10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2005

Commission File Number: 0-22065

RADIANT SYSTEMS, INC.

Georgia	11-2749765
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3925 Brookside Parkway, Alpharetta, Georgia	30022
(Address of principal executive offices)	(Zip Code)

(770) 576-6000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, no par value

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    Large accelerated filer  ¨    Accelerated filer  x    Non-accelerated filer  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

As of June 30, 2005, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $240.6 million based on the closing sales price ($11.40) as reported on The NASDAQ National Market System. For the purpose of this response, officers, directors and holders of 10% or more of the registrant’s common stock are considered to be affiliates of the registrant at that date.

As of February 23, 2006, there were 30,879,234 outstanding shares of the registrant’s no par value common stock.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive proxy statement to be delivered to the shareholders in connection with the Registrant’s 2006 Annual Meeting of Shareholders are incorporated by reference in response to Part III of this report.

Table of Contents

		Page
PART I		2
Item 1.	Business	2
Item 1A.	Risk Factors	11
Item 1B.	Unresolved Staff Comments	17
Item 2.	Properties	18
Item 3.	Legal Proceedings	19
Item 4.	Submission of Matters to a Vote of Security Holders	19
PART II		20
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	20
Item 6.	Selected Consolidated Financial Data	21
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	36
Item 8.	Financial Statements and Supplementary Data	36
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	78
Item 9A.	Controls and Procedures	78
Item 9B.	Other Information	80
PART III		81
Item 10.	Directors and Executive Officers of the Registrant	81
Item 11.	Executive Compensation	81
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	81
Item 13.	Certain Relationships and Related Transactions	81
Item 14.	Principal Accountant Fees and Services	81
PART IV		82
Item 15.	Exhibits and Financial Statement Schedules	82
EXHIBIT INDEX		83
SIGNATURES		86
EX-10.9	Office Lease Agreement, dated September 16, 2005, by and between Radiant Systems, Inc. and Centreport Trinity, Ltd.
EX-10.10	Radiant Lease Agreement for 1727 Kirby Parkway, dated January 3, 2006, by and between Radiant Systems, Inc. and Jeff Goldstein Investment Partnership
EX-10.31	Employment Arrangements with Executive Officers
EX-10.32	Director Compensation Arrangements
EX-21.1	(Subsidiaries of the registrant)
EX-23.1	(Consents of experts and counsel)
EX-31.1	(Certification required under Section 302 of the Sarbanes-Oxley Act of 2002)
EX-31.2	(Certification required under Section 302 of the Sarbanes-Oxley Act of 2002)
EX-32	(Certifications required under Section 906 of the Sarbanes-Oxley Act of 2002)

Forward-Looking Statements

This Annual Report on Form 10-K of Radiant Systems, Inc. and its subsidiaries (“Radiant,” “Company,” “we,” “us,” or “our”) contains forward-looking statements. All statements in this Annual Report on Form 10-K, including those made by the management of Radiant, other than statements of historical fact, are forward-looking statements. Examples of forward-looking statements include statements regarding Radiant’s future financial results, operating results, business strategies, projected costs, products, competitive positions, management’s plans and objectives for future operations, and industry trends. These forward-looking statements are based on management’s estimates, projections and assumptions as of the date hereof and include the assumptions that underlie such statements. Forward-looking statements may contain words such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” and “continue,” the negative of these terms, or other comparable terminology. Any expectations based on these forward-looking statements are subject to risks and uncertainties and other important factors, including those discussed below and in the section titled “Risk Factors.” Other risks and uncertainties are disclosed in Radiant’s prior Securities and Exchange Commission (SEC) filings. These and many other factors could affect Radiant’s future financial condition and operating results and could cause actual results to differ materially from expectations based on forward-looking statements made in this document or elsewhere by Radiant or on its behalf. Radiant undertakes no obligation to revise or update any forward-looking statements.

The following information should be read in conjunction with the Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements included in this Annual Report.

1

PART I

ITEM 1. BUSINESS

General

Founded in 1985 and headquartered in Alpharetta, Georgia, Radiant Systems, Inc. (the “Company” or “Radiant”) is a leading provider of innovative technology focused on the development, installation and delivery of solutions for managing site operations of hospitality and retail industries.

Radiant focuses on delivering site management systems, including point-of-sale (POS), self-service kiosk and back-office systems, designed specifically for the Company’s three reportable segments: (i) Hospitality, (ii) Petroleum and Convenience Retail, and (iii) Entertainment. For selected financial information about our business segments, see Note 13 to the consolidated financial statements contained elsewhere in this report. Radiant’s site management solutions include software products, site hardware, professional services and support services. Each product can be purchased independently or as a suite of integrated products to address the customer’s specific business needs. These products enable operators to drive top-line growth and improve bottom-line performance.

Radiant offers best-of-breed solutions designed for ease of integration with operators’ existing infrastructures. Radiant’s site management technology enables hospitality and retail operators to improve customer service while reducing costs. Radiant believes its approach to site management is unique in that its product solutions provide visibility and control at the site, field and headquarters levels. Additionally, Radiant focuses on addressing the unique requirements of the highly specialized environments in which its customers operate. These environments require a high degree of reliability, specialized functionality and peripheral compatibility. Using Radiant’s point-of-sale, customer self-service and back-office technology, businesses are able to improve customer service and loyalty, improve speed of service, increase revenue per transaction, and reduce fraud and shrink. Radiant’s full line of open, standards-based site management hardware allows operators to leverage advanced technology built specifically for the environment in which they operate.

Management believes its current generation of point-of-sale and customer self-service products, which utilize Microsoft Windows 2000, Windows XP, Windows XP Embedded and Windows CE operating systems, represents an innovative platform based on an open, modular software and hardware architecture that offers increased functionality and stability compared to other systems in the marketplace, at a lower total cost of ownership.

In January 2004, Radiant completed the split-off of its enterprise software business, now known as BlueCube Software, to Erez Goren, the Company’s former Co-Chairman of the Board and Co-Chief Executive Officer. Radiant retained the right to sell and market the Enterprise Productivity Suite, including functionality such as workforce and supply chain management, through a reseller agreement with BlueCube Software. The disposition of the Enterprise segment has allowed the Company to focus its efforts on better serving its core markets and increasing its market penetration. This disposition significantly improved the Company’s profits and cash flow.

Also in 2004, Radiant completed the acquisitions of Aloha Technologies, a leading provider of point-of-sale systems for the hospitality industry, and E-Needs, the leading provider of Film Management software and services in the North American exhibition industry. These were strategic acquisitions to assist in developing Radiant’s Hospitality and Entertainment segments.

In October 2005, Radiant acquired MenuLink Computer Solutions, Inc. (“MenuLink”), one of the largest independent suppliers of back-office software for the hospitality industry. The acquisition of MenuLink enables Radiant to deliver a tightly integrated solution linking Radiant hardware devices and Aloha POS applications to the open architecture and feature set of MenuLink’s back-office software. This combination creates an end-to-end solution designed to help operators minimize operational costs and maximize profits.

In January 2006, Radiant extended its reach into the retail industry by acquiring substantially all of the assets of Synchronics, Inc. (“Synchronics”), a leading provider of business management and point-of-sale software for the retail market. Synchronics has an experienced team which has developed an outstanding set of products that are distributed through a national network of dealer partners. Through the combination of Radiant and Synchronics product-lines and services, the Company will bring tightly integrated, high value product and service offerings to the marketplace. The Company plans on reporting the operations of the Synchronics business under a new “Retail” segment beginning in the first quarter of 2006.

To the extent that Radiant believes acquisitions, joint ventures and business partnerships can better position it to serve its current segments, it will continue to pursue such opportunities in the future.

2

Hospitality Segment

Food service operators today face a highly competitive and challenging environment in which consumers demand convenience and great service and have an increasing number of dining options at their disposal. To meet these challenges, food service operators require new technology that enables them to improve speed of service, manage site operations more efficiently, and reduce the total cost of technology ownership. Systems must permit employees to increase the speed and accuracy with which they take an order, prepare the food and fill the order, often accommodating numerous concurrent orders at multiple table-top, counter-top or drive-through locations. Operators need solutions to better manage menu and pricing functions, recipes and inventory, and schedule and track labor. Additionally, food service operators need the ability to centrally manage changes across sites and brands. Above-store level managers need access to timely operational information in order to proactively make informed business decisions across all sites. The market for automated information and transaction systems for restaurants is typically more advanced than in the convenience store and entertainment markets, but is highly fragmented and includes a large number of proprietary, closed systems. Radiant believes its technology enables food service operators to improve speed of service, manage site operations more efficiently, and reduce the total cost of technology ownership.

Radiant provides solutions to meet the unique needs of various hospitality industry segments including fast food/quick service restaurants and table service restaurants. Radiant’s hospitality solutions encompass point-of-sale systems and integrated back-office systems, self-service kiosks, customer loyalty programs, electronic gift card management, comprehensive reporting and systems management, and centralized data management.

With the acquisition in January 2004 of substantially all of the assets of Aloha Technologies, a leading provider of point-of-sale systems for the hospitality and food service industry, and certain affiliated entities of Aloha (collectively, “Aloha”), Radiant enhanced its presence in the hospitality industry, offering comprehensive solutions from advanced POS systems to self-service kiosks, customer loyalty systems, and integrated back-office solutions. In addition, Radiant accelerated the building of third-party reseller relationships through the acquisition of Aloha, which has a fully developed reseller network focused on the food service market both domestically and internationally. The combined Hospitality segment consisting of key Radiant and Aloha personnel has become one of the premier technology providers for the hospitality industry.

With the acquisition of MenuLink in October 2005, the Company expanded its presence in the hospitality industry. The Aloha POS and MenuLink back-office solutions are widely known as two of the industry’s easiest systems for servers and managers to use. With MenuLink’s proven experience delivering back-office solutions to very large restaurant chains as well as small chains and franchisees, Radiant has now complemented its solution to serve the needs of restaurant operators more comprehensively. The combination of MenuLink’s robust back-office applications and the Aloha suite of products, including QuickService/TableService POS, Enterprise, eCard and eFrequency, create an end-to-end solution designed to help operators minimize operational costs and maximize profits.

Radiant believes that the international hospitality market represents a continued growth opportunity in future years. To service this market, Radiant expanded its European presence with the opening of an office in London in the first quarter of 2006. With the addition of the London office, Radiant is well-positioned to continue serving its international client base and to enhance its solution offering for the hospitality industry throughout the United Kingdom and Europe. For the year ended December 31, 2005, approximately 5% of Radiant’s Hospitality segment revenues were from international customers.

Customers who have licensed or purchased Radiant’s Hospitality products and services include Burger King Corporation, Dunkin’ Brands, Inc., The Krystal Company, New World Restaurant Group, Schlotzsky’s, Ltd., CEC Entertainment, Inc., Carlson Restaurants Worldwide, Chipotle Mexican Grill, Inc., Blimpie International, Inc., P.F. Chang’s China Bistro, Inc., Krispy Kreme Doughnut Corp., Chick-fil-A, Inc., Texas Roadhouse, Inc., Jamba Juice Company, RARE Hospitality International, Inc., Cosi, Inc., Damon’s International, Inc., Church’s Chicken, Del Taco, Don Pablo’s, Sbarro, Inc., Fatburger Corporation and Landry’s Seafood Restaurants, Inc.

3

Petroleum and Convenience Retail Segment

The Petroleum and Convenience Retail segment provides site-oriented technologies such as Point-of-Sale, Customer Self-Service, Outside Payment Terminal and Fuel Control software and hardware to retail operators worldwide. Radiant’s software also interfaces with leading third party back-office and headquarters solutions utilizing industry standard technology. Radiant’s store technology helps petroleum and convenience retailers manage fuel operations, merchandise sales, foodservice, electronic payments and customer retention programs. Radiant’s store technology solutions are designed to enhance speed of service in an easy-to-use, reliable format.

In response to gross margin pressure on traditional categories, including fuel and tobacco, and enhanced competition for the convenience dollar from non-traditional sources, convenience retailers are changing business models and pursuing new revenue channels, including made-to-order food, coffee programs and expanded services offerings. These changes have resulted in new growth opportunities for Radiant as implementation of these programs requires additional automation for effective management.

High-volume retailers such as grocery stores, mass-merchants, warehouse clubs and others are also adding fuel and made-to-order food to their offerings and represent additional growth opportunities for Radiant. As a result of the changes in the petroleum and convenience retail market, Radiant believes that there will continue to be strong demand for the foreseeable future for Radiant’s technology solutions. Management also believes that based on the success of technology in recent years and the positive return on investment seen by Radiant’s clients, demand for new technology will remain strong from both new and existing customers.

Radiant believes that the international petroleum and convenience retail market represents an additional substantial growth opportunity. For the year ended December 31, 2005, approximately 46% of Radiant’s Petroleum and Convenience Retail segment revenues were from international customers.

Radiant’s Petroleum and Convenience Retail segment has over 1,500 customers worldwide. Customers who have licensed or purchased Radiant’s petroleum and convenience products and services include BP, p.l.c., ConocoPhillips, Holiday Stationstores, Kroger Corporation, Exxon Mobil Corporation, Royal Dutch Shell, Repsol YPF, S.A., Sheetz, Inc., Speedway SuperAmerica, LLC, 7-Eleven Australia, Pty Ltd., Alimentation Couche-Tard, Amerada Hess, The Home Depot, Shell Canada, Maverik Country Stores, Rutter’s Farm Stores and Wawa, Inc.

Entertainment Segment

Radiant’s entertainment solutions include innovative point-of-sale, self-service kiosk and site management technology designed to help cinema operators drive growth and customer loyalty, while reducing costs and labor. Radiant’s solutions can be implemented individually and integrated with existing technology or deployed as an end-to-end system.

Radiant has a proven track record of delivering enhanced value for cinema operators including new offerings such as expanded concessions and foodservice, self-service ticketing and concessions, and gift card programs. With over 36,000 cinema screens at more than 6,100 sites in the United States, cinema operators are focusing on implementing cost controls from headquarters. Radiant believes that cinema operators can improve customer service and profitability by implementing integrated site management systems that enable them to speed customer transactions, reduce lines, manage inventory and schedule labor to meet variations in traffic. Due to the lack of end user market growth and Radiant’s high penetration in this segment, Radiant does not expect significant growth in this segment over the near term.

In April 2004, Radiant acquired E-Needs, the leading provider of Film Management software and services in the North American exhibition industry. Film Management is a critical component of exhibitors’ headquarters operations. The E-Needs acquisition has enabled Radiant’s Entertainment segment to provide product and services to exhibition headquarters operations, thereby opening an incremental market opportunity. Other products and services are expected to be developed from the E-Needs platform for above-store operations. These capabilities will be a key differentiator in this competitive market going forward.

For the year ended December 31, 2005, approximately 7% of Radiant’s Entertainment segment revenues were from international customers.

Radiant’s Entertainment segment has approximately 100 customers in the United States and Canada. Customers who have licensed or purchased Radiant’s entertainment products and services include AMC Entertainment, Lowes Cineplex Entertainment, Showcase Cinemas, The Marcus Corporation, Muvico Theaters, Wehrenberg Theatres, Reading Entertainment, MJR Theatres and Mann Theatres.

4

Products and Services

Radiant provides site management solutions, which include software, hardware and professional services, to its customers in the hospitality, petroleum and convenience retail, and entertainment industries. The product strategy is to provide targeted solutions to each of these markets to allow customers to increase revenue through more frequent consumer visits, greater revenues per visit, faster transactions and more efficient site operations.

Point-of-Sale

Radiant’s point-of-sale systems increase speed and quality of service, minimize user training, and provide mission-critical reliability. The point-of-sale systems can be integrated with Radiant’s back-office system or third party back-office applications. Radiant’s point-of-sale software runs on multiple open hardware platforms including IBM, NCR, PAR, WincorNixdorf, and Radiant hardware. Additionally, Radiant’s point-of-sale hardware supports Radiant point-of-sale software and third-party point-of-sale software products that adhere to open standards. Radiant’s point-of-sale terminals offer an open architecture, retail-hardened design, comprehensive support and return-to-service programs, and run on Windows CE, Windows XP, Windows XP Embedded, and Windows 2000.

Customer Self-Service

Within many markets of the hospitality and retail industries, customer self-service has emerged as a preferred ordering and transaction method. Radiant has an easy to use, consumer-activated system that allows a consumer to purchase tickets, place a food order, pay with a credit card, make inquiries, and view promotions through the use of a touch screen application. The software development environment and authoring tools allow various media such as video clips, logos, pictures and recordings to be quickly integrated into a consumer-friendly application.

Management believes consumer self-service kiosks allow hospitality and retail operators to accelerate speed of service, increase revenues through suggestive up-selling, increase order accuracy, capture consumer information at the point-of-sale, increase labor productivity, and respond quickly to changing consumer preferences. Radiant’s customer self-service products help operators create a uniform and repeatable approach to customer service while improving revenue.

Site-Management Systems

Operators in all of Radiant’s segments have varying requirements for site-management systems--from the most basic site-based technology to the most advanced centralized back-office system.

Aloha eServices

Radiant’s Aloha eServices product suite is built to give restaurant operators the tools they need to act decisively to capitalize on revenue opportunities and prevent unnecessary costs. Aloha Enterprise.com combines intelligent features such as business alerts, complete suite of enterprise-level reporting, GL and payroll interfaces, and drilldown analysis tools. Enterprise comes complete with a robust centralized database management (CDM) toolset designed to facilitate data management such as price and item changes directly from the corporate office.

Radiant’s Aloha eServices product suite is completed by powerful loyalty and gift card solutions that can be used in conjunction with enterprise.com or as standalone products. All eServices products are fully integrated with the Aloha POS, both Table Service and Quick Service.

Enterprise.com is sold as an application service provider (ASP) on a subscription basis, where a low per-site monthly fee includes unlimited users and access, training and support. Enterprise is a hosted solution, housed at a fully-redundant, ultra-secure data center, delivering near 100% up-time. Each company receives its own private data warehouse, with granular security, controlled by the headquarters.

MenuLink Back Office Solutions

MenuLink back office solutions help operators run a more profitable hospitality business through the delivery of tools and critical information needed to help in the reduction of food and labor costs and improving customer service and management efficiency. MenuLink offers a comprehensive back office product that includes inventory and recipe management, purchasing, labor management, cash management and reporting.

Radiant Site Manager

In the petroleum and convenience retail segment, Radiant Site Manager provides operators with tools designed to provide basic functions required to operate a convenience store. Radiant Site Manager bridges the gap between the point-of-sale and a back-office system. The Radiant Point-of-Sale integrates to leading petroleum and convenience retail back-office systems utilizing the industry standard PCATS-NAXML interface.

Back Office Software for the Entertainment Segment

Radiant’s headquarters-based management system permits theatre corporate offices to manage the circuit’s business needs including inventory management, price book management, film booking, film scheduling, film settlement, General Ledger accrual and payments. Radiant’s Back Office Software provides operators with the capabilities to manage inventory, shift reconciliation, and theatre balancing. Additionally, these systems provide the means for operators to easily gather point-of-sale and management information including current sales monitoring for both Box Office and Concession.

Professional Services

Professional services are an essential component of the Radiant solution. Radiant’s professional services play a critical role in the successful design, implementation, application, installation and integration of Radiant’s solutions. Radiant’s professional services include consulting, customization, training and integration.

The market for Radiant’s professional services is intensely competitive. Radiant believes the principal competitive factors include product quality, reliability, performance, price, vendor and product reputation, financial stability, features and functions, ease of use, quality of support, and degree of integration effort required with other systems. In the market for professional services, Radiant competes with Accenture, Ltd., Capgemini, Electronic Data Systems, Inc., International Business Machines and other systems integrators.

5

Maintenance and Client Support

Radiant offers client support on a 24-hour basis, a service that historically has been purchased by a majority of its clients and which also entitles the client to product upgrades. In some cases, hardware support is provided by third parties. Radiant can remotely access clients’ systems in order to perform quick diagnostics and provide on-line assistance. The annual support option is typically priced at a percentage of the software and hardware cost. Additionally, Radiant offers clients hardware and software maintenance and unspecified software enhancements.

Sales and Marketing

Through a focused and dedicated sales effort designed to address the requirements of each of its business segments, Radiant believes its sales force is positioned to understand its customers’ businesses, trends in the marketplace, competitive products and opportunities for new product development. This allows Radiant to take a consultative approach to working with customers.

Radiant’s sales personnel focus on selling its technology solutions to major customers, both domestically and internationally. All sales personnel are compensated with a base salary and commission based on revenue quotas, gross margins and other profitability measures.

A large portion of the hospitality and retail markets is comprised of small businesses. Prior to 2004, Radiant primarily built its business on serving large operators. However, over recent years, Radiant has increased investments in developing relationships with third-party resellers to distribute its products to small to medium-sized operators. Radiant accelerated the building of these relationships in the hospitality industry through the acquisition of Aloha and in the retail industry through the acquisition of Synchronics, both of which have a fully developed reseller network focused on their respective markets.

While serving and meeting the expectations of large operators remains a top priority, Radiant intends to serve the needs of all operators within its segments. To better serve the small to medium-sized customer, Radiant will continue to develop the reseller channel and package its solutions in a manner that is easy for operators to afford, implement and support. Radiant’s strategy is to deliver rich products that are easy to implement and support, establish a strong presence within critical franchised brands, and support resellers with strong operational tools.

In 2005, the Company’s international revenues accounted for approximately 19% of total revenues. Management believes that this percentage can be increased substantially in the coming years. The growing number of large, multi-national companies which are among Radiant’s major North American customers, together with its successful record of implementing solutions with retailers in Western Europe, Eastern Europe and Asia, positions Radiant to make additional progress internationally in the future. Additionally, the majority of Radiant’s current business outside the United States has been in the petroleum and convenience retail market. Management believes there is opportunity for significant growth in the hospitality and retail markets outside the United States. Currently, Radiant has more than 100 employees in Europe, Asia and Australia. Radiant has previously executed international projects in Australia, Canada, Spain, the Czech Republic, Hong Kong, Hungary, Ireland, Japan, Macau, Malaysia, Poland, Slovakia, Sweden, Switzerland, Thailand, Trinidad and Tobago and the United Kingdom. Radiant currently has offices in Melbourne, Prague, Singapore, and the United Kingdom and representation in Spain and Central and South America.

To date, Radiant’s primary marketing objectives have been to increase awareness of Radiant’s technology solutions and generate sales leads. To this end, Radiant attends industry trade shows, conducts direct marketing programs, and selectively advertises in industry publications. Radiant intends to increase its sales and marketing activities both domestically and internationally. Additionally, Radiant intends to continue expanding an independent distribution network to sell and service its products to certain segments of the domestic and international markets.

Radiant’s business is usually seasonal and cyclical in nature, based on the capital equipment investment patterns of its customers. These expenditure patterns are based on many factors, including customer capital expenditure budget constraints, the development of new technologies, global and regional economic conditions, changes in the pricing and promotion policies of the Company and its competitors and domestic and international holidays.

During 2005, 2004 and 2003, no one customer made up 10% or more of the Company’s revenues. In 2005, the Company was party to certain contracts with the U.S. Government, which contained standard termination for convenience clauses. The Company does not anticipate any material adverse financial impact if the U.S. Government elects to exercise its rights under these termination clauses.

6

Product Development

The products sold by the Company are subject to rapid and continual technological change. Products available from the Company, as well as from its competitors, have increasingly offered a wider range of features and capabilities. The Company believes that in order to compete effectively in its selected markets, it must provide compatible systems incorporating new technologies at competitive prices. In order to achieve this, the Company has made a substantial ongoing commitment to research and development. During 2005, 2004 and 2003, Radiant incurred approximately $15.0 million, $14.8 million and $12.1 million, respectively, in product development costs.

Radiant’s product development strategy is focused on creating common technology elements that can be leveraged in applications across its core markets. Radiant’s software architecture is based on open platforms and is modular, thereby allowing it to be phased into a customer’s operations. Radiant has developed numerous applications running on Microsoft Windows-based platforms, including Windows 2000, Windows XP, Windows XP Embedded, and Windows CE. The software architecture incorporates Microsoft’s Component Object Model, providing an efficient environment for application development.

In order to remain competitive, Radiant is currently designing, coding and testing a number of new products and developing expanded functionality of its current products. In addition, Radiant strives to achieve compatibility between its products and products that are, or that Radiant believes will become, popular and widely adopted.

Manufacturing, Raw Materials and Supplies

Radiant’s manufacturing activities consist primarily of assembling various commercial and proprietary components into finished systems in Georgia. Manufacturing requires some raw materials, including a wide variety of mechanical and electrical components, to be manufactured to Radiant’s specifications. Radiant uses numerous companies to supply parts, components and subassemblies for the manufacture and support of its products. Although Radiant makes reasonable efforts to assure that parts are available from multiple qualified suppliers, this is not always possible. Accordingly, some key parts may be obtained only from a single supplier or a limited group of suppliers. Radiant has sought, and will continue to seek, to minimize the risk of production and service interruptions and/or shortages of key parts by: (1) qualifying and selecting alternate suppliers for key parts; (2) monitoring the financial condition of key suppliers; (3) maintaining appropriate inventories of key parts; and (4) qualifying new parts on a timely basis.

Market Background and Trends

Successful hospitality and retail operators increasingly require information systems that capture detailed consumer activity data at the point-of-sale and store and transport that data in an easy-to-access fashion. Early technology innovators in the hospitality and retail industries deployed robust, integrated information systems at the point-of-sale and used the information to react quickly to changing consumer preferences, ultimately gaining market share in the process. In addition, integrated information systems helped these early innovators achieve operational efficiencies. Many large national hospitality and retail companies have followed suit by investing in proprietary information systems.

For many types of hospitality and retail operators, however, this type of information system did not make economic or business sense. In particular, merchants with a large number of relatively small sites, such as convenience stores, petroleum retail sites, restaurants and entertainment venues, generally have not been able to cost-effectively develop and deploy sophisticated, enterprise-wide information systems. Economic and standardization problems for these businesses are exacerbated by the fact that many sites operate as franchises, dealerships or under other decentralized ownership and control structures. Without an investment in technology, these operators continue to depend on labor and paper to process transactions. Radiant’s management believes that high labor costs, lack of centralized management control of distributed sites, and inadequate informational reporting, together with emerging technology trends, have caused many of these hospitality and retail businesses to reexamine how technology solutions can benefit their operations.

Typically, the existing information systems in these industries consist of stand-alone devices such as cash registers or other point-of-sale systems with little or no integration with either the back-office of the site or an enterprise-wide information system. Implementation of information systems providing this functionality typically involves multiple vendors and an independent systems integration firm. The resulting proprietary solutions are often difficult to support and have inherently high risks associated with implementation. Management believes that technology solutions that are highly functional and scalable, relatively inexpensive and easy to deploy are critical for successful penetration in these markets.

In the absence of an integrated solution, operators in these markets typically rely on manual reporting to capture data on site activity and disseminate it to different levels of management. Basic information on consumers (i.e., who they are, when they visit and what they buy) is not captured in sufficient detail, at the right time, or in a manner that can be communicated easily to others in the organization. Similarly, information such as price changes does not flow from headquarters to individual sites in a timely manner. In addition, communications with vendors often remain manual, involving paperwork, delays and other process-related problems.

7

Recent trends in the hospitality and retail industries have accelerated the need for information and have heightened demand for feature-rich operational systems. Based in part upon industry association reports and other studies, as well as Radiant’s experience in marketing its products, management believes consumer preferences have shifted away from brand loyalty toward value and convenience, creating a greater need for timely data concerning consumer buying patterns and preferences. Management also believes that convenient consumer-activated ordering and payment systems, such as automated kiosks, ATMs, voice response units and “pay at the pump” systems have become important to retailers, food service providers, and cinema operators that wish to retain and build a customer base. Additionally, through the use of integrated systems, hospitality and retail businesses can improve operational efficiencies through better management of inventory, purchasing, merchandising, pricing, promotions and shrinkage control. Management believes that the ability to provide tight system integration to a variety of industry standard back-office solutions can enable customers to improve control and enforce best practices across operational sites. Furthermore, management believes that the constant flow of information among the point-of-sale, the back-office, headquarters and the supply chain has become a key competitive advantage in the hospitality and retail industries, resulting in operators demanding more sophisticated and easily integrated solutions from their systems vendors. In a parallel development, technological advances have improved the capability of information systems that are available. With the price of computing power declining, technology investments have become economically feasible for many hospitality and retail businesses. Furthermore, computing power has become increasingly flexible and distributable, facilitating data capture and processing by applications located at the point-of-sale. Also, front-end graphical user interfaces have made systems easier to use, which reduces training time and transaction costs and facilitates more types of consumer-activated applications.

Economic Conditions within the Market Place

In the early 2000’s, Radiant was impacted both directly and indirectly by declining global economic conditions. The retail industry was cautious of investment in information technology during difficult economic times which resulted in reduced budgets and spending. This impacted Radiant through reduced revenues, elongated selling cycles, delay in product implementation and increased competitive margin pressure. While these impacts have occurred in recent periods, the longer term impact has been on technology spending habits. The general economic conditions have improved; however, buying patterns have changed. Demand has shifted from large scale enterprise wide investments to more targeted investments with quicker deployment requirements. As a result, Radiant’s revenue base has shifted from primarily large dollar purchases by a limited number of customers to a mix of smaller sized purchases by an increased number of customers in a given period. In addition, pricing has been cut by competitors, creating the potential for long-term reductions in product margins. Radiant’s expectations for future periods are based on its current view that the major global markets will continue to experience an improvement in economic conditions. Given the uncertain nature of the economic environment, these trends could change quickly and have a direct impact on Radiant’s results.

Competition

The markets in which Radiant operates are intensely competitive. Radiant believes the principal competitive factors include product quality, reliability, performance, price, vendor and product reputation, financial stability, features and functions, ease of use, quality of support and degree of integration effort required with other systems.

Radiant believes it is uniquely positioned with its exclusive focus on providing site management systems for hospitality, petroleum and convenience retail, entertainment and retail businesses. Radiant’s ability to commercialize its technology and continually improve its products, processes and services, as well as its ability to develop new products, enables the Company to meet constantly evolving customer requirements. Radiant competitors include International Business Machines, Corp., NCR Corporation, Casio, Dell, VeriFone, Inc., Dresser Wayne, Retalix, Ltd., Pacer/CATS (owned by Clarity Commerce Solutions plc), Micros Systems, Inc., Par Technology Corporation, POSitouch, Danaher Corporation, Panasonic, The Pinnacle Corporation, InfoGenesis and others that provide point-of-sale and site management systems with varying degrees of functionality.

The Company could also be faced with new market entrants attempting to develop fully integrated systems targeting the retail industry. Radiant believes the risk of this happening is small due to the significant amount of time and effort required to create point-of-sale and back-office headquarters-based management systems and due to the detailed knowledge required of a retailer’s operations at local sites and headquarters to duplicate the functionality of these products.

In the market for consulting services, the Company competes with various companies. See “Products and Services — Professional Services” for additional information. Many of Radiant’s existing competitors, as well as a number of potential new competitors, have significantly greater financial, technical and marketing resources than the Company.

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Proprietary Rights

Radiant’s success and ability to compete is dependent in part upon its proprietary technology, including its software source code. To protect its proprietary technology, Radiant relies on a combination of trade secret, nondisclosure, copyright and patent law, which may afford only limited protection. In addition, effective copyright and trade secret protection may be unavailable or limited in certain foreign countries. Although Radiant relies on the limited protection afforded by such intellectual property laws, it also believes that factors such as the technological and creative skills of its personnel, new product developments, frequent product enhancements, name recognition and reliable maintenance are essential to establishing and maintaining a technology leadership position. Radiant presently has four patents and two patents pending. The source code for Radiant’s various proprietary software products is protected both as a trade secret and as a copyrighted work. Radiant generally enters into confidentiality or license agreements with its employees, consultants and customers, and generally controls access to and distribution of its software, documentation and other proprietary information. Although the Company restricts its customers’ use of Radiant’s software and does not permit the resale, sublicense or other transfer of such software, there can be no assurance that unauthorized use of the Company’s technology will not occur.

Despite the measures taken by the Company to protect its proprietary rights, unauthorized parties may attempt to reverse engineer or copy aspects of Radiant’s products or to obtain and use information that the Company regards as proprietary. Policing unauthorized use of Radiant’s products is difficult. In addition, litigation may be necessary in the future to enforce Radiant’s intellectual property rights, such as Radiant’s trade secrets, to determine the validity and scope of Radiant’s or others’ proprietary rights, or to defend against claims of infringement or invalidity. Such litigation could result in substantial costs and diversion of resources and could have a material adverse effect on Radiant’s business, operating results and financial condition.

