have the same rights and remedies for the nonpayment thereof as in the case of default in the payment of Rent.

33. Tenant’s Remedy.

If, as a consequence of a default by Landlord under this Lease, Tenant recovers a money judgment against Landlord, such judgment shall be satisfied only against the right, title and interest of Landlord in the Building, and neither Landlord nor Landlord’s Agents shall be liable for any deficiency.

34. Mortgagee Protection.

If Landlord defaults under this Lease, Tenant shall give written notice of such default to any beneficiary of a deed of trust or mortgagee of a mortgage covering the Premises, so long as Tenant has received written notice of the existence of such beneficiary or mortgagee, and offer such beneficiary or mortgagee a reasonable opportunity to cure the default, including time to obtain possession of the Premises by power of sale or a judicial foreclosure, if such should prove necessary to effect a cure.

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35. Brokers.

Landlord and Tenant acknowledge and agree that Tenant has utilized the services of Cornish & Carey Commercial and Landlord has utilized the services of BT Commercial with respect to the transactions between Landlord and Tenant that are represented by this Lease. Landlord shall pay commissions to such brokers pursuant to a separate agreement. Tenant warrants and represents that it has had no dealings with any other real estate broker or agent in connection with the negotiation of this Lease, 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 Lease.

36. Acceptance.

This Lease shall only become effective and binding upon full execution hereof by Landlord and delivery of a signed copy to Tenant. If Landlord approves the Lease, it shall sign and return the Lease to Tenant within three (3) business days after Tenant signs and delivers the Lease to Landlord. Neither party shall record this Lease nor a short form memorandum thereof.

37. Parking.

Tenant shall have the non-exclusive right, in common with any other tenants or occupants of the Project, to use three and two-tenths (3.2) unassigned parking spaces per each one thousand (1,000) square feet of Rentable Area in the Premises, upon terms and conditions as may from time to time be reasonably established by Landlord. Should parking charges or surcharges of any kind be imposed on the parking facilities by a governmental agency, Tenant shall reimburse Landlord for such charges and/or surcharges or, if possible, shall pay such charges and/or surcharges directly to the governmental agency and, in such event, Tenant shall provide Landlord with proof that such charges and/or surcharges have been paid by Tenant. Otherwise, Tenant shall not be charged for parking.

38. General.

A. Captions. The captions and headings used in this Lease are for the purpose of convenience only and shall not be construed to limit or extend the meaning of any part of this Lease.

B. Executed Copy. Any fully executed copy of this Lease shall be deemed an original for all purposes.

C. Time. Time is of the essence for the performance of each term, condition and covenant of this Lease.

D. Severability. If one or more of the provisions contained herein, except for the payment of Rent, is for any reason held invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Lease, but this Lease shall be construed as if such invalid, illegal or unenforceable provision had not been contained herein.

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E. Choice of Law. This Lease shall be construed and enforced in accordance with the laws of the State of California. The language in all parts of this Lease shall in all cases be construed as a whole according to its fair meaning and not strictly for or against either Landlord or Tenant.

F. Gender; Singular, Plural. When the context of this Lease requires, the neuter gender includes the masculine, the feminine, a partnership or corporation or joint venture, and the singular includes the plural.

G. Binding Effect. The covenants and agreement contained in this Lease shall be binding on the parties hereto and on their respective successors and assigns to the extent this Lease is assignable.

H. Waiver. The waiver by Landlord or Tenant of any breach of any term, condition or covenant, of this Lease shall not be deemed to be a waiver of such provision or any subsequent breach of the same or any other term, condition or covenant of this Lease. The subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach at the time of acceptance of such payment. No covenant, term or condition of this Lease shall be deemed to have been waived by Landlord or Tenant unless such waiver is in writing signed by the other party.

I. Entire Agreement. This Lease is the entire agreement between the parties, and there are no agreements or representations between the parties except as expressed herein. Except as otherwise provided herein, no subsequent change or addition to this Lease shall be binding unless in writing and signed by the parties hereto.

J. Authority. If Tenant is a corporation or a partnership, each individual executing this Lease on behalf of said corporation or partnership, as the case may be, represents and warrants that he is duly authorized to execute and deliver this Lease on behalf of said entity in accordance with its corporate bylaws, statement of partnership or certificate of limited partnership, as the case may be, and that this Lease is binding upon said entity in accordance with its terms. Landlord, at its option, may require a copy of such written authorization to enter into this Lease.

K. Exhibits. All exhibits, amendments, riders and addenda attached hereto are hereby incorporated herein and made a part hereof.

L. Lease Summary. The Lease Summary attached to this Lease is intended to provide general information only. In the event of any inconsistency between the Lease Summary and the specific provisions of this Lease, the specific provisions of this Lease shall prevail.

M. Force Majeure. Except for Tenant’s obligations to pay Rent, Landlord and Tenant shall incur no liability to each other with respect to, and shall not be responsible for any failure to perform, any of their respective obligations hereunder if such failure is caused by any reason beyond the control of the non-performing party including, but not limited to, strike, labor trouble, governmental rule, regulations, ordinance, statute or interpretation, or by fire, earthquake, civil commotion, or failure or disruption of utility services (individually, a “Force

51

Majeure Event”). The amount of time for the non-performing party to perform any of its obligations shall be extended by the amount of time the non-performing party is delayed in performing such obligation by reason of any Force Majeure Event.

N. Consent. Unless otherwise provided in this Lease, whenever Landlord’s approval, consent or satisfaction (collectively, an “approval”) is required pursuant to this Lease or an Exhibit hereto, such approval may be withheld in Landlord’s sole and absolute discretion.

39. Opening to Existing Slide. At any time during the term on the Lease, upon prior written notice to Tenant, Landlord shall have the right, at its sole cost and expense, to close the opening located on the second floor of the Premises from which a slide to the first floor is currently located. The finishing on the exterior of such closure visible from the interior of the Premises shall be compatible with the existing finishing adjacent to such closure. Tenant acknowledges that the installation of such closure may temporarily create noise and dust in the Premises. Tenant agrees that such installation shall not constitute a constructive eviction.

[SIGNATURES FOLLOW ON NEXT PAGE]

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THIS LEASE is effective as of December 15, 2003.

	LANDLORD:
Dated: December 12, 2003	MPTP HOLDING, LLC, a Delaware limited liability company
	By:	MIDPOINT HOLDING, LLC, a Delaware limited liability company Its: Member
		By:	CREDIT LYONNAIS NEW YORK BRANCH Its: Member
			By:	/s/ Bruce Evans
				Bruce Evans Its: First Vice President
	TENANT:
Dated: December 12, 2003	CLARIA CORPORATION, a Delaware corporation
	By:	/s/ Jeff McFadden
	Its:	CEO/President
	By:	/s/ Dennis Jang
	Its:	SR. Director of Finance

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EXHIBIT A

FLOOR PLAN

Exhibit A is an image of a floor plan.

Exhibit A-1

EXHIBIT B

SITE PLAN OF PROJECT

Exhibit B is an image of a site plan.

Exhibit B-1

EXHIBIT C

WORK LETTER

This Work Letter is attached to and forms a part of the Lease dated as of December 15, 2003 (the “Lease”), by and between MPTP HOLDING, LLC, a Delaware limited liability company (“Landlord”), and CLARIA CORPORATION, a Delaware corporation, pertaining to certain premises located in the building, commonly known as 555 Broadway, in the City of Redwood City, County of San Mateo, State of California. Except where clearly inconsistent or inapplicable, the provisions of the Lease are incorporated into this Work Letter, and capitalized terms used without being defined in this Work Letter shall have the meanings given them in the Lease.

The purpose of this Work Letter is to set forth the respective responsibilities of Landlord and Tenant with respect to the design and construction of all alterations, additions and improvements which Tenant may deem necessary or appropriate to prepare the Premises for occupancy by Tenant under the Lease. Such alterations, additions and improvements to the Premises are referred to in this Work Letter as the “Tenant Improvements,” and the work of constructing the Tenant Improvements is referred to as the “Tenant Improvement Work.”

Landlord and Tenant agree as follows:

1. General.

1.1 Tenant is solely responsible for designing the Tenant Improvements and performing the Tenant Improvement Work (subject to Landlord’s rights of review and approval set forth in this Work Letter).

1.2 Landlord’s sole interest in reviewing and approving the Construction Drawings (as hereinafter defined) is to protect the Project and Landlord’s interests, and no such review or approval by Landlord shall be deemed to create any liability of any kind on the part of Landlord, or constitute a representation on the part of Landlord or any person consulted by Landlord in connection with such review and approval that the Space Plans or Final Working Drawings are corrector accurate, or are in compliance with any applicable laws.

1.3 Landlord shall contribute (subject to the terms and conditions set forth in this Work Letter) the amount specified in Section 5.1 below as the “Allowances,” towards the costs of performing the Tenant Improvement Work.

1.4 Tenant shall be responsible for all costs of designing the Tenant Improvements and performing the Tenant Improvement Work to the extent such costs exceed the Construction Allowance.

1.5 On reasonable prior notice, Landlord will permit Tenant and Tenant’s Agents (as defined below) to enter the Premises from time to time prior to the Commencement Date as may be reasonably necessary or appropriate. Tenant shall indemnify, protect, defend and

Exhibit C-1

hold Landlord and Landlord’s Agents harmless from and against any and all claims suffered or incurred by Landlord and Landlord’s Agent arising from such entry.

2. Base Building Improvements. Prior to the Commencement Date, Landlord shall construct, at Landlord’s sole cost and expense, the Base Building Improvements listed in Schedule 1 hereto. Upon Landlord’s reasonable determination that the Base Building Improvements have been substantially completed to the extent reasonably necessary for the commencement of the construction of the Tenant Improvements, and provided that the completion of the remainder of the Base Building Improvements shall not unreasonably delay or unreasonably interfere with the construction of the Tenant Improvements, Landlord shall deliver the Premises to Tenant.

3. Design and Approval of the Tenant Improvements.

3.1 Selection of Tenant’s Architect; Construction Drawings.

(a) Tenant shall retain an architect/space planner (“Tenant’s Architect”) to prepare the Construction Drawings. Tenant’s Architect shall be subject to the written approval of Landlord, which approval will not be unreasonably withheld or delayed. Tenant shall retain engineering consultants designated by Landlord (the “Engineers”) to prepare all plans and engineering working drawings relating to the structural, mechanical, electrical, plumbing, HVAC, life-safety and sprinkler work, if any, in the Premises in connection with the Tenant Improvements. The plans and drawings to be prepared by Tenant’s Architect and the Engineers hereunder shall be known, collectively, as the “Construction Drawings”.

(b) All Construction Drawings shall be subject to Landlord’s approval, which approval shall not be unreasonably withheld or delayed.

3.2 Space Plans. Prior to drafting any Construction Drawings, Tenant shall furnish Landlord with Tenant’s final space plans for the Premises (“Space Plans”). The Space Plans shall show locations of all proposed improvements, including partitions, cabinetry, equipment and fixtures, shall identify materials and finishes by location, and shall specify the location of any proposed structural floor penetrations, the location and extent of floor loading, any special HVAC requirements, the location and description of any special plumbing requirements, and any special electrical requirements. In addition, the Space Plans shall show telephone and telecommunications facilities, and computer and electronic data facilities. Landlord shall approve or disapprove the Space Plans by written notice given to Tenant within ten (10) business days after receipt of the Space Plans. Landlord shall not unreasonably withhold its approval of the Space Plans, provided that, without limiting the generality of the foregoing, Landlord shall be entitled to withhold its consent to the Space Plans if, in Landlord’s good faith judgment, any one or more of the following situations exist: (a) the proposed Tenant Improvements will adversely affect the exterior appearance of the Project; or (b) the proposed Tenant Improvements may impair the structural strength of the Project, adversely affect the roof or any of the Building Systems or materially adversely affect the value of the Project; (c) the proposed Tenant Improvement Work would trigger the necessity under applicable laws or otherwise for work to be performed outside the Premises; or (d) the specifications for the proposed Tenant Improvements are not consistent with, or would detract from, the character or

Exhibit C-2

image of the Project. If Tenant’s proposed interior partitioning or other aspects of the Tenant Improvement Work will, in Landlord’s good faith judgment, require changes or alterations in the HVAC, electrical, plumbing, telecommunications, security, life safety or other building systems outside of the Premises, and Landlord approves such changes or alterations, such changes or alterations shall be made at Tenant’s expense. If Landlord disapproves the Space Plans, Landlord shall return the Space Plans to Tenant with a statement of Landlord’s reasons for disapproval, or specifying any required corrections and/or revisions. Landlord shall approve or disapprove of any revisions to the Space Plans by written notice given to Tenant within five (5) business days after receipt of such revisions. This procedure shall be repeated until Landlord approves the Space Plans.

3.3 Final Working Drawings. Following Landlord’s approval of the Space Plans, Tenant shall cause Tenant’s Architect and the Engineers to prepare and submit for Landlord’s approval complete and detailed construction plans and specifications, including a fully coordinated set of architectural, structural, mechanical, fire protection, electrical and plumbing working drawings for the Tenant Improvement Work, in a form which is sufficiently complete to permit subcontractors to bid on the work, obtain all required Permits (as hereinafter defined) and commence construction (the “Final Working Drawings”). Tenant shall furnish Landlord with four (4) copies signed by Tenant of such Final Working Drawings. Landlord shall approve or disapprove of the Final Working Drawings by giving written notice to Tenant within ten (10) business days after receipt thereof. Landlord shall not unreasonably withhold or delay its approval of the Final Working Drawings, provided that, without limiting the generality of the foregoing, Landlord shall be entitled to withhold its consent to the Final Working Drawings for any of the reasons specified in Section 3.2 above, or if in Landlord’s good faith judgment, the Final Working Drawings are inconsistent with, or do not conform to, the Space Plans. If Landlord disapproves the Final Working Drawings, Landlord shall return the Final Working Drawings to Tenant with a statement of Landlord’s reasons for disapproval and/or specifying any required corrections or revisions. Landlord shall approve or disapprove of any such revisions to the Final Working Drawings within five (5) business days after receipt of such revisions. This procedure shall be repeated until Landlord approves the Final Working Drawings (as so approved, the “Approved Working Drawings”).

4. Construction of Tenant Improvements.

4.1 Contracts with Tenant’s Contractor and Subcontractors.

(a) Tenant shall retain Devcon Construction Incorporated as the general contractor for the construction of the Tenant Improvements (“Tenant’s Contractor”). All subcontractors, laborers, materialmen and suppliers used by Tenant must be approved in writing by Landlord, which approval shall not be unreasonably withheld. Such subcontractors, laborers, materialmen and suppliers, together with Tenant’s Contractor, are collectively referred to herein as “Tenant’s Agents”.

(b) Tenant shall furnish Landlord with true and correct copies of all construction contracts between or among Tenant, Tenant’s Contractor and all subcontractors relating to the Tenant Improvement Work, provided that Landlord’s review of such contracts shall not relieve Tenant from its obligations under this Work Letter nor shall such review be

Exhibit C-3

deemed to constitute Landlord’s representation that such contracts comply with the requirements of this Work Letter. All such contracts shall expressly provide that (i) the work to be performed thereunder shall be subject to the terms and conditions of this Work Letter, and (ii) the Tenant Improvement Work (or in the case of a subcontractor, the portion thereof performed by such subcontractor) shall be warranted in writing to Tenant and Landlord to be free from any defects in workmanship and materials for a period of not less than one (1) year from the date of completion of the Tenant Improvement Work. Tenant agrees to give to Landlord any assignment or other assurances which may be necessary to permit Landlord to directly enforce such warranties (such warranties shall include, without additional charge, the repair of any portion of the Project or Common Area which may be damaged as a result of the removal or replacement of the defective Tenant Improvements). Tenant shall cause Tenant’s Agents to engage only labor that is harmonious and compatible with other labor working in the Project. In the event of any labor disturbance caused by persons employed by Tenant or Tenant’s Contractor, Tenant shall immediately take all actions necessary to eliminate such disturbance. If at any time any of Tenant’s Agents interferes with any other occupant of the Project, or hinders or delays any other work of improvement in the Project, or performs any work which may or does impair the quality, integrity or performance of any portion of the Project, including any building systems, Tenant shall cause such subcontractor, laborer, materialman or supplier to leave the Project and remove all tools, equipment and materials immediately upon written notice delivered to Tenant, and, without limiting Tenant’s indemnity obligations set forth in Article 12 of the Lease, Tenant shall reimburse Landlord for all costs, expenses, losses or damages incurred or suffered by Landlord resulting from the acts or omissions of Tenant’s Agents in or about the Project.

4.2 Permits. Following approval of the Final Working Drawings, Tenant shall obtain all building permits and other permits, authorizations and approvals which may be required in connection with, or to satisfy all laws applicable to, the construction of the Tenant Improvements in accordance with the Approved Working Drawings (the “Permits”). Tenant shall provide Landlord with copies of any documents or applications filed by Tenant to obtain Permits concurrently with any such filing, but in no event shall Tenant file any such documents or applications until the Final Working Drawings have been approved. Tenant agrees that neither Landlord nor Landlord’s consultants shall be responsible for obtaining any Permits or the certificate of occupancy for the Premises, and that obtaining the same shall be Tenant’s responsibility; provided, however, that Landlord will cooperate with Tenant in executing permit applications and performing other ministerial acts reasonably necessary to enable Tenant to obtain any such Permit or certificate of occupancy. Any amendments or revisions to the Approved Working Drawings that may be necessary to obtain any such Permits, or which may be required by city officials or inspectors to comply with code rulings or interpretations, shall be prepared by Tenant’s Architect, at Tenant’s expense (provided that to the extent funds are available, such expense may be reimbursed from the Construction Allowance), and submitted to Landlord for Landlord’s review and approval as a Change Order under Section 6 below. If Landlord disapproves of such amendments or revisions, Landlord shall return the same to Tenant with a statement of Landlord’s reasons for disapproval, or specifying any required corrections. This procedure shall be repeated until Landlord approves the amendments or revisions and all Permits have been obtained for the Approved Working Drawings, as so amended.

4.3 Commencement of Work. At least ten (10) days prior to the commencement of construction of the Tenant Improvements, or the delivery of any construction

Exhibit C-4

materials for the Tenant Improvement Work to the Premises, whichever is earlier, Tenant shall submit to Landlord a notice specifying the date Tenant will commence construction of the Tenant Improvements, the estimated date of completion of the Tenant Improvements and the construction schedule provided by Tenant’s Contractor. In addition, prior to the commencement of construction of the Tenant Improvements, or the delivery of any construction materials for the Tenant Improvement Work to the Premises, whichever is earlier, Tenant shall submit to Landlord the following: (a) all Permits required to commence construction of the Tenant Improvements; (b) a copy of the executed construction contract with Tenant’s Contractor, in the form previously approved by Landlord, together with a detailed breakdown, by trade, of the final costs to be incurred, or which have theretofore been incurred, in connection with the design and construction of the Tenant Improvements, which costs of construction form a basis for the amount of the construction contract; and (c) true and correct copies of all policies of insurance, or original certificates thereof executed by an authorized agent of the insurer or insurers, together with any endorsements referred to in Section 4.5 below, confirming to Landlord’s reasonable satisfaction compliance with the insurance requirements of this Work Letter.

4.4 Performance of Work. All work performed by Tenant’s Contractor shall strictly conform to the Approved Working Drawings, shall comply with all applicable laws (including building codes) and all applicable standards of the American Insurance Association and the National Electrical Code and all building material manufacturer’s specifications, shall comply with all rules and regulations from time to time adopted by Landlord to govern construction in or about the Project and shall be performed in a good and professional manner and so as not to interfere with the occupancy of any other tenant of the Project, the performance of any other work within the Project, or with Landlord’s maintenance or operation of the Project. At all times during construction of the Tenant Improvements, Landlord and Landlord’s employees and agents shall have the right to enter the Premises to inspect the Tenant Improvement Work, and to require the correction of any faulty work or any material deviation from the Approved Working Drawings. Tenant shall not close-up any Tenant Improvement Work affecting the life safety, telecommunications, HVAC, plumbing, electrical or other building systems in the Premises until the same have been inspected and approved by Landlord’s agents. No inspection or approval by Landlord of any such work shall constitute an endorsement thereof or any representation as to the adequacy thereof for any purpose or the conformance thereof with any applicable laws, and Tenant shall be fully responsible and liable therefor. Tenant shall reimburse Landlord for the cost of any repairs, corrections or restoration which must be made, in Landlord’s good faith judgment, to the Premises or any other portion of the Project, if caused by Tenant’s Contractor or any other of Tenant’s Agents.

4.5 Insurance. At all times during the construction of the Tenant Improvements (and in the case of Products and Completed Operations Coverage, for 5 years following completion of the Tenant Improvement Work), in addition to the insurance required to be maintained by Tenant under the Lease, Tenant shall require all of Tenant’s Agents to maintain (a) Commercial General Liability Insurance with limits of not less than $2,000,000 combined single limit for bodily injury and property damage, including personal injury and death, and Contractor’s Protective Liability, and Products and Completed Operations Coverage in an amount not less than $500,000 per incident, $1,000,000 in the aggregate; (b) Comprehensive automobile liability insurance with a policy limit of not less than $1,000,000 each accident for bodily injury and property damage, providing coverage at least as broad as the Insurance

Exhibit C-5

Services Office (ISO) Business Auto Coverage form covering Automobile Liability, code 1 “any auto”, and insuring against all loss in connection with the ownership, maintenance and operation of automotive equipment that is owned, hired or non-owned; (c) Worker’s Compensation with statutory limits and Employer’s Liability Insurance with limits of not less than $100,000 per accident, $500,000 aggregate disease coverage and $100,000 disease coverage per employee. In addition, Tenant shall carry “Builder’s All Risk” insurance in an amount approved by Landlord covering the construction of the Tenant Improvements, including such extended coverage endorsements as may be reasonably required by Landlord. Tenant’s liability insurance shall be written on an “occurrence” basis and shall name Landlord, any Encumbrancer and Landlord’s designated agents as additional insureds (by endorsement reasonably acceptable to Landlord). The “Builder’s All Risk” insurance shall name Landlord and such other parties as Landlord may specify as the loss payee(s) with respect to all proceeds received therefrom. All of the insurance required to be carried by Tenant hereunder shall provide that it is primary insurance, and not excess over or contributory with any other valid, existing, and applicable insurance in force for or on behalf of Landlord, shall provide that Landlord shall receive thirty (30) days’ written notice from the insurer prior to any cancellation or change of coverage, and shall be placed with companies which are rated A:X or better by Best’s Insurance Guide and licensed to business in the State of California. All deductibles and self-insured retentions under Tenant’s policies are subject to Landlord’s reasonable approval, and all insurance, except Workers’ Compensation, maintained by Tenant’s Agents shall preclude subrogation claims by the insurer against anyone insured thereunder. Tenant’s compliance with the provisions of this Section shall in no way limit Tenant’s liability under any of the other provisions of the Lease.

4.6 Liens. Tenant shall keep the Premises and the Project free from any liens arising out of work performed, materials furnished or obligations incurred by Tenant. Should Tenant fail to remove any such lien within five (5) days after notice to do so from Landlord, Landlord may, in addition to any other remedies, record a bond pursuant to California Civil Code Section 3143 and all costs and obligations incurred by Landlord in so doing shall immediately become due and payable by Tenant to Landlord as Additional Rent under the Lease. Landlord shall have the right to post and keep posted on the Premises any notices that may be required or permitted by applicable laws, or which Landlord may deem to be proper, for the protection of Landlord and the Project from such liens. Promptly following completion of construction, Tenant shall provide Landlord a copy of a final unconditional lien release from Tenant’s Contractor and each of Tenant’s Agents who performed work or supplied materials for the Tenant Improvements. Upon completion of construction, Tenant shall promptly record a notice of completion in accordance with California Civil Code Section 3093 and provide a copy thereof to Landlord.

5. Responsibility for Design and Construction Costs.

5.1 Construction Allowance. Landlord will contribute to the costs of performing the Tenant Improvement Work, as depicted on the Approved Working Drawings, to the extent of the lesser of (a) Three Hundred Eighty Eight Thousand Three Hundred Sixty Two and 00/100 Dollars ($388,362.00) (calculated at the rate of $6.00 per square foot of Rentable Area in the Premises) or (b) the actual cost for such work (the “Construction Allowance”). Tenant shall pay all costs in excess of the Construction Allowance for the design and construction of the Tenant Improvements. Except as otherwise specified in this Work Letter, the

Exhibit C-6

Construction Allowance may be applied only to the payment or reimbursement of documented costs of planning and permitting and of labor and materials incorporated into the Tenant Improvements (excluding all costs of data and telephone cabling, and all costs of furnishings, fixtures, equipment, signage and other personal property, including switches, servers, routers and similar data and telecommunications equipment). In addition to the Construction Allowance, Landlord will contribute to the costs of performing certain improvements within the Premises listed on Schedule 2 in the amount for each such improvement not to exceed the itemized amount identified for such improvement on Schedule 2 (the “Fixturing Allowance”). The portion of the Fixturing Allowance in each line item of Schedule 2 may be applied only to the payment or reimbursement of documented costs of labor and materials for the improvements in such line item.

5.2 Disbursement of Allowances. Provided that (a) this Lease is then in full force and effect, (b) Tenant is not then in default of any of its obligations under this Lease, including, without limitation, Tenant’s obligations under this Work Letter to perform Tenant Improvement Work in accordance with the Approved Working Drawings and all applicable laws, and (c) Tenant has commenced business operations in the Premises, Landlord shall pay the Allowances to Tenant within thirty (30) days after satisfactory completion of the Tenant Improvement Work and submission by Tenant of (i) “as-built” drawings in CAD format showing the Tenant Improvements (updated by Tenant’s Architect as necessary to reflect all changes made to the Approved Working Drawings during the course of construction), (ii) a written statement from Tenant’s Architect that the work described on any such invoices has been completed in accordance with the Approved Working Drawings, (iii) properly executed mechanics’ lien releases in compliance with both California Civil Code Section 3262(d)(2) and either Section 3262(d)(3) or Section 3262(d)(4) from all of Tenant’s Agents; and (iv) copies of all Permits, licenses, certificates and other governmental authorizations and approvals necessary in connection with, and indicating final approval of, the Tenant Improvement Work, and which may be necessary for the operation of Tenant’s business within the Premises, Tenant shall submit the documents described in clauses (i) through (iv) above to Landlord within thirty (30) days following the date Tenant commences business operations in the Premises.

6. Change Orders. Landlord will not unreasonably withhold its approval of (a) any request by Tenant, or by Tenant’s Contractor with Tenant’s approval, to amend or change the Approved Working Drawings, or (b) any change or amendment to the Approved Working Drawings that may be necessary to obtain any Permits, or which may be required by city officials or inspectors to comply with code rulings or interpretations (any of the foregoing, a “Change Order”), provided such Change Order does not diminish the quality of construction of the Tenant Improvements. Without limiting the generality of the foregoing, however, Tenant acknowledges that it shall not be unreasonable for Landlord to withhold consent to any Change Order if any of the circumstances listed in clauses 3.2(a) through 3.2(d) of this Work Letter apply. No material changes or modifications to the Approved Working Drawings shall be made unless by written Change Order signed by Landlord and Tenant. Tenant shall pay all costs attributable to Change Orders, including costs incurred by Landlord in reviewing proposed Change Orders (provided that to the extent funds are available, such costs may be paid or reimbursed from the Construction Allowance).

Exhibit C-7

7. Ownership of Tenant Improvements. The Tenant Improvements shall be deemed, effective upon installation, to be a part of the Premises and shall be deemed to be the property of Landlord (subject to Tenant’s right to use the same during the Term of the Lease), and shall be surrendered at the expiration or earlier termination of the Term, unless Landlord shall have conditioned its approval of the Final Working Drawings or any Change Order on Tenant’s agreement to remove any items thereof, in which event, prior to the expiration or termination of the Term, the specified items shall be removed at Tenant’s expense, any damage caused by such removal shall be repaired, and the Premises shall be restored to their condition existing prior to the installation of the items in question, normal wear and tear excepted. The removal, repair and restoration described above shall, at Landlord’s sole election, be performed either by Tenant or by Landlord; and if such work shall be performed by Landlord, Tenant shall pay to Landlord, within twenty (20) days following Landlord’s demand, the reasonable cost and expense of such work. Tenant shall not take a position with the United States Internal Revenue Service that is inconsistent with Landlord’s depreciation of the Tenant Improvements.

Exhibit C-8

SCHEDULE 1

BASE BUILDING IMPROVEMENTS

The Premises shall be delivered in their existing condition, except that Landlord shall perform the following work:

(a) Relocate the existing telecommunication circuits that currently serve certain premises in the Project commonly known as 475 Broadway (the “475 Broadway Premises”) from the minimum point of entry (“MPOE”) in the data center in the Building to the MPOE located in the electrical closet within the 475 Broadway Premises.

(b) Inspect and perform maintenance, if necessary, to the HVAC systems servicing the Premises, including the split-system HVAC system that currently serves the data center, so that such systems are operational as of the Commencement Date.

(c) Inspect and perform maintenance, if necessary, to the power distribution unit (“PDU”) and the uninterruptable power supply (“UPS”) equipment servicing the data center located within the Building, so that the PDU and UPS equipment are operational as of the Commencement Date.

(d) Inspect and perform maintenance, if necessary, to the VESPA component and the FM 200 component of the fire suppression system so that such components are operational as of the Commencement Date.

(e) Perform maintenance to the pedestal system supporting the floor tiles within the data center to level the floor; provided, however, that Landlord shall not be obligated to incur costs in excess of Three Thousand Dollars ($3,000) in performing such work as of the Commencement Date.

(f) Inspect and perform maintenance, if necessary, to the generator servicing the data center, so that such generator is operational as of the Commencement Date.

Exhibit C-9

SCHEDULE 2

TENANT FIXTURING

Improvement		Maximum Landlord Allowance
(a)	Painting of the interior of the walls.	$	40,000.00
(b)	Removal of all existing station cabling and installation of new plenum rated data and telephone cabling (including two data and one voice per station).	$	110,000.00
(c)	Inspection and performance of maintenance and modification, if necessary, to the security systems (including card key system and alarm system) so that such systems are operational as of the Commencement Date as stand alone systems, separate from the common systems currently shared by tenants of other Buildings in the Project.	$	12,397.00
(d)	(1) Labor for construction and reconfiguration of existing cubicles and electrical servicing such cubicles pursuant to a mutually agreed upon plan.	$	62,000.00
	(2) Replacement of shortage of materials missing from existing cubicles as would be required to build a typical 8’x 8’cubicle configuration (namely, 1 corner, 2 returns, 2 pedestals, 1 overhead flipper door cabinet, 1 shelf and 1 lamp).	$	15,000.00
(e)	Cleaning of existing carpeting or installation of new carpeting and repair of concrete floors as necessary.	$	16,000.00
(f)	Replace all light bulbs throughout the Premises and replace or repair ballasts as necessary.	$	30,000.00

Exhibit C-10

EXHIBIT D

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

This SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this “Agreement”), made as of _____________________, _____, by and between CREDIT LYONNAIS NEW YORK BRANCH, a branch under the laws of the State of New York of a foreign banking corporation organized under the laws of the Republic of France having an address at The Credit Lyonnais Building, 1301 Avenue of the Americas, New York, New York 10019 (together with its successors and assigns, in such capacity, the “Agent”), as agent for the lenders which are party to the Loan Agreement described in the hereinafter defined Deed of Trust (each, together with its successors and assigns, a “Lender”, and collectively, the “Lenders”) and _____________________, a _________________, having an address at __________________________________________ (the “Tenant”);

W I T N E S S E T H:

WHEREAS, by that certain Lease Agreement (as the same may be amended, supplemented or otherwise modified from time to time, the “Lease”) dated _____________________, between ________________________, as landlord (“Landlord”), and Tenant, as tenant, the Landlord leased to Tenant a certain portion of the Landlord’s property located in ________________________, as more particularly described on Schedule A attached hereto (the “Land”), said leased portion of the Land being more particularly described in the Lease and herein referred to as the “Premises”;

WHEREAS, the Landlord has executed and delivered to the Agent on behalf of itself and other lenders certain mortgage notes in the aggregate original principal amount of $150,000,000, which notes are secured by, among other things, a deed of trust (which deed of trust, and all amendments, renewals, increases, modifications, replacements, substitutions, extensions, spreaders, restatements and consolidations of each and all advances and re-advances under each and additions thereto, is referred to herein as the “Deed of Trust”) encumbering the Land, together with the buildings and other improvements located or to be located thereon (such buildings and other improvements and the Land, collectively, the “Deeded Property”) including, without limitation, the Premises.

NOW, THEREFORE, the parties hereto, in consideration of the covenants contained herein, have agreed and hereby agree as follows:

1. The Lease, as the same may hereafter be modified, amended or extended, is and shall be subject and subordinate in each and every respect to the Deed of Trust, to all renewals, modifications, replacements and extensions thereof, to all terms, conditions and provisions thereof and to each and every advance heretofore made or hereafter made under the Deed of Trust.

2. The Agent agrees that if any action or proceeding is commenced by the Agent for the foreclosure of the Deed of Trust or the sale of the Deeded Property, the Tenant shall not be named as a party therein (unless required by law), and the sale of the Deeded Property in any

Exhibit D-1

such action or proceeding and the exercise by the Agent of any of its other rights under the Deed of Trust, or under the note secured by the Deed of Trust, shall be made subject to all rights of the Tenant under the Lease, provided that at the time of the commencement of any such action or proceeding and at the time of any such sale or exercise of any such other rights, the Tenant shall not be in default under any of the terms, covenants or conditions of the Lease or of this Agreement on the Tenant’s part to be observed or performed.

3. The Tenant shall concurrently give the Agent copies of all notices and other communications given by the Tenant to the Landlord relating to (i) defaults or alleged defaults on the part of the Landlord or the Tenant under the Lease, (ii) any violations of any ordinances, statutes, laws, rules, codes, regulations or requirements of any governmental agency, and (iii) any assignment or subletting of all or any portion of the Premises.

4. In the event of any act or omission by the Landlord which would give the Tenant the right, either immediately or after the lapse of a period of time, to terminate the Lease, to claim a partial or total eviction, or to cure Landlord’s defaults or perform Landlord’s obligations under the Lease, the Tenant will not exercise any such right (i) until it has sent written notice of such act or omission to the Agent as provided herein, and (ii) unless the Agent shall have failed within sixty (60) days after receipt of such notice to cure such default or, if such default is not reasonably susceptible of cure within such sixty (60) days, the Agent shall not have commenced the cure of such default within sixty (60) days of receipt of such notice and thereafter diligently pursued such action.

5. In the event that the interest of the Landlord is transferred by reason of, or assigned in lieu of foreclosure or other proceedings for enforcement of the Deed of Trust, then, subject to the provisions of this Agreement, the Lease shall nevertheless continue in full force and effect and, upon the written request of the Agent, the Tenant shall attorn to the Agent and shall recognize the Agent as its landlord. Although the foregoing provision shall be self-operative, in order to confirm such attornment, upon the request of the Agent, the Tenant shall execute and deliver to the Agent (i) an agreement of attornment in form and content reasonably satisfactory to the Agent, confirming the foregoing attornment and agreeing to perform all the terms, covenants and conditions of the Lease on the Tenant’s part to be performed for the benefit of such Agent with the same force and effect as if such Agent were the Landlord originally named in this Lease or (ii) a new lease with the Agent, as landlord, for the remaining term of the Lease and otherwise on the same terms and conditions and with the same options, if any, then remaining.

6. Nothing herein contained shall be construed however, to obligate the Agent or any Lender to cure any default by the Landlord under the Lease occurring prior to any date on which the Agent shall succeed to the rights of the Landlord, it being expressly agreed that under no circumstances shall the Agent or any Lender be obligated to remedy any such default.

7. If the Agent shall succeed to the interest of the Landlord, the Agent nor any Lender shall have no personal liability as successor to the Landlord, and the Tenant shall look only to the estate and property of the Agent and the Lenders in the Deeded Property or the proceeds thereof for the satisfaction of the Tenant’s remedies for the collection of a judgment (or other judicial process) requiring the payment of money in the event of any default by the Agent

Exhibit D-2

as landlord under the Lease. In addition, the Agent as holder of the Deed of Trust or as landlord under the Lease if it succeeds to that position, and each Lender, shall in no event (i) be liable to the Tenant for any act or omission of any prior landlord, (ii) be subject to any offset or defense which the Tenant might have against any prior landlord, (iii) be liable to the Tenant for any liability or obligation of any prior landlord occurring prior to the date that the Agent or any subsequent owner acquires title to the Premises, or (iv) be liable to the Tenant for any security or other deposits given to secure the performance of the Tenant’s obligations under the Lease, except to the extent that the Agent shall have acknowledged actual receipt of such security or other deposits in writing. No other property or assets of the Agent or any Lender shall be subject to levy, execution or other enforcement procedure for the satisfaction of the Tenant’s remedies under or with respect to the Lease, the relationship of the landlord and the tenant thereunder or the Tenant’s use or occupancy of the Premises.

8. All notices and other communications hereunder shall be sent by certified or registered mail (postage prepaid, return receipt requested) to the Agent at the address set forth above, Attention: Allen Nuber, with an additional copy to Kaye, Scholer, Fierman, Hays & Handler, LLP, 1999 Avenue of the Stars, Los Angeles, California 90067, Attention: Michael A. Santoro, Esq., or to the Tenant at the address set forth in the Lease, or to such other address or person as may be specified in a notice sent in accordance with the provisions of this Section 8, and shall be deemed given when received at the addresses specified above.

9. No prepayment of rent or additional rent due under the Lease of more than one month in advance shall be binding upon the Agent, as holder of the Deed of Trust or as landlord under the Lease if the Agent succeeds to that position, or any Lender, unless consented to by the Agent, and from and after the date hereof, no amendment, modification, surrender or cancellation of the Lease shall be binding upon the Agent, as holder of the Deed of Trust or as landlord under the Lease if the Agent succeeds to that position, or any Lender, unless Agent has consented in writing to such amendment, modification, surrender or cancellation.

10. This Agreement shall apply to, bind and inure to the benefit of the parties hereto and their respective successors and assigns. As used herein, the term “Tenant” shall mean and include the present tenant under the Lease, any permitted subtenant under the Lease, any permitted assignee of the Lease and any successor of any of them. The term “Agent” as used herein shall include the beneficiary of the Deed of Trust, the successors, replacements and assigns of the Agent, and any person, party or entity which shall become the owner of the Deeded Property by reason of a foreclosure of the Deed of Trust or the acceptance of a deed or assignment in lieu of foreclosure or other proceedings for enforcement of the Deed of Trust or otherwise. The term “Landlord” as used herein shall mean and include the present landlord under the Lease and such landlord’s predecessors and successors in interest under the Lease (other than the Agent).

11. This Agreement may not be modified in any manner or terminated except by an instrument in writing executed by the parties hereto.

12. This Agreement satisfies the condition, if any, to the subordination of the Lease to the Deed of Trust set forth in the Lease with respect to the execution and delivery of a non-disturbance agreement.

Exhibit D-3

13. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

14. Both the Tenant and the Agent hereby irrevocably waive all right to trial by jury in any action, proceeding or counterclaim arising out of or relating to the Lease or this Agreement.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

CREDIT LYONNAIS NEW YORK BRANCH, as Agent
By:
	Name:
	Title:
[TENANT]
By:
	Name:
	Title:

Agreed and acknowledged:

[LANDLORD/BORROWER]

Exhibit D-4

STATE OF	)
	)
COUNTY OF	)

On _____________________ before me, _____________________, a Notary Public in and for said State, personally appeared _____________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

Signature

STATE OF	)
	)
COUNTY OF	)

On _____________________ before me, _____________________, a Notary Public in and for said State, personally appeared _____________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

Signature

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STATE OF	)
	)
COUNTY OF	)

On _____________________ before me, _____________________, a Notary Public in and for said State, personally appeared _____________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

Signature

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EXHIBIT E

COMMENCEMENT MEMORANDUM

LANDLORD:	MPTP HOLDING, LLC
TENANT:	CLARIA CORPORATION
LEASE DATE:	December     , 2003
PREMISES:	555 Broadway, Redwood City, California

Pursuant to Paragraph 4.A. of the referenced Lease, the “Commencement Date” is hereby established as _____________________, 2004. Rent shall commence on _____________________, 2004 and the Lease shall terminate on December 31, 2009.

LANDLORD:
MPTP HOLDING, LLC, a Delaware limited liability company
By:	MIDPOINT HOLDING, LLC, a Delaware limited liability company Its: Member
	By:	CREDIT LYONNAIS NEW YORK BRANCH Its: Member
		By:
			Bruce Evans
			Its: First Vice President
TENANT:
CLARIA CORPORATION, a Delaware corporation
By:
Its:
By:
Its:

Exhibit E-1

EXHIBIT F

Exhibit F is an image of a floor plan.

Exhibit F-1

EX-10.05

Exhibit 10.05

eGuard, Inc.

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is dated as of, Feb. 26, 1999, by and between Jeffrey A. McFadden (“Employee”) and eGuard, Inc., a Delaware corporation (the “Company”).

1. Term of Agreement. This Agreement shall commence on the date hereof and shall continue until terminated pursuant to the terms herein.

2. Duties.

(a) Position. Employee shall be employed as the Company’s President and Chief Executive Officer, and as such, subject to subsection 2(c) below, will devote all of his normal business time and attention to the affairs of the Company and promotion of its interests. Employee shall also be referred to as a co-founder of the Company.

(b) Report. Employee will report to the Company’s Board of Directors.

(c) Obligations to the Company. Employee agrees to the best of his ability and experience that he will at all times loyally and conscientiously perform all of the duties and obligations required of and from Employee pursuant to the express and implicit terms hereof, to the reasonable satisfaction of the Company. During the term of Employee’s employment relationship with the Company, Employee further agrees that he will devote all of his business time and attention to the business of the Company, the Company will be entitled to all of the benefits and profits arising from or incident to all such work services and advice, Employee will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, without the prior written consent of the Company’s Board of Directors,, and Employee will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company. Nothing in this Agreement will prevent Employee from accepting speaking or presentation engagements in exchange for honoraria or from serving on boards of charitable organizations, or from owning no more than 1% of the outstanding equity securities of a corporation whose stock is listed on a national stock exchange or the Nasdaq National Market, Employee will comply with and be bound by the Company’s operating policies, procedures and practices from time to time, in effect during the term of Employee’s employment. Notwithstanding the above, until the date the Company consummates equity financing totaling $2,000,000 in the aggregate, including amounts raised on or prior to the date of this Agreement (the “Major Funding Date”), Employee shall be entitled to fulfill any existing obligations he may have that may detract from his obligations to the Company as set forth above.

3. At-Will Employment. The Company and Employee acknowledge that Employee’s employment is and shall continue to be at-will, as defined under applicable law, an that Employee’s employment with the Company may be terminated by either party at any time for any or no reason. If Employee’s employment terminates for any reason, Employee shall not be entitled to any payments, benefits, damages award or compensation other than as provided in

this Agreement. The rights and duties created by this Section 3: may not be modified in any way except by a written agreement executed by the: Board of Directors of the Company.

4. Compensation. For the duties and services to be performed by Employee hereunder, the Company shall pay Employee, and Employee agrees to accept, the salary, stock options, bonuses and other benefits described below in this Section 4.

(a) Salary. Until the Major Funding Date, Employee shall receive a monthly salary of $10,000, which is equivalent to $120,000 on an annualized basis. After the Major Funding Date, Employee shall receive a monthly salary of $16,666.67, which is equivalent to $200,000 on an annualized basis. Employee’s monthly salary will be payable: in two equal payments per month pursuant to the Company’s normal payroll practices. Employee’s salary shall be reviewed on at least an annual basis by the Board or the Company’s Compensation Committee, and any increase will be effective as of the date determined appropriate by the Board or its Compensation Committee, provided that any salary increase made more than one year after the most recent prior salary adjustment effective date (for which purpose the effective date of this agreement will be deemed the first salary adjustment affective date) will be effective not later than the anniversary of the preceding salary adjustment effective date.

(b) Stock Grant. In connection with the commencement of Employee’s employment, the Board of Directors shall grant to Employee the right to purchase 3,080,000 shares of the Company’s Common Stock (“Shares”) at a price per share of $0.02 per share. This purchase will be made pursuant to the Company’s form Restricted Stock Purchase Agreement pursuant to a full recourse promissory note and secured by a Pledge and Security Agreement, the forms of which are attached as Exhibit A. These shares shall vest in 48 equal monthly installments, beginning on December 15, 1998 based on Employee’s continued provision of services to the Company. Subject to the discretion of the Company’s Board of Directors, Employee may be eligible to receive additional grants of purchase rights or stock options from time to time in the future, on such terms and subject to such conditions as the Board of Directors shall determine as of the date of any such grant.

(c) Acceleration of Vesting. In addition to the acceleration of vesting provisions of Section 5, the Company’s right of repurchase with respect to the stock purchased by Employee pursuant to subsection 4(b) above (and any securities issued thereon in connection with any stock dividend, stock split or other recapitalization of the Company) shall lapse as to one-eighth (1/8th) of such stock one tune only in the event of (1) a Change of Control (as defined below), provided that Employee continues to comply with the provisions of Section 2(c) with respect to either the Company or its successor-in-interest for a period of three (3) months following the Change of Control; (ii) the closing of the Company’s initial public offering of Common Stock resulting in gross proceeds to the Company of at least $15,000,000; and (iii) a private funding, provided, that the equity financing raised at least $5,000,000 at a price per share greater than or equal to $5.00 (as appropriately adjusted for stock splits, dividends and recapitalizations subsequent to Dec 15, 1998).

For purposes of this Agreement, “Change of Control” shall mean the occurrence of any of the following events: (i) an acquisition of the Company by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization,

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merger or consolidation but excluding any merger effected exclusively for the purpose of changing the domicile of the Company), or (ii) a sale of all or substantially all of the assets of the Company (collectively, a “Merger”), so long as in either case (x) the Company’s stockholders of record immediately prior to such Merger will, immediately after such Merger, hold less than 50% of the voting power of the surviving or acquiring entity, or (y) the Company’s stockholders of record immediately prior to such Merger will, immediately after such Merger, hold less than 60% of the voting power of the surviving or acquiring entity and a majority of the members of the Board of Directors of the surviving or acquiring entity immediately after such Merger were not members of the Board of Directors of the Company immediately prior to such Merger.

(d) Bonuses. Employee shall participate in a bonus plan after the Major Funding Date providing for quarterly payments scheduled to coincide with the completion of Company quarters of up to $12,500 in accordance with a commercially reasonable plan agreed upon between Employee and the Board of Directors of the Company or the Compensation Committee thereof.

(e) Additional Benefits. Employee will be eligible to participate in the Company’s employee benefit plans of general application, including without limitation, those plans covering medical, disability and life insurance in accordance with the rules established for individual participation in any such plan and under applicable law. Employee will be eligible for vacation and sick leave in accordance with the policies in effect during the term of this Agreement and will receive such other benefits as the Company generally provides to its other employees of comparable position and experience.

(f) Reimbursement of Expenses. Employee shall be authorized to incur on behalf and for the benefit of, and shall be reimbursed by, the Company for reasonable expenses, provided that such expenses are substantiated in accordance with Company policies. In addition, Employee shall be entitled to be reimbursed for up to $1,500 incurred as legal fees and expenses in connection with the negotiation of this Agreement.

5. Termination of Employment and Severance Benefits.

(a) Termination of Employment. This Agreement may be terminated upon the occurrence of any of the following events:

(i) The Company’s determination in good faith that it is terminating Employee for Cause (as defined in Section 6 below) (“Termination for Cause”);

(ii) The Company’s determination that it is terminating Employee without Cause, which determination may be made by the Company at any time at the Company’s sole discretion, for any or no reason (“Termination Without Cause”);

(iii) The effective date of a written notice sent to the Company from Employee stating that Employee is electing to terminate his or her employment with the Company (“Voluntary Termination”);

(iv) A change in Employee’s status such that a “Constructive Termination” (as defined in Section 5(b)(vi) below) has occurred; or

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(v) Following Employee’s death or Disability (as defined in Section 7 below).

(b) Severance. Benefits. Employee shall be entitled to receive severance benefits upon termination of employment only as set forth in this Section 5(b):

(i) Voluntary Termination. If Employee’s employment terminates by Voluntary Termination, then Employee shall not be entitled to receive payment of any severance benefits. Employee will receive payment(s) for all salary and unpaid vacation accrued as of the date of Employee’s termination of employment and Employee’s benefits will be continued under the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of termination and in accordance with applicable law.

(ii) Involuntary Termination. If Employee’s employment is terminated under Section 5(a)(ii) above, then Employee will be entitled to receive payment of severance benefits equal to three (3) months of Employee’s then-current regular monthly salary, plus an additional month of such salary for each full year Employee serves at the Company, up to a cumulative maximum of twelve months. Such payments shall be made ratably over the three months following such termination, according to the Company’s standard payroll schedule. Employee will also be entitled to receive payment on the date of termination of any bonus payable under Section 4. Health insurance benefits with the same coverage provided to Employee prior to the termination (e.g. medical, dental, optical, mental health) and in all other respects significantly comparable to those in place immediately prior to the termination will be provided at the Company’s cost over the Severance Period. In addition, the Company’s right of repurchase with respect to the stock purchased by Employee pursuant to subsection 4(b) above, and any additional Company securities sold, gifted, or otherwise issued or transferred to Employee subject to any Company rights of repurchase, including securities issued thereon in connection with any stock dividend, stock split or other recapitalization of the Company, and any vesting restrictions on stock options or warrants held by Employee and exercisable for Company stock (collectively, the “Employee’s Securities”), shall lapse as to one-fourth (l/4th) of the total amount of all such Employee’s Securities (or such lesser fraction of such Employee’s Securities as shall then be subject to vesting or repurchase restrictions).

(iii) Constructive Termination. If, following a Change of Control, Employee’s employment with the Company or its successor-in-interest is terminated pursuant to a Constructive Termination, then Employee will be entitled to receive the severance benefits set forth in Section 5(b)(ii) above, and the Company’s right of repurchase and vesting restrictions with, respect to the Employee’s Securities shall lapse in their entirety; provided, that if the Constructive Termination is pursuant to the relocation referenced in 5(a)(vi)(3), and such relocation is to a facility or location within 35 miles of Hillsborough, California, but outside San Mateo County then the right of repurchase and the vesting restrictions shall only lapse as to one-eighth (1/8th) of the total amount of all Employee’s Securities (or such lesser fraction of such Employee’s Securities as shall then be subject to vesting or repurchase restrictions).

(iv) Termination for Cause. If Employee’s employment is terminated for Cause, then Employee shall not be entitled to receive payment of any severance benefits. Employee will receive payment(s) for all salary and unpaid vacation accrued as of the date of

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Employee’s termination of employment and Employee’s benefits will be continued under the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of termination and in accordance with applicable law.

(v) Termination by Reason of Death or Disability. In the event that Employee’s employment with the Company terminates as a result of Employee’s death or Disability (as defined in Section 7 below), Employee or Employee’s estate or representative shall receive all salary and unpaid vacation accrued as of the date of Employee’s death or Disability and any other benefits payable under the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of den or Disability and in accordance with applicable law. In addition, Employee’s estate or representative will receive the amount of Employee’s target bonus for the fiscal year in which the death or Disability occurs to the extent that the bonus has been earned as of the date of Employee’s death or Disability, as determined by the Board of Directors or its Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year.

(vi) Constructive Termination. “Constructive Termination” shall be deemed to occur if (A)(1) there is a material adverse change in Employee’s position causing such position to be of materially reduced stature or responsibility, (2) a reduction of Employee’s base compensation, or (3) the Company requires Employee to relocate to a facility or location outside San Mateo County and more than 35 miles from Hillsborough; and (B) within the 60-day period immediately following such material change or reduction Employee elects to terminate his or her employment voluntarily.

6. Definition of Cause. For purposes of this Agreement, “Cause” for Employee’s termination will exist at any time after the happening of one or more of the following events:

(a) Employee’s willful misconduct or gross negligence in performance of his or her duties hereunder, including Employee’s refusal to comply in any material respect with the legal directives of the Company’s Board of Directors so long as such directives are not inconsistent with the Employee’s position and duties, and such refusal to comply is not remedied within 30 working days after written notice from the Board of Directors, which written notice shall define a commercially reasonable remedy that is acceptable to the Board of Directors and state that failure to remedy such conduct may result in Termination for Cause;

(b) Dishonest or fraudulent conduct, a deliberate attempt to do a material injury to the Company, or conduct that materially discredits the Company or is materially detrimental to the reputation of the Company, including conviction of a felony; or

(c) Employee’s incurable material breach of any element of the Company’s Confidential Information and Invention Assignment Agreement, including without limitation, Employee’s theft or other misappropriation of the Company’s proprietary information.

7. Definition of Disability. For purposes of this Agreement, “Disability” shall mean that Employee has been unable to perform his or her duties hereunder as the result of his or her incapacity due to physical or mental illness, and such inability, which continues for at least 120 consecutive calendar days or 150 calendar days during any consecutive twelve-month

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period, is determined to be total and permanent by a physician selected by the Company and its insurers and acceptable to Employee or to Employee’s legal representative (with such agreement on acceptability not to be unreasonably withheld).

8. Confidentiality Agreement. Employee shall sign, or has signed, a Proprietary Information and Inventions Agreement (the “Confidentiality Agreement”) substantially in the form attached hereto as Exhibit B. Employee hereby represents and warrants to the Company that he or she has complied with all obligations under the Confidentiality Agreement and agrees to continue to abide by the terms of the Confidentiality Agreement and further agrees that the provisions of the Confidentiality Agreement shall survive any termination of this Agreement or of Employee’s employment relationship with the Company,

9. Noncompetition Covenant. Employee hereby agrees that he or she shall not, during the term of his or her employment pursuant to this Agreement and during the time period that he or she is receiving severance benefits from the Company, if any, do any of the following without the prior written consent of the Company’s Board of Directors:

(a) Compete. Carry on any business or activity (whether directly or indirectly, as a partner, stockholder, principal, agent, director, affiliate, employee or consultant) which is competitive with the business conducted by the Company (as conducted now or during the term of Employee’s employment), nor engage in any other activities that conflict with Employee’s obligations to the Company.

(b) Solicit Business. Solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct his or its purchase of the Company’s products and/or services to any person, firm, corporation, institution or other entity in competition with the business of the Company.

(c) Solicit Personnel. During the term of this Agreement and for a period of one (1) year thereafter, solicit or influence or attempt to influence any person then employed by the Company to terminate or otherwise cease his employment with the Company or become an employee of any competitor of the Company, although this provision shall not prohibit Employee from conducting general solicitations for employment through newspaper advertisements, job postings on website(s) and other such general, non targeted means of solicitation. This Section 9(c) is to be read in conjunction with Section 6 of the Confidential Information and Invention Assignment Agreement executed by Employee.

10. Limitation on Stock Option/Ownership Acceleration Benefits. In the event that any stock option or stock ownership acceleration benefits provided for in this Agreement to Employee (i) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue: Code of 1986, as amended (the “Code”) and (ii) but for this Section 10, would be subject to the excise tax imposed by Section 4999^; of the Code, then Employee’s acceleration benefits under this Agreement shall be payable either:

(a) in full, or

(b) as to such lesser amount which would result in no portion of such benefit being subject to excise tax under Section 4999 of the Code,

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whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Employee on an after-tax basis, of the greatest amount of benefits under this Agreement, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. Unless the Company or Employee otherwise agree in writing, any determination required under this Section 10 shall be made in writing by independent public accountants appointed by Employee and reasonably acceptable to the Company (the “Accountants”), whose determination shall be conclusive and binding upon Employee and the Company for all purposes. For purposes of making the calculations required by this Section 10, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 10. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 10.

11. Conflicts. Employee represents that his or her performance of all the terms of this Agreement will not breach any other agreement to which Employee is a party. Employee has not, and will not during the term of this Agreement, enter into any oral or written agreement in conflict with any of the provisions of this Agreement. Employee further represents that he or she is entering into or has entered into an employment relationship with the Company of his or her own free will and that he or she has not been solicited as an employee in any way by the Company.

12. Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantial all of the Company’s business and/or assets shall assume the obligations under this Agreement and agrees expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. The terms of this Agreement and all of Employee’s rights hereunder shall inure to the benefit of, and be enforceable by, Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

13. Miscellaneous Provisions.

(a) No Duty to Mitigate. Employee shall not be required to mitigate the amount of any payment contemplated by this Agreement (whether by seeking new employment or in any other manner), nor, except as otherwise provided in this Agreement, shall any such payment be reduced by any earnings that Employee may receive from any other source.

(b) Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the parties,

(c) Sole Agreement. This Agreement, including any Exhibits hereto, constitutes the sole agreement of the parties and supersedes all oral negotiations and prior writings with respect to the subject matter hereof.

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(d) Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by a nationally-recognized delivery service (such as Federal Express or UPS), or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified at such party’s address as set forth below or as subsequently modified by written notice.

(e) Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflict of laws.

(f) 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.

(g) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

(h) Arbitration. Any dispute or claim arising out of or in connection with this Agreement will be finally settled by binding arbitration in San Jose, California in accordance with the rules of the American Arbitration Association by one arbitrator appointed in accordance with said rules. The arbitrator shall apply California law, without reference to rules of conflicts of law or rules of statutory arbitration, to the resolution of any dispute, which shall be rendered within thirty (30) days after the submission of the claim to arbitration. Judgment on the award rendered by the arbitrator may be: entered in any court having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief or to compel arbitration in accordance with this paragraph, without breach of this arbitration provision. This Section 13(h) shall not apply to the Confidentiality Agreement.

(i) Advice of Counsel. EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

[Signature Page Follows]

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The parties have executed this Agreement the date first written above.

EGUARD, INC.
By:	/s/ Denis R. Coleman
Title:	Chairman
Address:

JEFFREY A MCFADDEN
By:	/s/ Jeffrey McFadden
Address:

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EXHIBIT B

PROPRIETARY INFORMATION AND

INVENTIONS AGREEMENT

10

EX-10.06

Exhibit 10.06

eGuard, Inc.

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is dated as of March 19_, 1999, by and between Tony Martin (“Employee”) and eGuard, Inc., a Delaware corporation (the “Company”).

1. Term of Agreement. This Agreement shall commence on the date hereof and shall continue until terminated pursuant to the terms herein.

2. Duties.

(a) Position. Employee shall be employed as the Vice President of Software Engineering, and as such, will devote all of his normal business time and attention, to the affairs of the Company and promotion of its interests, including, but not limited to, development and delivery of the Company’s software products.

(b) Report. Employee will report to the Company’s Chief Executive Officer.

(c) Obligations to the Company. Employee agrees to the best of his ability and experience that he will at all times loyally and conscientiously perform all of the duties and obligations required of and from Employee pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company. During the term of Employee’s employment relationship with the Company, Employee further agrees that he will devote all of his business time and attention to the business of the Company, the Company will be entitled to all of the benefits and profits arising from or incident to all such work services and advice, Employee will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, without the prior written consent of the Company’s Board of Directors, and Employee will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company. Nothing in this Agreement will prevent Employee from accepting speaking or presentation engagements in exchange for honoraria or from serving on boards of charitable organizations, or from owning no more than 1% of the outstanding equity securities of a corporation whose stock is listed on a national stock exchange or the Nasdaq National Market. Employee will comply with and be bound by the Company’s operating policies, procedures and practices from time to time in effect during the term of Employee’s employment. Notwithstanding the foregoing, Employee may fulfill his reasonable obligations to Visioneer, Inc. for those commitments as to legacy projects for Visioneer to provide for an orderly transition, ending on June 30, 1999, so long as such satisfaction of obligations does not interfere with Employee’s performance under this Agreement.

3. At-Will Employment. The Company and Employee acknowledge that Employee’s employment is and shall continue to be at-will, as defined under applicable law, and that Employee’s employment with the Company may be terminated by either party at any time for any or no reason. If Employee’s employment terminates for any reason, Employee shall not be entitled to any payments, benefits, damages, award or compensation other than as provided in this Agreement. The rights and duties created by this Section 3 may not be modified in any way except by a written agreement executed by the Board of Directors of the Company.

4. Compensation. For the duties and services to be performed by Employee hereunder, the Company shall pay Employee, and Employee agrees to accept, the salary, stock options, bonuses and other benefits described below in this Section 4.

(a) Salary. Employee shall receive a monthly salary of $11,250.00, which is equivalent to $135,000 on an annualized basis, retroactive back to February 1, 1999. Employee’s monthly salary will be payable in two equal payments per month pursuant to the Company’s normal payroll practices. Employee’s salary shall be reviewed on at least an annual basis by the Board or the Company’s Compensation Committee, and any increase will be effective as of the date determined appropriate by the Board or its Compensation Committee, provided that any salary increase made more than one year after the most recent prior salary adjustment effective date (for which purpose the effective date of this agreement will be deemed the first salary adjustment effective date) will be effective not later than the anniversary of the preceding salary adjustment effective date.

(b) Stock Grant. In connection with the commencement of Employee’s employment, the Board of Directors shall grant to Employee the right to purchase 343,363 shares of the Company’s Common Stock (“Shares”) at a price per share of $0.02 per share. This purchase will be made pursuant to the Company’s form Restricted Stock Purchase Agreement pursuant to a full recourse promissory note bearing interest at 6% per annum and secured by a Pledge and Security Agreement, the forms of which are attached as Exhibit A. 26,413 of the Shares shall be vested as of the date of purchase. As to the remaining 316,950, 12.5% of the Shares will vest as of the six-month anniversary of February 1, 1999, which is Employee’s vesting commencement date. The remaining Shares shall vest in 42 equal monthly installments thereafter, based on Employee’s continued provision of services to the Company. Subject to the discretion of the Company’s Board of Directors, Employee may be eligible to receive additional grants of purchase rights or stock options from time to time in the future, on such terms and subject to such conditions as the Board of Directors shall determine as of the date of any such grant.

(c) Bonuses. Employee shall participate in a bonus plan after the Major Funding Date providing for quarterly payments scheduled to coincide with the completion of Company quarters of up to $5,000 in accordance with a commercially reasonable plan agreed upon between Employee and the Board of Directors of the Company or the Compensation Committee thereof.

(d) Additional Benefits. Employee will be eligible to participate in the Company’s employee benefit plans of general application, including without limitation, those plans covering medical, disability and life insurance in accordance with the rules established for individual participation in any such plan and under applicable law. Employee will be eligible for vacation and sick leave in accordance with the policies in effect during the term of this Agreement and will receive such other benefits as the Company generally provides to its other employees of comparable position and experience.

(e) Reimbursement of Expenses. Employee shall be authorized to incur on behalf and for the benefit of, and shall be reimbursed by, the Company for reasonable expenses, provided that such expenses are substantiated in accordance with Company policies.

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5. Termination of Employment and Severance Benefits.

(a) Termination of Employment. This Agreement may be terminated upon the occurrence of any of the following events:

(i) The Company’s determination in good faith that it is terminating Employee for Cause (as defined in Section 6 below) (“Termination for Cause”);

(ii) The Company’s determination that it is terminating Employee without Cause, which determination may be made by the Company at any time at the Company’s sole discretion, for any or no reason (“Termination Without Cause”);

(iii) The effective date of a written notice sent to the Company from Employee stating that Employee is electing to terminate his or her employment with the Company (“Voluntary Termination”);

(iv) A change in Employee’s status such that a “Constructive Termination” (as defined in Section 5(b)(vi) below) has occurred; or

(v) Following Employee’s death or Disability (as defined in Section 7 below).

(b) Severance Benefits. Employee shall be entitled to receive severance benefits upon termination of employment only as set forth in this Section 5(b):

(i) Voluntary Termination. If Employee’s employment terminates by Voluntary Termination, then Employee shall not be entitled to receive payment of any severance benefits. Employee will receive payment(s) for all salary and unpaid vacation accrued as of the date of Employee’s termination of employment and Employee’s benefits will be continued and the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of termination and in accordance with applicable law.

(ii) Involuntary Termination.

(A) If Employee’s employment is terminated under Section 5(a)(ii) above prior to a Change of Control (as defined in Section 5(b)(vi) below, then Employee will be entitled to receive payment of severance benefits equal to six (6) months of Employee’s then-current regular monthly salary. Such payments shall be made ratably over the six (6) months following such termination, according to the Company’s standard payroll schedule. In addition, the Company’s right of repurchase with respect to the stock purchased by Employee pursuant to subsection 4(b) above, and any additional Company securities sold, gifted, or otherwise issued or transferred to Employee subject to any Company rights of repurchase, including securities issued thereon in connection with any stock dividend, stock split or other recapitalization of the Company, and any vesting restrictions on stock options or warrants held by Employee and exercisable for Company stock (collectively, the “Employee’s Securities”), shall lapse as if Employee had been a service provider to the Company for a six (6) month period following such date of termination. Employee will also be entitled to receive payment on the date of termination of any bonus payable under Section 4. Health insurance benefits with the

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same coverage provided to Employee prior to the termination (e.g. medical, dental, optical, mental health) and in all other respects significantly comparable to those in place immediately prior to the termination will be provided at the Company’s cost over the Severance Period.

(B) If Employee’s employment is terminated under Section 5(a)(ii) above following a Change of Control, the severance amount as specified in 5(b)(ii)A above shall be payable in one lump sum promptly following the date of termination, and the Company’s right of repurchase with respect to the Employee’s Securities, shall lapse as to the one-half (1/2) of the amount of all such Employee’s Securities (or such lesser fraction of such Employee’s Securities as shall then be subject to vesting or repurchase restrictions) instead of as to six (6) months of service. Employee will also be entitled to receive payment on the date of termination of any bonus payable under Section 4. Health insurance benefits with the same coverage provided to Employee prior to the termination (e.g. medical, dental, optical, mental health) and in all other respects significantly comparable to those in place immediately prior to the termination will be provided at the Company’s cost over the Severance Period.

(iii) Constructive Termination. If, following a Change of Control, Employee’s employment with the Company or its successor-in-interest is terminated pursuant to a Termination Without Cause or a Constructive Termination, then Employee will be entitled to receive the severance benefits set forth in Section 5(b)(ii) (B) above.

(iv) Termination for Cause. If Employee’s employment is terminated for Cause, then Employee shall not be entitled to receive payment of any severance benefits. Employee will receive payment(s) for all salary and unpaid vacation accrued as of the date of Employee’s termination of employment and Employee’s benefits will be continued under the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of termination and in accordance with applicable law.

(v) Termination by Reason of Death or Disability. In the event that Employee’s employment with the Company terminates as a result of Employee’s death or Disability (as defined in Section 7 below), Employee or Employee’s estate or representative will receive all salary and unpaid vacation accrued as of the date of Employee’s death or Disability and any other benefits payable under the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of death or Disability and in accordance with applicable law. In addition, Employee’s estate or representative will receive the amount of Employee’s target bonus for the fiscal year in which the death or Disability occurs to the extent that the bonus has been earned as of the date of Employee’s death or Disability, as determined by the Board of Directors or its Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year.

(vi) Constructive Termination. “Constructive Termination” shall be deemed to occur if (1) there is a material adverse change in Employee’s position causing such position to be of materially reduced stature, role, job title, or responsibility or (2) a reduction of Employee’s base compensation by more than five percent (5%) or (3) any requirement that Employee move his principal place of work more than 50 miles from the Company’s current headquarters in Redwood City, California.

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(vii) Change of Control. “Change of Control” shall mean the occurrence of any of the following events: (i) an acquisition of the Company by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation but excluding any merger effected exclusively for the purpose of changing the domicile of the Company), or (ii) a sale of all or substantially all of the assets of the Company (collectively, a “Merger”), so long as in either case (x) the Company’s stockholders of record immediately prior to such Merger will, immediately after such Merger, hold less than 50% of the voting power of the surviving or acquiring entity, or (y) the Company’s stockholders of record immediately prior to such Merger will, immediately after such Merger, hold less than 60% of the voting power of the surviving or acquiring entity and a majority of the members of the Board of Directors of the surviving or acquiring entity immediately after such Merger were not members of the Board of Directors of the Company immediately prior to such Merger.

6. Definition of Cause. For purposes of this Agreement, “Cause” for Employee’s termination will exist at any time after the happening of one or more of the following events:

(a) Employee’s willful misconduct or gross negligence in performance of his or her duties hereunder, including Employee’s refusal to comply in any material respect with the legal directives of the Company’s Board of Directors so long as such directives are not inconsistent with the Employee’s position and duties, and such refusal to comply is not remedied within 30 working days after written notice from the Board of Directors, which written notice shall define a commercially reasonable remedy that is acceptable to the Board of Directors and state that failure to remedy such conduct may result in Termination for Cause;

(b) Dishonest or fraudulent conduct, a deliberate attempt to do a material injury to the Company, or conduct that materially discredits the Company or is materially detrimental to the reputation of the Company, including conviction of a felony; or

(c) Employee’s incurable material breach of any element of the Company’s Confidential Information and Invention Assignment Agreement, including without limitation, Employee’s theft or other misappropriation of the Company’s proprietary information.

7. Definition of Disability. For purposes of this Agreement, “Disability” shall mean that Employee has been unable to perform his or her duties hereunder as the result of his or her incapacity due to physical or mental illness, and such inability, which continues for at least 120 consecutive calendar days or 150 calendar days during any consecutive twelve-month period, is determined to be total and permanent by a physician selected by the Company and its insurers and acceptable to Employee or to Employee’s legal representative (with such agreement on acceptability not to be unreasonably withheld).

8. Confidentiality. Employee shall sign, or has signed, a Proprietary Information and Inventions Agreement (the “Confidentiality Agreement”) substantially in the form attached hereto as Exhibit B. Employee hereby represents and warrants to the Company that he or she has complied with all obligations under the Confidentiality Agreement and agrees to continue to abide by the terms of the Confidentiality Agreement and further agrees that the provisions of the Confidentiality Agreement shall survive any termination of this Agreement or of Employee’s

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employment relationship with the Company. Employee warrants, as a condition of his Employment, that the terms and conditions of his employment shall remain confidential, and shall not be disclosed, except as to (1) the Company’s Chief Executive Officer and Board of Directors, and (2) family members and other personal financial advisors.

9. Noncompetition Covenant. Employee hereby agrees that he or she shall not, during the term of his or her employment pursuant to this Agreement and during the time period that he or she is receiving severance benefits from the Company, if any, do any of the following without the prior written consent of the Company’s Board of Directors:

(a) Compete. Carry on any business or activity (whether directly or indirectly, as a partner, stockholder, principal, agent, director, affiliate, employee or consultant) which is competitive with the business conducted by the Company (as conducted now or during the term of Employee’s employment), nor engage in any other activities that conflict with Employee’s obligations to the Company.

(b) Solicit Business. Solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct his or its purchase of the Company’s products and/or services to any person, firm, corporation, institution or other entity in competition with the business of the Company.

(c) Solicit Personnel. During the term of this Agreement and for a period of one (1) year thereafter, solicit or influence or attempt to influence any person then employed by the Company to terminate or otherwise cease his employment with the Company or become an employee of any competitor of the Company, although this provision shall not prohibit Employee from conducting general solicitations for employment through newspaper advertisements, job postings on website(s) and other such general, non-targeted means of solicitation. This Section 9(c) is to be read in conjunction with Section 6 of the Confidential Information and Invention Assignment Agreement executed by Employee.

10. Limitation on Stock Option/Ownership Acceleration Benefits. In the event that any stock option or stock ownership acceleration benefits provided for in this Agreement Employee (i) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and (ii) but for this Section 10, would be subject to the excise tax imposed by Section 4999 of the Code, then Employee’s acceleration benefits under this Agreement shall be payable either:

(a) in full, or

(b) as to such lesser amount which would result in no portion of such benefits being subject to excise tax under Section 4999 of the Code,

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Employee on an after-tax basis, of the greatest amount of benefits under this Agreement, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. Unless the Company or Employee otherwise agree in writing, any determination required under this Section 10 shall be made in writing by independent public accountants appointed by Employee

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and reasonably acceptable to the Company (the “Accountants”), whose determination shall be conclusive and binding upon Employee and the Company for all purposes. For purposes of making the calculations required by this Section 10, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 10. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 10.

11. Conflicts. Employee represents that his or her performance of all the terms of this Agreement will not breach any other agreement to which Employee is a party. Employee has not, and will not during the term of this Agreement, enter into any oral or written agreement in conflict with any of the provisions of this Agreement. Employee further represents that he or she is entering into or has entered into an employment relationship with the Company of his or her own free will and that he or she has not been solicited as an employee in any way by the Company.

12. Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the obligations under this Agreement and agrees expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. The terms of this Agreement and all of Employee’s rights hereunder shall inure to the benefit of, and be enforceable by, Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

13. Miscellaneous Provisions.

(a) No Duty to Mitigate. Employee shall not be required to mitigate the amount of any payment contemplated by this Agreement (whether by seeking new employment or in any other manner), nor, except as otherwise provided in this Agreement, shall any such payment be reduced by any earnings that Employee may receive from any other source.

(b) Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the parties.

(c) Sole Agreement. This Agreement, including any Exhibits hereto, constitutes the sole agreement of the parties and supersedes all oral negotiations and prior writings with respect to the subject matter hereof, including without limitation any consulting arrangements between the Company and Employee.

(d) Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by a nationally-recognized delivery service (such as Federal Express or UPS), or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is

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addressed to the party to be notified at such party’s address as set forth below or as subsequently modified by written notice.

(e) Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflict of laws.

(f) Severability. If one or more provisions of this Agreement are held to 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.

(g) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

(h) Arbitration. Any dispute or claim arising out of or in connection with this Agreement will be finally settled by binding arbitration in San Jose, California in accordance with the rules of the American Arbitration Association by one arbitrator appointed in accordance with said rules. The arbitrator shall apply California law, without reference to rules of conflicts of law or rules of statutory arbitration, to the resolution of any dispute, which shall be rendered within thirty (30) days after the submission of the claim to arbitration. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, or to compel arbitration in accordance with this paragraph, without breach of this arbitration provision. This Section 13(h) shall not apply to the Confidentiality Agreement.

(i) Advice of Counsel. EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

[Signature Page Follows]

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The parties have executed this Agreement the date first written above.

EGUARD, INC.
By:	/s/ Denis R. Coleman
Title:		Chairman
Address:

TONY MARTIN
Signature:	/s/ Tony Martin
Address:

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EXHIBIT B

PROPRIETARY INFORMATION AND

INVENTIONS AGREEMENT

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EX-10.07

Exhibit 10.07

eGuard, Inc.

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is dated as of March 16, 1999, by and between Scott Eagle (“Employee”) and eGuard, Inc., a Delaware corporation (the “Company”).

1. Term of Agreement. This Agreement shall commence on the date hereof and shall continue until terminated pursuant to the terms herein.

2. Duties.

(a) Position. Employee shall be employed as the Vice President of Marketing and as such, will devote all of his normal business time and attention to the affairs of the Company and promotion of its interests, including, but not limited to, product management, positioning, promotion and marketing of the Company’s products.

(b) Report. Employee will report to the Company’s Chief Executive Officer.

(c) Obligations to the Company. Employee agrees to the best of his ability and experience that he will at all times loyally and conscientiously perform all of the duties and obligations required of and from Employee pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company. During the term of Employee’s employment relationship with the Company, Employee further agrees that he will devote all of his business time and attention to the business of the Company, the Company will be entitled to all of the benefits and profits arising from or incident to all such work services and advice, Employee will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, without the prior written consent of the Company’s Board of Directors and Employee will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company. Nothing in this Agreement will prevent Employee from accepting speaking or presentation engagements in exchange for honoraria or from serving on boards of charitable organizations, or from owning no more than 1% of the outstanding equity securities of a corporation whose stock is listed on a national stock exchange or the Nasdaq National Market. Employee will comply with and be bound by the Company’s operating policies, procedures and practices from time to time in effect during the term of Employee’s employment. Notwithstanding the foregoing, Employee may fulfill his reasonable obligations to Concentric Networks for up to three (3) hours per week, ending on             12/31            , 1999, so long as such satisfaction of obligations does not interfere with Employee’s performance under this Agreement.

3. At-Will Employment. The Company and Employee acknowledge that Employee’s employment is and shall continue to be at-will, as defined under applicable law, and that Employee’s employment with the Company may be terminated by either party at any time for any or no reason. If Employee’s employment terminates for any reason, Employee shall not be entitled to any payments, benefits, damages, award or compensation other than as provided in this Agreement. The rights and duties created by this Section 3 may not be modified in any way except by a written agreement executed by the Board of Directors of the Company.

4. Compensation. For the duties and services to be performed by Employee hereunder, the Company shall pay Employee, and Employee agrees to accept, the salary, stock options, bonuses and other benefits described below in this Section 4.

(a) Salary. Employee shall receive a monthly salary of $11,666.67, which is equivalent to $140,000 on an annualized basis, retroactive back to January 1, 1999, but offset by amounts paid by the Company to Employee for consulting services prior to the effective date of this Agreement. Employee’s monthly salary will be payable in two equal payments per month pursuant to the Company’s normal payroll practices; provided, that the retroactive salary owed to Employee for January 1999, as offset by the amounts paid for consulting services, shall be paid within one (1) week after the date of this Agreement. Employee’s salary shall be reviewed on at least an annual basis by the Board or the Company’s Compensation Committee, and any increase will be effective as of the date determined appropriate by the Board or its Compensation Committee, provided that any salary increase made more than one year after the most recent prior salary adjustment effective date (for which purpose the effective date of this agreement will be deemed the first salary adjustment effective date) will be effective not later than the anniversary of the preceding salary adjustment effective date.

(b) Stock Grant. In connection with the commencement of Employee’s employment, the Board of Directors shall grant to Employee the right to purchase 316,950 shares of the Company’s Common Stock (“Shares”) at a price per share of $0.02 per share. This purchase shall be made pursuant to the Company’s form Restricted Stock Purchase Agreement. Employees vesting commencement date under the Restricted Stock Purchase Agreement will be January 1, 1999. 12.5% of the Shares issued under the Restricted Stock Purchase Agreement shall be released from the companies repurchase option on July 1, 1999, which is the six-month anniversary of Employee’s vesting commencement date. The remaining Shares shall vest in 42 equal monthly installments thereafter, provided Employee continues to provide services to the Company. Subject to the discretion of the Company’s Board of Directors, Employee may be eligible to receive additional grants of purchase rights or stock options from time to time in the future, on such terms and subject to such conditions as the Board of Directors shall determine as of the date of any such grant.

(c) Additional Stock Grant. If the Company, upon the earlier to occur of (i) the closing of a transaction or transactions resulting in the Company’s raising equity financing totaling $8,000,000 in the aggregate (including conversion of outstanding convertible promissory notes), and (ii) Sept. 30, 1999, the amount of Employee’s Shares are not equal to 3.0% of the Company’s “Fully-Diluted Capitalization” (as defined below), the Company will promptly grant Employee an option to purchase that number of shares of Company’s Common Stock so that the number of Shares owned by the Employee, plus the number of shares under such new option, will equal 3.0% of the Company’s Fully-Diluted Capitalization (including, without limitation, all outstanding shares, warrants and stock options). If the Company has not raised equity financing totaling $8,000,000 in the aggregate by September 30,1999, then the Company shall promptly grant employee an option to purchase the greater of (a) 200,000 shares of the Company’s common stock, or (b) that number of shares of the Company’s common stock so that the number of shares owned by the employee, plus the number of shares under such new option, will equal 3.0% of the Company’s fully-diluted capitalization (as defined above). The vesting schedule for Employee’s option shall be identical to the vesting schedule for Employee’s Shares purchased

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pursuant to §4(b), and therefore, the Vesting Commencement Date of Employee’s options shall be January 1, 1999. The exercise price of the options shall be the fair market value of a share of the Company’s Common Stock on the date of grant.

(d) Bonuses. Employee shall be eligible for a $5,000 bonus per Company quarter in accordance with a commercially reasonable plan agreed upon between Employee and the Board of Directors of the Company or the Company’s Compensation Committee Employee’s bonus plan shall be retroactive to January 1, 1999.

(e) Additional Benefits. Employee will be eligible to participate in the Company’s employee benefit plans of general application, including without limitation, those plans covering medical, disability and life insurance in accordance with the rules established for individual participation in any such plan and under applicable law. Employee will be eligible for vacation and sick leave in accordance with the policies in effect during the term of this Agreement and will receive such other benefits as the Company generally provides to its other employees of comparable position and experience.

(f) Reimbursement of Expenses. Employee shall be authorized to incur on behalf and for the benefit of, and shall be reimbursed by, the Company for reasonable expenses, provided that such expenses are substantiated in accordance with Company policies. Company shall promptly reimburse Employee for all reimbursable expenses.

5. Termination of Employment and Severance Benefits.

(a) Termination of Employment. This Agreement may be terminated upon the occurrence of any of the following events:

(i) The Company’s determination in good faith that it is terminating Employee for Cause (as defined in Section 6 below) (“Termination for Cause”);

(ii) The Company’s determination that it is terminating Employee without Cause, which determination may be made by the Company at any time at the Company’s sole discretion, for any or no reason (“Termination Without Cause”);

(iii) The effective date of a written notice sent to the Company from Employee stating that Employee is electing to terminate his or her employment with the Company (“Voluntary Termination”);

(iv) A change in Employee’s status such that a “Constructive Termination” (as defined in Section 5(b)(vi) below) has occurred; or

(v) Following Employee’s death or Disability (as defined in Section 7 below).

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(b) Severance Benefits. Employee shall be entitled to receive severance benefits upon termination of employment only as set forth in this Section 5(b):

(i) Voluntary Termination. If Employee’s employment terminates by Voluntary Termination, then Employee shall not be entitled to receive payment of any severance benefits. Employee will receive payment(s) for all salary and unpaid vacation accrued as of the date of Employee’s termination of employment and Employee’s benefits will be continued under the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of termination and in accordance with applicable law.

(ii) Involuntary Termination.

(A) If Employee’s employment with the Company or any successor-in interest is terminated pursuant to a Termination Without Cause or a Constructive Termination prior to a Change of Control (as defined in Section 5(b)(vi) below), then Employee will be entitled to receive payment of severance benefits equal to six (6) months of Employee’s then-current regular monthly salary. Such payments shall be made ratably over the six (6) months following such termination (“Severance Period”), according to the Company’s standard payroll schedule. In addition, six months of Employee’s stock purchased by Employee pursuant to subsection 4(b) above, and any additional Company securities sold, gifted, or otherwise issued or transferred to Employee subject to any Company rights of repurchase, including securities issued thereon in connection with any stock dividend, stock split or other recapitalization of the Company, then subject to the Company’s right of repurchase shall no longer be subject to the Company’s right of repurchase (the repurchase right shall lapse). In addition, six months of then unvested stock options or warrants held by Employee and exercisable for Company stock, shall immediately vest. Employee will also be entitled to receive payment on the date of termination of the prorated portion of any bonus payable under Section 4. Health insurance benefits with the same coverage provided to Employee prior to the termination (e.g. medical, dental, optical, mental health) and in all other respects significantly comparable to those in place immediately prior to the termination will be provided at the Company’s cost for the Severance Period.

(B) If, following a Change of Control, Employee’s employment with the Company or its successor-in-interest is terminated pursuant to a Termination Without Cause or a Constructive Termination, then, Company shall pay Employee on the termination date, in a one lump sum payment, an amount equal to six (6) months of Employee’s then-current base salary. In addition, the greater of (1) fifty percent (50%) of Employee’s Shares and other securities then subject to the Company’s right of repurchase or (2) six (6) months of Employee’s Shares and other securities then subject to the Company’s right to repurchase, shall no longer be subject to the Company’s right of repurchase (the repurchase right shall lapse). In addition, the greater of (1) fifty percent (50%) of Employee’s then unvested options and other unvested securities, or (2) six (6) months of Employee’s then unvested options and other unvested securities, shall immediately vest. Employee will also be entitled to receive payment on the date of termination of the prorated portion of any bonus payable under Section 4. Health insurance benefits with the same coverage provided to Employee prior to the termination (e.g. medical, dental, optical, mental health) and in all other respects significantly comparable to those in place immediately prior to the termination will be provided at the Company’s cost over the Severance Period.

(iii) Termination for Cause. If Employee’s employment is terminated for Cause, then Employee shall not be entitled to receive payment of any severance benefits.

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Employee will receive payment(s) for all salary and unpaid vacation accrued as of the date of Employee’s termination of employment and Employee’s benefits will be continued under the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of termination and in accordance with applicable law.

(iv) Termination by Reason of Death or Disability. In the event that Employee’s employment with the Company terminates as a result of Employee’s death or Disability (as defined in Section 7 below), Employee or Employee’s estate or representative will receive all salary and unpaid vacation accrued as of the date of Employee’s death or Disability and any other benefits payable under the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of death or Disability and in accordance with applicable law. In addition, Employee’s estate or representative will receive the amount of Employee’s target bonus for the fiscal year in which the death or Disability occurs to the extent that the bonus has been earned as of the date of Employee’s death or Disability, as determined by the Board of Directors or its Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year.

(v) Constructive Termination. “Constructive Termination” shall be deemed to occur if (1) there is a material adverse change in Employee’s position causing such position to be of materially reduced stature, role, job title, or responsibility, (2) a reduction of Employee’s base compensation by more than five percent (5%), or (3) any requirement that Employee move his principal place of work more than 50 miles from the Company’s current headquarters in Redwood City, California.

(vi) Change of Control. “Change of Control” shall mean the occurrence of any of the following events: (i) an acquisition of the Company by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation but excluding any merger effected exclusively for the purpose of changing the domicile of the Company), or (ii) a sale of all or substantially all of the assets of the Company (collectively, a “Merger”), so long as either case (x) the Company’s stockholders of record immediately prior to such Merger will, immediately after such Merger, hold less than 50% of the voting power of the surviving or acquiring entity, or (y) the Company’s stockholders of record immediately prior to such Merger will, immediately after such Merger, hold less than 60% of the voting power of the surviving or acquiring entity and a majority of the members of the Board of Directors of the surviving or acquiring entity immediately after such Merger were not members of the Board of Directors of the Company immediately prior to such Merger.

6. Definition of Cause. For purposes of this Agreement, “Cause” for Employee’s termination will exist at any time after the happening of one or more of the following events:

(a) Employee’s willful misconduct or gross negligence in performance of his or her duties hereunder, including Employee’s refusal to comply in any material respect with the legal directives of the Company’s Board of Directors so long as such directives are not inconsistent with the Employee’s position and duties, and such refusal to comply is not remedied within 30 working days after written notice from the Board of Directors, which written notice

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shall define a commercially reasonable remedy that is acceptable to the Board of Directors and state that failure to remedy such conduct may result in Termination for Cause;

(b) Dishonest or fraudulent conduct, a deliberate attempt to do a material injury to the Company, or conduct that materially discredits the Company or is materially detrimental to the reputation of the Company, including conviction of a felony; or

(c) Employee’s incurable material breach of any element of the Company’s Confidential Information and Invention Assignment Agreement, including without limitation, Employee’s theft or other misappropriation of the Company’s proprietary information.

7. Definition of Disability. For purposes of this Agreement, “Disability” shall mean that Employee has been unable to perform his or her duties hereunder as the result of his or her incapacity due to physical or mental illness, and such inability, which continues for at least 120 consecutive calendar days or 150 calendar days during any consecutive twelve-month period, is determined to be total and permanent by a physician selected by the Company and its insurers and acceptable to Employee or to Employee’s legal representative (with such agreement on acceptability not to be unreasonably withheld).

8. Confidentiality. Employee shall sign, or has signed, a Proprietary Information and Inventions Agreement (the “Confidentiality Agreement”) substantially in the form attached hereto as Exhibit B. Employee hereby represents and warrants to the Company that he or she has complied with all obligations under the Confidentiality Agreement and agrees to continue to abide by the terms of the Confidentiality Agreement and further agrees that the provisions of the Confidentiality Agreement shall survive any termination of this Agreement or of Employee’s employment relationship with the Company. Employee warrants, as a condition of his Employment, that the terms and conditions of his employment shall remain confidential, and shall not be disclosed, except as to (1) the Company’s Chief Executive Officer and Board of Directors, and (2) family members and other personal financial advisors.

9. Noncompetition Covenant. Employee hereby agrees that he or she shall not, during the term of his or her employment pursuant to this Agreement and during the time period that he or she is receiving severance benefits from the Company, if any, do any of the following without the prior written consent of the Company’s Board of Directors:

(a) Compete. Carry on any business or activity (whether directly or indirectly, or a as a partner, stockholder, principal, agent, director, affiliate, or consultant) which is competitive with the business conducted by the Company (as conducted now or during the term of Employee’s employment), nor engage in any other activities that conflict with Employee’s obligations to the Company.

(b) Solicit Business. Solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct his or its purchase of the Company’s products and/or services to any person, firm, corporation, institution or other entity in competition with the business of the Company.

(c) Solicit Personnel. During the term of this Agreement and for a period of one (1) year thereafter, solicit or influence or attempt to influence any person then employed by

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the Company to terminate or otherwise cease his employment with the Company or become an employee of any competitor of the Company, although this provision shall not prohibit Employee from conducting general solicitations for employment through newspaper advertisements, job postings on website(s) and other such general, non-targeted means of solicitation. This Section 9(c) is to be read in conjunction with Section 6 of the Confidential Information and Invention Assignment Agreement executed by Employee.

10. Limitation on Stock Option/Ownership Acceleration Benefits. In the event that any stock option or stock ownership acceleration benefit provided for in this Agreement to Employee (i) constitute “parachute payments” within the meaning, of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and (ii) but for this Section 10, would be subject to the excise tax imposed by Section 4999 of the Code, then Employee’s acceleration benefits under this Agreement shall be payable either:

(a) in full, or

(b) as to such lesser amount which would result in no portion of such benefits being subject to excise tax under Section 4999 of the Code,

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by Employee on an after-tax basis, of the greatest amount of benefits under this Agreement, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. Unless the Company or Employee otherwise agree in writing, any determination required under this Section 10 shall be made in writing by independent public accountants appointed by Employee and reasonably acceptable to the Company (the “Accountants”), whose determination shall be conclusive and binding upon Employee and the Company for all purposes. For purposes of making the calculations required by this Section 10, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 10. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 10.

11. Conflicts. Employee represents that his or her performance of all the terms of this Agreement will not breach any other agreement to which Employee is a party. Employee has not, and will not during the term of this Agreement, enter into any oral or written agreement in conflict with any of the provisions of this Agreement. Employee further represents that he or she is entering into or has entered into an employment relationship with the Company of his or her own free will and that he or she has not been solicited as an employee in any way by the Company.

12. Successors. Any successor to the Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the obligations under this Agreement and agrees expressly to perform the obligations under this Agreement in the same

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manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. The terms of this Agreement and all of Employee’s rights hereunder shall inure to the benefit of, and be enforceable by, Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

13. Miscellaneous Provisions.

(a) No Duty to Mitigate. Employee shall not be required to mitigate the amount of any payment contemplated by this Agreement (whether by seeking new employment or in any other manner), nor, except as otherwise provided in this Agreement, shall any such payment be reduced by any earnings that Employee may receive from any other source.

(b) Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the parties.

(c) Sole Agreement. This Agreement, including any Exhibits hereto, constitutes the sole agreement of the parties and supersedes all oral negotiations and prior writings with respect to the subject matter hereof, including without limitation any consulting arrangements between the Company and Employee.

(d) Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by a nationally-recognized delivery service (such as Federal Express or UPS), or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is addressed to the party to be notified at such party’s address as set forth below or as subsequently modified by written notice.

(e) Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflict of laws.

(f) 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.

(g) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

(h) Arbitration. Any dispute or claim arising out of or in connection with this Agreement will be finally settled by binding arbitration in San Jose, California in accordance with the rules of the American Arbitration Association by one arbitrator appointed in accordance with said rules. The arbitrator shall apply California law, without reference to rules of conflicts of law or rules of statutory arbitration, to the resolution of any dispute, which shall be rendered within thirty (30) days after the submission of the claim to arbitration. Judgment on the award

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rendered by the arbitrator may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, or to compel arbitration in accordance with this paragraph, without breach of this arbitration provision. This Section 13(h) shall not apply to the Confidentiality Agreement.

(i) Advice of Counsel. EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

[Signature Page Follows]

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The parties have executed this Agreement the date first date written above.

EGUARD, INC.:
By:	/s/ Denis R. Coleman
Title:	Chairman
Address:

SCOTT EAGLE:
Signature:	/s/ Scott Eagle
Address:

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EXHIBIT B

PROPRIETARY INFORMATION AND

INVENTIONS AGREEMENT

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EX-10.08

Exhibit 10.08

Mitchell T. Weisman

Dear Mitchell:

On behalf of Gator.com (the “Company”), we are delighted to extend an offer to you to join the Company as its senior director of business development. The members of the Company’s management team are all very impressed with your credentials and we look forward to your future success in this position.

The terms of your new position with the Company are as set forth below:

1. Position.

(a) As Senior Director of Business Development, working out of the Company’s new headquarters office in Redwood City, California, you will help manage the initiation, negotiation, and implementation of strategic partnerships, as well as helping to manage venture capital, corporate finance, and/or mergers and acquisition activity for the Company, reporting to Jeff McFadden.

2. Start Date. Subject to fulfillment of any conditions imposed by this letter agreement, you will be retroactively assumed to have commenced this new position on October 24, 1999.

3. Proof of Right to Work. For purposes of Federal Immigration Law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated. Failure by the Company to notify you of any required documentation within five business days of days of your date of hire shall be deemed the Company’s satisfaction that you are in compliance with such Federal Immigration Law.

4. Compensation.

(a) Cash Salary. You will be: paid a monthly base salary of $10,416.67 (i.e. $125,000 on an annualized basis). Your salary will be payable semimonthly pursuant to the Company’s regular payroll policy. In addition, you will be paid a performance-based bonus oat a quarterly basis. The target for this bonus will be $10,000 per quarter for expected performance. The bonus may vary from this target to the extent actual performance is stronger or weaker than expected. Performance will be reviewed quarterly, and salary will be reviewed the earlier of (a) August 1, 2000 or (b) such time as it is determined that you will be promoted to VP Business Development.

(b) Stock Options. In connection with your prior consulting, the Company will recommend to the Board of Directors that you be granted an option to purchase 35,000 shares of the Company’s Common Stock (“Consulting Shares”) with an exercise price equal to the fair market value at the time of your Start Date. These Consulting Shares will be fully vested at the time of grant. In addition, in connection with the commencement of your employment, the Company will recommend to the Board that you be granted an option to purchase 212,500 shares of the Company’s Common Stock (“Employment Shares”) with an exercise price equal to the fair market value on the date of the grant. The Employment Shares will vest as follows: (1) 25% at the earlier of (a) March 31, 2000, or (b) such time as the Company elects to terminate your employment without Cause (as defined below); and (2) 75% in 48 equal monthly installments, beginning retroactively from August 1, 1999. Except as otherwise described herein, vesting will cease at such time as you are no longer employed with the Company. The options will be incentive stock options to the maximum extent allowed by the tax code and will be subject to the terms of the Company’s Stock Plan and the Stock Option Agreement between you and the Company.

(c) VP of Business Development. The Company believes you may be a viable candidate to be promoted to VP of Business Development. To this end, the Company will review your performance and make a decision on a potential promotion no later than June 30, 2000. If the Company, in it’s sole discretion, elects to promote you to VP of Business Development, the Company will recommend to the Board that you be granted an option to purchase an additional 212,500 shares of the Company’s Common Stock (“VP Shares”) with an exercise price equal to the fair market value at the time of the grant. These VP Shares will begin vesting in 48 equal monthly installments, beginning with the first month after the date of such promotion.

(d) Contingent upon Board approval. The company understands that your acceptance of this offer is contingent upon approval of the stock grants described herein by the Company’s Board of Directors within 30 days.

5. Benefits. You will be entitled to participate in the Company’s benefits plans. You will also be entitled to the Company’s vacation program, which is currently fifteen days vacation and ten paid holidays.

6. Responsibilities. You agree, to the best of your ability and experience, that you will at all times loyally and conscientiously perform all of the duties and obligations required of and from you pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company. During the term of your employment, you further agree that you will devote most of your business time and attention to the business of the Company. You shall cease other full time employment immediately upon execution of this agreement. However, the Company understands and acknowledges that you will be performing against other obligations (“Non-Company Obligations”) during your employment, which may at times involve conflicts of interest, and which may involve monetary compensation. In general, these activities may include (1) managing Farley West Ventures on-going affairs, both administrative and vis-à-vis portfolio companies, and (2) pursuing a new venture capital opportunity, which would likely take

the form of supporting the fund-formation process. The Company will provide you written notice if it believes either (a) your time allocation to performing Non-Company Obligations is significantly inhibiting your ability to perform your Company duties, or (b) you have an unreasonable conflict of interest. Other than the activities described above, you will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, without the prior written consent of the Company’s Board of Directors. Except as it relates to private equity investments, you will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company. Nothing in this letter agreement will prevent you from accepting speaking or presentation engagements in exchange for honoraria, from serving on boards of companies or charitable organizations, periodically making private equity investments, or from owning no more than one percent (1%) of the outstanding equity securities of a corporation whose stock is listed on a national stock exchange.

7. Confidentiality of Terms. You agree to follow the Company’s policy that employees must not disclose, either directly or indirectly, any information, including any of the terms of this agreement, regarding salary, bonuses, or stock purchase or option allocations to any person, including other employees of the Company; provided, however, that you may discuss such terms with members of your immediate family and any legal, tax or accounting specialists who provide you with individual legal, tax or accounting advice.

At-Will Employment. Your employment with the Company will be on an “at will” basis, meaning that either you or the Company may terminate your employment at any time for any reason or no reason, without further obligation or liability except as provided in this agreement. However, in the event the Company elects to terminate your employment without Cause prior to March 31, 2000, then you will immediately vest in the 25% of your Employment Shares that would otherwise have vested on March 31, 2000.

For purposes of this Agreement, the Company shall be: deemed to have Cause for terminating your employment in the following circumstances:

(i) After having received written notice from the Company that the Company, in it’s sole discretion, determines that your time allocation to performing Non-Company Obligations is significantly inhibiting your ability to perform your Company duties, or that you have an unreasonable conflict of interest, you fail to adjust such time allocation or resolve such conflict of interest within 30 days of your receiving such written notice;

(ii) You engage in self-dealing constituting a breach of your duty of loyalty to the Company, including engaging in any competitive activity, any breach of the Confidentiality Agreement described in Section 9 hereof or other intentional disclosure of confidential Company information to any third party without specific authority to do so, or any disparagement of the

Company to any employee, customer or supplier (provided, however, that you will not be considered to have breached your duty of loyalty to the Company or to have engaged in any competitive activities by performing your Non-Company Obligations or other private equity investment activities unless you disclose Company Confidential Information);

(iii) You commit a criminal act relating to the performance of your duties hereunder or which is punishable as a felony, or which involves moral turpitude;

(iv) You violate the Company’s policies prohibiting discrimination and harassment; or

(v) You materially fail to perform the duties of your position after written notice from the Company specifying with particularity the alleged failure, and you do not remedy such failure within 30 days of receiving written notice from the Company of such failure.

8. Confidentiality Agreement. In connection with and as a condition of your employment with the Company, you agree to execute an agreement that is similar to the enclosed standard Company Confidential Information and Inventions Assignment Agreement. The confidentiality agreement you sign shall permit you to disclose such information to Gator.com investors whose interests you represent to the extent that you may be required in order to uphold your non-company fiduciary duties.

We are all delighted to be able to extend you this offer and look forward to working with you. To indicate your acceptance of the Company’s offer, please sign and date this letter in the space provided below and return it to us, along with a signed and dated copy of the Confidentiality Agreement. This letter, together with the Confidentiality Agreement, set forth the terms of your employment with the Company and supersede any prior representations or agreements, whether written or oral. This letter may not be modified or amended except by a written agreement, signed by the Company and by you.

Very truly yours, Gator.com Corporation
By:	/s/ Jeff McFadden
	Jeff McFadden, CEO

ACCEPTED AND AGREED:

/s/ Mitchell T. Weisman

Mitchell T. Weisman

Signature

11/16/99

Date

Enclosure: Confidential Information and Inventions Assignment Agreement

EX-10.09

Exhibit 10.09

THE GATOR CORPORATION

KEY EMPLOYEE RETENTION AGREEMENT

This Key Employee Retention Agreement (the “Agreement”) is made and entered into by and between Mitchell Weisman (the “Employee”) and The Gator Corporation, a Delaware corporation (the “Company”), effective as of February 7, 2001

RECITALS

A. It is expected that the Company from time to time will consider the possibility of an acquisition by another company or other change of control. The Board of Directors of the Company (the “Board”) recognizes that such consideration can be a distraction to the Employee and can cause the Employee to consider alternative employment opportunities. The Board has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication and objectivity of the Employee, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined in Section 5 below) of the Company.

B. The Board believes that it is in the best interests of the Company and its stockholders to provide the Employee with an incentive to continue his or her employment and to motivate the Employee to maximize the value of the Company upon a Change of Control for the benefit of its stockholders.

C. The Board believes that it is imperative to provide the Employee with certain benefits upon a Change of Control that provide the Employee with enhanced financial security and incentive and encouragement to the Employee to remain with the Company notwithstanding the possibility of a Change of Control.

D. Certain capitalized terms used in the Agreement are defined in Section 5 below.

The parties hereto agree as follows:

1. TERM OF AGREEMENT. This Agreement shall terminate upon the earlier of: (a) the termination of Employee’s employment for any reason prior to, and not in connection with, a Change of Control, or (b) the date that all obligations of the parties hereto with respect to this Agreement have been satisfied.

2. AT-WILL EMPLOYMENT. The Company and the Employee acknowledge that the Employee’s employment is and shall continue to be at-will, as defined under applicable law. If the Employee’s employment terminates for any reason prior to, and not in connection with, a Change of Control, the Employee shall not be entitled to the benefits provided by this Agreement, or any other benefits unless otherwise available in accordance with the Company’s established employee plans and practices or pursuant to other agreements with the Company.

3. SEPARATION BENEFITS UPON INVOLUNTARY TERMINATION FOLLOWING CHANGE OF CONTROL. If within one year of the effective date of a

Change of Control, the Employee’s employment with the Company is terminated (an “Involuntary Termination”) by the Company or the successor corporation without Cause or by the Employee as the result of a Constructive Termination by the Company or the successor corporation, then, subject to the limitations in this Section 3 and Section 4 below, the vesting of 25% of Employee’s then unvested shares of the Company’s common stock shall automatically be accelerated so as to become vested as of the effective date of the Involuntary Termination or Constructive Termination.

4. LIMITATION ON PAYMENTS. In the event that the separation benefits (the “Benefits”) provided for in this Agreement or otherwise payable to the Employee (i) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for this Section 4, would be subject to the excise tax imposed by Section 4999 of the Code (or any corresponding provisions of state income tax law), then the Employee’s Benefits under Section 3 shall be either:

(a) delivered in full, or

(b) delivered as to such lesser extent which would result in no portion of such Benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by the Employee on an after-tax-basis, of the greater amount of Benefits, notwithstanding that all or some portion of such Benefits may be taxable under Section 4999 of the Code. Unless the Company and the Employee otherwise agree in writing, any determination required under this Section 4 shall be made in writing by the Accountants, whose determination shall be conclusive and binding upon the Employee and the Company for all purposes. For purposes of making the calculations required by this Section 5, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and the Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 4. In the event that subsection (a) above applies, then Employee shall be responsible for any excise taxes imposed with respect to such severance and other benefits. In the event that subsection (b) above applies, then each benefit provided hereunder shall be proportionately reduced to the extent necessary to avoid imposition of such excise taxes.

5. DEFINITION OF TERMS. The following terms referred to in this Agreement shall have the: following meanings:

(a) Change of Control. “Change of Control” shall mean a sale of all or substantially all of the Company’s assets, or a merger, consolidation or other capital reorganization of the Company with or into another corporation; provided however that a merger, consolidation or other capital reorganization in which the holders of more than 50% of the shares of capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by the voting securities remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the total voting power represented by

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the voting securities of the Company, or such surviving entity, outstanding immediately after such transaction shall not constitute a Change in Control.

(b) Cause. “Cause” for Employee’s termination shall mean, the good faith judgment of the Company’s Board of Directors, that the undersigned has engaged in or committed any of the following: (i) gross negligence or willful misconduct in the performance of his duties to the Company where such gross negligence or willful misconduct has resulted or is likely to result in substantial and material damage to the Company or its subsidiaries, (ii) repeated unexplained or unjustified absence from the Company, (iii) a material and willful violation of any federal or state law, (iv) commission of any act of fraud with respect to the Company, (v) breach of any confidentiality obligation to the Company, whether determined by agreement or by applicable law; or (vi) conviction of a felony or a crime involving moral turpitude causing material harm to the standing and reputation of the Company, in each case as determined in good faith by the Board of Directors of the Company. Not withstanding anything to the contrary herein, neither poor performance in achievement of job objectives nor disability shall constitute “Cause”.

(c) Constructive Termination. “Constructive Termination” shall be deemed to occur if, within twelve months of the change in control, there is (i)(A) a material adverse change in Employee’s position causing such position to be of materially reduced responsibility, (B) any reduction of greater than 5.0% of Employee’s total current compensation including salary, incentive payments, bonuses, benefits, etc., or (C) Employee’s refusal to relocate to a facility or location more than 50 miles from the Company’s current location in Redwood City, California; and (ii) following any of the foregoing events, Employee elects to terminate his or her employment voluntarily.

6. SUCCESSORS.

(a) Company’s Successors. Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the, same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this Section 6(a) or which becomes bound by the terms of this Agreement by operation of law.

(b) Employee’s Successors. The terms of this Agreement an all rights of the Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

7. NOTICE. Notices and all other communications contemplated by his Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or three (3) days after being mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Employee, mailed notices shall be addressed to him or her at

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the home address which he or she most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.

8. MISCELLANEOUS PROVISIONS.

(a) Waiver. No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Employee and by an authorized officer of the Company (other than the Employee). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(b) Whole Agreement. This Agreement represents the entire agreement between the Employee and the Company with respect to the matters set forth herein. No agreements, representations or understandings (whether oral or written and whether express or implied) which are not expressly set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof.

(c) Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California as applied to agreements entered into and performed within California solely by residents of that state.

(d) Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

(e) Legal Fees and Expenses. The parties shall each bear their own expenses, legal fees, and other fees incurred in connection with this Agreement.

(f) Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income and employment taxes.

(g) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the date set forth above.

COMPANY:	THE GATOR CORPORATION
	By:	/s/ Jeff McFadden
		Jeff McFadden, President/CEO
	Date:

EMPLOYEE:	Signature:	/s/ Mitchell Weisman
		Mitchell Weisman

Date: 2/7/01

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EX-10.10

Exhibit 10.10

Mr. Scott VanDeVelde

March 23, 2000

Dear Scott:

On behalf of Gator.com (the “Company”), we are delighted to extend an offer to you to join the Company as its Vice President of Sales. The members of the Company’s management team are all very impressed with your credentials and we look forward to your future success in this position.

The terms of your new position with the Company are as set forth below:

1. Position.

a. As the Vice President of Sales, you will work out of your home office in Chicago and the Company’s headquarters office in Redwood City, California, and you will report directly to Jeff McFadden, Chief Executive Officer.

2. Start Date. Subject to fulfillment of any conditions imposed by this letter agreement, you will commence this new position with the Company on March 23, 2000.

3. Proof of Right to Work. For purposes of Federal Immigration Law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.

4. Compensation.

a. Base Salary. You will be paid a monthly salary of $14,583, which is equivalent to $175,000 on an annualized basis. Your salary will be payable semimonthly pursuant to the Company’s regular payroll policy.

b. Bonus. For your first two successive quarters of employment with the Company (Q2FY00 and Q3FY00), you will be guaranteed a bonus in the gross amount of $45,000 per quarter. For the time period of five successive quarters, commencing on the start of Q4FY00 and ending at the close of Q4FY01, you will be eligible to earn up to $45,000 per quarter on a pro-rata basis of your achievement of the sales goals. For the time period commencing Q1FY02, you will be eligible to earn an additional bonus in accordance with the Sales Bonus Plan attached hereto as Exhibit A.

c. Stock Options. In connection with the commencement of your employment, the Company will recommend that the Board of Directors grant you an option to purchase 350,000 shares of the Company’s Common Stock (“Shares”) with an exercise price equal to the fair market value on the date of the grant. Your shares will vest 25% on the first anniversary of your joining the Company (March 24, 2000), with the balance vesting in equal monthly installments over the subsequent three years. Vesting will, of course, depend on your continued employment with the Company. The option will be an incentive stock option to the maximum extent allowed by the tax code and will be subject to the terms of the Company’s Stock Plan and the Stock Option Agreement between you and the Company. In addition, the Company will recommend that the Board of Directors grant you an option to purchase 75,000 shares of the Company’s Common Stock (“Performance Shares”) with an exercise price equal to the fair market value on the date of grant. With regard to this second option grant of 75,000 Performance Shares, for the time period of five successive quarters, commencing on the start of Q4FY00 and ending on the close of Q4FY01, you will be eligible to accelerate vesting of up to 15,000 Performance Shares per quarter based on your performance of achieving the sales goals of the Company in accordance with the Stock Incentive Plan attached hereto as Exhibit B, in any event you will fully vest in this option grant after five (5) years of continued employment with the company from your date of hire. This option will be an incentive stock option to the maximum extent allowed by the tax code and will be subject to the terms of the Company’s Stock Plan and the Stock Option Agreement between you and the Company.

d. Temporary Relocation. In order to assist you in acclimating to the Company, the Company will provide you with the temporary relocation benefits including all expenses related to travel and lodging in the Bay area for you as our employee, and your spouse and children, for the time period spanning up to one year.

5. Benefits. You will be entitled to participate in the Company’s benefits plans. You will also be entitled to the Company’s vacation program, which is currently fifteen days vacation and ten paid holidays.

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6. Responsibilities. You agree, to the best of your ability and experience, that you will at all times loyally and conscientiously perform all of the duties and obligations required of and from you pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company. During the term of your employment, you further agree that you will devote all of your business time and attention to the business of the Company. The Company will be entitled to all of the benefits and profits arising from or incident to all such work services and advice. You will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, without the prior written consent of the Company’s Board of Directors, and you will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company. Nothing in this letter agreement will prevent you from accepting speaking or presentation engagements in exchange for honoraria, or from serving on boards of charitable organizations, or from owning no more than one percent (1%) of the outstanding equity securities of a corporation whose stock is listed on a national stock exchange.

7. Confidential Information and Invention Assignment Agreement. Your acceptance of this offer and commencement of employment with the Company is contingent upon the execution and return to an officer of the Company, of the Company’s Confidential Information and Invention Assignment Agreement, a copy of which is enclosed for your review and execution (the “Confidentiality Agreement”), prior to or on your Start Date.

8. Confidentiality of Terms. You agree to follow the Company’s policy that employees must not disclose, either directly or indirectly, any information, including any of the terms of this agreement, regarding salary, bonuses, or stock purchase or option allocations to any person, including other employees of the Company; provided, however, that you may discuss such terms with members of your immediate family and any legal, tax or accounting specialists who provide you with individual legal, tax or accounting advice.

9. At-Will Employment. Your employment with the Company will be on an “at will” basis, meaning that either you or the Company may terminate your employment at any time for any reason or no reason, without further obligation or liability.

We are all delighted to be able to extend you this offer and look forward to working with you. To indicate your acceptance of the Company’s offer, please sign and date this letter in the space provided below and return it to us, along with a signed and dated copy of the Confidentiality Agreement. This letter, together with the Confidentiality Agreement, set forth the terms of your employment with the Company and supersede any prior representations or agreements, whether written or oral. This letter may not be modified or amended except by a written agreement, signed by the Company and by you.