Certain technology used in conjunction with Radiant’s products is licensed from third parties, generally on a non-exclusive basis. These licenses usually require Radiant to pay royalties and fulfill confidentiality obligations. Radiant believes that there are alternative sources for each of the material components of technology licensed by Radiant from third parties. However, the termination of any of these licenses, or the failure of the third-party licensors to adequately maintain or update their products, could result in a delay in Radiant’s ability to ship certain of its products while it seeks to implement technology offered by alternative sources. Any required alternative licenses could prove costly. Also, any such delay, to the extent it becomes extended or occurs at or near the end of a fiscal quarter, could result in a material adverse effect on Radiant’s business, operating results and financial condition. While it may be necessary or desirable in the future to obtain other licenses relating to one or more of Radiant’s products or relating to current or future technologies, there can be no assurance that Radiant will be able to do so on commercially reasonable terms or at all.

There can be no assurance that Radiant will not become the subject of infringement claims or legal proceedings by third parties with respect to current or future products. Defending against any such claim could be time-consuming, result in costly litigation, cause product shipment delays or force Radiant to enter into royalty or license agreements rather than dispute the merits of such claims. Moreover, an adverse outcome in litigation or similar adversarial proceeding could subject Radiant to significant liabilities to third parties, require the expenditure of significant resources to develop non-infringing technology, require disputed rights to be licensed from others or require Radiant to cease the marketing or use of certain products, any of which could have a material adverse effect on Radiant’s business, operating results and financial condition. To the extent Radiant desires or is required to obtain licenses to patents or proprietary rights of others, there can be no assurance that any such licenses will be made available on terms acceptable to Radiant, if at all. As the number of software products in the industry increases and the functionality of these products further overlaps, Radiant believes that software developers may become increasingly subject to infringement claims. Any such claims against Radiant, with or without merit, as well as claims initiated by Radiant against third parties, could be time consuming and expensive to defend, prosecute or resolve.

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Employees

As of December 31, 2005, the Company employed 904 people. None of Radiant’s employees is represented by a collective bargaining agreement nor has the Company experienced any work stoppages. Radiant considers its relations with its employees to be good.

Radiant’s future operating results depend in significant part upon the continued service of its key technical, consulting and senior management personnel and its continuing ability to attract and retain highly qualified technical and managerial personnel. Competition for such personnel is intense, and there can be no assurance that Radiant will retain its key managerial or technical personnel or attract such personnel in the future. Radiant has at times experienced and continues to experience difficulty recruiting qualified personnel, and there can be no assurance that Radiant will not experience such difficulties in the future. Radiant, either directly or through personnel search firms, actively recruits qualified product development, consulting, sales and marketing, and administrative personnel. If Radiant is unable to hire and retain qualified personnel in the future, such inability could have a material adverse effect on Radiant’s business, operating results and financial condition.

Environmental Matters

The Company believes that it is in compliance in all material respects with all applicable environmental laws and does not anticipate that such compliance will have a material effect on its future capital expenditures, earnings or competitive position with respect to any of its operations.

Available Information

Radiant maintains a website at www.radiantsystems.com. Radiant makes available free of charge its annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K on its website as soon as practicable after such reports are filed with the SEC. These filings can be accessed through the ‘Investor Relations’ page on Radiant’s website. Radiant’s common stock is traded on The NASDAQ National Market under the symbol “RADS.”

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ITEM 1A. RISK FACTORS

In addition to the other information contained in this report, the following risks should be considered carefully in evaluating Radiant and its business.

The Company has generated operating losses in the past and an investment in the Company’s common stock is extremely speculative and involves a high degree of risk.

The Company anticipates that completing its products under development, and marketing existing products and new releases will require additional ongoing expenditures, while the majority of the Company’s revenues are not guaranteed. Accordingly, an investment in the Company’s common stock is extremely speculative in nature and involves a high degree of risk.

The Company’s revenues are significantly concentrated in the convenience store and the hospitality markets and the demand for the Company’s products and services in these markets could be disproportionately affected by instability or a downturn in either market.

Approximately 34%, 40% and 55% of the Company’s total revenues for the years ended December 31, 2005, 2004 and 2003, respectively, were attributed to the convenience store market and approximately 54%, 44% and 21% of the Company’s total revenues for the years ended December 31, 2005, 2004 and 2003, respectively, were attributed to the hospitality market. The hospitality and convenience store markets are affected by a variety of factors, including global and regional instability, governmental policy and regulation, political instability, natural disasters, environmental and health disasters, consumer buying habits, consolidation in the petroleum industry, war, terrorism and general economic conditions. Adverse developments in either market could materially and adversely affect the Company’s business, operating results and financial condition. In addition, the Company believes the purchase of its products is relatively discretionary and generally involves a significant commitment of capital, because purchases of the Company’s products are often accompanied by large scale hardware purchases. As a result, demand for the Company’s products and services could be disproportionately affected by instability or downturns in the hospitality market and/or convenience store market which may cause clients to exit the industry or delay, cancel or reduce planned-for information management systems and software products.

The Company may be required to defer recognition of revenues on its software products, which may have a material adverse effect on its financial results.

The Company may be required to defer recognition of revenues for a significant period of time after entering into a license agreement for a variety of reasons, including:

• transactions that include both currently deliverable software products and software products that are under development;

• transactions where the client demands services that include significant modifications, customizations or complex interfaces that could delay product delivery or acceptance;

• transactions that involve acceptance criteria that may preclude revenue recognition or if there are identified product-related issues, such as performance issues; and

• transactions that involve payment terms or fees that depend upon contingencies.

Because of the factors listed above and other specific requirements under generally accepted accounting principles (“GAAP”) for software revenue recognition, the Company must have very precise terms in its license agreements in order to recognize revenue when it initially delivers software or performs services. Although the Company has a standard form of license agreement that meets the criteria under GAAP for current revenue recognition on delivered elements, it negotiates and revises these terms and conditions in some transactions. Negotiation of mutually acceptable terms and conditions can extend the sales cycle, and sometimes result in deferred revenue recognition well after the time of delivery or project completion.

Damage to the Company’s manufacturing site could limit its ability to operate its business.

The Company does not have redundant, multiple-site manufacturing capacity. Therefore, damage to its manufacturing site from a natural disaster or other catastrophic event such as fire, flood, terrorist attack, power loss and other similar events could cause interruptions or delays in our manufacturing process or render us unable to accept and fulfill customer orders. We have not established a formal disaster recovery plan and our business interruption insurance may not be adequate to compensate us for losses we may suffer.

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The Company’s failure to manage its growth effectively could have a material adverse effect on the Company’s business, operating results and financial condition.

The growth in the size and complexity of the Company’s business and the expansion of its product lines and its client base may place a significant strain on the Company’s management and operations. An increase in the demand for the Company’s products could strain the Company’s resources or result in delivery problems, delayed software releases, slow response time, or insufficient resources for assisting clients with implementation of the Company’s products and services, which could have a material adverse effect on the Company’s business, operating results and financial condition. The Company anticipates that continued growth, if any, will require it to recruit, hire and assimilate a substantial number of new employees, including consulting, product development, sales and marketing, and administrative personnel.

The Company’s ability to compete effectively and to manage future growth, if any, will also depend on its ability to continue to implement and improve operational, financial and management information systems on a timely basis and to expand, train, motivate and manage its work force, particularly its direct sales force and consulting services organization. There can be no assurance that the Company will be able to manage any future growth, and any failure to do so could have a material adverse effect on the Company’s business, operating results and financial condition.

The Company may be unable to find suitable acquisition candidates and may not be able to successfully integrate acquired businesses into the Company’s operations.

As part of its operating history and growth strategy, the Company has acquired other businesses. In the future, the Company may continue to seek acquisition candidates in selected markets and from time to time engage in exploratory discussions with suitable candidates. There can be no assurance, however, that the Company will be able to identify and acquire targeted businesses or obtain financing for such acquisitions on satisfactory terms. The process of integrating acquired businesses into the Company’s operations may result in unforeseen difficulties and may require a disproportionate amount of resources and management attention. In particular, the integration of acquired technologies with the Company’s existing products could cause delays in the introduction of new products. In connection with future acquisitions, the Company may incur significant charges to earnings as a result of, among other things, the write-off of purchased research and development. Future acquisitions may be financed through the issuance of common stock, which may dilute the ownership of the Company’s shareholders, or through the incurrence of additional indebtedness. Furthermore, there can be no assurance that competition for acquisition candidates will not escalate, thereby increasing the costs of making acquisitions or making suitable acquisitions unattainable.

The Company’s revenues and results of operations are difficult to predict and may fluctuate substantially from quarter to quarter, which could negatively affect the trading price of the Company’s common stock.

The Company’s revenues and results of operations are difficult to predict and may fluctuate substantially from quarter to quarter. These fluctuations can adversely affect the Company’s business and the market price of its stock. License revenues in any quarter depend substantially upon the Company’s total contracting activity and its ability to recognize revenues in that quarter in accordance with its revenue recognition policies. The Company’s contracting activity is difficult to forecast for a variety of reasons, including the following:

• the Company’s sales cycle is relatively long and varies as a result of the Company expanding its product line and broadening its software product applications to cover a client’s overall business;

• the size of license transactions can vary significantly;

• the possibility that economic downturns are characterized by decreased product demand, price erosion, technological shifts, work slowdowns and layoffs may substantially reduce contracting activity;

• clients may unexpectedly postpone or cancel anticipated system replacements or new system evaluations due to changes in their strategic priorities, project objectives, budgetary constraints or management;

• client evaluations and purchasing processes vary significantly from company to company, and a client’s internal approval and expenditure authorization process can be difficult and time consuming, even after selection of a vendor;

• changes in the Company’s pricing policies and discount plans may affect client purchasing patterns;

• the number, timing and significance of the Company’s and its competitors’ software product enhancements and new software product announcements may affect purchase decisions;

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• the introduction of new research and development projects requires the Company to increase significantly its operating expenses to fund greater levels of product development and to develop and commercialize additional products and services; and

• certain expenses, including those over which the Company exercises little or no control, such as health costs, compliance with new legislation, and property and liability insurance, may be difficult to manage.

In addition, the Company’s expense levels, operating costs and hiring plans are based on projections of future revenues and are relatively fixed. If the Company’s actual revenues fall below expectations, its net income is likely to be disproportionately adversely affected.

Due to all of the foregoing factors, in some future quarters the Company’s operating results may fall below the expectations of securities analysts and investors. In such event, the trading price of the Company’s common stock would likely be materially and adversely affected.

The Company is highly dependent on a limited number of clients, the loss of one or more of which could have a material adverse effect on its business, operating results and financial condition.

The Company sells systems and services to a limited number of large clients. Approximately 20%, 26% and 29%, of the Company’s revenues were derived from five clients during the years ended December 31, 2005, 2004 and 2003, respectively. There can be no assurance that the loss of one or more of these clients will not have a material adverse effect on the Company’s business, operating results and financial condition.

The Company has traditionally depended on its installed client base for future revenues from services and licenses of other products. If existing clients fail to renew their maintenance agreements, the Company’s revenues could decrease. The maintenance agreements are generally renewable annually at the option of the clients and there are no mandatory payment obligations or obligations to license additional software. Therefore, current clients may not necessarily generate significant maintenance revenues in future periods. In addition, clients may not purchase additional products or services. Any downturn in software license revenue could result in lower services revenues in future quarters.

The Company’s success will depend on its ability to develop new products and to adapt to rapid technological change.

The types of products sold by the Company are subject to rapid and continual technological change. Products available from the Company, as well as from its competitors, have increasingly offered a wider range of features and capabilities. The Company believes that in order to compete effectively in selected vertical markets, it must provide compatible systems incorporating new technologies at competitive prices. To the extent the Company determines that new software and hardware technologies are required to remain competitive or our customers demand more advanced offerings, the development, acquisition and implementation of these technologies are likely to require significant capital investments by the Company. To the extent that such expenses precede or are not subsequently followed by increased revenues, our business, results of operations and financial condition may be materially and adversely affected. There can be no assurance that the Company will be able to continue funding research and development at levels sufficient to enhance its current product offerings or will be able to develop and introduce on a timely basis new products that keep pace with technological developments and emerging industry standards and address the evolving needs of clients. There can also be no assurance that the Company will not experience difficulties that will result in delaying or preventing the successful development, introduction and marketing of new products in its existing markets or that its new products and product enhancements will adequately meet the requirements of the marketplace or achieve any significant degree of market acceptance. Likewise, there can be no assurance as to the acceptance of Company products in new markets, nor can there be any assurance as to the success of the Company’s penetration of these markets, or to the revenue or profit margins with respect to these products. The inability of the Company, for any reason, to develop and introduce new products and product enhancements in a timely manner in response to changing market conditions or client requirements could materially adversely affect the Company’s business, operating results and financial condition.

In addition, Radiant strives to achieve compatibility between the Company’s products and retail systems that management believes are or will become popular and widely adopted. The Company invests substantial resources in development efforts aimed at achieving such compatibility. Any failure by the Company to anticipate or respond adequately to technology or market developments could materially adversely affect the Company’s business, operating results and financial condition.

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The Company operates in a highly competitive market and can make no assurance that it will be able to compete successfully against its current or future competitors.

The market for retail information systems is intensely competitive. The Company believes the principal competitive factors in such market are product quality, reliability, performance and price, vendor and product reputation, financial stability, features and functions, ease of use, quality of support, and degree of integration effort required with other systems. A number of companies offer competitive products addressing certain of the Company’s target markets. In addition, the Company believes that new market entrants may attempt to develop fully integrated systems targeting the retail industry. In the market for consulting services, the Company competes with various systems integrators. Many of the Company’s existing competitors, as well as a number of potential new competitors, have significantly greater financial, technical and marketing resources than the Company. There can be no assurance that the Company will be able to compete successfully against its current or future competitors or that competition will not have a material adverse effect on the Company’s business, operating results and financial condition.

Additionally, the Company competes with a variety of hardware and software vendors. Some of the Company’s competitors may have advantages over the Company due to their significant worldwide presence, longer operating and product development history, and substantially greater financial, technical and marketing resources. If competitors offer more favorable payment terms and/or more favorable contractual implementation terms or guarantees, the Company may need to lower prices or offer other favorable terms in order to compete successfully. Any such changes would be likely to reduce margins.

The Company’s increased investment in the international market could expose it to risks in addition to those experienced in the United States.

The Company’s international revenues represented approximately $33.1 million or 19% of the Company’s total revenues in 2005 and the Company will continue to invest in expanding its international operations. The global reach of the Company’s business could cause it to be subject to unexpected, uncontrollable and rapidly changing events and circumstances in addition to those experienced in domestic locations. The following factors, among others, present risks that could have an adverse impact on the Company’s business, operating results and financial condition:

• Weaker protection of intellectual property rights;

• The Company may be unable to replicate its previous international revenues;

• Conducting business in currencies other than United States dollars subjects the Company to currency controls and fluctuations in currency exchange rates. The Company may be unable to hedge the currency risk in some transactions because of uncertainty or the inability to reasonably estimate its foreign exchange exposure;

• Increased cost and development time may be required to adapt the Company’s products to local markets;

• The Company may lack experience in a particular geographic market;

• Legal, regulatory, social, political, labor or economic conditions in a specific country or region, including loss or modification of exemptions for taxes and tariffs, and import and export license requirements may have a negative impact on the Company; and

• Operating costs in many countries are higher than in the United States.

The loss of key personnel could have a material adverse effect on the Company.

The Company’s future success depends in part on the performance of its executive officers and key employees. The Company does not have in place employment agreements with any of its executive officers. The loss of the services of any of its executive officers or other key employees could have a material adverse effect on the business, operating results and financial condition of the Company.

In addition, the failure of Radiant to recruit and retain qualified accounting and finance personnel may result in excessive third party accounting and auditing costs and expenses in connection with compliance with the Sarbanes-Oxley Act, specifically in connection with Section 404 (internal control over financial reporting).

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The Company’s inability to attract, hire or retain the necessary technical and managerial personnel could have a material adverse effect on the Company’s business, operating results and financial condition.

The Company is heavily dependent upon its ability to attract, retain and motivate skilled technical and managerial personnel, especially highly skilled engineers involved in ongoing product development and consulting personnel who assist in the development and implementation of the Company’s total business solutions. The market for such individuals is intensely competitive. Due to the critical role of the Company’s product development and consulting staffs, the inability to recruit successfully or the loss of a significant part of its product development or consulting staffs could have a material adverse effect on the Company. The software industry is characterized by a high level of employee mobility and aggressive recruiting of skilled personnel. There can be no assurance that the Company will be able to retain its current personnel, or that it will be able to attract, assimilate or retain other highly qualified technical and managerial personnel in the future. The inability to attract, hire or retain the necessary technical and managerial personnel could have a material adverse effect upon the Company’s business, operating results and financial condition.

The Company’s success and ability to compete is dependent upon its ability to protect its proprietary technology.

The Company’s success and ability to compete is dependent in part upon its ability to protect its proprietary technology. The Company relies on a combination of patent, copyright and trade secret laws and non-disclosure agreements to protect this proprietary technology. The Company enters into confidentiality and non-compete agreements with its employees and license agreements with its clients and potential clients, which limits access to and distribution of its software, documentation and other proprietary information. There can be no assurance that the steps taken by the Company to protect its proprietary rights will be adequate to prevent misappropriation of its technology or that the Company’s competitors will not independently develop technologies that are substantially equivalent or superior to the Company’s technology. In addition, the laws of some foreign countries do not protect the Company’s proprietary rights to the same extent as do the laws of the United States.

Certain technology used in conjunction with the Company’s products is licensed from third parties, generally on a non-exclusive basis. The termination of any such licenses, or the failure of the third-party licensors to adequately maintain or update their products, could result in delay in the Company’s ability to ship certain of its products while it seeks to implement technology offered by alternative sources, and any required replacement licenses could prove costly. While it may be necessary or desirable in the future to obtain other licenses relating to one or more of the Company’s products or relating to current or future technologies, there can be no assurance that the Company will be able to do so on commercially reasonable terms or at all.

The Company may have difficulty implementing its products, which could damage its reputation and its ability to generate new business.

Implementation of the Company’s software products can be a lengthy process, and commitment of resources by our clients is subject to a number of significant risks over which we have little or no control. Delays in the implementations of any of the Company’s software products, whether by our business partners or us, may result in client dissatisfaction, disputes with customers, or damage to our reputation. Significant problems implementing the Company’s software therefore can cause delays or prevent us from collecting fees for our software and can damage our ability to generate new business.

If the Company becomes subject to adverse claims alleging infringement of third-party proprietary rights, we may incur unanticipated costs and our competitive position may suffer.

The Company is subject to the risk that it is infringing on the proprietary rights of third parties. Although we are not aware of any infringement by our technology on the proprietary rights of others and are not currently subject to any legal proceedings involving claimed infringements, we can make no assurances that we will not be subject to such third-party claims, litigation or indemnity demands and that these claims will not be successful. If a claim or indemnity demand were to be brought against the Company, it could result in costly litigation or product shipment delays or force us to stop selling or providing such services or to enter into royalty or license agreements.

Errors or defects in the Company’s software products could diminish demand for our products, injure our reputation and reduce our operating results.

The Company’s software products are complex and may contain errors that could be detected at any point in the life of the product. We cannot make any assurances that errors will not be found in new products or releases after shipment. This could result in diminished demand for our products, delays in market acceptance and sales, diversion of development resources, injury to our reputation or increased service and warranty costs. If any of these were to occur, our operating results could be adversely affected.

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The Company’s acquisition of existing businesses and its failure to successfully integrate these businesses could disrupt our business, dilute our common stock and harm our financial condition and operating results.

In January 2004, the Company acquired substantially all of the assets of Aloha Technologies and certain affiliated entities and in April 2004, the Company acquired substantially all of the assets of E-Needs, Inc. In October 2005, the Company acquired the shares of MenuLink Computer Solutions, Inc. In January 2006, the Company acquired substantially all of the assets of Synchronics, Inc. We intend to make future strategic acquisitions of complementary companies, products or technologies. Such acquisitions could disrupt our business. In addition, holdings in the Company would be diluted if we issue equity securities in connection with any acquisition, as we did in the transactions involving the acquisitions of Aloha, E-Needs, MenuLink and Synchronics. Acquisitions involve numerous risks, including:

• problems combining the acquired operations, technologies or products;

• unanticipated costs or liabilities;

• diversion of management’s attention;

• adverse effects on existing business relationships with suppliers and customers;

• risks associated with entering markets in which we have limited or no prior experience; and

• potential loss of key employees, particularly those of the acquired organizations.

For example, until we actually assume operating control of the business assets and operation, it is difficult to ascertain the actual value or understand the potential liabilities of our acquisitions. The Company may not be able to successfully integrate any business, technologies or personnel that it has acquired or that it might acquire in the future, and this could harm our financial condition and operating results.

The Company’s executive officers own a significant amount of the Company’s common stock and will be able to exercise significant influence on matters requiring shareholder approval.

The Company’s executive officers collectively owned approximately 16% of the Company’s outstanding common stock as of February 23, 2006. Consequently, together they continue to be able to exert significant influence over the election of the Company’s directors, the outcome of most corporate actions requiring shareholder approval and the business of the Company.

The market price for the Company’s common stock is extremely volatile and the Company does not expect to pay dividends on its common stock in the foreseeable future.

The market price for the Company’s common stock has experienced substantial price volatility since its initial public offering in February 1997 and such volatility may continue in the future. Quarterly operating results of the Company or of other companies participating in the computer-based products and services industry, changes in conditions in the economy, the financial markets of the computer products and services industries, natural disasters or other developments affecting the Company or its competitors could cause the market price of the common stock to fluctuate substantially. In addition, the stock market has experienced extreme price and volume fluctuations that have affected the market price of many technology stocks in particular and that have often been unrelated or disproportionate to the operating performance of these companies. For the foreseeable future, it is expected that earnings, if any, generated from the Company’s operations will be used to finance the growth of its business, and that no dividends will be paid to holders of the common stock.

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The Company’s Articles of Incorporation contain anti-takeover provisions which could have the effect of making it more difficult for a third party to acquire control of the Company.

The Company’s Amended and Restated Articles of Incorporation authorize the Board of Directors to issue up to 5,000,000 shares of preferred stock and to fix the rights, preferences, privileges and restrictions, including voting rights, of the preferred stock without further vote or action by the Company’s shareholders. The rights of the holders of common stock will be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. While the Company has no present intention to issue additional shares of preferred stock, such issuance, while providing desired flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire a majority of the outstanding voting stock of the Company. For example, an issuance of preferred stock could:

• adversely affect the voting power of the stockholders of our common stock;

• make it more difficult for a third party to gain control of the Company;

• discourage bids for the Company’s common stock at a premium;

• limit or eliminate any payments that the stockholders of our common stock could expect to receive upon the Company’s liquidation; or

• otherwise adversely affect the market price of our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

There are no material unresolved written comments that were received from the Securities and Exchange Commission staff 180 days or more before the end of our fiscal year relating to our current reports under the Exchange Act.

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ITEM 2. PROPERTIES

The Company currently conducts its operations from 11 locations and 22 different facilities, all of which are leased. The facilities consist of assembly/warehouse and sales/administrative offices totaling approximately 335,000 square feet. In addition, the Company subleases approximately 100,000 square feet at two facilities in Alpharetta, Georgia. The long-term leases on the Company’s facilities expire at various dates through 2013. The Company believes its facilities are adequate for its current needs and does not anticipate any material difficulty in securing facilities for new space, should the need arise. See “Liquidity and Capital Resources” for a summary of the Company’s lease obligations. A summary of our principal leased properties that are currently in use is as follows:

Location	Description	Area (sq. feet)	Lease Expiration
Alpharetta, Georgia	Assembly and warehouse	101,570	January 2011
Alpharetta, Georgia	Office space	106,631	January 2013
Alpharetta, Georgia (1)	Office space	75,759	January 2013
Alpharetta, Georgia (2)	Office space	43,715	December 2010
Alpharetta, Georgia (3)	Warehouse	9,600	April 2011
Huntington Beach, California	Office space	9,706	October 2008
Brea, California	Office space	1,500	March 2007
Bedford, Texas (4)	Office space	42,000	September 2007
Fort Worth, Texas (4)	Office space	68,511	August 2013
Syracuse, New York	Office space	897	July 2006
Memphis, Tennessee (5)	Office space	28,792	December 2010
Victoria, Australia (6)	Office and warehouse space	18,144	Various thru January 2007
Kinross, Scotland	Office space	223	April 2006
London, England	Office space	400	December 2006
Prague, Czech Republic (7)	Office space	12,690	Various thru January 2008
Singapore	Office space	2,130	March 2007

(1) The Company is subleasing 100% of this facility. The sublease expires concurrent with the Company’s primary lease agreement in January 2013.

(2) The Company is currently subleasing approximately 24,000 square feet of this facility. The sublease expires concurrent with the Company’s primary lease agreement in December 2010.

(3) This lease, which commences in the second quarter of 2006, was entered into subsequent to December 31, 2005.

(4) The Company is scheduled to relocate its current offices in Bedford, Texas to a facility in Fort Worth, Texas during the first half of 2006, at which point the lease on the Fort Worth facility will commence. The lease on the facility in Bedford, Texas does not include an early termination clause and it currently appears that the Company will not be able to sublease the facility.

(5) This property relates to the acquisition of Synchronics, which the Company completed on January 3, 2006. See discussion of this subsequent event in Note 15 of the consolidated financial statements.

(6) The Company has a total of five leased facilities in Victoria, Australia. Certain of the leases expire on various dates through January 2007 while others are on a month-to-month basis.

(7) The Company has a total of six leased facilities in Prague, Czech Republic. The leases expire on various dates through February 2008.

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ITEM 3. LEGAL PROCEEDINGS

There are no material pending legal proceedings to which the Company is a party or of which any of its properties are subject; nor are there material proceedings known to the Company to be contemplated by any governmental authority. There are no material proceedings known to the Company, pending or contemplated, in which any director, officer or affiliate or any principal security holder of the Company, or any associate of any of the foregoing is a party or has an interest adverse to the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of our security holders during the fourth quarter of our fiscal year ended December 31, 2005.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company’s common stock is traded on The NASDAQ National Market under the symbol “RADS”. The following table sets forth the high and low closing sales prices of our common stock for the periods indicated as reported by The NASDAQ National Market.

Year ended December 31, 2005	High		Low
First Quarter	$	9.82	$	5.22
Second Quarter		12.33		8.06
Third Quarter		13.30		9.46
Fourth Quarter		14.00		8.59

Year ended December 31, 2004	High		Low
First Quarter	$	8.49	$	4.90
Second Quarter		6.27		4.00
Third Quarter		4.68		3.73
Fourth Quarter		6.93		4.03

As of February 23, 2006 there were 168 holders of record of the Company’s common stock. The closing price for the stock on this date was $14.38. Management of the Company believes that there are in excess of 5,500 beneficial holders of its common stock.

Dividends

The Company currently anticipates that all of its earnings will be retained for development of the Company’s business and does not anticipate paying any cash dividends in the foreseeable future. Future cash dividends, if any, will be at the discretion of the Company’s Board of Directors and will depend upon, among other things, the Company’s future earnings, operations, capital requirements and surplus, general financial condition, contractual restrictions and such other factors as the Board of Directors may deem relevant.

As part of the debt covenants with Wells Fargo Foothills Inc, the Company is prohibited from paying any future dividends without first obtaining consent from this lender.

Purchases of Common Stock

In the fourth quarter of 2005, the Board of Directors of the Company authorized a re-commencement of the Company’s stock repurchase program authorizing the repurchase of up to 1.0 million shares of its common stock at a price not to exceed $20.00 per share through October 2007. The Company did not repurchase any shares in the fourth quarter of 2005.

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ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

The following table sets forth selected consolidated financial data of the Company for each of its five most recent fiscal years which have been derived from the consolidated financial statements of the Company. As a result of the Company’s disposal of its Enterprise segment and operations in the first quarter of 2004, the Company’s previously reported consolidated statement of operations data for the years ended December 31, 2003, 2002 and 2001 have been restated to present the discontinued Enterprise segment and operations separate from continuing operations. See Note 4 to the consolidated financial statements for further explanation. The financial data as of and for the years ended December 31, 2005 and 2004 includes Radiant’s acquisition of Aloha Technologies and certain affiliated entities (collectively, “Aloha”) which took place in January 2004. The financial data as of and for the year ended December 31, 2005 includes Radiant’s acquisition of MenuLink, which took place in October 2005. See Note 4 to the consolidated financial statements for further explanation regarding these acquisitions. This selected consolidated financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements of the Company and the notes thereto included elsewhere herein (in thousands, except per share data):

	Year Ended December 31,
	2005		2004		2003			2002		2001 (unaudited)
Statement of Operations Data:
Revenues	$	172,042	$	134,874	$	93,937		$	124,855	$	122,024
Income (loss) from continuing operations		5,562		1,475		(5,955	)		5,030		5,407
Income (loss) from discontinued Enterprise business, net		—		2,713		(41,776	)		1,511		(5,835	)
Net income (loss)		5,562		4,188		(47,731	)		6,541		(428	)
Income (loss) per share from continuing operations:
Basic income (loss) per share	$	0.19	$	0.05	$	(0.21	)	$	0.18	$	0.20
Diluted income (loss) per share	$	0.18	$	0.05	$	(0.21	)	$	0.18	$	0.19
Net income (loss) per share:
Basic income (loss) per share	$	0.19	$	0.15	$	(1.71	)	$	0.24	$	(0.02	)
Diluted income (loss) per share	$	0.18	$	0.14	$	(1.71	)	$	0.23	$	(0.02	)

	December 31,
	2005		2004		2003		2002		2001 (unaudited)
Balance Sheet Data:
Working capital	$	22,822	$	19,186	$	44,529	$	66,201	$	55,205
Total assets		142,505		129,754		92,704		145,256		125,162
Long-term debt, including current portion		18,383		18,553		660		1,151		1,610
Shareholders’ equity		84,433		73,307		66,923		114,710		103,614

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

Management’s Discussion and Analysis (“MD&A”) is intended to facilitate an understanding of Radiant’s business and results of operations. This MD&A should be read in conjunction with Radiant’s consolidated financial statements and the accompanying notes to consolidated financial statements included elsewhere in this report. MD&A consists of the following sections:

• Overview: A summary of Radiant’s business, financial performance and opportunities

• Results of Operations: A discussion of operating results

• Liquidity and Capital Resources: An analysis of cash flows, sources and uses of cash, contractual obligations and financial position

• Critical Accounting Policies and Procedures: A discussion of critical accounting policies that require the exercise of judgments and estimates

• Recent Accounting Pronouncements: A summary of recent accounting pronouncements and the effects on the Company

Overview

We are a leading provider of retail technology focused on the development, installation and delivery of solutions for managing site operations of hospitality and retail businesses. Our point-of-sale and back-office technology is designed to enable businesses to deliver exceptional client service while improving profitability. We offer a full range of products that are tailored to specific hospitality and retail market needs including hardware, software and professional services. The Company offers best-of-breed solutions designed for ease of integration in managing site operations, thus enabling operators to improve customer service while reducing costs. We believe our approach to site operations is unique in that our product solutions provide enterprise visibility and control at the site, field, and the headquarters levels.

The Company operates primarily through three reportable segments: (i) Hospitality, (ii) Petroleum and Convenience Retail, and (iii) Entertainment. The current business segments were implemented subsequent to the disposition of the Enterprise Software Systems segment, through a renewed focus on the Company’s vertical market strategy.

Radiant’s financial performance during 2005 was positively impacted by strategic decisions designed to generate future revenue and operating income growth. The most significant factors that affected Radiant’s results of operations and financial condition during 2005 included the following:

• Significant growth within our Hospitality segment through both our direct and indirect sales channels;

• Increased revenues in our Petroleum and Convenience Retail segment specifically as it relates to our international markets;

• International market expansion in all segments;

• Efficient leveraging of our cost structure while growing substantially year over year; and

• The acquisition of MenuLink

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Results of Operations

The following table sets forth, for the periods indicated, the percentage relationship of certain statement of operation items to total revenues:

	Year ended December 31,
	2005		2004		2003
Revenues:
System sales	57.3	%	53.5	%	45.7	%
Client support, maintenance and other services	42.7		46.5		54.3
Total revenues	100.0		100.0		100.0
Cost of revenues:
System sales	31.2		27.1		26.6
Impairment of capitalized software and acquired software technology	—		—		1.5
Client support, maintenance and other services	28.3		29.2		34.8
Total cost of revenues	59.5		56.3		62.9
Gross profit	40.5		43.7		37.1
Operating expenses:
Product development	8.4		9.5		10.9
Sales and marketing	11.1		13.7		15.2
Depreciation of fixed assets	1.9		2.8		3.6
Amortization of intangible assets	3.1		3.6		0.0
Impairment of HotelTools software	0.3		—		—
Restructuring charges	0.8		—		1.3
General and administrative	10.5		12.1		11.3
Total operating expenses	36.1		41.7		42.2
Income (loss) from operations	4.4		2.0		(5.1	)
Interest and other expense (income), net	0.6		0.8		(0.6	)
Income (loss) from continuing operations before income tax provision	3.8		1.2		(4.5	)
Income tax provision	0.6		0.1		1.8
Income (loss) from continuing operations	3.2		1.1		(6.3	)
Income (loss) from discontinued Enterprise business, net	—		2.0		(44.5	)
Net income (loss)	3.2	%	3.1	%	(50.8	)%

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Year ended December 31, 2005 compared to year ended December 31, 2004

Radiant had a diluted net income from continuing operations of $0.18 per common share in 2005, compared with a diluted net income from continuing operations of $0.05 per common share in 2004. In addition, the Company’s revenues increased during the year ended December 31, 2005 by approximately $37.2 million, or 28%, compared to the year ended December 31, 2004. These increases were primarily due to the organic growth in all of the Company’s segments with the most significant growth occurring in the direct and reseller channels of our Hospitality segment and international growth in our Petroleum and Convenience Retail segment. In addition, the Company was able to leverage its operating costs effectively throughout 2005, which resulted in operating expenses decreasing as a percentage of revenues by approximately 6%.