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Very truly yours, Gator.com Corporation
By:	/s/ Jeff McFadden
Jeff McFadden
Chief Executive Officer

Cc: Mary Cunniff, Vice President of Human Resources

ACCEPTED AND AGREED:

Scott VanDeVelde

/s/ Scott VanDeVelde

Signature

March 24, 2000

Date

March 24, 2000
Start Date	Start Date Accepted	/s/ SRV
		(Employee) Initial
		(Company) Initial

Enclosure: Confidential Information and Invention Assignment Agreement

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EXHIBIT A

2002 Sales Bonus Plan

Beginning on 1/1/2002, you will also be eligible to earn a cash bonus for over goal performance as follows.

During each calendar quarter in which you achieve greater than 100% of goal and less than or equal to 125% of goal, your bonus will be equal to (N – 100%) * 125% * $45000, where N is your actual performance for that quarter.

During each calendar quarter in which you achieve greater than 125% of goal and less than or equal to 150% of goal, your bonus will be equal to $14063 + ((N – 125%) * 150% * $45000), where N is your actual performance for that quarter.

During each calendar quarter in which you achieve greater than 150% of goal, your bonus will be equal to $30938 + ((N – 150%) * 200% * $45000), where N is your actual performance for that quarter.

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EXHIBIT B

Gator.com Corporation
Scott VanDeVelde
Stock Incentive Plan
Sales Quota Achievement	Acceleration of Stock Options
100%	0
110%	3,000
120%	6,000
130%	9,000
140%	12,000
150%	15,000

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EX-10.11

Exhibit 10.11

GATOR.COM CORPORATION

KEY EMPLOYEE RETENTION AGREEMENT

This Key Employee Retention Agreement (the “Agreement”) is made and entered into by and between Scott VanDeVelde (the “Employee”) and Gator.com Corporation, a Delaware corporation (the “Company”), effective as of March 24, 2000.

RECITALS

A. It is expected that the Company from time to time will consider the possibility of an acquisition by another company or other change of control. The Board of Directors of the Company (the “Board”) recognizes that such consideration can be a distraction to the Employee and can cause the Employee to consider alternative employment opportunities. The Board has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication and objectivity of the Employee, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined in Section 5 below) of the Company.

B. The Board believes that it is in the best interests of the Company and its stockholders to provide the Employee with an incentive to continue his or her employment and to motivate the Employee to maximize the value of the Company upon a Change of Control for the benefit

C. The Board believes that it is imperative to provide the Employee with certain benefits upon a Change of Control that provide

D. Certain capitalized terms used in the Agreement are defined in Section 5 below.

The parties hereto agree as follows:

1. TERM OF AGREEMENT. This Agreement shall terminate upon the earlier of: (a) the termination of Employee’s employment for any reason prior to a Change of Control, or (b) the date that all obligations of the parties hereto with respect to this Agreement have been satisfied.

2. AT-WILL EMPLOYMENT. The Company and the Employee acknowledge that the Employee’s employment is and shall continue to be at-will, as defined under applicable law. If the Employee’s employment terminates for any reason prior to a Change of Control, Employee shall not be entitled to the benefits provided by this Agreement, or any other benefit unless otherwise available in accordance with the Company’s established employee plans and practices or pursuant to other agreements with the Company.

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3. SEPARATION BENEFITS UPON INVOLUNTARY TERMINATION FOLLOWING CHANGE OF CONTROL. If within one year of the effective date of a Change of Control, the Employee’s employment with the Company is terminated (an “Involuntary Termination”) by the Company or the successor corporation without Cause or, by the Employee as the result of a Constructive Termination by the Company or the successor corporation, then, subject to the limitations in this Section 3 and Section 4 below, the vesting of 25% of Employee’s then unvested shares of the Company’s common stock shall automatically be accelerated so as to become vested as of the effective date of the Involuntary Termination or Constructive Termination.

4. LIMITATION ON PAYMENTS. In the event that the separation benefits “Benefits”) provided for in this Agreement or otherwise payable to the Employee (i) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 19 6, as amended (the “Code”), and (ii) but for this Section 4, would be subject to the excise tax imposed by Section 4999 of the Code (or any corresponding provisions of state income tax la then the Employee’s Benefits under Section 3 shall be either.

(a) delivered in full, or

(b) delivered as to such lesser extent which would result in no portion of such Benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, results in the receipt by the Employee on an after-tax-basis, of the greater amount of Benefits, notwithstanding that all or some portion of such Benefits may be taxable under Section 4999 of the Code. Unless the Company and the Employee otherwise agree in writing, any determination required under this Section 4 shall be made in writing by the Accountants, whose determination shall be conclusive and binding upon the Employee and the Company for all purposes. For purposes of making the calculations required by this Section 5, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and the Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 4. In event that subsection (a) above applies, then Employee shall be responsible for any excise taxes imposed with respect to such severance and other benefits. In the event that subsection (b) above applies, then each benefit provided hereunder shall be proportionately reduced to the extent necessary to avoid imposition of such excise taxes.

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5. DEFINITION OF TERMS. The following terms referred to in this Agreement shall have the following meanings:

(a) Change of Control. “Change of Control” shall mean a sale of all or substantially all of the Company’s assets, or a merger, consolidation or other capital reorganization of the Company with or into another corporation; provided however that a merger, consolidation or other capital reorganization in which the holders of more than 50% of the of capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by the voting securities remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the total voting power represented by the voting securities of the Company, or such surviving entity, outstanding immediately after such transaction shall not constitute a Change in Control

(b) Cause. “Cause” for Employee’s termination shall mean the good faith judgment of the Company’s Board of Directors, that the undersigned has engaged in or committed any of the following: (i) gross negligence or willful misconduct in the performance f his duties to the Company where such gross negligence or willful misconduct has resulted or is likely to result in substantial and material damage to the Company or its subsidiaries, (ii) repeated unexplained or unjustified absence from the Company, (iii) a material and willful violation of federal or state law, (iv) commission of any act of fraud with respect to the Company, (v) breach of any confidentiality obligation to the Company, whether determined by agreement or by applicable law; or (vi) conviction of a felony or a crime involving moral turpitude causing material harm to the standing and reputation of the Company, in each case as determined in good faith the Board of Directors of the Company.

(c) Constructive Termination. “Constructive Termination” shall be deemed to occur if there is (i)(A) a material adverse change in Employee’s position causing such position to be of materially reduced responsibility, (B) any reduction of Employee’s base compensation unless in connection with similar decreases of other similarly situated employees of the Company or its successor corporation, or (C) Employee’s refusal to relocate to a facility or location more than 50 miles from the Company’s current location in Redwood City, California; and (ii) within the 30-day period immediately following any of the foregoing events, Employee elects to terminate his or her employment voluntarily.

6. SUCCESSORS.

(a) Company’s Successors. Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this Section 6(a) or which becomes bound by the terms of Agreement by operation of law.

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(b) Employee’s Successors. The terms of this Agreement and all rights of Employee hereunder shall inure to the benefit of and be enforceable by, the Employee’s personal or legal representatives, -executors, administrators, successors, heirs, distributees, devisees and legatees.

7. NOTICE. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or (3) days after being mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Employee, mailed notices shall be addressed to him or her at the home address which he or she most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.

8. MISCELLANEOUS PROVISIONS.

(a) Waiver. No provision of this Agreement shall, be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Employee and by an authorized officer of the Company (other than the Employee). No waiver party of any breach of or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the condition or provision at another time.

(b) Whole Agreement. This Agreement represents the entire agreement between the Employee and the Company with respect to the matters set forth herein. No agreements, representations or understandings (whether oral or written and whether express or implied) which are not expressly set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof.

(c) Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California as applied to agreements entered into and performed within California solely by residents of that state.

(d) Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

(e) Legal Fees and Expenses. The parties shall each bear their own expenses, legal fees, and other fees incurred in connection with this Agreement.

(f) Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income and employment taxes.

(g) Counterparts. This Agreement may be executed in counterparts, each which shall be deemed an original, but all of which together will constitute one and the same instrument.

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, case of the Company by its duly authorized officer, as of the date set forth above.

COMPANY:	GATOR.COM CORPORATION
	By:	/s/ Jeff McFadden
	Title:	President & CEO

EMPLOYEE	Scott VanDeVelde
	Signature:	/s/ Scott VanDeVelde
	Scott VanDeVelde
	Please print name

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EX-10.12

Exhibit 10.12

February 4, 2003

Joseph Cutts

Dear Joe:

On behalf of Claria Corporation (the “Company”), we are delighted to extend an offer to you to join the Company as a Board Member and Chairman of the Audit Committee. The members of the Company’s Board of Directors are all very impressed with your credentials and we look forward to your future success. The terms of your position with the Company are as set forth below:

1. Position. As Board Member and Chairman of the Audit Committee, you will be required from time to time to attend meetings at the Company’s headquarters in Redwood City, CA.

2. Start Date. Subject to any conditions imposed by this letter agreement, you will commence your position with the company at a mutually agreed upon date but not later than February 18, 2004.

3. Compensation.

a. Annual Retainer. You will be paid an Annual Retainer of $20,000 per year, which will be paid gross. You will be responsible for reporting and paying any applicable taxes.

b. Additional Fees. You will be paid $1,500 per each in-person Company board meeting you attend. In addition, you will be paid $1,000 per each in-person committee meeting you attend. No fees will be paid for conference calls, meeting preparation, etc. Reasonable expenses that you incur related to the performance of your duties will be reimbursed to you. You will be responsible for reporting and paying any applicable taxes.

c. Stock Options. In connection with the commencement of your employment, the Company will recommend that the Board of Directors grant you an option to purchase 60,000 shares of the Company’s Common Stock (“Shares”) with an exercise price equal to the fair market value on the date of the grant. The grant will vest in equal monthly installments over four years. Subject to review by the Board of Directors and Compensation Committee, on an annual basis, the Board of Directors will grant you an option to purchase 12,000 shares, with an exercise price equal to the fair market value on the date of the grant. The grant will vest in equal monthly installments over four years.

4. Indemnity. The Company maintains Directors’ and Officers’ Insurance. In addition, the Company’s bylaws permit it to indemnify its officers and directors to the fullest extent

permitted under the Delaware General Corporation Law and to enter into indemnification contracts with its officers and directors. If the Board of Directors determines that it is in the best interests of the Company to enter into indemnification contracts with any of its offers or directors, as a Board Member and Chairman of the Audit Committee, you will be entitled to such indemnification and the Company will enter into such an indemnification contract with you.

5. Confidential Information and Invention Assignment Agreement. Your acceptance of this offer and commencement of duties with the Company is contingent upon the execution and return to an officer of the Company, of the Company’s Confidential Information and Invention Assignment Agreement, a copy of which is enclosed for your review and execution (the “Confidentiality Agreement”), prior to or on your Start Date.

6. Confidentiality of Terms. You agree to follow the Company’s policy that employees and members of the Board of Directors, must not disclose, either directly or indirectly, any information, including any of the terms of this agreement, regarding salary, bonuses, or stock purchase or option allocations to any person, including other employees of the Company; provided, however, that you may discuss such terms with members of your immediate family and any legal, tax or accounting specialists who provide you with individual legal, tax or accounting advice.

We are all delighted to be able to extend you this offer and look forward to working with you. To indicate your acceptance of the Company’s offer, please sign and date this letter in the space provided below and return it to us, along with a signed and dated copy of the Confidentiality Agreement. This letter, together with the Confidentiality Agreement, set forth the terms of your service with the Company and supersede any prior representations or agreements, whether written or oral. This letter may not be modified or amended except by a written agreement, signed by the Company and by you.

Very truly yours,
Claria Corporation
By:	/s/ Jeff McFadden
	Jeff McFadden
	Chief Executive Officer

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ACCEPTED AND AGREED:

Joseph Cutts

/s/ Joseph Cutts

Signature

2/6/04

Date

2/6/04

Start Date

Start Date Accepted

/s/ JC

Employee Initial

/s/ JM

Company Initial

Enclosure: Confidential Information and Invention Assignment Agreement

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EX-10.13

Exhibit 10.13

GATOR.COM CORPORATION

SECOND AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

March 28, 2000

TABLE OF CONTENTS

			Page
1.	Registration Rights		2
	1.1	Definitions	2
	1.2	Request for Registration	3
	1.3	Company Registration	4
	1.4	Form S-3 Registration	5
	1.5	Obligations of the Company	5
	1.6	Furnish Information	7
	1.7	Expenses of Registration	7
	1.8	Underwriting Requirements	8
	1.9	Delay of Registration	9
	1.10	Indemnification	9
	1.11	Reports Under Securities Exchange Act of 1934	11
	1.12	Assignment of Registration Rights	11
	1.13	Limitations on Subsequent Registration Rights	12
	1.14	Market Stand-Off Agreement	12
	1.15	Termination of Registration Rights	13
2.	Covenants of the Company		13
	2.1	Delivery of Financial Statements	13
	2.2	Inspection	14
	2.3	Right of First Offer	14
	2.4	Prompt Payment of Taxes, etc	15
	2.5	Maintenance of Properties and Leases	15
	2.6	Insurance	16
	2.7	Use of Proceeds	16
	2.8	Compliance with Requirements of Government Authorities	16
	2.9	Maintenance of Corporate Existence, etc	16
	2.10	Termination of Covenants	16
3.	Miscellaneous		16
	3.1	Successors and Assigns	16
	3.2	Amendments and Waivers	17
	3.3	Notices	17
	3.4	Severability	17
	3.5	Governing Law	17
	3.6	Counterparts	17
	3.7	Titles and Subtitles	17
	3.8	Aggregation of Stock	18

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GATOR.COM CORPORATION

INVESTORS’ RIGHTS AGREEMENT

This Investors’ Rights Agreement (the “Agreement”) is made as of the 28th day of March, 2000, by and among Gator.com Corporation, a Delaware corporation (the “Company”), the holders of the Company’s Series A Preferred Stock listed on Exhibit A hereto (the “Series A Holders”), the holders of the Company’s Series B Preferred Stock listed on Exhibit B hereto (“the Series B Holders”); the holders of Series C Preferred Stock listed on Exhibit C hereto (the “Series C Holders”) and the holders of Series D Preferred Stock listed on Exhibit D hereto (the Series D Holders”), each of which is herein referred to as an “Investor,” and the individuals listed on Exhibit E hereto, each of whom is herein referred to as a “Founder”.

RECITALS

A. The Company, the Founders, the Series A Holders, the Series B Holders and the Series C Holders have previously entered into an Investors’ Rights Agreement dated as of November 30, 1999 (the “Series C Rights Agreement”), pursuant to which the Company granted the Founders, the Series A Holders, the Series B Holders and Series C Holders certain rights.

B. The Company and the Investors have entered into a Series D Preferred Stock Purchase Agreement (the “Purchase Agreement”) of even date herewith pursuant to which the Company desires to sell to the Series D Holders and the Series D Holders desire to purchase from the Company shares of the Company’s Series D Preferred Stock. A condition to the Series D Holders’ obligations under the Purchase Agreement is that the Company, the Founders and the Investors enter into this Agreement in order to provide the Series D Holders with (i) certain rights to register shares of the Company’s Common Stock issuable upon conversion of the Series D Preferred Stock held by the Series D Holders, (ii) certain rights to receive or inspect information pertaining to the Company, and (iii) a right of first offer with respect to certain issuances by the Company of its securities. The Company, the Investors and the Founders each desire to induce the Series D Holders to purchase shares of Series D Preferred Stock pursuant to the Purchase Agreement by agreeing to the terms and conditions set forth herein.

D. The Company, the Founders, the Series A Holders, the Series B Holders and the Series C Holders each desire to amend and restate the Series C Rights Agreement to add Series D Holders as parties to this Agreement and make certain other changes.

AGREEMENT

The parties hereby agree as follows:

A. Agreement of Prior Rights Agreement; Waiver of Right of First Offer.

Effective and contingent upon execution of this Agreement by the Company and the holders of a majority of the Registrable Securities, as that term is defined in the Series C Rights Agreement, not including the Founders Stock, as that term is defined in the Series C Rights

Agreement, and upon closing of the transactions contemplated by the Purchase Agreement, the Series C Rights Agreement is hereby amended and restated to read as set forth in this Agreement, and the Company, the Founders, and the Investors hereby agree to be bound by the provisions hereof as the sole agreement of the Company, the Founders and the Investors with respect to registration rights of the Company’s securities and certain other rights, as set forth herein. Each Investor that is a party to the Series C Rights Agreement hereby waives its rights set forth in Section 2.3 of the Series C Rights Agreement to the extent that such Investor is not purchasing its full pro rata portion of shares of the Company’s Series D Preferred Stock being issued in connection with the Series D Stock Purchase Agreement of even date herewith.

1. Registration Rights. The Company and the Investors covenant and agree as follows:

1.1 Definitions. For purposes of this Section 1:

(a) The terms “register,” “registered,” and “registration” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act of 1933, as amended (the “Securities Act”), and the declaration or ordering of effectiveness of such registration statement or document;

(b) The term “Registrable Securities” means (i) the shares of Common Stock issuable or issued upon conversion of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock (together the “Preferred Stock”), (ii) the shares of Common Stock issued to the Founders (the “Founders’ Stock”), provided, however, that for the purposes of Section 1.2, 1.4 or 1.13 the Founders’ Stock shall not be deemed Registrable Securities and the Founders shall not be deemed Holders, (iii) any other shares of Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares listed in (i) and (ii); provided, however, that the foregoing definition shall exclude in all cases any Registrable Securities sold by a person in a transaction in which his or her rights under this Agreement are not assigned. Notwithstanding the foregoing, Common Stock or other securities shall only be treated as Registrable Securities if and so long as they have not been (A) sold to or through a broker or dealer or underwriter in a public distribution or a public securities transaction, or (B) sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act under Section 4(1) thereof so that all transfer restrictions, and restrictive legends with respect thereto, if any, are removed upon the consummation of such sale;

(c) The number of shares of “Registrable Securities then outstanding” shall be determined by the number of shares of Common Stock outstanding which are, and the number of shares of Common Stock issuable pursuant to then exercisable or convertible securities which are, Registrable Securities;

(d) The term “Holder” means any person or persons or affiliates of person or persons owning or having the right to acquire Registrable Securities or any assignee thereof in accordance with Section 1.12 of this Agreement;

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(e) The term “Form S-3” means such form under the Securities Act as in effect on the date hereof or any successor form under the Securities Act;

(f) The term “SEC” means the Securities and Exchange Commission; and

(g) The term “Qualified IPO” means a firm commitment underwritten public offering by the Company of shares of its Common Stock pursuant to a registration statement on Form S-1 under the Securities Act, which results in a public offering price not less than $11.50 per share (appropriately adjusted for any stock split, dividend, combination or other recapitalization) and which results in aggregate cash proceeds of $25,000,000 (net of underwriting discounts and commissions).

1.2 Request for Registration.

(a) If the Company shall receive at any time after the earlier of (i) the fifth anniversary of the Initial Closing (as defined in the Purchase Agreement), or (ii) six (6) months after the effective date of the first registration statement for a public offering of securities of the Company (other than a registration statement relating either to the sale of securities to employees of the Company pursuant to a stock option, stock purchase or similar plan or an SEC Rule 145 transaction), a written request from the Holders of a majority of the Registrable Securities then outstanding that the Company file a registration statement under the Securities Act covering the registration of at least $10,000,000, then the Company shall, within ten (10) days of the receipt thereof, give written notice of such request to all Holders and shall, subject to the limitations of subsection 1.2(b), use its best efforts to effect as soon as practicable, and in any event within 60 days of the receipt of such request, the registration under the Securities Act of all Registrable Securities which the Holders request to be registered within twenty (20) days of the mailing of such notice by the Company in accordance with Section 3.3.

(b) If the Holders initiating the registration request hereunder (“Initiating Holders”) intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 1.2 and the Company shall include such information in the written notice referred to in subsection 1.2(a). The underwriter will be selected by a majority in interest of the Initiating Holders and shall be reasonably acceptable to the Company. In such event, the right of any Holder to include his Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder) to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in subsection 1.5(e)) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting. Notwithstanding any other provision of this Section 1.2, if the underwriter advises the Initiating Holders in writing that marketing factors require a limitation of the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities which would otherwise be underwritten pursuant hereto, and the number of shares of Registrable Securities that may be included in the

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underwriting shall be allocated among all Holders thereof, including the Initiating Holders, in proportion (as nearly as practicable) to the amount of Registrable Securities of the Company owned by each Holder; provided, however, that the number of shares of Registrable Securities to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting.

(c) Notwithstanding the foregoing, if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 1.2, a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its stockholders for such registration statement to be filed and it is therefore essential to defer the filing of such registration statement, the Company shall have the right to defer such filing for a period of not more than 120 days after receipt of the request of the Initiating Holders; provided, however, that the Company may not utilize this right more than once in any twelve-month period.

(d) In addition, the Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to this Section 1.2:

(i) After the Company has effected two (2) registrations pursuant to this Section 1.2 and such registrations have been declared or ordered effective;

(ii) During the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of filing of, and ending on a date one hundred eighty (180) days after the effective date of, a registration subject to Section 1.3 hereof; provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective; or

(iii) If the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 1.4 below.

1.3 Company Registration. If (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected by the Company for stockholders other than the Holders) any of its stock under the Securities Act in connection with the public offering of such securities solely for cash (other than a registration relating solely to the sale of securities to participants in a Company stock plan or a transaction covered by Rule 145 under the Securities Act, a registration in which the only stock being registered is Common Stock issuable upon conversion of debt securities which are also being registered, or any registration on any form which does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities), the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the written request of each Holder given within twenty (20) days after mailing of such notice by the Company in accordance with Section 3.3, the Company shall, subject to the provisions of Section 1.8, cause to be registered under the Securities Act all of the Registrable Securities that each such Holder has requested to be registered.

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1.4 Form S-3 Registration. In case the Company shall receive from any Holder or Holders of not less than forty percent (40%) of the Registrable Securities then outstanding a written request or requests that the Company effect a registration on Form S-3 and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company will:

(a) promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders; and

(b) as soon as practicable, effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holder’s or Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within 15 days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this Section 1.4: (i) if Form S-3 is not available for such offering by the Holders; (ii) if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public (net of any underwriters’ discounts or commissions) of less than $1,000,000; (iii) if the Company shall furnish to the Holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its stockholders for such Form S-3 Registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than 120 days after receipt of the request of the Holder or Holders under this Section 1.4; provided, however, that the Company shall not utilize this right more than once in any twelve month period; (iv) if the Company has, within the twelve (12) month period preceding the date of such request, already effected two registrations on Form S-3 for the Holders pursuant to this Section 1.4; (v) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance; or (vi) during the period ending one hundred eighty (180) days after the effective date of a registration statement subject to Section 1.3.

(c) Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Holders. Registrations effected pursuant to this Section 1.4 shall not be counted as demands for registration or registrations effected pursuant to Sections 1.2 or 1.3, respectively.

1.5 Obligations of the Company. Whenever required under this Section 1 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

(a) Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to

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become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for up to one hundred twenty (120) days. The Company shall not be required to file, cause to become effective or maintain the effectiveness of any registration statement that contemplates a distribution of securities on a delayed or continuous basis pursuant to Rule 415 under the Securities Act.

(b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for up to one hundred twenty (120) days.

(c) Furnish to the Holders such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them.

(d) Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.

(e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.

(f) Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, such obligation to continue for one hundred twenty (120) days.

(g) Cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed.

(h) Provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.

(i) Use its best efforts to furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to this Section 1, on the date that such

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Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Section 1, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities and (ii) a letter dated such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities.

1.6 Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 1 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required to effect the registration of such Holder’s Registrable Securities. The Company shall have no obligation with respect to any registration requested pursuant to Section 1.2 or Section 1.4 of this Agreement if, as a result of the application of the preceding sentence, the number of shares or the anticipated aggregate offering price of the Registrable Securities to be included in the registration does not equal or exceed the number of shares or the anticipated aggregate offering price required to originally trigger the Company’s obligation to initiate such registration as specified in subsection 1.2(a) or subsection 1.4(b)(2), whichever is applicable.

1.7 Expenses of Registration.

(a) Demand Registration. All expenses other than underwriting discounts and commissions incurred in connection with registrations, filings or qualifications pursuant to Section 1.2, including (without limitation) all registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of one counsel for the selling Holders selected by them with the approval of the Company, which approval shall not be unreasonably withheld, shall be borne by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 1.2 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all participating Holders shall bear such expenses), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one demand registration pursuant to Section 1.2; provided, further, that if the withdrawal by the Holders of the registration request is based upon material adverse information concerning the Company of which such Holders were not aware at the time of such registration request the Company shall bear such registration expenses and the Holders shall not have been deemed to forfeit their right to one demand registration pursuant to Section 1.2.

(b) Company Registration. All expenses other than underwriting discounts and commissions incurred in connection with registrations, filings or qualifications of

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Registrable Securities pursuant to Section 1.3 for each Holder (which right may be assigned as provided in Section 1.12), including (without limitation) all registration, filing, and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company and the reasonable fees and disbursements of one counsel for the selling Holder or Holders selected by them with the approval of the Company, which approval shall not be unreasonably withheld, shall be borne by the Company.

(c) Registration on Form S-3. All expenses incurred in connection with a registration requested pursuant to Section 1.4, including (without limitation) all registration, filing, qualification, printers’ and accounting fees and the reasonable fees and disbursements of one counsel (up to $25,000 in counsel fees per registration) for the selling Holder or Holders selected by them with the approval of the Company, which approval shall not be unreasonably withheld, and counsel for the Company, shall be borne by the Company. Any underwriters’ discounts or commissions associated with Registrable Securities, shall be borne pro rata by the Holder or Holders participating in the Form S-3 Registration. Notwithstanding the foregoing, under no circumstances, shall the Company incur any expenses for a S-3 registration after the Holders have effected three (3) registrations on Form S-3 pursuant to Section 1.4.

1.8 Underwriting Requirements. In connection with any offering involving an underwriting of shares of the Company’s capital stock, the Company shall not be required under Section 1.3 to include any of the Holders’ securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters determine in their sole discretion will not jeopardize the success of the offering (the securities so included to be apportioned pro rata among the selling stockholders according to the total amount of securities entitled to be included therein owned by each selling stockholder or in such other proportions as shall mutually be agreed to by such selling stockholders) but in no event shall (i) any shares being sold by a stockholder exercising a demand registration right similar to that granted in Section 1.2 be excluded from such offering, (ii) the amount of securities of the selling Holders included in the offering be reduced below twenty percent (20%) of the total amount of securities included in such offering, unless such offering is the initial public offering of the Company’s securities, in which case, except as provided in (i) the selling stockholders may be excluded if the underwriters make the determination described above and no other stockholder’s securities are included or (iii) any securities held by a Founder be included if any securities held by any selling Holder are excluded. For purposes of the preceding parenthetical concerning apportionment, for any selling stockholder which is a holder of Registrable Securities and which is a partnership or corporation, the partners, retired partners and stockholders of such holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “selling stockholder,” and any pro-rata reduction with respect to such “selling stockholder” shall be based upon the

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aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “selling stockholder,” as defined in this sentence.

1.9 Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 1.

1.10 Indemnification. In the event any Registrable Securities are included in a registration statement under this Section 1:

(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”): (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law; and the Company will pay to each such Holder, underwriter or controlling person, as incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this subsection 1.10(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable to any Holder, underwriter or controlling person for any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder, underwriter or controlling person.

(b) To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in

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reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this subsection 1.10(b), in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this subsection 1.10(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided, that in no event shall any indemnity under this subsection 1.10(b) exceed the net proceeds from the offering received by such Holder, except in the case of willful fraud by such Holder.

(c) Promptly after receipt by an indemnified party under this Section 1.10 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 1.10, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the reasonable fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 1.10, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 1.10.

(d) If the indemnification provided for in this Section 1.10 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense as well as any other relevant equitable considerations; provided, that in no event shall any contribution by a Holder under this Subsection 1.10(d) exceed the net proceeds from the offering received by such Holder, except in the case of willful fraud by such Holder. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

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(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

(f) The obligations of the Company and Holders under this Section 1.10 shall survive the completion of any offering of Registrable Securities in a registration statement under this Section 1, and otherwise.

1.11 Reports Under Securities Exchange Act of 1934. With a view to making available to the Holders the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to:

(a) make and keep public information available, as those terms are understood and defined in SEC Rule 144, at all times after ninety (90) days after the effective date of the first registration statement filed by the Company for the offering of its securities to the general public so long as the Company remains subject to the periodic reporting requirements under Sections 13 or 15(d) of the Exchange Act;

(b) take such action, including the voluntary registration of its Common Stock under Section 12 of the Exchange Act, as is necessary to enable the Holders to utilize Form S-3 for the sale of their Registrable Securities, such action to be taken as soon as practicable after the end of the fiscal year in which the first registration statement filed by the Company for the offering of its securities to the general public is declared effective;

(c) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and

(d) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company), the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC which permits the selling of any such securities without registration or pursuant to such form.

1.12 Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to this Section 1 may be assigned (but only with all related obligations) by a Holder to a transferee or assignee of at least 100,000 shares of such securities, provided the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with

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respect to which such registration rights are being assigned; and provided, further, that such assignment shall be effective only if immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Securities Act. For the purposes of determining the number of shares of Registrable Securities held by a transferee or assignee, the holdings of transferees and assignees of a partnership who are general partner, limited partners s or retired partners of such partnership (including spouses and ancestors, lineal descendants and siblings of such partners or spouses who acquire Registrable Securities by gift, will or intestate succession) shall be aggregated together and with the partnership; provided that all assignees and transferees who would not qualify individually for assignment of registration rights shall have a single attorney-in-fact for the purpose of exercising any rights, receiving notices or taking any action under Section 1.

1.13 Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of a majority of the outstanding Registrable Securities, enter into any agreement with any holder or prospective holder of any securities of the Company which would allow such holder or prospective holder (a) to include such securities in any registration filed under Section 1.2-1.4 hereof, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of his securities will not reduce the amount of the Registrable Securities of the Holders which is included or (b) to make a demand registration which could result in such registration statement being declared effective prior to the earlier of either of the dates set forth in subsection 1.2(a) or within one hundred twenty (120) days of the effective date of any registration effected pursuant to Section 1.2.

1.14 “Market Stand-Off” Agreement. Each Holder hereby agrees that, during the period of duration (up to, but not exceeding, 180 days) specified by the Company and an underwriter of Common Stock or other securities of the Company, following the effective date of a registration statement of the Company filed under the Securities Act, it shall not, to the extent requested by the Company and such underwriter, directly or indirectly sell, offer to sell, contract to sell (including, without limitation, any short sale), grant any option to purchase or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any securities of the Company held by it at any time during such period except Common Stock included in such registration; provided, however, that:

(a) such agreement shall be applicable only to the first such registration statement of the Company which covers Common Stock (or other securities) to be sold on its behalf to the public in an underwritten offering;

(b) all officers and directors of the Company, all one-percent securityholders, and all other persons with registration rights (whether or not pursuant to this Agreement) enter into similar agreements; and

(c) if the Company and the underwriter shall release any stockholders from the restriction set forth in this Section 1.14, the Company shall use its best efforts to ensure that all stockholders are released on a pro-rata basis.

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In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Registrable Securities of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period, and each Holder agrees that, if so requested, such Holder will execute an agreement in the form provided by the underwriter containing terms which are essentially consistent with the provisions of this Section 1.14.

Notwithstanding the foregoing, the obligations described in this Section 1.14 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms which may be promulgated in the future, or a registration relating solely to an SEC Rule 145 transaction on Form S-4 or similar forms which may be promulgated in the future or any stock acquired on the public market in or subsequent to a Qualified IPO.

1.15 Termination of Registration Rights. No Holder shall be entitled to exercise any right provided for in this Section 1 after the earlier of (i) five (5) years following the consummation of a Qualified IPO, or (ii) such time as Rule 144 or another similar exemption under the Securities Act is available for the sale of all of such Holder’s shares during a three (3)-month period without registration, or (iii) at such time as the holder holds Registrable Securities constituting less than one percent (1%) of the outstanding voting stock of the Company.

2. Covenants of the Company.

2.1 Delivery of Financial Statements. The Company shall deliver to each Holder of at least 100,000 shares of Series A, Series B, Series C and/or Series D Preferred Stock (other than a Holder reasonably deemed by the Company to be a competitor of the Company):

(a) as soon as practicable, but in any event within ninety (90) days after the end of each fiscal year of the Company, an income statement for such fiscal year, a balance sheet of the Company and statement of stockholder’s equity as of the end of such year, and a statement of cash flows for such year, such year-end financial reports to be in reasonable detail, prepared in accordance with generally accepted accounting principles (“GAAP”), and audited and certified by an independent public accounting firm of nationally recognized standing selected by the Company;

(b) as soon as practicable, but in any event within forty five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company, an unaudited profit or loss statement, a statement of cash flows for such fiscal quarter and an unaudited balance sheet as of the end of such fiscal quarter;

(c) as soon as practicable, but in any event thirty (30) days prior to the end of each fiscal year, a budget and business plan for the next fiscal year, prepared on a monthly basis, and, as soon as prepared, any other budgets or revised budgets prepared by the Company; provided, however, that the Company shall not be obligated pursuant to this Section 2.1 to provide access to any information which it reasonably considers to be a trade secret or similar confidential information and

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(d) with respect to the financial statements called for in subsections (b) and (c) of this Section 2.1, an instrument executed by the Chief Financial Officer or President of the Company and certifying that such financials were prepared in accordance with GAAP consistently applied with prior practice for earlier periods (with the exception of footnotes that may be required by GAAP) and fairly present the financial condition of the Company and its results of operation for the period specified, subject to year-end audit adjustment, provided that the foregoing shall not restrict the right of the Company to change its accounting principles consistent with GAAP, if the Board of Directors determines that it is in the best interest of the Company to do so.

2.2 Inspection. The Company shall permit each Holder of at least 100,000 shares of Series A, Series B, Series C and/or Series D Preferred Stock (except for a Holder reasonably deemed by the Company to be a competitor of the Company), at such Holder’s expense, to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times as may be requested by the Investor; provided, however, that the Company shall not be obligated pursuant to this Section 2.2 to provide access to any information which it reasonably considers to be a trade secret or similar confidential information.

2.3 Right of First Offer. Subject to the terms and conditions specified in this Section 2.3, the Company hereby grants to each Major Investor (as hereinafter defined) a right of first offer with respect to future sales by the Company of its Shares (as hereinafter defined). For purposes of this Section 2.3, a “Major Investor” shall mean any person who holds at least 100,000 shares of Preferred Stock (or the Common Stock issued upon conversion thereof). For purposes of this Section 2.3, Major Investor includes any general partners and affiliates of a Major Investor. A Major Investor who chooses to exercise the right of first offer may designate as purchasers under such right itself or its partners or affiliates in such proportions as it deems appropriate.

Each time the Company proposes to offer any shares of, or securities convertible into or exercisable for any shares of, any class of its capital stock (“Shares”), the Company shall first make an offering of such Shares to each Major Investor in accordance with the following provisions:

(a) The Company shall deliver a notice by certified mail (“Notice”) to the Major Investors stating (i) its bona fide intention to offer such Shares, (ii) the number of such Shares to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such Shares.

(b) Within 15 calendar days after delivery of the Notice, the Major Investor may elect to purchase or obtain, at the price and on the terms specified in the Notice, up to that portion of such Shares which equals the proportion that the number of shares of Preferred Stock (or Common Stock issued upon conversion thereof) then held, by such Major Investor bears to the total number of shares of Common Stock then outstanding (assuming full conversion and exercise of all convertible or exercisable securities).

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(c) The Company may, during the 45-day period following the expiration of the period provided in subsection 2.3(b) hereof, offer the remaining unsubscribed portion of the Shares to any person or persons at a price not less than, and upon terms no more favorable to the offeree than those specified in the Notice. If the Company does not enter into an agreement for the sale of the Shares within such period, or if such agreement is not consummated within 60 days of the execution thereof, the right provided hereunder shall be deemed to be revived and such Shares shall not be offered unless first reoffered to the Major Investors in accordance herewith.

(d) The right of first offer in this paragraph 2.3 shall not be applicable (i) to the issuance or sale of Common Stock (or options therefor) to employees, consultants and directors, pursuant to plans or agreements approved by the Board of Directors for the primary purpose of soliciting or retaining their services, (ii) to or after consummation of a Qualified IPO, (iii) to the issuance of securities pursuant to the conversion or exercise of convertible or exercisable securities, (iv) to the issuance of securities in connection with a bona fide business acquisition of or by the Company, whether by merger, consolidation, sale of assets, sale or exchange of stock or otherwise, (v) to the issuance of securities to financial institutions or lessors in connection with commercial credit arrangements, equipment financings, or similar transactions, (vi) to the issuance, sale or conversion of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock, (vii) to the issuance of securities that, with unanimous approval of the Board of Directors of the Company, are not offered to any existing stockholder of the Company, or (viii) any additional Closings as contemplated by the Series D Preferred Stock Purchase Agreement.

2.4 Prompt Payment of Taxes, etc. The Company will promptly pay and discharge, or cause to be paid and discharged, when due and payable, all lawful taxes, assessments and governmental charges or levies imposed upon the income, profits, property or business of the Company or any subsidiary; provided, however, that any such tax, assessment, charge or levy need not be paid if the validity thereof shall currently be contested in good faith by appropriate proceedings and if the Company shall have set aside on its books adequate reserves with respect thereto, and provided, further, that the Company will pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to foreclose any lien which may have attached as security therefor. The Company will promptly pay or cause to be paid when due, or in conformance with customary trade terms or otherwise in accordance with policies related thereto adopted by the Company’s Board of Directors, all other indebtedness incident to operations of the Company.

2.5 Maintenance of Properties and Leases. The Company will keep its properties and those of its subsidiaries in good repair, working order and condition, reasonable wear and tear excepted, and from time to time make all needful and proper repairs, renewals, replacements, additions and improvements thereto; and the Company and its subsidiaries will at all times comply with each material provision of all leases to which any of them is a party or under which any of them occupies property if the breach of such provision might have a material and adverse effect on the condition, financial or otherwise, or operations of the Company.

-15-

2.6 Insurance. Except as otherwise decided in accordance with policies adopted by the Company’s Board of Directors, the Company will keep its assets and those of its subsidiaries which are of an insurable character insured by financially sound and reputable insurers against loss or damage by fire, explosion and other risks customarily insured against by companies in the Company’s line of business, and the Company will maintain, with financial sound and reputable insurers, insurance against other hazards and risks and liability to persons and property to the extent and in the manner customary for companies in similar businesses similarly situated.

2.7 Use of Proceeds. The Company will use the proceeds from the sale of Series D Preferred Stock pursuant to the Series D Agreement for general corporate purposes. No proceeds will be used in the payment of any funded debt of the Company or in the repurchase or cancellation of securities held by any investor.

2.8 Compliance with Requirements of Government Authorities. The Company and all its subsidiaries shall duly observe and conform to all valid requirements of governmental authorities relating to the conduct of their businesses or to their properties or assets.

2.9 Maintenance of Corporate Existence, etc. The Company shall maintain in full force and effect its corporate existence, rights and franchises and all licenses and other rights in or to use patents, processes, licenses, trademarks, trade names or copyrights owned or possessed by it or any subsidiary and deemed by the Company to be necessary to the conduct of their business.

2.10 Termination of Covenants.

(a) The covenants set forth in Sections 2.1 through Section 2.9 shall terminate as to each Holder and be of no further force or effect (i) immediately prior to the consummation of a Qualified IPO, or (ii) when the Company shall sell, convey, or otherwise dispose of or encumber all or substantially all of its property or business or merge into or consolidate with any other corporation (other than a wholly-owned subsidiary corporation) or effect any other transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company is disposed of, provided that this subsection (ii) shall not apply to a merger effected exclusively for the purpose of changing the domicile of the Corporation.

(b) The covenants set forth in Sections 2.1 and 2.2 shall terminate as to each Holder and be of no further force or effect when the Company first becomes subject to the periodic reporting requirements of Sections 13 or 15(d) of the Exchange Act, if this occurs earlier than the events described in Section 2.4(a) above.

3. Miscellaneous.

3.1 Successors and Assigns. Except as otherwise provided in this Agreement, the terms and conditions of this Agreement shall inure to the benefit of and be

-16-

binding upon the respective permitted successors and assigns of the parties (including transferees of any of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock or any Common Stock issued upon conversion thereof). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. The Company agrees that TCV, IV L.P. may assign its right thereunder to TCV Strategic Partners, L.P. in connection with a transfer exempt from the registration under the Securities Act of portion of its Series D shares to such entity.

3.2 Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the Company and the holders of at least a majority of the Registrable Securities then outstanding, not including the Founders’ Stock; provided that if such amendment has the effect of affecting the Founders’ Stock (i) in a manner different than securities issued to the Investors and (ii) in a manner adverse to the interests of the holders of the Founders’ Stock, then such amendment shall require the consent of the holder or holders of a majority of the Founders’ Stock. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any Registrable Securities then outstanding, each future holder of all such Registrable Securities, and the Company.

3.3 Notices. Unless otherwise provided, any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon delivery, when delivered personally or by overnight courier 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 or fax number as set forth on the signature page on Exhibits A-D hereto or as subsequently modified by written notice.

3.4 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 (a) such provision shall be excluded from this Agreement, (b) the balance of the Agreement shall be interpreted as if such provision were so excluded and (c) the balance of the Agreement shall be enforceable in accordance with its terms.

3.5 Governing Law. This Agreement and all acts and transactions pursuant 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 laws.

3.6 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

3.7 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

-17-

3.8 Aggregation of Stock. All shares of the Preferred Stock held or acquired by affiliated entities or persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

[Signature Page Follows]

-18-

The parties have executed this Agreement as of the date first written above.

COMPANY:
GATOR.COM CORPORATION
By:	/s/ Jeff McFadden
Title:	President & CEO
Company Address:
Fax Number:
FOUNDERS:
Denis Coleman
Address:
/s/ Jeff McFadden
Jeff McFadden
Address:
/s/ Aleksandar S. Zorovic
Aleksandar S. Zorovic
Address:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Name of Investor
By:	/s/ Denis R. Coleman
Print Name:  Denis R. Coleman
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
David K. Tu and Kristl Lee Revocable Trust
Name of Investor
By:	/s/ David Tu
Print Name:  David Tu
Its:	Trustee
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Buch 1993 Revocable Trust
Name of Investor
By:	/s/ Wally S. Buch
Print Name:  Wally S. Buch
Its:	Trustee
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Craig W. Johnson
Name of Investor
By:	/s/ Craig Johnson
Print Name:  Craig Johnson
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Name of Investor
By:	/s/ Norman Tu
Print Name:  Norman Tu
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
By:	/s/ Jeffrey Y. Suto
Print Name:  Jeffrey Y. Suto
Its:
Address:	c/o Venture Law Group
	2775 Sand Hill Road
	Menlo Park, CA 94018
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Andreas Bechtolsheim
Name of Investor
By:	/s/ Andreas Bechtolsheim
Print Name:  Andreas Bechtolsheim
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
GARAGE.COM
By:	/s/ Mary Ann Cusenza
Print Name:  Mary Ann Cusenza
Its:	VP/CFO
Address:
Facsimile:
INVESTOR:
GARAGE.COM INVESTMENTS I, LP
By:	/s/ Mary Ann Cusenza
Print Name:  Mary Ann Cusenza
Its:	VP/CFO of the General Partner
Address:
Facsimile:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Nygimatech Ventures
Name of Investor
By:	/s/ Kurt Baumann
Print Name:  Kurt Baumann
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
G Robert Dow
Name of Investor
By:	/s/ G Robert Dow
Print Name:
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
David Burow
Name of Investor
By:	/s/ David Burow
Print Name:  David Burow
Its:	An Individual
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
William Herman
Name of Investor
By:	/s/ William Herman
Print Name:  William Herman
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Barry Andrew Newman
Name of Investor
By:	/s/ Barry Andrew Newman
Print Name:
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Richard B. Stone
Name of Investor
By:	/s/ Richard B. Stone
Print Name:
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Richard C. Jaffe
Name of Investor
By:	/s/ Richard C. Jaffe
Print Name:
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Muller Trust U/P/T 7-1-81
Name of Investor
By:	/s/ Anthony R. Muller
Print Name:  Anthony R. Muller
Its:	Trustee
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
COMDISCO, INC.
By:	/s/ Jill C. Hanses
Print Name:  Jill C. Hanses
Its:	Senior Vice President
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Name of Investor
By:	/s/ Howard L Spitz
Print Name:
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
VLG Investments 1999
Name of Investor
By:	/s/ John V. Bautista
Print Name:  John V. Bautista
Its:	Manager
Address:	c/o Venture Law Group
	2800 Sand Hill Rd
	Menlo Park, CA 94025
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Kenneth Cramer
Name of Investor
By:	/s/ Kenneth Cramer
Print Name:
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Richard Perez
Name of Investor
By:	/s/ Richard Perez
Print Name:	Richard Perez
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Name of Investor
By:	/s/ Michael E. Filice
Print Name:	Michael E. Filice
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
U. S. VENTURE PARTNERS VI, L.P.
USVP VI AFFILIATES FUND, L.P.
USVP ENTREPRENEUR PARTNERS VI, L.P.
2180 ASSOCIATES FUND VI, L.P.
By:	Presidio Management Group VI, L.L.C.
Its:	General Partner
By:	/s/ Michael P. Maher
Print Name:	Michael P. Maher
Its:	Attorney-in-fact
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Connie C. Lee MD
Name of Investor
By:	/s/ Connie C Lee MD
Print Name:	Connie C Lee MD
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
The Lee Family Limited Partnership
Name of Investor
By:	/s/ Connie C. Lee MD
Print Name:	Connie C. Lee MD
Its:	General Partner
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Electrodiagnosis & Rehab PA
Retirement Fund
Name of Investor
By:	/s/ Connie C. Lee MD
Print Name:	Connie C. Lee MD
Its:	President
Address:
Fax No.
E-mail

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Leopard Aggressive Fund, Ltd
Name of Investor
By:	/s/ Alain Berdouaré
Print Name:	Alain Berdouaré
Its:	Investment Manager
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Jon R. Love
Name of Investor
By:	/s/ Jon R. Love
Print Name:	Jon R. Love
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Capital M Group, LLC
Name of Investor
By:	/s/ Jeff Blank
Print Name:	Jeff Blank
Its:	Manager
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Name of Investor
By:	/s/ Richard Stollenwerck
Print Name:	Richard Stollenwerck
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Internet Ventures III
Name of Investor
By:	/s/ Anthony T. Coscio
Print Name:	Anthony T. Coscio
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
By:	/s/ Illegible
Print Name:
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
WTI Ventures
Name of Investor
By:	/s/ S. Allan Johnson
Print Name:	S. Allan Johnson
Its:	General Partner
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Scott Cook
Name of Investor
By:	/s/ Scott Cook
Print Name:
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Bruce R. Katz
Name of Investor
By:	/s/ Bruce R. Katz
Print Name: Bruce R. Katz
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Ian Sobieski
Name of Investor
By:	/s/ Ian Sobieski
Print Name: Ian Sobieski
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Richard Chisholm
Name of Investor
By:	/s/    RICHARD CHISHOLM
Print Name: Richard Chisholm
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
INVESTOR (GUERNSEY) LTD.
By:	/s/ Neil Crocker /s/ Mark Hollander
Print Name: Neil Crocker Mark Hollander
Its:
Address:
Fax No.:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
TCV IV, L.P. a Delaware Limited Partnership
By:	Technology Crossover Management IV, L.L.C.,
Its:	General Partner
By:	/s/ Carla S. Newell
Print Name: Carla S. Newell
Its:	Attorney in Fact
Mailing Address:
with a copy to:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Crosslink Crossover Fund III L.P.
Name of Investor
By:	/s/ Michael J. Stark
Print Name: Michael J. Stark
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Offshore Crosslink Crossover Fund III
Name of Investor
By:	/s/ Michael J. Stark
Print Name: Michael J. Stark
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Crosslink Omega Ventures III, L.L.C.
Name of Investor
By:	/s/ Michael J. Stark
Print Name: Michael J. Stark
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Omega Bayview, L.L.C.
Name of Investor
By:	/s/ Michael J. Stark
Print Name: Michael J. Stark
Its:
Address:		c/o Robertson Stephens 555 California Street, Suite 2606 San Francisco, CA 94104
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTORS:
GREYLOCK X LIMITED PARTNERSHIP
By:	Greylock X GP Limited Partnership, its General Partner
	By:	/s/ David Sze
	Print Name: David Sze
	Its: General Partner
GREYLOCK X-A LIMITED PARTNERSHIP
By:	Greylock X GP Limited Partnership, its General Partner
	By:	/s/ David Sze
	Print Name: David Sze
	Its: General Partner
Address:
Fax No.:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTORS:
MCCANCE FAMILY LIMITED PARTNERSHIP*
By:	Henry F. McCance, General Partner
HOWARD E. COX, JR.*
THE ROGER L. EVANS REVOCABLE TRUST DATED 12/16/99*
By:	Roger L. Evans, Trustee
MAPACHE INVESTMENTS L.P. U/A/D 05/31/99*
By:	David N. Strohm and Kathryn R. Reavis, Trustees
DAVID N. STROHM*
WILLIAM S. KAISER*
WILLIAM W. HELMAN*
CHARLES CHI AND RENEE VAN DIEEN COMMUNITY PROPERTY*
By:	Charles Chi and Renee Van Dieen
ANEEL BHUSRI*
*By:	/s/ William W. Helman
Print Name: William W. Helman
Its:	Attorney In-Fact
Address:
Facsimile:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTORS:
CHARLES M. HAZARD, JR.*
HAZARD FAMILY TRUST FOR WHITNEY KEANE HAZARD*
By:	Katharine Hazard Flynn, Trustee
HAZARD FAMILY TRUST FOR CHARLES MICHAEL HAZARD III, *
By:	Katharine Hazard Flynn, Trustee
HAZARD FAMILY TRUST FOR ISABELLE POWELL HAZARD, *
By:	Katharine Hazard Flynn, Trustee
DAVID SZE *
DAVID B. ARONOFF *
*By:	/s/ William W. Helman
Print Name: William W. Helman
Its:	Attorney In-Fact
Address:
Facsimile:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Steven E. Bochner
Name of Investor
By:	/s/ Steven E. Bochner
Print Name: Steven E. Bochner
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Jeff Samberg
Name of Investor
By:	/s/ Jeff Samberg
Print Name: Jeff Samberg
Its:
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
SILICON VALLEY BANCSHARES
By:	/s/ Harry W. Kellog, Jr.
Print Name: Harry W. Kellog, Jr.
Title:	Vice Chair
Address:
Facsimile:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
HYBRID VENTURE PARTNERS, L.P.,
a Delaware limited partnership
By:	Rosemont Venture Management I, L.L.C.
	Its: General Partner
By:	/s/ James P. Labe
Print Name: James P. Labe
Its:	Managing Member
Address:
Facsimile:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
INTERNET VENTURES VII
By:	/s/ David J. Laplaca 6/29/00
Print Name: David J. LaPlaca
Its:	Managing Member
Address:
Facsimile:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTOR:
Createlabs, Inc.
Name of Investor
By:	/s/ Bob Haya
Print Name: Bob Haya
Its:	President
Address:
Fax No.
E-mail:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

INVESTORS:
LIAM FULLERTON VENTURES, L.L.C.
By:	/s/ Mitchell Weisman
Print Name: Mitchell Weisman
Its:	Managing Member
Address:
Facsimile:
LIAM FULLERTON VENTURES II, L.L.C.
By:	/s/ Mitchell Weisman
Print Name: Mitchell Weisman
Its:	Managing Member
Address:
Facsimile:

SIGNATURE PAGE TO AMENDED AND RESTATED

INVESTORS’ RIGHTS AGREEMENT

EXHIBIT A

SERIES A HOLDERS

Name/Address

Denis Coleman

David K. Tu and Kristl W. Lee Revocable Trust

Buch 1993 Revocable Trust

Craig W. Johnson

Norman Tu Revocable Trust dated 2-14-90

Jeffrey Y. Suto

EXHIBIT B

SERIES B HOLDERS

Name/Address

Andreas Bechtolsheim

Garage.com Investments I, L.P.

Kurt Bauman

Robert Dow

David Burow

Vinnie Vyas

William Herman

Barry Andrew Newman

Judson A. Cooper

Name/Address

Joshua D. Schein

Richard B. Stone

David B. Kaufman

Maryann Michelizzi

Richard Jaffe

Anthony Richard Muller and Lary Lynn H. Muller,

trustees of the Anthony Richard Muller and Lary Lynn H.

Muller trusts, U/D/T 7-1-81

Uniphase

Comdisco, Inc.

Howard Spitz

Thomas Linear

Name/Address

VLG Investments 1999

c/o Venture Law Group

2800 Sand Hill Road

Menlo Park, CA 94025

Craig W. Johnson

c/o Venture Law Group

2800 Sand Hill Road

Menlo Park, CA 94025

Jeffrey Y. Suto

c/o Venture Law Group

2800 Sand Hill Road

Menlo Park, CA 94025

Kevin G. Montler

c/o Venture Law Group

2800 Sand Hill Road

Menlo Park, CA 94025

Kenneth D. Cramer

c/o Venture Law Group

2800 Sand Hill Road

Menlo Park, CA 94025

Richard Perez

Michael E. Filice

EXHIBIT C

SERIES C HOLDERS

Name	No. of Shares
U.S. Venture Partners VI, L.P.	3,984,678
USVP VI Affiliates Fund, L.P.	182,903
USVP Entrepreneur	117,581
2180 Associates Fund VI, L.P.	69,677
Andy Bechtolsheim (Note Conversion)	309,677
Connie C. Lee (Note Conversion)	32,258
Lee Family Limited Partnership (Note Conversion)	16,129
Electro-diagnosis and Rehabilitation P.A. Retirement Fund (Note Conversion)	16,129
Leopard Aggressive Fund, Ltd. (Note Conversion)	64,516
Michael Filice (Note Conversion)	16,129
JL & Co. (Note Conversion)	16,129
Capital M Group LLC (Note Conversion)	258,064
Richard Stollenwerck (Note Conversion)	64,516
Internet Ventures III (Note Conversion)	322,580
WTI Ventures (Note Conversion)	64,516
Farley West Ventures, LLC (Note Conversion)	322,580
Farley West Ventures II, LLC (Note Conversion)	161,290
Fullerton Capital Partners, L.P. (Note Conversion)	107,258
Farley West Ventures, LLC	129,032
Farley West Ventures II, LLC	145,161
Dave Burow	64,516
Vinnie Vyas	64,516
Will Herman	64,516
Barry Newman	26,961
Judson Cooper	23,444
Richard Stone	23,444
Kurt Bauman	64,119
Comdisco	64,516
Garage.com	32,258
Scott Cook	322,581
Bruce Katz	391,065
Ian Sobieski	3,226
VLG Investments 1999	29,032
Richard Chisholm	3,226
Total:	7,578,224

EXHIBIT D

SERIES D HOLDERS

SCHEDULE OF PURCHASERS

FIRST CLOSING

Name	No. of Shares	Amount
Investor (Guernsey) Ltd.	1,625,000	$	13,000,000
TCV IV, L.P.	1,625,000		13,000,000
Crosslink Crossover Fund III, L.P.	329,085		2,632,680
Offshore Crosslink Crossover Fund III, Unit Trust	49,748		397,984
Crosslink Omega Ventures III, L.L.C.	90,480		723,840
Crosslink Offshore Omega Ventures III (a Cayman Islands Unit Trust)	141,087		1,128,696
Omega Bayview, L.L.C.	14,600		116,800
U.S. Venture Partners VI, LP	686,250		5,490,000
USVP Entrepreneur Partners VI, LP	20,250		162,000
USVP VI Affiliates Fund, LP	31,500		252,000
2180 Associates Fund VI, LP	12,000		96,000
Greylock X Limited Partnership	558,913		4,471,304
Greylock X-A Limited Partnership	42,962		343,696
McCance Family Limited Partnership     Henry F. McCance, General Partner	11,703		93,624
Howard E. Cox, Jr.	11,703		93,624
The Roger L. Evans Revocable Trust dtd 12/16/99     The Roger L. Evans, Trustee	9,029		72,232
Mapache Investments L.P. u/a/d 05/31/99     David N. Strohm ad Kathryn R. Reavis, Trustees	6,771		54,168
David N. Strohm	2,257		18,056
William S. Kaiser	5,952		47,616
William W. Helman	5,952		47,616
Charles Chi and Renee Van Dieen Community Property	4,347		34,776
Aneel Bhusri	3,009		24,072
Charles M. Hazard, Jr.	2,508		20,064
Hazard Family Trust for Whitney Keane Hazard     Katherin Hazard Flynn, Trustee	167		1,336
Hazard Family Trust for Charles Michael Hazard III,     Katherin Hazard Flynn, Trustee	167		1,336
Hazard Family Trust for Isabelle Powell Hazard,     Katherin Hazard Flynn, Trustee	167		1,336
David Sze	3,009		24,072
David B. Aronoff	134		1,072
Steven Bochner	2,875		23,000
Jeff Samberg	3,125		25,000
Silicon Valley Bank	31,250		250,000
TOTAL	5,331,000	$	42,648,000

SECOND CLOSING:

Bruce Katz	24,375	$	195,000.00
Comdisco, Inc.	12,500	$	100,000.00
Hybrid Venture Partners, L.P.	62,500	$	500,000.00
Garage.com	18,750	$	150,000.00
Garage.com Investments I, L.P.	18,750	$	150,000.00
Internet Ventures VII	78,750	$	630,000.00
Scott Cook	34,029	$	272,232
Total	249,654	$	1,997,232

THIRD CLOSING:

Liam Fullerton Ventures, LLC	93,750	$	750,000.00
Liam Fullerton Ventures II, LLC	31,250	$	250,000.00
CreateLabs, Inc.	37,500	$	300,000.00
Total	162,500	$	1,300,000.00

EXHIBIT E

FOUNDERS

Denis Coleman

Sasa Zorovic

Jeff McFadden

EX-10.15

Exhibit 10.15

CONFIDENTIAL TREATMENT REQUESTED

SEARCH SERVICES AGREEMENT

This Search Services Agreement (the “Agreement”) is entered into effective as of March 28, 2003 (“the “Effective Date”) by and between Overture Services, Inc., a Delaware corporation (“Overture”) and The Gator Corporation (“Gator”), a Delaware corporation.