System sales – The Company derives the majority of its revenues from sales and licensing fees for its point-of-sale hardware, software and site management software solutions. System sales for 2005 were approximately $98.5 million compared to $72.2 million in 2004, an increase of approximately $26.3 million, or 36%.

The year over year increase is primarily due to the increased use of the hospitality re-seller channel for additional sales, the success of selling the Company’s new hardware products into its hospitality reseller markets (which began in the latter part of the second quarter 2004), increased presence in the international community with international revenues increasing 42% to $33.1 million, and improved product demand throughout the hospitality industry.

Client support, maintenance and other services – The Company also derives revenues from client support, maintenance and other services including training, custom software development, subscription and hosting, and implementation services (professional services). The majority of these revenues are from support and maintenance and is structured on a recurring revenue basis associated with installed sites in the field, while additional professional services are associated with projects related to new sales or implementation of products.

Client support, maintenance and other services increased by approximately $10.8 million, or 17%, from 2004. The increase is primarily due to the additional revenues generated in both software and hardware maintenance due to the increased sales in 2004 and continuing through 2005, the increase in revenues generated from the Company’s Hospitality subscription products due to continued marketing efforts around this product line, and the additional revenues generated through installations custom development and consulting projects with significant customer contracts signed in late 2004 and throughout 2005.

System sales gross profit – Cost of system sales consists primarily of hardware and peripherals for site-based systems, amortization of software costs and labor. All costs, other than amortization, are expensed as products are shipped, while software amortization is expensed at the greater of straight line amortization or proportion to sales volume. System sales gross profit increased during 2005 by approximately $9.2 million, or 26%, while the gross margin percentage decreased 3 points to 46% in 2005 compared to 2004. The decrease in the gross profit percentage is primarily due to the change in mix between the Company’s hardware and software product lines resulting from additional hardware sales within the reseller channel and an increase of low margin hardware products sold internationally during the later half of 2005. We expect our systems gross profit percentage for 2006 to improve to approximately 50%.

Client support, maintenance and other services gross profit – Cost of client support, maintenance and other services consists primarily of personnel and other costs associated with the Company’s services operations. The gross profit on services revenue increased during 2005 by approximately $1.6 million, or 7%, while the gross margin percentage decreased by 3 points to 34% for 2005 compared to 2004. The decrease in the gross margin percentage is primarily due to normal fluctuations between product development projects and maintenance projects that occur throughout the year and due to a major software project being released in the beginning of the third quarter 2004. Personnel expenses associated with this project were capitalized during the first half of 2004. Personnel assigned to this project were reassigned to software maintenance projects after the completion of this project in the third quarter of 2004. As such, costs were expensed as incurred. We expect our services gross profit percentage for 2006 to improve to above 35%.

Segment revenues – Total revenues in the Hospitality business segment were approximately $92.1 million in 2005 compared to approximately $59.2 million in 2004, an increase of approximately $32.9 million, or 56%. The two main reasons for the increase are the use of the reseller channel for additional sales into the hospitality market (specifically hardware sales which began selling through the reseller market in the latter part of the second quarter 2004) and improved demand throughout the industry. Total revenues in the Petroleum and Convenience Retail business segment were approximately $58.5 million in 2005 compared to approximately $54.1 million in 2004, which is an increase of approximately $4.4 million, or 8%. The increase is primarily due to the significant revenues being generated through new international customer sales, which have increased 31% over 2004. Our Entertainment business segment revenues increased by approximately $0.3 million, or 2%, to $19.3 million as growth in this industry has been stagnant due to low consumer demand.

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Total operating expenses – Total operating expenses for 2005 increased by approximately $5.8 million, or 10%, as compared to 2004. Excluding the lease restructuring charges, the impairment of the Company’s HotelTools software and amortization expense, total operating expenses for 2005 increased by approximately $3.4 million, or 7%, as compared to 2004. Total operating expenses (excluding the items noted previously) as a percentage of total revenues were 32% in 2005 compared to 38% in 2004. The following are the key components of the Company’s operating expenses:

• Product development expenses – Product development expenses consist primarily of wages and materials expended on product development efforts excluding any development expenses related to associated revenues which are included in costs of client support, maintenance and other services. Product development expenses increased during 2005 by approximately $1.5 million, or 12%, compared to 2004, primarily due to the continued increase in the Company’s investment in product development in order to promote future growth. The Company will continue to assess making advancements in our software offerings versus acquiring outside technology. Product development expense as a percentage of total revenue was approximately 8% and 10% in 2005 and 2004, respectively.

• Sales and marketing expenses – Sales and marketing expenses increased by approximately $0.7 million, or 4%, compared to 2004, primarily due to the increase in personnel and the sales commissions paid on the additional revenues generated year over year, and an increase in trade show participation and promotional items. Sales and marketing expenses as a percentage of total revenue were approximately 11% and 14% in 2005 and 2004, respectively.

• Depreciation of fixed assets and amortization of intangible assets – Depreciation and amortization expense remained relatively constant at approximately $8.6 million in 2005 as compared to approximately $8.7 million in 2004.

• Impairment of HotelTools software – During 2003, management approved a plan to sell the acquired HotelTools software. At the time this plan was approved, the software became available for immediate sale and management actively pursued interested parties to sell the software in its present condition. As a result of this impending sale and in accordance with the provisions of SFAS No. 86, Accounting for the Costs of Computer Software to Be Sold, Leased or Otherwise Marketed, the Company wrote down the assets associated with HotelTools to its net realizable value. Additionally, the Company reclassified the remaining intangible asset balance of $550,000 to other short-term assets to reflect the impending sale. During the second quarter of 2005, there was no activity or discussions with interested parties and management made the decision to no longer actively pursue potential buyers of the software. Accordingly, it was determined that the asset should be written off and an impairment charge of $550,000 was recorded during the second quarter of 2005.

• Lease restructuring charges – During the third quarter of 2005, Radiant consolidated certain facilities located in Alpharetta, Georgia, which resulted in the abandonment and the partial subleasing of one facility. In accordance with SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, the Company recorded a lease restructuring charge based on the fair value of the remaining lease payments at the abandonment date less the estimated sublease rentals that could reasonably be obtained from the property. This consolidation resulted in a restructuring charge of approximately $1.5 million in the third quarter of 2005 and consisted of $1.2 million for facility consolidations and approximately $0.3 million of fixed asset write-offs associated with the facility consolidation. As of December 31, 2005, approximately $1.0 million related to the lease commitments remained in the restructuring reserve to be paid. The Company anticipates the remaining payments will be made by the fourth quarter of 2010 (lease expiration date).

• General and administrative expenses – General and administrative expenses increased by approximately $1.7 million, or 11%, compared to 2004, primarily due to increased salary and bonus expense reflective of the Company’s growth and positive results and additional expense related to the Company’s contributions to its 401(k) and profit-sharing plan which began in the third quarter of 2004. General and administrative expenses as a percentage of total revenue were approximately 11% and 12% in 2005 and 2004, respectively.

Interest income and expense – The Company’s interest income is derived from the investment of its cash and cash equivalents and has remained relatively flat in 2005 compared to 2004. The Company’s interest expense includes interest expense incurred on its long-term debt and has increased from approximately $1.1 million in 2004 to $1.2 million in 2005. This increase is primarily due to the increase in the prime rate of interest during 2005.

Income tax provision – The Company recorded an income tax provision of approximately $1.0 million in 2005 compared to a tax provision of approximately $0.1 million in 2004. The increase is primarily due to income generated in foreign countries and domestic states in which the Company currently has no operating loss carry-forwards. At December 31, 2005, a valuation allowance has been established for all net deferred tax assets. Realization is dependent upon generating sufficient taxable income prior to the expiration of the operating loss carry-forwards in future periods. Although realization is not currently assured, management evaluates the need for a valuation allowance each quarter and in the future, should management determine that realization of net deferred tax assets is more likely than not, some or all of the valuation allowance will be reversed, and the Company’s effective tax rate will be reduced.

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Year ended December 31, 2004 compared to year ended December 31, 2003

Radiant had a diluted net income from continuing operations of $0.05 per common share in 2004, compared with a diluted net loss from continuing operations of $0.21 per common share in 2003. This increase was due to a 15% organic increase in revenue within the Company’s segments and the purchase of Aloha Technologies in January 2004.

The Company’s revenues increased during the year ended December 31, 2004 by approximately $40.9 million, or 44%, compared to the year ended December 31, 2003, primarily due to additional software license sales associated with the acquisition of Aloha, use of the hospitality reseller channel for additional sales, the continued success of selling new hardware products into direct and reseller markets and improved product demand throughout the hospitality and petroleum and convenience retail industries.

System sales – Throughout 2003, system sales declined due to decreases in demand as a result of economic conditions. However, demand improved during 2004. System sales for 2004 were $72.2 million, an increase of $29.3 million, or 68%, from 2003. The increase was primarily due to additional software license sales associated with the acquisition of Aloha in January 2004, use of the hospitality reseller channel for additional sales, the continued success of selling new hardware products into direct and reseller markets and improved product demand throughout the hospitality industry.

Client support, maintenance and other services – Client support, maintenance and other services increased 23% in 2004 from 2003, primarily due to the addition of software support and maintenance revenues from the acquisition of Aloha and the additional services provided due to the increase in the number of sites where Radiant products were installed.

System sales gross profit – System sales gross profit increased during 2004 by approximately $19.1 million, or 116%, and the gross margin percentage increased 11% to 49% for 2004 compared to 2003. The systems gross profit during 2003 included a non-recurring charge of approximately $1.4 million. The increase in the gross profit percentage was primarily due to the mix of our hardware and software product lines and an increased number of software licenses sold during 2004 compared to 2003 due to the acquisition of Aloha. The increase was also attributable to several software products becoming fully amortized in late 2003 and early 2004. In the second half of 2004, we began to see the gross margin in system sales decrease due to the change in mix between our hardware and software product lines, primarily due to the additional hardware sales within our reseller channel.

Client support, maintenance and other services gross profit – The gross profit percentage on service sales remained relatively constant at 37% and 36% for 2004 and 2003, respectively. The increase was primarily due to improved efficiency in providing client support, maintenance and other services to our customers and the acquisition of Aloha.

Segment revenues – Total revenues in the Hospitality business segment increased by approximately $39.7 million, or 204%, to $59.2 million from $19.5 million in 2003, primarily due to the acquisition of Aloha, use of the reseller channel for additional sales into the hospitality market and improved demand throughout the industry. Total revenues in the Petroleum and Convenience Retail business segment increased by approximately $2.1 million, or 4%, to $54.1 million primarily due to improved demand throughout the petroleum and convenience retail industry. Our Entertainment business segment revenues decreased by approximately $1.5 million, or 7%, to $19.0 million primarily due to a decrease in demand.

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Total operating expenses – The Company’s total operating expenses increased during 2004 by approximately $16.6 million, or 42%, compared to 2003 due to the following:

• Product development expenses – Product development expenses increased during 2004 by approximately $2.6 million, or 26%, compared to 2003, primarily due to additional product development expense from the acquisition of Aloha. Product development expense as a percentage of revenue remained relatively constant at 10% and 11% for 2004 and 2003, respectively.

• Sales and marketing expenses – Sales and marketing expenses increased by approximately $4.2 million, or 29%, compared to 2003, primarily due to additional sales and marketing expense related to product/trade shows, increased advertising expense and the acquisition of Aloha. Sales and marketing expenses as a percentage of revenue remained relatively constant at 14% and 15% for 2004 and 2003, respectively.

• Depreciation of fixed assets and amortization of intangible assets – Depreciation and amortization expense increased during 2004 by approximately $5.3 million as compared to 2003, primarily due to additional amortization of $4.9 million related to $24.8 million of amortizable intangible assets acquired as part of the Aloha acquisition.

• General and administrative expenses – General and administrative expenses increased by approximately $5.7 million, or 54%, compared to 2003, primarily due to the acquisition of Aloha, increased professional fees in connection with the implementation of Section 404 of the Sarbanes-Oxley Act, and increased bonus and commission expense reflective of the Company’s growth and positive results in 2004. General and administrative expenses as a percentage of total revenue remained relatively constant at 12% and 11% for 2004 and 2003, respectively.

Interest income and interest expense –Interest income decreased from approximately $0.4 million in 2003 to approximately $0.1 million in 2004. This decrease is due to the utilization of cash in 2004 in the acquisition of Aloha. The Company’s interest expense includes interest expense incurred on its long-term debt. Interest expense in 2004 increased to $1.1 million from a level of $0.1 million in 2003. This increase is a result of entering into interest bearing notes payable associated with the acquisition of Aloha.

Income tax provision – The Company recorded an income tax provision of approximately $0.1 million in 2004 compared to a tax provision of $1.7 million in 2003. No tax benefit was recorded on the 2003 loss due to the uncertainty of realizing the benefit of the net operating losses generated during the year. However, during 2004, the Company utilized a portion of its net operating losses to offset the Company’s recorded operating income for that year. In addition, as part of the provision for taxes, a $1.2 million reserve was placed on existing tax assets due to the uncertainty of realizing future benefit. At December 31, 2004, a valuation allowance had been established for all net deferred tax assets. The remaining tax provision represents various foreign and state income taxes.

Income (loss) from discontinued Enterprise business, net – The financial statements for 2003 have been restated to report the revenues and expenses of Radiant’s Enterprise business separately as discontinued operations.

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Liquidity and Capital Resources

On March 31, 2005, the Company entered into a senior secured credit facility (the “Credit Agreement”) with Wells Fargo Foothill, Inc., as the arranger, administrative agent and initial lender. Other lenders may participate in the Credit Agreement from time to time. The Credit Agreement provides for extensions of credit in the form of revolving loans in an aggregate principal amount of up to $15 million and a term loan facility in an aggregate principal amount of up to $15 million. Loans under the Credit Agreement will bear interest, at Radiant’s option, at either the London Interbank Offering Rate plus two and one half percent or at the rate that Wells Fargo Bank, N.A. announces as its prime rate then in effect. Fees associated with the Credit Agreement are typical for transactions of this type. As of December 31, 2005, the Company has approximately $3.3 million in letters of credit against its available balance of approximately $8.4 million and no outstanding balance against the revolver. On January 1, 2006, approximately $2.7 million in letters of credit expired and were not renewed.

The Credit Agreement contains certain customary representations and warranties from Radiant. In addition, the Credit Agreement contains certain financial and non-financial covenants, with which the Company was in compliance as of December 31, 2005.

During the second quarter of 2005, the Company received $15 million in proceeds from the term loan facility in its Credit Agreement. The principal on this note will be paid at $250,000 per month with all unpaid principal being due upon termination/expiration of the Credit Agreement. The majority of these funds were used to pay off a significant portion of the promissory notes held by the previous shareholders of Aloha. In connection with this payoff, the Company entered into an amended and restated promissory note in the amount of $1.5 million with the previous shareholders of Aloha. During the fourth quarter of 2005, the Company modified the amended promissory note by reducing the $1.5 million principal amount to $1.0 million. This decrease was due to agreed upon purchase price adjustments. The principal on this note will be paid over the course of the third and fourth quarters of 2008 and the first quarter of 2009.

On January 3, 2006, the Company entered into an amendment to its Credit Agreement with Wells Fargo Foothill, Inc. The amendment increased the aggregate term loan facility available under this agreement from $15 million to $31 million and extended the expiration date of the Credit Agreement from March 31, 2008 to March 31, 2010. Certain of the financial and other covenants were also modified as a result of the amendment. As of January 3, 2006, aggregate borrowings under this facility totaled approximately $29.3 million.

The Company’s working capital increased by approximately $3.6 million, or 19%, to $22.8 million at December 31, 2005 as compared to $19.2 million at December 31, 2004. The Company has historically funded its business through cash generated by operations. Cash provided by operating activities from continuing operations for 2005 was $15.0 million as compared to $10.9 million for 2004. Cash from operations in 2005 was mainly generated from net income, the adding back of non-cash items such as depreciation, amortization, lease restructuring charges and the impairment of the HotelTools software, and through the collection of calendar year support and maintenance invoices that are deferred and recognized over the course of the year. This was partially offset by normal fluctuations in accounts receivable, inventories, other assets, accounts payable, accrued liabilities, payables due to BlueCube, client deposits and deferred revenue and other liabilities. If near-term demand for the Company’s products weakens or if significant anticipated sales in any quarter do not close when expected, the availability of funds from operations may be adversely affected.

In 2004, the Company generated net income of approximately $4.2 million, which included a $3.6 million non-cash gain on the sale of the Company’s Enterprise segment. The remaining net income of approximately $0.6 million was primarily due to additional software license sales associated with Radiant’s acquisition of Aloha, use of the hospitality reseller channel for additional sales, the continued success of selling our new hardware products into our current direct and reseller markets and improved product demand throughout the hospitality and petroleum and convenience retail industries both domestically and internationally. In addition, approximately $9.4 million of depreciation and amortization expense was recorded in 2004, of which approximately $4.9 million was directly associated with the amortization of intangibles associated with the Company’s acquisitions. Due to the increased growth in the business and the acquisition of Aloha, increases in accounts receivable, inventories, accounts payable, accrued liabilities and deferred revenues occurred during 2004. The net effect of these increases resulted in positive cash flows from operations of approximately $0.8 million.

In 2003, the reconciliation of cash provided by operating activities to net loss included $17.7 million non-cash charge for the impairment of capitalized software and acquired technology, $10.6 million for the impairment of the TriYumf Asset and $6.2 million for the impairment of goodwill. These impairments are included in the Enterprise discontinued operations which are more fully described in Note 4 of the consolidated financial statements. In addition, cash provided by operating activities included a decrease in accounts receivable of $12.6 million as cash collections exceeded revenues during 2003, a decrease in inventories of $0.4 million, an increase in client deposits and deferred revenue of $2.5 million as client payments were received in advance of delivered goods and services and depreciation and amortization of $8.0 million. These amounts were offset by a decrease in accounts payable and accrued liabilities, net, of $3.5 million and an increase in other assets of $1.5 million. The changes in accounts payable and accrued liabilities were due to the timing of certain vendor payments.

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Cash used in investing activities during 2005 was $12.1 million as compared to $27.7 million during the same period in 2004. In 2005, investing activities mainly consisted of additional consideration related to the Breeze acquisition (see Note 2 of the consolidated financial statement footnotes), the purchase of equipment, expenditures for capitalizable software projects, the MenuLink acquisition, and the continued payout of accrued contractual obligations related to the Enterprise disposition.

The uses of cash in investing activities in 2004 consisted primarily of cash payments of approximately $12.0 million associated with the disposition of the Enterprise business, payment of $11.2 million made in connection with the acquisition of Aloha, purchases of property and equipment of $2.2 million, capitalized software costs of $1.9 million, and payment of $0.3 million in connection with the acquisition of E-Needs.

The uses of cash in investing activities during 2003 consisted primarily of purchases of property and equipment of $3.9 million, capitalized software costs of $5.5 million and the purchase of the TriYumf Asset and capitalized professional services costs of $5.5 million. During the fiscal period 2003, the Company paid $4.4 million as the third installment for the source code and object code for certain back office software and capitalized approximately $0.6 million in professional services costs.

Cash used in financing activities during 2005 was $0.3 million as compared to cash being used in financing activities of $1.9 million in 2004. In 2005, financing activities mainly consisted of the repayment of promissory notes related to the Aloha acquisition, proceeds generated from the Credit Agreement previously mentioned, payments made in connection with loan fees to enter into the Credit Agreement, the repurchase of common stock from previous Breeze shareholders, and cash generated from the issuance of shares from the Company’s Employee Stock Purchase Plan and the exercise of employee stock options.

The uses of cash in financing activities in 2004 consisted primarily of the payment of notes in the amount of $3.2 million in connection with the acquisition of Aloha, the Company’s purchase of common stock issued to the previous owners of Breeze Limited for approximately $1.0 million, and principal payments under capital lease obligations of approximately $0.6 million. These cash outflows were offset by cash received from the exercise of stock options of approximately $1.2 million and approximately $1.7 million of cash received for the purchase of stock issued under the Company’s employee stock purchase plan.

Cash of approximately $0.3 million was used in financing activities during 2003 due primarily to fund the Company’s purchase of common stock pursuant to its stock repurchase program for approximately $2.0 million and principal payments under capital lease obligations of approximately $0.5 million, offset by cash received from the exercise of stock options of approximately $0.8 million and approximately $1.1 million of cash received from stock issued under the Company’s employee stock purchase plan.

On January 13, 2004, the Company acquired substantially all of the assets of Aloha, a leading provider of point of sale systems for the hospitality industry. Aloha was acquired to further develop the Company’s hospitality division. Total consideration of approximately $49.4 million consisted of an $11.0 million cash payment, a five-year note in the principal amount of $19.7 million at an interest rate of prime plus one percent, a one-year note in the principal amount of $1.7 million at an interest rate of prime plus one percent, the issuance of 2.4 million shares of restricted common stock with a fair value of $6.50 per share on the date of announcement (December 15, 2003), and $0.9 million of direct expenses Radiant incurred related to the acquisition and the assumption of certain liabilities. See Note 4 of the consolidated financial statements for additional information.

On January 31, 2004, the Company completed a tax free split-off of the Company’s Enterprise business now known as BlueCube Software, to Erez Goren, the Company’s former Co-Chairman and Co-Chief Executive Officer. Pursuant to the terms of the Share Exchange Agreement under which the split-off was effected, Radiant contributed specified assets and liabilities of the Enterprise business, together with $4.0 million in cash, to the newly formed subsidiary, and then transferred all of the shares of the new company to Erez Goren in exchange for the redemption of 2.0 million shares of common stock of the Company, valued at $16.3 million based upon the quoted price of the Company’s stock (January 31, 2004). The shares redeemed represented approximately 7% of the Company’s outstanding shares at the time. See Note 4 of the consolidated financial statements for additional information.

On October 6, 2005, the Company acquired the shares of MenuLink Computer Solutions, Inc. (“MenuLink”). MenuLink is a leading supplier of back-office software for the hospitality industry. The purchase of MenuLink provides the Company with a fully integrated solution for the hospitality industry. Total consideration was approximately $12.8 million and consisted of $6.3 million in cash, three-year notes in the principal amount of $4.1 million, and 217,884 shares of restricted common stock with a value of $10.97 per share on the date of announcement (September 19, 2005). The notes have an interest rate equivalent to the prime rate. The cash of $6.3 million was paid on the date of closing. Debt will be paid in equal monthly installments (principal and interest) over the next three years. MenuLink has been included in the Company’s consolidated results of operations and financial position from the acquisition date through December 31, 2005.

29

On January 3, 2006, the Company acquired substantially all of the assets of Synchronics, Inc. (“Synchronics”), a supplier of business management and point-of-sale software for the specialty retail industry. Total consideration was approximately $27.0 million and consisted of approximately $19.5 million in cash (subject to a post-closing adjustment) and 592,347 shares of restricted common stock with a value of $12.66 per share based on the average closing price of the stock for the 20 days prior to the acquisition. The cash portion of the purchase price was paid on the date of closing.

The Company believes that its cash and cash equivalents, funds generated from operations and borrowing capacity will provide adequate liquidity to meet its normal operating requirements, as well as to fund the above obligations for at least the next twelve months.

30

Contractual Obligations

The Company leases office space, equipment and certain vehicles under non-cancelable operating lease agreements expiring on various dates through 2013. Additionally, the Company leases computer equipment under a three-year capital lease agreement which expires in December 2007. Contractual obligations as of December 31, 2005 and those arising subsequently as described in footnotes 1 and 4 below are as follows (in thousands):

	Payments Due by Period
Contractual Obligations:	Total		Less than 1 Year		1 – 3 Years		3 – 5 Years		More than 5 Years
Capital leases	$	83	$	41	$	42	$	—	$	—
Operating leases(1)		41,809		6,399		12,812		12,030		10,568
Other obligations:
Notes payable – acquisition of MenuLink Computer Solutions(2) acquisition		3,919		1,292		2,627		—		—
Notes payable – acquisition of Aloha Technologies(3)		964		—		771		193		—
Term note (Credit Agreement)		13,500		3,000		10,500		—		—
Term note borrowings after 12/31/05 (Credit Agreement)(4)		16,000		2,658		5,800		7,542		—
Estimated interest payments on notes payable and term notes		6,088		2,343		2,969		776		—
Divestiture of Enterprise Software Systems(5)		737		737		—		—		—
Purchase commitments(6)		2,342		2,129		213		—		—
Total contractual obligations	$	85,442	$	18,599	$	35,734	$	20,541	$	10,568

(1) The schedule includes the lease obligations resulting from (i) the Synchronics acquisition, which occurred on January 3, 2006, (ii) the lease on the new Fort Worth, Texas facility, which will commence in the first half of 2006 and (iii) the new lease on a warehouse facility in Alpharetta, Georgia, which will commence in the second quarter of 2006. Also included in this schedule are the future minimum lease payments related to facilities that are being subleased. The total minimum rentals to be received in the future under noncancelable subleases as of December 31, 2005 are approximately $1.6 million in less than one year, $3.3 million in one to three years and three to five years, respectively, and $3.0 million after five years.

(2) See Note 6 of the consolidated financial statements for further explanation. Interest accrues at prime and is not included in the above obligation amounts.

(3) See Note 6 of the consolidated financial statements for further explanation. Interest accrues at prime plus 1% and is not included in the above obligation amounts.

(4) Represents the additional $16 million in funds received from Wells Fargo Foothill, Inc. under the Credit Agreement as amended on January 3, 2006.

(5) See Note 4 the consolidated financial statements for further explanation.

(6) The Company has entered into certain noncancelable purchase orders for manufacturing supplies to be used in its normal operations. The related supplies are to be delivered at various dates between January 2006 and June 2007.

The Company believes there are opportunities to grow its business through the acquisition of complementary and synergistic companies, products and technologies. We look for acquisitions that can be readily integrated and accretive to earnings, although we may pursue smaller non-accretive acquisitions that will shorten our time to market with new technologies. The Company expects the general size of cash acquisitions it would currently consider would be in the $5 million to $30 million range. Any material acquisition could result in a decrease to the Company’s working capital depending on the amount, timing and nature of the consideration to be paid. In addition, any material acquisitions of complementary or synergistic companies, products or technologies could require that we obtain additional debt or equity financing. There can be no assurance that such additional financing will be available or that, if available, such financing will be obtained on terms favorable to us and would not result in additional dilution to our stockholders.

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Critical Accounting Policies and Procedures

General

The Company’s discussion and analysis of its financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company’s management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to client programs and incentives, product returns, bad debts, inventories, intangible assets, income taxes, and commitments and contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Management believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

Revenue Recognition

The Company’s revenue is generated primarily through software and system sales, support and maintenance, and other services. The Company recognizes revenue using the guidance from AICPA Statement of Position (SOP) 97-2, Software Revenue Recognition, as amended by SOP 98-9, Modification of SOP 97-2, Software Revenue Recognition, with Respect to Certain Transactions, SOP 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts (“SOP 81-1”), Accounting Research Bulletin (ARB) No. 45, Long-Term Construction-Type Contracts (“ARB 45”), SEC Staff Accounting Bulletin No. 104, Revenue Recognition and Emerging Issues Task Force No. 00-03, Application of AICPA Statement of Position 97-2 to Arrangements That Include the Right to Use Software Stored on Another Entity’s Hardware. Under these guidelines, the Company recognizes revenue when the following criteria are met: (1) persuasive evidence of an agreement exists; (2) delivery of the product has occurred; (3) the fee is fixed or determinable; (4) collectibility is reasonably assured; and (5) remaining obligations under the agreement are insignificant. Under multiple element arrangements, where each element is separately stated, sold and priced, the Company allocates revenues to the various elements based on vendor-specific objective evidence (“VSOE”) of fair value. The Company’s VSOE of fair value is determined based on the price charged when the same element is sold separately. If evidence of fair value does not exist for all elements in a multiple element arrangement, the Company recognizes revenue using the residual method. Under the residual method, a delivered element without VSOE of fair value is recognized as revenue if all undelivered elements have VSOE of fair value.

The Company generally sells its products, which include both software licenses and hardware, directly to end-users and resellers. Revenue from software licenses and system sales is generally recognized as products are shipped, provided that no significant vendor obligations remain and that the collection of the related receivable is probable. For those agreements that provide for significant services or custom development that are essential to the software’s functionality, the software license and contracted services are recognized under the percentage of completion method as prescribed by the provisions of ARB 45 and SOP 81-1.

The Company offers its clients post-contract support in the form of maintenance, telephone support and unspecified software enhancements. Revenue from support and maintenance is recognized ratably over the term of the agreement.

The Company’s services revenue consists of professional fees generated from consulting, custom development, installation and training. Revenue related to professional services performed by the Company is generally recognized on a time and materials basis as the services are performed. Under contracts where revenue is recognized using the percentage of completion method under the provisions of SOP 81-1, the Company measures its progress-to-completion by using input measures, primarily labor hours. The Company continually updates and revises estimates of its input measures. If those estimates indicate a loss will be incurred, the entire loss is recognized in that period.

In addition, the Company offers its customers subscription pricing and hosting services for some of its products. Under these subscription based contracts, revenue is recognized ratably over the contract period commencing, generally, when the product has been installed and training has been completed.

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Allowance for Doubtful Accounts

The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of clients to make required payments. Estimates are developed by using standard quantitative measures based on historical losses, adjusting for current economic conditions and, in some cases, evaluating specific client accounts for risk of loss. The establishment of reserves requires the use of judgment and assumptions regarding the potential for losses on receivable balances. Though the Company considers these balances adequate and proper, if the financial condition of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

Inventories

Inventories are stated at the lower of cost or market value. Cost is principally determined by the first-in, first-out method. The Company records adjustments to the value of inventory based upon its forecasted plans to sell its inventories. The physical condition (e.g., age and quality) of the inventories is also considered in establishing its valuation. These adjustments are estimates, which could vary significantly, either favorably or unfavorably, from actual requirements if future economic conditions, client inventory levels or competitive conditions differ from expectations.

Capitalized Software Development Costs

In accordance with Statement of Financial Accounting Standards No. 86, the Company’s policy on capitalized software costs determines the timing of recognition of certain development costs. In addition, this policy determines whether the cost is classified as development expense or cost of license fees. Capitalization of such costs begins when a detail program or a working model has been produced as evidenced by the completion of design, planning, coding and testing, such that the product meets its design specifications and has thereby established technological feasibility. Capitalization of such costs ends when the resulting product is available for general release to the public. Amortization of capitalized software development costs is provided at the greater of the ratio of current product revenue to the total of current and anticipated product revenue or on a straight-line basis over the estimated economic life of the software, which the Company has determined is not more than five years. Management is required to use its judgment in determining whether development costs meet the criteria for immediate expense or capitalization. Additionally, management is required to use its judgment in the valuation of the unamortized capitalized software costs in determining whether the recorded value is recoverable based on future product sales.

Long-Lived Assets

The Company evaluates the recoverability of long-lived assets and finite-lived identifiable intangibles not held for sale whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable. Such circumstances could include, but are not limited to (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used or in its physical condition, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of an asset. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds the fair value of the asset. The fair value is measured based on quoted market prices, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows.

Goodwill and Intangible Assets

The Company has significant intangible assets related to goodwill and other acquired intangibles as well as capitalized software costs. In assessing the recoverability of goodwill and other intangible assets, the Company must make assumptions regarding the estimated future cash flows and other factors to determine the fair value of these assets. If these estimates or their related assumptions change in the future, the Company may be required to record impairment charges against these assets in the reporting period in which the impairment is determined. For intangible assets, this evaluation includes an analysis of estimated future undiscounted net cash flows expected to be generated by the assets over their estimated useful lives. If the estimated future undiscounted net cash flows are insufficient to recover the carrying value of the assets over their estimated useful lives, the Company will record an impairment charge in the amount by which the carrying value of the assets exceeds their fair value. For goodwill, the impairment evaluation includes a comparison of the carrying value of the reporting unit which houses goodwill to that reporting unit’s fair value. The fair value of the reporting units is based upon the net present value of future cash flows, including a terminal value calculation. If the reporting units’ estimated fair value exceeds the reporting units’ carrying value, no impairment of goodwill exists. If the fair value of the reporting unit does not exceed its carrying value, then further analysis would be required to determine the amount of the impairment, if any. If the Company determines that there is an impairment in either an intangible asset, or goodwill, the Company may be required to record an impairment charge in the reporting period in which the impairment is determined, which may have a negative impact on earnings.