RECITALS

WHEREAS, Overture has developed certain technology and functionality for matching particular keyword requests with an index of certain web site URLs, for providing the results of that match via the Internet and then enabling users to link to a designated page for advertisers which comprise the results of such match;

WHEREAS, Gator provides certain permission-based marketing services and has developed certain technology and functionality in connection therewith;

WHEREAS, Overture and Gator desire to enter into a strategic arrangement whereby Overture will provide Gator with Overture results in connection with searches conducted on Gator’s Web site and in connection with Internet activities of Gator users; and

WHEREAS, the parties will share revenue generated by such Overture results, all as provided for in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and conditions contained herein, and for good and valuable consideration, the parties agree as follows:

AGREEMENT

1. Agreement. This Agreement comprises this document, the attached Exhibits, and the attached Terms and Conditions, all of which are incorporated herein in their entirety. In the event of a conflict, this document prevails over the Terms and Conditions. Unless defined herein, capitalized terms have the meanings set forth in Exhibit A attached hereto.

2. Overture Responsibilities - Provision of Overture Results. After receiving a Searchscout Query or a Pop Under Query from Gator matching a Commercial Term, Overture shall deliver, subject to reasonable routine downtime of Overture’s systems: (i) all Overture Results available, (ii) if, less than [***] Overture Results are available, Overture shall provide as many Supplemental Results as necessary to provide [***] Results (Overture Results plus Supplemental Results), and (iii) if no Overture Results are available, then Overture may respond that no results are being delivered for such query. Overture shall provide Gator a means to distinguish any and all Results provided by Overture as either Overture Results or Supplemental Results. Overture may redirect a URL in the process of transferring a User to a site identified within an Overture Result.

3. Overture’s Payment Obligations.

3.1 Payments. Overture shall pay Gator [***] percent ([***]%) of Gross Revenue resulting from Searchscout Queries and Pop Under Queries; provided that, during the third year of this Agreement, Gator’s percentage share of such Gross Revenue shall [***] (i) [***] percent ([***]%) or (ii) Overture’s [***] for the [***]. In no event, however, shall Gator’s percentage share of such Gross Revenue for the third year exceed [***] percent ([***]%).

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

3.2 Payment Mechanics.

(a) Timing; Reporting. Overture shall pay Gator the amounts set forth in Section 3.1 above, excluding any taxes Overture may be required by law to withhold or to pay (other than taxes on Overture’s income) and less any Prepayments made in accordance with Section 3.2(b) below, within [***] after the end of each month in which such amounts were incurred. In connection with any such payment, Overture shall provide reporting to Gator describing the basis for the amounts paid. Overture will retain all revenue derived from the Overture Services and Overture Results, except as specifically set forth in this Agreement. Payments shall be made in U.S. Dollars.

(b) Prepayments. Within the [***] of each month during the Term, Overture shall make a prepayment to Gator of the amounts incurred during such month (a “Prepayment”). Each Prepayment shall equal [***]%[***] Until such time as payments are made to Gator under this Agreement, Prepayments shall be based on payments made by Overture to Gator pursuant to that certain letter agreement between the parties dated January 17, 2003. In the event that a Prepayment exceeds the amounts actually payable during the applicable month, any excess Prepayment shall be credited against future payments due hereunder; provided that Gator shall immediately refund to Overture any excess Prepayments outstanding as of the end of the Term.

4. Gator Responsibilities.

4.1 Searchscout.

(a) Search Queries. Gator shall enable Users of the Searchscout Site to initiate Searchscout Queries. Each month during the Term, Gator shall immediately send to Overture all Searchscout Queries, subject to reasonable routine downtime of Gator’s systems.

(b) Placement of Search Boxes. Gator shall display Search Boxes on top of the home page for the Searchscout Site and on the top of all Results Pages and shall additionally display Search Boxes on the bottom of all Results Pages. All Search Boxes shall be displayed in at least as prominent position as displayed by Gator on the Searchscout Site as of the Effective Date. All additional placements of such Search Boxes must be approved in advance by Overture in writing.

(i) Search Box Appearance. Gator shall maintain the size, the functionality and the “look and feel” of the Search Boxes currently on the Searchscout Site, as depicted in the mock-ups attached as Exhibit B hereto; provided, however, that the parties may mutually agree to change such Search Boxes as the parties deem appropriate.

(ii) Restricted Access. Gator shall not enable a User of the Searchscout Site to conduct any type of search other than through a Search Box or Related Search Terms.

(c) Display of Results; Adherence to Mock-Ups. In response to each Searchscout Query delivered to Overture in accordance with Section 4.1(a) above, Gator shall display the Results in a Results Page appearing within the Searchscout Site. Gator shall display first the Overture Results in the order identified by Overture, followed by any Supplemental Results supplied by Overture in the order identified by Overture. Except as otherwise specified by prior written agreement of the parties, all aspects of the Results Page, and the display of the Overture Results therein, including but not limited to left and right margins, text size, color, font, headings, shading/background, spacing, blank areas, content categories, placements on the page (both top and bottom and left to right) and all other aspects of “look and feel,” must be displayed as depicted in the mock-ups attached hereto as Exhibit C, other than Related Search Terms which may be displayed in the right margin of the Results Page as mutually agreed upon by the parties; provided, however, that the parties may mutually agree to change the Results Page, and the display of the Overture Results therein, as the parties deem appropriate.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

2

4.2 Pop Under Searches.

(a) Pop Under Queries. Subject to Section 6 below, Gator shall enable Users to initiate Pop Under Queries. Each month during the Term, Gator shall immediately send to Overture (subject to reasonable routine downtime of Gator’s systems) all Pop Under Queries initiated by Users utilizing any of the top [***] ([***]) search engines as mutually agreed upon by both parties to this Agreement (but subject to the restrictions of Section 3.2(g) of the Terms and Conditions), or based on such other properties mutually agreed upon by both parties to this Agreement. Without limiting the foregoing and unless otherwise determined by the mutual agreement of the parties, Gator shall not send to Overture Pop Under Queries generated by a specific, individual User more frequently than every [***].

(b) Display of Results; Adherence to Mock-Ups. In response to each Pop Under Query delivered to Overture in accordance with Section 4.2(a) above, Gator shall display the Results in a Results Page appearing within a Pop Under Window. Gator shall not serve any additional advertising or other content in response to any such Pop Under Query. Gator shall display first the Overture Results in the order identified by Overture, followed by any Supplemental Results supplied by Overture in the order identified by Overture. Except as otherwise specified by prior written agreement of the parties, all aspects of the Results Page, and the display of the Overture Results therein, including but not limited to left and right margins, text size, color, font, headings, shading/background, spacing, blank areas, content categories, placements on the page (both top and bottom and left to right) and all other aspects of “look and feel” must be displayed as depicted in the mock-ups attached hereto as Exhibit D, other than Related Search Terms which may be displayed in the right margin of the Results Page as mutually agreed upon by the parties; provided, however, that the parties may mutually agree to change the Results Page, and the display of the Overture Results therein, as the parties deem appropriate.

4.3 Identifying Language; Informational Links. Gator shall include prominently in each Pop Under Window the following language: “THIS AD IS BROUGHT TO YOU BY GAIN ADVERTISING SOFTWARE. IT IS NOT SPONSORED OR DISPLAYED BY OR ON BEHALF OF THE WEB SITE YOU WERE VIEWING.” Alternatively, Gator may replace “This ad” with “Search Scout” in the foregoing required sentence. Gator shall display the foregoing language in a size and manner as Overture may reasonably request from time to time. Gator shall also include prominently in each Pop Under Window, an “about” link providing information regarding the Results. The content and appearance of the link and the information linked thereto shall be subject to the mutual agreement of the parties. Upon a request by one party, the language may be revised as mutually agreed upon by the parties.

4.4 Other Gator Obligations.

(a) Placement of Search Boxes. Gator shall display Search Boxes on the top and on the bottom of all Results Pages displayed in Pop Under Windows. Gator shall maintain the size, the functionality and the “look and feel” of such Search Boxes as specified in the mock-ups attached as Exhibits C and D hereto. Gator covenants that such Search Boxes shall not have any additional functionality that either (i) allows a User to search for related searches or (ii) suggests other searches.

(b) Restricted Access. Gator shall not enable a User to conduct a search other than through a Search Box or Related Search Terms.

(c) Tracking Solution for Search Queries. Gator will include source-identifying “tags,” search URLs or other source feed indicators provided by Overture (the “Tags”) for (i) each unique source of Searchscout Queries or Pop Under Queries including but not limited to the “next” button; and (ii) identifying any search service testing performed by Gator related to the Overture Results. Further, Gator will send Overture at the time of any such query for the purpose of identifying automated or otherwise invalid search traffic the following information: an anonymous but consistent User ID (if such user is ascribed a User ID by Gator) together with information identifying the Web site from which such query was originated and such other information as Overture may reasonably request from time to time provided that Gator’s compliance with such request is not in conflict with Gator’s contractual obligations.

(d) Minimizing Bot Traffic. Gator will work with Overture to minimize such automated or otherwise invalid search traffic generated by bots, metaspiders, macro programs, or any other automated means.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

3

(e) All Searchscout and Pop Under Queries. Except as set forth in Section 4.2(a), Pop Under Queries, and Section 6, Overture’s [***] and Gator’s [***], Gator shall send to Overture, subject to reasonable routine downtime of Gator’s systems, all Searchscout Queries and Pop Under Queries resulting from Gator Services.

(f) No Other Search Queries. Unless otherwise agreed in writing by the parties, Gator shall not send to Overture any queries other than Searchscout Queries or Pop Under Queries.

4.5 Exact Transmission. Gator shall not modify or otherwise alter the Search Query (e.g., the Search Query entered into a third party Web site shall be the same query sent to Overture for the Pop Under Query).

4.6 Other Specifications. Gator shall display Overture Results with Overture’s full title and description, as well as with the full URL of the web page associated with each Overture Result. Gator shall not modify any aspect of the Overture Results (including the data contained therein).

4.7 Blocked Content. Gator will not sell or display advertising units (including but not limited to pop-up windows) that are intentionally programmed to be displayed as the active window on the User’s computer screen which blocks any portion of a User’s view of the Overture Results.

4.8 Transmission of Certain Foreign Searches. Gator shall not display a Results Page to a User if the search results page displayed by the search engine to which the search was directed by the User is both: (a) a search results page that is typically displayed by that search engine to foreign (i.e. non-U.S.) Users, and (b) where the Web address for such search results page is capable of being programmatically identified by recognizing a text string within the Web address of such search results page (e.g. the text string “fr.search.searchengine.com” in the following Web address: http://fr.search.searchengine.com/search/fr?p=jeux).

4.9 Foreign Language Software Bundled with Gator Software. Gator shall not transmit Pop Under Search Queries to Overture that are initiated by Users who became Users as a result of having downloaded Gator software bundled with (a) a foreign language (i.e. non-English) version of a software program or (b) a software program that is knowingly promoted or distributed through a foreign language Web site.

5. Performance-Based Termination Rights.

5.1 Decline in PPC. In the event that the Gator PPC declines below [***] for a period of [***] ([***]) successive [***], [***] shall have the right to terminate this Agreement on [***] prior written notice. Notwithstanding the foregoing, [***] shall have the right to prevent termination on that basis following the receipt of notice thereof by calculating and [***] on the basis of an average price per click of [***] and giving notice to [***] (within five (5) days following receipt of [***] notice) that it intends to exercise such right to prevent [***] termination; provided, however, that if the Gator PPC during any subsequent [***] rises above [***], [***] shall pay [***] appropriate revenue share under Section 3.1, Payments.

5.2 Decline in Advertiser Base. In the event that the number of Advertisers falls below [***] and Gator CTR decreases by more than [***] percent ([***]%) from the Gator CTR as of the Effective Date, [***] shall have the right to terminate this Agreement on [***] prior written notice.

5.3 Below Average Conversion Rate. For any month in which the Advertiser conversion rate from Overture Results displayed by Gator (the “Gator Conversion Rate”) is [***] percent ([***]%) or more below the average conversion rate for all Overture Network Partners tracked by Overture (the “Overall Conversion Rate”), Overture shall provide Gator with a written statement (a “Conversion Statement”) setting forth the percentage difference between the Gator Conversion Rate and the Overall Conversion Rate. In the event that the Gator Conversion Rate falls [***] percent ([***]%) or more below the Overall Conversion Rate, then Gator shall have a [***] ([***])[***] period in which to cure by raising the Gator Conversion Rate to a rate less than [***] percent ([***]%) below the Overall Conversion Rate. In the event that Gator fails to cure within such [***] period, or in the event that in any [***] following such cure, the Gator Conversion Rate again falls to [***] percent ([***]%) or more below the Overall Conversion Rate, Overture shall have the right to terminate this Agreement immediately.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

4

Notwithstanding the foregoing, Overture shall have no right to terminate this Agreement, if, during the one-month period prior to the termination right, Overture has failed to provide Gator with (i) a Conversion Statement on or about both the first day of such month and (ii) a Conversion Statement on or about the fifteenth day of such month reflecting a Gator Conversion Rate [***] percent ([***]%) or more below the Overall Conversion Rate (e.g., for Overture to have a termination right starting on March 1, Overture has to provide (i) a Conversion Statement on or about February 1^st and (ii) a Conversion Statement on or about February 15^th showing a Gator Conversion Rate [***] percent ([***]%) or more below the Overall Conversion Rate). Each Conversion Statement provided hereunder shall be treated as Overture’s Confidential Information under Section 5 of the Terms and Conditions, Confidentiality.

6. Overture’s [***] and Gator’s [***] Right.

6.1 [***]. Overture may instruct Gator in writing (each, a “[***]”) not to send to Overture Pop Under Queries as a result of Users performing Search Queries from Web pages operated by [***] (each, an [***]). Each [***] shall specify a date upon which Gator shall [***] as a result of Users performing Search Queries from Web pages operated by one or more [***] (the “[***]”). On the [***], Gator shall [***] (but in no event longer that [***] hours for [***]% of such Pop Under Queries and [***] ([***]) days for [***]% of such Pop Under Queries) cease sending to Overture Pop Under Queries initiated by Users from Web pages operated [***] and shall [***] Results Pages in response to all such Pop Under Queries. Commencing upon Gator’s compliance with such [***] and subject to Sections 6.2 and 6.3 below, Overture, in accordance with Section 6.4, Payment, shall pay Gator, for each day through the end of the Term, an amount equal to [***] generated from Pop Under Queries as a result of Users conducting Search Queries from such [***] Web page(s) during the [***] preceding the [***] (or, if less than [***] ([***])[***] has passed since the execution of this Agreement, an amount equal to [***] for all days during which this Agreement has been in effect prior to such [***]) (the “[***]”). If Gator does anything unusual to increase the [***] during such [***] day period, or if Overture does anything unusual to decrease the [***] during such [***]-day period, then the parties shall work together to determine a fair [***]. Prior to the [***], Overture shall pay Gator for the Pop Under Queries being [***] of pursuant to Section 3.1 of this Agreement.

6.2 [***]

6.3 Mitigation. The parties shall work together to minimize any loss of revenue associated with a [***] as follows: (I) Overture shall have the right to subcontract with one or more third parties for the provision of search results in response to Pop Under Queries from the affected [***] Web site(s). (II) Alternatively, Overture may require Gator, on commercially reasonable terms, to contract directly with such third party to obtain such results. Any proposed agreement with a third party containing substantially similar terms to this Agreement shall be deemed “commercially reasonable” within the meaning of the preceding sentence; provided, however, that if there is any particular provision that Gator in its sole discretion exercised in good faith cannot agree to because of the particular third party involved, then Gator shall not have to agree to such provision even if such provision is the same as the provision in this Agreement. Gator must promptly provide its rationale to Overture and must accept a reasonable compromise offered by Overture or such third party. (III) In the event that neither of the foregoing options is feasible or at Overture’s option, Gator shall use commercially reasonable efforts to resell the right to provide search results in response to Pop Under Queries from the affected [***] Web site(s). Gator shall report to Overture on a monthly basis the amounts of any revenue generated by Gator under (II) or (III) above and such revenue shall offset, dollar for dollar, any payments to be made by Overture under Section 6.1, above.

6.4 Payment. Payments made by Overture pursuant to Section 6.1 above shall be reported and paid concurrently with payments made under Section 3.2(a) above.

7. Additional Termination Rights. In the event that a court of competent jurisdiction enters a final, binding judgment that prevents either party from carrying out its respective obligations under this Agreement, this Agreement shall terminate. Either party may terminate this Agreement if (i) at [***] ([***]) separate [***] are [***] asserting [***] in a [***] and [***] determines in [***] that [***] materially impair its business; or (ii) a court of competent jurisdiction enters a final judgment against [***] that [***] determines in [***] materially impairs the value of this Agreement. Each party shall provide the other party with prompt written notice [***] under this

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

5

Section 7. Neither the provision of notice under the preceding sentence, nor the failure to provide such notice, shall prejudice a Party’s right to seek indemnification under Section 6 of the Terms and Conditions, Indemnification.

8. Change of Control.

8.1 Term of Agreement. In the event of a Change of Control of Gator or Overture, this Agreement shall continue through the end of the Term; provided that, if such a Change of Control occurs during the last six months of the Term, the other party may elect to extend this Agreement by six (6) months from the date of such Change of Control. In the event of a Change of Control of Overture, the right to issue a Stop Payment Notice to Gator as described in Section 6.2 above shall no longer apply. The term “Change of Control” means, with respect to either party, the public announcement of (or consummation of the transaction if not previously announced) any transaction (including, without limitation, a merger, consolidation, sale of stock or sale of assets, but excluding any assignment as security for indebtedness) after which any person (or group of persons acting in concert) other than the previously existing shareholders of such party would own in excess of 50% of the voting stock of the applicable party (or the person into which such party would have been merged or consolidated) and would have the right to elect a majority of the members of the board of directors or would acquire all or substantially all of the consolidated assets of such entity.

8.2 Termination Prior to Change in Control. If either party terminates any or all of this Agreement, including by one or more [***], (but excluding termination due to a breach by the other party and other than a termination pursuant to Sections 5 or 7 above), and within ninety (90) days after such termination the terminating party is subject to a Change of Control, the terminating party must pay the other party an amount equal to the [***] revenue earned under this Agreement by such party (as to the terminated portion of the Agreement, if less than the whole Agreement is terminated or, if the entire Agreement is terminated, then the entire amount of the non-terminating party’s share of revenue earned or due under this Agreement by such party) for the longer of [***] ([***])[***] or the remainder of the Term. This payment obligation is subject to the mitigation provision of Section 6.3, Mitigation.

9. Exclusivity.

9.1 Restricted Search Results. Except as expressly permitted under Section 6.2, [***], and Section 9.2, Permitted Display, Gator shall not display, or link to, any Restricted Search Results. Gator acknowledges and agrees that any violation, or any threatened violation, of this Section 9.1 will cause Overture to suffer irreparable harm for which there is no adequate remedy at law, entitling Overture to injunctive relief, in addition to all other available legal remedies, to restrain any such violation, threatened or actual, without proof of irreparable injury and without the necessity of posting bond even if otherwise normally required. Overture acknowledges and agrees that any violation, or any threatened violation, of Section 9.3, Specific Exclusivity, will cause Gator to suffer irreparable harm for which there is no adequate remedy at law, entitling Gator to injunctive relief, in addition to all other available legal remedies, to restrain any such violation, threatened or actual, without proof of irreparable injury and without the necessity of posting bond even if otherwise normally required.

9.2 Permitted Display. Gator shall have the right to display [***] from [***] alternative [***] providers ([***]) below the first [***] ([***]) Overture Results on the Results Page; provided, however, if Overture provides less than [***] ([***]) Overture Results in response to any Pop Under Query or Searchscout Query, then Gator may display [***] from [***] ([***]) below the last Overture Result provided in response to such query. No [***] from any provider other than Overture may appear above or to the left or right of the first [***] ([***]) Results displayed on a Searchscout Results Page; provided, however, that Related Search Terms may be displayed in accordance with Section 4, above.

9.3 Specific [***]. During the Term (but not during any extension or renewal thereof unless expressly agreed by the parties in writing), Overture will not enter into an agreement (written or otherwise) with [***] pertaining to the display of [***] provided by Overture. Gator understands that Overture has, and in the future may have, agreements that allow third parties (i.e., some [***]) to syndicate [***] and any such syndication shall not violate this Agreement and this clause shall in no manner be deemed an inducement for Overture to breach or cease performance of any agreement or otherwise interfere with any business relationship. If Gator enters into an

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

6

agreement for the display of [***] results (or other content) in connection with Gator’s users’ web activities, then the provisions of this Section 9.3 shall no longer apply.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

“Gator”		“OVERTURE”
The Gator Corporation, a Delaware corporation		Overture Services, Inc., a Delaware corporation
By:	/s/ Jeff McFadden	By:	/s/ Ted Meisel
Name:	Jeff McFadden	Name:	Ted Meisel
Title:	CEO	Title:	President and CEO

Exhibits:
Exhibit A -	Definitions
Exhibit B -	Searchscout Mock-Up
Exhibit C -	Searchscout Results Page Mock-Up
Exhibit D -	Pop Under Mock-Up

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

7

TERMS AND CONDITIONS OF AGREEMENT

1. DEFINITIONS. All capitalized terms not otherwise defined in these Terms and Conditions are defined in Exhibit A of the Agreement.

2. GRANT OF LICENSE.

2.1 License. Subject to the terms and conditions of this Agreement, Overture grants to Gator a limited, non-exclusive, non-assignable, non-transferable, non-sub-licensable (unless explicitly provided for under this Agreement) license during the Term to use and display the Licensed Materials as provided by Overture to Gator on the Searchscout Site and as otherwise specifically authorized or described in this Agreement.

2.2 Conditions of License. The Licensed Materials must be reproduced and displayed in the size, place, and manner indicated in this Agreement, and only in compliance with Overture’s Usage Guidelines, attached hereto as Schedule 1, as modified from time to time by Overture in its sole discretion.

2.3 Ownership of Licensed Materials. Gator acknowledges that all right, title and interest in and to the Licensed Materials is exclusively owned by Overture and/or its licensors, and that no right, title or interest other than the limited license granted herein is provided to Gator. Gator shall not assert copyright, trademark or other intellectual property ownership or other proprietary rights in the Licensed Materials, the Overture Services or in any element, derivation, adaptation, variation or name thereof. Gator shall not contest the validity of, or, as between Overture and Gator, Overture’s ownership of, any of the Licensed Materials or the Overture Services. During the Term, Gator shall not, in any jurisdiction, adopt, use, or register, or apply for registration of, whether as a corporate name, trademark, service mark or other indication of origin, or as a domain name, any Overture Marks, or any word, symbol or device, or any combination confusingly similar to any of the Overture Marks.

2.4 Ownership of Goodwill. Gator agrees that its use and display of the Licensed Materials inures to the benefit of Overture. All goodwill or reputation in the Licensed Materials automatically vests in Overture when the Licensed Materials are used by Gator pursuant to this Agreement.

2.5 Ownership of Overture Services. Gator acknowledges and agrees that, as between the parties, Overture owns all right, title and interest in and to the Overture Services and the Overture Results, whether or not such items are included in the Licensed Materials.

2.6 Caching Licensed Material. Gator shall not cache any Overture Results or any other Licensed Material.

3. ADDITIONAL GATOR RESPONSIBILITIES.

3.1 The Gator Services: Gator agrees that it is solely responsible for the development, maintenance and operation of the Gator Services and for all materials and content that appear in connection with the Gator Services or on the Searchscout Site. Gator shall not offer its Users incentives of any kind to use any of the Overture Services. Upon a User clicking on an Overture Result, the URL will send the User directly to Overture and Overture shall use commercially reasonable efforts to send the User to the Advertiser’s Web page.

3.2 Wrongful Acts: Overture Results may only be provided to Users as set forth in the Agreement. Without limiting the generality of the foregoing, Gator shall not provide Overture Results to any Users, nor direct Users to any Web page containing Overture Results, by means of any computer or browser functionality or by means of any Web page not specified in this Agreement. Gator shall not allow any of the following to occur: (a) misleading links in which a User is persuaded to perform a search in order to obtain some other benefit, (b) hyper-linked words, unless specifically approved by Overture, (c) searches from or after 404 or other error messages, (d) searches required of the User in order for the User to do another function, such as leaving a Web page or closing a pop-up window, (e) searches performed upon a User hitting the back button or any other element of the browser, (f) searches from Users who were on adults sites, unless such Users actively typed in the URL for the Searchscout Site or are properly using Gator Services while on such sites, all as approved by Overture, (g) searches originating from Web sites containing a top level domain other than “.com”, and (h) the syndication or delivery of Search Box or Overture Results to any site or application or third party not approved in advance in writing by Overture. If Gator violates any provision of this Section and such violation remains uncured for more than two (2) business days after receipt of notice of such violation, then Overture may terminate this Agreement immediately upon notice to Gator.

3.3 Comments Disparaging Overture Results. Under no circumstances shall Gator disparage Overture or the Overture Results on any pages of the Searchscout Site that include Overture Results nor shall Gator incorporate into any such pages any words (or

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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symbols) that specifically indicate that the Overture Results are inferior in any way to other content or search results or that any other content or search results are better in any way than the Overture Results.

4. REPRESENTATIONS AND WARRANTIES.

4.1 Overture Warranties. Overture represents and warrants that it has full power and authority to enter into this Agreement. Overture does not warrant that the Licensed Materials or Overture Services will meet all of Gator’s requirements or that performance of the Licensed Materials or Overture Services will be uninterrupted or error-free.

4.2 Gator Warranties. Gator represents and warrants that: (i) it has full power and authority to enter into this Agreement, (ii) the tax identification number set forth on the top of page 1 to this Agreement is Gator’s correct federal tax identification number and (iii) as of the Effective Date, it has the ability to fulfill its obligations under this Agreement, including but not limited to under Section 6.1, [***].

4.3 Disclaimer. EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER PARTY SHALL BE RESPONSIBLE FOR ANY CONTENT PROVIDED BY THIRD PARTIES (INCLUDING ADVERTISERS), OR FOR ANY THIRD PARTY SITES THAT CAN BE LINKED TO OR FROM SUCH PARTY’S WEB SITE. NEITHER PARTY NOR SUCH PARTY’S LICENSORS MAKE ANY OTHER WARRANTY OF ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR USE, AND NONINFRINGEMENT.

5. CONFIDENTIALITY.

5.1 Definition. “Confidential Information” means any information disclosed by either party to the other party during the Term (and any renewal terms), either directly or indirectly, in writing, orally or by inspection of tangible objects, which is designated as “Confidential,” “Proprietary” or some similar designation. All of the terms of this Agreement shall be deemed “Confidential.” Information communicated orally will be considered Confidential Information if such information is designated as being Confidential Information at the time of disclosure and confirmed in writing as being Confidential Information within 20 days after the initial disclosure. Confidential Information will not, however, include any information which (i) was publicly known and made generally available in the public domain prior to the time of disclosure by the disclosing party; (ii) becomes publicly known and made generally available after disclosure by the disclosing party to the receiving party through no action or inaction of the receiving party; (iii) is already in the possession of the receiving party at the time of disclosure by the disclosing party from a source other than the disclosing party; (iv) is obtained by the receiving party from a third party without a breach of such third party’s obligations of confidentiality; or (v) is independently developed by the receiving party without use of or reference to the disclosing party’s Confidential Information.

5.2 Restrictions. The receiving party agrees (i) not to disclose any Confidential Information of the disclosing party to any third parties, (ii) not to use any such Confidential Information for any purposes except to carry out its rights and responsibilities under this Agreement and (iii) to keep such Confidential Information confidential using the same degree of care the receiving party uses to protect its own Confidential Information, as long as it uses at least reasonable care. If either party receives a subpoena or other validly issued judicial process requesting, or is required by a government agency (such as the SEC), through its rules and regulations or otherwise, to disclose, Confidential Information of the other party, then the receiving party (a) shall not disclose such Confidential Information without the prior written approval of the disclosing party, which approval shall not unreasonably be withheld or delayed and shall be deemed given if a response is not provided within five (5) days of a request thereof; (b) shall promptly notify the disclosing party of such requirement using all reasonable efforts to provide such notification no less than ten (10) days prior to the date of any required disclosure; and (c) shall reasonably cooperate to seek confidential treatment or to obtain an appropriate protective order to preserve the confidentiality of the Confidential Information. All obligations under this Section 5.2 shall survive for 3 years after termination of the Agreement.

6. INDEMNIFICATION.

6.1 Overture Indemnification. Overture, at its own expense, shall indemnify, defend, and hold harmless Gator and its directors, officers, trustees, shareholders, employees, independent contractors, subsidiaries, agents, successors and assigns from and against any and all losses, costs, liabilities, judgments, damages and expenses, including without limitation reasonable attorneys’ fees and expenses, arising out of or relating to any third party claim, action, investigation, proceeding or suit, whether threatened or asserted (collectively, a “Claim”) that alleges facts that (i) would constitute a breach of any warranty, representation, or covenant made by Overture under this Agreement or are related to Overture’s breach of a material obligation under this Agreement, (ii)

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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Overture’s technology infringes or violates any patents, copyrights, trade secrets, licenses, or other property, contract, personal or proprietary rights of any third party; or (iii) Overture Results provided hereunder violate any state or federal statute or infringe the rights of any third party, if such Claim could have been asserted against Overture had the Overture Result appeared on Overture’s own site. Overture shall have no obligation to indemnify Gator in the event that any Claim under subsection (iii) is based on the fact of the appearance of an Overture Result in a Pop Under Window or the Searchscout Site and nothing contained in this Section 6.1 shall be deemed to relieve or diminish Gator’s obligation to indemnify Overture under Section 6.2 of these Terms and Conditions.

6.2 Gator Indemnification. Gator, at its own expense, shall indemnify, defend, and hold harmless Overture (including without limitation payments that Overture makes to its Advertisers when it is not legally obligated to do so ), its Affiliates and Advertisers, and each of their respective directors, officers, trustees, shareholders, employees, independent contractors, subsidiaries, agents, successors and assigns from and against any and all losses, costs, liabilities, judgments, damages and expenses, including without limitation reasonable attorneys’ fees and expenses arising out of or relating to any Claim (i) that alleges facts that would constitute a breach of any warranty, representation or covenant made by Gator under this Agreement or are related to Gator’s breach of a material obligation under this Agreement; or (ii) arising from or related to any aspect of the Gator Services , including any Claims that the Gator Services (a) infringe or violate any patents, copyrights, trade secrets, licenses, or other property, contract, personal or proprietary rights of any third party; (b) violate any person’s right to privacy, (c) cause likelihood of confusion in the market, (d) violate any state or federal statute, (e) violate any published policies of a third party, (f) constitute conversion or trespass to chattels, (g) cause personal injury or property damage, (h) constitute fraud, negligent or intentional misrepresentation or (i) tortiously disparage or tortiously harm another person’s business activities or reputation.

6.3 Indemnification Procedures. A party (an “Indemnified Party”) seeking indemnification for any Claim under Section 6.1 or Section of these Terms and Conditions, as applicable (an “Indemnified Claim”), shall promptly notify the other party (the “Indemnifying Party”) in writing of such Indemnified Claim (provided, however, that failure to do so shall not relieve the Indemnifying Party of its indemnification obligations hereunder except to the extent of any material prejudice to the Indemnifying Party as a direct result of such failure) and shall promptly tender the control of the defense and settlement of any such claim to the Indemnifying Party (at the Indemnifying Party’s expense and with Indemnifying Party’s choice of counsel). The Indemnified Party shall provide reasonable cooperation with the Indemnifying Party (at the Indemnifying Party’s request and expense) in defending or settling such Indemnified Claim, including but not limited to providing any information or materials necessary for the Indemnifying Party to perform the foregoing. The Indemnifying Party will not enter into any settlement or compromise of any Indemnified Claim that may adversely affect the Indemnified Party without the Indemnified Party’s prior written consent, which shall not be unreasonably withheld.

7. LIMITATION OF LIABILITY.

7.1 NO CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), EQUITY, OR OTHERWISE, FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS OR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES) ARISING OUT OF OR RELATING TO THIS AGREEMENT, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

7.2 LIMIT ON DIRECT DAMAGES. IN NO EVENT SHALL GATOR’S TOTAL AGGREGATE LIABILITY TO OVERTURE UNDER THIS AGREEMENT EXCEED THE GREATER OF (I) ALL AMOUNTS PAID OR PAYABLE TO GATOR UNDER THIS AGREEMENT IN THE PREVIOUS [***] ([***])[***] OR (II) [***] DOLLARS ($[***]) OR (III) IN THE EVENT OF AN UNCURED BREACH OF SECTION 8.2, TERMINATION PRIOR TO CHANGE IN CONTROL, ALL AMOUNTS PAYABLE TO OVERTURE THEREUNDER. IN NO EVENT SHALL OVERTURE’S TOTAL AGGREGATE LIABILITY TO GATOR UNDER THIS AGREEMENT EXCEED THE GREATER OF (I) ALL AMOUNTS THEN OWING TO GATOR UNDER THIS AGREEMENT, (II) [***] DOLLARS ($[***]) OR (III) IN THE EVENT OF AN UNCURED BREACH OF SECTION 6.2, [***], OR SECTION 8.2, TERMINATION PRIOR TO CHANGE IN CONTROL, ALL AMOUNTS PAYABLE TO GATOR UNDER SUCH SECTION.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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7.3 EXCEPTIONS TO LIMITATIONS OF LIABILITY. THE LIMITATIONS OF LIABILITY IN SECTION 7.1 AND 7.2 OF THESE TERMS AND CONDITIONS SHALL NOT APPLY TO (I) GATOR’S BREACH OF SECTION 6.1, [***] (II) A PARTY’S INDEMNIFICATION OBLIGATIONS UNDER THIS AGREEMENT, (III) A BREACH BY A PARTY OF ITS CONFIDENTIALITY OBLIGATIONS UNDER THIS AGREEMENT OR ITS OBLIGATIONS UNDER SECTION 9.2 OF THESE TERMS AND CONDITIONS (PRESS RELEASE), (IV) A PARTY’S BREACH OF SECTION 9, EXCLUSIVITY, AND (V) A PARTY’S WILLFUL MISCONDUCT OR KNOWING, WILLFUL AND INTENTIONAL BREACH OF ITS OBLIGATIONS UNDER THIS AGREEMENT (WHICH BREACH REMAINS UNCURED AFTER NOTICE THEREOF FOR THIRTY DAYS OR SUCH SHORTER CURE PERIOD AS MAY BE PROVIDED UNDER THIS AGREEMENT).

8. TERM.

8.1 Term. This Agreement is effective as of the Effective Date and shall continue in force for the Term.

8.2 Termination For Breach or Insolvency. Except for shorter cure periods as explicitly provided for in this Agreement, if either party breaches any covenant, representation and/or warranty of this Agreement and such breaching party does not cure such breach within thirty (30) days of written notice by the non-breaching party of such breach, then the non-breaching party may terminate the Agreement upon written notice to the breaching party after failure to cure within those thirty (30) days. Notwithstanding the foregoing, (i) any display by Gator of a Results Page or Overture Results in any type of advertising vehicle other than a pop under window (i.e., an inactive window displayed beneath the active window that is displayed to, or viewed by, a User) shall be deemed a material breach giving rise to a termination right hereunder if not cured by Gator within one business day of receipt of written notice thereof and (ii) any breach by Gator of Section 4.2 of this Agreement, Pop Under Searches, shall be deemed a material breach giving rise to a termination right hereunder if not cured by Gator within one week of receipt of written notice thereof. In addition, either party may suspend performance and/or terminate this Agreement if the other party makes any assignment for the benefit of creditors or has any petition under bankruptcy law filed against it, which petition is not dismissed within sixty (60) days of such filing, or has a trustee or receiver appointed for its business or assets or any party thereof.

8.3 Effect of Termination or Expiration. Upon the termination or expiration of this Agreement for any reason (i) all license rights granted herein shall terminate immediately, and (ii) Gator shall immediately cease use of the Licensed Materials. Sections 2.3, 2.4, 2.5, 5, 6, 7 and 8 of these Terms and Conditions shall survive expiration or earlier termination of this Agreement. If this Agreement terminates for any reason, in whole or in part, prior to the date that Gator has fully earned any prepayments, then Gator shall immediately refund to Overture (without limiting any other rights or remedies the parties might have) the entire amount of the prepayments made by Overture which have not been fully earned by Gator.

9. MISCELLANEOUS.

9.1 Notice. Any notice required for or permitted by this Agreement shall be in writing and shall be deemed delivered if delivered as indicated: (i) by personal delivery when delivered personally, (ii) by overnight courier upon written verification of receipt, (iii) by telecopy or facsimile transmission when confirmed by telecopier or facsimile transmission report, (iv) by certified or registered mail, return receipt requested, upon verification of receipt; or (v) by the same day, when delivered by email. All notices must be sent to Gator at the address first described above or to Overture at 74 North Pasadena Avenue, Pasadena, California 91103, Attn: Vice President Business Affairs, or to such other address that the receiving party may have provided for the purpose of notice in accordance with this Section.

9.2 Press Release. Neither party shall issue any press release unless such press release has been mutually agreed upon by both parties. Excluding disclosures that may be required by law, neither party shall disclose any other terms of this Agreement to any medium without the prior approval of the other party. Notwithstanding the foregoing, (i) Overture shall have the right to notify its advertisers and potential advertisers of the general nature of this transaction (including the quality of the traffic from Gator and Overture’s estimate of the increase in traffic) in order to encourage Overture’s Advertisers to increase their spending with Overture and to encourage potential advertisers to advertise with Overture, and (ii) both parties shall be entitled to provide additional disclosures containing any and all information contained in any previously agreed upon press release. When determining whether a disclosure is “required by law” both parties may rely on their legal counsels’ advice on such matters.

9.3 Specific Disclosures. Notwithstanding anything contained in this Agreement to the contrary, Overture shall be entitled to disclose: (1) the implementation

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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and display provisions contained in the Agreement, (2) reasons why Overture Results may not be displayed in response to certain queries, (3) the type (and methodology) of searches conducted under the Agreement, (4) the duration of the Agreement, and (5) general terms of the Agreement for the purpose of describing the nature of the relationship hereunder (but excluding specific business terms of the Agreement such as revenue or revenue share information).

9.4 Assignment, Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns. Notwithstanding the foregoing, neither Overture nor Gator may assign this Agreement or any of its rights or delegate any of its duties under this Agreement without the prior written consent of the other; provided, however that this Agreement shall, without the prior written consent of the other party, automatically be assigned to, and inure to the benefit of, any entity that succeeds to all or substantially all of the assets and liabilities of such party.

9.5 No Third Party Beneficiaries. All rights and obligations of the parties hereunder are personal to them. This Agreement is not intended to benefit, nor shall it be deemed to give rise to, any rights in any third party.

9.6 Governing Law. This Agreement will be governed and construed, to the extent applicable, in accordance with United States law, and otherwise, in accordance with California law, without regard to conflict of law principles. Except for requests for injunctive relief, any dispute or claim arising out of or in connection with this Agreement shall be finally settled by binding arbitration in Los Angeles County, California under the Commercial Rules of the American Arbitration Association by one arbitrator appointed in accordance with said rules. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

9.7 Independent Contractors. The parties are independent contractors. This Agreement shall not be construed to create a joint venture or partnership between the parties. Neither party shall be deemed to be an employee, agent, partner or legal representative of the other for any purpose and neither shall have any right, power or authority to create any obligation or responsibility on behalf of the other.

9.8 Force Majeure. Neither party shall be liable hereunder by reason of any failure or delay in the performance of its obligations (except for the payment of money) on account of strikes, shortages, riots, insurrection, terrorism, fires, flood, storm, explosions, earthquakes, Internet outages, acts of God, war, governmental action, or any other cause that is beyond the reasonable control of such party.

9.9 Compliance with Law. Each party shall be responsible for compliance with all applicable laws, rules and regulations, if any, related to the performance of its obligations under this Agreement.

9.10 Entire Agreement. This Agreement (including the Agreement, these Terms and Conditions and all exhibits, riders and mock ups attached thereto) constitutes the entire agreement between the parties with respect to the subject matter hereof. This Agreement supersedes, and the terms of this Agreement govern, any other prior or collateral agreements (including without limitation, any warranties) with respect to the subject matter hereof. Any amendments to this Agreement must be in writing and executed by an officer of the parties. Nothing in this Agreement shall impair or affect how Overture operates its business. Overture shall be entitled to make any and all changes to its business as it deems appropriate, including but not limited to terminating products, without incurring any liability to Gator.

9.11 Fax Signature Counterparts. This Agreement may be entered into by each party in separate counterparts and shall constitute one fully executed Agreement upon execution by both Gator and Overture. Any signature page delivered by fax machine shall be binding to the same extent as an original signature page.

9.12 Severability. If any provision of this Agreement is held or made invalid or unenforceable for any reason, such invalidity shall not affect the remainder of this Agreement, and the invalid or unenforceable provisions shall be replaced by a mutually acceptable provision, which being valid, legal and enforceable comes closest to the original intentions of the parties hereto and has like economic effect.

9.13 Waiver. The terms or covenants of this Agreement may be waived only by a written instrument executed by the party waiving compliance. The failure of either party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by either party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach or a waiver of the breach of any other term or covenant contained in this Agreement.

9.14 Section Headings. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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SCHEDULE 1

OVERTURE USAGE GUIDELINES

1. Gator may use the Licensed Materials solely for the purpose authorized herein by Overture and only in compliance with the specifications, directions, information and standards supplied by Overture and modified by Overture upon notice to Gator from time to time.

2. Gator agrees to comply with any requirements established by Overture concerning the style, design, display and use of the Licensed Materials; to correctly use the trademark symbol ^™ or registration symbol ^® with every use of the trademarks, service marks and/or tradenames as part of the Licensed Materials as instructed by Overture; to use the registration symbol ^® upon receiving notice from Overture of registration of any trademarks, service marks and/or tradenames that are part of the Licensed Materials.

3. Gator may not alter the Licensed Materials in any manner, or use the Licensed Materials in any manner that may dilute, diminish, or otherwise damage Overture’s rights and goodwill in any Overture marks that are part of the Licensed Materials.

4. Gator may not use the Licensed Materials in any manner that implies sponsorship or endorsement by Overture of services and products other than those provided by Overture.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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EXHIBIT A

DEFINITIONS

As used in the Agreement and the Terms and Conditions, the following capitalized terms have the meanings set forth below:

(a) Advertiser means any third party that has signed up to be included in the Overture Services for the specific keywords clicked upon by a User, has agreed to Overture’s advertiser terms and conditions and has agreed to pay every time a User clicks on the link to such third party’s site.

(b) Affiliate means, with respect to any entity, any entity controlling, controlled by or under common control with such entity. For purposes of this definition, “control” means ownership of in excess of 50% of the voting stock of the controlled entity. the right to elect a majority of the members of the board of directors of such entity or ownership of all or substantially all of the consolidated assets of such entity.

(c) Bidded Click means a valid click on an Overture Result by a User. Bidded Clicks are counted by Overture and only include clicks in which Overture receives payment from its Advertisers.

(d) Commerical Terms means the commercial keyword terms developed by Overture, as modified by mutual agreement of the parties from time to time.

(e) Confidential Information shall have the meaning set forth in Section 5.1 of the Terms and Conditions.

(f) CTR means the network-wide percentage of all Web pages displaying paid Overture search results that receive valid clicks for which Overture receives payment from its Advertisers.

(g) Effective Date shall have the meaning set forth in the preamble above.

(h) GAIN means the Gator Advertising and Information Network.

(i) Gator CTR means the percentage of all Web pages displayed by Gator displaying Overture Results that receive valid clicks for which Overture receives payment from its Advertisers.

(j) Gator PPC means the average price obtained by Overture from its Advertisers per Bidded Click from all Results Pages displayed by Gator during a specified period of time.

(k) Gator Services means permission-based advertising and related services and technology whereby Gator, a Gator Affiliate and/or any authorized distributor, offers Users the proposition that they may receive free software in exchange for allowing Gator to deliver various forms of popup and pop under advertising to Users’ computer screens based on their Internet usage. Gator Services also includes the Searchscout Site.

(l) Gross Revenue means amounts collected by Overture for Bidded Clicks (after deducting any taxes Overture is required to collect, if any). The “amounts collected by Overture” take into account adjustments for such matters as bad debt, credit card charges and refunds Overture pays to Advertisers.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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(m) Licensed Materials means the Overture Results provided for display on the Searchscout Site and in Pop Under Windows, and the Overture Marks, if any, provided to be displayed on the Searchscout Site and in Pop Under Windows.

(n) Overture Marks means (i) any or all of the following, as provided by Overture: (A) The mark “Overture” in typed form and stylized formats; (B) a circular center, surrounded by three concentric circular rings (the “Overture Logo”, as may be modified from time to time); (C) any words or phrases in which Overture has intellectual property rights; and (ii) all of the following (X) the format or general image or appearance of the Overture Results or the Web pages provided by Overture or produced by any of its technology or services; (Y) any word, symbol or device, or any combination thereof, used or intended to be used by Overture to identify and distinguish Overture’s products or services from the products or services of others, and to indicate the source of such goods or services; and (Z) any updates to the foregoing.

(o) Overture Results means search results provided by Overture in response to a Searchscout Query or a Pop Under Query under this Agreement, which results include only results provided by Overture’s Advertisers.

(p) Overture Services means Overture’s technology and functionality for matching particular keyword requests with an index of certain web site URLs, for providing the results of that match via the Internet and then enabling users to link to a designated page for the Advertisers (which such page has been designated by the Advertisers themselves) that comprise the results of such match.

(q) Pop Under Query means (i) a keyword search request that is triggered as a result of a Search Query that is initiated from a Web site operated by a third party and (ii) any Secondary Search Query arising therefrom.

(r) Pop Under Window means a browser window displayed full screen beneath a browser window that is displayed to, or viewed by, a User.

(s) Related Search means a keyword search request that is triggered as a result of a User clicking on Related Search Terms.

(t) Related Search Terms means words and phrases displayed to a User on the basis of contextual relevance to a Search Query conducted by the User. Related Search Terms specifically does not include “Hotspots,” which are words or phrases that are not contextually relevant to a User’s Search Query.

(u) Restricted Search Result means anything that responds to a query for which the review, cataloging, collection, maintenance, display, indexing, ranking, or other activity is paid regardless of the method by which that payment is counted, whether cost per click, cost per action, cost per impression, pay for placement, paid inclusion, or otherwise, excluding Overture Results, traditional banner advertising units and non-dynamic buttons (provided that such banners, buttons and third-party advertisements do not respond to keyword searches or queries with content related to specific keyword searches or queries). In the determination of whether a response to a query is “paid” for, it does not matter whether Gator directly receives payment.

(v) Results means, collectively, the Overture Results and/or the Supplemental Results.

(w) Results Page means a page delivered to a User in response to a Searchscout Query or a Pop Under Query, as applicable, which contains Overture Results as provided for in this Agreement.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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(x) Search Box means a graphical area on a Web page in which a user submits a query by typing in a search term or request and includes the area in which a user submits search queries or requests.

(y) Search Query means a search initiated by a User who types in a search query into a Search Box and conducts a search on such query .

(z) Searchscout Query means (i) a Search Query that is initiated from the Searchscout Site and (ii) any Secondary Search Query arising therefrom.

(aa) Secondary Search Query means (i) any Search Query initiated from Search Boxes appearing in a Results Page and (ii) any Related Search.

(bb) Searchscout Site means the Web page located at www.searchscout.com and all Web pages available under the searchscout.com domain or any successor domain.

(cc) Supplemental Results means search results provided by Overture in response to a Searchscout Query, a Pop Under Query, or a Secondary Search Query under this Agreement, which results are algorithmically generated by Overture or third party providers selected by Overture in its sole discretion.

(dd) Term means the period of time beginning on the Effective Date and continuing for thirty-six (36) months thereafter, unless this Agreement is earlier terminated in its entirety.

(ee) User means a person (as compared to bots, metaspiders, macro programs, Internet agents or any other automated means) that has installed, uses or otherwise receives the Gator Services.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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EX-10.16

Exhibit 10.16

CONFIDENTIAL TREATMENT REQUESTED

AMENDMENT #1 TO THE SEARCH SERVICES AGREEMENT

This Amendment #1 to the Search Services Agreement (the “Agreement”) entered into by and between Overture Services, Inc., a Delaware corporation (“Overture”) and The Gator Corporation (“Gator”) effective as of March 28, 2003, is made and entered into effective as of September 12, 2003 (the “Amendment Effective Date”).

In consideration of the mutual covenants contained herein, and for such other good and valuable consideration, the sufficiency of which is acknowledged by the parties hereto, the parties hereby agree to the below terms and conditions and hereby amend the Agreement as follows:

1 The definition of “Term” in Exhibit A, “Definitions,” Section (dd) is hereby deleted and replaced in its entirety with the following:

“(dd) Term means the period of time beginning on the Effective Date and continuing until September 11, 2007, unless this Agreement is earlier terminated in its entirety as set forth in this Agreement.”

2. Section 3.1, “Payments,” of the Agreement is hereby deleted and replaced in its entirety with the following:

“3.1 Payments. Overture shall pay Gator [***] percent ([***]%) of Gross Revenue resulting from Searchscout Queries and Pop Under Queries; provided that, beginning on September 11, 2005 and continuing until the end of the Term, Gator’s percentage share of such Gross Revenue shall [***] (i) [***] percent ([***]%) or (ii) Overture’s [***] for the [***]. In no event, however, shall Gator’s percentage share of such Gross Revenue for the final two years of the Term exceed [***] percent ([***]%).”

3. Section 3.2(a), is hereby deleted and replaced in its entirety with the following:

“3.2(a) Timing: Reporting. Overture shall pay Gator the amounts set forth in Section 3.1 above, excluding any taxes Overture may be required by law to withhold or to pay (other than taxes on Overture’s income) and less any Prepayments made in accordance with Section 3.2(b) below, within forty-five (45) days after the end of each month in which such amounts were incurred. In connection with any such payment, Overture shall provide reporting to Gator describing the basis for the amounts paid. Overture will retain all revenue derived from the Overture Services and Overture Results, except as specifically set forth in this Agreement. Payments shall be made in U.S. Dollars.”

4. For the avoidance of doubt, Section 9.3, Exclusivity, shall continue to be in full force and effect through the end of the Term as amended in this Amendment #1.

In the event of conflict between the terms and conditions of the Agreement and the terms and conditions of this Amendment #1, the terms and conditions of this Amendment #1 will control. All capitalized terms used but not defined herein shall have the meaning assigned to them in the Agreement.

Except as provided above, the terms and conditions of the Agreement remain unchanged.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

The Gator Corporation:		Overture Services, Inc.
Signature:	/s/ Jeff McFadden	Signature:	/s/ William Demas
Name: Jeff McFadden		Name: William Demas
Title: CEO		Title: SVP, PBSG
Date: 9-12-2003		Date: 9-16-03

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

EX-10.17

Exhibit 10.17

CONFIDENTIAL TREATMENT REQUESTED

AMENDMENT #2 TO THE SEARCH SERVICES AGREEMENT

This Amendment #2 to the Search Services Agreement (the “Agreement”) entered into by and between Overture Services, Inc., a Delaware corporation (“Overture”) and Claria Corporation (formerly known as The Gator Corporation) (“Claria”) effective as of March 28, 2003, as amended September 12, 2003, is made and entered into effective as of October 1, 2003 (the “Amendment Effective Date”).

In consideration of the mutual covenants contained herein, and for such other good and valuable consideration, the sufficiency of which is acknowledged by the parties hereto, the parties hereby agree to the below terms and conditions and hereby amend the Agreement as follows:

1. All instances of Gator are hereby amended and replaced to read Claria.

2. Section 4.8 of the Agreement is amended by adding the following sentences at the end of the paragraph:

“Notwithstanding the foregoing, Claria may display a Results Page to a User in response to a User using a search engine that typically displays results to Users in the countries listed on Exhibit 1 to this Amendment #2 so long as the Results Page contains Overture Results provided by the Overture authorized country specific results feed. In addition, the parties have also agreed to display Results Pages to Users in the countries listed on Exhibit 2 to this Amendment #2 on a test basis.”

3. Section 4.9 of the Agreement is hereby amended by adding the following sentence at the end of the paragraph:

“Notwithstanding the foregoing, Claria shall transmit Pop Under Search Queries to Overture that are initiated by Users using a search engine that typically displays results to Users in the countries listed on Exhibit 1 and on Exhibit 2 (on a test basis only).”

4. A new Section 4.10 is hereby added stating the following:

“4.10 Test Countries. The countries listed on Exhibit 2 to this Amendment #2, and any other countries as mutually agreed between the parties (agreement by email is acceptable), shall be considered test countries for forty-five (45) days (such forty-five day period for the countries listed on Exhibit 2 to end no earlier than February 16, 2004) following the first display of a Results Page to Users (“Launch”) in the countries listed on Exhibit 2 and either party may opt-out of such countries on twenty-four hours notice (notice by email is acceptable). For the avoidance of doubt, upon the expiration of the aforementioned forty-five (45) day period, such country shall cease to be considered a test country and all the Parties’ obligations under this Agreement shall apply as if that country appeared on Exhibit 1.”

5. Section 5.1, Decline in PPC, is hereby deleted and replaced in its entirety with the following:

“5.1 Decline in PPC. In the event that the Claria PPC for any one country declines below [***]% of the average Claria PPC for the prior [***] period (the “Pre-Decline PPC”) for a period of [***] ([***]) successive months, on [***] prior written notice, [***] shall have the right to terminate this Agreement only as to the parties’ obligations under this Agreement with respect to Users in such

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

country. Notwithstanding the foregoing, [***] shall have the right to prevent termination on that basis following the receipt of notice thereof by calculating [***] on the basis of an average price per click equal to the Pre-Decline PPC arising out of Searchscout Queries and Pop Under Queries from Users in such country and giving notice to [***] (within five (5) days following receipt of [***] notice) that it intends to exercise such right to prevent [***] termination; provided, however, that if the Claria PPC during any subsequent [***] rises above the Pre-Decline PPC arising out of Searchscout Queries and Pop Under Queries from Users in such country, Overture shall pay Claria’s appropriate revenue share under Section 3.1, Payments.”

6. Section 5.3, Below Average Conversion Rate, is hereby deleted and replaced in its entirety with the following:

“5.3 Below Average Conversion Rate. On a country by country basis, for any month in which the Advertiser conversion rate from Overture Results displayed by Claria (the “Claria Conversion Rate”) is [***] percent ([***]%) or more below the average conversion rate for all Overture Network Partners tracked by Overture for such country (the “Overall Conversion Rate”), Overture shall provide Claria with a written statement (a “Conversion Statement”) setting forth the percentage difference between the Claria Conversion Rate for such country and the Overall Conversion Rate for such country. In the event that the Claria Conversion Rate for any country falls [***] percent ([***]%) or more below the Overall Conversion Rate for such country, then Claria shall have a [***] ([***]) month period in which to cure by raising the Claria Conversion Rate for such country to a rate less than [***] percent ([***]%) below the Overall Conversion Rate for such country. In the event that Claria fails to cure within such [***] period, or in the event that in any [***] following such cure, the Claria Conversion Rate for such country again falls to [***] percent ([***]%) or more below the Overall Conversion Rate for such country, Overture shall have the right to immediately terminate this Agreement only as to the Parties obligations under this contract with respect to Users in such country. Notwithstanding the foregoing, Overture shall have no right to terminate this Agreement (in whole or in part), if, during the one-month period prior to the termination right, Overture has failed to provide Claria with (i) a Conversion Statement on or about both the first day of such month and (ii) a Conversion Statement on or about the fifteenth day of such month reflecting a Claria Conversion Rate [***] percent ([***]%) or more below the Overall Conversion Rate (e.g., for Overture to have a termination right starting on March 1, Overture has to provide (i) a Conversion Statement on or about February 1st and (ii) a Conversion Statement on or about February 15th showing a Claria Conversion Rate [***] percent ([***]%) or more below the Overall Conversion Rate). Each Conversion Statement provided hereunder shall be treated as Overture’s Confidential Information under Section 5 of the Terms and Conditions, Confidentiality.”

7. Section 7, Additional Termination Rights, is hereby deleted and replaced in its entirety with the following:

“7. Additional Termination Rights. On a country by country basis, if a court of competent jurisdiction enters a final, binding judgment that prevents either party from carrying out its respective obligations under this Agreement as to such country, this Agreement shall terminate only as to the parties’ obligations applicable to Users located in such country and the delivery and display of Results to the same. If (i) at least [***] ([***]) separate [***] are [***] in any one country asserting [***] in a [***] ([***]) and [***] determines in [***] that [***] materially impair its business; or (ii) a court of competent jurisdiction enters a final judgment against [***] that [***] determines in [***] materially impairs the value of this Agreement, then either party may terminate this Agreement as to the parties’ obligations applicable to Users located in such country and the display and delivery of

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

Results to the same. Each party shall provide the other party with prompt written notice [***] under this Section 8.4. Neither the provision of notice under the preceding sentence, nor the failure to provide such notice, shall prejudice a party’s right to seek indemnification under Section 6 of the Terms and Conditions (Indemnification).”

8. Section 3.2 (g) of the Terms and Conditions of the Agreement is hereby amended by adding the following words at the end of the phrase:

“unless the top level domain corresponds with a country listed on Exhibit 1 or on Exhibit 2 (on a test basis only)”

In the event of conflict between the terms and conditions of the Agreement and the terms and conditions of this Amendment #2, the terms and conditions of this Amendment #2 will control. All capitalized terms used but not defined herein shall have the meaning assigned to them in the Agreement. Except as provided above, the terms and conditions of the Agreement remain unchanged.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment #2 to the Agreement to be executed by their duly authorized representatives on the date(s) set forth below.

Claria Corporation:		Overture Services, Inc.:
Signature:	/s/ Scott VanDeVelde	Signature:	/s/ William Demas
Name: Scott VanDeVelde		Name: William Demas
Title: SVP, Global Sales		Title: SVP & GM, PBSG
Date: 1/12/04		Date: 1/16/04

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

Exhibit 1

List of Countries

[***]

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

Exhibit 2

List of Countries in Test Phase

[***]

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

EX-10.18

Exhibit 10.18

CONFIDENTIAL TREATMENT REQUESTED

CONTEXTUAL SEARCH AGREEMENT

This Contextual Search Agreement (the “Agreement”), effective as of the date of the last signature of this Agreement (“the “Effective Date”), is entered into by and between Overture Services, Inc., a Delaware corporation (“Overture”) and The Gator Corporation (“Gator”), a Delaware corporation.

RECITALS

WHEREAS, Overture has developed certain technology and functionality for matching particular keyword requests with an index of certain web site URLs, for providing the results of that match via the Internet and then enabling users to link to a designated page for advertisers which comprise the results of such match;

WHEREAS, Gator provides certain permission-based marketing services and has developed certain technology and functionality in connection therewith;

WHEREAS, Overture and Gator desire to enter into a strategic arrangement whereby Overture will provide Gator with Results in connection with Internet activities of Users; and

WHEREAS, the parties will share revenue generated by Overture Results, all as provided for in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and conditions contained herein, and for good and valuable consideration, the parties agree as follows:

AGREEMENT

1. Agreement. This Agreement comprises this document, the attached Exhibits, Schedule 1 and the attached Terms and Conditions, all of which are incorporated herein in their entirety. This Agreement does not affect the Search Agreement, which remains in full force and effect. In the event of a conflict, this document and the accompanying Exhibits prevails over the Terms and Conditions. Unless defined herein, capitalized terms have the meanings set forth in Exhibit A attached hereto.

2. Category Designation and Right of First Refusal.

2.1 Initial Category Designation. Attached hereto as Exhibit C is the list of Active Categories agreed upon by the parties as of the Effective Date. In addition, each party may define and propose to the other party new Categories that may become additional Active Categories (“Proposed Categories”) and Mapped Keywords for such Proposed Category. The parties must mutually agree on both the Proposed Category and the related Mapped Keywords before the parties may conduct a Trial Period for such Proposed Category. Attached hereto as Exhibit E is the mutually agreed list of initial Proposed Categories and Mapped Keywords (“Initial Proposed Categories”). Gator will provide to Overture, at least [***] in advance of each calendar month, a monthly roll-out schedule, drawn first from the Initial Proposed Categories, until the list of Initial Proposed Categories has been exhausted. Gator and Overture must mutually agree in writing to the Mapped Keywords for Proposed Categories and Active Categories at all times. Once agreed, Mapped Keywords for Proposed Categories and Active Categories may only be changed upon the written consent of both parties. All Initial Proposed Categories and other Proposed Categories shall be subject to a Trial Period as described in Section 6.1, below. Except for Initial Proposed Categories, either party, in its sole discretion, may determine not to conduct a Trial Period with respect to a Proposed Category (in which event, either party shall provide the other with written notice of such determination either five (5) days prior to the proposed Launch or ten (10) days after receiving notification of the Proposed Category, whichever is later). Notwithstanding the foregoing, the parties agree to work together in good faith to Launch at least [***] Proposed Categories per month into a Trial Period until the parties have agreed in writing upon [***] Active Categories.

2.2 Right of First Refusal. For each and every Category, Gator grants Overture the exclusive right to provide paid search results in connection with Generic Impressions from such Category until such time as Overture (i) determines not to proceed with a Trial Period for such Category as provided in Section 2.1 above, or (ii)

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

otherwise opts-out of such Proposed Category (or Active Category) as permitted under this Agreement. For the avoidance of doubt, Gator shall not display paid search results other than Overture Results in connection with Generic Impressions from any Category except in the event of (i) or (ii) in the preceding sentence and only to the extent expressly permitted in Sections 9.1 and 9.2 below.

2.3 Notice. Notice and/or written agreement in or by email are acceptable under this Section 2.

3. Overture Responsibilities.

3.1 Provision of Overture Results. After receiving a Behavioral Query from Gator, Overture shall deliver, subject to reasonable routine downtime of Overture’s systems: (i) all Overture Results available, (ii) if, less than [***] Overture Results are available, Overture shall provide as many Supplemental Results as necessary to provide [***] Results (Overture Results plus Supplemental Results), and (iii) if no Overture Results are available, then Overture may respond that no results are being delivered for such query. Overture shall provide Gator a means to distinguish any and all Results provided by Overture as either Overture Results or Supplemental Results. Overture may redirect a URL in the process of transferring a User to a site identified within an Overture Result.

3.2 Overture Advertisers. An Advertiser’s paid listings may be [***] from Overture Results, provided that Overture [***] no more than [***] additional Advertisers per [***]. Overture shall have the right to [***] more than [***] additional Advertisers each [***] upon receiving Gator’s consent, which consent shall not be unreasonably withheld or delayed. Overture shall report to Gator on a monthly basis the total number of Advertisers that have been [***] from Overture Results and the name of such Advertisers, solely to the extent that such disclosure is not in breach of Overture’s confidentiality obligations to such Advertisers.

4. Overture’s Payment Obligations.

4.1 Payment. Overture shall pay Gator [***] percent ([***]        %) of Gross Revenue resulting from (a) Behavioral Queries and (b) Search Queries on the Results Pages.

4.2 Payment Mechanics.

(a) Timing; Reporting. Overture shall pay Gator the amounts set forth in Section 4.1 above, excluding any taxes Overture may be required by law to withhold or to pay (other than taxes on Overture’s income) and less any Prepayments made in accordance with Section 4.2(b) below, within [***] after the end of each month in which such amounts were incurred. In connection with any such payment, Overture shall provide reporting to Gator describing the basis for the amounts paid. Overture will retain all revenue derived from the Overture Services and Overture Results, except as specifically set forth in this Agreement. Payments shall be made in U.S. Dollars.

(b) Prepayments. Within the [***] during the Term, Overture shall make a prepayment to Gator of the amounts estimated to be incurred during such month (a “Prepayment”). Each Prepayment shall equal [***]% of [***]. Until such time as payments are made to Gator under this Agreement, Prepayments shall be based on payments made by Overture to Gator pursuant to that certain letter agreement between the parties dated April 15, 2003, as amended by that certain letter agreement between the parties dated June 11, 2003 (collectively, the “Letter Agreements”). In the event that a Prepayment exceeds the amounts actually payable during the applicable month, any excess Prepayment shall be credited against future payments due hereunder; provided that Gator shall immediately refund to Overture any excess Prepayments outstanding as of the end of the Term.

5. Gator Responsibilities.

5.1 Behavioral Queries.

(a) Behavioral Queries. Subject to Section 6 below and subject further to reasonable routine downtime of Gator’s systems, Gator shall send to Overture a Behavioral Query generated from an Initial Impression for each User in each Active Category during each User Month. Gator shall send up to [***] Behavioral Queries per Active Category per User per User Month; provided, however, that if Gator sends [***] Behavioral Queries per

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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Active Category per User in a User Month, then Gator shall not send less than ([***]) such Behavioral Queries each User Month thereafter without Overture's prior written consent.

(b) Display of Results; Adherence to Mock-Ups. In response to each Behavioral Query delivered to Overture in accordance with Section 5.1(a) above, Gator shall display the Results in a Results Page appearing within a Pop Under Window. Gator shall not serve any additional advertising or other content in response to any such Behavioral Query. Gator shall display first the Overture Results in the order identified by Overture, followed by any Supplemental Results supplied by Overture in the order identified by Overture. Except as otherwise specified by prior written agreement of the parties, all aspects of the Results Page, and the display of the Overture Results therein, including but not limited to left and right margins, text size, color, font, headings, shading/background, spacing, blank areas, content categories, placements on the page (both top and bottom and left to right) and all other aspects of “look and feel” must be displayed as depicted in the mock-ups attached hereto as Exhibit B; provided, however, that the parties may mutually agree in writing to change the Results Page, and the display of the Overture Results therein, as the parties deem appropriate. Agreement in or by email shall be acceptable under this Section 5.1(b).

5.2 Identifying Language; Informational Links. Gator shall include prominently in each Pop Under Window the following language: “THIS AD IS BROUGHT TO YOU BY GAIN ADVERTISING SOFTWARE. IT IS NOT SPONSORED OR DISPLAYED BY OR ON BEHALF OF THE WEB SITE YOU WERE VIEWING.” Alternatively, Gator may replace “This ad” with “Search Scout” in the foregoing required sentence. Gator shall display the foregoing language in a size and manner as Overture may reasonably request from time to time. Gator shall also include prominently in each Pop Under Window, an “about” link providing information regarding the Results. The content and appearance of the link and the information linked thereto shall be subject to the mutual agreement of the parties. Upon a request by one party, the language may be revised as mutually agreed upon in writing by the parties, such agreement not to be unreasonably withheld or delayed. Agreement in or by email shall be acceptable under this Section 5.2.

5.3 Other Gator Obligations.

(a) Placement of Search Boxes. Gator shall display Search Boxes on the top and on the bottom of all Results Pages displayed in Pop Under Windows. Gator shall maintain the size, the functionality and the “look and feel” of such Search Boxes as specified in the mock-up attached as Exhibit B hereto. Gator covenants that such Search Boxes shall not have any additional functionality that either (i) allows a User to search for related searches or (ii) suggests other searches.

(b) Restricted Access. On a Results Page, Gator shall not enable a User to conduct a search other than through a Search Box.

(c) Tracking Solution for Search Queries. Gator will include source-identifying “tags,” search URLs or other source feed indicators provided by Overture (the “Tags”) for (i) each unique source of Behavioral Queries (including identifiers for Category or Active Category, as applicable) and Search Queries and (ii) identifying any search service testing performed by Gator related to the Overture Results. Further, Gator will send Overture at the time of any Behavioral Query or Search Query for the purpose of identifying automated or otherwise invalid search traffic the following information: an anonymous but consistent User ID (if such user is ascribed a User ID by Gator) together with information identifying the Web site from which such query was originated and such other information as Overture may reasonably request from time to time provided that Gator’s compliance with such request is not in conflict with Gator’s contractual obligations.

(d) Minimizing ‘Bot Traffic. Gator will work with Overture in good faith to minimize such automated or otherwise invalid search traffic generated by ‘bots, metaspiders, macro programs, or any other automated means.

(e) No Other Search Queries. Unless otherwise agreed in writing by the parties (including but not limited to the Search Agreement), Gator shall not send to Overture any queries other than Behavioral Queries and Search Queries.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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5.4 Exact Transmission. Gator shall not modify or otherwise alter the Search Query.

5.5 Other Specifications. Gator shall display Overture Results with Overture’s full title and description, as well as with the full URL of the Web page associated with each Overture Result. Gator shall not modify any aspect of the Overture Results (including the data contained therein).

5.6 Blocked Content; Additional Pop Under Windows. Gator will not sell or display advertising units (including but not limited to pop-up windows) that are intentionally programmed to be displayed as the active window on the User’s computer screen which blocks any portion of a User’s view of the Overture Results.

5.7 Foreign Language Software Bundled with Gator Software. Gator shall not transmit Behavioral Queries to Overture that are initiated by Users who became Users as a result of having downloaded Gator software bundled with (a) a foreign language (i.e. non-English) version of a software program or (b) a software program that is knowingly promoted or distributed through a foreign language Web site.

6. Category Optimization/Category Opt-Out.

6.1 Trial Period. Upon Launch, Gator shall conduct a trial of each Proposed Category by displaying Results Pages for each such Proposed Category to no more than [***] percent ([***]%) (“Trial Percentage”) of the Users for the longer of: (i) [***], or (ii) until at least [***] Users have clicked on an Overture Result for such Proposed Category (“Trial Period”). Attached hereto as Exhibit F is the list of Proposed Categories with corresponding Launch dates that are currently in a Trial Period. Overture and Gator may mutually agree in writing to increase the percentage of Users receiving Results Pages during the Trial Period above the Trial Percentage and/or extend the term of the Trial Period. During the Trial Period, either party may (1) opt out of any Proposed Category by providing the other party with two (2) business days written notice (written notice includes by email) or (2) request a change to the Mapped Keywords for such Proposed Category, which change shall not take effect without the written consent of both parties. Within 1 week after the conclusion of the Trial Period, Gator shall provide Overture with a report summarizing the performance of each Proposed Category (“Trial Report”), which report shall include for each Proposed Category, Behavioral Query volume, click-through rate information, Conversion Rate information (substantially in the form of a Category Report as defined in Section 6.3 below), and such other information as Overture may reasonably request from time to time. Overture may opt out of any Proposed Category by providing Gator with two (2) business days written notice at any time during the 1 week period following receipt of a Trial Report. Unless a party opts out of a Proposed Category pursuant to this Section 6.1, each Proposed Category shall be deemed an “Active Category.” Once a Category is an Active Category (i) neither party can opt-out of such Active Category, except as expressly permitted in this Agreement, (ii) neither party may change the Mapped Keywords for such Active Category, except with the written consent of the other party (which consent shall not be unreasonably withheld), (iii) Gator may not consolidate Active Categories or eliminate an Active Category; and (iv) Results Pages for such Active Category shall be displayed to all Users in accordance with the terms and conditions of this Agreement. Notwithstanding anything to the contrary in this Agreement, the parties agree to accept as Active Categories at least [***] percent ([***]%) of the Initial Proposed Categories that meet the requirements of Section 6.2(a) below unless the parties mutually agree to accept a lesser number of Active Categories.

6.2 Post-Trial Opt-Out Rights.

(a) Conversion Rate.

(i) For each Active Category, Gator makes the following “Conversion Commitment”: the [***] Conversion Rate (as measured by Gator) for a Results Page for Behavioral Queries generated from such Active Category (“Average RL Conversion Rate”) shall equal or exceed the [***] Conversion Rate (as measured by Gator on a consistent basis as it measures Conversion Rates under this Agreement) for a Results Page generated from a Pop Under Query (as defined under the Search Agreement) containing the same Keywords for the same time period (“Average Search Conversion Rate”). Gator shall use commercially reasonable efforts to consistently measure Conversion Rates using the latest possible User action that constitutes a completed transaction for each Advertiser in calculating conversions for all Active Categories. If at any time during the Term an Active Category fails to meet the Conversion Commitment, then Gator shall have [***] in which to cure by raising the Average RL

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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Conversion Rate to equal the Average Search Conversion Rate. If Gator is unable to raise the applicable Conversion Rate after [***], then Overture shall have the right to opt-out of such Active Category.

(ii) Notwithstanding Section 6.2(a)(i) above, if for any Active Category the Average RL Conversion Rate at the time that the Proposed Category became an Active Category (including the Active Categories listed in Exhibit C) was less than the Average Search Conversion Rate (“Initial Conversion Rate”), then the Conversion Commitment shall be measured against the Initial Conversion Rate rather than the Average Search Conversion Rate. Overture may request in writing that Gator raise the Conversion Commitment for such Active Categories from the Initial Conversion Rate to the Average Search Conversion Rate; provided that Overture may make such a request once a week and for no more than [***] Active Categories per week. Following such request, Gator shall have [***] to raise the Agreed Upon Conversion Rate for such Active Categories to the Average Search Conversion Rate. If Gator is unable to raise the applicable Conversion Rate after [***], then Overture shall have the right to opt-out of such Active Category.

(b) Risk. If in the reasonable good faith judgment of either party, the Mapped Keyword for any Active Category poses legal risk, then either party shall have the right to propose one or more alternative Mapped Keywords for such Active Category. In the event the parties cannot agree on the Mapped Keyword for such Active Category then either party shall have the right to opt out of such Active Category. If in the reasonable good faith judgment of either party, its participation in an Active Category poses legal risk or risk of [***] because of the subject matter of the products or services represented by the Active Category, then either party shall have the right to opt out of such Active Category. In the event either party opts out of an Active Category pursuant to this Section 6.2(b) (“Opted-Out Active Category”) then the parties shall use commercially reasonable efforts to replace such Active Category with one or more Proposed Categories with estimated Gross Revenue comparable to the Gross Revenue paid to Gator for the Opted-Out Active Category for the calendar month prior to the opt out.

6.3 Reporting. For each Active Category, Gator shall provide Overture with a report (“Category Report”), a form of which is set forth in Exhibit D-1, containing (i) the Average RL Conversion Rate for the most recent four-week period; (ii) the Average Search Conversion Rate for the most recent four-week period; and (iii) the Initial Conversion Rate, if applicable, for the most recent four-week period; provided, however, that Gator shall not be required to provide a Category Report for any Active Category that has been designated as an Active Category for less than four weeks. Gator shall provide each Category Report to Overture at least once every four weeks. If Overture disagrees with (X) Gator’s calculation of Average RL Conversion Rate, Average Search Conversion Rate or any other Conversion Rate or (Y) Gator’s determination (“Gator’s Determination”) of the User action that constitutes a conversion for each Advertiser in its calculation of Conversion Rates, then the parties agree to work together to resolve any discrepancies. In the event the parties cannot agree on the correct Conversion Rates or Gator’s Determination then the parties shall appoint an independent auditor to verify the Conversion Rates set forth in the Category Reports. If the parties cannot agree on an independent auditor within ten (10) days then Deloitte & Touche shall be appointed the independent auditor. Gator shall also provide to Overture, upon Overture’s request, reports sufficient to verify Gator’s compliance with its obligations under Section 5.1(a) of this Agreement. In addition, Gator shall provide a monthly report containing [***]. Moreover, Gator shall provide Overture during the Term with access to Custom Reporting, as defined in, and in accordance with, the provisions set forth in Exhibit D-2. All reports provided by Gator hereunder, including Custom Reporting, [***].

6.4 Active Category Opt-Out Instruction. If Overture chooses to opt out of an Active Category pursuant to Section 6.2, then Overture may instruct Gator in writing (each, a “Category Opt-Out Instruction”) not to send to Overture Behavioral Queries generated from such Active Category. Each Category Opt-Out Instruction shall specify a date upon which Gator shall stop sending to Overture Behavioral Queries generated from such Active Category (the “Category Opt-Out Date”). On the Category Opt-Out Date, Gator shall immediately (but in no event longer that [***] for [***] percent ([***]%) of such Behavioral Queries and [***] for [***] percent ([***]%) of such Behavioral Queries) cease sending to Overture Behavioral Queries generated from such Active Category and shall cease displaying Results Pages in response to all such Behavioral Queries. Overture shall have no obligation to provide Results for any Active Category specified in the Category Opt-Out Instruction as of the Category Opt-Out Date.

6.5 Notice. Notice and/or written agreement in or by email are acceptable under this Section 6.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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7. Performance-Based Rights.

7.1 Decline in PPC.

(a) Due to [***].

(i) In the event that the Gator PPC for all Active Categories in any given calendar month declines below [***] percent ([***]%) of the average Gator PPC for the same Active Categories over the prior [***] period (the “Pre-Decline PPC”) and is caused by [***] as permitted under Section [***] of the Terms and Conditions, then [***] shall provide [***] with written notice of such decline in the Gator PPC (“Gator PPC Decline Notice”). If such decline continues through the next [***], [***] shall have the right at the end of such [***] to terminate this Agreement upon [***] prior written notice.

(ii) Minimum Payment. Notwithstanding the foregoing paragraph, [***] shall have the right to prevent termination pursuant to Section 7.1(a)(i) above, or Section 7.1(b), below, following the receipt of the Gator PPC Decline Notice, or to prevent the exercise by [***] of its rights under Section 7.1(a)(iii) below, by calculating and [***] on the basis of an average price per click equal to the Pre-Decline PPC (“Minimum Payment”) and giving notice to [***] (within five (5) days following receipt of the Gator PPC Decline Notice) that it intends to exercise such right to prevent [***] termination. [***] may elect to stop making Minimum Payments by providing [***] with ninety (90) days prior written notice. Gator shall have the right to terminate the Agreement as of the effective date of discontinuation of [***] upon [***] prior written notice. If the Gator PPC during any calendar month during which [***] makes Minimum Payments rises above the Pre-Decline PPC, (i) Overture shall pay Gator’s appropriate revenue share under Section 4.1 (Payment); (ii) any termination right exercised by [***] shall be ineffective; and (iii) [***] shall no longer be obligated to make Minimum Payments in subsequent months unless this Section 7.1 is triggered again by a subsequent decline in Gator PPC.

(iii) [***] Rights. In the event that [***] declines to exercise either of its termination rights as provided in this Section 7.1(a)(i) or 7.1(a)(ii) and [***] has not otherwise elected to make Minimum Payments, then: (A) Gator shall no longer be required to provide Behavioral Queries generated from Initial Impressions as set forth in Section 5.1(a) above (provided that Gator shall continue to send no more than [***] Behavioral Queries per Active Category per User per User Month); (B) Gator may display [***] provided by alternative [***], including, but not limited to, [***] referred to in the Search Agreement as [***] in response to Generic Impressions; provided that Gator may not display [***] on a Results Page or in more than [***] percent ([***]%) of all advertising units containing paid search results displayed as a result of Generic Impressions; (C) Sections 9.1 and 9.2 shall continue to apply except that Gator may display paid search results provided by its own direct advertisers above Overture Results on a Results Page; (D) Sections 7.2 and 9.3 shall no longer apply; and (E) Overture shall continue to be obligated to provide all Overture Results available under Section 3.1.

(iv) Overture Rights. Overture shall have a right to terminate this Agreement upon fifteen (15) days prior written notice in the event that Gator displays [***] paid search results (which is permitted solely under Section 7.1(a)(iii) above) in more than [***] percent ([***]        %) of all advertising units containing paid search results displayed as a result of Generic Impressions. Starting [***] after the date of the Gator PPC Decline Notice, Overture shall also have a right to terminate this Agreement upon [***] prior written notice if, in any calendar month, Gator delivers less than [***] percent ([***]        %) of the Bidded Clicks Gator delivered in the highest volume calendar month during the [***] period following the Gator PPC Decline Notice.

(b) Due to Any Decline. Notwithstanding anything to the contrary in this Section 7.1 or elsewhere in this Agreement, if the Gator PPC for all Active Categories in any given calendar month declines, for any reason, below [***] percent ([***]%) of the Pre-Decline PPC, then Gator shall provide Overture with a Gator PPC Decline Notice. If such decline continues through the next [***], [***] shall have the right at the end of such [***] to terminate this Agreement upon [***] prior written notice.

(c) Obligations. Gator agrees that it shall not take any actions out of the ordinary course of business to decrease the Gator PPC. In the event of any decline in Gator PPC, Overture and Gator shall [***].

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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7.2 Decline in Behavioral Query Volume. If, in any calendar month, Gator delivers less than [***] percent ([***]%) of the Behavioral Queries for Active Categories (a “Volume Decline”) that Gator sent to Overture in the highest volume calendar month during the previous [***] period (“the Measurement Month”), Overture shall provide written notice to Gator of such Volume Decline. Upon receipt of notice of a Volume Decline, Gator shall either (i) cure within thirty (30) days by raising the number of Behavioral Queries for Active Categories to at least [***] percent ([***]%) of the number of Behavioral Queries for Active Categories during the Measurement Month, or (ii) provide documentation substantiating that the Volume Decline was the result of (a) a decline in the aggregate number of Web pages being viewed by Users, (b) seasonality, (c) mutually agreed Active Category changes, or (d) Active Category changes resulting from Overture’s [***] pursuant to Section 8.1 below . If Gator is unable to cure a Volume Decline not due to one of the reasons listed in 7.2(ii) above within thirty (30) days, Overture shall have the right to terminate this Agreement on [***] prior written notice. Notwithstanding the foregoing, if in any month Gator delivers less than [***] percent ([***]%) of the average number of Behavioral Queries for Active Categories that Gator sent to Overture over the prior [***] period (excluding declines caused by mutually agreed Active Category changes, or Active Category changes resulting from Overture’s [***] pursuant to Section 8.1 below), then Overture shall have the right to terminate this Agreement on [***] prior written notice if Gator is unable to cure such volume decline within thirty (30) days. At Overture’s sole cost and expense, Overture may appoint an independent auditor solely to verify the documentation provided by Gator under Section 7.2(ii) above.

7.3 Search Agreement. Overture shall have the right to terminate this Agreement immediately in the event Overture has a right to terminate the Search Agreement pursuant to Section 5.3 therein.

8. Overture’s [***] and Gator’s [***] Right.

8.1 [***]. Overture may instruct Gator in writing (each, a “[***]”) to cease sending to Overture Behavioral Queries from Users’ browsing activities related to Internet domains owned or operated by [***] (each an “[***]”). Each [***] shall specify a date (which date shall be no sooner than five (5) business days in the event that such [***] is used in [***] or less Proposed Categories and Active Categories, or [***] in the event that such [***] is used in more than [***] Proposed Categories and Active Categories, or such later date that the parties may mutually agree in writing), from Gator’s receipt of the [***] upon which Gator shall stop using the [***] for sending Behavioral Queries to Overture (the “[***]”). On the [***], Gator shall immediately (but in no event longer that [***] for [***] percent ([***]%) of such Behavioral Queries and [***] for [***] percent ([***]%) of such Behavioral Queries) cease sending to Overture Behavioral Queries generated from the [***] and shall [***] Results Pages in response to all such Behavioral Queries. Overture shall have no obligation to provide Results for any Behavioral Queries related to an [***] specified in the [***] as of the [***]. Commencing upon Gator’s compliance with such [***] Overture, in accordance with Section 8.3 (Payment), shall pay Gator, for each day through the end of the Term, an amount equal to the difference, if any, between (i) Gator’s share of the [***] generated from Behavioral Queries as a result of Users viewing such [***] during the [***] preceding [***] (or, if less than [***] has passed since the execution of this Agreement, an amount equal to [***] for all days during which this Agreement has been in effect prior to such [***]) (the “[***]”) and (ii) the [***] of [***] sent to Overture during such measurement period multiplied by [***]. If Gator does anything out of the ordinary course of business to increase the [***] or decrease its average [***] during such [***] period, or if Overture does anything out of the ordinary course of business to decrease the [***] during such [***] period, then the parties shall work together to determine a fair [***] or average revenue per Generic Impression, as applicable. Prior to the [***], Overture shall pay Gator for the Behavioral Queries being opted out of pursuant to Section 4.1 of this Agreement.

8.2 Opt Out for Change of Control. Notwithstanding Section 8.1, Overture shall be entitled to issue, and shall have no payment obligation with respect to, a [***] given in connection with a Change of Control for Internet domains owned or controlled by an Acquiring Party and its Affiliates; provided that the [***] in such event shall be no sooner than: (i) the date of the consummation of the Change of Control, and (ii) thirty (30) days from Gator’s receipt of such [***]. The term “Change of Control” means any transaction (including, without limitation, a merger, consolidation, sale of stock or sale of assets, but excluding any assignment as security for indebtedness) after which any person (or group of persons acting in concert) other than the previously existing shareholders of such party would own in excess of 50% of the voting stock of Overture (or the person into which such party would have been merged or consolidated) and would have the right to elect a majority of the members of the board of directors or would acquire all or substantially all of the consolidated assets of such entity. The surviving or controlling entity or group of entities and its Affiliates after a Change of Control shall be referred to herein as the “Acquiring Party.”

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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8.3 Payment. Payments made by Overture pursuant to Section [***] above shall be reported and paid concurrently with payments made under Section [***] above.

8.4 Additional Termination Rights. In the event that a court of competent jurisdiction enters a final, binding judgment that prevents either party from carrying out its respective obligations under this Agreement, this Agreement shall terminate. Either party may terminate this Agreement if (i) at [***] are [***] asserting [***] in a [***] and [***] determines in [***] that [***] materially impair its business; or (ii) a court of competent jurisdiction enters a final judgment against [***] that [***] determines in [***] materially impair the value of this Agreement. Each party shall provide the other party with prompt written notice [***] under this Section 7. Neither the provision of notice under the preceding sentence, nor the failure to provide such notice, shall prejudice a Party’s right to seek indemnification under Section 6 of the Terms and Conditions (Indemnification).

9. Exclusivity.

9.1 Restricted Search Results. Except as expressly permitted under Section 9.2 (Permitted Display), Gator shall not display, or link to, any Restricted Search Results. Gator acknowledges and agrees that any violation, or any threatened violation, of this Section 9.1 will cause Overture to suffer irreparable harm for which there is no adequate remedy at law, entitling Overture to injunctive relief, in addition to all other available legal remedies, to restrain any such violation, threatened or actual, without proof of irreparable injury and without the necessity of posting bond even if otherwise normally required. Overture acknowledges and agrees that any violation, or any threatened violation, of Section 9.3 (Specific [***]), will cause Gator to suffer irreparable harm for which there is no adequate remedy at law, entitling Gator to injunctive relief, in addition to all other available legal remedies, to restrain any such violation, threatened or actual, without proof of irreparable injury and without the necessity of posting bond even if otherwise normally required.

9.2 Permitted Display. Gator shall have the right to display [***] from [***] below the first [***] Overture Results on the Results Page; provided, however, if Overture provides less than [***] Overture Results in response to any Behavioral Query, then Gator may display [***] from [***] below the last Overture Result provided in response to such query. No paid search results from any provider other than Overture may appear above or to the left or right of the first [***] Results displayed on a Results Page.

9.3 Specific [***]. During the Term (but not during any extension or renewal thereof unless expressly agreed by the parties in writing), Overture will not enter into an agreement (written or otherwise) pertaining to the display of paid search results provided by Overture with [***]. Gator understands that Overture has, and in the future may have, agreements that allow third parties (i.e., some Overture Network Partners) to syndicate [***] and any such syndication shall not violate this Agreement and this clause shall in no manner be deemed an inducement for Overture to breach or cease performance of any agreement or otherwise interfere with any business relationship. Gator shall not enter into an agreement with [***] in connection with [***] (including [***] results), the [***], or Gator providing analytics of the same nature as contemplated under Section 6.3 above.

10. Search Applications. Gator shall not bundle, distribute or market any software application that performs general Internet Web search functionality except for a software application developed, provided or otherwise approved in writing by Overture; provided, however, that this Section 10 shall not in any way prohibit Gator from distributing: (i) any of its software applications through third party software application providers who may also distribute applications containing general Internet search functionality, or (ii) any software application developed by Gator which contains general Internet search functionality. Gator acknowledges and agrees that a software application under the preceding sentence would fall within the scope of the Search Agreement and search queries conducted from such application would be treated as Searchscout Queries thereunder; provided, however, that such queries may originate from a domain other than www.searchscout.com so long as such domain is wholly-owned or controlled by Gator.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

“Gator”		“OVERTURE”
The Gator Corporation, a Delaware corporation		Overture Services, Inc., a Delaware corporation
By:	/s/ Jeff McFadden	By:	/s/ William Demas
Name:	Jeff McFadden	Name:	William Demas
Title:	CEO	Title:	SVP, PBSG
Date:	9-12-03	Date:	9-16-03

Exhibits:

Exhibit A - Exhibit B - Exhibit C - Exhibit D-1 - Exhibit D-2 - Exhibit E - Exhibit F - Exhibit G - Definitions Pop Under Mock-Up Active Categories Form of Category Report Custom Reporting Initial Proposed Categories Proposed Categories in a Trial Period Overture Marks

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

TERMS AND CONDITIONS OF AGREEMENT

1. DEFINITIONS. All capitalized terms not otherwise defined in these Terms and Conditions are defined in Exhibit A of the Agreement.

2. GRANT OF LICENSE.

2.1 License. Subject to the terms and conditions of this Agreement, Overture grants to Gator a limited, non-exclusive, non-assignable, non-transferable, non-sub-licensable (unless explicitly provided for under this Agreement) license during the Term to use and display the Licensed Materials as provided by Overture to Gator and as specifically authorized or described in this Agreement.

2.2 Conditions of License. The Licensed Materials must be reproduced and displayed in the size, place, and manner indicated in this Agreement, and only in compliance with Overture’s Usage Guidelines, attached hereto as Schedule 1, as modified from time to time by Overture in its sole discretion.

2.3 Ownership of Licensed Materials. Gator acknowledges that all right, title and interest in and to the Licensed Materials is exclusively owned by Overture and/or its licensors, and that no right, title or interest other than the limited license granted herein is provided to Gator. Gator shall not assert copyright, trademark or other intellectual property ownership or other proprietary rights in the Licensed Materials, the Overture Services or in any element, derivation, adaptation, variation or name thereof. Gator shall not contest the validity of, or, as between Overture and Gator, Overture’s ownership of, any of the Licensed Materials or the Overture Services. During the Term, Gator shall not, in any jurisdiction, adopt, use, or register, or apply for registration of, whether as a corporate name, trademark, service mark or other indication of origin, or as a domain name, any Overture Marks, or any word, symbol or device, or any combination confusingly similar to any of the Overture Marks.

2.4 Ownership of Goodwill. Gator agrees that its use and display of the Licensed Materials inures to the benefit of Overture. All goodwill or reputation in the Licensed Materials automatically vests in Overture when the Licensed Materials are used by Gator pursuant to this Agreement.

2.5 Ownership of Overture Services. Gator acknowledges and agrees that, as between the parties, Overture owns all right, title and interest in and to the Overture Services and the Overture Results, whether or not such items are included in the Licensed Materials.

2.6 Caching Licensed Material. Gator shall not cache any Overture Results or any other Licensed Materials.

2.7 License to Use Gator Reports and Custom Reporting. Subject to the restrictions set forth in Section 2.9 below, Gator grants Overture a perpetual, limited, non-transferable, exclusive, worldwide license to: (i) use, copy, modify, adapt, and prepare derivative works of Custom Reporting (as defined in Exhibit D-2) for internal purposes, (ii) provide Gator Reports to Overture Network Partners and Advertisers subject to a confidentiality and/or non-disclosure agreement restricting disclosure of confidential information to any third party and provided that Overture shall take necessary and proper measures to ensure that the Gator Reports are considered confidential information under such confidentiality and/or non-disclosure agreement, (iii) publish the data from Gator Reports or Custom Reporting with Gator’s written consent, and (iv) use the Custom Reporting to promote Overture’s search and/or contextual advertising marketplaces provided that, for the avoidance of doubt, Overture shall not sell, license or syndicate the Custom Reporting. At Overture’s sole cost and expense, Overture may appoint an independent auditor solely to verify the Custom Reporting. For the avoidance of doubt, the perpetual license to the Custom Reporting set forth in this Section 2.7 above does not extend the limited license to the Software set forth in Section 2.8 below; provided, that term of the license to the Software may be extended pursuant to Section 2 of Exhibit D-2.

2.8 License to Use Custom Gator Software. If Gator provides software (“Software”) to Overture in order for Overture to access the Custom Reporting, then Gator hereby grants Overture a limited, non-transferable, non-exclusive, worldwide license, for the Term of this Agreement to use the Software by and for up to [***] concurrent users and solely for internal purposes only and solely for the purpose of accessing the Custom Reporting.

2.9 License Restrictions. Overture shall not sell, license or syndicate the Custom Reporting or Software. Moreover, Overture shall not distribute or otherwise provide the Custom Reporting or Software to third parties except as expressly provided in Section 2.7 above. Gator reserves all right, title and interest in and to the Custom Reporting and Software. Overture shall not remove or obscure any copyright notice on the Custom Reporting or Software. If the Custom Reporting or Software or any portion thereof are modified, merged, incorporated or combined into any software, hardware, or other data, they shall continue to be subject to the provisions of this Agreement, and Gator retains ownership of all such Custom Reporting

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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and Software and all such portions. The Custom Reporting and Software are being made available to Overture for the Term of this Agreement and in no manner, and under no circumstances, shall Gator be deemed obligated to provide or make available the Custom Reporting or Software after the Term of this Agreement.

3. ADDITIONAL GATOR RESPONSIBILITIES.

3.1 The Gator Services: Gator agrees that it is solely responsible for the development, maintenance and operation of the Gator Services and for all materials and content that appear in connection with the Gator Services. Gator shall not offer its Users incentives of any kind to use any of the Overture Services. Upon a User clicking on an Overture Result, the URL will send the User directly to Overture and Overture shall use commercially reasonable efforts to send the User to the Advertiser’s Web page.

3.2 Wrongful Acts: Overture Results may only be provided to Users as set forth in the Agreement. Without limiting the generality of the foregoing, Gator shall not provide Overture Results to any Users, nor direct Users to any Web page containing Overture Results, by means of any computer or browser functionality or by means of any Web page not specified in this Agreement. Gator shall not allow any of the following to occur: (a) misleading links in which a User is persuaded to perform a search or visit a Web page in order to obtain some other benefit, (b) hyper-linked words, unless specifically approved by Overture, (c) searches or Behavioral Queries from or after 404 or other error messages unless otherwise agreed in writing between the parties, (d) searches or Behavioral Queries required of the User in order for the User to do another function, such as leaving a Web page or closing a pop-up window, (e) searches or Behavioral Queries performed upon a User hitting the back button or any other element of the browser, (f) searches or Behavioral Queries from Users who were on adults sites, unless such Users actively typed in the URL or are properly using Gator Services while on such sites, all as approved by Overture, (g) searches or Behavioral Queries originating from Web sites containing a top level domain other than “.com,” “.net,” “.org,” “.gov,” “.tv” or “.biz”, and (h) the syndication or delivery of Search Box or Overture Results to any site or application or third party not approved in advance in writing by Overture, which approval Overture may withhold for any reason, with or without good cause. If Gator violates any provision of this Section and such violation remains uncured for more than two (2) business days after receipt of notice of such violation, then Overture may terminate this Agreement immediately upon notice to Gator.

3.3 Comments Disparaging Overture Results. Under no circumstances shall Gator disparage Overture or the Overture Results on any Results Pages nor shall Gator incorporate into any such pages any words (or symbols) that specifically indicate that the Overture Results are inferior in any way to other content or search results or that any other content or search results are better in any way than the Overture Results.

4. REPRESENTATIONS AND WARRANTIES.

4.1 Overture Warranties. Overture represents and warrants that it has full power and authority to enter into this Agreement. Overture does not warrant that the Licensed Materials or Overture Services will meet all of Gator’s requirements or that performance of the Licensed Materials or Overture Services will be uninterrupted or error-free.

4.2 Gator Warranties. Gator represents and warrants that: (i) it has full power and authority to enter into this Agreement, (ii) as of the Effective Date, it has the ability to fulfill its obligations under this Agreement, including but not limited to under Section 6.4 (Category Opt-Out Instruction) and Section 8.1 ([***]), (iii) the privacy statement and/or end user license agreement (a “EULA”) for its applications distributed to its Users clearly inform the Users that they may be served Pop Under Windows based on viewing certain Web pages, (iv) the GAIN AdServer software (or any other software through which Pop Under Windows delivered hereunder are enabled) is programmed to uninstall when Users uninstall all GAIN Ad-Supported software from their computers using the “Add/Remove” programs feature of the Microsoft operating system and as instructed in Gator’s EULA, (v) installation of the GAIN AdServer software (or any other software through which Pop Under Windows delivered hereunder are enabled) requires the affirmative assent of a User to Gator’s end user license agreement, (vi) its Users have access to and the opportunity to review the EULA and privacy statement for Gator’s applications before such applications are installed onto the Users’ computers, and at all times thereafter while Gator’s applications are installed onto the Users’ computers, (vii) Gator does, and will at all times, abide by the EULA and privacy statement, (viii) all Pop Under Windows are, and will at all times, be clearly and conspicuously branded and identified as provided by the GAIN AdServer software, and (ix) the Custom Reporting and Software does not, and will not, contain any viruses, worms, time bombs, time locks, drop dead devices, traps, access codes, trap door devices, or any other similar harmful, malicious or hidden software code, procedures, routines or mechanisms that would cause the Software to cease functioning or to damage or corrupt data, storage media, programs, equipment or communications, or otherwise interfere with Overture’s operations.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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4.3 No Warranties. Except as provided in Section 4.2 or elsewhere in this Agreement, Gator makes the Custom Reporting and Software available on an “AS IS” and “WITH ALL FAULTS” basis. The Custom Reporting and Software are WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED. GATOR DOES NOT WARRANT THAT THE CUSTOM REPORTING OR SOFTWARE WILL BE ERROR FREE AND GATOR EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, OR RELIABILITY OF THE CUSTOM REPORTING OR SOFTWARE. PROVISION AND/OR USE OF THE CUSTOM REPORTING OR DATA ARE AT OVERTURE’S, OVERTURE’S NETWORK PARTNERS’, AND OVERTURE’S ADVERTISERS’ SOLE RISK.

4.4 Disclaimer. EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER PARTY SHALL BE RESPONSIBLE FOR ANY CONTENT PROVIDED BY THIRD PARTIES (INCLUDING ADVERTISERS), OR FOR ANY THIRD PARTY SITES THAT CAN BE LINKED TO OR FROM SUCH PARTY’S WEB SITE. NEITHER PARTY NOR SUCH PARTY’S LICENSORS MAKE ANY OTHER WARRANTY OF ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR USE, AND NONINFRINGEMENT.

5. CONFIDENTIALITY.

5.1 Definition. “Confidential Information” means any information disclosed by either party to the other party during the Term (and any renewal terms), either directly or indirectly, in writing, orally or by inspection of tangible objects, which is designated as “Confidential,” “Proprietary” or some similar designation. All of the terms of this Agreement shall be deemed “Confidential.” Information communicated orally will be considered Confidential Information if such information is designated as being Confidential Information at the time of disclosure and confirmed in writing as being Confidential Information within 20 days after the initial disclosure. Confidential Information will not, however, include any information which (i) was publicly known and made generally available in the public domain prior to the time of disclosure by the disclosing party; (ii) becomes publicly known and made generally available after disclosure by the disclosing party to the receiving party through no action or inaction of the receiving party; (iii) is already in the possession of the receiving party at the time of disclosure by the disclosing party from a source other than the disclosing party; (iv) is obtained by the receiving party from a third party without a breach of such third party’s obligations of confidentiality; or (v) is independently developed by the receiving party without use of or reference to the disclosing party’s Confidential Information.

5.2 Restrictions. Except as expressly permitted in this Agreement, the receiving party agrees (i) not to disclose any Confidential Information of the disclosing party to any third parties, (ii) not to use any such Confidential Information for any purposes except to carry out its rights and responsibilities under this Agreement and (iii) to keep such Confidential Information confidential using the same degree of care the receiving party uses to protect its own Confidential Information, as long as it uses at least reasonable care. If either party receives a subpoena or other validly issued judicial process requesting, or is required by a government agency (such as the SEC), through its rules and regulations or otherwise, to disclose, Confidential Information of the other party, then the receiving party (a) shall promptly notify the disclosing party of such requirement using all reasonable efforts to provide such notification no less than ten (10) days prior to the date of any required disclosure; and (b) shall reasonably cooperate to seek confidential treatment or to obtain an appropriate protective order to preserve the confidentiality of the Confidential Information. Each party will use best efforts to give the other party 10 days prior notice of its intent to file this Agreement with the SEC and will use best efforts to consult with the other party for the purpose of incorporating reasonably proposed redactions (i.e., such proposed redactions that comply with laws, rules and regulations interpreting securities laws). All obligations under this Section 5.2 shall survive for 3 years after termination of the Agreement.

6. INDEMNIFICATION.

6.1 Overture Indemnification. Overture, at its own expense, shall indemnify, defend, and hold harmless Gator and its directors, officers, trustees, shareholders, employees, independent contractors, subsidiaries, agents, successors and assigns from and against any and all losses, costs, liabilities, judgments, damages and expenses, including without limitation reasonable attorneys’ fees and expenses, arising out of or relating to any third party claim, action, investigation, proceeding or suit, whether threatened or asserted (collectively, a “Claim”) that alleges facts that (i) would constitute a breach of any warranty, representation, or covenant made by Overture under this Agreement or are related to Overture’s breach of a material obligation under this Agreement, (ii) Overture’s technology infringes or violates any patents, copyrights, trade secrets, licenses, or other property, contract, personal or proprietary rights of any third party; or (iii) Overture Results provided hereunder violate any state or federal statute or infringe the rights of any third party, if such Claim

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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could have been asserted against Overture had the Overture Result appeared on Overture’s own site. Overture shall have no obligation to indemnify Gator in the event that any Claim under subsection (iii) is based on the fact of the appearance of an Overture Result in a Pop Under Window and nothing contained in this Section 6.1 shall be deemed to relieve or diminish Gator’s obligation to indemnify Overture under Section 6.2 of these Terms and Conditions.

6.2 Gator Indemnification. Gator, at its own expense, shall indemnify, defend, and hold harmless Overture (including without limitation payments that Overture makes to its Advertisers when it is not legally obligated to do so), its Affiliates and Advertisers, and each of their respective directors, officers, trustees, shareholders, employees, independent contractors, subsidiaries, agents, successors and assigns from and against any and all losses, costs, liabilities, judgments, damages and expenses, including without limitation reasonable attorneys’ fees and expenses arising out of or relating to any Claim (i) that alleges facts that would constitute a breach of any warranty, representation or covenant made by Gator under this Agreement or are related to Gator’s breach of a material obligation under this Agreement; or (ii) arising from or related to any aspect of the Gator Services, including without limitation any Claims that the Gator Services or the Software (a) infringe or violate any patents, copyrights, trade secrets, licenses, or other property, contract, personal or proprietary rights of any third party; (b) violate any person’s right to privacy, (c) cause likelihood of confusion in the market, (d) violate any state or federal statute, (e) violate any published policies of a third party, (f) constitute conversion or trespass to chattels, (g) cause personal injury or property damage, (h) constitute fraud, negligent or intentional misrepresentation or (i) tortiously disparage or tortiously harm another person’s business activities or reputation.

6.3 Indemnification Procedures. A party (an “Indemnified Party”) seeking indemnification for any Claim under Section 6.1 or Section 6.2 of these Terms and Conditions, as applicable (an “Indemnified Claim”), shall promptly notify the other party (the “Indemnifying Party”) in writing of such Indemnified Claim (provided, however, that failure to do so shall not relieve the Indemnifying Party of its indemnification obligations hereunder except to the extent of any material prejudice to the Indemnifying Party as a direct result of such failure) and shall promptly tender the control of the defense and settlement of any such claim to the Indemnifying Party (at the Indemnifying Party’s expense and with Indemnifying Party’s choice of counsel). The Indemnified Party shall provide reasonable cooperation with the Indemnifying Party (at the Indemnifying Party’s request and expense) in defending or settling such Indemnified Claim, including but not limited to providing any information or materials necessary for the Indemnifying Party to perform the foregoing. The Indemnifying Party will not enter into any settlement or compromise of any Indemnified Claim that may adversely affect the Indemnified Party without the Indemnified Party’s prior written consent, which shall not be unreasonably withheld.

7. LIMITATION OF LIABILITY.

7.1 NO CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), EQUITY, OR OTHERWISE, FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF PROFITS OR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES) ARISING OUT OF OR RELATING TO THIS AGREEMENT, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

7.2 LIMIT ON DIRECT DAMAGES. IN NO EVENT SHALL GATOR’S TOTAL AGGREGATE LIABILITY TO OVERTURE UNDER THIS AGREEMENT EXCEED THE GREATER OF (I) ALL AMOUNTS PAID OR PAYABLE TO GATOR UNDER THIS AGREEMENT IN THE PREVIOUS [***] OR (II) [***] DOLLARS ($[***]). IN NO EVENT SHALL OVERTURE’S TOTAL AGGREGATE LIABILITY TO GATOR UNDER THIS AGREEMENT EXCEED THE GREATER OF (I) ALL AMOUNTS EARNED BY OVERTURE, BUT NOT PAID TO GATOR UNDER SECTION 4.1 (PAYMENT), BY PROVIDING OVERTURE RESULTS UNDER THIS AGREEMENT IN THE PREVIOUS [***], (II) [***] DOLLARS ($[***]), OR (III) IN THE EVENT OF AN UNCURED BREACH OF SECTION 7.1 (DECLINE IN PPC) OR SECTION 8.1 ([***]), ALL AMOUNTS PAYABLE TO GATOR UNDER SUCH SECTIONS.

7.3 EXCEPTIONS TO LIMITATIONS OF LIABILITY. THE LIMITATIONS OF LIABILITY IN SECTION 7.1 AND 7.2 OF THESE TERMS AND CONDITIONS SHALL NOT APPLY TO (I) GATOR’S BREACH OF SECTION 6.4 (ACTIVE CATEGORY OPT-OUT INSTRUCTION) OR SECTION 8.1 ([***]), (II) A PARTY’S INDEMNIFICATION OBLIGATIONS UNDER THIS AGREEMENT, (III) A BREACH BY A PARTY OF ITS CONFIDENTIALITY OBLIGATIONS UNDER THIS AGREEMENT OR ITS OBLIGATIONS UNDER SECTION 9.2 OF THESE TERMS AND CONDITIONS (PRESS RELEASE) AND (IV) A PARTY’S BREACH OF

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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SECTION 9 (EXCLUSIVITY). THE LIMITATIONS OF LIABILITY IN SECTION 7.2 OF THESE TERMS AND CONDITIONS SHALL NOT APPLY TO A PARTY’S WILLFUL MISCONDUCT OR KNOWING, WILLFUL AND INTENTIONAL BREACH OF ITS OBLIGATIONS UNDER THIS AGREEMENT (WHICH BREACH REMAINS UNCURED AFTER NOTICE THEREOF FOR THIRTY DAYS OR SUCH SHORTER CURE PERIOD AS MAY BE PROVIDED UNDER THIS AGREEMENT). FOR THE AVOIDANCE OF DOUBT AND NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT (INCLUDING BUT NOT LIMITED TO THIS SECTION 7), IN THE EVENT OF OVERTURE’S KNOWING, WILLFUL AND INTENTIONAL UNCURED BREACH OF SECTION 3.1 (PROVISION OF OVERTURE RESULTS) OR GATOR’S KNOWING, WILLFUL AND INTENTIONAL UNCURED BREACH OF SECTION 5.1 (BEHAVIORAL QUERIES), THE BREACHING PARTY SHALL BE LIABLE FOR DAMAGES (IN AN AMOUNT TO BE PROVEN, SUBJECT TO ANY DEFENSES OR COUNTERCLAIMS THAT THE BREACHING PARTY MAY ASSERT, EACH OF WHICH IS EXPRESSLY RESERVED), MEASURED BY THE MONIES THE NON-BREACHING PARTY WOULD HAVE EARNED UNDER THIS AGREEMENT FOR THE REMAINDER OF THE TERM BUT FOR SUCH UNCURED BREACH SUBJECT TO THE NON-BREACHING PARTY’S DUTY TO MITIGATE ITS DAMAGE FROM THE BREACH.

8. TERM.

8.1 Term. This Agreement is effective as of the Effective Date and shall continue in force for the Term.

8.2 Termination For Breach or Insolvency. Except for shorter cure periods as explicitly provided for in this Agreement, if either party breaches any covenant, representation and/or warranty of this Agreement and such breaching party does not cure such breach within thirty (30) days of written notice by the non-breaching party of such breach, then the non-breaching party may terminate the Agreement upon written notice to the breaching party after failure to cure within those thirty (30) days. Notwithstanding the foregoing, (i) any display by Gator of a Results Page or Overture Results in any type of advertising vehicle other than a pop under window (i.e., an inactive window displayed beneath the active window that is displayed to, or viewed by, a User) shall be deemed a material breach giving rise to a termination right hereunder if not cured by Gator within one business day of receipt of written notice thereof and (ii) any breach by Gator of Section 5.1 of this Agreement (Behavioral Queries), shall be deemed a material breach giving rise to a termination right hereunder if not cured by Gator within one week of receipt of written notice thereof. In addition, either party may suspend performance and/or terminate this Agreement if the other party makes any assignment for the benefit of creditors or has any petition under bankruptcy law filed against it, which petition is not dismissed within sixty (60) days of such filing, or has a trustee or receiver appointed for its business or assets or any party thereof.

8.3 Effect of Termination or Expiration. Upon the termination or expiration of this Agreement for any reason (i) all license rights granted herein shall terminate immediately, and (ii) Gator shall immediately cease use of the Licensed Materials. Sections 2.3, 2.4, 2.5, 2.7, 5, 6, 7 and 8 of these Terms and Conditions shall survive expiration or earlier termination of this Agreement. If this Agreement terminates for any reason, in whole or in part, prior to the date that Gator has fully earned any prepayments, then Gator shall immediately refund to Overture (without limiting any other rights or remedies the parties might have) the entire amount of the prepayments made by Overture which have not been fully earned by Gator.