33

Income Taxes

The Company has significant amounts of deferred tax assets that are reviewed for recoverability and valued accordingly. These assets are evaluated by using estimates of future taxable income, the timing of reversals of temporary taxable differences and the impact of tax planning strategies. Valuation allowances related to net deferred tax assets could be impacted by changes to tax codes, changes in statutory tax rates and the Company’s future taxable income levels. At December 31, 2005, the Company had a full valuation allowance against its deferred tax assets. The Company will continue to monitor the recoverability of its net deferred tax assets and will adjust the valuation allowance as necessary in future periods.

Recent Accounting Pronouncements

The following new accounting standards have been or will be adopted by Radiant subsequent to January 1, 2003 and the impact of such adoption, if applicable, has been presented in the accompanying consolidated financial statements:

In December 2003, the FASB issued FASB Interpretation No. 46 (“FIN 46”), Consolidation of Variable Interest Entities. Variable interest entities are defined as entities with a level of invested equity that is not sufficient to fund future activities to permit it to operate on a stand alone basis. In December 2003, the FASB published FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities (“FIN 46(R)”). FIN 46(R), among other things, defers the effective date of implementation for certain entities. The revised interpretation is effective for the first interim or annual reporting period ending after March 15, 2004, with the exception of structures that are commonly referred to as special-purpose entities, for which the statement is effective for periods ending after December 15, 2003. The Company does not participate in variable interest entities.

In October 2004, the American Jobs Creation Act (“AJCA”) was signed into law. The AJCA includes items such as the phase out of the Extraterritorial Income Exclusion Act of 2000 over a three-year period, the introduction of a qualified manufacturing deduction and a one-time election to repatriate foreign earnings. The Company has determined that the AJCA did not have an impact on its financial statements.

In November 2004, the FASB issued Statement of Financial Accounting Standards No. 151, Inventory Costs—An amendment of ARB No. 43, Chapter 4 (“SFAS 151”), which is effective for fiscal periods beginning January 1, 2006 and must be applied prospectively. SFAS 151 requires that abnormal amounts of idle capacity, freight, handling costs and spoilage should be excluded from the cost of inventory and expensed as incurred. The Company does not expect the adoption of this standard to have a material effect on its financial position, results of operations or cash flows.

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 153, Exchanges of Nonmonetary Assets (“SFAS 153”). SFAS 153 is an amendment to APB Opinion No. 29, Accounting for Nonmonetary Transactions. SFAS 153 eliminates the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. The Company adopted the provisions of SFAS 153 on July 1, 2005. The adoption of SFAS 153 did not have an impact on its financial statements.

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In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment (“SFAS 123R”) which is effective for the Company beginning on January 1, 2006. SFAS 123R replaces SFAS 123, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees (“APB 25”). SFAS 123R requires that the compensation cost relating to share-based awards to employees be recognized in financial statements and be measured based on the grant-date fair value of the stock options or other equity-based compensation. The Company will recognize stock-based compensation expense on all awards on a straight-line basis over the requisite service period using the modified prospective method. The Company has unamortized stock-based compensation of approximately $4.3 million as of December 31, 2005, which will be amortized over future periods. See Note 2 of Notes to the Consolidated Financial Statements for information related to the pro forma effect on Radiant’s reported net income and net earnings per share of applying the fair value provisions of the SFAS 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation.

In March 2005, the SEC released SEC Staff Accounting Bulletin No. 107 (“SAB 107”). SAB 107 provides the SEC staff position regarding the application of SFAS 123R, “Share-Based Payment.” SAB 107 contains interpretive guidance relating to the interaction between SFAS 123R and certain SEC rules and regulations, as well as the staff’s views regarding the valuation of share-based payment arrangements for public companies. SAB 107 also highlights the importance of disclosures made related to the accounting for share-based payment transactions. Radiant is currently evaluating SAB 107 and will be incorporating it as part of its adoption of SFAS 123R in the first quarter of 2006.

In March 2005, the FASB issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations – An Interpretation of FASB Statement No. 143 (“FIN 47”), which is effective for fiscal periods ending after December 15, 2005. FIN 47 requires an entity to recognize a liability for the fair value of a conditional asset retirement obligation when incurred if the liability’s fair value can be reasonably estimated. The adoption of this standard did not have a material effect on the Company’s financial position, results of operations or cash flows.

In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154, Accounting Changes and Error Correction Replacement of APB Opinion No. 20 and FASB Statement No. 3 (“SFAS 154”). SFAS 154 replaces APB Opinion No. 20, Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes the requirements for the accounting for and reporting of a change in accounting principle. Opinion 20 previously required that most voluntary changes in accounting principle be recognized by including in net income of the period of the change the cumulative effect of changing to the new accounting principle. SFAS 154 requires retrospective application to prior periods’ financial statements of changes in accounting principle. SFAS 154 defines retrospective application as the application of a different accounting principle to prior accounting periods as if that principle had always been used or as the adjustment of previously issued financial statements to reflect a change in the reporting entity. SFAS 154 also requires that a change in depreciation, amortization, or depletion method for long-lived, non-financial assets be accounted for as a change in accounting estimate affected by a change in accounting principle. The Company is required to adopt the provision of SFAS 154 as of January 1, 2006, although earlier adoption is permitted. Radiant will apply the guidance in SFAS 154 in the event of any future changes in accounting principles.

Off-Balance Sheet Arrangements

The Company does not have any material off-balance sheet arrangements (as defined in the applicable regulations) that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rates

The Company’s financial instruments that are subject to market risks are its cash and cash equivalents and long-term debt. During 2005, the weighted average interest rate on its cash balances was approximately 1.57%. A 10% decrease in this rate would have decreased interest income by approximately $3,000 during 2005. Also during 2005, the weighted average interest rate on the Company’s long-term debt was approximately 7.18%. A 10% increase in this rate would have increased interest expense by approximately $122,000 during 2005.

Foreign Exchange

As more fully explained in Note 14 of the consolidated financial statements, the Company’s international revenues were approximately $33.1 million, $23.3 million and $12.5 million for the years ended December 31, 2005, 2004 and 2003, respectively. The Company’s international operations are subject to risks typical of an international business, including, but not limited to: differing economic conditions, changes in political climate, differing tax structures, other regulations and restrictions and foreign exchange rate volatility. Accordingly, the Company’s future results could be materially adversely impacted by changes in these or other factors. The effect of foreign exchange rate fluctuations on the Company’s results of operations and financial position during 2005, 2004 and 2003 were not material.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following consolidated financial statements are filed with this Report:

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Radiant Systems, Inc.

We have audited the accompanying consolidated balance sheets of Radiant Systems, Inc and subsidiaries (the “Company”) as of December 31, 2005 and 2004, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2005. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

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

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Radiant Systems, Inc. and subsidiaries at December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 1, 2006 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

DELOITTE & TOUCHE LLP

Atlanta, Georgia

March 1, 2006

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RADIANT SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2005 AND 2004

(In thousands, except share data)

	2005			2004
ASSETS
Current assets
Cash and cash equivalents	$	17,641		$	15,067
Accounts receivable, net of allowances for doubtful accounts of $3,407 and $3,624 in 2005 and 2004, respectively		27,047			25,730
Receivable due from BlueCube		512			267
Inventories, net		18,093			18,647
Other current assets		2,287			2,122
Total current assets		65,580			61,833
Property and equipment, net		9,607			8,590
Software development costs, net		2,249			2,344
Goodwill		44,239			34,927
Other intangible assets, net		20,537			22,029
Other long-term assets		293			31
	$	142,505		$	129,754
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	10,355		$	12,198
Accrued liabilities		13,637			11,925
Accrued contractual obligations and payables due to BlueCube		1,947			2,982
Client deposits and unearned revenues		12,490			9,881
Current portion of capital lease payments		37			218
Current portion of long-term debt		4,292			5,443
Total current liabilities		42,758			42,647
Client deposits and unearned revenues, less current portion		376			564
Long-term portion of capital lease payments		42			64
Long-term debt, less current portion		14,091			12,828
Other long-term liabilities		805			344
Total liabilities		58,072			56,447
Shareholders’ equity
Preferred stock, no par value; 5,000,000 shares authorized, no shares issued		—			—
Common stock, no par value; 100,000,000 shares authorized, 30,094,973 and 29,321,360 shares issued and outstanding at December 31, 2005 and 2004, respectively		—			—
Additional paid-in capital		124,744			118,649
Accumulated other comprehensive (loss) income		(287	)		244
Accumulated deficit		(40,024	)		(45,586	)
Total shareholders’ equity		84,433			73,307
	$	142,505		$	129,754

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

38

RADIANT SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

(In thousands, except per share data)

	2005			2004			2003
Revenues:
System sales	$	98,530		$	72,198		$	42,937
Client support, maintenance, and other services		73,512			62,676			51,000
Total revenues		172,042			134,874			93,937
Cost of revenues:
System sales		53,687			36,546			24,973
Impairment of capitalized software and acquired software technology		—			—			1,438
Client support, maintenance, and other services		48,605			39,372			32,668
Total cost of revenues		102,292			75,918			59,079
Gross profit		69,750			58,956			34,858
Operating expenses:
Product development		14,406			12,864			10,245
Sales and marketing		19,137			18,453			14,277
Depreciation of fixed assets		3,267			3,792			3,346
Amortization of intangible assets		5,317			4,891			31
Impairment of HotelTools software (Note 4)		550			—			—
Restructuring charges		1,450			—			1,179
General and administrative		18,022			16,308			10,610
Total operating expenses		62,149			56,308			39,688
Income (loss) from operations		7,601			2,648			(4,830	)
Interest income		26			81			434
Interest expense		(1,219	)		(1,050	)		(61	)
Other income (expense), net		183			(65	)		232
Income (loss) from continuing operations before income tax provision		6,591			1,614			(4,225	)
Income tax provision		1,029			139			1,730
Income (loss) from continuing operations		5,562			1,475			(5,955	)
Income (loss) from discontinued Enterprise business (Note 4)
Loss from operations of Enterprise business, net		—			(913	)		(41,776	)
Gain on disposal of Enterprise business, net		—			3,626			—
Income (loss) from discontinued Enterprise business, net		—			2,713			(41,776	)
Net income (loss)	$	5,562		$	4,188		$	(47,731	)
Income (loss) per share from continuing operations:
Basic income (loss) per share	$	0.19		$	0.05		$	(0.21	)
Diluted income (loss) per share	$	0.18		$	0.05		$	(0.21	)
Income (loss) per share from discontinued Enterprise business, net:
Basic income (loss) per share	$	—		$	0.10		$	(1.50	)
Diluted income (loss) per share	$	—		$	0.09		$	(1.50	)
Net income (loss) per share:
Basic income (loss) per share	$	0.19		$	0.15		$	(1.71	)
Diluted income (loss) per share	$	0.18		$	0.14		$	(1.71	)
Weighted average shares outstanding:
Basic		29,503			28,828			27,835
Diluted		31,569			29,099			27,835

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

39

RADIANT SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

(In thousands)

	Common Stock				Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total
	Shares		Amount
BALANCE, January 1, 2003	28,022		$	—	$	116,752		$	(2,043	)	$	1		$	114,710
Components of comprehensive loss:
Net loss	—			—		—			(47,731	)		—			(47,731	)
Foreign currency translation adjustment	—			—		—			—			216			216
Total comprehensive loss:	—			—		—			(47,731	)		216			(47,515	)
Issuance of common stock	141			—		1,188			—			—			1,188
Treasury stock purchase and retirement	(495	)		—		(3,443	)		—			—			(3,443	)
Exercise of employee stock options	205			—		839			—			—			840
Stock issued under employee stock purchase plan	232			—		1,144			—			—			1,145
BALANCE, December 31, 2003	28,105			—		116,480			(49,774	)		217			66,923
Components of comprehensive income:
Net income	—			—		—			4,188			—			4,188
Foreign currency translation adjustment	—			—		—			—			27			27
Total comprehensive income:	—			—		—			4,188			27			4,215
Issuance of common stock in connection with acquisitions	2,638			—		16,556			—			—			16,556
Treasury stock purchase and retirement in connection with the divestiture of the Enterprise segment (Note 4)	(2,000	)		—		(16,300	)		—			—			(16,300	)
Treasury stock purchase and retirement	(141	)		—		(1,020	)		—			—			(1,020	)
Exercise of employee stock options	271			—		1,202			—			—			1,202
Stock issued under employee stock purchase plan	448			—		1,731			—			—			1,731
BALANCE, December 31, 2004	29,321			—		118,649			(45,586	)		244			73,307
Components of comprehensive income:
Net income	—			—		—			5,562			—			5,562
Foreign currency translation adjustment	—			—		—			—			(531	)		(531	)
Total comprehensive income:	—			—		—			5,562			(531	)		5,031
Issuance of common stock in connection with acquisitions	218			—		2,390			—			—			2,390
Treasury stock purchase and retirement	(237	)		—		(1,000	)		—			—			(1,000	)
Exercise of employee stock options	500			—		2,895			—			—			2,895
Stock issued under employee stock purchase plan	293			—		1,810			—			—			1,810
BALANCE, December 31, 2005	30,095		$	—	$	124,744		$	(40,024	)	$	(287	)	$	84,433

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

40

RADIANT SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

(In thousands)

	2005			2004			2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	5,562		$	4,188		$	(47,731	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Impairment of HotelTools software (see Note 4)		550			—			—
Disposal of leasehold improvements related to lease restructuring (see Note 7)		250			—			—
Gain on sale of Enterprise business		—			(3,626	)		—
Deferred income taxes		—			—			1,215
Utilization of acquired deferred tax asset		571			—			—
Impairment of capitalized software, acquired software technology and fixed assets		—			—			17,661
Impairment of TriYumf Asset		—			—			10,589
Impairment of goodwill		—			—			6,172
Depreciation and amortization		9,408			9,427			7,979
Interest incurred and accrued – Aloha acquisition		—			88			—
Changes in assets and liabilities, net of acquired entities:
Accounts receivable		(2,127	)		(3,283	)		12,553
Inventories		520			(5,563	)		443
Other assets		(722	)		554			(1,498	)
Accounts payable		(1,843	)		5,691			(4,832	)
Accrued liabilities		998			1,434			1,287
Lease restructuring reserve (see Note 7)		1,200			—			—
Payables due to BlueCube (see Note 4)		(433	)		1,642			—
Client deposits and deferred revenue		1,331			395			2,496
Other liabilities		(293	)		(83	)		—
Net cash provided by operating activities		14,972			10,864			6,334
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(4,785	)		(2,239	)		(3,930	)
Capitalized software development costs		(554	)		(1,894	)		(5,477	)
Accrued contractual obligation and other payments related to sale of Enterprise business		(604	)		(12,022	)		—
Proceeds from sale of fixed assets		193			—			—
Acquisition of MenuLink, net of cash acquired		(5,046	)		—			—
Additional consideration for Breeze acquisition		(1,300	)		—			—
Acquisition of Aloha, net of cash acquired		—			(11,200	)		(666	)
Acquisition of E-Needs		—			(300	)		—
Purchase of TriYumf Asset and capitalized professional services costs		—			—			(5,529	)
Net cash used in investing activities		(12,096	)		(27,655	)		(15,602	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of employee stock options		2,895			1,202			839
Proceeds from shares issued under employee stock purchase plan		1,810			1,731			1,144
Principal payments on capital lease obligations		(203	)		(599	)		(491	)
Principal payments on debt – Aloha acquisition		—			(3,230	)		—
Proceeds under long-term debt facility		15,000			—			—
Principal payments on long-term debt facility		(750	)		—			—
Payment of debt issuance costs		(342	)		—			—
Repurchase of common stock		(1,000	)		(1,020	)		(2,048	)
Principal payment on notes payable to shareholders		(17,712	)		—			—
Other		—			—			216
Net cash used in financing activities		(302	)		(1,916	)		(340	)
Increase (decrease) in cash and cash equivalents		2,574			(18,707	)		(9,608	)
Cash and cash equivalents at beginning of year		15,067			33,774			43,382
Cash and cash equivalents at end of year	$	17,641		$	15,067		$	33,774

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

41

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Non-cash transactions related to acquisitions and divestitures (Note 4):
Issuance of common stock — MenuLink	$	2,390	$	—	$	—
Reduction in long-term note payable (purchase price adjustment) — Aloha	$	537	$	—	$	—
Issuance of common stock — Aloha	$	—	$	15,300	$	—
Issuance of common stock — E-Needs	$	—	$	300	$	—
Issuance of common stock — Breeze	$	—	$	956	$	2,006
Long-term notes payable — MenuLink	$	4,110	$	—	$	—
Long-term note payable — Aloha	$	—	$	21,418	$	—
Common stock received in divestiture — Enterprise	$	—	$	16,300	$	—
Assets acquired under capital lease	$	—	$	93	$	—
Cash paid for interest	$	1,150	$	939	$	92
Cash paid for income taxes	$	32	$	104	$	526

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

42

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE YEARS ENDED DECEMBER 31, 2005

1. ORGANIZATION AND BACKGROUND

Radiant Systems, Inc. (the “Company” or “Radiant”) develops, installs and delivers solutions for managing site operations of hospitality and retail businesses. Radiant’s point-of-sale and back-office technology is designed to enable businesses to deliver exceptional client service while improving profitability. The Company offers a full range of products that are tailored to specific hospitality and retail market needs including hardware, software and professional services. Radiant offers best-of-breed solutions designed for ease of integration in managing site operations enabling operators to improve customer service while reducing costs.

Headquartered in Alpharetta, Georgia, Radiant operates primarily through three reportable segments: (i) Hospitality, (ii) Petroleum and Convenience Retail, and (iii) Entertainment. During 2003, the Company operated primarily through the Store Systems segment and the Enterprise Software Systems segment. The current business segments were implemented subsequent to the disposition of the Enterprise Software Systems segment in January 2004, through a renewed focus on the Company’s vertical market strategy.

In addition to its technology, the Company offers professional services focusing on technical implementation and process improvement, as well as hardware maintenance services and 24-hour help desk support.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Radiant Systems, Inc. and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates and Assumptions

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, liabilities, revenues, and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying consolidated financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results could differ from those estimates and assumptions.

Discontinued Operations

As a result of Radiant’s disposal of its Enterprise segment and operations in 2004, the Company’s previously reported consolidated statement of operations for the year ended December 31, 2003 has been restated to present the discontinued operations of the Enterprise segment separate from continuing operations (Note 4). The net tax effect of discontinued operations during 2004 and 2003 was not material to the financial statements.

Treasury Stock

The Company records treasury stock purchases against additional paid in capital at cost.

43

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Foreign Currency Translation

The financial statements of the Company’s non-U.S. subsidiaries are translated into U.S. dollars for financial reporting purposes in accordance with Statement of Financial Accounting Standards No. 52, Foreign Currency Translation. The assets and liabilities of non-U.S. operations whose functional currencies are not in U.S. dollars are translated at the current rates of exchange, while revenues and expenses are translated at the average exchange rate for the year. The cumulative translation adjustments are reflected in shareholders’ equity. Gains and losses on transactions denominated in other than the functional currency were not material for all periods presented in the consolidated statements of operations.

Revenue Recognition

The Company’s revenue is generated primarily through software and system sales, support and maintenance, and other services. The Company recognizes revenue using the guidance from AICPA Statement of Position (SOP) 97-2, Software Revenue Recognition, as amended by SOP 98-9, Modification of SOP 97-2, Software Revenue Recognition, with Respect to Certain Transactions, SOP 81-1, Accounting for Performance of Construction-Type and Certain Production-Type Contracts (“SOP 81-1”), Accounting Research Bulletin (ARB) No. 45, Long-Term Construction-Type Contracts (“ARB 45”), SEC Staff Accounting Bulletin No. 104, Revenue Recognition and Emerging Issues Task Force (“EITF”) No. 00-03, Application of AICPA Statement of Position 97-2 to Arrangements That Include the Right to Use Software Stored on Another Entity’s Hardware. Under these guidelines, the Company recognizes revenue when the following criteria are met: (1) persuasive evidence of an agreement exists; (2) delivery of the product has occurred; (3) the fee is fixed or determinable; (4) collectibility is reasonably assured; and (5) remaining obligations under the agreement are insignificant. Under multiple element arrangements, where each element is separately stated, sold and priced, the Company allocates revenues to the various elements based on vendor-specific objective evidence (“VSOE”) of fair value. The Company’s VSOE of fair value is determined based on the price charged when the same element is sold separately. If evidence of fair value does not exist for all elements in a multiple element arrangement, the Company recognizes revenue using the residual method. Under the residual method, a delivered element without VSOE of fair value is recognized as revenue if all undelivered elements have VSOE of fair value.

System Sales

The Company sells its products, which include both software licenses and hardware, to both resellers and directly to end-users. Revenue from software licenses and system sales is generally recognized as products are shipped, provided that no significant vendor obligations remain and that collection of the related receivable is probable. For those agreements that provide for significant services or custom development that are essential to the software’s functionality, the software license and contracted services are recognized under the percentage of completion method as prescribed by the provisions of ARB 45 and SOP 81-1.

Support and Maintenance

The Company offers its clients post-contract support in the form of maintenance, telephone support and unspecified software enhancements. Revenue from support and maintenance is recognized ratably over the term of the agreement.

Other Services

The Company’s services revenue consists of professional fees generated from consulting, custom development, installation and training. Revenue related to professional services performed by the Company is generally recognized on a time and materials basis as the services are performed. Under contracts where revenue is recognized using the percentage of completion method under the provisions of SOP 81-1, the Company measures its progress-to-completion by using input measures, primarily labor hours. The Company continually updates and revises estimates of its input measures. If those estimates indicate a loss will be incurred, the entire loss is recognized in that period.

In addition, the Company offers its customers subscription pricing and hosting services for some of its products. Under these subscription based contracts, revenue is recognized ratably over the contract period commencing, generally, when the product has been installed and training has been completed.

44

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Unearned Revenue

Unearned revenue represents amounts collected prior to complete performance of professional services, customer support services, software enhancements, and significant obligations under license agreements.

Accounts Receivable and Allowance for Doubtful Accounts

A summary of the Company’s accounts receivable as of December 31, 2005 and 2004 is as follows (in thousands):

	2005			2004
Trade receivables billed	$	28,523		$	28,860
Trade receivables unbilled		1,931			494
		30,454			29,354
Less allowance for doubtful accounts		(3,407	)		(3,624	)
	$	27,047		$	25,730

The Company maintains allowances for doubtful accounts for estimated losses that may result from the inability of clients to make required payments. Estimates are developed by using standard quantitative measures based on customer payment practices and history, inquiries, credit reports from third parties and other financial information. If the financial condition of the Company’s customers were to deteriorate, resulting in impairment of their ability to make payments, additional allowances may be required. Bad debt expense totaled approximately $0.7 million, $1.0 million and $0.6 million in the years ended December 31, 2005, 2004 and 2003, respectively.

Inventory

Inventories consist principally of computer hardware and software media and are stated at the lower of cost (first-in, first-out method) or market. A summary of the Company’s inventory as of December 31, 2005 and 2004 is as follows (in thousands):

	2005		2004
Raw materials, net	$	10,587	$	11,091
Work in process		525		1,520
Finished goods, net		6,981		6,036
	$	18,093	$	18,647

45

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Property and Equipment

Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation of property and equipment is provided using the straight-line method over estimated useful lives of one to five years. Leasehold improvements are amortized over the terms of the respective leases or useful lives of the improvements, whichever is shorter. Maintenance and repairs are charged to expense as incurred, and the costs of additions and improvements are capitalized. Any gain or loss from the retirement or sale of an asset is credited or charged to operations.

Property and equipment at December 31, 2005 and 2004 are summarized as follows (in thousands):

	2005			2004
Computers and equipment	$	11,698		$	9,496
Leasehold improvements		4,393			4,285
Purchased software		7,883			7,707
Furniture and fixtures		7,466			6,817
Land		2,517			2,517
		33,957			30,822
Less accumulated depreciation and amortization		(24,350	)		(22,232	)
	$	9,607		$	8,590

Depreciation expense for the years ended December 31, 2005, 2004 and 2003 was approximately $3.5 million, $3.8 million and $3.3 million, respectively. Depreciation expense includes amortization of assets under capital leases in the amount of approximately $0.4 million, $0.4 million and $0.5 million for the years ended December 31, 2005, 2004 and 2003, respectively.

Capitalized leased assets are amortized over the shorter of the term of the lease, using the straight-line method, or in accordance with practices established for similar owned assets. Amortization of capitalized leased assets is included with depreciation expense in the accompanying financial statements. Included in property and equipment are the following capitalized leases (in thousands):

	2005			2004
Computers and equipment	$	97		$	164
Furniture and fixtures		1,937			1,937
		2,034			2,101
Less accumulated depreciation and amortization		(1,970	)		(1,965	)
	$	64		$	136

46

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Goodwill and Intangible Assets

The Company applied the provisions of Statement of Financial Accounting Standards No. 142 (“SFAS 142”), Goodwill and Other Intangible Assets. In accordance with SFAS 142 the Company evaluates the carrying value of goodwill as of January 1^st of each year and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Such circumstances could include, but are not limited to, (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator. When evaluating whether goodwill is impaired, the Company compares the fair value of the reporting unit to which the goodwill is assigned to its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, then the amount of the impairment loss must be measured. The impairment loss would be calculated by comparing the implied fair value of the reporting unit’s goodwill to its carrying amount. In calculating the implied fair value of goodwill, the fair value of the reporting unit is allocated to all of the other assets and liabilities of that unit based on their fair values. The excess of the fair value of a reporting unit over the amount assigned to its other assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds its implied fair value. The Company’s annual evaluations of goodwill completed on January 1, 2006, 2005 and 2004 in accordance with SFAS 142 resulted in no impairment losses. The Company’s evaluations of goodwill completed during 2003 resulted in impairment losses (Note 5).

Long-Lived Assets

The Company evaluates the recoverability of long-lived assets and finite-lived identifiable intangibles not held for sale whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable. Such circumstances could include, but are not limited to, (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used or in its physical condition, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of an asset. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds the fair value of the asset. The fair value is measured based on quoted market prices, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows.

Software Development Costs

Capitalized software development costs consist principally of salaries and certain other expenses directly related to the development and modification of software products. Capitalization of such costs begins when a detail program or a working model has been produced as evidenced by the completion of design, planning, coding and testing, such that the product meets its design specifications and has thereby established technological feasibility. Capitalization of such costs ends when the resulting product is available for general release to the public. Amortization of capitalized software development costs is provided at the greater of the ratio of current product revenue to the total of current and anticipated product revenue or on a straight-line basis over the estimated economic life of the software, which the Company has determined is not more than five years. For the years ended December 31, 2005, 2004 and 2003, amortization of capitalized software development costs was approximately $0.7 million, $0.6 million and $2.8 million, respectively.

The Company evaluates the recoverability of capitalized software development costs on an annual basis or whenever events or changes in circumstances indicate that the carrying amount of the asset may be less than its net realizable value. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds the net realizable value of the asset. The Company’s annual evaluation of capitalized software development costs on January 1, 2006, 2005 and 2004 resulted in no impairment.

47

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Internally Developed Software Costs

The Company applies the provisions of the AICPA Statement of Position 98-1 (“SOP 98-1”), Accounting for the Costs of Computer Software Developed or Obtained for Internal Use. SOP 98-1 requires all costs related to the development of internal use software other than those incurred during the application development stage to be expensed as incurred. Costs incurred during the application development stage are required to be capitalized and amortized over the estimated useful life of the software.

Research, Development and Engineering Costs

Expenditures for research, development and engineering not capitalized are charged to operations as incurred (Note 3).

Financing Costs Related to Long-Term Debt

Costs associated with obtaining long-term debt are deferred and amortized over the term of the related debt. The Company incurred financing costs in 2005 related to the Credit Agreement and other long-term debt agreements. The costs were deferred and are being amortized over three years. Amortization of financing costs totaled approximately $0.1 million in 2005.

Advertising Costs

Advertising costs are charged to expense as incurred. Advertising expenses for fiscal years 2005, 2004 and 2003 were $0.3 million, $0.7 million and $0.1 million, respectively.

Accounting for Stock-Based Compensation

Radiant measures compensation expense for its stock-based employee compensation plans using the intrinsic value method under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations, until otherwise required by Statement of Financial Accounting Standards No. 123(R), as further discussed below. Under the intrinsic value method, as the exercise price of all options granted under these plans was equal to the fair market price of the underlying common stock on the grant date, no stock-based employee compensation cost is recognized in the consolidated statement of operations.

In accordance with Statement of Financial Accounting Standards No. 148 (“SFAS 148”), Accounting for Stock-Based Compensation — Transition and Disclosure— an Amendment of FASB Statement No. 123, and Statement of Financial Accounting Standards No. 123 (“SFAS 123”), Accounting for Stock-Based Compensation, Radiant’s pro forma option expense is computed using the Black-Scholes option pricing model. This model was developed for use in estimating the value of publicly traded options that have no vesting restrictions and are fully transferable.

To comply with SFAS 148, Radiant presents the following table to illustrate the effect on the net income (loss) and earnings (loss) per share if it had applied the fair value recognition provisions of SFAS 123, as amended, to options granted under its stock-based employee compensation plans. The weighted average Black-Scholes value per option granted in 2005, 2004 and 2003 was $5.05, $3.98 and $5.67, respectively. For purposes of this pro forma disclosure, the estimated value of the stock-based compensation is amortized ratably to expense over the options’ vesting period, which is the shorter of the service term or the expected vesting period of the options. However, if the Company recognized the expense associated with equity awards in the consolidated statement of operations, additional paid-in capital would have increased by a corresponding amount, net of applicable taxes.

Radiant’s pro forma stock-based compensation expense in 2005 was significantly higher than in 2004 primarily as a result of certain stock options that were granted in the fourth quarter of 2004. These options include early vesting provisions if certain stock price targets are met (as described in Note 12). Various stock price targets were met during 2005, which resulted in the immediate vesting, and therefore expensing, of the previously unamortized value of the options. In addition, the stock-based compensation expense in 2004 was lower as it included a benefit related to the cancellation of options that had been granted to employees of the disposed Enterprise business.

48

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)	2005			2004			2003
Net income (loss) as reported	$	5,562		$	4,188		$	(47,731	)
Stock-based compensation expense		(4,768	)		(536	)		(10,531	)
Pro forma net income (loss)	$	794		$	3,652		$	(58,262	)
Basic income (loss) per share — as reported	$	0.19		$	0.15		$	(1.71	)
Diluted income (loss) per share — as reported	$	0.18		$	0.14		$	(1.71	)
Basic and diluted income (loss) per share — pro forma	$	0.03		$	0.13		$	(2.09	)
Assumptions:
Expected dividend yield		0.0	%		0.0	%		0.0	%
Expected stock price volatility		61	%		71	%		95	%
Risk-free interest rate		4.29	%		3.44	%		3.25	%
Expected life of option		3.8 years			4.5 years			4.5 years

In December 2004, the FASB issued SFAS No. 123 (revised 2004) (“SFAS No. 123R”), Share-Based Payment, which addresses the accounting for share-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. SFAS No. 123R eliminates the ability to account for share-based compensation transactions using the intrinsic value method under APB Opinion No. 25, and requires instead that such transactions be accounted for using a fair-value-based method. In January 2005, the SEC issued SAB No. 107, which provides supplemental implementation guidance for SFAS No. 123R. SFAS No. 123R will be effective for the Company beginning in the first quarter of 2006. The Company’s assessment of the estimated stock-based compensation expense is affected by the Company’s stock price as well as assumptions regarding a number of complex variables and the related tax impact. These variables include, but are not limited to, the Company’s stock price, volatility, and employee stock option exercise behaviors and the related tax impact. The Company will recognize stock-based compensation expense on all awards on a straight-line basis over the requisite service period using the modified prospective method. Although the adoption of SFAS No. 123R is expected to have a material effect on the Company’s results of operations, future changes to various assumptions used to determine the fair-value of awards issued or the amount and type of equity awards granted create uncertainty as to whether future stock-based compensation expense will be similar to the historical SFAS No. 123 pro forma expense.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Income tax expense (benefit) is generally comprised of the tax payable (receivable) for the period and the change in deferred income tax assets and liabilities during the period. A valuation allowance is established for deferred tax assets when their realizability is not considered to be more likely than not.

Net Income (Loss) Per Share

Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of shares outstanding. In the event of a net loss, dilutive loss per share is the same as basic loss per share. Diluted net income (loss) per share includes the dilutive effect of stock options. A reconciliation of the weighted average number of common shares outstanding assuming dilution is as follows (in thousands):

	2005	2004	2003
Weighted average common shares outstanding	29,503	28,828	27,835
Dilutive effect of outstanding stock options	2,066	271	—
Weighted average common shares outstanding assuming dilution	31,569	29,099	27,835

For the years ended December 31, 2005, 2004 and 2003, options to purchase approximately 1.6 million, 5.2 million and 6.7 million shares of common stock, respectively, were excluded from the above reconciliation, as the options were antidilutive for the years then ended.