9. MISCELLANEOUS.

9.1 Notice. Any notice required for or permitted by this Agreement shall be in writing and shall be deemed delivered if delivered as indicated: (i) by personal delivery when delivered personally, (ii) by overnight courier upon written verification of receipt, (iii) by certified or registered mail, return receipt requested, upon verification of receipt, or (iv) by telecopy or facsimile transmission when confirmed by telecopier or facsimile transmission report and followed by delivery of a copy of such transmission in accordance with either (i), (ii) or (iii). All notices must be sent to Gator at 2000 Bridge Parkway, Suite 100, Redwood City, California 94065, Fax # 650-232-0401, Attn. Legal Department or to Overture at 74 North Pasadena Avenue, Third Floor, Pasadena, California 91103, Attn: Vice President Business Affairs, Fax # 626-685-5601, or to such other address that the receiving party may have provided for the purpose of notice in accordance with this Section. Any email notice expressly permitted under this Agreement shall be made to dave.goulden@gator.com and scottv@gator.com, if to Gator, and to mark.rabe@overture.com and brian.chisholm@overture.com, if to Overture.

9.2 Press Release. Neither party shall issue any press release unless such press release has been mutually agreed upon in writing by both parties. Excluding disclosures that may be required by law, neither party shall disclose any other terms of this Agreement to any medium without the prior approval of the other party. Notwithstanding the foregoing, (i) Overture

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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shall have the right to notify its advertisers and potential advertisers of the general nature of this transaction (including the quality of the traffic from Gator and Overture’s estimate of the increase in traffic) in order to encourage Overture’s Advertisers to increase their spending with Overture and to encourage potential advertisers to advertise with Overture, and (ii) both parties shall be entitled to provide additional disclosures containing any and all information contained in any previously agreed upon press release. When determining whether a disclosure is “required by law” both parties may rely on their legal counsels’ advice on such matters.

9.3 Specific Disclosures. Notwithstanding anything contained in this Agreement to the contrary, Overture shall be entitled to disclose: (1) the implementation and display provisions contained in the Agreement, (2) reasons why Overture Results may not be displayed in response to certain queries, (3) the type (and methodology) of searches conducted under the Agreement, (4) the duration of the Agreement, and (5) general terms of the Agreement for the purpose of describing the nature of the relationship hereunder (but excluding specific business terms of the Agreement such as revenue or revenue share information).

9.4 Assignment, Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and assigns. Notwithstanding the foregoing, neither Overture nor Gator may assign this Agreement or any of its rights or delegate any of its duties (except for Supplemental Search Results that may be provided by a third party provider selected by Overture) under this Agreement without the prior written consent of the other; provided, however that this Agreement may, without the consent of the other party, be assigned, and shall inure to the benefit of, any entity that succeeds to all or substantially all of the assets and liabilities of such party or in connection with the merger or acquisition of either party. For the avoidance of doubt, Overture may assign this Agreement, without Gator’s consent, to Yahoo! Inc. or one of its Affiliates in connection with the announced acquisition of Overture by Yahoo! Upon or after the close of that transaction, provided, however, that such assignment shall not act as a novation of Overture’s responsibilities hereunder.

9.5 No Third Party Beneficiaries. All rights and obligations of the parties hereunder are personal to them. This Agreement is not intended to benefit, nor shall it be deemed to give rise to, any rights in any third party.

9.6 Governing Law. This Agreement will be governed and construed, to the extent applicable, in accordance with United States law, and otherwise, in accordance with California law, without regard to conflict of law principles. Except for requests for injunctive relief, any dispute or claim arising out of or in connection with this Agreement shall be finally settled by binding arbitration in Los Angeles County, California under the Commercial Rules of the American Arbitration Association by a panel of three (3) arbitrators appointed in accordance with said rules. Judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.

9.7 Independent Contractors. The parties are independent contractors. This Agreement shall not be construed to create a joint venture or partnership between the parties. Neither party shall be deemed to be an employee, agent, partner or legal representative of the other for any purpose and neither shall have any right, power or authority to create any obligation or responsibility on behalf of the other.

9.8 Force Majeure. Neither party shall be liable hereunder by reason of any failure or delay in the performance of its obligations (except for the payment of money) on account of strikes, shortages, riots, insurrection, terrorism, fires, flood, storm, explosions, earthquakes, Internet outages, acts of God, war, governmental action, or any other cause that is beyond the reasonable control of such party.

9.9 Compliance with Law. Each party shall be responsible for compliance with all applicable laws, rules and regulations, if any, related to the performance of its obligations under this Agreement.

9.10 Entire Agreement. This Agreement (including the Agreement, these Terms and Conditions and all exhibits, riders and mock ups attached thereto) constitutes the entire agreement between the parties with respect to the subject matter hereof. This Agreement supersedes, and the terms of this Agreement govern, any other prior or collateral agreements (including without limitation, any warranties), including without limitation the Letter Agreements, with respect to the subject matter hereof. Any amendments to this Agreement must be in writing and executed by an officer of the parties. Nothing in this Agreement shall impair or affect how Overture operates its business. Overture shall be entitled to make any and all changes to its business as it deems appropriate, including but not limited to terminating products, without incurring any liability to Gator.

9.11 Fax Signature Counterparts. This Agreement may be entered into by each party in separate counterparts and shall constitute one fully executed Agreement upon execution by both Gator and Overture. Any signature page delivered by fax machine shall be binding to the same extent as an original signature page.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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9.12 Severability. If any provision of this Agreement is held or made invalid or unenforceable for any reason, such invalidity shall not affect the remainder of this Agreement, and the invalid or unenforceable provisions shall be replaced by a mutually acceptable provision, which being valid, legal and enforceable comes closest to the original intentions of the parties hereto and has like economic effect.

9.13 Waiver. The terms or covenants of this Agreement may be waived only by a written instrument executed by the party waiving compliance. The failure of either party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by either party of the breach of any term or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach or a waiver of the breach of any other term or covenant contained in this Agreement.

9.14 Section Headings. The section headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

9.15 [***]. Overture shall have the right to make any and all changes to the current marketplace and any other marketplace(s) it may create; provided, that (a) Overture shall not [***] and (b) the number of Bidded Clicks from Gator shall not [***]. Notwithstanding anything contained in this Section 9.15 of the Terms and Conditions or elsewhere in this Agreement, nothing shall (X) limit in any way Overture’s right to create and provide custom marketplaces for Overture Network Partners (including Overture and its successors and Affiliates) and/or for specific products (e.g., Content Match) or (Y) affect Overture’s right pursuant to Section 3.2 of the Agreement to exclude Advertisers from the Overture Results.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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SCHEDULE 1

OVERTURE USAGE GUIDELINES

1. Gator may use the Licensed Materials solely for the purpose authorized herein by Overture and only in compliance with the specifications, directions, information and standards supplied by Overture and modified by Overture upon notice to Gator from time to time.

2. Gator agrees to comply with any requirements established by Overture concerning the style, design, display and use of the Licensed Materials; to correctly use the trademark symbol ^™ or registration symbol ^® with every use of the trademarks, service marks and/or tradenames as part of the Licensed Materials as instructed by Overture; to use the registration symbol ^® upon receiving notice from Overture of registration of any trademarks, service marks and/or tradenames that are part of the Licensed Materials.

3. Gator may not alter the Licensed Materials in any manner, or use the Licensed Materials in any manner that may dilute, diminish, or otherwise damage Overture’s rights and goodwill in any Overture marks that are part of the Licensed Materials.

4. Gator may not use the Licensed Materials in any manner that implies sponsorship or endorsement by Overture of services and products other than those provided by Overture.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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EXHIBIT A

DEFINITIONS

As used in the Agreement and the Terms and Conditions, the following capitalized terms have the meanings set forth below:

(a) Active Categories means the Categories listed in Exhibit C and such other Proposed Categories that have been mutually agreed upon by the parties in writing after a Trial Period as provided for in the Agreement.

(b) Advertiser means any third party that has signed up to be included in the Overture Services for the specific keywords clicked upon by a User, has agreed to Overture’s advertiser terms and conditions and has agreed to pay every time a User clicks on the link to such third party’s site.

(c) Affiliate means, with respect to any entity, any entity controlling, controlled by or under common control with such entity. For purposes of this definition, “control” means ownership of in excess of 50% of the voting stock of the controlled entity, the right to elect a majority of the members of the board of directors of such entity or ownership of all or substantially all of the consolidated assets of such entity.

(d) Behavioral Query means a request, generated from a Generic Impression, for Results for a specified Keyword associated by Gator and Overture with a Proposed Category (during a Trial Period) or an Active Category.

(e) Bidded Click means a valid click on an Overture Result by a User. Bidded Clicks are counted by Overture and only include clicks in which Overture receives payment from its Advertisers.

(f) Category means an area of consumer interest in a specific product or service (e.g., canoes, tooth whitening, digital cameras, etc.).

(g) Confidential Information shall have the meaning set forth in Section 5.1 of the Terms and Conditions.

(h) Conversion Rate means, for the Users who are displayed a Results Page either as a result of a Behavioral Query or as a result of a Pop Under Query under the Search Agreement, as applicable, the percentage of Users who click on an Overture Result and complete a transaction with Overture’s Advertisers.

(i) CTR means the network-wide percentage of all Web pages displaying paid Overture search results that receive valid clicks for which Overture receives payment from its Advertisers.

(j) Effective Date shall have the meaning set forth in the preamble above.

(k) GAIN means the Gator Advertising and Information Network.

(l) Gator PPC means the average price obtained by Overture from its Advertisers per Bidded Click from all Results Pages displayed by Gator during a specified period of time.

(m) Gator Services means permission-based advertising and related services and technology whereby Gator, a Gator Affiliate and/or any authorized distributor, offers Users the proposition that they may receive free software in exchange for allowing Gator to deliver various forms of pop up and pop under advertising to Users’ computer screens based on their Internet usage.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

(n) Generic Impression means a unit of Gator advertising inventory created as a result of a User’s Internet browsing activities and application of Gator’s proprietary algorithms.

(o) Gross Revenue means amounts collected by Overture for Bidded Clicks (after deducting any taxes Overture is required to collect, if any). The “amounts collected by Overture” take into account adjustments for such matters as bad debt, credit card charges and refunds Overture pays to Advertisers.

(p) Initial Impression means either the first or second Generic Impression created by a User in each Active Category during a User Month.

(q) Keyword means the words and/or phrases that are bid on by Advertisers and mapped to Categories pursuant to this Agreement.

(r) Launch means, with respect to a given Proposed Category, the first display of a Results Page in response to a Behavioral Query.

(s) Letter Agreements means that certain letter agreement between the parties dated April 15, 2003, as amended by that certain letter agreement between the parties dated June 11, 2003.

(t) Licensed Materials means the Overture Results provided for display in Pop Under Windows, and the Overture Marks, if any, provided to be displayed in Pop Under Windows.

(u) Mapped Keywords means the Keywords mapped to Proposed Categories or Active Categories.

(v) Overture Marks means (i) the marks listed on Exhibit G; and (ii) the format or general image or appearance of the Overture Results or the Web pages provided by Overture or produced by any of its technology or services. Overture Marks shall not include any intellectual property owned by Yahoo! Inc. or any of its Affiliates.

(w) Overture Results means search results provided by Overture in response to a Behavioral Query or Search Query under this Agreement, which results include only results provided by Overture’s Advertisers.

(x) Overture Network Partner means a Web site operator receiving Overture Services.

(y) Overture Services means Overture’s technology and functionality for matching particular keyword requests with an index of certain URLs, for providing the results of that match via the Internet and then enabling users to link to a designated page for the Advertisers (which such page has been designated by the Advertisers themselves) that comprise the results of such match.

(z) Pop Under Window means a browser window displayed full screen beneath a browser window that is displayed to, or viewed by, a User.

(aa) Proposed Category is defined in Section 2.1.

(bb) Restricted Search Result means anything that responds to a query for which the review, cataloging, collection, maintenance, display, indexing, ranking, or other activity is paid regardless of the method by which that payment is counted, whether cost per click, cost per action, cost per impression, pay for placement, paid inclusion, or otherwise, excluding Overture Results, traditional banner advertising units and non-dynamic buttons (provided that such banners, buttons and third-party advertisements do not respond to keyword searches or queries with content related to specific keyword searches or queries). In the determination of whether a response to a query is “paid” for, it does not matter whether Gator directly receives payment.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

(cc) Results means, collectively, the Overture Results and the Supplemental Results.

(dd) Results Page means a page delivered by Gator to a User in response to a Behavioral Query or a Search Query, which contains Overture Results as provided for in this Agreement.

(ee) Search Agreement means the Search Services Agreement between the parties dated March 28, 2003.

(ff) Search Box means a graphical area on a Web page in which a user submits a query by typing in a search term or request and includes the area in which a user submits search queries or requests.

(gg) Search Query means a search initiated by a User who types in a search query into a Search Box appearing in a Results Page and conducts a search on such query.

(hh) Supplemental Results means search results provided by Overture in response to a Behavioral Query or a Search Query under this Agreement, which results are algorithmically generated by Overture or third party providers selected by Overture in its sole discretion.

(ii) Term means the period of time beginning on the Effective Date and continuing for four (4) years, unless this Agreement is earlier terminated in its entirety only as specifically provided herein.

(jj) Trial Period is defined in Section 6.1.

(kk) User means a person (as compared to bots, metaspiders, macro programs, Internet agents or any other automated means) that has installed, uses or otherwise receives the Gator Services.

(ll) User Months means, with respect to each User, the successive thirty (30) day periods commencing on the date such User becomes a User and ending either on the date such User ceases to be a User or at the end of the Term, whichever comes first.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

EXHIBIT B

POP UNDER MOCK-UP

Exhibit B is a sample mock-up of a pop under window.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

EXHIBIT C

ACTIVE CATEGORIES

The Categories are listed by Keyword. The category name is in parentheses if it is different from the Keyword.

[***]

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

EXHIBIT D-1

FORM OF CATEGORY REPORT

Exhibit D-1 is a sample mock-up of a report page.

[***]

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

EXHIBIT D-2

CUSTOM REPORTING

1) Custom Reporting.

a) Overture may provide, and Gator shall cooperate in good faith to assist Overture in providing, mutually agreeable written specifications (“Specifications”) for a custom reporting system whose scope and purpose shall be specifically limited to information regarding [***] that may require Gator to [***] that Gator does not [***] as well as developing custom analytics and which shall be subject to the limitations provided in Section 5 below (“Custom Reporting”). Gator shall design and create a data collection system that is capable of collecting up to [***] of data [***] that shall be dedicated for Custom Reporting. Subject to reasonable downtime, (i) Gator agrees to provide Overture twenty-four (24) hours per day online access to the Custom Reporting for, at a minimum, the most recent [***] and (ii) Gator shall regularly update the Custom Reporting no later than [***] after the later of (A) when the data event has occurred, or (B) when Overture fulfills its obligations under Section 5 below, to the extent that collecting or making the Custom Reporting available requires data and/or processing by Overture.

b) Within [***] of Gator’s receipt of any Specifications, Gator shall provide Overture with a schedule for creating such Custom Reporting (“Timeline”). The first Specifications shall contain at least the fields and scope of desired data. Notwithstanding the foregoing, Gator shall not be required to collect data on [***]). For the first Specifications supplied by Overture, which shall be received by Gator within [***] of the Effective Date, if Gator fails to provide a Timeline within [***] of receipt of the Specifications, Gator’s revenue share under Section 4.1 of the Agreement shall decrease from [***] percent ([***]%) to [***] percent ([***]%).

c) Overture acknowledges that creating Custom Reporting may require creating new software, or modifying existing software in Gator’s proprietary client software applications and that the Timeline shall reflect the extent and magnitude of the software development required. Overture further acknowledges that Gator’s average timeline for creating and testing software modifications to Gator’s proprietary client software applications is [***] and that distributing the new and/or modified software application to Users after the creation and testing of such software occurs over a period of time with [***] percent ([***]%) of Users typically being updated within [***], provided, however, that Gator can make some data available with as little as [***] percent ([***]%) of Users having the new and/or modified software. Overture further acknowledges that Gator’s average timeline for creating and testing the systems necessary for software tools necessary for querying the Custom Reporting may take as long as [***] from the time of Gator’s receipt of specifications. Notwithstanding the foregoing, Gator shall use commercially reasonable efforts to effectuate any client change to enable the Custom Reporting as quickly as commercially practicable, but no later than in accordance with the Timeline.

2) Failure to Meet Timeline. If Gator, in good faith, fails to meet any Timeline, then Gator's sole obligation, and Overture's sole remedy, shall be that the parties’ obligations set forth in Section 6.3 of the Agreement, in Sections 2.7, 2.8, 2.9, 4.2(ix), 4.3, 5, 6, 7, and 9 of the Terms and Conditions and in this Exhibit D-2 shall continue beyond the Term for a period of time equal to the period of time starting with the date on which the Custom Reporting was due pursuant to the applicable Timeline and ending with the date on which Gator fulfills its obligation to provide the Custom Reporting set forth in the applicable Specifications.

3) Engineering Commitment. Gator shall have [***] engineers available for creating and making available to Overture the systems and software for enabling the Custom Reporting.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

4) Escalation. Overture shall direct all communications regarding the Custom Reporting to Gator’s representative Dave Goulden, (or such other Gator Representative at Gator’s sole discretion) (“Gator Representative”). Gator shall direct all communications regarding the Custom Reporting to Overture’s representative Bill Lepler (or such other Overture Representative at Overture’s sole discretion) (“Overture Representative”). If the Gator Representative and the Overture Representative reach an impasse on the Custom Reporting, the impasse shall be escalated to Scott Van DeVelde on behalf of Gator (or such other Gator Representative at Gator’s sole discretion) (“Gator Manager”) and Paul Schulz on behalf of Overture (or such other Overture Representative at Overture’s sole discretion) (“Overture Manager”). If the Gator Manager and the Overture Manager reach an impasse regarding the Custom Reporting, the impasse shall be escalated to Jeff McFadden on behalf of Gator and Ted Meisel on behalf of Overture.

5) Limitations. Notwithstanding anything to the contrary in this Agreement, Gator shall not be required to collect any data that in Gator’s reasonable good faith judgment: (i) would violate Gator’s Privacy Statement or End User License Agreement, Version 5.0, effective August 2003, or (ii) is not capable of being collected through a client-side software application. Overture acknowledges that notwithstanding anything to the contrary herein, Overture shall have full access to query the Custom Reporting, but in no manner shall Overture be given access to or be able to view, any User and/or computer level data. Gator shall not disclose any aspect of the Custom Reporting to any party other than Overture and its Affiliates. Moreover, if the parties mutually agree that collection of certain types of data poses legal risks because of the type or nature of the data, the parties may elect to not collect, or stop collecting, such data.

6) Overture Obligations. If fulfilling Gator’s obligations under this Agreement requires Overture to provide certain data in the possession of Overture to Gator and/or requires processing by Overture, then Overture shall provide such information and/or processing within a commercially reasonable time and Gator’s obligations under this Exhibit D-2 shall be contingent on Overture providing such Overture data and/or processing.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

EXHIBIT E

INITIAL PROPOSED CATEGORIES

The Mapped Keyword is in parentheses if it is different from the Proposed Category.

[***]

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

EXHIBIT F

PROPOSED CATEGORIES IN A TRIAL PERIOD

Proposed Categories in a Trial Period

The Mapped Keyword is in parentheses if it is different from the Proposed Category.

Launch Dates	Keyword
[***]	[***]

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

EXHIBIT G

OVERTURE MARKS

Word Marks

Overture^®

Design Marks

Design marks is a sample mock-up of Overture design marks.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

EX-10.19

Exhibit 10.19

CONFIDENTIAL TREATMENT REQUESTED

Execution Copy Contract #203908-1

AMENDMENT #1 TO THE CONTEXTUAL SEARCH AGREEMENT

This Amendment #1 to the Contextual Search Agreement (the “Agreement”) entered into by and between Overture Services, Inc., a Delaware corporation (“Overture”) and Claria Corporation (formerly known as The Gator Corporation) (“Claria”) effective as of September 12, 2003, is made and entered into effective as of December 17, 2003 (the “Amendment Effective Date”).

In consideration of the mutual covenants contained herein, and for such other good and valuable consideration, the sufficiency of which is acknowledged by the parties hereto, the parties hereby agree to the below terms and conditions and hereby amend the Agreement as follows:

1. All instances of Gator are hereby amended and replaced to read Claria.

2. Section 3.2 of the Agreement is amended by adding the following words at the end of the first sentence: “per country.”

3. Section 5.1(b) of the Agreement is amended by adding the following sentences at the end of the paragraph:

“Moreover, for Behavioral Queries identified by Claria as likely having been generated from Users located in the countries listed in Exhibits 1 and 2, Claria shall display a Results Page containing Overture Results provided by the Overture authorized country specific Results feed.

4. Section 5.7 of the Agreement is amended by adding the following words at the beginning of the sentence: “Unless such Users are in a country listed on Exhibit 1 or on Exhibit 2 (on a test basis only) to Amendment #1.”

5. The following Sections shall not apply to Behavioral Queries identified by Claria as likely having been generated from Users located in the countries listed in Exhibits 1 and 2: 6.1, 6.2(a), and 6.3.

6. Section 6.2(b) of the Agreement is amended by adding the following sentence prior to the last sentence in the paragraph:

“Overture may also [***] of an [***] if Overture [***] as to the Conversion Rate, provided that, for purposes of this Overture right, such [***] is exclusively used for Behavior Queries identified by Claria as likely having been generated from Users located in the countries listed in Exhibit 1.”

7. A new Section 6.1(a) is hereby added stating the following:

“(a) International Trial Period. For Categories exclusively used for Behavioral Queries identified by Claria as likely having been generated from Users located in the countries listed in Exhibits 1 and 2, upon Launch, Claria shall conduct a trial of each Proposed Category in each country by displaying Results Pages for each such Proposed Category to no more than the Trial Percentage of the Users for thirty (30) days (the “International Trial Period”). Overture and Claria may mutually agree in writing to increase the percentage of Users receiving Results Pages during the International Trial Period above the Trial Percentage and/or extend the term of the International Trial Period for such country. During the International Trial Period, either party may (1) opt out of any Proposed Category by providing the

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

other party with two (2) business days written notice (written notice includes by email), or (2) request a change to the Mapped Keywords for such Proposed Category, which change shall not take effect without the written consent of both parties. Unless a party opts out of a Proposed Category pursuant to this Section 6.1(a), each Proposed Category shall be deemed an “Active Category.” Once a Category is an Active Category (i) neither party can opt-out of such Active Category, except as expressly permitted in this Agreement, (ii) neither party may change the Mapped Keywords for such Active Category, except with the written consent of the other party (which consent shall not be unreasonably withheld), (iii) Claria may not consolidate Active Categories or eliminate an Active Category; and (iv) Results Pages for such Active Category shall be displayed to all Users in accordance with the terms and conditions of this Agreement.”

8. A new Section 6.1(b) is hereby added stating the following:

“(b) Test Countries. Notwithstanding anything to the contrary in Section 6.1(a), International Trial Period, the countries listed on Exhibit 2 to this Amendment #1, and any other countries as mutually agreed between the parties (agreement by email is acceptable), shall be considered test countries for forty-five (45) days following the Launch of the first Proposed Category in such country and either Party may (1) terminate any Proposed or Active Category in such test country or (2) opt out of such test country, on twenty-four hours notice (notice by email is acceptable). For the avoidance of doubt, upon the expiration of the aforementioned forty-five day period, such country shall cease to be considered a test country and termination of any Proposed or Active Category shall only be permitted as otherwise set forth in this Agreement.”

9. Section 7.1(b) is amended by deleting the paragraph in its entirety and replacing it with the following:

“Notwithstanding anything to the contrary in this Section 7.1 or elsewhere in this Agreement, if the Claria PPC for all Active Categories in any given calendar month declines in a country, for any reason, below [***] percent ([***]%) of the Pre-Decline PPC for such country, then Claria shall provide Overture with a Claria PPC Decline Notice. If such decline continues through the next [***],[***] shall have the right at the end of such calendar month to terminate this Agreement in such country upon [***] prior written notice.”

10. Section 7.2 of the Agreement is amended by deleting the paragraph in its entirety and replacing it with the following:

“If, in any calendar month, Claria delivers less than [***] percent ([***]%) of the Behavioral Queries for Active Categories (a “Volume Decline”) that Claria sent to Overture in the highest volume calendar month during the previous [***] period (“the Measurement Month”) for any country, Overture shall provide written notice to Claria of such Volume Decline for such country. Upon receipt of notice of a Volume Decline for a specific country, Claria shall either (i) cure within [***] ([***])[***] by raising the number of Behavioral Queries for Active Categories in such country to at least [***] percent ([***]%) of the number of Behavioral Queries for Active Categories during the Measurement Month for such country, or (ii) provide documentation substantiating that the Volume Decline in such country was the result of (a) a decline in the aggregate number of Web pages being viewed by Users, (b) seasonality, (c) mutually agreed Active Category changes, or (d) Active Category changes resulting from Overture’s [***] pursuant to Section 8.1 below . If Claria is unable to cure a Volume Decline in a specific country not due to one of the reasons listed in 7.2(ii) above

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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within [***], Overture shall have the right to terminate this Agreement for such country on [***] prior written notice. Notwithstanding the foregoing, if in any month Claria delivers less than [***] percent ([***]        %) of the average number of Behavioral Queries for Active Categories that Claria sent to Overture over the prior [***] period in any country (excluding declines caused by mutually agreed Active Category changes, or Active Category changes resulting from Overture’s [***] pursuant to Section 8.1 below), then Overture shall have the right to terminate this Agreement for such country on [***] prior written notice if Claria is unable to cure such volume decline in such country within [***]. At Overture’s sole cost and expense, Overture may appoint an independent auditor solely to verify the documentation provided by Claria under Section 7.2(ii) above.”

11. Section 8.4, Additional Termination Rights, is hereby deleted and replaced in its entirety with the following:

“Additional Termination Rights. On a country by country basis, if a court of competent jurisdiction enters a final, binding judgment that prevents either party from carrying out its respective obligations under this Agreement as to such country, this Agreement shall terminate only as to the parties’ obligations applicable to Behavioral Queries generated from Users located in such country and the delivery and display of Results to the same. If (i) at [***] are [***] in any one country asserting [***] in a [***] ([***]) and the [***] determines in [***] that [***] materially impair its business; or (ii) a court of competent jurisdiction enters a final judgment against [***] that [***] determines in [***] materially impairs the value of this Agreement, then either party may terminate this Agreement as to the parties’ obligations applicable to Behavioral Queries generated from Users located in such country and the display and delivery of Results to the same. Each party shall provide the other party with prompt written notice [***] under this Section 8.4. Neither the provision of notice under the preceding sentence, nor the failure to provide such notice, shall prejudice a party’s right to seek indemnification under Section 6 of the Terms and Conditions (Indemnification).”

12. Section 3.2 (g) of the Terms and Conditions of the Agreement is hereby amended by adding the following words at the end of the phrase: “unless the top level domain corresponds with a country listed on Exhibit 1 or on Exhibit 2 (on a test basis only) to Amendment #1.”

In the event of conflict between the terms and conditions of the Agreement and the terms and conditions of this Amendment #1, the terms and conditions of this Amendment #1 will control. All capitalized terms used but not defined herein shall have the meaning assigned to them in the Agreement.

Except as provided above, the terms and conditions of the Agreement remain unchanged.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment #1 to the Agreement to be executed by their duly authorized representatives on the date(s) set forth below.

Claria Corporation:		Overture Services, Inc.:
Signature:	/s/ Scott VanDeVelde	Signature:	/s/ William Demas
Name:	Scott VanDeVelde	Name:	William Demas
Title:	SVP, Sales	Title:	SVP & GM, PBSG
Date:	12/19/03	Date:	1/16/04

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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Exhibit 1

List of Countries

[***]

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

Exhibit 2

List of Countries in Test Phase

[***]

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

EX-10.20

Exhibit 10.20

CONFIDENTIAL TREATMENT REQUESTED

DISTRIBUTION AGREEMENT

This Distribution Agreement (this “Agreement”) is entered into as of September 9, 2003 (the “Effective Date”), by and between Sharman Networks Ltd., a Vanuatu corporation (together with its Affiliates, “Sharman”), and Yorton Limited (s/k/a GAIN Publishing, Ltd.), an Irish corporation (“TGC”). Sharman and TGC together shall be individually referred to herein as a “Party” or collectively referred to as the “Parties.”

WHEREAS, TGC Parent has developed, distributes, manages and operates the proprietary contextual advertising software application known as the GAIN AdServer (“Gain AdServer”), whose functionality and behavior is at all times compliant with and governed by the terms, conditions and policies contained in TGC Parent’s privacy statement and end user license agreement (the “GAIN EULA”) attached as Exhibit A hereto and which upon download by an end user currently enables TGC Parent to serve Contextual Advertisements or Proactive Search Results (as. defined below) to the end user.

WHEREAS, TGC Parent has provided TGC the right to sublicense to Sharman all Intellectual Property required solely to carry out its obligation to distribute the GAIN AdServer as set forth herein.

WHEREAS, Sharman has developed and distributes the proprietary file sharing software application known as the Kazaa Media Desktop, or KMD, which enables content to be searched, retrieved and distributed among users of certain peer-to-peer software applications; and

WHEREAS, TGC and Sharman desire to enter into an agreement for purposes of distributing the GAIN AdServer with the KMD and to share in the revenues generated from such a collaboration on the terms set forth in this Agreement.

NOW THEREFORE, in consideration of the covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

1. Definitions. For purposes of this Agreement, the capitalized terms shall have the meanings ascribed to them in this Agreement or as set forth below:

1.1 “Advance Payments” means the sum total of Initial Advances and Monthly Minimum Advances paid to Sharman under this Agreement.

1.2 “Affiliate” of a Party means any corporation, partnership or other entity that, directly or indirectly, controls, is under common control with, or is controlled by, such Party, for so long as such control exists. Additionally, whether or not controlled by or under common control with Sharman, LEF Interactive Pty. Ltd. shall, for purposes of this Agreement, be deemed to be an Affiliate of Sharman.

1.3 “Complete GAIN Supported KMD Client Installs” shall be determined by TGC by calculating the sum of (a) GAIN Complete Installs plus (b) the number of completed

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

installations of the GAIN Supported KMD Client on computers, which, at time of install, already contain GAIN Supported Software.

1.4 “Contextual Advertisements or Proactive Search Results” means any on screen message containing an advertisement and/or search results selected for display on the screen of a particular unique computer based upon the web surfing behavior using an Internet browser of that particular computer’s user.

1.5 “Dollar” or “$” shall mean currency of the United States of America.

1.6 “Eligible Download” means all downloads of the KMD from and after the Launch Date other than (i) downloads for which a fee is paid by the recipient or end-user for the KMD, (ii) versions of the KMD for use with operating systems on which the GAIN AdServer is not compatible, and (iii) pre-release alpha, test, evaluation and beta versions of the KMD as long as such alpha, test, evaluation and beta versions do not exceed in any calendar month, [***] percent ([***]%), or such higher number as may be mutually agreed, of the total installs of all free versions of KMD in that particular calendar month.

1.7 “FSG” means a small software application developed by TGC Parent which will be included with the installer for the GAIN Supported KMD Client and is designed to download, while allowing the user to continue utilizing their computer, install and run the balance of GAIN AdServer Distributed by Sharman, after KMD is completely installed, in the background when a user is on the Internet.

1.8 “FSG Execution” means an instance in which a unique user has completed any installation of the GAIN Supported KMD Client, and the KMD installer has executed FSG. FSG Executions are determined by TGC by counting the number of instances of initial communication between (i) any unique instance of FSG containing Sharman’s partnership identification code, and (ii) TGC’s servers. When executed, FSG is designed to contact TGC’s servers and communicate when certain steps in the install, download and uninstall of FSG are reached and completed. If TGC’s servers receive one or more of these communications, and the personal computer does not exhibit fraudulent activity, then this personal computer is counted as a FSG Execution. The Parties acknowledge that Sharman is authorized to share with Altnet the number of FSG Executions reported to Sharman by TGC pursuant to Section 4.4.1, provided that Altnet has executed a separate copy of the “Non-Disclosure Agreement” with TGC and TGC Parent as defined in Section 7.2.

1.9 “GAIN Registry Entry” means an additional entry into the registry of the Microsoft Windows operating system of an end user’s personal computer that is performed by the GAIN. Supported KMD Client, during the installation of GAIN Supported KMD Client, in accordance with mutually agreed specifications.

1.10 “GAIN Active Users” means the total number of unique personal computers, with GAIN AdServer Distributed by Sharman installed on that personal computer, that communicate with TGC’s servers at least once during a given calendar month.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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1.11 “GAIN AdServer Distributed by Sharman” means the GAIN AdServer distributed by Sharman that display advertising messages published by TGC’s Parent or Affiliate.

1.12 “GAIN Complete Install” means a full and complete installation of GAIN AdServer Distributed by Sharman occurring as a result of this Agreement on a unique personal computer that does not already have GAIN Supported Software installed on that personal computer, as described in this Section. Each installation of the GAIN AdServer Distributed by Sharman on a personal computer generates a unique tracking number for that personal computer and two communications between the GAIN AdServer Distributed by Sharman and TGC’s servers. These two client-server communications inform TGC of the presence (or lack thereof) of data on the personal computer which identifies whether or not the personal computer has GA1N Supported Software installed at the time the GAIN AdServer Distributed by Sharman is installed. If TGC’s servers receive one or both of these client-server communications indicating that GAIN Supported Software is not installed at the time the GAIN AdServer Distributed by Sharman is installed, and the personal computer does not exhibit fraudulent activity, then this personal computer is counted as a GAIN Complete Install.

1.13 “GAIN Extension Install” is created on the first day of the first calendar month immediately following an instance where both of the following two (2) conditions are met: (i) first, the GAIN Supported KMD Client is installed on a unique computer which, at time of install, already contains GAIN Supported Software, and (ii) subsequently, all GAIN supported Software except the GAIN Supported KMD Client is uninstalled from that same unique computer. The GAIN AdServer Distributed by Sharman is designed to communicate to TGC, among other things, a list of GAIN Supported Software applications presently installed on that unique personal computer and the sequence in which each GAIN Supported Software application was installed. If GAIN Supported Software is present on the personal computer at the time the GAIN Supported KMD Client is installed, then TGC continues to communicate with the personal computer on a monthly basis to determine the continued presence of GAIN Supported Software on that personal computer. If these communications indicate that the earliest installed GAIN Supported Software on that personal computer is the GAIN Supported KMD Client, that personal computer is then counted as a GAIN Extension Install.

1.14 “GAIN/KMD Installed Application” means every instance of GAIN AdServer Distributed by Sharman installed on a personal computer as a GAIN Complete Install or a GAIN Extension Install.

1.15 “GAIN Supported KMD Client” means the KMD distributed by Sharman with the TGC Components Distributed With KMD such that the uninstall of the KMD causes, if there are no other GAIN Supported Software applications on the desktop, the GAIN AdServer Distributed by Sharman to also uninstall.

1.16 “GAIN Supported Software” means a software application with which the GAIN AdServer is distributed such that when the software application is uninstalled the GAIN AdServer is, by design, also uninstalled; provided, however, that the software application shall not be, or shall cease to be, GAIN Supported Software if, at the time of determination, the GAIN

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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AdServer distributed with the software application is not receiving advertisements in a manner consistent with other GAIN AdServer clients.

1.17 “Gross Revenue” means the gross amount (including all fees, rebates, revenue share, barter and other consideration in any form) collected by TGC and TGC’s Affiliates from all interactions with the GAIN/KMD Installed Applications or from the use of information derived from communication with GAIN/KMD Installed Applications, including, without limitation, for and from all advertising (in all forms including paid links and results, sponsorships, e-commerce and other messaging) and surveys of users, displayed by, or by means of or as a consequence of the operation of GAIN/KMD Installed Applications, including all amounts and consideration received by TGC or its Affiliates from TGC’s direct customers, independent sales representatives, agents and brokers, without deduction for any internal overhead or costs or amounts paid to Affiliates.

1.18 “Intellectual Property Rights” means, with respect to any item, any and all now known or hereafter known tangible and, intangible (a) rights associated with works of authorship throughout the universe, including but not limited to copyrights and moral rights, (b) trademark and trade name rights and similar rights, (c) trade secret rights, (d) patents, designs, algorithms and other industrial property rights, (e) all other intellectual property and industrial property rights, and (f) all registrations, initial applications, renewals, extensions, continuations, divisions or reissues hereof now or hereafter in force (including any rights in any of the foregoing).

1.19 “KMD” means the peer-to-peer file sharing software program currently distributed by Sharman under the name “Kazaa Media Desktop” and all versions, successors (including any brand or name changes), updates, patches, and enhancements of any kind thereto, distributed by Sharman or any of its Affiliates.

1.20 “KMD/GAIN Software Start” means an instance in which a unique user has completed an initial installation of the GAIN Supported KMD Client, and the KMD installer has executed FSG. KMD/GAIN Software Starts are determined by TGC by counting the number of instances of initial communication between (i) any unique client computer running a copy of FSG containing Sharman’s partnership identification code, and (ii) TGC’s servers. When executed, FSG is designed to contact TGC’s servers and communicate when certain steps in the install, download and uninstall of FSG and/or the GAIN AdServer are reached and completed. If TGC’s servers receive one or more of these communications, and the personal computer does not exhibit fraudulent activity, then this personal computer is counted as a KMD/GAIN Software Start.

1.21 “Launch Date” means the date on which GAIN Supported KMD Client is first distributed by Sharman as the default download at www.download.com, or any alternate download site through which at least [***] percent ([***]%) of all KMD downloads are initiated.

1.22 “Net Revenue” means Gross Revenue less a deduction of [***] percent ([***]%) of the portion of [***] generated from relationships with advertisers or bona fide advertising agencies originated directly by TGC’s or TGC Parent’s direct sales force. In

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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determining Net Revenue, there shall be no deduction applicable to any other Gross Revenue including Gross Revenue [***].

1.23 “Sharman Marks” means any trademarks and tradenames owned or controlled by Sharman and its Affiliates, including, but not limited to, “Sharman,” “Kazaa,” “Kazaa Media Desktop,” and “KMD” and any logos, “look and feel” and artwork associated therewith.

1.24 “Sharman Business” means the business of distribution of the KMD and operation of the web sites of Sharman, including Kazaa.com and desktop.kazaa.com.

1.25 “Sharman URLs” means the following domains, and their associated web pages owned and operated by Sharman: kazaa.com and desktop.kazaa.com. Sharman may update the list of Sharman URL’s as they relate to the Sharman Business up to twice in each twelve (12) month period beginning on the Launch Date, subject to TGC’s acceptance of such updates, which acceptance shall not be unreasonably withheld.

1.26 “Term” has the meaning set forth in Section 11.1.

1.27 “TGC” Components Distributed With KMD” means, collectively, the GAIN Registry Entry, FSG, Install Screen, and GAIN EULA.

1.28 “TGC Parent” means The Gator Corporation, a Delaware corporation.

1.29 “US%” means the percentage of GAIN Complete Installs that are on computers located in the United States and Canada, determined by TGC at the end of each month by dividing the total number of GAIN Complete Installs on computers whose operating systems are set to continental US time zones and/or US English language by the total number of GAIN Complete Installs for all time zones and language settings for that month.

2. GAIN AdServer Development and Marketing.

2.1 General.

(a) Subject to the other terms of this Agreement, TGC or its Affiliates shall be solely and exclusively responsible for the design, development, operation and maintenance of the GAIN AdServer Distributed by Sharman. TGC and the GAIN AdServer Distributed by Sharman shall at all times meet and comply with the GAIN EULA as set forth on Exhibit A hereto, and the GAIN AdServer Distributed by Sharman shall not contain any functionality, features or behavior which are in conflict with or in violation of the GAIN EULA.

(b) TGC shall design, or have designed, and deliver TGC Components Distributed With KMD and/or GAIN AdServer Distributed by Sharman that will automatically uninstall itself upon uninstall of the GAIN Supported KMD Client, unless there are additional GAIN Supported Software applications installed on the user’s computer at the time of such GAIN Supported KMD Client uninstall.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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(c) The GAIN EULA discloses all functionality that diminishes user privacy in accordance with the laws of the US and European Union.

(d) TGC shall not include in the GAIN AdServer Distributed by Sharman any technology that gathers or reports to any person other than TGC, its Affiliates, or the user of the GAIN AdServer Distributed by Sharman, any information about such user in conflict with the GAIN EULA the user has accepted.

(e) TGC agrees that in the event third party websites and/or print media publish information stating that the GAIN AdServer includes “spyware,” TGC will use its commercially reasonable efforts to resolve or adequately refute such allegations.

(f) When installed on a personal computer and that personal computer is connected to the Internet, the GAIN AdServer Distributed by Sharman shall be designed and will attempt to contact TGC’s servers to confirm the presence of such software on that particular personal computer. TGC covenants that it shall maintain all necessary monitoring, reporting and technical capabilities to accurately measure, and that TGC will accurately measure and report, all metrics required to be reported under this Agreement, and as necessary for accurate and verifiable reporting of all performance and payment measures contemplated by this Agreement. GAIN AdServer Distributed by Sharman and FSG shall be designed and will attempt to report to TGC every instance in which a unique user has completed an installation of the GAIN Supported KMD Client, and TGC shall maintain a system to receive and count initial communication(s) between a unique client computer running a copy of FSG containing Sharman’s partnership identification code and TGC’s servers.

(g) TGC shall not serve any Contextual Advertisements or Proactive Search Results through any particular GAIN AdServer Distributed by Sharman on an end user’s computer unless that GAIN AdServer Distributed by Sharman will be recorded by TGC and reported to Sharman as either a GAIN Complete Install or GAIN Extension Install pursuant to the requirements of this Agreement.

(h) TGC shall use commercially reasonable efforts to ensure that reproducible bugs or errors in the functioning of the GAIN AdServer Distributed by Sharman are corrected and released to users of GAIN AdServer Distributed by Sharman with reasonable promptness following approval of such changes by Sharman. Additionally, TGC shall use best efforts to ensure that reproducible bugs or errors in the functioning of the GAIN AdServer Distributed by Sharman that significantly adversely affect a computer’s mission critical applications, including the KMD, web browser, operating system, electronic mail, and other communications software, are corrected and released to users of GAIN AdServer Distributed by Sharman with reasonable promptness following approval of such changes by Sharman.

(i) TGC shall have the exclusive right to sell and control, directly or through others, all advertising (in all forms including paid links and results, sponsorships, e-commerce and other messaging) displayed by, or by means of or as a consequence of the operation of the GAIN AdServer Distributed by Sharman (“Advertisements”), provided that TGC uses commercially reasonable efforts not to publish any Advertisements containing or

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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promoting pornographic content or encouraging or condoning known copyright infringement, benefiting any [***], and/or attacking or disparaging Sharman or peer to peer technologies used by Sharman, the KMD or Altnet. TGC shall not sell or place any advertising triggered by searches for [***] (or any variations thereof) or by [***]. Except as set forth in this Agreement, TGC shall sell all Advertisement inventory, if any, on the GAIN AdServer Distributed by Sharman as it deems appropriate.

Unless otherwise mutually agreed, Advertisements shall identify their origin as “the GAIN Network”, or variations thereof or subsequent/successor brand(s), but shall not use “Gator” branding.

(j) TGC and its Affiliates shall use commercially reasonable and customary efforts to collect and retain all Gross Revenues and shall distribute Sharman’s share in accordance with the terms of this Agreement.

(k) TGC shall not, and shall ensure that its Affiliates do not, directly or indirectly knowingly discriminate against Sharman or the GAIN AdServer Distributed by Sharman in connection with the placement, frequency or pricing of advertising inventory available to TGC and its Affiliates unless otherwise allowable by this Agreement. Notwithstanding anything to the contrary herein, it shall not be “discrimination” within the meaning of this Section 2.1(k) if all of the following are true: (i) some new features or functionality related to TGC’s capabilities to deliver Contextual Advertisements or Proactive Search Results contained in the GAIN AdServer or any of its successors result in some differential in the placement, frequency or pricing of advertising inventory displayed by TGC and its Affiliates, (ii) such features or functionality are not included in the GAIN AdServer Distributed by Sharman, (iii) such features and functionality were included in an update to the GAIN AdServer Distributed by Sharman which was offered to, and rejected by Sharman, and (iv) where such proposed update was not in conflict with the GAIN EULA as may be amended by mutual agreement, and did not contain any features or functionality not in furtherance of TGC’s capabilities to deliver Contextual Advertisements or Proactive Search Results.

(l) TGC shall not knowingly serve Contextual Advertisements or Proactive Search Results appearing in, or in response to activity that takes place within the KMD or the Altnet Peer Points Manager or TopSearch software programs distributed by Altnet, Inc.

(m) TGC shall comply with all applicable laws in connection with the operation of its business.

(n) TGC shall actively pursue and fund during the term of this Agreement a public relations campaign to proactively address allegations that the GAIN AdServer Distributed by Sharman or other software distributed by TGC comprises or includes “spyware.” Additionally TGC shall use commercially reasonable efforts to monitor hacker sites and “spyware” focused sites to maintain a proactive approach to these issues. If the GAIN AdServer Distributed by Sharman is hacked or corrupted, TGC shall immediately use best efforts to develop a solution to disable or repair such hacked or corrupted GAIN AdServer Distributed by Sharman, and shall implement such solution immediately following approval by Sharman.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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(o) TGC shall use its commercially reasonable efforts to [***] delivered via GAIN. AdServer Distributed by Sharman and to communicate to Sharman at its request the status of [***] via GAIN AdServer Distributed by Sharman [***]. TGC shall not [***] GAIN AdServer Distributed by Sharman [***] without the prior written consent of Sharman, which consent shall not be unreasonably withheld.

(p) TGC shall use commercially reasonable efforts to [***], so long as [***]. Sharman shall use its’ best efforts to consolidate and [***] as to not create an undue burden on TGC.

(q) Unless otherwise requested or authorized by Sharman, TGC shall not prepare, and shall not provide to any third party, any studies, surveys or research reports related to users, or groups or subsets of users, of GAIN AdServer Distributed by Sharman as a separate group. Nothing herein shall prevent TGC from including information about users, or groups of users, of GAIN AdServer Distributed by Sharman as part of a bona fide larger group of users of GAIN AdServer.

2.2 Industry Promotion. During the Term of this Agreement, TGC shall contribute $[***] per [***] to the [***] (or a similar organization designated by Sharman), and assist Sharman to support a coalition focused on promoting and enhancing the legitimate commercial use of peer to peer computing through advocacy in the United States Congress and the media.

2.3 Updates. Updates to the GAIN AdServer Distributed by Sharman and TGC Components Distributed With KMD will be limited to regular enhancements (no more than [***] ([***]) times per any [***] ([***]) [***] period) of the GAIN AdServer Distributed by Sharman’s Contextual Advertisement and Proactive Search capabilities and maintenance in each case the material features of which have been [***] in each case [***], and [***] Sharman [***] (such [***]); provided that during any period following the termination of this Agreement in which TGC is permitted to continue serving Advertisements (referred to as the “Tail Period”), updates shall be [***]. All other additions of features or functionality to the GAIN AdServer Distributed by Sharman and TGC Components Distributed With KMD shall be [***] disclosed to Sharman [***]. TGC shall not include any third party applications in any update or upgrade to the GAIN AdServer Distributed by Sharman or TGC Components Distributed With KMD. TGC will not enable or permit the use of GAIN AdServer Distributed by Sharman for any new purpose other than enhancements to its capabilities to serve Contextual Advertisements or Proactive Search Results in accordance with this Agreement without Sharman’s advance written approval.

2.4 Non-Interference. TGC shall not (i) uninstall, disable or otherwise interfere with, and TGC shall not distribute software that uninstalls, disables, or otherwise interferes with, the operation of the KMD or any applications distributed by Sharman with the KMD as of the Effective Date, or (ii) knowingly uninstall, disable or otherwise interfere with, and TGC shall not knowingly distribute software that uninstalls, disables, or otherwise interferes with, the operation of any applications distributed by Sharman with the KMD after the Effective Date which are not being distributed by Sharman as of the Effective Date.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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2.5 Customer Support. TGC will provide email support to end users who have requested support from Sharman solely in relation to the GAIN AdServer Distributed by Sharman. In addition, when requested by end-users, TGC will provide end users with complete and simple instructions explaining how to uninstall the GAIN AdServer. In addition, when requested by end-users, Sharman will provide end users with complete and simple instructions explaining how to uninstall the KMD GAIN-Supported Client.

2.6 Ad Serving Limitations. TGC shall serve only Contextual Advertisements or Proactive Search Results via GAIN AdServer Distributed by Sharman.

2.7 Ad Serving Frequency. Without Sharman’s prior written consent, during any calendar month, TGC shall be permitted to serve, or have served, through GAIN AdServer Distributed by Sharman no more than a maximum number of Contextual Advertisements or Proactive Search Results equal to the product obtained by multiplying [***] ([***]) [***]: (i) [***] ([***]); and (ii) [***] GAIN Active Users for [***].

2.8 Marketing and Sales Force. TGC and/or its Affiliates shall maintain and manage an internal and/or independent marketing and sales force to actively promote the sale of Advertisements, such sales force to have sufficient size, skill, training, experience and resources to service the advertising inventory available from all installs of GAIN AdServer in a professional manner consistent with the highest industry standards. Except as disclosed to Sharman in writing and included in Gross Revenues, TGC and its Affiliates shall not accept or retain any rebates, promotional incentives or other remuneration from its customers, independent sales representatives and/or brokers. The Parties acknowledge that as of Effective Date, TGC and/or its Affiliates are in compliance with this Section 2.8.

2.9 Promotion. TGC and/or its Affiliates shall use commercially reasonable efforts to promote the sale of Advertisements. TGC may, among other things, engage in promotional and public relations activities intended to maximize advertiser awareness of, interest of, interest in, and demand for the Advertisements and promote Advertisements at major industry shows and conventions.

2.10 Advertisements at [***]. Sharman may elect to require TGC and/or its Affiliates to use commercially reasonable efforts to avoid displaying Advertisements via the GAIN AdServer Distributed by Sharman while users are viewing [***] and [***], by providing written notice of such election to TGC within the first thirty (30) days immediately following the Launch Date. In the event Sharman makes this election, the Normal Advance Rate shall be reduced by [***] ([***]), and the Alternate Advance Rate shall be reduced by [***] ([***]).

2.11 Uninstall. Upon the uninstall of the GAIN Supported KMD Client, unless there is additional GAIN Supported Software installed on the user’s computer at the time of such GAIN Supported KMD Client uninstall, the GAIN AdServer Distributed by Sharman shall automatically and completely uninstall itself. Upon such uninstall, the GAIN AdServer Distributed by Sharman shall not leave on the personal computer any executable software program.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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2.12 Privacy and Security. GAIN AdServer Distributed by Sharman and TGC Components Distributed with KMD shall comply with the GAIN EULA as amended by mutual agreement of the Parties. Additionally, TGC and its Affiliates shall at all times maintain reasonable security measures under the circumstances to protect against system compromises from unauthorized intruders. The Parties acknowledge that as of Effective Date, TGC and/or its Affiliates are in compliance with this Section 2.12. TGC warrants that the representations made to Sharman’s CTO in connection with his security questions are true and correct.

2.13 Audit of Obligations. During the Term of this Agreement, Sharman, at its own expense, may cause an audit to be made of TGC’s and TGC Parent’s production environment; source code, operations and other elements of TGC’s business solely for the purpose of verifying. compliance with the GAIN EULA and this Agreement provided that: (i) such audit shall take place at TGC’s place of business and/or at TGC’s production facilities during normal business hours and with reasonable prior written notice, (ii) audits shall be conducted by an independent third party qualified to conduct a review of such matters and is reasonably acceptable to TGC, (iii) Sharman will only receive information from the auditor and/or TGC on specific items that fail to comply with the GAIN EULA, this Agreement or reasonable security procedures, and any information shared with Sharman shall be treated as confidential information by TGC, Sharman and the auditor; (iv) while only certain information will be provided to Sharman, all information made available to the auditor shall be kept confidential between the auditor and TGC, and shall be used by the auditor solely for the purpose of verifying TGC’s compliance with the GAIN EULA, the Agreement or reasonable security procedures, (v) all information made available to the auditor and Sharman shall be shall be treated as confidential information by TGC, Sharman and the auditor; and (vi) audits shall not be conducted more than once in any twelve (12) month period.

2.14 Kazaa Branding. If requested by Sharman, TGC agrees to conduct good faith conversations with Sharman regarding cooperating and possibly developing a Kazaa branded private label version of the GAIN AdServer Distributed by Sharman. For purposes hereof, “Kazaa-branded private label” means presentation of the advertisements with Sharman’s visual logos and Sharman Marks.

3. Sharman Obligations.

3.1 Product Distribution and Promotion.

(a) A test build of the GAIN AdServer Distributed by Sharman and TGC Components Distributed With KMD shall be submitted to Sharman for approval prior to distribution with the KMD. Following approval, Sharman shall include TGC Components Distributed With KMD with any and all Eligible Downloads.

(b) Prior to the actual installation and execution of the GAIN Supported KMD Client and/or GAIN AdServer Distributed by Sharman and/or FSG, Sharman shall ensure that users have in this order: (1) been shown a screen provided by TGC describing the GAIN AdServer Distributed by Sharman (“Install Screen”) during the installation process of

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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each GAIN Supported KMD Client, and (2) accepted and agreed to, in a manner that is reasonably satisfactory to TGC, the terms of the then current GAIN EULA.

(c) Sharman shall aggressively prompt and encourage all active KMD users in a mutually agreeable manner to upgrade to the GAIN Supported KMD Client within ninety (90) days of the Launch Date.

(d) The GAIN AdServer Distributed by Sharman will not have a separate user facing uninstall process unless mutually agreed by the Parties.

3.2 Removal of GAIN Registry Entry. Sharman shall ensure that the uninstaller for the GAIN Supported KMD Client deletes the GAIN Registry Entry if and only if (a) a user has navigated to the Add/Remove Program menu and has actively uninstalled the GAIN Supported KMD Client or (b) a user upgrades to a paid version of KMD, or (c) this Agreement has been terminated and in accordance with Section 11.5, a user upgrades to a version of the KMD that does not contain the GAIN AdServer Distributed by Sharman.

3.3 Non-Interference. Except as allowed in Section 3.2, neither Sharman nor its Affiliates shall uninstall, disable, or otherwise interfere with the operation of GAIN AdServer or GAIN AdServer Distributed by Sharman, including, without limitation, modifying or removing the GAIN Registry Entry. Further, except as allowed by Section 3.2 (including communications encouraging users to upgrade to a version of the KMD that does not contain the GAIN AdServer Distributed Sharman as permitted by Section 11.5), neither Sharman nor its Affiliates shall uninstall, disable, or otherwise interfere with the operation of GAIN AdServer or GAIN AdServer Distributed by Sharman and/or knowingly display any messaging, or knowingly request or assist any third party to display any messaging, to users of GAIN AdServer or GAIN AdServer Distributed by Sharman in any way referring to GAIN AdServer or GAIN AdServer Distributed by Sharman in a defamatory manner, including, but not limited to referring to same . as spyware, or which includes any other statements that are intended to cause or encourage users to (a) uninstall, disable or otherwise interfere with the operation of GAIN AdServer and/or GAIN AdServer Distributed by Sharman, or (b) install a new version of KMD that is not a GAIN Supported KMD Client, or (c) modify or remove the GAIN Registry Entry. This section shall survive termination or expiration of this Agreement.