49

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Fair Value of Financial Instruments

The carrying values of cash, trade accounts receivable, trade accounts payable and other financial instruments approximate their fair values principally because of the short-term maturities of these instruments. As the Company’s long-term debt bears interest at variable rates, the carrying value of the debt approximates fair value.

Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. At December 31, 2005 and 2004, the Company held cash equivalents in the form of bank certificates of deposits and commercial paper of $0 and approximately $2.9 million, respectively.

The Company maintains its cash accounts primarily with one bank in Georgia. The total cash balances are insured by the FDIC up to $100,000 per bank. As of December 31, 2005, the Company has cash balances on deposit with this bank that exceeded the balance insured by the FDIC in the amount of approximately $16.4 million.

Concentration of Business and Credit Risk

Financial instruments, which potentially subject the Company to credit risk, consist principally of trade receivables and interest bearing investments. The Company performs on-going credit evaluations of its clients and generally does not require collateral. The Company estimates the losses for uncollectible accounts based on the aging of the accounts receivable and the evaluation of the likelihood of success in collecting the receivable. The Company maintains adequate reserves for potential losses and such losses, which have historically been minimal, have been included in management’s estimates.

As of December 31, 2005 and 2004, approximately 26% and 29%, respectively, of the Company’s accounts receivable was derived from five clients.

During the years ended December 31, 2005, 2004 and 2003, approximately 20%, 26% and 29%, respectively, of the Company’s revenues were derived from five clients. For the years ended December 31, 2005, 2004 and 2003 no client individually accounted for more than 10% of the Company’s total revenues.

Comprehensive Income

The Company follows Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income. This statement establishes the rules for the reporting of comprehensive income and its components. The Company’s comprehensive income includes net income and foreign currency translation adjustments. Total comprehensive income for the years ended December 31, 2005 and 2004 was approximately $5.0 million and $4.2 million, respectively. Total comprehensive loss for the year ended December 31, 2003 was approximately $47.5 million.

50

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Recent Accounting Pronouncements

The following new accounting standards have been or will be adopted by Radiant subsequent to January 1, 2003 and the impact of such adoption, if applicable, has been presented in the accompanying consolidated financial statements:

In December 2003, the FASB issued FASB Interpretation No. 46 (“FIN 46”), Consolidation of Variable Interest Entities. Variable interest entities are defined as entities with a level of invested equity that is not sufficient to fund future activities to permit it to operate on a stand alone basis. In December 2003, the FASB published FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities (“FIN 46(R)”). FIN 46(R), among other things, defers the effective date of implementation for certain entities. The revised interpretation is effective for the first interim or annual reporting period ending after March 15, 2004, with the exception of structures that are commonly referred to as special-purpose entities, for which the statement is effective for periods ending after December 15, 2003. The Company does not participate in variable interest entities.

In October 2004, the American Jobs Creation Act (“AJCA”) was signed into law. The AJCA includes items such as the phase out of the Extraterritorial Income Exclusion Act of 2000 over a three-year period, the introduction of a qualified manufacturing deduction and a one-time election to repatriate foreign earnings. The Company has determined that the AJCA did not have an impact on its financial statements.

In November 2004, the FASB issued Statement of Financial Accounting Standards No. 151, Inventory Costs—An amendment of ARB No. 43, Chapter 4 (“SFAS 151”), which is effective for fiscal periods beginning January 1, 2006 and must be applied prospectively. SFAS 151 requires that abnormal amounts of idle capacity, freight, handling costs and spoilage should be excluded from the cost of inventory and expensed as incurred. The Company does not expect the adoption of this standard to have a material effect on its financial position, results of operations or cash flows.

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 153, Exchanges of Nonmonetary Assets (“SFAS 153”). SFAS 153 is an amendment to APB Opinion No. 29, Accounting for Nonmonetary Transactions. SFAS 153 eliminates the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. The Company adopted the provisions of SFAS 153 on July 1, 2005. The adoption of SFAS 153 did not have an impact on the financial statements.

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment (“SFAS 123R”) which is effective for the Company beginning on January 1, 2006. SFAS 123R replaces SFAS 123, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees (“APB 25”). SFAS 123R requires that the compensation cost relating to share-based awards to employees be recognized in financial statements and be measured based on the grant-date fair value of the stock options or other equity-based compensation. The Company will recognize stock-based compensation expense on all awards on a straight-line basis over the requisite service period using the modified prospective method. The Company has unamortized stock-based compensation of approximately $4.3 million as of December 31, 2005, which will be amortized over future periods. See Note 2 of Notes to the Consolidated Financial Statements for information related to the pro forma effect on Radiant’s reported net income and net earnings per share of applying the fair value provisions of the SFAS 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation.

In March 2005, the SEC released SEC Staff Accounting Bulletin No. 107 (“SAB 107”). SAB 107 provides the SEC staff position regarding the application of SFAS 123R, “Share-Based Payment.” SAB 107 contains interpretive guidance relating to the interaction between SFAS 123R and certain SEC rules and regulations, as well as the staff’s views regarding the valuation of share-based payment arrangements for public companies. SAB 107 also highlights the importance of disclosures made related to the accounting for share-based payment transactions. Radiant is currently evaluating SAB 107 and will be incorporating it as part of its adoption of SFAS 123R in the first quarter of 2006.

In March 2005, the FASB issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations – An Interpretation of FASB Statement No. 143 (“FIN 47”), which is effective for fiscal periods ending after December 15, 2005. FIN 47 requires an entity to recognize a liability for the fair value of a conditional asset retirement obligation when incurred if the liability’s fair value can be reasonably estimated. The adoption of this standard did not have a material effect on the Company’s financial position, results of operations or cash flows.

51

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154, Accounting Changes and Error Correction Replacement of APB Opinion No. 20 and FASB Statement No. 3 (“SFAS 154”). SFAS 154 replaces APB Opinion No. 20, Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes the requirements for the accounting for and reporting of a change in accounting principle. Opinion 20 previously required that most voluntary changes in accounting principle be recognized by including in net income of the period of the change the cumulative effect of changing to the new accounting principle. SFAS 154 requires retrospective application to prior periods’ financial statements of changes in accounting principle. SFAS 154 defines retrospective application as the application of a different accounting principle to prior accounting periods as if that principle had always been used or as the adjustment of previously issued financial statements to reflect a change in the reporting entity. SFAS 154 also requires that a change in depreciation, amortization, or depletion method for long-lived, non-financial assets be accounted for as a change in accounting estimate affected by a change in accounting principle. The Company is required to adopt the provision of SFAS 154 as of January 1, 2006, although earlier adoption is permitted. Radiant will apply the guidance in SFAS 154 in the event of any future changes in accounting principles.

52

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

3. PRODUCT DEVELOPMENT EXPENDITURES

Product development expenditures for the years ended December 31, 2005, 2004 and 2003 are summarized as follows (in thousands):

	2005		2004		2003
Total development expenditures	$	14,960	$	14,758	$	12,089
Less amounts capitalized		554		1,894		1,844
Product development expense	$	14,406	$	12,864	$	10,245

The activity in the capitalized software development account during 2005, 2004 and 2003 is summarized as follows (in thousands):

	2005			2004			2003
Balance at beginning of period, net	$	2,344		$	2,844		$	16,969
Capitalized software development costs – continuing operations		554			1,894			1,844
Capitalized software development costs – Enterprise		—			—			3,685
Write-off of impaired capitalized software, net of accumulated amortization – Enterprise (Note 4)		—			(1,704	)		(16,242	)
Write-off of impaired capitalized software, net of accumulated amortization – continuing operations		—			—			(535	)
Amortization expense		(649	)		(690	)		(2,877	)
Balance at end of period, net	$	2,249		$	2,344		$	2,844

During 2003, the Company recognized an asset impairment charge of approximately $0.5 million attributable to specific capitalized software assets developed for the Hospitality segment. The Company performed an evaluation of the carrying value of these assets based on expected cash flows related to this software. The Company was required to reduce the carrying value of the asset and recognize an asset impairment charge because the carrying value of the assets exceeded the net realizable value. As a result of the impairment, the Company recorded approximately $0.5 million in cost of revenues in the accompanying 2003 consolidated statements of operations.

Amortization of capitalized software costs is included in system sales costs of revenues in the accompanying statements of operations.

53

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. ACQUISITIONS AND DIVESTITURES

Each of the acquisitions discussed below were accounted for using the purchase method of accounting as required by Statement of Financial Accounting Standards No. 141, Business Combinations.

Acquisition of MenuLink Computer Solutions, Inc.

On October 6, 2005, the Company acquired the shares of MenuLink Computer Solutions, Inc. (“MenuLink”). MenuLink is a leading supplier of back-office software for the hospitality industry. The purchase of MenuLink provided the Company with a fully integrated solution for the hospitality industry. Total consideration was approximately $12.8 million and consisted of $6.3 million in cash, three-year notes in the principal amount of approximately $4.1 million, and 217,884 shares of restricted common stock with a value of $10.97 per share on the date of announcement (September 19, 2005). The cash of $6.3 million was paid on the date of closing. The notes have an interest rate equivalent to the prime rate and will be paid off in equal monthly installments (principal and interest) over a 36-month period through October 2008. MenuLink has been included in the Company’s consolidated results of operations and financial position from the date of acquisition. The purchase price allocation has been preliminarily determined and is subject to adjustment if necessary.

The intangible assets acquired were valued by the Company with the assistance of independent appraisers utilizing customary valuation procedures and techniques. Goodwill recorded in the acquisition has been tested for impairment as required by Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (“SFAS 142”).

The following is a summary of the estimated fair values of the assets acquired and liabilities assumed as of the date of the MenuLink acquisition:

(Dollars in Thousands)
Current assets	$	1,390
Property, plant and equipment		105
Identifiable intangible assets		3,800
Goodwill		10,163
Total assets acquired		15,458
Total liabilities assumed (all of which were considered current)		2,658
Purchase price	$	12,800

As a result of the MenuLink acquisition, goodwill of approximately $10.2 million was recorded and assigned to the Hospitality segment. The goodwill will be deductible for tax purposes over a period of 15 years. The following is a summary of the intangible assets acquired and the weighted-average useful lives over which they will be amortized:

(Dollars in Thousands)	Purchased Assets		Weighted- Average Useful Lives
Core and developed technology	$	1,900	4 years
Customer list and contracts		1,400	7 years
Trademarks and tradenames		300	5 years
Covenants not to compete		200	5 years
Total intangible assets acquired	$	3,800

54

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Acquisition of E-Needs, Inc.

On April 14, 2004, the Company acquired substantially all of the assets of E-Needs, Inc. (“E-Needs”), a company engaged in the business of developing, marketing, licensing and selling software and services in the movie-theatre circuit and related financial management marketplaces. The operating results of E-Needs are included in the consolidated financial statements from the date of acquisition. Pro forma information has not been presented as it is not material to the Company’s financial statements. The transaction included the purchase of certain software technology source code and customer lists. Total consideration and transaction costs were approximately $0.7 million and consisted of $0.3 million in cash, the issuance of 46,133 shares of common stock with a fair value of $6.50 per share based on the average closing price for the 10 days prior to the date of announcement (March 17, 2004) and approximately $0.1 million of assumed liabilities and direct expenses. The purchase agreement also provides for additional cash payments if certain future operating targets are achieved. The additional payments may aggregate to approximately $1.6 million and will be accounted for as part of the purchase price. As of December 31, 2005, none of these future operating targets had been achieved. Intangible assets of approximately $0.6 million were recorded and are being amortized over the assets estimated useful lives, which range from three to ten years. The remaining $0.1 million of the purchase price was recorded as goodwill and assigned to the Entertainment segment. The goodwill will be deductible for tax purposes over a period of 15 years.

Acquisition of Aloha Technologies, Inc.

On January 13, 2004, the Company acquired substantially all of the assets of Aloha Technologies and certain affiliated entities (collectively, “Aloha”). Aloha is a leading provider of point of sale systems for the hospitality industry. Aloha was acquired to further develop the Company’s Hospitality business segment. The results of Aloha have been included in the consolidated financial statements from the date of the acquisition.

Total consideration and transaction costs of approximately $48.9 million consisted of an $11.0 million cash payment, a five-year note in the principal amount of $19.7 million at an interest rate of prime plus one percent, a one-year note in the principal amount of $1.7 million at an interest rate of prime plus one percent, the issuance of 2,353,846 shares of restricted common stock with a fair value of $6.50 per share on the date of announcement (December 15, 2003), an initial purchase price adjustment of approximately $0.8 million, and approximately $0.9 million of direct expenses Radiant incurred related to the acquisition and the assumption of certain liabilities. In the fourth quarter of 2005, an additional purchase price adjustment was recorded which reduced the current assets acquired by approximately $0.5 million.

The intangible assets acquired were valued by the Company with the assistance of independent appraisers utilizing customary valuation procedures and techniques. Goodwill recorded in the acquisition has been tested as required by SFAS 142. During the year ended December 31, 2004 and in accordance with Emerging Issues Task Force (“EITF”) Issue 95-3, “Recognition of Liabilities in Connection with a Purchase Business Combination,” accrued liabilities and goodwill of approximately $1.1 million were recorded to account for the execution of the integration plan developed at the time of acquisition, including severance packages to Aloha employees.

The following is a summary of the fair values of the assets acquired and liabilities assumed as of the date of the Aloha acquisition:

(Dollars in Thousands)
Current assets	$	4,057
Property, plant and equipment		618
Identifiable intangible assets		26,100
Goodwill		24,743
Total assets acquired		55,518
Current liabilities		6,583
Long-term liabilities		45
Total liabilities assumed		6,628
Purchase price	$	48,890

55

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As a result of the Aloha acquisition, goodwill of approximately $24.7 million was assigned to the Hospitality segment and will be deductible for tax purposes over a period of 15 years. The following is a summary of the intangible assets acquired and the weighted-average useful lives over which they will be amortized:

(Dollars in Thousands)	Purchased Assets		Weighted- Average Useful Lives
Core and developed technology	$	10,600	3 years
Reseller network		9,200	15 years
Direct sales channel		3,600	10 years
Covenants not to compete		1,400	3 years
Trademarks and tradenames		1,300	Indefinite
Total intangible assets acquired	$	26,100

The following unaudited pro forma financial information for the year ended December 31, 2004 presents results as if the acquisition had occurred on January 1, 2004 and is presented for comparison purposes with the actual results for the year ended December 31, 2005 (in thousands, except per share data):

	2005		2004
Revenue	$	172,042	$	135,709
Income (loss) from continuing operations, after income tax		5,562		1,501
Income (loss) per share from continuing operations—basic		0.19		0.05
Income (loss) per share from continuing operations—diluted		0.18		0.05

These pro forma results have been prepared for comparative purposes only and include certain adjustments such as additional amortization expense as a result of identifiable intangible assets arising from the acquisition and from increased interest expense on acquisition debt. The pro forma results are not necessarily indicative either of the results of operations that actually would have resulted had the acquisition been consummated on January 1, 2004.

56

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Acquisition of ICON Software Limited

On December 18, 2002 the Company purchased the software source code from ICON Software Limited (“ICON”), a provider of software solutions for the entertainment and cinema industry. The transaction included the purchase of certain software technology source code and customer lists. The purchase price consisted of approximately $0.4 million in cash. Intangible assets of approximately $0.4 million were recorded as a result of this transaction. Prior to 2003, the intangibles related to this acquisition were being amortized over one year (See Notes 2 and 5). As more fully described in Note 5, during the second quarter of 2003, the Company wrote off the remaining unamortized portion of these intangible assets of approximately $0.2 million.

Acquisition of Breeze Software Proprietary Limited

On May 9, 2001, the Company acquired all of the outstanding common stock of Breeze Software Proprietary Limited (“Breeze”), a leading provider of software applications for retailers in the Australian marketplace. The purchase price consisted of $1.7 million in cash and assumption of net liabilities of approximately $0.7 million. Total consideration, including approximately $0.4 million in transaction costs, was approximately $2.8 million. Goodwill of approximately $2.8 million was recorded as a result of this transaction. The Company was obligated to pay additional consideration of cash and/or stock in the event that certain earnings milestones were achieved. During the years ended December 31, 2004 and 2003, certain specified earnings milestones were achieved and the Company paid additional consideration of approximately 238,000 shares and 141,000 shares, respectively, of common stock for a total consideration of approximately $1.0 million and $1.2 million, respectively, based upon the quoted price of the Company’s stock, which was allocated to goodwill. In addition, during the fourth quarter of 2004, a final earnings milestone was achieved and the Company elected to pay the additional consideration of $1.3 million in cash. This final payment, which was allocated to goodwill, was accrued in the fourth quarter of 2004 and paid during the first quarter of 2005.

Divestiture of Enterprise Software Systems Business

On January 31, 2004, the Company completed a tax free split-off of the Company’s Enterprise Software Systems (“Enterprise”) business now known as BlueCube Software, to Erez Goren, the Company’s former Co-Chairman and Co-Chief Executive Officer. Pursuant to the terms of the Share Exchange Agreement under which the split-off was effected, Radiant contributed specified assets and liabilities of the Enterprise business, together with $4.0 million in cash, to the newly formed subsidiary, and then transferred all of the shares of the new company to Erez Goren in exchange for the redemption of 2.0 million shares of common stock of the Company, valued at $16.3 million based upon the quoted price of the Company’s stock on January 31, 2004. The shares redeemed represented approximately 7% of the Company’s outstanding shares at the time. The consideration for the transaction was determined based on negotiations between the special committee of the Company’s independent directors and Mr. Goren. At the completion of this transaction, Mr. Goren resigned as Co-Chairman and Co-Chief Executive Officer of Radiant and as a member of the Company’s Board of Directors.

During the year ended December 31, 2005, the Company recorded no additional expenses related to the divestiture of the Enterprise business.

For the one month ended January 31, 2004 and the year ended December 31, 2003, the Enterprise business generated revenues of approximately $1.8 million and $17.8 million, respectively, and generated net losses of approximately $0.9 million and $41.8 million, respectively. Approximately $32.9 million of the loss generated by the Enterprise business during the year ended December 31, 2003 was the result of non-recurring charges related to impairments of (1) goodwill of approximately $6.2 million, (2) TriYumf Asset of approximately $10.6 million and (3) capitalized software of approximately $16.1 million. The Enterprise results are included in discontinued operations in the Company’s consolidated statement of operations.

57

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following is a summary of asset and liabilities of the Enterprise business that were contributed to BlueCube Software, the proceeds received, and the resulting gain on disposal:

(Dollars in Thousands)
Cash	$	4,000
BlueCube liabilities paid by Radiant		4,026
Payable due to BlueCube		5,337
Other current assets		837
Property, plant and equipment, net		1,723
Capitalized software		1,704
Total assets contributed		17,627
Transaction costs paid by Radiant		1,612
Future contractual obligations assumed by BlueCube		(6,565	)
Net assets and transaction costs	$	12,674
Redemption of 2 million shares of Radiant stock		16,300
Gain on disposal of Enterprise business, net	$	3,626

Commitments and Contingencies from Enterprise Divestiture

Radiant has a contractual obligation for performance under certain existing customer contracts that have not been assigned to BlueCube at Radiant’s choice or because they require the consent of the customer (Legacy Contracts). Under a Reseller and Services Agreement, BlueCube is obligated to fulfill the terms of these Legacy Contracts, including providing hosting, support, maintenance and professional services. BlueCube will act as Radiant’s subcontractor, and indemnify Radiant for any losses associated with its performance or non-performance of the Legacy Contract obligations. Radiant will continue to invoice these Legacy customers on behalf of BlueCube. Radiant will pass through the payments received in these transactions as they are received from the customers. As of December 31, 2005, Radiant had received approximately $0.1 million from Legacy customers that was not yet passed through to BlueCube. This amount has been included in accrued contractual obligations and payables due to BlueCube in the accompanying consolidated balance sheet as of December 31, 2005.

Under this Reseller and Services Agreement with BlueCube, Radiant became a preferred reseller of selected BlueCube computer products. A portion of the fixed price charged to customers for BlueCube products is remitted to BlueCube based on a fixed percentage of this price, as stated in the agreement. For the years ended December 31, 2005 and 2004, the Company recognized approximately $2.0 million and $1.7 million of revenues on a gross basis under this agreement, respectively. As of December 31, 2005 and 2004, Radiant had a payable due to BlueCube related to the fixed percentage passed through of approximately $1.2 million and $1.3 million, respectively. These amounts have been included in accrued contractual obligations and payables due to BlueCube in the accompanying consolidated balance sheet. In addition, for the years ended December 31, 2005 and 2004, the Company recognized approximately $0.5 million and $1.3 million of revenues that were generated from the sale of Radiant products to BlueCube. As of December 31, 2005 and 2004, Radiant had a receivable due from BlueCube of approximately $0.5 million and $0.3 million, respectively.

Radiant also maintains rights to access product source code and information needed to fulfill Legacy Contract obligations if BlueCube fails to perform. For a limited number of existing customer contracts, Radiant and BlueCube had a shared liability, which included penalties, for a period of 18 months after January 31, 2004, based upon the revenue received by each party under the contract. For one of these contracts, milestones defined in the original contract were amended. Failure to meet these amended milestones would have resulted in penalties and/or losses. Radiant did not incur any penalties and/or losses under this contract.

58

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In addition to the initial cash included in the transaction, it was agreed that approximately $5.3 million of unearned revenue would be transferred to BlueCube upon BlueCube’s completion of the related contractual commitments. Approximately $0.6 million, $4.0 million and $4.6 million was paid during the years ended December 31, 2005 and 2004 and from the disposition date through December 31, 2005, respectively. Management expects the majority of the remaining cash to be transferred to BlueCube over the next twelve months. The remaining liability of approximately $0.7 million is included in accrued contractual obligations and payables due to BlueCube in the accompanying consolidated balance sheet as of December 31, 2005.

Radiant has also agreed to sublease a portion of its property, currently under an operating lease, to BlueCube. This sublease will expire concurrently with Radiant’s operating lease on the property in January 2013. Operating lease rentals received are recorded against operating lease expense in the consolidated statements of operations. BlueCube has the right to early termination beginning on January 31, 2007, and must provide Radiant with an 18 month notice that early termination will occur. Payments received from BlueCube under this sublease totaled approximately $1.3 million and $1.1 million during the years ended December 31, 2005 and 2004, respectively. Aggregate future minimum lease payments under this sublease agreement as of December 31, 2005, are approximately $1.4 million per year for years 2006 through 2010, and a total of approximately $3.0 million over the remaining 25 months of the lease. In conjunction with this sublease agreement, Radiant and BlueCube entered into a right of refusal and option agreement pertaining to real property currently owned by Radiant and adjacent to the property being subleased by BlueCube. Under this agreement, BlueCube has an option to purchase the real property at a stated value, which management believes is the fair value at the time of the split-off. BlueCube has the right of refusal if Radiant obtains an offer to sell the real property to another party. The exercise of this right will result in BlueCube purchasing the real property at a price based on a formula and the third-party offer obtained by Radiant. This agreement is subordinate to a pre-existing right of first refusal with a third-party.

Impairment of HotelTools Software

During 2003, management approved a plan to sell the acquired HotelTools software. At the time this plan was approved, the software became available for immediate sale and management actively pursued interested parties to sell the software in its present condition. As a result of this impending sale and in accordance with the provisions of Statement of Financial Accounting Standards No. 86, Accounting for the Costs of Computer Software to Be Sold, Leased or Otherwise Marketed, the Company wrote down the assets associated with HotelTools to its net realizable value. Additionally, the Company reclassified the remaining intangible asset balance of approximately $550,000 to other short-term assets to reflect the impending sale. During the second quarter of 2005, there was no activity or discussions with interested parties and management made the decision to no longer actively pursue potential acquirers of the software. Accordingly, it was determined that the asset should be written off and an impairment charge of approximately $550,000 has been reflected in the accompanying consolidated statement of operations for the year ended December 31, 2005.

59

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

5. GOODWILL AND OTHER INTANGIBLES, NET

Goodwill

During the second quarter of 2003, management determined that it was more likely than not that a portion of the business, the Enterprise Software Systems business, would be sold or otherwise disposed. Management determined that the likelihood of sale did not warrant assets held for sale treatment as all the criteria for held for sale treatment were not met as prescribed under Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS 144”). However, the Company viewed the likelihood of this sale as a triggering event requiring an interim impairment test as prescribed by the guidelines in SFAS 142. As a result, the Company performed a step one impairment test to determine if the carrying value of any reporting unit including goodwill exceeded its fair value. Upon completion of this initial test, the Company determined that goodwill was potentially impaired at two of its business units, Hospitality and International, and that a step two impairment test was required. The Company has subsequently restructured its reportable segments. To determine whether the goodwill at these business units was impaired, the Company performed an analysis similar to that of a purchase price allocation, where the fair value of the individual tangible and intangible assets (excluding goodwill) and liabilities of the reporting units were compared to the fair value of the reporting units, with the residual amount being the fair value assigned to goodwill. The fair values of reporting units were estimated using discounted cash flows, specifically, estimating the present value of the future cash flows of the reporting units. The fair value of each of the assigned assets and liabilities was determined using either a cost, market or income approach, as appropriate, for each individual asset or liability. As a result of the foregoing, the Company determined that the goodwill assigned to its Hospitality business unit in the amount of $2.3 million was impaired, as well as approximately $3.9 million of goodwill at its International business unit. As such, the Company recorded a goodwill impairment charge totaling $6.2 million during the second quarter of 2003 which is reflected in the income (loss) from discontinued Enterprise business in the Company’s consolidated statements of operations (Note 4).

The Company’s evaluation of goodwill in accordance with SFAS 142 for 2005 and 2004 and completed on January 1, 2006 and 2005, respectively, resulted in no impairment losses. Changes in the carrying amount of goodwill for the years ended December 31, 2005 and 2004 are as follows (in thousands):

	Hospitality		Petroleum & Convenience Retail			Entertainment		Total
Balance, December 31, 2003	$	—	$	5,276		$	2,261	$	7,537
Aloha acquisition (Note 4)		24,743		—			—		24,743
E-Needs acquisition (Note 4)		—		—			110		110
Breeze acquisition, including associated currency translation adjustment (Note 4)		—		2,537			—		2,537
Balance, December 31, 2004		24,743		7,813			2,371		34,927
Currency translation adjustment related to Breeze acquisition (Note 4)		—		(280	)		—		(280	)
MenuLink acquisition (Note 4)		10,163		—			—		10,163
Utilization of acquired deferred tax asset (Note 9)		—		(571	)		—		(571	)
Balance, December 31, 2005	$	34,906	$	6,962		$	2,371	$	44,239

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RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Intangible Assets

A summary of the Company’s intangible assets as of December 31, 2005 and 2004 is as follows (in thousands):

	Weighted Average Amortization Lives	December 31, 2005					December 31, 2004
Description		Gross Carrying Value		Accumulated Amortization			Gross Carrying Value		Accumulated Amortization
Core and developed technology – Hospitality	3.5 years	$	12,500	$	(7,031	)	$	10,600	$	(3,386	)
Reseller network – Hospitality	15 years		9,200		(1,201	)		9,200		(588	)
Direct sales channel – Hospitality	8.5 years		5,000		(752	)		3,600		(345	)
Covenants not to compete – Hospitality	4 years		1,600		(924	)		1,400		(447	)
Trademarks and tradenames – Hospitality	Indefinite		1,300		—			1,300		—
Trademarks and tradenames – Hospitality	5 years		300		(15	)		—		—
Customer list and contracts – Entertainment	5 years		250		(85	)		250		(35	)
Core and developed technology – Entertainment	2.5 years		200		(114	)		200		(47	)
Covenants not to compete – Entertainment	10 years		150		(26	)		150		(11	)
Other			492		(307	)		492		(304	)
Total intangible assets		$	30,992	$	(10,455	)	$	27,192	$	(5,163	)

Amortization expense related to intangible assets was approximately $5.3 million, $4.9 million and $31,000 for the years ended December 31, 2005, 2004 and 2003, respectively.

Future amortization expense, including the January 2006 Synchronics acquisition as discussed in Note 15 and assuming no future acquisitions, dispositions or impairments of intangible assets, is estimated to be $7.5 million in 2006, $3.6 million in 2007, $3.4 million in 2008, $3.3 million in 2009 and $2.9 million in 2010.

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RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6. DEBT

On March 31, 2005, the Company entered into a senior secured credit facility (the “Credit Agreement”) with Wells Fargo Foothill, Inc., as the arranger, administrative agent and initial lender. Other lenders may participate in the Credit Agreement from time to time. The Credit Agreement provides for extensions of credit, upon satisfaction of certain conditions, in the form of revolving loans in an aggregate principal amount of up to $15 million and a term loan facility in an aggregate principal amount of up to $15 million. The revolving loan amount available to the Company is derived from a monthly borrowing base calculation using the Company’s various receivables balances. The amount derived from this borrowing base calculation is further reduced by the total amount of letters of credit outstanding. Loans under the Credit Agreement will bear interest, at Radiant’s option, at either the London Interbank Offering Rate plus two and one half percent or at the rate that Wells Fargo Bank, N.A. announces as its prime rate then in effect. Fees associated with the Credit Agreement are typical for transactions of this type. The Credit Agreement contains certain customary representations and warranties from Radiant. It also contains customary covenants, including: use of proceeds; limitations on liens; limitations on mergers, consolidations and sales of Radiant’s assets; and limitations on transactions with related parties. In addition, the Credit Agreement contains various financial covenants, including: minimum EBITDA levels; minimum tangible Net Worth; and maximum capital expenditures. As of December 31, 2005, the Company was in compliance with all financial covenants. The Credit Agreement also contains customary events of default, including: nonpayment of principal, interest, fees or charges when due; breach of covenants; material inaccuracy of representations and warranties when made; and insolvency. If any events of default occur and are not cured within the applicable grace periods or waived, the administrative agent shall at the election of the required lenders terminate the commitments and declare the loans then outstanding to be due and payable in whole or in part together with accrued interest and any unpaid accrued fees and all other liabilities of Radiant there under. The Credit Agreement is secured by the assets of the Company. As of December 31, 2005, the Company has approximately $3.3 million in letters of credit against its available balance of approximately $8.4 million and no outstanding balance against the revolver. On January 1, 2006, approximately $2.7 million in letters of credit expired and were not renewed.

In the second quarter of 2005, the Company received $15 million in proceeds from the term loan facility in its Credit Agreement. The majority of these funds were used to pay off a significant portion of the promissory notes held by the previous shareholders of Aloha. In connection with this payoff, the Company entered into an amended and restated promissory note in the amount of $1.5 million with the previous shareholders of Aloha. During the fourth quarter of 2005, the Company modified the amended promissory note by reducing the $1.5 million principal amount to $1.0 million. The decrease was due to agreed upon purchase price adjustments. The principal on this note will be paid over the course of the third and fourth quarters of 2008 and the first quarter of 2009.

The Company entered into an amendment of its Credit Agreement with Wells Fargo Foothill, Inc. on January 3, 2006 (see Note 15 of the consolidated financial statements). The amendment increased the aggregate term loan facility available under this agreement from $15 million to $31 million and extended the expiration of the date of the Credit Agreement from March 31, 2008 to March 31, 2010. Certain of the financial and other covenants were also modified as a result of the amendment. As of January 3, 2006, aggregate borrowings under this facility totaled approximately $29.3 million.

In the fourth quarter of 2005, the Company issued approximately $4.1 million in notes payable related to the acquisition of MenuLink. The interest on the notes is calculated based on the prime rate and payments for both principal and interest are being made in equal installments over a 36-month period. The notes are scheduled to be paid off by the fourth quarter of 2008.

62

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following is a summary of long-term debt and the related balances as of December 31, 2005 and 2004 (in thousands):

Description of Debt	2005		2004
Promissory note with shareholders bearing interest based on the prime rate plus one percent. All principal and interest were paid in January 2005.	$	—	$	1,788
Promissory note (as amended) with Aloha shareholders bearing interest based on the prime rate plus one percent with interest being paid monthly and principal being paid over the course of three fiscal quarters beginning in the third quarter of 2008.		964		16,483
Term loan with a bank bearing interest based on the prime rate with principal being paid at $250,000 per month plus accrued interest. All unpaid principal and accrued interest is due upon termination or expiration of the Credit Agreement.		13,500		—
Promissory notes with MenuLink shareholders bearing interest based on the prime rate and being paid in thirty-six equal installments of principal and interest through the fourth quarter of 2008.		3,919		—
Total	$	18,383	$	18,271

Approximate annual maturities of notes payable that were outstanding at December 31, 2005 are as follows:

(Dollars in Thousands)
2006	$	4,292
2007		4,382
2008		9,516
2009		193
Balance, December 31, 2005	$	18,383

If the $16 million in loan proceeds received from Wells Fargo Foothill, Inc. on January 3, 2006 had been included in the schedule above, the approximate annual maturities of notes payable for the periods subsequent to December 31, 2005 would have been approximately $7.0 million in 2006, $7.3 million in 2007, $12.4 million in 2008, $3.1 million in 2009, and $4.6 million in 2010.