3.4 Overlap with SaveNow Application.

(a) If the First Month Overlap Percentage (as defined below) is greater than [***] percent ([***]%), then the Normal Advance Rate shall be temporarily reduced by [***] ([***]), and the Alternate Advance Rate shall be temporarily reduced by [***] ([***]) until the earlier of (i) [***] ([***]) days after the Launch Date, or (ii) [***] ([***]) days after Sharman begins prompting the then-current installed base of KMD users to upgrade to the GAIN Supported KMD Client. If the First Month Overlap Percentage is equal to or less than [***] percent ([***]%), then there shall be no temporary reduction to the Normal Advance Rate or the Alternate Advance Rate.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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(b) “First Month Overlap Percentage” shall be determined and reported by TGC by sampling all, and in no case receiving data from less than [***] percent ([***]%) of the Complete GAIN Supported KMD Client Installs, and then dividing (i) the number of sampled Complete GAIN Supported KMD Client Installs for which TGC has received data during the first [***] ([***]) days immediately following the Launch Date on computers [***] or [***] by (ii) the total number of sampled Complete GAIN Supported KMD Client Installs for which TGC has received data during the first [***] ([***]) days immediately following the Launch Date. TGC shall deliver its report containing sufficient detail for Sharman to verify the First Month Overlap Percentage within [***] ([***]) days following the last day of the measurement period.

4. Compensation and Audit.

4.1 Initial Advance. TGC shall pay to Sharman an initial advance of $[***] (the “Initial Advance”) via wire transfer to an account designated by Sharman. The Initial Advance shall be a pre-payment against Revenue Share amounts and Minimum Monthly Payment amounts payable by TGC to Sharman commencing on the Launch Date and recoupable by TGC at the following rates: (i) $[***] from every Dollar of Revenue Share payments due Sharman that accrue during the first [***] ([***]) [***] following the Launch Date; (ii) $[***] from every Dollar of Revenue Share payments due Sharman that accrue after the [***] ([***]) and on or before the [***] ([***]) [***] following the Launch Date; (iii) [***] from every Dollar of Revenue Share payments due Sharman that accrue after the [***] ([***]) [***] following the Launch Date; (iv) [***] from every Dollar of Minimum Monthly Advance payments due Sharman that accrue during the first [***] ([***]) [***] following the Launch Date; and (v) [***] from every Dollar of Minimum Monthly Advance payments due Sharman that accrue after the first [***] ([***]) [***] following the Launch Date. In any given month, recoupments of the Initial Advance from Revenue Share payments shall be applied before recoupments of the Initial Advance from Minimum Monthly Advance payments. The portion of the Initial Advance that has been recouped by TGC shall be non-refundable. The un-recouped portion of the Initial Advance shall be immediately refundable by Sharman upon expiration of this Agreement or upon termination of this Agreement for any reason other than termination by Sharman following a material breach by TGC under Section 11.4(b) hereof (in which limited circumstance any un-recouped portion of the Initial Advance shall be non-refundable). Sharman shall pay TGC the refundable portion of the Initial Advance, if any, within the later of: (i) ten (10) business days of expiration or termination of this Agreement, or (ii) within three (3) business days of TGC providing wire transfer instructions to Sharman. TGC shall pay the Initial Advance to Sharman as follows:

(a) $[***] within [***] ([***]) [***] following the Effective Date;

(b) $[***] within [***] ([***]) [***] from the delivery by Sharman to TGC of a completed build approved for launch by Sharman of an installer for the GAIN Supported KMD Client;

(c) [***] within [***] ([***]) [***] after the Launch Date of the GAIN Supported KMD Client; and

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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(d) [***] on the [***] of each of the [***] and [***] full [***] following the Launch Date.

4.2 Minimum Monthly Advance. For each calendar month during the Term, TGC shall pay to Sharman (subject to recoupment of the Initial Advance as provided in Section 4.11) a non-refundable, minimum monthly advance (“Minimum Monthly Advance”) pursuant to numbers reported in the Month End Report, described in Section 4.4, below. The Minimum Monthly Advance shall be calculated as follows:

(a) For months in which the US% is at least [***] percent ([***]%), the Minimum Monthly Advance shall equal [***] ($[***]) (the. “Normal Advance Rate”) multiplied by the greater of (i) the number of GAIN Complete Installs, or (ii) [***] percent ([***]%) of KMD/GAIN Software Starts.

(b) For months in which the US% is less than [***] percent ([***]%), the Minimum Monthly Advance shall equal [***] ($[***]) (the “Alternate Advance Rate”) multiplied by the greater of (i) the number of GAIN Complete Installs multiplied by the US% for that month, or (ii) [***] percent ([***]%) of the KMD/GAIN Software Starts multiplied by the US% for that month, and nothing for other GAIN Complete Installs, or other KMD/GAIN Software Starts completed that month.

Each Minimum Monthly Advance shall be a pre-payment against Revenue Share amounts payable by TGC to Sharman under this Agreement, shall not be recoupable until after the Initial Advance has been fully recouped by TGC, and (following recoupment of the Initial Advance) shall be recoupable by TGC at the following rates: (i) [***] from every Dollar of Revenue Share payments due Sharman that accrue during the first [***] ([***]) [***] following the Launch Date; (ii) $[***] from every Dollar of Revenue Share payments due Sharman that accrue after the [***] ([***]) and on or before the [***] ([***]) [***] following the Launch Date; and (iii) $[***] from every Dollar of Revenue Share payments due Sharman that accrue after the [***] ([***]) [***] following the Launch Date.

4.3 Revenue Share Compensation. For each calendar month commencing with the month which includes the Launch Date, TGC shall pay Sharman [***] percent ([***]%) of the Net Revenue generated during the calendar month (the “Revenue Share”), as reduced by any portions of the Initial Advance and Minimum Monthly Advance which are recoupable pursuant to Sections 4.1 and 4.2 above.

4.4 Reporting.

4.4.1 TGC shall determine and report to Sharman: (i) the number of GAIN Complete Installs and KMD/GAIN Software Starts on a [***] basis and will undertake reasonable commercial efforts to report such information on a more frequent basis; (ii) the number of GAIN Complete Installs, GAIN Extension Installs, US%, GAIN Active Users, FSG Executions and KMD/GAIN Software Starts on a monthly basis within [***] ([***]) business days after the last day of each calendar month (the “Month End Report”); (iii) Gross Revenue,

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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Net Revenue, and Revenue Share for a calendar month within [***] ([***]) days after the last day of the applicable calendar month (the “Revenue Share Report”).

4.4.2 During (i) the Term of this Agreement and (ii) the Tail Period until the first calendar month in which the Revenue Share reported in the Revenue Share Report is less than [***] dollars ($[***]), TGC shall use commercially reasonable efforts to provide Sharman, as soon as commercially practicable following the Launch Date, with [***], online access to any of TGC or TGC’s Affiliates’ reporting system or systems reporting metrics TGC is required to report by this Agreement, filtered so as to contain only data for users of the GAIN Supported KMD Client, for which all of the following are true: (i) such reporting system or systems exist or come into existence in the future, (ii) such reporting system or systems provide real-time data to employees of TGC or TGC Affiliates, and, (iii) employees can filter such data to view only that portion of such data that reflects activities of users of the GAIN Supported KMD Client. TGC and TGC Affiliates will cooperate with Sharman to facilitate enhanced reporting and reporting tools as and when such capabilities become available to TGC and TGC Affiliates.

4.4.3 TGC shall provide to Sharman, at Sharman’s reasonable request, with information regarding the GAIN AdServer Distributed by Sharman or the users of the GAIN Supported KMD Client; provided, however, that in providing such information to Sharman, TGC shall not be required to prepare any report outside of its normal course of business or incur any significant expense, nor shall TGC be required to spend more than ten (15) man hours per month in preparing such materials specifically for Sharman.

4.5 Payment Terms. The Month End Report and the Revenue Share Report delivered by TGC to Sharman shall be considered a simultaneous invoice delivered by Sharman to TGC, and TGC shall pay Sharman the Revenue Share and Minimum Monthly Advances due for each calendar month, via wire transfer, as follows: (i) for the first, second, third and fourth calendar months beginning with the month that includes the Launch Date, TGC shall make payment within thirty (30) days following the last day of the calendar month; and (ii) for all subsequent calendar months, TGC shall make payment within forty-five (45) days following the last day of the calendar month. TGC shall pay such amounts to Sharman from one or more TGC bank accounts in banking institutions located in the jurisdiction of TGC’s incorporation, or such other locations as may be approved by Sharman in writing from time to time.

4.6 Audit Rights. TGC shall maintain accurate records of the calculations of the payments due to Sharman hereunder. During the Term and, if TGC continues to serve Contextual Advertisements or Proactive Search Results following the Term, for every calendar quarter following the expiration or termination of this Agreement in which Revenue Share under Section 4.3 of this Agreement exceeds [***] for any calendar month within such calendar quarter, Sharman, at its expense, may cause an audit to be made of the applicable records of TGC, TGC Parent and all TGC Affiliates solely for the purpose of verifying the payments made pursuant to this Agreement, provided that: (i) such audit be made by an independent certified public accountant of national standing in the United States and reasonably acceptable to TGC; (ii) results limited only to discrepancies in the amounts due Sharman and any discrepancies in reports provided to Sharman under Section 4.4.1 above will be provided to Sharman, and shall be treated as confidential information by TGC, Sharman and the auditor; (iii) while results will be

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

14

provided to Sharman, all information made available to the auditor shall be kept confidential between the auditor and TGC, and shall be used by the auditor solely for the purpose of verifying payments made pursuant to this Agreement; (iv) the audit will be conducted at TGC’s place of business during normal business hours and with reasonable prior written notice; and (v) audits shall not be conducted more than once in any three (3) month period. Any errors, omission and/or discrepancies disclosed by an audit shall be promptly adjusted to compensate the effected Party for such error, omission and/or discrepancy. If an audit reveals that TGC has underpaid Sharman by greater than [***] percent ([***]%) then TGC shall bear the entire cost of the audit and pay a penalty to Sharman equal to the cost of the audit.

4.7 Designated Contacts. During the Term of this Agreement, TGC shall assign a senior account executive to manage TGC’s relationship with Sharman and shall provide Sharman with 24 hour a day pager and home phone access to this senior executive.

4.8 Account Review. TGC shall, at its cost, conduct a one-day in person account review with Sharman at the offices of LEF (Sharman’s Australian management services company) in Australia any time Sharman requests such an account review, provided such in person account reviews are not required to be held more than once in any three month period.

4.9 Taxes. TGC shall pay all sales, use, value added and other taxes, applicable to the distribution and operation of the GAIN AdServer Distributed by Sharman.

5. Exclusivity.

5.1 During the Term of this Agreement, Sharman and/or Affiliates shall not launch, operate, distribute, endorse, promote or otherwise advance any products, services or features that deliver, display, or assist with the delivery or display of any Contextual Advertisements or Proactive. Search Results (“Competing Software”). Example: notwithstanding anything to the contrary in this Agreement, the Parties acknowledge that Sharman and/or its Affiliates undertaking, or entering into any business agreement(s) permitting any partner of Sharman and/or its Affiliates to undertake the following action would constitute a breach of this Section 5: displaying or facilitating the display, through an application or browser plugin: (i) downloaded from Sharman and/or its Affiliates by a user, or (ii) downloaded by a user with assistance from Sharman and/or its Affiliates (e.g. bundled with KMD), of an advertisement promoting banking services from [***] on the screen of a specific computer containing KMD, where such decision to display, or to facilitate such display of such advertisement on the screen of such specific computer containing KMD, is made as a direct result of the user of that specific computer containing KMD loading into his or her browser, or previously having loaded into his or her browser, the web page found at [***].

5.2 Notwithstanding Section 5.1, nothing in this Agreement shall prohibit Sharman or Sharman bundle partners from (and none of the following shall constitute “Competing Software” or “Contextual Advertisements or Proactive Search Results” for purposes hereof) (a) displaying advertising triggered within the user interface of KMD when it is open, or minimized but active, or otherwise in a manner consistent with Sharman and/or its Affiliates’ current implementation(s) as of the Effective Date (e.g., [***] and their direct competitors), (b)

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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bundling software that resets users’ default homepages or that recommends alternative websites related to browsing behavior and destinations (but does not otherwise trigger popups, popunders or other browser windows with contextual advertising content), or (c) displaying search results (including sponsored results/links/ads) when a search is initiated by a user typing a search string into either (i) a search box located within the KMD user interface or on the KMD website (e.g. [***] or any successor search provider), or (ii) a search box provided by. a Sharman partner located in the browser’s user interface (e.g., the [***] bar and its direct competitors), or (iii) displaying search results within the user interface of any application, other than Internet Explorer, including mediaplayer/email/instant messenger/P2P telephony/broadcast applications, integrated or distributed by Sharman.

6. Licenses.

6.1 Grant of Software License to Sharman. Subject to the terms and conditions of this Agreement, TGC hereby grants Sharman a non-exclusive, non-transferable, non-sub licensable worldwide license to reproduce and distribute the GAIN AdServer Distributed by Sharman in object code solely in accordance with the terms and conditions of this Agreement and to make copies of the GAIN AdServer Distributed by Sharman solely as necessary in order to engage in such distribution.

6.2 Grant of Trademark License to TGC. Sharman hereby grants to TGC, a royalty-free, non-exclusive, non-transferable worldwide license to use and display the Sharman Marks on marketing and promotional materials for or referring to Sharman and/or KMD, as approved by Sharman. TGC agrees that it will not take any action inconsistent with Sharman’s ownership of the Sharman Marks, that it will not use the Sharman Marks in an unsavory or disparaging manner, that it will not challenge Sharman’s rights in the Sharman Marks, and that it will not attempt to register the Sharman Marks or any other mark substantially similar thereto. All use of the Sharman Marks by TGC and all goodwill associated therewith shall inure solely to the benefit of Sharman.

6.3 Grant of Trademark License to Sharman. TGC hereby grants to Sharman, a royalty-free, non-exclusive, non-transferable worldwide license to use and display TGC Parent’s trademarks and logos (the “TGC Marks”) on marketing and promotional materials for or referring to the GAIN AdServer Distributed by Sharman, as approved by TGC. Sharman agrees that it will not take any action inconsistent with TGC Parent’s ownership of the TGC Marks, that it will not use the TGC Marks in an unsavory or disparaging manner, that it will not challenge TGC’s rights in the TGC Marks, and that it will not attempt to register the TGC Marks or any other mark substantially similar thereto. All use of the TGC Marks by Sharman and all goodwill associated therewith shall inure solely to the benefit of TGC Parent.

7. Ownership: Confidential Information.

7.1 Ownership. Title to and ownership of any IP, including, without limitation, derivative works prepared by each Party, and all related technical know-how and all rights therein (including, without limitation, all Intellectual Property Rights), are and shall remain the exclusive property of that Party or its Affiliates. Except as expressly provided herein,

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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the Parties shall not copy, modify, reproduce, display, decompile, reverse engineer, localize, store; translate, sell, lease or otherwise transfer, distribute or use any of the other Party’s or TGC Parent’s IP, products or documentation, in whole or in part without the other Party’s prior written consent. All rights not specifically granted herein with respect to the Sharman Business, other Sharman technology, Sharman Marks and Sharman’s software are reserved to Sharman, and with respect to TGC’s business, TGC technology, TGC Marks, GAIN AdServer, TGC Components Distributed with KMD and GAIN AdServer Distributed by Sharman are reserved to TGC and TGC Parent. As used herein, “IP” means (i) as applied to TGC, GAIN AdServer, GAIN AdServer Distributed by Sharman and the TGC Trademarks, (ii) as applied to Sharman, the KMD and Sharman Marks, and (iii) as applied to both Parties, any and all software, documents, writings, images, drawings, source code, object code, algorithms, and any component parts thereof embodied in the property stated in this definition.

7.2 Confidential Information. Each Party acknowledges that by reason of its relationship to the other Party under this Agreement it will have access to and acquire knowledge from, material, data, systems and other information concerning the operation, business, financial affairs, products, customers and intellectual property of the other Party that may not be accessible or known to the general public, including, but not limited to the terms of this Agreement, all of which shall constitute “Confidential Information” within the meaning of, and be subject to the terms and conditions of, that certain Mutual Nondisclosure Agreement dated April 24, 2003, between Sharman and TGC Parent, as amended concurrently with the execution and delivery of this Agreement (as amended, the “Non-Disclosure Agreement”), the terms of which are incorporated herein TGC agrees that it is and shall be bound by the terms of the Non-Disclosure Agreement to the same extent as TGC Parent, and that all references to TGC Parent therein shall for all legal purposes be deemed to be references to TGC. The Parties acknowledge that any and all data, information, content of reporting systems, and/or access to any reporting systems related to this Agreement will be subject to the terms and conditions of the Non-Disclosure Agreement. Notwithstanding any terms of the Non-Disclosure Agreement to the contrary, the receiving Party’s obligation of confidentiality thereunder shall survive until the later of the expiration of the Non-Disclosure Agreement or two, (2) years after the expiration or termination of this Agreement.

8. Representations and Warranties.

8.1 Mutual Representations and Warranties. Each Party represents and warrants to the other Party that it has the power and authority to enter into this Agreement, to grant the licenses contained herein, and to otherwise perform its obligations and covenants hereunder.

8.2 Sharman Representations and Warranties. Throughout the Term, Sharman hereby represents and warrant to TGC that:

(a) Sharman is the exclusive owner of all rights and interests in the KMD (exclusive of those elements licensed. from third parties); and

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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(b) Sharman has obtained all of the rights which are needed in order for Sharman to satisfy its obligations hereunder and has the ability, power and permission to grant such rights to TGC and to make the promises and covenants as are set forth herein.

8.3 TGC Representations and Warranties. Throughout the Term, TGC (on behalf of itself and its Affiliates) hereby represents and warrants to Sharman that:

(a) The GAIN AdServer Distributed by Sharman complies with the GAIN EULA and does not contain features or functionality that are in conflict with or violation of the GAIN EULA;

(b) TGC and/or its Affiliates is the exclusive owner of all rights and interests in the GAIN AdServer Distributed by Sharman (exclusive of those elements duly and validly licensed from third parties);

(c) None of the marketing, distribution or use of the GAIN AdServer Distributed by Sharman, to TGC’s actual knowledge as determined by a final non-appealable judgment, infringes any U.S. copyright, patent, trademark, license or other proprietary right of any person or entity. As of the Effective Date only, to TGC’s actual knowledge, none of the marketing, distribution or use of the GAIN AdServer Distributed by Sharman, infringes any U.S. copyright, patent, trademark, license or other proprietary right of any person or entity;

(d) The GAIN AdServer Distributed by Sharman does not contain nor will contain any material that is defamatory, obscene, indecent or pornographic material or any computer “virus” Trojan horses, worms, time bombs, cancelbots or other computer programming routines that are intended to damage, detrimentally interfere with, surreptitiously intercept or expropriate any system, data or personal information or any other contaminating or destructive feature; and

(e) TGC and the operation of the GAIN AdServer Distributed by Sharman shall comply in all material respects with all applicable United States laws and regulations relating to the distribution and operation of the GAIN AdServer Distributed by Sharman as provided hereunder, including without limitation, export or re-export control laws and regulations.

8.4 TGC Covenants. TGC hereby covenants that, at no time shall the GAIN AdServer Distributed by Sharman contain or display any content or features or functionality that: (a) is unlawful, libelous, defamatory, harassing, threatening, harmful, invasive of privacy or publicity rights, abusive, inflammatory, fraudulent, deceptive, or misleading; (b) constitutes, assists or encourages a criminal offense, violate the rights of any party, or that would otherwise create liability or violate any U.S. federal and state laws, European Union Directives, and United Kingdom laws; (c) to TGC’s actual knowledge, may infringe any U.S. patent, trademark, trade secret, copyright or other intellectual or proprietary right of any party; (d) TGC does not have the lawful right to distribute or reproduce (or sublicense Sharman to do the same), or perform any other action necessary to carry out the terms hereof, including TGC’s obligations pursuant to this Agreement; or (e) constitutes unsolicited promotions, advertising or solicitations for funds,

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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goods or services, including junk mail and spam, without Sharman’s written permission, provided however the Parties acknowledge that delivery by TGC and/or TGC Affiliates of Contextual. Advertisements or Proactive Search Results does not constitute any breach of this Section 8.4(e). In addition, TGC hereby covenants that the GAIN AdServer Distributed by Sharman will not contain any mechanism that once the GAIN AdServer Distributed by Sharman has been validly uninstalled by means of an authorized method would initiate a re-installment of the GAIN AdServer Distributed by Sharman at a later time.

8.5 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH HEREIN, NEITHER PARTY MAKES, AND EACH PARTY SPECIFICALLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED INCLUDING, WITHOUT LIMITATION, ACTUAL OR IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS_. FOR A PARTICULAR PURPOSE AND TITLE OR ANY OTHER WARRANTY WITH RESPECT TO THE QUALITY, ACCURACY OR FREEDOM FROM ERROR OF THE OPERATION, USE AND FUNCTION OF THE GAIN ADSERVER DISTRIBUTED BY SHARMAN, TGC COMPONENTS DISTRIBUTED WITH KMD, KMD OR GAIN SUPPORTED KMD CLIENT.

9. Indemnification.

9.1 Mutual Indemnification. Subject to compliance with Section 9.4 hereof, each Party (the “Indemnifying Party”) will defend, indemnify and hold harmless the other Party (the “Indemnified Party”), and the respective directors, officers, employees, agents and Affiliates of the Indemnified Party, from and against any and all third party claims, costs, losses, damages, judgments and expenses (including reasonable attorneys’ fees and costs of investigation) (collectively, “Damages”) arising out of, relating to, or incurred as a result of (i) any failure by the Indemnifying Party to perform its obligations under this Agreement; (ii) the breach or inaccuracy of a representation or warranty made by, or breach of a covenant of, the Indemnifying Party hereunder; and (iii) the negligence or willful misconduct of the Indemnifying Party in performance of its obligations under this Agreement.

9.2 Indemnification by TGC. Subject to compliance with Section 9.4, TGC (in this case, the Indemnifying Party) will defend, indemnify and hold harmless Sharman, and its respective directors, officers, employees, agents and Affiliates (in this case, the Indemnified Party), from and against any and all Damages arising out of, relating to, or incurred as a result of a third party claim (i) the marketing, distribution or use of the GAIN AdServer Distributed by Sharman in the manner contemplated by this Agreement infringes or violates any patent rights of any person, or (ii) relating to the content of any advertisements, messages or other information served through the GAIN AdServer Distributed by Sharman.

9.3 Indemnification by Sharman. Subject to compliance with Section 9.4, Sharman (in this case, the Indemnifying Party) will defend, indemnify and hold harmless TGC, and its respective directors, officers, employees, agents and Affiliates (in this case, the Indemnified Party), from and against any and all Damages arising out of, relating to, or incurred as a result of a third party claim that: (i) the marketing or distribution of the KMD infringes or

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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violates any patent rights of any person, or (ii) the use of the KMD by Sharman and/or its Affiliates infringes or violates any patent rights of any person.

9.4 The Indemnified Party shall notify promptly the Indemnifying Party of any such claim of which it becomes aware and shall: (i) at the Indemnifying Party’s expense, provide reasonable cooperation to the Indemnifying Party in connection with the defense or settlement of any such claim; and (ii) at the Indemnified Party’s expense, be entitled to participate in the defense of any such claim.

9.5 The Indemnified Party agrees that the Indemnifying Party shall have sole and exclusive control over the defense and settlement of any such third Party claim. However, the Indemnifying Party shall not acquiesce to any judgment or enter into any settlement that adversely affects the Indemnified Party’s rights or interests without prior written consent of the Indemnified Party.

10. Limitation of Liability; Specific Remedies.

EXCEPT AS REQUIRED UNDER SECTION 9, UNDER NO CIRCUMSTANCES_. AND UNDER NO LEGAL THEORY, WHETHER IN TORT, CONTRACT OR OTHERWISE, SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY AFFILIATE OR OTHER PERSON FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY CHARACTER, ARISING UNDER THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF GOODWILL, LOST PROFITS (EXCEPT AS SPECIFIED IN SECTION 11.6), WORK STOPPAGE, COMPUTER FAILURE OR MALFUNCTION, EVEN IF THE PARTY SHALL HAVE BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL THE LIMITATION SET FORTH IN THE FOREGOING CLAUSE LIMIT OR CAP SHARMAN’S RIGHTS TO COMPENSATION UNDER SECTIONS 4.1, 4.2 and 4.3, OR LIMIT OR CAP TGC’S RIGHTS TO REIMBURSEMENT OF THE INITIAL ADVANCE UNDER SECTION 4. SUBJECT TO THE FINAL SENTENCE OF THIS SECTION 10, IN NO EVENT SHALL EITHER PARTY’S MAXIMUM CUMULATIVE LIABILITY UNDER THIS AGREEMENT EXCEED $[***]. NOTWITHSTANDING THE IMMEDIATELY PRECEDING SENTENCE, THE CAP ON LIABILITY PROVIDED FOR IN THE IMMEDIATELY PRECEDING SENTENCE SHALL NOT APPLY TO, AND THE APPLICABLE PARTY SHALL BE ENTITLED TO RECOVER IN ADDITION TO THE CAP, (I) ACCRUED BUT UNPAID AMOUNTS DUE SUCH PARTY UNDER THIS AGREEMENT AS OF THE DATE OF DETERMINATION, (II) AMOUNTS THAT BECOME DUE SUCH PARTY UNDER THIS AGREEMENT FOR ACTIVITIES AFTER THE DATE OF DETERMINATION, AND (III) REIMBURSEMENT OF THE INITIAL ADVANCE UNDER SECTION 4. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN THESE LIMITATIONS OF LIABILITY APPLY ONLY TO MATTERS THAT ARISE UNDER THIS AGREEMENT.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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11. Term and Termination.

11.1 Term. The initial term of this Agreement (the “Initial Term”) shall be five (5) years commencing on the Effective Date. After the expiration of the Initial Term, this Agreement will renew for successive two-year periods (each a “Renewal Term” and together with the Initial Term, the “Term”) unless terminated by written notice received by the non-terminating Party not less than sixty (60) days prior to the end of the applicable Renewal Term.

11.2 Termination by Sharman.

(a) Commencing eighteen (18) months after the Launch Date, Sharman may terminate this Agreement by giving sixty (60) days advance written notice to TGC (which may be delivered via email), if and only if Sharman has been paid less than $[***] by TGC for the activities under this Agreement during the first eighteen (18) month period (i.e. months 1 through 18) immediately following the Launch Date, inclusive of any and all advances and inclusive of any amounts owed as a result of activities during the first eighteen (18) months immediately following the Launch Date.

(b) Commencing thirty (30) months after the Launch Date, Sharman may terminate this Agreement by giving sixty (60) days advance written notice to TGC (which may be delivered via email), if and only if Sharman has been paid less than $[***] by TGC for the activities under this Agreement during the next twelve (12) month period (i.e. months 19 through 30) immediately following the Launch Date, inclusive of any and all advances and inclusive of any amounts owed as a result of activities during the 19^th through 30th months immediately following the Launch Date.

(c) Commencing thirty-six (36) months after the Launch Date, Sharman may terminate this Agreement for any reason by giving sixty (60) days advance written notice to TGC.

11.3 Termination by TGC. Commencing eighteen (18) months after the Launch Date, TGC may terminate this Agreement for any reason by giving sixty (60) days advance written notice to Shaman.

11.4 Termination by Either Party. Either Party may terminate this Agreement if:

(a) The US% falls below [***] percent ([***]%) in a given calendar month as determined by the Month End Report by providing sixty (60) days advance written notice to the other Party. Such notice of termination must be provided to the other Party within forty-five (45) days following delivery of the Month, End Report for the calendar month in which the US% falls below [***]%; or

(b) The other Party has materially breached this Agreement by: (i) failure to pay amounts due according to Month End Reports and/or Revenue Share Reports delivered to Sharman under Section 4.4.1, (ii) failure by TGC to deliver Month End Reports and/or Revenue Share Reports as required by Section 4.4.1, or (iii) failure by either Party to pay

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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undisputed amounts due as determined by an audit conducted pursuant to Section 4.6, in each case where the breaching Party has failed to cure such material breach within ten (10) business days of receiving written notice from the non-breaching Party describing such material breach, and the non-breaching Party thereafter provides two (2) day written notice of termination to the breaching Party within thirty (30) days of the breaching Party’s failure to cure; or

(c) The other Party has materially breached this Agreement in any manner not expressly described in Section 11.4(b) above and the breaching Party has failed to cure such material breach within sixty (60) days of receiving written notice from the non-breaching Party describing such material breach, and the non-breaching Party thereafter provides two (2) day written notice of termination to the breaching Party within thirty (30) days of the breaching Party’s failure to cure; provided, however, that if the breaching Party acknowledges in writing the existence of a material breach, and such breach is not capable off being cured within sixty (60) days despite the breaching Party’s commercially reasonable effort to do so, then the cure period shall be extended for an additional thirty (30) days so long as the breaching Party exercises during the entire cure period commercially reasonable efforts to cure the breach as soon as practicable.

Notwithstanding the foregoing, if the breaching Party contests in good faith the existence of a material breach within fifteen (15) days of receipt of written notice from the non-breaching Party, then the determination of whether a material breach has occurred shall be determined by expedited binding arbitration, which the Parties will commence within forty-five (45) days following such written notice from the breaching Party, and which the Parties will use best efforts to complete within forty-five (45) days of the initiation of such arbitration proceedings. The expedited binding arbitration shall be administered by the International Center for Dispute Resolution of the American Arbitration Association in accordance with its International Arbitration Rules. The number of arbitrators shall be three; the place of arbitration shall be London, England; the language of the arbitration shall be in English; and the losing party shall pay the costs and expenses (including reasonable attorneys’ fees) of the prevailing party and of the arbitration as determined by the arbitration panel. If the arbitrators’ find that a material breach has occurred, and the breaching Party has failed to cure such material breach Within thirty (30) days of such finding, or a longer period (not to exceed ninety (90) days of such finding) as determined by the arbitrators as commercially reasonable, the non-breaching Party may thereafter terminate this Agreement by providing two (2) day written notice of termination to the breaching Party within thirty (30) days of the breaching Party’s failure to cure.

11.5 Impact on GAIN AdServer Distributed by Sharman upon Expiration or Termination.

(a) Sharman may (but shall not be obligated to) (i) in all cases outlined below, prompt users of the GAIN AdServer. Distributed by Sharman encouraging them to upgrade to a version of the KMD that does not contain the GAIN AdServer Distributed by Sharman, and will result in deletion of the GAIN Registry Entry which, only if there is no other GAIN Supported Software on that computer, will result in the un-install of the GAIN AdServer Distributed by Sharman, and/or (ii) only-in the case of clauses (i) and (iv) below, require TGC to

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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case serving any advertising to or through GAIN AdServer Distributed by Sharman to KMD users acquired under this Agreement, as follows:

(i) If Sharman terminates this Agreement prior to expiration of the Term under Sections 11.4(b) or 11.4(c);

(ii) If Sharman terminates this Agreement prior to expiration of the Term for any reason permitted hereunder, other than under Sections 11.4(b) or 11.4(c) or the term expires, and either (A) TGC has collected sufficient aggregate Net Revenue such that its total Net Revenue, minus the sum of all cash payments by TGC or TGC Parent to Sharman in respect of all Advance Payments and Revenue Share payments (such result being referred to as the “Net Cash Position”) is equal to or greater than 100% of the sum of (i) the Initial Advance paid to Sharman, plus (ii) all cash payments to Sharman paid as Minimum Monthly Advances net of any refunds of the Initial Advance and recoupments of the Initial Advance deducted from the Minimum Monthly Advance (the “Cash Investment Amount”), or (B) Sharman pays to TGC by wire transfer an amount equal to (i) 100% of the Cash Investment Amount minus (ii) the aggregate Net Revenue collected by TGC to date, plus (iii) all payments, including the Cash Investment Amount and Revenue Share payments, made by TGC to Sharman to date, provided however, if the result of this calculation is less than or equal to zero, Sharman shall not be required to pay anything pursuant to this Section 11.5(a)(ii); or

(iii) If TGC terminates this Agreement for any reason permitted hereunder, other than under Sections 11.4(b) or 11.4(c), prior to expiration of the Term, and either (A) TGC has collected sufficient aggregate Net Revenue such that its Net Cash Position is equal to or greater than 50% of the Cash Investment Amount, or (B) Sharman pays to TGC tr_y wire transfer an amount equal to: (i) 50% of the Cash Investment Amount made by TGC or TGC Parent to Sharman minus (ii) the aggregate Net Revenue collected by TGC to date plus (iii) all payments, including the Cash Investment Amount and Revenue Share payments made by TGC to Sharman to date, provided however, if the result of this calculation is less than or equal to zero, Sharman shall not be required to pay anything pursuant to this Section 11.5(a)(iii); or

(iv) If Sharman terminates this Agreement prior to expiration of the Term for any reason other than under Sections 1.1.4(b) or 11.4(c), or the Term expires, and TGC thereafter is determined via the arbitration process outlined in Section 11.4(c) to be in material breach of its obligations relating to the operation of the GAIN AdServer Distributed by Sharman set forth in Sections 2, 4, 8.3, 8.4 and 9 of this Agreement, all of which will continue to apply to TGC for so long as Sharman does not require TGC to cease serving any advertising to or through GAIN AdServer Distributed by Sharman to KMD users acquired under this Agreement.

(b) Notwithstanding Section 11.5(a), and notwithstanding expiration of the Term or termination of this Agreement by either party for any reason, so long as TGC continues to serve or have served Contextual Advertisements or Proactive Search Results to KMD users acquired under this Agreement (whether permitted hereunder or not), Sharman, without limitation on any other remedies, shall be entitled to continue to receive any amounts it

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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would otherwise have been entitled to receive pursuant to Section 4.3 as if this Term had not expired or this Agreement had not been terminated.

11.6 Other Effects of Termination. The termination rights of the Parties and the rights of the Parties stated in connection with any breach or termination under this Agreement (including under Sections 11.2, 11.3, 11.4 and 11.5) are cumulative and are not a limitation or in lieu of any other available remedies, including recovery of actual damages and -recovery for loss of potential profits that would have been earned for the full duration of this Agreement absent the breach in question (i.e., lost Revenue Share, Initial Advance, Minimum Monthly Advance amounts) (but excluding consequential damages other than loss of potential Revenue Share, Initial Advance, Minimum Monthly Advance amounts that would have been earned for the full duration of this Agreement absent the breach in question). Upon expiration or termination of this Agreement, ‘ Sharman will stop distributing the GAIN AdServer Distributed by Sharman upon the release of the next version of the KMD but will not earn Minimum Monthly Advances or Revenue Share on GAIN Complete Installs or GAIN Extension Installs that occur after the date on which the Agreement expires or is terminated. Neither expiration nor termination by either Party of this Agreement will affect the rights of any end user under the terms of any applicable end user license agreement. Following termination of this Agreement permitted hereunder, other than a termination resulting from Sections 11.4(b) or 11.4(c), TOC may elect in its sole discretion to cease displaying Advertisements using the GAIN AdServer Distributed by Sharman provided that such election shall be irrevocable and shall not impose upon Sharman any liability arising as a result of such election.

11.7 Survival. In addition to the provisions which, by their express terms, survive expiration or termination of this Agreement, the provisions of (i) Sections 2.1(q), 2.5, 3.2, 3.3, 4.3 (4.1 and 4.2 as necessary to calculate payments under 4.3) 4.4.1, 4.5, 4.6,7, 8.5, 9, 10, 11.4(b), 11.4(c), 11.5 through 11.7, 12, 13, and 15 shall survive expiration or termination of this Agreement, and (ii) Sections 2.1(f) through (l), 2.6, 2.7, 2.10, 2.11, and 4.9 shall survive expiration or termination of this Agreement until the first calendar month of the Tail Period in Which Revenue Share reported in the Revenue Share Report is less than five thousand dollars ($5,000).

12. Governing Law. Recovery of Fees. This Agreement will be governed by and construed in accordance with the laws of the State of New York without regard to its conflict of laws principles. The parties expressly waive the application of the United Nations Convention .on Contracts for the International Sale of Goods to the terms of this Agreement.

13. Arbitration. Any controversy or claim arising out of or, relating to this Agreement, or the breach thereof, shall be determined by binding arbitration administered by the International Center for Dispute Resolution of the American Arbitration Association in accordance with its International Arbitration Rules. The number of arbitrators shall be three; the pace of arbitration shall be London, England; the language of the arbitration shall be in English; and the losing party in any proceeding related to or arising out of this Agreement shall pay the costs and expenses (including reasonable attorneys’ fees) of the prevailing party as determined by the arbitration panel. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof, including but not limited to the courts of New South

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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Wales, Australia. Each of TGC and Sharman agrees to submit to the jurisdiction of the courts of New South Wales, Australia for purposes of (i) enforcement of this arbitration agreement and (ii) recognition and enforcement of any award rendered by the arbitrators.

14. Parent Guaranty. TGC Parent shall provide to Sharman a guaranty, governed by the law of New York, and with jurisdiction and venue in, New South Wales, Australia, pursuant to which TGC Parent shall be responsible for and will guaranty the full and punctual performance by TGC of all of its obligations hereunder to the same extent as if TGC Parent and not TGC were the counterparty to this Agreement.

15. General.

15.1 Export Controls. Both parties will adhere to all applicable laws, regulations and rules relating to the export of technical data and will, not export or re-export any technical data, any products received from the other Party or the direct product of such technical data to any proscribed country listed in such applicable laws, regulations and rules unless properly authorized.

15.2 Independent Contractor. The relationship created by this Agreement is one of independent contractors, and not partners, franchisees or joint ventures. No employees, consultants, contractors or agents of one Party are employees, consultants, contractors or agents of the other Party, nor do they have any authority to bind the other Party by contract or otherwise to any obligation, except as expressly set forth herein. They will not represent to the contrary, either expressly, implicitly or otherwise.

15.3 Notices. All notices and demands under this Agreement will: (i) be in writing, (ii) be specifically identified as a “Notice” under this Section 15.3 of this Agreement, and (iii) be delivered by personal service, confirmed fax, confirmed e-mail, express courier, or certified mail, return receipt requested, to each of individuals listed below at the address of the receiving Party set forth below, or at such different address as may be designated by such Party by written notice to the other Party from time to time. Notice will be effective on receipt.

To Sharman:	To TGC:
Sharman Networks Limited	C/o The Gator Corporation
1st Floor, BDO House	2000 Bridge Parkway, Suite 100
Port Villa, Vanuatu	Redwood City, CA 94065
Attn: Chief Executive Officer and Chief Operating Officer	Attn: Chief Executive Officer and Senior Vice President Finance & Business Development & Chief Counsel
Email:  nikki@sharmannetworks.com,              alan@sharmannetworks.com	Email: jeff@gator.com, mitchell@gator.com, sprimak@gator.com
Fax Number:	Fax Number:

15.4 No Assignment. Neither Party may assign this Agreement, in whole or in part, without the other Party’s written consent; provided, however, that either Party may assign this Agreement without such consent to a parent, successor in interest, any affiliate or in

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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connection with any merger, consolidation, any sale of all or substantially all of such Party’s assets or any other transaction in which more than fifty percent (50%) of such Party’s voting securities are transferred; and provided, further, that either party may assign this Agreement without such consent to any party which acquires all or substantially all of its assets. Any attempt to assign this Agreement other than in accordance with this provision shall be null and void. This Agreement shall be binding upon and inure to, the benefit of the Parties’ permitted successors and assigns.

15.5 Force Majeure. If by reason of labor disputes, strikes, lookouts, action of the elements governmental restrictions, appropriation or other similar causes beyond the control of a Party hereto (a “Force Majeure Event”), such Party is unable to perform in whole or in part its obligations as set forth in this Agreement, then such Party shall be relieved of those obligations to the extent it is so unable to perform and such inability to perform shall not make such Party liable to the other Party (the “Non-Affected Party”) and such Party shall give notice to the Non-Affected Party. Neither Party shall be liable for any loss, injury, delay or damages suffered or incurred by the other Party due to the above causes.

15.6 Entire Agreement. This Agreement and the exhibits hereto constitute the complete and exclusive agreement between the parties with respect to the subject matter hereof, superseding and replacing any and all prior or contemporaneous agreements, communications, and understandings (whether written or oral) regarding such subject matter. This Agreement may only be modified, or any rights under it waived, by a written document executed by both parties.

15.7 Waiver. The failure of either party to exercise or enforce any of its rights under this Agreement will not act as a waiver, or continuing waiver, of such rights.

15.8 Remedies Cumulative. Any and all remedies herein expressly conferred upon a Party shall be deemed cumulative end not exclusive of any other remedy conferred hereby or by law, and the exercise of any one remedy shall not preclude the exercise of any other. Headings shall not be considered in interpreting this Agreement.

15.9 Counterparts. This Agreement may be signed by telecopy and in counterparts by Sharman and TGC, each of which counterpart shall be deemed an original and all of which counterparts when taken together, shall constitute but one and the same instrument.

15.10 Severability. If any provision of this Agreement is, becomes, or is deemed invalid or unenforceable in any jurisdiction, such provision will be enforced to the maximum extent permissible in such jurisdiction so as to effect the intent of the parties, and the validity,. legality and enforceability of such provision shall not in any way be affected or impaired thereby in any other jurisdiction. If such provision cannot be so amended without materially altering the intention of the parties, it shall be stricken in the jurisdiction so deeming, and the remainder of this Agreement shall remain in full force and effect.

15.11 Language. This Agreement has been written in the English language, and it may be translated, for convenience, into other languages. However, in the case of error or disagreement, the executed English language version shall prevail.

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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INTENDING TO BE LEGALLY BOUND, the Parties have executed this Agreement by their duly authorized representatives, to be effective, as of the date first written above.

SHARMAN NETWORKS, LTD.		YORTON LIMITED
By:	/s/ ILLEGIBLE	By:	/s/ Jeff McFadden
Name:	Worldwide Nominees LTD By its duly authorized representative	Name:	Jeff McFadden
Title:	Sole Director	Title:	Director

*** Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.

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EXHIBIT A

GAIN EULA

PLEASE READ THE GATOR CORPORATION PRIVACY STATEMENT AND END USER LICENSE AGREEMENT (COLLECTIVELY “Terms and Conditions”) CAREFULLY AND MAKE SURE YOU UNDERSTAND THEM. THEY CONTAIN IMPORTANT INFORMATION THAT YOU SHOULD KNOW BEFORE ACCEPTING THIS SOFTWARE.

The Gator Corporation (“TGC”) Terms and Conditions describe the operation of the GAIN AdServer software (defined below) you are about to download and the terms and conditions that govern your use of this software. These Terms and Conditions apply only to the GAIN AdServer distributed with the Kazaa Media Desktop and do not supercede or modify the Terms and Conditions applicable to other GAIN-Supported Software (defined below) that may be currently or subsequently installed on this computer. For a list of GAIN-Supported Software on this computer, see http://webpdp.gator.com/gain/32/about-gain-01.html, (see Attachment A) incorporated herein by reference, that generates a list of GAIN-Supported Software that resides on the computer that is used to access the link.

TGC provides you the opportunity to download a software product you desire at no charge or a reduced charge in return for your agreement to also download TGC’s software product which will periodically deliver advertisements and promotional messages to your computer based on your interests as shown by the some websites you view. Before you may download and install these, software products, you must agree to the terms and conditions described below.

If you would like to stop receiving GAIN-branded advertisements, you will need to remove all GAIN-Supported Software on your computer using the Add/Remove Programs menu in the Microsoft Windows Control Panel. http://webpdp.gator.com/gain/32/about-gain-01.html (see Attachment A) incorporated herein by reference, generates a list of GAIN-Supported Software that resides on the computer that is used to access the link. Soon after all GAIN-Supported Software has been removed, the GAIN AdServer will remove itself automatically. Using the Add/Remove Programs menu is the only authorized means to uninstall GAIN-Supported Software and the use of any other means may not result in the un-installation of GAIN-Supported Software.

Privacy Statement and End User License Agreement

(‘Terms and Conditions’)

The Gator Corporation (‘TGC’) provides personal computer users with a valuable proposition: the ability to obtain Kazaa Media Desktop software, valued at up to $30, free-of-charge or at a reduced cost in exchange for users’ agreement to accept advertising and other promotional messages delivered by TGC to users’ personal computers. Downloading or installing these ad-supported software applications requires acceptance of these Terms and Conditions which allows TGC to download and install the ‘GAIN^sm Ad Server’ software, which delivers ‘GAIN’ branded advertising, and various informational or promotional messages to computer screens while users view Internet Web pages (‘GAIN Ads’).

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The GAIN AdServer is patent-pending technology that identifies the interests of anonymous computer users based on some of their computer usage and some of their web surfing behavior, including the URLs of Web pages viewed by users and other criteria as set forth in this Privacy Statement but which does not collect ANY personally identifying information. The GAIN AdServer displays GAIN Ads on computer screens on behalf of TGC’s advertising clients and not on behalf of the Web site the user may be viewing when the ad appears. TGC’s advertising clients may be competitors of the publishers whose Web pages users may be viewing, or may have recently viewed. GAIN Ads are distinguishable from other ads or messages because all GAIN Ads contain the trademark “GAIN” in the title bar and/or the GAIN logo in the ad.

GAIN-Supported Software includes both software applications published by TGC (TGC GAIN-Supported Software), as well as software applications developed by other companies (Third Party GAIN-Supported Software); At any time, you can see a list of all GAIN-Supported Software residing on a computer by directing that computer’s Internet browser to http://webpdp.gator.com/gain/32/about-gain-01.html.

Unless otherwise specified, these Terms and Conditions constitute your agreement with TGC for use of the GAIN AdServer software.

Privacy Statement

We don’t know who our users are. . .

TGC does not know the identity of GAIN-Supported Software users. We do not transmit to our servers personally identifiable information like email addresses, last name, street addresses, or phone numbers. Nor do we have any other sensitive or personal financial information, such as credit card numbers, login IDs, passwords or bank account numbers.

Here’s what we do know. . .

While we don’t know the identity of GAIN-Supported Software users, the GAIN AdServer and TGC collect and use the following kinds of anonymous information:

• Some of the Web pages viewed

• The amount of time spent at some Web sites

• Standard web log information (excluding IP Addresses) and system settings

• Non-personally identifiable information on Web pages

For more information, http://www.gatorcorporation.com/help/psdocs/datause50.html, (see Attachment B) incorporated herein by reference, provides a more detailed description of the information collected by TGC and how it is used.

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Here’s what we do with it

We associate the anonymous information we collect with a particular computer through a randomly generated Anonymous ID number to accomplish the following:

• Create an anonymous profile of the categories of products or services in which GAIN-Support Software users appear to be interested in order to select GAIN Ads to display to GAIN-Supported Software users’ computer screens. GAIN Ads may be displayed on behalf of advertisers who may be competitors of the publishers of the Web pages you are viewing or have recently viewed.

Any information provided to any TGC employees or contractors, such as our technical support department, may be stored on our servers in archives of our support and customer service department. This information, however, will not be associated with the information we may store and use listed above.

We share anonymous aggregate information about what Web pages users view on the Internet. For example, we might tell a merchant that we have 50,000 users who buy books. We do not disclose information associated with any individual user to that merchant.

We sometimes use third party contractors who may be given access to any non-personally identifiable information we have so they may perform tasks that might otherwise be done by our employees. These contractors, however, have no rights to use such information for purposes other than those described herein; and they are subject to the same restrictions as our employees. In the event that TGC merges with another company, transfers or sells substantially all of its assets or capital stock to a third party, all collected information would be included in the merger, transfer or sale and that company would be bound by these Terms and Conditions just as we are bound today.

If legally required to do so, we will disclose to a third party any information we have.

GAIN Ads contain the GAIN name and/or logo. . .

GAIN Ads contain the name ‘GAIN’ in the title bar and/or the GAIN logo in the advertisement. The GAIN brand is displayed to inform users that GAIN Ads come from TGC and are not associated, sponsored, or affiliated in any way with any other Web pages being viewed by users. The logo and/or GAIN name distinguishes GAIN Ads from all other advertisements.

How we display GAIN Ads

GAIN Ads will only be displayed on a computer’s screen or storage media if one or more GAIN-Supported Software programs reside on that computer. Many GAIN Ads are displayed on computer screens on behalf of advertisers who compete with the company whose Web pages the GAIN-Supported Software user may be viewing or may have recently viewed.

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TGC displays GAIN Ads on computer screens in a variety of ways. The GAIN Ad formats we may use include, among others, the following:

• Pop-Up Windows appear as windows on top of or beneath other windows on the computer screen.

• Pop-Up Slider Windows appear as floating images on top other windows on the computer screen.

http:/www.gatorcorporation.com/help/psdoes/advehicles.html, (see Attachment C) incorporated herein by reference, more fully describes some of these GAIN Ad formats.

How to Control the Display of GAIN Ads. . .

Some GAIN ad formats offer user preference settings that allow users to control some aspects of the display of GAIN Ads. These user preference settings may be found by clicking on the question mark (            ) box at the top right of the title bar of certain GAIN Ads.

How to Stop the Display of GAIN Ads

To stop GAIN Ads from being displayed one must remove all of the GAIN-Supported Software applications residing on the computer using the Add/Remove Programs menu in the Microsoft Windows control panel. Users can view a list of all GAIN-Supported Software on their computer, along with removal instructions, in a variety of locations including: (i) through the start, programs, GAIN, About GAIN menu entry (via a hypertext link), (ii) by clicking on the question (            ) box at the top right of the title bar of certain GAIN Ads, and (iii) via TGC’s web site at http://webpdp.gator.com/gain/32/about-gain-0l.html. (see Attachment A)

How the GAIN AdServer Works

When running on a computer, the GAIN AdServer regularly communicates with TGC servers, and in some cases, third party servers, among other reasons, to:

1. maintain/update the GAIN AdServer;

2. facilitate installing and removing the GAIN-Supported Software or the GAIN AdServer;

3. retrieve content and ads for display;

4. facilitate various GAIN AdServer features as contained in this Privacy Statement; and/or

5. collect anonymous computer user usage information.

http://www.gatorcorporation.com/help/psdocs/communications50.html (see Attachment D) incorporated herein by reference, provides more detail regarding communications between a computer and other computers arising from use of the GAIN AdServer.

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How we use cookies and web beacons?

The GAIN AdServer uses cookies for the following purposes:

• To identify the business associate that was responsible for introducing GAIN-Supported Software so that we can pay that business associate a fee which is why the software is available to users for free;

• To assist us in identifying users who have purchased a license to GAIN-Supported Software;

• To identify the GAIN-Supported Software on the computer; and/or

• To limit how often we display GAIN Ads.

In order to enable authorized third parties to display targeted ads and informational messages on our behalf, the GAIN AdServer may read cookie information that those third parties stored on the computer. That information may be sent to our servers so that we can include it in advertisement display requests that we send to those third parties. Please note that when any third party service providers, such as ad serving companies, set and access cookies at our request, they do so in accordance with their own privacy statements.

http://www.gatorcorporation.com/help/psdocs/thirdparties.html (see Attachment E) incorporated herein by reference, provides a list of any third parties who set and access cookies on the computer in order to facilitate a feature or service associated with GAIN-Supported Software. This list also includes links to their privacy statements.

Third party service providers that serve ads to Internet users, at our request, may use web beacons. Some GAIN Ads include “web beacons,” which allow third party service providers to access cookies on a computer to target ads and provide campaign analysis for their clients who use our services. Some third party service providers who access cookies in this way allow Internet users to opt-out of their use of these cookies.

http://www.gatorcorporation.com/help/psdocs/naisite.html, is a third party Web site that allows Internet users to inform some advertisers they wish to revoke the right of those advertisers to access cookies on a computer.

Some third parties offer visitors the opportunity to download TGC GAIN Supported Software from their Web sites. TGC hosts some of the Web pages for these third parties. We use web beacons on these pages to count the number of people who have viewed these pages so that we can pay the third parties for any downloads of TGC GAIN-Supported Software that originate from their Web sites.

How do we use optional surveys?

From time to time, we may display a GAIN branded pop-up advertisement from Feedback Research, a division of TGC, inviting users to join a survey panel or participate in a survey. A

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survey panel is a group of people that meet a certain criteria that are periodically asked for their opinions. Participation in a survey panel is completely voluntary and optional.

Eligibility for joining a panel or taking a survey may require a person to answer demographic ‘screening’ questions such as gender, age, employment status, income range, educational level, head of household, the number of people in their family, and/or whether they own or rent their home. Answers to these screening questions and/or to the Feedback Research survey questions are often stored on Feedback Research servers, and anonymous individual responses to these questions may be provided to our clients. Answers to both screening questions and survey questions may be associated with an Anonymous ID, but not with a user’s identity which remains unknown to Feedback Research and TGC.

Finally, Feedback Research may offer users the opportunity to provide an email address in order to enter a sweepstakes. The sole purpose of collecting this email is to contact them if they win. To ensure their privacy, any email address provided to Feedback Research for this reason are sent directly to a third party contractors’ servers to ensure they are stored separate from, and cannot be associated in any way with, Anonymous IDs or the answers to Feedback Research screening or survey questions.

Changes to our Privacy Statement and End User License Agreement

If these Terms and Conditions change in the future, we will not, collect, use, or store any personally identifiable information without first obtaining permission. As we issue subsequent revisions to these Terms and Conditions that do not involve personally identifiable information,, we will provide notice by displaying an online pop-up message. We will also continue to publish the current Terms and Conditions on our web site.

For support questions contact us at support@gatorcorporation.com. For specific questions regarding the specific terms of these Terms and Conditions, contact us at privacy@gatorcorporation.com.

End User License Agreement (“Agreement”)

Terms defined in the TGC Privacy Statement used in this Agreement will retain the definition provided in the TGC Privacy Statement. The GAIN AdServer, any Web sites owned and operated by us, and any content available therefore shall be collectively referred to as, Gator Supplied Materials.”

Ownership; All Users of This Computer Bound. You represent and warrant that you are the owner of the computer and that you have authorized the download and installation of the GAIN AdServer and GAIN-Supported Software, or that the owner of the computer has authorized you to do so. You agree, with respect to all other users of the computer that you have caused the GAIN AdServer and GAIN-Supported Software to reside, to (i) provide a copy of the TGC Privacy Statement and End User License Agreement; and (ii) to obtain their consent to same before allowing them to use the computer to view Web sites on the Internet.

Alternatively, if you have the legal right to accept this Agreement on behalf of one or more users of the computer that you have caused the GAIN AdServer and GAIN-Supported Software to

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reside, then you hereby accept this Agreement on behalf of all such^- other users. Also, you agree not to use the GAIN AdServer, or GAIN-Supported Software, in a manner prohibited by law, or in violation of any contractual provision by which you are bound. You agree to comply with all applicable laws, rules and regulations in your use of the GAIN AdServer and GAIN-Supported Software.

Access and Interference. You agree that you will not use, or encourage others to use, any unauthorized means for the removal of the GAIN AdServer, or any GAIN-Supported Software from a computer. For a list of authorized means for the removal of GAIN-Supported Software, view http://webpdp.gator.com/gain/32/about-gain-01.htm1. (see Attachment A) You also agree that you will not use, or encourage others to use, any robot, spider, other automatic or non-automatic manual device or process intended to interfere or attempt to interfere with the proper working of any Gator Supplied Materials, or third party GAIN-Supported Software. You agree not to use any means to avoid the display of any GAIN Ads while retaining the ability to use any GAIN-Supported Software other than purchasing a license to all GAIN Supported Software.

Voluntary Software and Right to Remove. You understand and agree that the presence of any GAIN-Supported Software on any computer is voluntary and that you may remove any of them from your computer at any time. To stop receiving GAIN Ads, every GAIN-Supported Software program residing on the computer must be removed or, alternatively, replaced with a paid version of that GAIN-Supported Software program. Users can view a list of all GAIN-Supported Software on their computer, along with instructions for its removal, in a variety of locations including: (i) through the start, programs, GAIN, About GAIN menu entry (via a hypertext link), (ii) by clicking on the question (            ) box at the top right of the. title bar of certain GAIN Ads, and (iii) via TGC’s web. site at http://webpdp.gator.com/gain/32/about-gain-01.html, (see Attachment A) incorporated herein by reference. To remove a GAIN Supported Software program from a computer, you must use the Microsoft Windows Add/Remove Programs menu in the Microsoft Windows Control Panel. Shortly after every GAIN Supported software program is removed, the GAIN AdServer will remove itself automatically.