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RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

7. RESTRUCTURING CHARGES

Lease Restructuring Charges

During the third quarter of 2005, Radiant decided to consolidate certain facilities located in Alpharetta, Georgia, in order to reduce future operating costs. This resulted in the abandonment of one facility, which formerly housed the Company’s customer support call center. The restructuring charges were not attributable to any of the Company’s reportable segments. In accordance with Statement of Financial Accounting Standards No. 146, Accounting for Costs Associated with Exit or Disposal Activities (“SFAS 146”), the Company recorded a lease restructuring charge based on the fair value of the remaining lease payments at the abandonment date less the estimated sublease rentals that could reasonably be obtained from the property.

This consolidation resulted in a restructuring charge of approximately $1.5 million in the third quarter of 2005 which consisted of $1.2 million for facility consolidations and $0.3 million of fixed asset write-offs associated with the facility consolidation. As of December 31, 2005, approximately $1.0 million related to the lease commitments remained in the restructuring reserve to be paid. The Company anticipates the remaining payments will be made by the fourth quarter of 2010 (lease expiration date). The table below summarizes the activity in the restructuring reserve:

	Lease Commitments									Write-off of Leasehold Improvements			Total
(Dollars in thousands)	Short- Term			Long- Term			Total
Balance as of December 31, 2004	$	—		$	—		$	—		$	—		$	—
Lease restructuring charges		446			754			1,200			250			1,450
Non-cash expense		—			—			—			(250	)		(250	)
Expenses charged against restructuring reserve		(84	)		(129	)		(213	)		—			(213	)
Balance as of December 31, 2005	$	362		$	625		$	987		$	—		$	987

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RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Severance Costs

During the second quarter 2003, in response to slower economic conditions, the Company downsized its workforce by approximately 5% to reduce its operating expenses and better align resources within the Company. As a result, the Company established a restructuring reserve of approximately $0.2 million for employee severance. The Company paid all amounts under this reserve and had no further liabilities related to this action as of December 31, 2005 and 2004.

During 2004, in connection with the purchase of Aloha and the efficiencies obtained in the consolidation of several processes and the alignment of resources, the Company accrued for severance payments of approximately $1.1 million and included this amount in goodwill. During 2005 and 2004, approximately $0.6 million and $0.2 million of these liabilities, respectively, were paid and the remaining liability is included in accrued expenses and other long-term liabilities. The remaining liability of approximately $0.3 million is expected to be paid in 2006.

Lease Termination Fees

In January 2001, the Company announced the permanent closure of its facilities in Hillsboro, Oregon and Pleasanton, California. The decision to close these facilities was made to reduce costs and consolidate operations at the Company’s headquarters in Alpharetta, Georgia. As a result of the closings, in 2001 the Company recorded a restructuring charge of approximately $1.2 million relating to severance and estimates of certain lease termination fees based on management’s estimation of time to re-lease the California facilities. During 2003, the Company recorded an additional restructuring charge of approximately $1.0 million. This charge related to actual lease settlement fees associated with the closure of one of the California facilities, as well as management’s estimate of settlement fees, recorded at the minimum amount of a probable range, associated with a second California facility. While the settlement fees related to these facilities occurred prior to the issuance of SFAS 146, the accounting treatment is consistent with the provisions of SFAS 146.

8. ACCRUED LIABILITIES

The components of accrued liabilities at December 31, 2005 and 2004 are as follows (in thousands):

	2005		2004
Accrued wages	$	2,297	$	2,242
Bonus and commissions payable		5,073		3,060
Payable to former Breeze shareholders		—		1,297
Employee benefits payable		136		1,410
Other accrued liabilities		6,131		3,916
	$	13,637	$	11,925

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RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

9. INCOME TAXES

The following summarizes the components of the income tax provision (in thousands):

	Years ended December 31,
	2005		2004		2003
Current taxes:
Federal	$	95	$	—	$	—
State		50		40		69
Foreign		313		99		311
Deferred taxes		571		—		1,350
Income tax provision	$	1,029	$	139	$	1,730

The total tax provision is different from the amount that would have been recorded by applying the U.S. statutory federal income tax rate to income from continuing operations before taxes. Reconciliation of these differences is as follows:

	2005		2004		2003
Statutory federal tax rate	34.0	%	35.0	%	(35.0	)%
State income taxes, net of federal tax benefit	0.8		5.0		(5.0	)
Foreign taxes	2.0		2.5		0.4
Meals and Entertainment	1.0		2.3		0.1
Valuation allowance on deferred tax assets	(23.0	)	(36.2	)	40.6
Other	1.1		—		2.6
	15.9	%	8.6	%	3.7	%

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RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The components of the deferred taxes as of December 31, 2005 and 2004 are as follows (in thousands):

	December 31,
	2005			2004
Current:
Inventory reserve	$	1,445		$	1,652
Allowance for doubtful accounts		1,504			1,348
Other		957			231
Valuation allowance		(3,906	)		(3,231	)
Total current deferred taxes	$	—		$	—
Long term:
Net operating loss carryforward	$	9,770		$	11,593
Research tax credit		2,448			2,447
Foreign tax credit		137			—
Alternative minimum tax credit		113			—
Depreciation		753			768
Intangibles		2,709			4,169
Capitalized software		(843	)		(938	)
Valuation allowance		(15,283	)		(18,039	)
Other		196			—
Total long term deferred taxes	$	—		$	—

Significant management judgment is required in determining whether any valuation allowance should be recorded against the Company’s net deferred tax asset. A valuation allowance of $19.2 million and $21.3 million has been provided at December 31, 2005 and 2004, respectively, to offset the related deferred tax assets due to uncertainty of realizing the benefit of the US and foreign net operating losses, tax credits and temporary differences. For the year ended December 31, 2005, the valuation allowance decreased by approximately $2.1 million primarily as a result of (1) the utilization of U.S. and foreign net operating losses to offset current taxable income and (2) the offsetting temporary differences associated with the intangible assets acquired as part of the MenuLink acquisition. Of the total reduction, $0.6 million resulted in a reduction in goodwill. Despite the valuation allowance, the income tax benefits related to these deferred tax assets will remain available to offset the tax liability of future taxable income.

67

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At December 31, 2005, the Company had U.S. federal net operating loss carryforwards of approximately $24.7 million and foreign net operating loss carryforwards of $0.9 million. The tax losses and carryforwards (if not utilized against taxable income) expire from 2018 to 2024. Approximately $13.3 million of the U.S. net operating loss carryforwards are attributable to tax deductions related to the exercise of stock options. Because stock option deductions are not recognized as an expense for financial purposes, the tax benefit for stock option deductions must be credited to additional paid-in capital when recognized.

In addition, the Company has certain tax credit carryforwards available to offset future tax liability including research and development, alternative minimum and foreign tax credits. The amounts at December 31, 2005 total $2.5 million, $0.1 million and $0.1 million respectively. The research and development and foreign tax credits expire from 2010 to 2025. The alternative minimum tax credit carries forward indefinitely to offset future U.S. tax liability.

U.S. income and foreign withholding taxes have not been provided for cumulative undistributed earnings of foreign subsidiaries and equity investees. The Company intends to reinvest these earnings for the foreseeable future. If these amounts were distributed to the United States, in the form of dividends or otherwise, or if the shares of the relevant foreign subsidiaries were sold or otherwise transferred, we would be subject to additional U.S. income taxes (subject to an adjustment for foreign tax credits) and foreign withholding taxes. Determination of the amount of unrecognized deferred income tax liability related to these earnings or investments is not practicable.

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RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

10. COMMITMENTS AND CONTINGENCIES

Leases

The Company leases office space, equipment and certain vehicles under noncancelable operating lease agreements expiring on various dates through 2013. Total rent expense under operating leases was approximately $3.7 million, $4.2 million and $4.4 million for the years ended December 31, 2005, 2004 and 2003, respectively. The Company leases various equipment under a three-year capital lease that expires in December 2007. Aggregate future minimum lease payments under the capital lease, noncancelable operating leases in effect as of December 31, 2005, and noncancelable operating leases which commenced subsequent to December 31, 2005 are as follows (in thousands):

	Capital Leases		Operating Leases
2006	$	41	$	6,398
2007		42		6,655
2008		—		6,157
2009		—		5,981
2010		—		6,050
Thereafter		—		10,568
Total	$	83	$	41,809
Less: Amount representing interest		4
Net present value of minimum lease payments		79
Less: Current portion of capital lease		37
Long-term portion of capital lease obligation	$	42

The schedule above includes the lease obligations resulting from (i) the Synchronics acquisition, which occurred on January 3, 2006, (ii) the lease on the new Fort Worth, Texas facility, which will commence in the first half of 2006 and (iii) the new lease on a warehouse facility in Alpharetta, Georgia, which will commence in the second quarter of 2006. Also included in this schedule are the future minimum lease payments related to facilities that are being subleased. The total minimum rentals to be received in the future under noncancelable subleases as of December 31, 2005 are approximately $1.6 million in years 2006 through 2009, $1.7 million in 2010 and $3.0 million thereafter.

Employment Agreements

As part of the acquisitions of Aloha and MenuLink, the Company has employment agreements with four employees. Under these employment agreements, in the event the Company terminates the employment without cause or if the employee terminates the employment with good reason, the Company would be obligated to pay the employee severance at a rate equal to his or her base salary at the date of termination for the remaining term of the agreement. The employment agreements expire over various periods through January 2007.

Letters of Credit

As of December 31, 2005 and 2004, the Company had outstanding letters of credit of approximately $3.3 million and $2.5 million, respectively. These letters of credit typically act as a guarantee of payment to certain third parties in accordance with specified terms and conditions. The outstanding letters of credit reduce the amount available under the revolving loan provided by the Credit Agreement with Wells Fargo Foothill, Inc. Further explanation of this agreement is presented in Note 6. On January 1, 2006, approximately $2.7 million in letters of credit expired and were not renewed.

Legal Matters

Radiant is and has been involved in legal proceedings arising in the normal course of business. The Company is of the opinion, based upon presently available information and the advice of counsel concerning pertinent legal matters, that any resulting liability should not have a material adverse effect on the Company’s results of operations or financial position.

Purchase Commitments

The Company has entered into certain noncancelable purchase orders for manufacturing supplies to be used in its normal operations. The anticipated payments related to these purchase orders are approximately $2.1 million in 2006 and $0.2 million in 2007.

69

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

11. SHAREHOLDERS’ EQUITY

Treasury Stock

In May 2000, the Board of Directors of the Company authorized a stock repurchase program pursuant to which the Company was authorized to repurchase up to 1.0 million shares of common stock of the Company over the following twelve months. During 2000, the Company repurchased and subsequently retired approximately 90,000 shares at prices ranging from $18.25 to $19.94 per share, for total consideration of approximately $1.8 million.

In May 2001, the Board of Directors of the Company renewed this stock repurchase program whereby the Company was authorized to repurchase up to 1.0 million shares of common stock of the Company through May 2002. During 2001, the Company repurchased and subsequently retired approximately 725,000 shares at prices ranging from $5.27 to $18.67 per share, for total consideration of approximately $6.0 million. During the first quarter 2002, the Company repurchased and subsequently retired approximately 25,000 shares at prices ranging from $7.71 to $8.00 per share, for total consideration of approximately $196,000 under this program.

In August 2002, the Board of Directors of the Company authorized a re-commencement of the Company’s stock repurchase program authorizing the repurchase of up to 1.0 million shares of its common stock through August 2003. In 2003, the Company repurchased and subsequently retired approximately 495,000 shares at prices ranging from $5.81 to $8.16 per share, for total consideration of approximately $3.4 million.

In 2004, the Company repurchased 2.1 million shares at a weighted average price of $8.09 for its treasury at a cost of approximately $17.3 million. Approximately 2.0 million shares were repurchased in connection with the divesture of the Enterprise segment and were subsequently retired (Note 4). The remaining 141,000 shares were repurchased from the former shareholders of Breeze, who were issued the shares in December 2003 in connection with the additional consideration given for obtaining certain earnings milestones, pursuant to the Breeze acquisition agreement (Note 4). At the Company’s option, cash equaling the value of the shares issued was exchanged for the shares. During the fourth quarter 2004, the Company retired the remaining 141,000 shares that remained in its treasury.

In the first quarter of 2005, the Company repurchased approximately 238,000 shares of common stock at a cost of approximately $1.0 million from the former shareholders of Breeze, who were issued the shares in connection with the specified earnings milestones that were achieved in the fourth quarter of 2004.

In the fourth quarter of 2005, the Board of Directors of the Company authorized a re-commencement of the Company’s stock repurchase program authorizing the repurchase of up to 1.0 million shares at a price not to exceed $20.00 per share through October 2007. The Company did not repurchase any shares under this plan in 2005.

As of December 31, 2005, the Company has repurchased and subsequently retired approximately 3.6 million shares of its common stock, for total consideration of approximately $30.0 million under these repurchase programs.

Preferred Stock

In January 1997, the Company authorized 5,000,000 shares of preferred stock with no par value. The Company’s Board of Directors has the authority to issue these shares and to fix dividends, voting and conversion rights, redemption provisions, liquidation preferences and other rights and restrictions.

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RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

12. EMPLOYEE BENEFITS

Stock-Based Compensation Plans

Employee Stock Purchase Plan

During 1998, the Company’s Board of Directors adopted, with shareholder approval, the 1998 Employee Stock Purchase Plan (the “ESPP”). Under the ESPP, the Company is authorized to issue up to 2,500,000 shares of Radiant’s common stock to its qualified employees, who may purchase shares at 85% of the appropriate market price every six months. The purchase price of the stock is the lower of the market price in effect on the day the offering starts or the day the offering terminates. In 2005, 2004 and 2003, the Company issued approximately 293,000 shares, 448,000 shares and 232,000 shares under the ESPP at an average price of $6.18, $3.83 and $5.52 per share, respectively. As of December 31, 2005, there were approximately 1,002,000 shares available for future issuance under the ESPP.

Effective January 1, 2005, an amendment was made to the ESPP which required any shares purchased under the plan to be held for a minimum of six months. However, as of December 31, 2005, the Company announced its intentions to remove the required six-month holding period. In addition, the Company plans to increase the frequency of stock purchased under the ESPP to a monthly basis and decrease the purchase price discount from 15% to 5%. The changes to the ESPP are being made in an effort to reduce future stock compensation expense. The Company is finalizing these changes and plans to implement the new program effective June 1, 2006.

Directors Stock Option Plan

During 1997, the Company’s Board of Directors adopted, with shareholder approval, the Non-Management Directors’ Stock Option Plan (the “Directors’ Plan”) for non-management directors of the Company, under which the Company may grant options to purchase up to 150,000 shares of Radiant’s common stock to nonemployee directors of the Company. Options are granted at an exercise price, which is not less than fair value as referenced to quoted market prices. Initial grants to new directors are exercisable over three years, while annual grants are exercisable six months after the grant date. Options granted under the Directors’ Plan expire ten years from the date of grant. During 2002, the Directors’ Plan was amended to increase the number of options available for grant to 300,000 shares, as well as to increase the grant to a non-employee director upon initial appointment to 25,000 from 15,000 and the annual grant to 10,000 from 5,000. The Company granted 65,000, 30,000 and 55,000 options under this plan in 2005, 2004 and 2003, respectively. As of December 31, 2005, the Company has granted approximately 335,000 options under the Directors’ Plan, of which 7,500 have been exercised and 47,500 have been cancelled.

1995 Stock Option Plan

The Company’s 1995 Stock Option Plan (the “1995 Plan”), as amended, was approved by shareholders and authorizes the issuance of up to 13,000,000 incentive and nonqualified stock options to key employees. Options are granted at an exercise price which is not less than fair value as estimated by the Board of Directors and become exercisable as determined by the Board of Directors, generally over a period of four to five years. Options granted under the 1995 Plan expire ten years from the date of grant. At December 31, 2005, there were no more options available to purchase shares of common stock under the 1995 Plan. From the inception of the 1995 Plan through December 31, 2005, the Company has granted a cumulative 1,477,235 nonqualified stock options outside the plan, of which, 710,935 have been cancelled and 551,100 have been exercised. During the fourth quarter of 2004, the Company made a one-time grant of 1,136,000 options to key employees. The options granted in 2005 and 2004 contain provisions that allow for early vesting if certain stock price targets are met.

2005 Long-Term Incentive Plan

Effective April 25, 2005, the 2005 Long-Term Incentive Plan (“LTIP”) was adopted by the Company’s board of directors. The intent of the LTIP is to replace both the 1995 Plan and the Directors’ Plan and become the only plan for providing stock-based incentive compensation to directors and employees of the Company, other than the ESPP which remains in effect. Options previously granted under the 1995 Plan and the Directors’ Plan will remain exercisable in accordance with the terms of the respective plans. The LTIP provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, performance units and phantom stock. The LTIP authorizes the issuance of up to 2,500,000 shares of the Company’s common stock and the maximum that may be granted to any one employee in any calendar year is 250,000. No grants may be made under the LTIP subsequent to April 24, 2015. During the year ended December 31, 2005, no awards were granted under the LTIP as the Company continued to grant options from the 1995 Plan and the Directors’ Plan.

71

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Stock Option Exchange Program

On December 2, 2004, the Company announced a voluntary stock option exchange program for the benefit of its employees. Under the program, employees were offered the opportunity, if they elected, to cancel certain outstanding stock options previously granted to them under the Plan for new stock options granted in 2005. Under the exchange program, the new options were exercisable for one share of common stock for every two shares of common stock issuable upon exercise of a surrendered option. For options with exercise prices greater than $15.00 per share, the new options were exercisable for one share of common stock for every three shares of common stock issuable upon exercise of a surrendered option. The exercise price of the new options were equal to the last reported sale price of common stock during regular trading hours as reported by the NASDAQ National Market System on the grant date. The new options become exercisable in three equal annual installments beginning on the first anniversary of the date of grant and will expire on the fifth anniversary of the grant date, or earlier in the event of the termination of employment. The election period ended on December 30, 2004. On December 31, 2004, 116,094 options at an average exercise price of $15.84 were cancelled under this program. In accordance with EITF Issue 00-23, “Issues Related to the Accounting for Stock Compensation under APB Opinion No. 25 and FASB Interpretation No. 44 Abstract,” no compensation charges were recorded. Members of the Company’s Board of Directors, executive officers, and certain other members of the senior management team were not eligible to participate in this program. On July 1, 2005, 50,922 new options were granted under this program.

Radiant measures compensation expense for its stock-based employee compensation plans using the intrinsic value method. As the exercise of all options granted under these plans was equal to the fair market price of the underlying common stock on the grant date, no stock-based employee compensation cost is recognized in the consolidated statements of operations.

Stock option activity for each of the past three years was as follows (in thousands, except weighted average exercise price):

	2005				2004				2003
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Outstanding at beginning of year	6,989		$	8.63	7,302		$	10.62	7,073		$	11.31
Granted	371			10.79	2,395			5.11	1,257			6.95
Canceled	(444	)		10.74	(2,442	)		11.61	(817	)		12.51
Exercised	(503	)		5.79	(266	)		4.38	(211	)		4.21
Outstanding at end of year	6,413		$	8.83	6,989		$	8.63	7,302		$	10.62
Options exercisable at end of year	4,381		$	9.67	3,444		$	10.72	3,981		$	11.01

72

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table sets forth the range of exercise prices, number of shares, weighted average exercise price and remaining contractual lives by groups of similar price and grant date for stock options outstanding as of December 31, 2005 (in thousands, except weighted average price and remaining contractual life):

	Options Outstanding			Weighted Average Remaining Contractual Life (Years)	Options Exercisable
Range of Exercise Price	Number of Shares	Weighted Average Exercise Price			Number of Shares	Weighted Average Exercise Price
$0.67 - $4.92	2,044	$	4.41	5.35	1,205	$	4.45
$5.23 - $7.00	1,564		6.22	6.69	1,143		6.11
$7.13 - $9.33	1,004		8.59	6.13	650		8.58
$9.50 - $15.27	922		12.00	6.60	526		12.63
$15.40 - $45.58	879		20.68	4.39	857		20.77
Total	6,413	$	8.83		4,381	$	9.67

Employee Savings Plans

The Company has a 401(k) profit-sharing plan (the “401(k) Plan”) available to all employees of the Company who have attained age 21. The 401(k) Plan includes a salary deferral arrangement pursuant to which employees may contribute a minimum of 1% and a maximum of 80% of their salary on a pretax basis, up to $14,000 in 2005. The Company may make both matching and additional contributions at the discretion of the Company’s Board of Directors. The Company made contributions of approximately $0.4 million, $0.3 million and $0 during 2005, 2004 and 2003, respectively.

As a result of the Company’s acquisition of Aloha in January 2004, the Company adopted Aloha’s 401(k) profit-sharing plan (“Aloha Plan”), which is available to all employees who have attained age 21. The Aloha Plan includes a salary deferral arrangement pursuant to which employees may contribute a minimum of 1% and a maximum of 50% of their salary on a pretax basis, up to $14,000 in 2005. The Company may make both matching and additional contributions at the discretion of the Company’s Board of Directors. The Company made contributions of approximately $0.2 million in each of the years ending December 31, 2005 and 2004. The total for 2005 includes contributions made by the Company on behalf of MenuLink employees, who participate in the Aloha Plan.

73

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

13. SEGMENT REPORTING DATA

Prior to January 1, 2004, the Company operated through two primary reportable segments: Store Systems and Enterprise Software Systems. During the first quarter of 2004, the Company disposed of the Enterprise Software Systems segment and, as a result, restructured its business units into three primary segments: (i) Hospitality, (ii) Petroleum and Convenience Retail, and (iii) Entertainment. Each segment focuses on delivering site management systems, including point-of-sale (“POS”), self-service kiosk and back-office systems, designed specifically for each of the core vertical markets. All prior periods have been restated to conform to the new segments.

The accounting policies of the segments are substantially the same as those described in the summary of significant accounting policies. The Company’s management evaluates the performance of the segments based on an internal measure of contribution margin, which is defined as income or loss from operations before certain allocated costs. The summary of the Company’s operating segments is as follows (in thousands):

	For the year ended December 31, 2005
	Hospitality			Petroleum & Convenience Retail		Entertainment		All Other			Total
Revenues	$	92,102		$	58,499	$	19,312	$	2,129		$	172,042
Amortization of intangible assets		5,159			—		132		26			5,317
Product development		6,846			2,530		1,500		—			10,876
Contribution margin		17,997			8,955		4,891		402			32,245
Goodwill		34,906			6,962		2,371		—			44,239
Other identifiable assets		31,998			18,879		3,528		1,599			56,004
	For the year ended December 31, 2004
	Hospitality			Petroleum & Convenience Retail		Entertainment		All Other			Total
Revenues	$	59,176		$	54,095	$	19,008	$	2,595		$	134,874
Amortization of intangible assets		4,784			—		94		13			4,891
Product development		3,431			3,768		1,551		44			8,794
Contribution margin		5,955			10,810		6,517		900			24,182
Goodwill		24,743			7,813		2,371		—			34,927
Other identifiable assets		39,226			17,248		3,994		2,470			62,938
	For the year ended December 31, 2003
	Hospitality			Petroleum & Convenience Retail		Entertainment		All Other			Total
Revenues	$	19,507		$	51,969	$	20,498	$	1,963		$	93,937
Product development		3,251			5,675		1,319		—			10,245
Restructuring charges and impairments		1,714			—		—		903			2,617
Contribution margin		(4,265	)		9,393		7,527		(1,085	)		11,570
Goodwill		—			5,276		2,261		—			7,537
Other identifiable assets		4,869			15,321		3,277		3,327			26,794

74

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The reconciliation of contribution margin to net income (loss) for the years ended December 31, 2005, 2004 and 2003 is as follows (in thousands):

	December 31,
	2005			2004			2003
Contribution margin for reportable segments	$	32,245		$	24,182		$	11,570
Central corporate expenses unallocated		(26,683	)		(22,707	)		(17,525	)
Income (loss) from operations of Enterprise business		—			(913	)		(41,776	)
Gain on disposal of Enterprise business		—			3,626			—
Net income (loss)	$	5,562		$	4,188		$	(47,731	)

The reconciliation of other identifiable assets to total assets as of December 31, 2005 and 2004 is as follows (in thousands):

	December 31,
	2005		2004
Other identifiable assets for reportable segments	$	56,004	$	62,938
Goodwill for reportable segments		44,239		34,927
Central corporate assets unallocated, including discontinued operations		42,262		31,889
Total assets	$	142,505	$	129,754

Revenues not associated with the Company’s Hospitality, Petroleum and Convenience Retail, or Entertainment segments are comprised of revenues from sales to BlueCube (Note 4) and hardware sales outside the Company’s segments.

The Company distributes its technology both within the United States of America and internationally. The Company currently has international offices in Australia, Czech Republic, the United Kingdom and Singapore. Revenues derived from international sources were approximately $33.1 million, $23.3 million and $12.5 million for the years ended December 31, 2005, 2004 and 2003, respectively. At December 31, 2005 and 2004, the Company had international identifiable assets, including goodwill, of approximately $12.4 million and $14.4 million, respectively, of which approximately $4.1 million and $4.9 million, respectively, are considered long-lived assets.

The segment reporting data presented above may not reflect actual performance and actual asset balances had each segment been a stand-alone entity. Furthermore, the segment information may not be indicative of future performance.

75

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

14. SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION (Unaudited)

The following tables set forth certain unaudited financial data for each of the Company’s last eight calendar quarters. The information has been derived from unaudited consolidated financial statements that, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of such quarterly information. The operating results for any quarter are not necessarily indicative of the results to be expected for any future period. Net income per share is computed independently for each of the quarters presented. As such, the summation of the quarterly amounts may not equal the total net income per share reported for the year. Results for 2005 and 2004 include the results of MenuLink, Aloha and E-Needs from the date of acquisition (in thousands, except per share data):

	Quarter ended
	Mar 31, 2005			June 30, 2005			Sep 30, 2005			Dec 31, 2005
Total revenues	$	37,339		$	39,525		$	46,836		$	48,342
Gross profit		15,450			16,657			17,707			19,936
Net income		1,172			1,229			731			2,430
Basic and diluted net income per share		0.04			0.04			0.02			0.08
Basic and diluted income per share from continuing operations		0.04			0.04			0.02			0.08
	Quarter ended
	Mar 31, 2004			June 30, 2004			Sep 30, 2004			Dec 31, 2004
Total revenues	$	26,841		$	32,324		$	35,939	(1)	$	39,770	(1)
Gross profit		12,887			14,648			15,243			16,178
Net income (loss)		1,932			(199	)		804			1,651
Basic and diluted net income (loss) per share		0.07			(0.01	)		0.03			0.06
Basic and diluted (loss) income per share from continuing operations		(0.03	)		—			0.03			0.05
Basic and diluted income (loss) per share from discontinued Enterprise business, net		0.10			(0.01	)		—			—

(1) An adjustment was made to reclassify amounts into the proper period by decreasing third quarter 2004 revenue and cost of sales by $0.4 million and increasing fourth quarter 2004 revenue and cost of sales by $0.4 million.

76

RADIANT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

15. SUBSEQUENT EVENTS

Acquisition of Synchronics, Inc.

On January 3, 2006, the Company acquired substantially all of the assets of Synchronics, Inc. (“Synchronics”), a supplier of business management and point-of-sale software for the specialty retail industry. Total consideration was approximately $27.0 million and consisted of approximately $19.5 million in cash (subject to a post-closing adjustment) and 592,347 shares of restricted common stock with a value of $12.66 per share based on the average closing price of the stock for the 20 days prior to the acquisition. The cash portion of the purchase price was paid on the date of closing. The Company expects the acquisition of Synchronics to be accretive to 2006 earnings as adjusted to exclude amortization of intangible assets. Under the purchase method of accounting, the purchase price is allocated to the net assets acquired based on their fair values. The valuation to determine the fair value of the net assets acquired has not been completed yet. Accordingly, the Company cannot currently estimate the values that will be assigned to goodwill and other intangible assets. The Company plans on reporting the operations of the Synchronics business under a new “Retail” segment beginning in the first quarter of 2006.

Amendment to Credit Agreement

On January 3, 2006, the Company entered into an amendment to its Credit Agreement with Wells Fargo Foothill, Inc. The amendment increased the aggregate principal amount of loans available under this agreement from $30 million to $46 million and extended the expiration date of the Credit Agreement from March 31, 2008 to March 31, 2010. Certain of the financial and other covenants were also modified as a result of the amendment. As of January 3, 2006, aggregate borrowings under this facility totaled approximately $29.3 million.

77

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company has established disclosure controls and procedures to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the officers who certify its financial reports and to other members of senior management and the Company’s board of directors.

Based on their evaluation as of December 31, 2005, the principal executive officer and principal financial officer of the Company have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company’s management, including its principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its evaluation under the framework in Internal Control - Integrated Framework, the Company’s management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2005. Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein.

During the quarter ended December 31, 2005, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

78

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

Radiant Systems, Inc.

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that Radiant Systems, Inc and subsidiaries (the “Company”) maintained effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2005 of the Company and our report dated March 1, 2006 expressed an unqualified opinion on those financial statements and financial statement schedule.

DELOITTE & TOUCHE LLP

Atlanta, Georgia

March 1, 2006

79

ITEM 9B. OTHER INFORMATION

Not applicable.

80

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information required by this item will be included in our proxy statement to be used in connection with the solicitation of proxies for our 2006 annual meeting of shareholders (the “2006 Proxy Statement”) to be filed with the Securities and Exchange Commission and is incorporated herein by reference.

Code of Ethics

The Company has adopted a Code of Business Conduct and Ethics within the meaning of Item 406(b) of Regulation S-K, which applies to the Company’s principal executive officer, principal financial officer and principal accounting officer. This Code of Business Conduct and Ethics is publicly available on the Company’s website at www.radiantsystems.com or upon request by writing to Radiant Systems, Inc., Attn: Investor Relations Director, 3925 Brookside Parkway, Alpharetta, Georgia 30022. If the Company makes substantial amendments to the Code of Business Conduct and Ethics or grants any waiver, including an implicit waiver, the Company will disclose the nature of such amendment or waiver on its website or in a report on Form 8-K within five days of such amendment or waiver.

ITEM 11. EXECUTIVE COMPENSATION

Information required by this item will be included in our 2006 Proxy Statement and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information required by this item will be included in our 2006 Proxy Statement and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information required by this item will be included in our 2006 Proxy Statement and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information required by this item will be included in our 2006 Proxy Statement and is incorporated herein by reference.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

1. Financial Statements

The following consolidated financial statements, together with the applicable reports of the independent registered public accounting firm, have been filed as Item 8 in Part II of this Report:

2. Financial Statement Schedules

SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS

All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions are inapplicable, or the required information is included elsewhere in the financial statements.

SCHEDULE II

RADIANT SYSTEMS, INC. AND SUBSIDIARIES

VALUATION AND QUALIFYING ACCOUNTS

Allowance for doubtful accounts for the year ended (in thousands)	Balance at Beginning of Period		Additions Charged to Operations		Deductions		Balance at End of Period
December 31, 2003	$	2,597	$	612	$	545	$	2,664
December 31, 2004		2,664		986		26		3,624
December 31 ,2005		3,624		687		904		3,407

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3. Exhibits

The following exhibits are filed with or incorporated by reference into this report. The exhibits which are denominated by an asterisk (*) were previously filed as a part of, and are hereby incorporated by reference from (i) a Registration Statement on Form S-1 for the Registrant, Registration No. 333-17723, as amended (“2/97 S-1”), (ii) a Registration Statement on Form S-1 for the Registrant, Registration No. 333-30289 (“6/97 S-1”), (iii) a Registration Statement on Form S-8 for the Registrant, Registration No. 333-41291 (“1997 S-8”), (iv) a Registration Statement on Form S-8 for the Registrant, Registration No. 333-62157 (“1998 S-8”), (v) a Registration Statement on Form S-8 for the Registrant, Registration No. 333-62151 (“ESPP S-8”), (vi) the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1998, (“1998 10-K”), (vii) the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2001 (the “June 2001 10-Q”), (viii) the Registrant’s Form 8-K filed October 14, 2003 (the “October 14, 2003 8-K”), (ix) the Registrant’s Form 8-K filed December 16, 2003 (the “December 16, 2003 8-K”), (x) the Registrant’s Form 8-K filed January 23, 2004 (the “January 23, 2004 8-K”), (xi) the Registrant’s Form 8-K filed February 17, 2004 (the “February 17, 2004 8-K”), (xii) the Registrant’s Form 8-K filed December 15, 2003 (“December 15, 2003 8-K”), (xiii) the Registrant’s Form 8-K filed January 23, 2004 (“January 23, 2004 8-K”), (xiv) Registration Statement on Form S-8, Registration No. 333-71892 (“2001 S-8”), (xv) Exhibit 12(d)(5)(i) of the Schedule to Tender Offer Statement filed by the Registrant on December 2, 2004 (“2004 Schedule To”), (xvi) the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (the “March 2005 10-Q”), (xvii) the Registrant’s From 8-K filed January 9, 2006 (the “January 9, 2006 8-K”), and (xviii) Appendix A of the Registrant’s Definitive Proxy Statement filed July 19, 2005 (the “2005 Proxy”).

Exhibit Number	Description of Exhibit
*2.1	Asset Purchase Agreement, dated December 15, 2003, by and among Radiant Systems, Inc., Aloha Technologies, Ltd. et al. (December 16, 2003 8-K)
*2.1.1	Amendment No. 1 to Asset Purchase Agreement, dated January 13, 2004 (January 23, 2004 8-K)
*2.2	Asset Purchase Agreement, dated December 12, 2005, by and among Radiant Systems, Inc., Synchronics, Inc. and Jeff Goldstein (January 9, 2006 8-K)
* 3. (i)	Amended and Restated Articles of Incorporation (2/97 S-1)
* 3. (ii)	Amended and Restated Bylaws (2/97 S-1)
* 4.1	Specimen Certificate of Common Stock (2/97 S-1)
*10.1	Form of License, Support and Equipment Purchase Agreement (2/97 S-1)
*10.2	Employee Stock Purchase Plan (ESPP S-8, Exhibit 10.1)
*10.3	Amended and Restated 1995 Stock Option Plan (2/97 S-1)
*10.3.1	Amendment No. 1 to Amended and Restated 1995 Stock Option Plan (1997 S-8)
*10.3.2	Amendment No. 2 to Amended and Restated 1995 Stock Option Plan (1998 S-8)
*10.3.3	Amendment No. 3 to Amended and Restated 1995 Stock Option Plan (2001 S-8)
*10.3.4	Form of Option Agreement under 1995 Stock Option Plan (2004 Schedule To)
*10.4	Lease Agreement dated October 7, 1997, by and between Weeks Realty, L.P. and the Registrant for lease of office space in Alpharetta, Georgia (Brookside Parkway) (1998 10-K)
*10.4.1	First Amendment to Lease Agreement dated April 3, 1998, by and between Weeks Realty, L.P. and the Registrant for lease of office space in Alpharetta, Georgia (Brookside Parkway) (1998 10-K)
*10.4.2	Second Amendment to Lease Agreement dated September 1998, by and between Weeks Realty, L.P. and the Registrant for lease of office space in Alpharetta, Georgia (Brookside Parkway) (1998 10-K)
*10.5	Lease Agreement dated November 11, 1997 by and between Meadows Industrial, LLC and the Registrant for lease of office space in Alpharetta, Georgia (Shiloh Road) (1998 10-K)

83

Exhibit Number	Description of Exhibit
*10.5.1	First Amendment to Lease Agreement dated August 14, 1998 by and between Meadows Industrial, LLC and the Registrant for lease of office space in Alpharetta, Georgia (Shiloh Road) (1998 10-K)
*10.6	Credit Agreement, dated March 31, 2005, between Radiant Systems, Inc. and Wells Fargo Foothill, Inc. (March 2005 10-Q)
*10.6.1	Fifth Amendment to Credit Agreement, dated January 3, 2006, between Radiant Systems, Inc. and Wells Fargo Foothill, Inc. (January 9, 2006 8-K)
*10.7	2005 Long-Term Incentive Plan (2005 Proxy)
10.9	Office Lease Agreement, dated September 16, 2005, by and between Radiant Systems, Inc. and Centreport Trinity, Ltd.
10.10	Radiant Lease Agreement for 1727 Kirby Parkway, dated January 3, 2006, by and between Radiant Systems, Inc. and Jeff Goldstein Investment Partnership
*10.13	Non-Management Directors’ Stock Option Plan (6/97 S-1)
*10.20	Asset Purchase and License Agreement, dated June 30, 2001, by and between Radiant Systems, Inc. and Tricon Restaurant Services Group (June 2001 10-Q)**
*10.21	Share Exchange Agreement, dated October 10, 2003, between Radiant Systems, Inc. and Erez Goren (October 14, 2003 8-K)
*10.22	Asset Purchase Agreement, dated December 15, 2003, by and among Radiant Systems, Inc., Aloha Technologies, Ltd. et al. (December 15, 2003 8-K)
*10.22.1	Amendment No. 1 to Asset Purchase Agreement, dated January 13, 2004 (January 23, 2004 8-K)
*10.23	Separation Agreement, dated January 31, 2004, between Radiant Systems, Inc. and Wave Enterprise Systems, Inc. (February 17, 2004 8-K)
*10.24	Registration Rights Agreement, dated January 13, 2004 (January 23, 2004 8-K)
*10.25	Reseller and Services Agreement, dated January 31, 2004, between Radiant Systems, Inc. and Wave Enterprise Systems, Inc. (February 17, 2004 8-K)
*10.26	Noncompetition Agreement, dated January 31, 2004, between Radiant Systems, Inc. and Erez Goren (February 17, 2004 8-K)
*10.27	Tax Disaffiliation Agreement, dated January 31, 2004, between Radiant Systems, Inc. and Wave Enterprise Systems, Inc. (February 17, 2004 8-K)
*10.28	Employee Benefits Agreement, dated January 31, 2004, between Radiant Systems, Inc. and Wave Enterprise Systems, Inc. (February 17, 2004 8-K)
*10.29	Right of First Refusal and Purchase Option Agreement, dated January 31, 2004, between Radiant Systems, Inc. and Wave Enterprise Systems, Inc. (February 17, 2004 8-K)
*10.30	Sublease and Facilities Agreement, dated January 31, 2004, between Radiant Systems, Inc. and Wave Enterprise Systems, Inc. (February 17, 2004 8-K)
10.31	Employment Arrangements with Executive Officers
10.32	Director Compensation Arrangements
21.1	Subsidiaries of the Registrant

84

Exhibit Number	Description of Exhibit
23.1	Consent of Deloitte & Touche LLP
31.1	Certification of John H. Heyman, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Mark E. Haidet, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

85

SIGNATURES

In accordance with the requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, in the City of Alpharetta, State of Georgia on March 1, 2006.

RADIANT SYSTEMS, INC.
By:	/s/ JOHN H. HEYMAN
	John H. Heyman Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Signature	Title	Date
/s/ ALON GOREN Alon Goren	Chairman of the Board and Chief Technology Officer	March 1, 2006
/s/ JOHN H. HEYMAN John H. Heyman	Chief Executive Officer and Director (principal executive officer)	March 1, 2006
/s/ MARK E. HAIDET Mark E. Haidet	Chief Financial Officer (principal financial officer)	March 1, 2006
/s/ ROBERT R. ELLIS Robert R. Ellis	Corporate Controller (principal accounting officer)	March 1, 2006
/s/ MICHAEL Z. KAY Michael Z. Kay	Director	March 1, 2006
/s/ JAMES S. BALLOUN James S. Balloun	Director	March 1, 2006
/s/ J. ALEXANDER M. DOUGLAS, JR. J. Alexander M. Douglas, Jr.	Director	March 1, 2006
/s/ WILLIAM A. CLEMENT, JR. William A. Clement, Jr.	Director	March 1, 2006

86

EX-10.9

Exhibit 10.9

OFFICE LEASE AGREEMENT

BETWEEN

CENTREPORT TRINITY, LTD.

AS LANDLORD

AND

RADIANT SYSTEMS, INC.

AS TENANT

DATED

September 16, 2005

OFFICE LEASE AGREEMENT

CentrePort/Radiant Systems, Inc.

TABLE OF CONTENTS

1.      Definitions and Basic Provisions	1
2.      Lease Grant	1
3.      Tender of Possession	1
4.      Rent	2
5.      Delinquent Payment; Handling Charges	3
6.      Security Deposit	3
7.      Services; Utilities; Common Areas	4
(a)    Services	4
(b)    Use of Electrical Services by Tenant	5
(c)    Common Areas	5
(d)    Electricity Costs	6
8.      Alterations; Repairs; Maintenance; Signs	7
(a)    Alterations	7
(b)    Repairs; Maintenance	8
(i)     By Landlord	8
(ii)    By Tenant	9
(iii)  Performance of Work	10
(c)    Mechanic’s Liens	11
(d)    Signs	11
9.      Use	12
10.    Assignment and Subletting	13
(a)    Transfers	13
(b)    Consent Standards	13
(c)    Request for Consent	14
(d)    Conditions to Consent	14
(e)    Attornment by Subtenants	14
(f)     Cancellation	15
(g)    Additional Compensation	15
(h)    Permitted Transfers	15
11.    Insurance; Waivers; Subrogation; Indemnity	16
(a)    Tenant’s Insurance	16
(b)    Landlord’s Insurance	17
(c)    No Subrogation	18
(d)    Indemnity	18
12.    Subordination; Attornment; Notice to Landlord’s Mortgagee	18
(a)    Subordination	18
(b)    Attornment	19
(c)    Notice to Landlord’s Mortgagee	19
(d)    Landlord’s Mortgagee’s Protection Provisions	19
13.    Rules and Regulations	19
14.    Condemnation	20
(a)    Total Taking	20
(b)    Partial Taking - Tenant’s Rights	20
(c)    Partial Taking - Landlord’s Rights	20
(d)    Award	20

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. i

15. Fire or Other Casualty	21
(a)    Repair Estimate	21
(b)    Tenant’s Rights	21
(c)    Landlord’s Rights	21
(d)    Repair Obligation	21
(e)    Abatement of Rent	22
16.    Personal Property Taxes	22
17.    Events of Default	22
(a)    Payment Default	22
(b)    Abandonment	22
(c)    Estoppel/Financial Statement/Commencement Date Letter	22
(d)    Insurance	22
(e)    Mechanic’s Liens	23
(f)     Other Defaults	23
(g)    Insolvency	23
18.    Remedies	23
(a)    Termination of Lease	23
(b)    Termination of Possession	23
(c)    Perform Acts on Behalf of Tenant	24
(d)    Alteration of Locks	24
19.    Payment by Tenant; Non-Waiver; Cumulative Remedies	24
(a)    Payment by Tenant	24
(b)    No Waiver	25
(c)    Cumulative Remedies	25
20.    Landlord’s Lien	25
21.    Surrender of Premises	25
22.    Holding Over	26
23.    Certain Rights Reserved by Landlord	26
(a)    Building Operations	26
(b)    Security	26
(c)    Repairs and Maintenance	27
(d)    Prospective Purchasers and Lenders	27
(e)    Prospective Tenants	27
24.    Substitution Space	27
25.    Hazardous Materials	27
26.    Miscellaneous	29
(a)    Landlord Transfer	29
(b)    Landlord’s Liability	29
(c)    Force Majeure	29
(d)    Brokerage	30
(e)    Estoppel Certificates	30
(f)     Notices	30
(g)    Separability	30
(h)    Amendments; Binding Effect	30
(i)     Quiet Enjoyment	31
(j)     No Merger	31

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. ii

(k)    No Offer	31
(l)     Entire Agreement	31
(m)   Waiver of Jury Trial	31
(n)    Governing Law	31
(o)    Recording	31
(p)    Joint and Several Liability	31
(q)    Financial Reports	32
(r)     Landlord’s Fees	32
(s)    Telecommunications	32
(t)     Representations and Warranties.	33
(u)    Confidentiality	33
(v)    Authority	33
(w)   List of Exhibits	33

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. iii

BASIC LEASE INFORMATION

This Basic Lease Information is attached to and incorporated by reference to an Office Lease Agreement between Landlord and Tenant, as defined below.

Lease Date:	September 16, 2005
Landlord:	CENTREPORT TRINITY, LTD., a Texas limited partnership
Tenant:	RADIANT SYSTEMS, INC., a Georgia corporation
Premises:	Approximately 68,511 rentable square feet, in the building commonly known as CentrePort Office Center Building B, and whose street address is 14770 Trinity, Ft. Worth, Texas 76155 (the “Building”). The Premises are outlined on the plan attached to the Lease as Exhibit A, and consists of two areas, one containing approximately 60,000 rentable square feet (the “Initial Premises”), and one containing approximately 8,511 rentable square feet (the “Must Take Space”). The land on which the Building is located (the “Land”) is described on Exhibit B. The term “Project” shall collectively refer to the Building, the Land and the driveways, parking facilities, and similar improvements and easements associated with the foregoing or the operation thereof, including without limitation the Common Areas (as defined in Section 7(c)). The term “Complex” shall collectively refer to the Building and any other buildings which comprise a multi-building Complex owned by Landlord, if applicable.
Term:	Approximately one hundred twenty-six (126) months, commencing on the Initial Premises Commencement Date and ending at 5:00 p.m. local time on the last day of the 126th full calendar month following the Initial Premises Commencement Date, subject to adjustment and earlier termination as provided in the Lease.
Initial Premises Commencement Date:	The earliest of: (a) the date on which Tenant occupies any portion of the Premises and begins conducting business therein; or (b) the first business day of the week following the date on which the Work (as defined in Exhibit D hereto) in the Premises is Substantially Completed (as defined in Exhibit D hereto) (or would have been Substantially Completed but for the occurrence of any Tenant Delay Days (as defined in Exhibit D hereto), but in no event earlier than January 1, 2006.
Must Take Space Commencement Date:	The first day of the twenty-fifth (25th) month of the Lease Term.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. -1-

Base Rent: Base Rent shall be the following amounts for the following periods of time:

Lease Month	Annual Base Rent Rate Per Rentable Square Foot		Monthly Base Rent
1 – 6	$	0.00	$	0.00
7-24	$	16.06	$	80,300.00
25-66	$	16.06	$	91,690.55
67-126	$	17.26	$	98,541.65

	As used herein, the term “Lease Month” shall mean each calendar month during the Term (and if the Initial Premises Commencement Date does not occur on the first (1st) day of a calendar month, the period from the Initial Premises Commencement Date to the first (1st) day of the next calendar month shall be included in the first (1st) Lease Month for purposes of determining the duration of the Term and the monthly Base Rent rate applicable for such partial month).
Security Deposit:	$91,690.55, which may be in the form of cash or letter of credit in accordance with Section 6.
Rent:	Base Rent, Additional Rent, Taxes, and Insurance (each as defined in Exhibit C hereto), and all other sums that Tenant may owe to Landlord or otherwise be required to pay under the Lease.
Permitted Use:	The operation of a call center including training, together with associated office and storage uses, and for no other purpose whatsoever. Notwithstanding the foregoing, any general office use shall also be considered a Permitted Use.
Tenant’s Proportionate Share:	The percentage obtained by dividing (a) the number of rentable square feet in the Premises as stated above by (b) the rentable square feet in the Building or Complex, as applicable, with respect to the charge being prorated at the time a respective charge was incurred. Landlord shall, upon the written request of Tenant received prior to the Initial Premises Commencement Date, cause the rentable square footage of the Premises to be verified by an architect selected by Landlord and approved by Tenant (which approval shall not be unreasonably withheld or delayed) in accordance with building standard methods of measurement. For purposes of such measurement, any partitions will be

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. -2-

	measured from center wall or the exterior of brick, as the case may be, to center wall or the exterior of brick, as the case may be. If such measurement results in a change in the rentable square footage of the Premises, the Base Rent, Additional Rent, Taxes, Insurance, Tenant’s Proportionate Share, and any other matters affected by the rentable square footage of the Premises shall be adjusted accordingly. If there is a change in the rentable square footage of the Premises, Tenant shall within fifteen (15) days after Landlord’s written request, execute and return a lease amendment effective as of the Initial Premises Commencement Date, confirming the necessary adjustments. Landlord agrees to pay one-half of the cost of such remeasurement not to exceed $750.00, and Tenant shall be responsible for the remainder of such costs of remeasurement.
Initial Liability Insurance Amount:	$3,000,000
Broker/Agent:	For Tenant: Cushman & Wakefield of Texas, Inc.
	For Landlord: GVA Cawley Realty Services
Tenant’s Address:	Prior to Initial Commencement Date: RADIANT SYSTEMS, INC. 3925 Brookside Parkway Alpharetta, GA 30022 Attention: Jamie Graves, Esq. Telephone: 800-229-0991 Telecopy: 770-576-6000	Following Initial Commencement Date: RADIANT SYSTEMS, INC. 3925 Brookside Parkway Alpharetta, GA 30022 Attention: Jamie Graves, Esq. Telephone: 800-229-0991 Telecopy: 770-576-6000
		RADIANT SYSTEMS, INC. 14770 Trinity Blvd. Ft. Worth, TX 76155 Attention: Manager
		With a copy to: SMITH, GAMBRELL & RUSSELL, LLP Suite 3100, Promenade II 1230 Peachtree Street, N.E. Atlanta, Georgia 30309-3592 Attention: Richard G. Greenstein Telephone: (404) 815-3623 Telecopy: (404) 815-3509

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. -3-

Landlord’s Address: For all Notices: GVA Cawley Realty Services 14785 Preston Road, Suite 850 Dallas, TX 75254 Attention: Property Manager Telephone: 972-759-7800 Telecopy: 972-759-7801 With a copies to: CENTREPORT TRINITY, LTD. Attn: Asset Manager Invesco Real Estate 500 Three Galleria Tower 13155 Noel Road Dallas, Texas 75240 Phone No.: 972-715-7400 Facsimile No.: 972-715-7474

The foregoing Basic Lease Information is incorporated into and made a part of the Lease identified above. If any conflict exists between any Basic Lease Information and the Lease, then the Lease shall control.

LANDLORD:	CENTREPORT TRINITY, LTD.,
	a Texas limited partnership
	By:	CARDINAL CENTREPORT, LLC,
		a Texas limited liability company,
		its General Partner
		By:	INVESCO, INC.,
			a Delaware corporation
			its Manager
			By:	INVESCO REAL ESTATE
				DIVISION
				By:	/s/ Kevin Johnson
				Name:	Kevin Johnson
				Title:	Vice President

TENANT:	RADIANT SYSTEMS, INC.,
	a Georgia corporation
	By:	/s/ Mark Haidet
	Name:	Mark Haidet
	Title:	Chief Financial Officer

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. -4-

OFFICE LEASE AGREEMENT

This Office Lease Agreement (this “Lease”) is entered into as of September 16, 2005, between CENTREPORT TRINITY, LTD., a Texas limited partnership (“Landlord”), and RADIANT SYSTEMS, INC., a Georgia corporation (“Tenant”).

1. Definitions and Basic Provisions. The definitions and basic provisions set forth in the Basic Lease Information (the “Basic Lease Information”) executed by Landlord and Tenant contemporaneously herewith are incorporated herein by reference for all purposes. Additionally, the following terms shall have the following meanings when used in this Lease: “Affiliate” means any person or entity which, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the party in question; “Building’s Structure” means the Building’s exterior walls, roof, elevator shafts (if any), footings, foundations, structural portions of load-bearing walls, structural floors and subfloors, and structural columns and beams; “Building’s Systems” means the Premises’ and Building’s HVAC, life-safety, plumbing, electrical, and mechanical systems; “Business Day(s)” means Monday through Friday of each week, exclusive of Holidays; “Holidays” means New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, and any other nationally or regionally recognized holiday; “including” means including, without limitation; “Laws” means all federal, state, and local laws, ordinances, rules and regulations, all court orders, governmental directives, and governmental orders and all interpretations of the foregoing, and all restrictive covenants affecting the Project, and “Law” shall mean any of the foregoing; “Normal Business Hours” means 7:00 a.m. until 7:00 p.m., on Business Days, and 8:00 a.m. until 2:00 p.m. on Saturdays, exclusive of Holidays; “Tenant’s Off-Premises Equipment” means any of Tenant’s equipment or other property that may be located on or about the Project (other than inside the Premises); and “Tenant Party” means any of the following persons: Tenant; any assignees claiming by, through, or under Tenant; any subtenants claiming by, through, or under Tenant; and any of their respective agents, contractors, employees, and invitees.

2. Lease Grant. Subject to the terms of this Lease, Landlord leases to Tenant, and Tenant leases from Landlord, the Premises (as defined in the Basic Lease Information).

3. Tender of Possession. Landlord and Tenant presently anticipate that possession of the Initial Premises will be tendered to Tenant in the condition required by this Lease on or about January 1, 2006 (the “Estimated Delivery Date”). If Landlord is unable to tender possession of the Initial Premises in such condition to Tenant by the Estimated Delivery Date, then: (a) the validity of this Lease shall not be affected or impaired thereby; (b) Landlord shall not be in default hereunder or be liable for damages therefor; and (c) Tenant shall accept possession of the Initial Premises when Landlord tenders possession thereof to Tenant. Notwithstanding the foregoing, in the event Landlord fails to deliver possession of the Initial Premises in the condition required by this Lease on or before to June 30, 2006 (the “Delivery Date Deadline”), then Tenant shall have the right to terminate this Lease at any time within the thirty (30) day period following such Delivery Date Deadline by providing written notice of such election to Landlord. Notwithstanding the foregoing, the Delivery Date Deadline shall be extended one day for each Tenant Delay Day (as defined in Exhibit D). Further notwithstanding the foregoing, Tenant may have access to the Premises one hundred twenty (120) days prior to

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. 1

the Initial Premises Commencement Date for purposes of installing furniture, fixtures and equipment; provided, however, if Tenant interferes with Landlord’s performance of the Work (as defined in Exhibit D), then each such day of delay shall be a Tenant Delay Day. Landlord agrees to advise Tenant in writing approximately fifteen (15) days prior to the date Landlord believes it will tender possession of the Initial Premises to Tenant in the condition required hereunder. Tenant acknowledges that tenant improvement work shall be performed on the entire Premises at the commencement of the Lease Term, but that it shall have no right to occupy the Must Take Space until the Must Take Space Commencement Date. If Tenant occupies the Must Take Space prior to such date, it shall be obligated to pay Base Rent and all other amounts due under the Lease for such period of occupancy. By occupying any portion of the Premises, Tenant shall be deemed to have accepted the Premises in their condition as of the date of such occupancy, subject to latent defects, if any, for which notice is given to Landlord within six (6) months of the applicable Commencement Date, and the performance of punch-list items that remain to be performed by Landlord, if any. Prior to occupying any portion of the Premises, Tenant shall execute and deliver to Landlord a letter substantially in the form of Exhibit F hereto confirming: (1) the Initial Premises Commencement Date and Must Take Space Commencement Date (each as defined in the Basic Lease Information) and the expiration date of the initial Term (as defined in the Basic Lease Information); (2) that Tenant has accepted the Premises subject to latent defects, if any, for which notice is given to Landlord within six (6) months of the applicable Commencement Date; and (3) that Landlord has performed all of its obligations with respect to the Premises (except for punch-list items specified in such letter); however, the failure of the parties to execute such letter shall not defer the Initial Premises Commencement Date or otherwise invalidate this Lease. Tenant’s failure to execute such document within ten (10) days of receipt thereof from Landlord shall be deemed Tenant’s agreement to the contents of such document. Occupancy of any portion of the Premises by Tenant prior to the Initial Premises Commencement Date shall be subject to all of the provisions of this Lease excepting only those requiring the payment of Rent.

4. Rent. Tenant shall timely pay to Landlord Rent (as defined in the Basic Lease Information), including the amounts set forth in Exhibit C hereto, without notice, demand, deduction or set-off (except as otherwise expressly provided herein), by good and sufficient check drawn on a national banking association at Landlord’s address provided for in this Lease or as otherwise specified by Landlord and shall be accompanied by all applicable state and local sales or use taxes. The obligations of Tenant to pay Base Rent (as defined in the Basic Lease Information) and other sums to Landlord and the obligations of Landlord under this Lease are independent obligations. Base Rent, adjusted as herein provided, shall be payable monthly in advance. The first (1st) monthly installment of Base Rent shall be payable contemporaneously with the execution of this Lease; thereafter, Base Rent shall be payable on the first (1st) day of each month beginning on the first (1st) day of the eighth (8^th) full calendar month of the Term. The monthly Base Rent for any partial month at the beginning of the Term shall equal the product of 1/365 (or in the event of a leap year, 1/366) of the annual Base Rent in effect during the partial month and the number of days in the partial month, and shall be due on the Initial Premises Commencement Date. Payments of Base Rent for any fractional calendar month at the end of the Term shall be similarly prorated. Tenant shall pay Additional Rent, Taxes and Insurance (each as defined in Exhibit C) at the same time and in the same manner as Base Rent.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. 2

5. Delinquent Payment; Handling Charges. All past due payments required of Tenant hereunder shall bear interest from that date which is thirty (30) days following the date due until paid at the lesser of fifteen percent (15%) per annum or the maximum lawful rate of interest (such lesser amount is referred to herein as the “Default Rate”); additionally, as to all payments due hereunder which are not made within five (5) days of their due date, Landlord, in addition to all other rights and remedies available to it, may charge Tenant a fee equal to five percent (5%) of the delinquent payment to reimburse Landlord for its cost and inconvenience incurred as a consequence of Tenant’s delinquency. In no event, however, shall the charges permitted under this Section 5 or elsewhere in this Lease, to the extent they are considered to be interest under applicable Law, exceed the maximum lawful rate of interest. Notwithstanding the foregoing; (i) the late fee referenced above shall not be charged with respect to the first occurrence (but not any subsequent occurrence) during any twelve-month period that Tenant fails to make payment when due, until five (5) days after Landlord delivers written notice of such delinquency to Tenant; and (ii) the interest referenced above shall not be charged with respect to the first occurrence (but may be charged for any subsequent occurrence) during any twelve-month period that Tenant fails to make payment when due, until five (5) days after Landlord delivers written notice of such delinquency to Tenant.

6. Security Deposit. Contemporaneously with the execution of this Lease, Tenant shall pay to Landlord the Security Deposit (as defined in the Basic Lease Information), which shall be held by Landlord to secure Tenant’s performance of its obligations under this Lease. The Security Deposit is not an advance payment of Rent or a measure or limit of Landlord’s damages upon an Event of Default (as defined in Section 17). Landlord may at Landlord’s discretion, from time to time following an Event of Default and without prejudice to any other remedy, use all or a part of the Security Deposit to perform any obligation Tenant fails to perform hereunder or in connection with Landlord’s remedies under this Lease. Following any such application of the Security Deposit, Tenant shall pay to Landlord on demand the amount so applied in order to restore the Security Deposit to its original amount. Subject to the requirements of, and conditions imposed by, Laws applicable to security deposits under commercial leases, Landlord shall, within the time required by applicable Law (but in any event within thirty (30) days following the expiration or earlier termination of this Lease), return to Tenant the portion of the Security Deposit remaining after deducting all damages, charges and other amounts permitted by Law. Landlord and Tenant agree that such deductions shall include, without limitation, all damages and losses that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of any breach of this Lease by Tenant. Unless required otherwise by applicable Law, the Security Deposit may be commingled with other funds, and no interest shall be paid thereon. If Landlord transfers its interest in the Premises, Landlord shall assign the Security Deposit to the transferee and, upon such transfer (and the delivery to Tenant of an acknowledgement of the transferee’s responsibility for the Security Deposit), Landlord thereafter shall have no further liability for the return of the Security Deposit. In lieu of a cash Security Deposit, Tenant may deliver to Landlord within ten (10) days after the date of execution of the Lease an irrevocable, unconditional letter of credit in the amount of $91,960.55 (the “Letter of Credit”). The Letter of Credit shall be addressed to Landlord, issued in a form and substance similar to that attached hereto as Exhibit M and by a national financial institution approved by Landlord, in Landlord’s reasonable discretion, shall be freely transferable without fee payable by the beneficiary thereof, shall permit partial draws, shall have a one-year term with automatic one-year renewals and an expiration date falling no sooner than thirty (30) days after

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. 3

the expiration of the Lease Term. In the event Tenant fails to renew the Letter of Credit as required hereunder, Landlord shall have the right to draw down the entire amount of such Letter of Credit and hold such amount as the Security Deposit hereunder. Tenant agrees that upon any occurrence of any other Event of Default by Tenant under the terms and provisions of this Lease, Landlord shall have the right to receive payment under any Letter of Credit of such portion of the Letter of Credit as Landlord reasonably estimates is necessary to effectuate a cure of the subject Event of Default. Any such amounts received by Landlord shall be held by Landlord and applied in accordance with this Lease in the same manner as a Security Deposit. Landlord shall at all times during the Term, hold a letter of credit in the amounts described above.

Notwithstanding the foregoing, subject to the Conditions (defined below), if Tenant waives its Termination Option set forth in Exhibit K, then at the expiration of the ninetieth (90^th) month of the Lease Term (the “Release Date”) Landlord shall return one-half of the Security Deposit to Tenant (or Tenant may reduce the amount of the Letter of Credit to $46,000.00, if the Security Deposit is held in the form of a Letter of Credit). Such return or reduction is conditioned upon the following: (i) not more than one (1) written notice of Tenant’s failure to pay any monetary amounts under the Lease when due shall have been sent by Landlord in any twenty-four (24) month period of the Lease Term; and (ii) on the Release Date Tenant shall not be in default under the Lease (collectively, the “Conditions”).

7. Services; Utilities; Common Areas.

(a) Services. Subject to the provisions of this Lease, following the Initial Premises Commencement Date, Landlord agrees to furnish Tenant, for the portion of the Premises which are then occupied by Tenant, the following services: (i) cold water at those points of supply provided as a part of Building Standard improvements (provided that Tenant acknowledges that Tenant shall be solely responsible for installing within the Premises all plumbing facilities, fixtures and equipment required to service any kitchen, restroom or other area within the Premises, and that Landlord shall have no responsibility in connection therewith); (ii) routine maintenance and electric lighting service for all Common Areas in the manner and to the extent deemed by Landlord in its reasonable discretion to be standard for comparable properties in the CentrePort submarket of the Dallas/Ft. Worth, Texas area (for purposes of this Lease, each reference to “comparable properties” in the Lease shall use the conditions in effect on the Commencement Date for comparison); (iii) janitorial service, on weekdays, other than Holidays, in accordance with Exhibit N; provided, however, if Tenant’s floor covering or other improvements require special treatment, Tenant shall pay the additional cleaning cost attributable thereto as rent upon presentation of a statement therefor by Landlord; (iv) subject to the provisions of Section 7(b) hereof, facilities to provide electric current not to exceed six (6) watts per square foot of useable area; and (v) Building Standard fluorescent bulb and ballast replacement in the Premises and fluorescent and candescent bulb and ballast replacement in the Common Areas. Tenant acknowledges that Landlord shall not be required to provide electric current to or for the benefit of Tenant in connection with the Premises, and that Tenant shall be responsible for contracting directly with the applicable utility company for electrical service to the Premises and for paying all costs and expenses arising in connection therewith, as set forth in Section 7(d). Notwithstanding any other provision contained herein to the contrary, Landlord acknowledges and agrees that all services provided by Landlord to Tenant shall be provided to a standard at least comparable to such services as are provided at other comparable buildings in the

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. 4

CentrePort submarket of Dallas/Ft. Worth, Texas. Notwithstanding the foregoing, if: (i) utility service is interrupted because of the acts of Landlord, its employees, agents or contractors; (ii) Tenant notifies Landlord of such interruption in writing (the “Interruption Notice”); (iii) such interruption does not arise in whole or in part as a result of an act or omission of a Tenant Party; (iv) such interruption is not caused by a fire or other casualty; (v) the repair or restoration of such service is reasonably within the control of Landlord; and (vi) as a result of such interruption, the Premises or a material portion thereof, is rendered untenantable (meaning that Tenant is unable to use the Premises in the normal course of it business) and Tenant in fact ceases to use the Premises, or material portion thereof, then, Tenant’s sole remedy for such interruption shall be as follows: on the fifth (5^th) consecutive Business Day following the later to occur of the date the Premises (or material portion thereof) becomes untenantable, the date Tenant ceases to use such space and the date Tenant provides Landlord with an Interruption Notice, the Rent payable hereunder shall be abated on a per diem basis for each day after such five (5) Business Day period based upon the percentage of the Premises so rendered untenantable and not used by Tenant, and such abatement shall continue until the date the Premises become tenantable again.

(b) Use of Electrical Services by Tenant. Tenant’s electrical equipment and overhead lighting shall be restricted to that equipment which individually and collectively does not have a rated capacity greater than equipment and lighting normally utilized in general office use, as determined by Landlord, which in no event shall exceed a collective average of six (6) watts per square foot of area within the Premises. If Landlord should determine that Tenant’s consumption of electrical services exceeds the limitations set forth in the preceding sentence, or exceeds the capacity of existing wiring, risers or feeders to the Building, then Landlord shall be entitled, in its reasonable discretion, to either (a) require Tenant to terminate any excess usage and, in such event, Tenant shall, at its sole cost and expense, remove any equipment and/or lighting necessary to achieve compliance within ten (10) days after receiving notice from Landlord, or (b) Landlord may, at Landlord’s option, and at Tenant’s sole cost and expense, upgrade the electrical service to the Premises to accommodate such excess demand.