Termination. These Terms and Conditions may be terminated at any time, by any user, by removing all GAIN-Supported Software from the computer using one or more of the above described removal methods and destroying any other copies of the GAIN AdServer and GAIN-Supported Software you may have made.

Links. Gator Supplied Materials and GAIN Ads that are displayed on a computer screen may contain links to web sites operated by other parties. These linked web sites are not under the control of TGC, and TGC is not responsible for the content available on any other Internet sites so linked. Unless otherwise stated, such links do not imply TGC’s endorsement of material on any other web site. Access to any other Internet sites linked as herein described is at the users own risk.

Unless otherwise set forth in a written agreement between you and TGC, in order to link to one or more of TGC’ s Web Site(s) you must adhere to TGC’s linking statement as follows: (i) any link to TGC’s Web Site must be a text only link clearly marked “TGC Web Site,” (ii) the appearance, position and other aspects of the link may not be such as to damage or dilute the goodwill associated with TGC’s names and trademarks, (iii) the link must “point” to the URL

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http://www.gatorcorporation.com/ (see Attachment F) and not to other pages within TGC Web Site, (iv) the appearance, position and other attributes of the link may not create the false appearance that your organization or entity is sponsored by, affiliated with, or associated with TGC, Inc., (v) when selected by a user, the link must display TGC Web Site on full-screen and not within a “frame” on the linking web site, and (vi) TGC reserves the right to revoke its consent to the link at any time and in its sole discretion.

Scope of License. TGC grants you a non-exclusive, limited license, pursuant to the terms hereof, to only (a) install and use the most current versions of GAIN AdServer solely for the purpose of accessing and using GAIN-Supported Software available through our Web site or servers, or the Web sites and servers of our business associates, and (b) use the GAIN AdServer in the ordinary manner for which the it was designed as provided in the user ‘Help’ screens, frequently asked questions, on TGC’s Web sites, or in other TGC supplied product usage documentation and only for your personal, non-commercial purposes.

License Restrictions. TGC may from time to time, either automatically or through other means, distribute an update to the GAIN AdServer and/or may replace the GAIN AdServer with newer versions thereof and/or otherwise modify or add to the GAIN AdServer. Your license to an existing version of the GAIN AdServer may, at TGC’s discretion, expire when new versions of the GAIN AdServer is released. When installed on your computer, the GAIN AdServer communicates with TGC or third party servers as described in TGC Privacy Statement. Additionally, TGC may require the update or automatic distribution of the GAIN AdServer on your computer when a new version of the GAIN AdServer is released to the general public, when new features are available, to display promotional offers, and/or to add new applications to the applications that comprise the GAIN AdServer. This update or new download may occur automatically or through other-means. You understand that TGC and/or one of our business associates may require your review and acceptance of TGC’s or their then current privacy statement and/or license agreement before you will be permitted a limited license to any subsequent versions of the GAIN AdServer. Notwithstanding the foregoing, TGC and its business associates have no obligation to make available to you any subsequent versions of the GAIN AdServer.

You may not access or use the GAIN AdServer other than through the graphical user interface provided with the GAIN AdServer, if any, and you are prohibited to access or cause the operation of the GAIN AdServer through the use of any type of high-volume, automated, or electronic processes. You may not distribute or copy (other than for backup purposes) the GAIN AdServer. You may not, and you agree not to attempt or allow others to attempt to, modify, reverse-engineer, decompile, disassemble, or otherwise discover the. GAIN AdServer or equivalents of the GAIN AdServer including but not limited to TGC’s technology and methodology for delivery of advertisements and the content of any and all of TGC’s communications and content stored on TGC’s servers, or to access or modify the GAIN AdServer’ s source code in any way. You do not have the right to create derivative works of the GAIN AdServer and any and all such modifications or enhancements to the GAIN AdServer are the sole property of TGC or its business associates. You further agree not to access TGC or TGC business associate services or software application by any means other than the interface provided by TGC or such business associate to access the relevant service. You acknowledge and agree that any and all communications between TGC and the GAIN AdServer and the

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content stored on TGC’s computer servers and in its software includes confidential information of TGC and you may not access, publish, transmit, display, create derivative works of, store, or otherwise exploit any such confidential information except as such functions are performed by the GAIN AdServer in the ordinary course of operation. Any use of a packet sniffer or other device to intercept or access communications between TGC and the GAIN AdServer is strictly prohibited. Without limiting TGC’s rights, you understand that TGC, in its discretion, may modify, discontinue, or suspend your right to access any of the GAIN AdServer at any time; provided, however, in the event that TGC makes such modification, discontinuance, or suspension of your right to access any of the GAIN AdServer, you may terminate your obligation to receive GAIN Ads, and this Agreement, by removing all GAIN Supported Software as provided hereunder.

TGC reserves all rights in the GAIN AdServer not expressly granted to you in this Agreement.

Other Restrictions. You may not rent, lend, assign, or lease the GAIN AdServer, but you may transfer your rights under these Terms and Conditions on a permanent basis provided (i) such transfer is permitted under your agreement with the publisher of the GAIN-Supported Software, (ii) you transfer all copies of the GAIN-Supported Software application and the GAIN AdServer and these Terms and Conditions; and (iii) the recipient agrees to be bound to these Terms and Conditions. Any transfer must include the most recent product upgrade. Prior to transferring the GAIN-Supported Software application and GAIN AdServer you must remove the GAIN-Supported Software application and GAIN AdServer to be transferred from your machine.

Ownership. You agree that the GAIN AdServer is licensed, not sold to you. You agree that the GAIN AdServer belongs to TGC, including all intellectual and proprietary rights, unless otherwise specified. TGC retains all right, title and interest in and to the GAIN AdServer at all times, and regardless of the form or media in or on which the original or other copies may subsequently exist. Additionally, all content accessed through the GAIN AdServer is the property of the applicable content owner and may be protected by applicable intellectual property laws. This Agreement gives you no rights to_. such content. Finally, any suggestions, ideas or inventions that you voluntarily and optionally disclose to us through any means will be used, or not used, by TGC at TGC’s sole discretion; and, TGC will have no obligation to you regarding any ideas or inventions that you disclose through such means.

Disclaimer of Warranty. USE OF Gator Supplied Materials IS AT YOUR OWN RISK. TGC PROVIDES Gator Supplied Materials ON AN “AS IS,” “WHERE IS,” BASIS WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, ACCURACY, OR NON-INFRINGEMENT. TGC ALSO DISCLAIMS ALL LIABILITY WITH REGARD TO YOUR’VIEWING OF ANY WEB SITES THAT MAY BE LINKED FROM ANY GATOR SUPPLIED MATERIALS. THIS DISCLAIMER OF WARRANTY CONSTITUTES AN ESSENTIAL PART OF THIS AGREEMENT. TGC MAKES NO WARRANTY THAT (i) THE Gator Supplied Materials ARE ACCURATE, TIMELY, UNINTERRUPTED OR ERROR-FREE; (ii) THE RESULTS THAT MAY BE OBTAINED FROM THE USE OF THE Gator Supplied Materials WILL BE RELIABLE; (iii) THE Gator Supplied Materials WILL IDENTIFY ANY IDENTITY THEFT, (iv) THE QUALITY OF ANY PRODUCTS OBTAINED

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OR PURCHASED THROUGH THE USE OF THE Gator Supplied Materials WILL MEET YOUR EXPECTATIONS; OR (v) ANY ERRORS IN THE Gator Supplied Materials WILL BE CORRECTED. The above exclusions may not apply in jurisdictions that do not allow the exclusion of certain implied warranties.

Limitation of Liability. IN NO EVENT WILL TGC, DISTRIBUTORS, DISTRIBUTEES, SUPPLIERS, MERCHANT BUSINESS ASSOCIATES, ADVERTISERS, THIRD PARTY DEVELOPERS OR DISTRIBUTORS OF GAINSUPPORTED SOFTWARE, OR ANY OF THE FOREGOING ENTITIES OFFICERS, DIRECTORS, EMPLOYEES, OR AGENT (COLLECTIVELY “Protected Parties”) BE LIABLE FOR. ANY INDIRECT DAMAGES, INCLUDING, BY WAY OF ILLUSTRATION AND NOT LIMITATION, LOST PROFITS, LOST BUSINESS OR LOST OPPORTUNITY, OR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL OR EXEMPLARY DAMAGES, INCLUDING LEGAL FEES, ARISING OUT OF TGC PRIVACY STATEMENT, END USER LICENSE AGREEMENT, OR YOUR USE OR INABILITY TO USE the GAIN AdServer, any GAIN-Supported Software, OR Gator Supplied Materials EVEN IF A Protected Party HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT WILL Protected Parties MAXIMUM CUMULATIVE LIABILITY UNDER THIS AGREEMENT, OR TGC PRIVACY STATEMENT, EXCEED THE LESSER OF $100 OR THE REVENUE ACTUALLY RECEIVED BY TGC DIRECTLY ATTRIBUTABLE TO THE GAIN AdServer.

Because some states or jurisdictions do not allow the exclusion or the limitation of liability for consequential or incidental damages, in such states or jurisdictions, Protected Parties liability shall be limited to the extent permitted by law.

No Protected Parties Liability. Protected Parties assume no liability hereunder . for, and. shall have no obligation to defend you or to pay costs, damages or attorneys’ fees for, any claim arising from: (i) any method or process in which GAIN-Supported Software or the GAIN AdServer may be used by you; (ii) any results of using GAIN-Supported Software or the GAIN AdServer; (iii) any use of other than a current unaltered release of the GAIN AdServer; or (iv) the combination, operation or use of any the GAIN AdServer furnished hereunder with other software programs, data or materials if such infringement would have been avoided by avoidance of the combination, operation, or use of the GAIN AdServer with other programs, data, or other materials.

Privacy Statement and Other Policies. You agree to be bound by and comply with the TGC Privacy Statement applicable to any GAIN-Supported Software, the privacy statements applicable to third party GAIN-Supported Software, and any other policies governing the use of Gator Supplied Materials for which, as appropriate, you have accepted via a click-thru agreement; or have been provided notice. Visit http://www.gatorcorporation.com/help/psdocs/thirdparties.html (see Attachment E) to view a list of any third parties, if any, who set and access cookies on your computer in order to facilitate a feature or service of the GAIN AdServer or TGC GAIN-Supported Software. This list will also include links to their privacy statements.

Export Controls. The GAIN AdServer, GAIN-Supported Software, and the underlying information and technology may not be downloaded or otherwise exported or re-exported (i) into

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(or to a national or resident of) Cuba, Iraq, Libya, Yugoslavia, North Korea, Iran, Sudan, Syria or any other country to which the U.S. has embargoed goods; or (ii) to anyone on the U.S. Treasury Department’s list of Specially Designated Nationals or the U.S. Commerce Department’s Table of Deny Orders. By downloading or using the GAIN AdServer or GAIN-Supported Software, you are agreeing to the foregoing and you represent and warrant that you are not located in, under the control of, or a national or resident of any such country or on any such list, and that you will otherwise comply with all applicable export control laws.

Applicable Law. The laws of the State of California will govern this Agreement, without reference to conflicts of law principles. The parties hereby submit to the jurisdiction of, and waive any venue objections against, the state and federal courts in Santa Clara or San Mateo County, California. The United Nations Convention on Contracts for the Sale of Goods does not apply to this Agreement.

Arbitration. Any claim or controversy arising out of or related to these Terms and Conditions, the GAIN AdServer, Gator Supplied Materials, or any GAIN-Supported Software shall be settled by binding arbitration in accordance with the rules of the American Arbitration Association. Any such claim or controversy shall be arbitrated on an individual basis and shall not be consolidated with a claim of any other party. The foregoing shall not preclude TGC from seeking any injunctive relief in State or Federal courts for protection of TGC’s intellectual property rights.

Successor Agreements. These Terms and Conditions may change in the future. In such case, and when appropriate, TGC will obtain your consent prior to the new document going into effect.

In most cases, TGC will provide you with an on-line pop-up window notice informing you that changes have been made to the documents and will provide you either with an active link, or inactive URL address, that you can use to view a web page containing the revised documents (or leading you to the appropriate documents). TGC will always post its most recent Privacy Statement and End User License Agreement on TGC’s web site that can be accessed at http://www.gatorcorporation.com/help/psdocs/privacy-help.html.

You agree that after receipt of such change notice, you consent to TGC’s revised Terms and Conditions unless you remove all GAIN-Supported Software from your computer, and destroy all copies of same you may have created. Failure to remove and destroy all GAIN-Supported Software from your computer will be deemed an acceptance of the terms of TGC’s most current Terms and Conditions for which you have given your consent, or for which you have been given notice, as appropriate. Except as provided in this section, these Terms and Conditions may not be revised except in writing signed by all relevant parties.

U.S. Government Restricted Rights. Licensed Materials are provided with Restricted Rights. Use, duplication, or disclosure by the United States Government is subject to restrictions set forth in subparagraph (c)(1)(ii) of The Rights in Technical Data and Computer Software clause at DFARS 252.227-7013 or subparagraphs (c)(1) and (2) of the Commercial Computer Software-Restricted Rights at 48 C.F.R. 52.227-19, as applicable.

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General. These Terms and Conditions, as modified from time to time as described above, and including the policies incorporated by reference, sets forth the entire understanding and agreement between you and TGC with respect to the subject matter hereof. If any provision or provisions hereof shall be held to be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not be in any way affected or impaired thereby. TGC shall not be liable for any delay or failure in performance under this Agreement or interruption of service resulting from acts of God, civil or military authority, war, labor disputes, materials provided by third parties, or any cause beyond the reasonable control of TGC. Except as described herein, you may not assign this Agreement without our explicit consent.

Effective: September 2003

Gator and GAIN are registered service marks of The Gator Corporation. TGC, Gator eWallet, Offer Companion, Precision Time, Date Manager and WeatherScope are marks of The Gator Corporation. The use of the mark Gator, alone, is strictly prohibited.

Microsoft Windows is either a registered trademark or a trademark of Microsoft Corporation in the United States. and/or other countries.

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Attachment A

To determine which GAIN-Supported applications are on this computer:

1. Click on the Windows Start button, select Programs, GAIN, and then About GAIN.

2. When the About GAIN screen opens, click on the link titled, “supported product or service”.

3. A screen will appear that will tell you what GAIN-Supported Software are installed on this computer.

If you decide you don’t want GAIN-Supported Software, you can easily remove them through the Add/Remove Programs menu in your Microsoft^® Windows^® control panel.

If you decide you don’t want GAIN supported applications, you can easily remove them through the Add/Remove Programs menu in your Microsoft^® Windows^® control panel.

Instructions on uninstalling GAIN Supported Software are provided below.

1. Click on the Microsoft^® Windows^® Start button, select Settings and then Control Panel.

2. When the Control Panel window opens, double-click on the Add/Remove Programs icon.

3. When the Add/Remove Programs Properties window opens, locate the program that you would like to un-install from the list of installed programs. (If you are uncertain which programs to uninstall, all of the GAIN Supported Software that we can detect on your computer is in the previous screen.)

4. Click once on the program to be uninstalled and then click on the Add/Remove button.

If you don’t find “GAIN” through the Start Menu then you don’t have any GAIN-Supported Software.

If no GAIN-Supported Software are listed then the installation may be in progress. Complete installation can take up to 20 minutes or more of online time. Repeat the above process after sufficient time has elapsed to see whether GAIN-Supported Software is on this computer.

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Data use - Attachment B

We don’t know who you are

We use the information we collect to select a small number of ads, relative to the total ads we have available, to increase the likelihood that you may find them interesting and to make sure that we don’t bother the users of the computer with the majority of the available ads that we don’t think would be of interest to them For example, if a user visits a recipe site we might display a special offer or advertisement for cookware. Depending on which services and applications are used, as well as user preferences, these special offers and. advertisements will be displayed using pop-up windows that float over the web pages viewed.

While we don’t know who a computer’s users are, the GAIN AdServer does collect and use certain information as described below. We associate such information with a particular computer through an Anonymous ID randomly generated by the technology. Some information that the GAIN AdServer may collect, use, and associate with an Anonymous ID includes:

• Some web pages your computer views and how much time is spent at those sites: This includes information about some of the web pages viewed, such as a page’s web address, how long it is viewed, site entry and exit patterns, what categories of information are viewed, and whether products were purchased online. We store this information on our servers, in an anonymous profile, and use it to help determine the computer users’ interests so that we can select the appropriate ads to display to the computer’s screen.

• Response to the ads we display: Information about the history of various special offers and advertising delivered by the GAIN AdServer, and the various responses to them, are stored on our servers and associated with the computer’s Anonymous ID. We use this information to improve the relevancy of the advertising we display to the computer’s screen and limit the number of times we may show the same advertisement.

• Standard web log information (but not IP Addresses) and system settings: Such as operating system type and version, browser types and versions, various system related information (such as screen resolution, time zone selected, etc.), which GAIN-Supported Software and rich media apps are installed and their version numbers, proxy server information (if one is used). We use this information to optimize how the GAIN AdServer and TGC GAIN-Supported Software operate and how ads are displayed to the computer’s screen.

• What software is on the host computer: Information about software installed on the host computer may be accessed and stored on our servers. We. may identify the existence or non-existence of certain software titles on the computer (including GAIN-Supported Software), as well as their version numbers, so that we can offer new software that does not currently reside on the computer, or to offer upgrades to the software that does currently reside on the computer. We may also utilize this information to determine whether the users’ of the computer are in

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compliance with The Gator Corporation Privacy Statement and End User License Agreement.

• Non-personally identifiable information on Web pages: In order to maximize the relevancy of advertisements that we display to the computer screen, non-personally identifiable information may be collected, sent to, and stored on our servers.

• TGC GAIN-Supported Software usage characteristics and preferences: Usage characteristics and preferences, such as the location where an ad appears on the screen, or whether there is a delay before the ad is displayed, are sent to The Gator Corporation servers and associated with the computer’s Anonymous ID.

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Distribution - Attachment C

We deliver advertisements in a variety of ways including:

• Pop-Up Windows appear as windows on top of or beneath other windows on the computer screen. Mouse over image to view full size

• Pop-Up Slider Windows appear as floating images on top of other windows on the computer screen. Mouse over image to view full size

• Embedded Ads are displayed within some GAIN-Supported Software applications. Mouse over image to view full size Click here to see a demonstration of our current ad vehicles

GAIN Ads contain the GAIN name. and/or. Many GAIN Ads that we display to consumers are on behalf of advertisers who compete with the company whose web page the consumer may be viewing. GAIN Ads bear the GAIN brand to, among other reasons, make clear that GAIN ads and our advertisers and their products or services are not associated with, sponsored, or endorsed by the company whose web page you may be viewing.

The ? on GAIN Ads. Some GAIN ad vehicles have a ? in the top or bottom right hand corner. Clicking on the ? provides:

• More information about GAIN ads.

• Access to a list of the GAIN supported software on that computer.

• Access to a control panel that allows you to change the frequency of some GAIN pop up ads. See demo for more information.

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Communications - Attachment D

Client-Server Communications

This is an overview of the communications that may take place between your computer running TGC GAIN-Supported Software and any servers. Generally, TGC GAIN-Supported Software on your computer communicate with servers to enable certain end-user features (like filling forms with one-click), to keep your TGC GAIN-Supported Software up to date, and to deliver relevant advertisements and information.

Communications may take place for any of the following four reasons. Any other suspected communications you may see (observed via firewall monitoring, packet sniffing, etc.) do not originate from TGC GAIN-Supported Software.

1. To maintain/update TGC GAIN-Supported Software

The GAIN AdServer periodically contacts The Gator Corporation servers in order to determine if there’s a newer version of TGC GAIN-Supported Software available. This occurs about once every 24 hours. To be as polite as possible, computers with a persistent Internet connection may attempt this communication in the middle of the night. The point is to not negatively impact your bandwidth utilization. If a newer version is available, the server replies with the address of the required patch. The GAIN AdServer then retrieves the patch and updates itself. If the connect request times out, the GAIN AdServer will retry many times, using an exponential backoff delay. Only TGC servers are involved in the transaction. The GAIN AdServer also periodically contacts the TGC servers to provide diagnostic information to ensure the proper operation of GAIN-Supported Software and/or the GAIN AdServer software. If problems are found, they may be corrected automatically.

2. To facilitate installing and uninstalling software

To streamline the download and installation of software that users have accepted from TGC, we may slowly download the required installation* files in the background prior to starting the installation process. In all cases you are asked before any software applications are installed. When such a background download is used, a small executable file is installed on the machine and launched after you have agreed to the appropriate legal documents. The GAIN AdServer will transfer the necessary files in 100 byte pieces in the background. The point is to not negatively impact your bandwidth utilization. Depending on the connection type and available bandwidth, this process can take from minutes to days to complete. For example, a client machine on a T1 or using DSL will trickle down the remaining software in minutes. A client machine that uses a slow dial-up connection and is only online for a small amount of time each day may result in the application being trickled. down over a couple of weeks. Only TGC servers are involved. Data is sent to TGC servers each time software is installed or uninstalled. When software is installed; or uninstalled, a small amount of data (about 100 bytes) is sent to TGC servers.

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3. To retrieve content and ads for display

About once every 24 hours the GAIN AdServer will retrieve a list of the currently available ads and related rules from TGC servers. If the GAIN AdServer identifies an interest of one or more users of the computer, it will retrieve an ad relevant to that interest from TGC servers, and at an appropriate time, will be displayed to the computer screen.

4. To collect anonymous usage information we collect the following types of behavioral information:

a. information about some of the web pages viewed (such as the domain, and. the number of pages viewed), and

b. information about which of our ads were displayed and whether a user interacted with them or not.

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Third Parties - Attachment E

Third parties who set and access cookies on your computer in order to facilitate a feature or service of GAIN-Supported Software:

At this time, there are no third parties who set and access cookies on your computer in order to facilitate a feature or service of GAIN-Supported Software.

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The Gator Corporation - Attachment F

The Gator Corporation is the leader in online marketing. The Gator Corporation has a unique permission-based relationship with over 30 million users, growing at the rate of a million new users per month. Gator enables consumers to download and use some of the Web’s most popular software applications — for free. In return, consumers agree to receive targeted promotions/ads from Gator advertisers.

Direct and Brand Marketing Success

Whether you are an advertiser, direct marketer or researcher, Gator can reach your target audience through:

• Demographic and lifestyle profiles

• Delivering your message to consumers viewing any site on the Web, at any time.

• Delivery of customized offers to consumers based on past behavior.

Gator provides targeted promotions and advertisements for over 400 companies (including 60 Fortune 500 companies and 80 advertising agencies), driving extraordinary ROI. Gator campaigns often reach double-digit click and conversion rates - up to 20 to 40 times higher than traditional banner ads.

Gator has the ability to anonymously monitor user behavior throughout their Web travels without ever collecting personally identifiable information. To review our Privacy Statement, click here. Through this permission-based relationship, Gator has incredible insights into user behavior, and thus can deliver targeted, relevant ads

To learn more about Gator Advertising and how it works, click here.

Real-Time Research

The Gator Corporation also provides insightful, cost-effective, and unbiased marketing research through their Feedback Research division. Feedback Research can conduct surveys and provide database analysis on our users’ behavior based on the Web sites they view. To learn more about our marketing research capabilities, click here.

Making the Web easier for users

The Gator Corporation produces and distributes some of the Web’s most popular applications.

Gator eWallet, the world’s most popular digital wallet, was our first application. Other current Gator Corporation applications that are available now include:

Precision TimeSM - automatically syncs your computer clock to the U.S. Atomic Clock

Date Manager - allows you to quickly view a 2 month calendar and set reminders

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EX-10.21

Exhibit 10.21

CONSULTING AGREEMENT

This Consulting Agreement (the “Agreement”) is entered into by and between The Gator Corporation (the “Company”) and John Giuliani (“Consultant”).

1. Consulting Relationship. During the term of this agreement, Consultant will provide consulting services (the “Services”) to the Company as described on Exhibit A attached to this Agreement. Consultant shall use Consultant’s best efforts to perform the Services in a manner satisfactory to the Company.

2. Fees. As consideration for the Services to be provided by Consultant and other obligations, the Company will compensate Consultant with grants of fully vested stock options, not to exceed eighteen thousand (18,000) shares. The stock options will be issued on a quarterly basis, with an exercise price equal to the lesser of $0.40 per share or the then fair market price as determined by the board of directors, for work preformed in the previous quarter. The scheduled stock option grants will only be issued while this Agreement is in effect. The timing of the grants is described in Exhibit B to this Agreement.

3. Expenses. Consultant shall not be authorized to incur on behalf of the Company any expenses, with the exception of travel related expenses, without the prior written consent of either Jeff McFadden, President, Scott Eagle, SVP Marketing, Scott VanDeVelde, VP Sales, Mitch Weisman, VP Business Development and, Dennis Jang, Director of Finance (the “Management Team”). As a condition to receipt of reimbursement, Consultant shall be required to submit to the Company reasonable evidence that the amount involved was expended and related to Services provided under this Agreement.

4. Term and Termination. Consultant shall serve as a consultant to the Company for a period commencing on July 1, 2001 to June 30, 2002, OR the earlier of the date on which Consultant ceases to provide services to the Company under this Agreement. Either party may terminate this Agreement at any time upon five (10) days’ written notice.

5. Independent Contractor. Consultant’s relationship with the Company will be that of an independent contractor and not that of an employee. Consultant will not be eligible for any employee benefits, nor will the Company make deductions from payments made to Consultant for taxes, all of which will be Consultant’s responsibility. Consultant agrees to indemnify and hold the Company harmless from any liability for, or assessment of, any such taxes imposed on the Company by relevant taxing authorities. Consultant will have no authority to enter into contracts that bind the Company or create obligations on the part of the Company without the prior written authorization of the Company.

6. Supervision of Consultant’s Services. All services to be performed by Consultant, including but not limited to the Services, will be as agreed between Consultant and the Company’s members of the Company’s Management Team. Consultant will be required to report to members of the Management Team concerning the Services performed under this

Agreement. The nature and frequency of these reports will be left to the discretion of the members of the Management Team.

7. Consulting or Other Services for Competitors. Consultant represents and warrants that Consultant will not, during the term of this Agreement, perform any consulting or other services for any company, person or entity whose business or proposed business in any way involves products or services which could reasonably be determined to be competitive with the products or services or proposed products or services of the Company.

8. Confidentiality Agreement. Consultant shall sign, or has signed, a Confidential Information and Invention Assignment Agreement substantially in the form attached to this Agreement as Exhibit C (the “Confidentiality Agreement”), prior to or on the date on which Consultant’s consulting relationship with the Company commences. In the event that Consultant is an entity or otherwise will be causing individuals in its employ or under its supervision to participate in the rendering of the Services, Consultant warrants that it shall cause each of such individuals to execute a Confidentiality Agreement in the form attached as Exhibit C.

9. Conflicts with this Agreement. Consultant represents and warrants that neither Consultant nor any of Consultant’s partners, employees or agents is under any pre-existing obligation in conflict or in any way inconsistent with the provisions of this Agreement. Consultant warrants that Consultant has the right to disclose or use all ideas, processes, techniques and other information, if any, which Consultant has gained from third parties, and which Consultant discloses to the Company in the course of performance of this Agreement, without liability to such third parties. Consultant represents and warrants that Consultant has not granted any rights or licenses to any intellectual property or technology that would conflict with Consultant’s obligations under this Agreement. Consultant will not knowingly infringe upon any copyright, patent, trade secret or other property right of any former client, employer or third party in the performance of the services required by this Agreement.

10. Miscellaneous.

(a) Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the parties.

(b) Sole Agreement. This Agreement, including the Exhibits hereto, constitutes the sole agreement of the parties and supersedes all oral negotiations and prior writings with respect to the subject matter hereof.

(c) Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or forty-eight (48) hours after being deposited in the regular mail as certified or registered mall (airmail if sent internationally) with postage prepaid, if such notice is addressed to the party to be notified at such party’s address or facsimile number as set forth below, or as subsequently modified by written notice.

(d) Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflict of laws.

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(e) 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.

(f) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

(g) Arbitration. Any dispute or claim arising out of or in connection with any provision of this Agreement, excluding Section 7 hereof, will be finally settled by binding arbitration Redwood City, California in accordance with the rules of the American Arbitration Association by one arbitrator appointed in accordance with said rules. The arbitrator shall apply California law, without reference to rules of conflicts of law or rules of statutory arbitration, to the resolution of any dispute. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, or to compel arbitration in accordance with this paragraph, without breach of this arbitration provision. This Section 10(g) shall not apply to the Confidentiality Agreement.

(h) Advice of Counsel. EACH PARTY ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

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The parties have executed this Agreement on the respective dates set forth below.

Gator.com Corporation
By:
	Jeff McFadden

Title: President & Chief Executive Officer
Address:	2000 Bridge Parkway, # 100 Redwood City, CA 94065

Date:

John Giuliani

/s/ John Giuliani

Address:

Date:

SS or Fed. ID #:

SIGNATURE PAGE TO THE GATOR CORPORATION, CONSULTING AGREEMENT

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EXHIBIT A

DESCRIPTION OF CONSULTING SERVICES

Description of Services	Schedule/Deadline
1. TBD by Jeff McFadden	July 1, 2001 – June 30, 2002

EXHIBIT B

COMPENSATION

STOCK OPTION GRANT SCHEDULE

Grant Date	Number of Shares	Type of Grant
October 1, 2001	4,500	Fully Vested Option
January 1, 2002	4,500	Fully Vested Option
April 1, 2002	4,500	Fully Vested Option
July 1, 2002	4,500	Fully Vested Option
Total	18,000

EX-10.22

Exhibit 10.22

GENERAL TERMS AGREEMENT

between

Avenue A, Inc. and The Gator Corporation

This Agreement (“Agreement”) is effective as of 5/29/02, is made by Avenue A Agency a Seattle Division of Avenue A, Inc., a Washington Corporation having its principal place of business at 506 Second Avenue, Seattle, WA and Avenue A/NYC, a New York Division of Avenue, Inc., a Washington Corporation having its principal place of business at 487 Greenwich Street, Fifth Floor, New York, NY 10013, (collectively, “Avenue A”), on behalf of Avenue A’s clients (“Advertisers”), and The Gator Corporation, a Delaware corporation having its principal place of business at 2000 Bridge Parkway, Suite 100, Redwood City, CA 94065 (“Supplier”). For purposes of this Agreement, Supplier’s authorized representative will be Scott VanDeVelde. Any legal notices required under this Agreement should also be directed to Supplier’s legal counsel, Scott Primak, at sprimak@gator.com. This Agreement governs advertising delivered through Supplier’s advertising vehicles, including those described at http://www.gator.com/advertise/vehicles.html (“AdVehicle(s)”). Avenue A and Supplier agree as follows:

RECITALS

A. Avenue A plans advertising campaigns and buys advertising media in respect to its clients.

B. Supplier sells certain advertising products and services that it is willing to make available in support of Avenue A’s clients’ advertising campaigns.

C. Supplier desires to sell and Avenue A desires to purchase certain of Supplier’s products and services in accordance with the terms set forth in this Agreement.

NOW THEREFORE, in consideration of the mutual covenants set forth herein, the parties agree as follows:

AGREEMENT

Section 1. Term and Termination. The term of this Agreement shall run concurrent with the term of any Order (defined below). Either party may terminate any Order, at any time, by providing notice to the other party’s authorized representative

Section 2. Order, Delivery, and Adjustments

2.1 RELATIONSHIP. From time to time, the parties may negotiate the terms of Orders under which Supplier will deliver advertisements (“Ads”) for advertising campaigns through its AdVehicle(s) for the benefit of Advertisers.

2.2 ORDERS. An (“Order”) means an insertion order that is submitted by Avenue A and is accepted by Supplier, or a proposal that is submitted by Supplier in response to a request for proposal and its accepted by Avenue A. Each Order shall specify at the placement level: (a) the type(s) of inventory to be delivered (e.g., impressions, clicks, or other desired actions); (b) the price(s) for such inventory; and (c) the maximum amount of money that Avenue A will be liable under the Order (“Total Spend”). Using such factors, the parties can calculate; (d) the rate that Ads must be delivered to ensure uniform delivery of Ads over the time remaining in each month of the campaign (“Target Rate”); (e) the amount of inventory to be delivered for each calendar month of the campaign (“Approved Monthly Delivery”); and (f) the amount of money that Avenue A will be liable for any calendar month of the Order (“Approved Monthly Spend”).

2.3 SUPPLIER’S DELIVERY. Supplier shall ensure its delivery of Ads (“Delivery”) is at a rate that is within 10% of the Target Rate. Supplier’s over-delivery of Ads shall not relieve Supplier of such obligation, nor obligate Avenue A to pay more than the Total Spend. In any event, Supplier is still obligated to deliver evenly, or at the most recent Target Rate communicated by Avenue A.

2.4 ADJUSTMENTS TO ORDERS.

2.4.1  BY AGREEMENT. The parties may make adjustment to Orders, via revised insertion orders, as that term is generally understood in the industry, when signed by both parties or when accepted via e-mail. These adjustments may include modifications to Orders such as changes in the price at the placement level, changes in the inventory desired at the placement level, or changes in the contracted amount at the placement level. Avenue A shall monitor and provide twice-weekly reports via e-mail (“Delivery Reports”) regarding Supplier’s Delivery. The Delivery Report will provide delivery information and from time to time may contain an adjustment of Orders by Avenue A. Adjustments to Orders may be requested by Avenue A and adjustments shall be effective upon Supplier’s acceptance. Examples of adjustments to Orders might include adjustments such as changes to dates, placements, and costs. These adjustments to Orders shall be effective upon Avenue A’s receipt of Supplier’s acceptance of the change, when signed by both parties or when accepted via e-mail.

2.4.2  AUTOMATIC. If Supplier’s Delivery deviates by more than 10% from the Target Rate, the Target Rate shall be automatically increased or decreased, as required to ensure uniform delivery of Ads over the remainder of the applicable calendar month, and the Delivery Reports shall show such changes.

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2.5 UNDERDELIVERY. If in at least 3 consecutive Delivery Reports, the Target Rate has increased as described in Section 2.4.2, due to under-delivery, Avenue A shall have the right to decrease the Approved Monthly Spend for the current month, as well as for all remaining calendar months in the campaign, to an amount that would result from Supplier’s current actual rate of Delivery. Avenue A shall communicate such decrease by showing it in the next Delivery Report. The decrease to the Approved Monthly Spend(s), and a corresponding decrease to the Total Spend, shall be effective as of the date of the request by Avenue A in the Delivery Report.

Section 3. Invoicing and Payment. Within 45 days after the last day of each calendar month for a specific campaign, Avenue A will pay Supplier for Ads actually delivered by Supplier during the applicable calendar month, subject to the applicable Order’s specifications, terms and conditions. Supplier shall ensure that invoices display Advertiser’s name, Buy Authorization number, and the time period being billed. Supplier shall send separate invoices for deliveries falling within different calendar months. Invoices shall be based on actual delivery amounts, not contracted numbers. All invoices received by Avenue A will be considered final and correct after 45 days of receipt unless Avenue A disputes the accuracy of an invoice. If Avenue A disputes an invoice, Avenue A shall pay the part of the invoice that is undisputed. The disputed part of the invoice shall be negotiated between the parties until agreement reached and Avenue A shall then pay the agreed upon price of the disputed amount. Further, any invoices not submitted to Avenue A within 5 months from the last day of the calendar month for the specific campaign shall become void, and Avenue A’s obligation to pay such invoice shall be extinguished. Supplier acknowledges that Avenue A bills its Advertisers, and pays its Suppliers, based on actual delivery. Supplier shall deliver invoices to: Media Accounts Payable, Avenue A, 506 Second Avenue, Seattle, WA 98104; or Accounts Payable, Avenue A/NYC, 487 Greenwich Street, Fifth Floor, New York, NY 10013, depending on the firm with which Supplier originally contracted. Supplier’s delivery of the first Ad as Specified in an Order shall be deemed Supplier’s acceptance of the Order’s specifications, terms and conditions, including payment rates.

Section 4. Ad Serving Counts. All paid links shall be delivered through Supplier’s unique gateway and shall be recorded by Avenue A’s server. Supplier’s click-throughs of any link other than Avenue A’s Ads, or use of any other means of artificially enhancing click results shall be a material breach of this Agreement and upon such occurrence. Avenue A may terminate this Agreement effective upon delivery of notice. Such termination is at the sole discretion of Avenue A and is not in lieu of any other remedy available at law or equity. Avenue A’s ad server will be the official counter for determining the number of Ads delivered under an applicable Order, and amounts payable under this Agreement. If a discrepancy exists in the count between the Supplier’s and Avenue A’s ad servers. Supplier shall contact Avenue A promptly so that the parties may negotiate in good faith a resolution to the discrepancy.

Section 5. Campaign Discontinuance. Either party has the option, in its sole discretion, to discontinue any Ad campaign or obligation under an Order, without cause, by giving 14 days notice via e-mail, telephone or fax to the party’s authorized representative. If Avenue A elects to discontinue any Ad campaign or obligation under any Order, all unfulfilled contractual

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commitments subsequent to the 14-day notice period shall become null and void, and Avenue A shall pay Supplier only for Ads delivered through the end of the 14-day notice period so long as such Ads are delivered evenly, or at a rate consistent with the original Target Rate specified in the first Delivery Report. Avenue A shall have no obligation to pay for Ads delivered by Supplier during the 14-day notice period that exceed the number specified in the original order or that fail to meet the original Target Rate for the remaining days within campaign following discontinuance.

Section 6. Unacceptable Sites. Supplier acknowledges that Avenue A shall not accept AdVehicles that contain: obscene or pornographic images or links; libelous material; or hate speech (collectively “Undesirable Content”). Supplier warrants that, during the term of this Agreement, its AdVehicle(s) shall not contain Undesirable Content. If Avenue A determines that Supplier’s AdVehicles) include any Undesirable Content, Avenue A may discontinue the Ad campaign upon notice, and Supplier shall immediately cease delivering such AdVehicle(s). In no event, will Avenue A or is Advertisers be obligated to pay for delivery of AdVehicle(s) containing Undesirable Content after Supplier’s receipt of such notice from Avenue A.

Section 7. Linking and Trafficking Guidelines. Prior to running the first Ad specified in an Order, Avenue A shall provide Supplier with linking instructions, URL, banner, and alternative text for the Ad (“Advertising Material”). Avenue A may make changes to any such Advertising Material upon 48 hours notice, via e-mail, telephone or fax. Supplier shall process such changes so as to deliver the Ads correctly, clearly, and at the times and frequencies specified by Avenue A. In the event Supplier fails to run the Ads properly, Avenue A may require appropriate delivery of additional Ads and/or a proportional reduction in amounts payable.

Section 8. Delivery of Ads. Avenue A shall provide all Advertising Material to Supplier via servers at Avenue A. Avenue A shall issue Orders to Supplier, and shall provide Supplier with appropriate linking instructions to the Avenue A ad servers (“AXIS”), Supplier shall obtain the Advertising Materials from AXIS at the time of delivery of each Ad. If Supplier is unable to obtain the Advertising Materials from AXIS on a consistent basis, Supplier shall cease delivering Ads and shall contact Avenue A promptly, but in no event more than 24 hours after the problem first occurred. Supplier shall not resume Ad delivery until Avenue A directs Supplier to do so. In the event of a persistent outage of AXIS, Avenue A may, at its option, provide Supplier with the Advertising Materials directly, and may direct Supplier to serve the Advertising Materials from its servers.

Section 9. License. Neither party shall use the trade names or trademarks of the other party or Advertisers without prior written approval from the party owning such name or mark. Avenue A hereby grants to Supplier a nonexclusive license to display the Advertising Materials, during the term of and solely for the purpose of this Agreement. Advertisers shall retain complete ownership rights to all materials they provide. Avenue A reserves the right to monitor the display of Ads published through AdVehicle(s). If Avenue A sends Supplier a request to remove any Ad from Supplier’s AdVehicle(s), Supplier agrees to do so within three business days after receiving Avenue A’s request.

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Section 10. Privacy.

10.1 PRIVACY POLICY. Each party shall include conspicuously on its website, a privacy policy that describes how such party collects, uses, stores and discloses users’ personal data if any is collected, including e-mail addresses, and instructs users how to opt-out of such practices. Supplier’s applicable privacy policy shall disclose that third party advertisers may place cookies on the browsers of Supplier’s users. Each party shall also include on its website a link to http://www.networkadvertising.org/optout_nonppii.asp.

10.2 E-MAIL. When specified in an Order, Suppler shall deliver e-mail products on behalf of Avenue A’s Advertisers. In each such case, Supplier shall: (a) use commercially reasonable efforts to determine the residents country of the user corresponding to such e-mail address (the “User Residence Country”) (i.e., by asking the user to identify his/her residence country at the time the e-mail address is collected); and (b) notify Avenue A of the User Residence Country of each e-mail address, prior to sending such e-mail messages. Supplier warrants that it shall comply with all applicable laws and regulations of the User Residence Country for each such e-mail address, including but not limited to laws governing advertising, privacy, and data protection. Where the User Residence Country is the United States, Supplier shall ensure that the e-mail addresses are collected on an opt-in basis. Every e-mail message sent pursuant to this Agreement shall include an opportunity for the e-mail addressee to opt-out of the receipt of e-mail messages from Supplier, and instructions how to do so.

Section 11. Confidentiality. Avenue A shall disclose to Supplier the names of Avenue A’s Advertisers (“Client List”), Supplier agrees that it shall use the information contained in the Client List solely for its performance under this Agreement. Supplier further agrees that it will not disclose to any third party the existence or nature of Avenue A’s relationship with any Advertisers included in the Client List. Supplier’s obligations under this paragraph, with respect to any Order, shall continue for 1 year following the date of termination of that Order.

Section 12. Representations and Warranties. Each party warrants to the other that, during the term of this Agreement, it shall comply with all applicable laws and regulations (including but not limited to laws governing privacy, and data protection). Avenue A represents and warrants to Supplier that Avenue A has the right to publish the content contained in the Ads and that such Ads shall not infringe the intellectual property rights of any third parties.

Section 13. Limitation of Liability. IN NO EVENT SHALL SUPPLIER BE LIABLE TO AVENUE A, AVENUE A’S ADVERTISER, OR ANY OTHER PERSON—NOR SHALL AVENUE A BE LIABLE TO SUPPLIER—FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, INCLUDING LOSS OF PROFIT OR GOODWILL, FOR ANY MATTER ARISING OUT OF OR RELATING TO ANY ORDER OR ITS SUBJECT MATTER, WHETHER SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT, TORT OR OTHERWISE EVEN IF THE ALLEGED WRONG DOER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. IN ANY CASE, EITHER PARTY’S MAXIMUM CUMULATIVE LIABILITY TO ANY OTHER PARTY, AND THOSE PARTIES EXCLUSIVE REMEDY. FOR ANY CLAIMS ARISING OUT OF OR RELATED TO ANY ORDER WILL BE LIMITED TO THE AMOUNT ACTUALLY PAID BY

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AVENUE A TO SUPPLIER PURSUANT TO THE ORDER(S) GIVING RISE TO THE CLAIM(S).

Section 14. Audits. Each party shall have the right, upon thirty days’ prior written notice, to audit the other party’s records related to counts or delivery of media, and related to amounts payable under this Agreement during the immediately preceding 6-month period. In addition, the parties agree to a reciprocal relationship, where both parties retain and make available the count regarding the delivery of media to the other party upon request. Each audit may be conducted no more than once per 6-month period, during normal business hours, and in a manner that minimizes disruption to the audited party’s normal business activities. Upon reasonable request by the audited party, the persons conducting the audit shall execute an appropriate confidentiality agreement.

Section 15. Choice of Law, Venue. All claims and defenses arising out of this Agreement, or any Order, asserted by Avenue A against Supplier shall be construed and controlled by the laws of the State of California. All claims and defenses arising out of this Agreement, or any Order, asserted by Supplier against Avenue A shall be construed and controlled by the laws of Washington. If Avenue A initiates litigation arising out of this Agreement, or any Order, against Supplier, the parties consent to exclusive jurisdiction and venue in state and federal courts in Santa Clara or San Francisco County, California. If Supplier initiates litigation arising out of this Agreement against Avenue A, the parties consent to exclusive jurisdiction and venue in the federal courts sitting in King County, Washington.

Section 16. General. In the event of any inconsistency between an Order and this Agreement, the terms of the Order shall prevail. This Agreement shall bind and inure to the benefit of each of the party’s successors and permitted assigns. Neither party may transfer or assign its rights or delegate its obligations under this Agreement without the prior written consent of the other party; provided, however, that each party shall have the right to assign this Agreement and its obligations to an entity acquiring all or substantially all of the assets or equity of such party due to merger, acquisition, consolidation, or otherwise, so long as the assignee assumes all of the assigning party’s obligation’s under this Agreement and the other party is notified in writing in advance. This Agreement, together with all fully-executed Addenda, attachments and exhibits attached hereto, and all proper Orders, contains every obligation and understanding between the parties regarding the subject matter hereof, and merges and supersedes all prior and contemporaneous agreements and understandings, if any, regarding the subject manner hereof. No amendment to or modification of this Agreement will be binding unless in writing and signed by a duly authorized representative of both parties. If any provision herein is held to be unenforceable, the remaining provisions shall remain in full force and effect. All rights and remedies hereunder are cumulative.

SUPPLIER		AVENUE A, INC.
By	/s/ Scott VanDeVelde	By	/s/ Matthew Wood
Printed Name Scott VanDeVelde		Printed Name Matthew Wood
Title VP Sales		Title	Illegible

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EX-10.23

Exhibit 10.23

[CLARIA LETTERHEAD]

January 26, 2004

Richard Mora

Dear Richard:

On behalf of Claria Corporation (the “Company”), we are delighted to extend an offer to you to join the Company as Senior Vice President, Chief Financial Officer. The members of the Company’s management team are all very impressed with your credentials and we look forward to your future success in this position. The terms of your new position with the Company are as set forth below:

1.    Position.    As Senior Vice President, Chief Financial Officer, you will work out of the Company’s headquarters in Redwood City, CA, reporting to the President and CEO, Jeff McFadden.

2.    Start Date.    Subject to any conditions imposed by this letter agreement, you will commence your position with the company at a mutually agreed upon date but not later than February 10, 2004.

3.    Proof of Right to Work.    For purposes of Federal Immigration Law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.

4.    Compensation.

a.    Base Salary.    You will be paid a bi-weekly salary of $7,692.31 or $200,000 on an annualized basis. Your salary will be payable bi-weekly pursuant to the Company’s regular payroll policy.

b.    Bonus.    You will participate in the executive management bonus program. Your base annual incentive bonus target is $100,000. You have the opportunity to earn more or less than the target bonus based on the attainment of executive management team goals and individual goals as determined by the Company’s Board of Directors and President.

c.    Stock Options.    In connection with the commencement of your employment, the Company will recommend that the Board of Directors grant you an option to purchase 500,000 shares of the Company’s Common Stock (“Shares”) with an exercise price equal to the fair market value on the date of the grant. The grant will vest according to the Company’s standard vesting schedule (25% on the first anniversary of the vesting commencement date, which corresponds to your employment start date, with the balance vesting in equal monthly installments over the subsequent three years). In addition, in a separate agreement, the Company will provide you with certain acceleration of vesting benefits in conjunction with change of control.

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5.    Benefits.    You will be entitled to participate in the Company’s benefits plans. You will also be entitled to the Company’s vacation program, which is currently fifteen days vacation and ten paid holidays annually.

6.    Indemnity.    The Company maintains Directors’ and Officers’ Insurance. In addition, the Company’s bylaws permit it to indemnify its officers and directors to the fullest extent permitted under the Delaware General Corporation Law and to enter into indemnification contracts with its officers and directors. If the Board of Directors determines that it is in the best interests of the Company to enter into indemnification contracts with any of its offers or directors, as Chief Financial Officer, you will be entitled to such indemnification and the Company will enter into such an indemnification contract with you.

7.    Responsibilities.    You agree, to the best of your ability and experience, that you will at all times loyally and conscientiously perform all of the duties and obligations required of and from you pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company. During the term of your employment, you further agree that you will devote all of your business time and attention to the business of the Company. The Company will be entitled to all of the benefits and profits arising from or incident to all such work services and advice. You will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, that materially affects your ability to carry out your responsibilities as an employee of the Company, without the prior written consent of an officer of the Company, and you will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company. Nothing in this letter agreement will prevent you from accepting speaking or presentation engagements in exchange for honoraria, or from serving on boards of charitable organizations, or from owning no more than one percent (1%) of the outstanding equity securities of a corporation whose stock is listed on a national stock exchange.

8.    Confidential Information and Invention Assignment Agreement.    Your acceptance of this offer and commencement of employment with the Company is contingent upon the execution and return to an officer of the Company, of the Company’s Confidential Information and Invention Assignment Agreement, a copy of which is enclosed for your review and execution (the “Confidentiality Agreement”), prior to or on your Start Date.

9.    Confidentiality of Terms.    You agree to follow the Company’s policy that employees must not disclose, either directly or indirectly, any information, including any of the terms of this agreement, regarding salary, bonuses, or stock purchase or option allocations to any person, including other employees of the Company; provided, however, that you may discuss such terms with members of your immediate family and any legal, tax or accounting specialists who provide you with individual legal, tax or accounting advice.

10.    At-Will Employment.    Your employment with the Company will be on an “at will” basis, meaning that either you or the Company may terminate your employment at any time for any reason or no reason, without further obligation or liability except as defined in paragraph 4.B of this letter.

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We are all delighted to be able to extend you this offer and look forward to working with you. To indicate your acceptance of the Company’s offer, please sign and date this letter in the space provided below and return it to us, along with a signed and dated copy of the Confidentiality Agreement. This letter, together with the Confidentiality Agreement, set forth the terms of your employment with the Company and supersede any prior representations or agreements, whether written or oral. This letter may not be modified or amended except by a written agreement, signed by the Company and by you.

Very truly yours,
Claria Corporation
By:	/s/    Jeff McFadden
	Jeffrey A. McFadden
	President & CEO

ACCEPTED AND AGREED:

Richard Mora

/s/ Richard Mora

Signature

1/27/04

Date

1/27/04

Start Date

Start Date Accepted

/s/ RM

Employee Initial

/s/ JM

Company Initial

Enclosure: Confidential Information and Invention Assignment Agreement

Key Employee Retention Agreement

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EX-10.24

Exhibit 10.24

CLARIA CORPORATION

KEY EMPLOYEE RETENTION AGREEMENT

This Key Employee Retention Agreement (the “Agreement”) is made and entered into by and between Richard Mora (the “Employee”) and Claria Corporation, a Delaware corporation (the “Company”), effective as of [employee start date].

RECITALS

A. It is expected that the Company from time to time will consider the possibility of an acquisition by another company or other change of control. The Board of Directors of the Company (the “Board”) recognizes that such consideration can be a distraction to the Employee and can cause the Employee to consider alternative employment opportunities. The Board has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication and objectivity of the Employee, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined in Section 5 below) of the Company.

B. The Board believes that it is in the best interests of the Company and its stockholders to provide the Employee with an incentive to continue his or her employment and to motivate the Employee to maximize the value of the Company upon Change of Control for the benefit of its stockholders.

C. The Board believes that it is imperative to provide the Employee with certain benefits upon a Change of Control that provide the Employee with enhanced financial security and incentive and encouragement to the Employee to remain with the Company notwithstanding the possibility of a Change of Control.

D. Certain capitalized terms used in the Agreement are defined in Section 5 below.

The parties hereto agree as follows:

1. TERM OF AGREEMENT. This Agreement shall terminate upon the earlier of: (a) the termination of Employee’s employment for any reason prior to, and not in connection with, a Change of Control, or (b) the date that all obligations of the parties hereto with respect to this Agreement have been satisfied.

2. AT-WILL EMPLOYMENT. The Company and the Employee acknowledge that the Employee’s employment is and shall continue to be at-will, as defined under applicable law. If the Employee’s employment terminates for any reason prior to, and not in connection with, a Change of Control, the Employee shall not be entitled to the benefits provided by this Agreement, or any other benefits unless otherwise available in accordance with the Company’s established employee plans and practices or pursuant to other agreements with the Company.

3. ACCELERATION BENEFITS UPON A CHANGE IN CONTROL. In the event that the Company undergoes a Change of Control, and the Employee’s employment with the Company is terminated (an “Involuntary Termination”) by the Company or the successor corporation without Cause or by the Employee as the result of a Constructive Termination by the Company or the successor corporation, then, subject to the limitations in this Section 3 and Section 4 below, the vesting of 100% of Employee’s then unvested shares of the Company’s common stock shall automatically be accelerated so as to become vested as of the effective date of the Involuntary Termination or Constructive Termination.

4. DEFINITION OF TERMS. The following terms referred to in this Agreement shall have the following meanings:

(a) Change of Control. “Change of Control” shall mean a sale of all or substantially all of the Company’s assets, or a merger, consolidation or other capital reorganization of the Company with or into another corporation; provided however that a merger, consolidation or other capital reorganization in which the holders of more than 50% of the shares of capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by the voting securities remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the total voting power represented by the voting securities of the Company, or such surviving entity, outstanding immediately after such transaction shall not constitute a Change in Control.

(b) Cause. “Cause” for Employee’s termination shall mean the good faith judgment of the Company’s Board of Directors, that the undersigned has engaged in or committed any of the following: (i) gross negligence or willful misconduct in the performance of his duties to the Company where such gross negligence or willful misconduct has resulted or is likely to result in substantial and material damage to the Company or its subsidiaries, (ii) repeated unexplained or unjustified absence from the Company, (iii) a material and willful violation of any federal or state law, (iv) commission of any act of fraud with respect to the Company, (v) breach of any confidentiality obligation to the Company, whether determined by agreement or by applicable law; or (vi) conviction of a felony or a crime involving moral turpitude causing material harm to the standing and reputation of the Company, in each case as determined in good faith by the Board of Directors of the Company.

(c) Constructive Termination. “Constructive Termination” shall be deemed to occur if (i) the employee is not given a bona fide offer to become the Chief Financial Officer of the successor corporation within 90 days after the completion of the transaction; and (ii) within the 30-day period immediately following the foregoing, Employee elects to terminate his or her employment voluntarily; provided however that such termination shall not be effective until six months following the completion of the transaction or such earlier date as is acceptable to acquiring company.

5. SUCCESSORS.

(a) Company’s Successors. Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this Section 6(a) or which becomes bound by the terms of this Agreement by operation of law.

(b) Employee’s Successors. The terms of this Agreement and all rights of the Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

6. NOTICE. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or three (3) days after being mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Employee, mailed notices shall be addressed to him or her at the home address which he or she most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.

7. MISCELLANEOUS PROVISIONS.

(a) Waiver. No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Employee and by an authorized officer of the Company (other than the Employee). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(b) Whole Agreement. This Agreement represents the entire agreement between the Employee and the Company with respect to the matters set forth herein. No agreements, representations or understandings (whether oral or written and whether express or implied) which are not expressly set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof.

(c) Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California as applied to agreements entered into and performed within California solely by residents of that state.

(d) Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

(e) Legal Fees and Expenses. The parties shall each bear their own expenses, legal fees, and other fees incurred in connection with this Agreement.

(f) Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable income and employment taxes.

(g) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the date set forth above.

COMPANY:	CLARIA CORPORATION
	By:	/s/ Jeff McFadden
		Jeff McFadden, President/CEO
	Date:	1/27/04
EMPLOYEE:	Signature:	/s/ Richard Mora
		Richard Mora
	Date:	1/27/04

EX-21.01

Exhibit 21.01

SUBSIDIARIES OF CLARIA CORPORATION

Claria Corporation Limited, a corporation organized under the laws of England and Wales

Gain Publishing Limited, a corporation organized under the laws of Ireland

EX-23.02

Exhibit 23.02

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-1 of our report dated March 26, 2004 relating to the financial statements of Claria Corporation, which appear in such Registration Statement. We also consent to the references to us under the headings “Experts” and “Selected Financial Data” in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

San Jose, California

April 7, 2004