(c) Common Areas. The term “Common Area” is defined for all purposes of this Lease as that part of the Project and/or Complex intended for the common use of all tenants, including among other facilities (as such may be applicable to the Complex), the lobby of the Building, elevator lobbies (if any), parking areas, private streets and alleys, landscaping, curbs, loading areas, sidewalks, malls and promenades (enclosed or otherwise), lighting facilities, drinking fountains, meeting rooms, public toilets, and the like, but excluding: (i) space in buildings (now or hereafter existing) designated for rental for commercial purposes, as the same may exist from time to time; (ii) streets and alleys maintained by a public authority; (iii) areas within the Complex which may from time to time not be owned by Landlord (unless subject to a cross-access agreement benefiting the area which includes the Premises); and (iv) areas leased to a single-purpose user where access is restricted. In addition, although the roof(s) of the building(s) in the Complex is not literally part of the Common Area, it will be deemed to be so included for purposes of: (i) Landlord’s ability to prescribe rules and regulations regarding same; and (ii) its inclusion for purposes of Operating Costs reimbursements. Subject to the limitations set forth below, Landlord reserves the right to change from time to time the dimensions and location of the Common Area, as well as the dimensions, identities, locations and types of any buildings, signs or other improvements in the Complex. For example, and without limiting the generality of the immediately preceding sentence, Landlord may from time

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to time substitute for any parking area other areas reasonably accessible to the tenants of the Building or Complex, as applicable, which areas may be elevated, surface or underground. Notwithstanding the foregoing or any other provision contained herein to the contrary, Landlord acknowledges and agrees that it shall have no right to alter the dimensions or location of the Common Area in any manner which would have a material adverse affect upon Tenant’s business operations. Tenant, and its employees and customers, and when duly authorized pursuant to the provisions of this Lease, its subtenants, licensees and concessionaires, shall have the non-exclusive right to use free of charge (except as set forth to the contrary in Exhibit C regarding Operating Costs) the Common Area (excluding roof(s)) as constituted from time to time, such use to be in common with Landlord, other tenants in the Building and/or Complex, as applicable, and other persons reasonably permitted by the Landlord to use the same without overburdening such Common Area, and subject to rights of governmental authorities, easements, other restrictions of record, and such reasonable non-discriminatory rules and regulations governing use as Landlord may from time to time prescribe. For example, and without limiting the generality of Landlord’s ability to establish reasonable non-discriminatory rules and regulations governing all aspects of the Common Area, Tenant agrees as follows:

(i) Tenant shall have the right to use the three hundred forty (340) parking spaces adjacent to the Building (the “Parking Area”) during the Lease Term at no additional charge. Such use shall be subject to the provisions of Exhibit H. Landlord confirms that as of the date of the Lease there are five (5) parking spaces for each one thousand (1,000) rentable square feet in the Building and the building located at 14760 Trinity Boulevard. Tenant agrees that if any automobile or other vehicle owned by Tenant or any of its employees, its subtenants, its licensees or its concessionaires, or their employees, shall at any time be parked in any part of the Project or Complex, as applicable, other than the specified areas, Landlord may have such vehicle towed at the cost of the owner of same. Landlord agrees that if another tenant overburdens the parking areas of the Complex, causing Tenant to not have available the number of spaces set forth above, then Landlord shall use commercially reasonable efforts to cause such overburdening to cease promptly.

(ii) Tenant shall not solicit business within the Common Area nor take any action which would interfere with the rights of other persons to use the Common Area.

(iii) Landlord may temporarily close any part of the Common Area for such periods of time as may be necessary to make repairs or alterations or to prevent the public from obtaining prescriptive rights.

(iv) With regard to the roof(s) of the building(s) in the Project or Complex, as applicable, use of the roof(s) is reserved to Landlord, or with regard to any tenant demonstrating to Landlord’s satisfaction a need to use same, to such tenant after receiving prior written consent from Landlord, such consent not to be unreasonably withheld.

(d) Electricity Costs. In addition to any other sums required to be paid by Tenant under this Lease, Tenant shall: (i) reimburse Landlord for all costs of providing electricity to the Premises within thirty (30) days of invoice (the “Electrical Charge”); and (ii) pay Tenant’s Proportionate Share of the costs of providing electricity to the Common Areas as part of Operating Costs, which amounts shall be payable as set forth in Exhibit C. With respect

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to the foregoing, the Electrical Charge shall be limited only to the actual amount charged by the utility provider to Landlord. For the period prior to the earlier of Tenant’s occupancy of the Must Take Space or the Must Take Space Commencement Date, an amount equal to $400.00 shall be deducted each month from the Electrical Charge to offset the additional costs that are estimated to occur because no demising wall separates the Initial Premises and the Must Take Space. Landlord and Tenant agree that $400.00 is a good faith estimate of such costs, and such costs shall not be modified or prorated.

8. Alterations; Repairs; Maintenance; Signs.

(a) Alterations. Tenant shall not make any alterations, additions or improvements to the Premises (collectively, the “Alterations”) without the prior written consent of Landlord, such consent not to be unreasonably withheld, conditioned or delayed, except for alterations of a cosmetic nature such as painting, wallpapering, hanging pictures and installing carpeting as well as installation of unattached, movable trade fixtures which may be installed without drilling, cutting or otherwise defacing the Premises. Tenant shall furnish complete plans and specifications to Landlord for its approval at the time it requests Landlord’s consent to any Alterations if the desired Alterations: (i) will affect the Building’s Systems or Building’s Structure; or (ii) will require the filing of plans and specifications with any governmental or quasi-governmental agency or authority; or (iii) will cost in excess of Ten Thousand and No/100 Dollars ($10,000.00). Subsequent to obtaining Landlord’s consent and prior to commencement of the Alterations, Tenant shall deliver to Landlord any building permit required by applicable Law and a copy of the executed construction contract(s). Tenant shall reimburse Landlord within ten (10) days after the rendition of a bill for all of Landlord’s actual out-of-pocket costs incurred in connection with any Alterations, including all commercially reasonable management, engineering, outside consulting, and construction fees incurred by or on behalf of Landlord for the review and approval of Tenant’s plans and specifications and for the monitoring of construction of the Alterations. If Landlord consents to the making of any Alteration, such Alteration shall be made by Tenant at Tenant’s sole cost and expense by a contractor approved in writing by Landlord such approval not to be unreasonably withheld. Tenant shall require its contractor to maintain insurance in such amounts and in such form as Landlord may require in its reasonable discretion. Without Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed, Tenant shall not use any portion of the Common Areas either within or without the Project or Complex, as applicable, in connection with the making of any Alterations. If the Alterations which Tenant causes to be constructed result in Landlord being required to make any alterations and/or improvements to other portions of the Project or Complex, as applicable, in order to comply with any applicable Laws, then Tenant shall reimburse Landlord upon demand for all out-of-pocket costs and expenses incurred by Landlord in making such alterations and/or improvements. Any Alterations made by Tenant shall become the property of Landlord upon installation and shall remain on and be surrendered with the Premises upon the expiration or sooner termination of this Lease, unless Landlord requires the removal of such Alterations. With respect to the foregoing, Landlord agrees to advise Tenant at the time of its approval of each Alteration as to whether Landlord will require the removal thereof. If Landlord requires the removal of such Alterations, Tenant shall at its sole cost and expense, forthwith and with all due diligence (but in any event not later than ten (10) days after the expiration or earlier termination of the Lease) remove all or any portion of any Alterations made by Tenant which are designated by Landlord to be removed (including without

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limitation stairs, bank vaults, and cabling, if applicable) and repair and restore the Premises in a good and workmanlike manner to their original condition, reasonable wear and tear excepted. Notwithstanding the foregoing, Tenant shall only be required to remove cabling or wiring installed to serve the Premises if Tenant does not remove the existing cabling and wiring which is located in the Premises on the date of the Lease; provided, however, if Tenant removes some but not all of the existing cabling and wiring, then Tenant’s removal obligations at the expiration or earlier termination of the Lease shall be limited to removing the remainder of the existing cabling and wiring. All construction work done by Tenant within the Premises shall be performed in a good and workmanlike manner with new materials of first-class quality, lien-free and in compliance with all Laws, and in such manner as to cause a minimum of interference with other construction in progress and with the transaction of business in the Project or Complex, as applicable. Tenant agrees to indemnify, defend and hold Landlord harmless against any loss, liability or damage resulting from such work, and Tenant shall, if requested by Landlord, furnish a bond or other security satisfactory to Landlord against any such loss, liability or damage. The foregoing indemnity shall survive the expiration or earlier termination of this Lease. Landlord’s consent to or approval of any alterations, additions or improvements (or the plans therefor) shall not constitute a representation or warranty by Landlord, nor Landlord’s acceptance, that the same comply with sound architectural and/or engineering practices or with all applicable Laws, and Tenant shall be solely responsible for ensuring all such compliance.

(b) Repairs; Maintenance.

(i) By Landlord. Landlord shall, subject to reimbursement as set forth in Exhibit C, keep and maintain in good repair and working order and make repairs to and perform maintenance upon: (1) the Building’s Structure; (2) the Building’s Systems; (3) Common Areas; (4) the roof of the Building; (5) exterior windows of the Building; and (6) elevators serving the Building, if any. If a shifting or settling of the foundation of the Building causes damage to Tenant’s flooring or wall covering, then Landlord agrees to make cosmetic repairs thereto, but shall not be required to replace same unless it causes a safety issue or materially interferes with Tenant’s use of the Premises for the Permitted Use. In addition: (i) if a shifting or settling of the foundation of the Building causes damage to the windows of the Premises, Landlord shall repair or replace such windows at Landlord’s cost; and (ii) Landlord shall replace ceiling tiles which are damaged due to roof leaks not caused by Tenant, its employees, agents or contractors. With respect to the foregoing, Landlord acknowledges and agrees that all such maintenance shall be performed to a standard comparable to the maintenance standards for comparable buildings in the CentrePort submarket of Dallas/Ft. Worth, Texas. Landlord shall not be liable for any failure to make any such repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after Landlord first learns of the need for the subject repair or maintenance whether through written notice of the need of such repairs or maintenance by Tenant or otherwise. If any of the foregoing maintenance or repair is necessitated due to the acts or omissions of any Tenant Party, Tenant shall pay the costs of such repairs or maintenance to Landlord within thirty (30) days after receipt of an invoice, together with an administrative charge in an amount equal to ten percent (10%) of the cost of the repairs. Landlord shall not be liable to Tenant for any interruption of Tenant’s business or inconvenience caused due to any work performed in the Premises or in the Complex pursuant to Landlord’s rights and obligations under the Lease, provided, however, Landlord shall use commercially reasonable efforts to not disturb the normal conduct of Tenant’s business while

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performing such repairs and maintenance. Except as otherwise specifically provided for herein to the contrary, Tenant waives the right to make repairs at Landlord’s expense under any law, statute or ordinance now or hereafter in effect. If Landlord fails to make any repairs or to perform any maintenance required of Landlord hereunder and within Landlord’s reasonable control, and such failure shall persist for an unreasonable time (not less than thirty (30) days) after written notice of the need for such repairs or maintenance is given to Landlord and unless Landlord has commenced such repairs or maintenance during such period and is diligently pursuing the same, and such failure creates a risk of bodily injury or property damage, Tenant may (but shall not be required to) following a second notice (which notice shall have a heading in at least 12-point type, bold and all caps “FAILURE TO RESPOND SHALL RESULT IN TENANT EXERCISING SELF-HELP RIGHTS”) and Landlord’s failure to commence repairs within five (5) days after receipt of such second notice, perform such repairs or maintenance in accordance with the provisions of this Lease governing Tenant’s repairs and Alterations and Landlord shall reimburse Tenant for all reasonable costs and expenses therefor within thirty (30) days after presentation of appropriate invoices and back-up documentation.

If in an Emergency Situation (hereinafter defined), a repair to the Premises which Landlord is obligated to perform is required, Tenant shall make all reasonable efforts to contact Landlord and Landlord’s managing agent by telephone and/or e-mail to advise Landlord of the need for the repair. If after making reasonable efforts to contact Landlord, either Tenant is unable to contact Landlord or Landlord’s managing agent, or Tenant succeeds in contacting Landlord or Landlord’s managing agent and Landlord fails to undertake action to correct the Emergency Situation within one (1) Business Day, then Tenant may perform the repair using a contractor skilled in the repair of the item being repaired (or if it pertains to the roof, Landlord’s roofing contractor). Upon completion of the repair, Landlord shall be required to reimburse Tenant for the actual cost of the repair. Landlord’s payment shall be due within thirty (30) days after receipt of Tenant’s bill accompanied by reasonable evidence that Tenant has paid for the repair. For the purpose of this section, an “Emergency Situation” means a condition or state of facts which if not corrected would reasonably be expected to result in immediate bodily injury or material property damage. Tenant’s self-help right under this section shall not be exercised in any manner that would violate any applicable Law, invalidate any warranty of Landlord, damage the premises of any other tenant of the Complex, or breach of the peace.

(ii) By Tenant. Tenant shall, at its sole cost and expense, promptly perform all maintenance and repairs to the Premises that are not Landlord’s express responsibility under this Lease, and shall keep the Premises in good condition and repair, ordinary wear and tear excepted. Tenant’s repair obligations include, without limitation, repairs to: (1) floor covering and/or raised flooring; (2) interior partitions; (3) doors; (4) the interior side of demising walls; (5) electronic, phone and data cabling and related equipment (collectively, “Cable”) that is installed by or for the exclusive benefit of Tenant and located in the Premises or other portions of the Building or Project; (6) supplemental air conditioning units, private showers and kitchens, including hot water heaters, plumbing, dishwashers, ice machines and similar facilities serving Tenant exclusively; (7) phone rooms used exclusively by Tenant; (8) Alterations performed by contractors retained by or on behalf of Tenant; and (9) all of Tenant’s furnishings, trade fixtures, equipment and inventory. Landlord reserves the right to perform any of the foregoing maintenance or repair obligations or require that such obligations be performed by a contractor approved by Landlord in its reasonable discretion, all at Tenant’s expense

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provided that any charge by Landlord for any such maintenance or repairs performed by it shall be competitively priced. All work shall be performed in accordance with the rules and procedures described in Section 8(a). If Tenant fails to make any repairs to the Premises for more than fifteen (15) days after notice from Landlord (although notice shall not be required if there is an emergency, or if the area to be repaired is visible from the exterior of the Building), Landlord may, in addition to any other remedy available to Landlord, make the repairs, and Tenant shall pay the commercially reasonable cost of the repairs to Landlord within thirty (30) days after receipt of an invoice, together with an administrative charge in an amount equal to ten percent (10%) of the cost of the repairs. At the expiration of this Lease, Tenant shall surrender the Premises in good condition, excepting reasonable wear and tear, casualty damage and losses required to be restored by Landlord. If Landlord elects to store any personal property of Tenant, including goods, wares, merchandise, inventory, trade fixtures and other personal property of Tenant which is left in the Premises beyond the natural expiration date or, if applicable, in excess of ten (10) days beyond the earlier termination of this Lease, same shall be stored at the sole risk of Tenant. Except to the extent same results from the negligence of Landlord, Landlord or its agents shall not be liable for any loss or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water or rain which may leak from any part of the Complex or from the pipes, appliances or plumbing works therein or from the roof, street or subsurface or from any other places resulting from dampness or any other cause whatsoever, or from the act or negligence of any other tenant or any officer, agent, employee, contractor or guest of any such tenant. It is generally understood that mold spores are present essentially everywhere and that mold can grow in most any moist location. Emphasis is properly placed on prevention of moisture and on good housekeeping and ventilation practices. Tenant acknowledges the necessity of housekeeping, ventilation, and moisture control (especially in kitchens, janitor’s closets, bathrooms, break rooms and around outside walls) for mold prevention. In signing this Lease, Tenant has first inspected the Premises and certifies that it has not observed mold, mildew or moisture within the Premises. To the best of Landlord’s actual knowledge without investigation, on the date of this Lease there were no hazardous mold conditions at the Premises (subject to the statement above that mold spores are present essentially everywhere). Tenant agrees to immediately notify Landlord if it observes mold/mildew and/or moisture conditions (from any source, including leaks), and allow Landlord to evaluate and make recommendations and/or take appropriate corrective action. Except to the extent same results from the negligence of Landlord, or Landlord’s failure to perform its maintenance obligations after applicable notice and cure periods, Tenant relieves Landlord from any liability for any bodily injury or damages to property caused by or associated with moisture or the growth of or occurrence of mold or mildew on the Premises. In addition, execution of this Lease constitutes acknowledgement by Tenant that control of moisture and mold prevention are integral to its Lease obligations.

(iii) Performance of Work. All work described in this Section 8 shall be performed only by contractors and subcontractors approved in writing by Landlord, such approval not to be unreasonably withheld, conditioned or delayed. Tenant shall cause all contractors and subcontractors to procure and maintain insurance coverage naming Landlord, Landlord’s property management company and INVESCO Institutional (N.A.), Inc. (“Invesco”) as additional insureds against such risks, in such amounts, and with such companies as Landlord may reasonably require. Tenant shall provide Landlord with the identities, mailing addresses and telephone numbers of all persons performing work or supplying materials prior to beginning

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such construction and Landlord may post on and about the Premises notices of non-responsibility pursuant to applicable Laws. All such work shall be performed in accordance with all Laws and in a good and workmanlike manner so as not to damage the Building (including the Premises, the Building’s Structure and the Building’s Systems). All such work which may affect the Building’s Structure or the Building’s Systems, at Landlord’s election, must be performed by Landlord’s usual contractor for such work or a contractor approved by Landlord in its reasonable discretion. All work affecting the roof of the Building must be performed by Landlord’s roofing contractor or a contractor approved by Landlord in its reasonable discretion and no such work will be permitted if it would void or reduce the warranty on the roof.

(c) Mechanic’s Liens. All work performed, materials furnished, or obligations incurred by or at the request of a Tenant Party shall be deemed authorized and ordered by Tenant only, and Tenant shall not permit any mechanic’s liens to be filed against the Premises or the Project in connection therewith. Upon completion of any such work, Tenant shall deliver to Landlord final lien waivers from all contractors, subcontractors and materialmen who performed such work. If such a lien is filed, then Tenant shall, within ten (10) days after Landlord has delivered notice of the filing thereof to Tenant (or such earlier time period as may be necessary to prevent the forfeiture of the Premises, Project or any interest of Landlord therein or the imposition of a civil or criminal fine with respect thereto), either: (1) pay the amount of the lien and cause the lien to be released of record; or (2) diligently contest such lien and deliver to Landlord a bond or other security reasonably satisfactory to Landlord. If Tenant fails to timely take either such action, then Landlord may pay the lien claim, and any amounts so paid, including expenses and interest, shall be paid by Tenant to Landlord within ten (10) days after Landlord has invoiced Tenant therefor. Landlord and Tenant acknowledge and agree that their relationship is and shall be solely that of “landlord-tenant” (thereby excluding a relationship of “owner-contractor,” “owner-agent” or other similar relationships). Accordingly, all materialmen, contractors, artisans, mechanics, laborers and any other persons now or hereafter contracting with Tenant, any contractor or subcontractor of Tenant or any other Tenant Party for the furnishing of any labor, services, materials, supplies or equipment with respect to any portion of the Premises, at any time from the date hereof until the end of the Term, are hereby charged with notice that they look exclusively to Tenant to obtain payment for same. Nothing herein shall be deemed a consent by Landlord to any liens being placed upon the Premises, Project or Landlord’s interest therein due to any work performed by or for Tenant or deemed to give any contractor or subcontractor or materialman any right or interest in any funds held by Landlord to reimburse Tenant for any portion of the cost of such work. Tenant shall indemnify, defend and hold harmless Landlord, its property manager, Invesco, any subsidiary or affiliate of the foregoing, and their respective officers, directors, shareholders, partners, employees, managers, contractors, attorneys and agents (collectively, the “Indemnitees”) from and against all claims, demands, causes of action, suits, judgments, damages and expenses (including attorneys’ fees) in any way arising from or relating to the failure by any Tenant Party to pay for any work performed, materials furnished, or obligations incurred by or at the request of a Tenant Party. The foregoing indemnity shall survive termination or expiration of this Lease.

(d) Signs. Tenant shall not place or permit to be placed any signs upon: (i) the roof of the Building; or (ii) the Common Areas; or (iii) any area visible from the exterior of the Premises without Landlord’s prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed provided any proposed sign is placed only in

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those locations as may be reasonably designated by Landlord, and complies with the reasonable non-discriminatory sign criteria promulgated by Landlord from time to time. Upon request of Landlord, Tenant shall immediately remove any sign, advertising material or lettering which Tenant has placed or permitted to be placed upon the exterior or interior surface of any door or window or at any point inside the Premises visible from the exterior of the Premises, which in Landlord’s reasonable opinion, is of such a nature as to not be in keeping with the standards of the Building, and if Tenant fails to do so, Landlord may without liability remove the same at Tenant’s expense. Tenant shall comply with such reasonable non-discriminatory regulations as may from time to time be promulgated by Landlord governing signs, advertising material or lettering of all tenants in the Project or Complex, as applicable. The Tenant, upon vacation of the Premises, or the removal or alteration of its sign for any reason, shall be responsible for the repair, painting or replacement of the Building fascia surface or other portion of the Building where signs are attached. If Tenant fails to do so, Landlord may have the sign removed and the cost of removal plus ten percent (10%) as an administrative fee shall be payable by Tenant within ten (10) days of invoice.

During the initial Term, Tenant shall have the exclusive right to place its name on the Building and one (1) existing monument sign in front of the Building (the “Signage”). The Signage shall be installed and maintained at Tenant’s sole cost and expense throughout the Term. The rights of Tenant under this paragraph: (i) are personal to Tenant and may not be assigned to any other party (other than a Permitted Transferee, an assignee of the Lease, or a subtenant of all the Premises); and (ii) are terminable by Landlord if Tenant reduces the size of the Premises below thirty thousand (30,000) square feet, notwithstanding the consent of Landlord thereto, and if the size of the Premises is reduced to forty thousand (40,000) square feet or less, then any monument signage shall be shared with other Building tenants. If Tenant subleases a portion of the Premises, then such subtenant shall have no right to Building signage, but Tenant may share its monument signage space with such subtenant. The location, size, material and design of the Signage must comply with any recorded restrictions affecting the Building and shall be subject to the prior written approval of Landlord, such approval not to be unreasonably withheld, conditioned or delayed. Tenant shall be responsible for compliance with Laws. Upon the expiration or earlier termination of this Lease or the termination of Tenant’s sign rights as set forth herein, Tenant shall remove the Signage, at Tenant’s sole cost and expense, and restore the monument sign and Building to its condition immediately prior to the installation of the Signage. If Tenant fails to timely remove the Signage, then the Signage shall conclusively be deemed to have been abandoned by Tenant and may be appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord without further notice to Tenant or any other person and without obligation to account therefor. Tenant shall reimburse Landlord for all reasonable costs incurred by Landlord in connection therewith within thirty (30) days of Landlord’s invoice. The provisions of this paragraph shall survive the expiration or earlier termination of the Lease.

9. Use. Tenant shall continuously occupy and use the Premises only for the Permitted Use (as set forth in the Basic Lease Information) and shall comply with all Laws relating to Tenant’s specific use, condition, access to, and occupancy of the Premises and will not commit waste, overload the Building’s Structure or the Building’s Systems or subject the Premises to any use that would damage the Premises. Tenant, at its sole cost and expense, shall obtain and keep in effect during the term, all permits, licenses, and other authorizations necessary to permit Tenant to use and occupy the Premises for the Permitted Use in accordance

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with applicable Law. Notwithstanding anything in this Lease to the contrary, as between Landlord and Tenant: (a) Tenant shall bear the risk of complying with Title III of the Americans With Disabilities Act of 1990, any state laws governing handicapped access or architectural barriers, and all rules, regulations, and guidelines promulgated under such laws, as amended from time to time (the “Disabilities Acts”) in the Premises; and (b) Landlord shall bear the risk of complying with the Disabilities Acts in the Common Areas (subject to reimbursement as set forth in Exhibit C), other than compliance that is necessitated by the use of the Premises for other than the Permitted Use or as a result of any alterations or additions made by Tenant (which risk and responsibility shall be borne by Tenant). The Premises shall not be used for any purpose which creates strong, unusual, or offensive odors, fumes, dust or vapors; which emits noise or sounds that are objectionable due to intermittence, beat, frequency, shrillness, or loudness; which is associated with indecent or pornographic matters; or which involves political or moral issues (such as abortion issues). Tenant shall conduct its business and control each other Tenant Party so as not to create any nuisance or unreasonably interfere with other tenants or Landlord in its management of the Building. Tenant shall not knowingly conduct or permit to be conducted in the Premises any activity, or place any equipment in or about the Premises or the Building, which will invalidate the insurance coverage in effect or increase the rate of fire insurance or other insurance on the Premises or the Building. If any invalidation of coverage or increase in the rate of fire insurance or other insurance occurs or is threatened by any insurance company due to activity conducted from the Premises, or any act or omission by Tenant, or its agents, employees, representatives, or contractors, such statement or threat shall be conclusive evidence that the increase in such rate is due to such act of Tenant or the contents or equipment in or about the Premises, and, as a result thereof, Tenant shall be liable for such increase and shall be considered Additional Rent payable with the next monthly installment of Base Rent due under this Lease. In no event shall Tenant introduce or permit to be kept on the Premises or brought into the Building any dangerous, noxious, radioactive or explosive substance.

10. Assignment and Subletting.

(a) Transfers. Except as expressly set forth below, Tenant shall not, without the prior written consent of Landlord, such consent not to be unreasonably withheld, conditioned or delayed: (1) assign, transfer, or encumber this Lease or any estate or interest herein, whether directly or by operation of law; (2) permit any other entity to become Tenant hereunder by merger, consolidation, or other reorganization; (3) if Tenant is an entity other than a corporation whose stock is publicly traded, permit the transfer of an ownership interest in Tenant so as to result in a change in the current control of Tenant; (4) sublet any portion of the Premises; (5) grant any license, concession, or other right of occupancy of any portion of the Premises; or (6) permit the use of the Premises by any parties other than Tenant (any of the events listed in Section 10(a)(1) through Section 10(a)(6) being a “Transfer”). Notwithstanding the foregoing, a collateral assignment of the Lease to a third party lender for financial purposes shall not be deemed a Transfer, but such lender shall be subject to the consent provisions of this Lease in the event of any foreclosure of any security interest in the Lease.

(b) Consent Standards. Landlord shall not unreasonably withhold or delay its consent to any assignment or subletting of the Premises, provided that Tenant is not then in default under the Lease before any applicable notice and cure period and the proposed transferee: (1) is creditworthy; (2) has a good reputation in the business community; (3) will use the

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Premises for the Permitted Use and will not use the Premises in any manner that would conflict with any exclusive use agreement or other similar agreement entered into by Landlord with any other tenant of the Project or Complex, as applicable; (4) will not use the Premises, Project or Complex in a manner that would materially increase the pedestrian or vehicular traffic to the Premises, Project or Complex; (5) is not a governmental entity, or subdivision or agency thereof; (6) is not another occupant of the Building or Complex, as applicable (provided that Landlord has space available in the Complex that meets the needs of such occupant); and (7) is not a person or entity with whom Landlord is then negotiating to lease space in the Building or Complex, as applicable, or any Affiliate of any such person or entity (and Landlord agrees upon Tenant’s request to provide a list of such negotiating persons or entities, or if Landlord elects to not provide such a list then consent may not be denied based on Tenant’s proposed transfer to such persons or entities under this subsection (7)); otherwise, Landlord may withhold its consent in its sole discretion.

(c) Request for Consent. If Tenant requests Landlord’s consent to a Transfer, then, at least thirty (30) days prior to the effective date of the proposed Transfer, Tenant shall provide Landlord with a written description of all terms and conditions of the proposed Transfer, copies of the proposed pertinent documentation, and the following information about the proposed transferee: name and address; reasonably satisfactory information about its business and business history; its proposed use of the Premises; banking, financial, and other credit information; and general references sufficient to enable Landlord to determine the proposed transferee’s creditworthiness and character. Concurrently with Tenant’s notice of any request for consent to a Transfer, Tenant shall pay to Landlord a fee of $500.00 to defray Landlord’s expenses in reviewing such request, and Tenant shall also reimburse Landlord immediately upon request for its reasonable attorneys’ fees not to exceed $2,500.00 incurred in connection with considering any request for consent to a Transfer.

(d) Conditions to Consent. If Landlord consents to a proposed assignment of this Lease, then the proposed assignee shall deliver to Landlord a written agreement whereby it expressly assumes Tenant’s obligations hereunder. In the event the Landlord consents to a proposed sublease, the subject sublessee shall deliver to Landlord a written agreement acknowledging that its sublease is subject and subordinate in all respects to the terms and conditions of this Lease. No Transfer shall release Tenant from its obligations under this Lease. Furthermore, in the event of an assignment of this Lease, Tenant and its transferee shall be jointly and severally liable therefor. Landlord’s consent to any Transfer shall not be deemed consent to any subsequent Transfers. If an Event of Default occurs while the Premises or any part thereof are subject to a Transfer, then Landlord, in addition to its other remedies, may collect directly from such transferee all rents becoming due to Tenant and apply such rents against Rent. Tenant authorizes its transferees to make payments of rent directly to Landlord upon receipt of notice from Landlord to do so following the occurrence of an Event of Default hereunder. Tenant shall pay for the cost of any demising walls or other improvements necessitated by a proposed subletting or assignment.

(e) Attornment by Subtenants. Each sublease by Tenant hereunder shall be subject and subordinate to this Lease and to the matters to which this Lease is or shall be subordinate, and each subtenant by entering into a sublease is deemed to have agreed that in the event of termination, re-entry or dispossession by Landlord under this Lease, Landlord may, at

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its option, either terminate the sublease or take over all of the right, title and interest of Tenant, as sublandlord, under such sublease, and such subtenant shall, at Landlord’s option, attorn to Landlord pursuant to the then executory provisions of such sublease.

(f) Cancellation. Landlord may, within fifteen (15) days after submission of Tenant’s written request for Landlord’s consent to an assignment of the Lease or a subletting of the entire Premises for the remainder of the Lease Term, cancel this Lease as of the date the proposed Transfer is to be effective. If Landlord cancels this Lease, Tenant shall pay to Landlord all Rent accrued through the cancellation date. Thereafter, Landlord may lease the Premises or any portion thereof to the prospective transferee (or to any other person) without liability to Tenant. Notwithstanding the foregoing, in the event Landlord so elects to provide such a termination notice within said fifteen (15) day period, then, Tenant shall have the right to render such cancellation notice null and void by providing Landlord notice of its election to withdraw such subletting/assignment request within ten (10) days of its receipt of Landlord’s notice of cancellation.

(g) Additional Compensation. Tenant shall pay to Landlord, immediately upon receipt thereof, fifty percent (50%) of the excess of all compensation received by Tenant for a Transfer over the Rent allocable to the portion of the Premises covered thereby, after deducting the following costs and expenses for such Transfer (which costs will be amortized over the term of the sublease or assignment pursuant to sound accounting principles and deducted monthly from such excess): (1) brokerage commissions and reasonable attorneys’ fees; (2) advertising for subtenants or assignees; (3) the actual costs paid in making any improvements or substitutions in the Premises required by any sublease or assignment; and (4) the costs of any inducements or concessions given to the subtenant or assignee.

(h) Permitted Transfers. Notwithstanding Section 10(a), Tenant may Transfer all or part of its interest in this Lease or all or part of the Premises (a “Permitted Transfer”) to the following types of entities (a “Permitted Transferee”) without the written consent of Landlord:

(1) an Affiliate of Tenant;

(2) any corporation, limited partnership, limited liability partnership, limited liability company or other business entity in which or with which Tenant, or its corporate successors or assigns, is merged or consolidated, in accordance with applicable statutory provisions governing merger and consolidation of business entities, so long as (A) Tenant’s obligations hereunder are assumed by the entity surviving such merger or created by such consolidation; and (B) the Tangible Net Worth of the surviving or created entity is not less than Fifteen Million Dollars ($15,000,000); or

(3) any corporation, limited partnership, limited liability partnership, limited liability company or other business entity acquiring all or substantially all of Tenant’s assets if such entity’s Tangible Net Worth after such acquisition is not less than Fifteen Million Dollars ($15,000,000).

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Tenant shall promptly notify Landlord of any such Permitted Transfer. Tenant shall remain liable for the performance of all of the obligations of Tenant hereunder, or if Tenant no longer exists because of a merger, consolidation, or acquisition, the surviving or acquiring entity shall expressly assume in writing the obligations of Tenant hereunder. Additionally, the Permitted Transferee shall comply with all of the terms and conditions of this Lease, including the Permitted Use, and the use of the Premises by the Permitted Transferee may not violate any other exclusive use agreements affecting the Premises, the Building or the Complex, Landlord or other tenants of the Complex. No later than ten (10) Business Days after the effective date of any Permitted Transfer, Tenant agrees to furnish Landlord with (A) copies of the instrument effecting any of the foregoing Transfers, (B) documentation establishing Tenant’s satisfaction of the requirements set forth above applicable to any such Transfer, and (C) evidence of insurance as required under this Lease with respect to the Permitted Transferee. The occurrence of a Permitted Transfer shall not waive Landlord’s rights as to any subsequent Transfers. “Tangible Net Worth” means the excess of total assets over total liabilities, in each case as determined in accordance with generally accepted accounting principles consistently applied (“GAAP”), excluding, however, from the determination of total assets all assets which would be classified as intangible assets under GAAP including goodwill, licenses, patents, trademarks, trade names, copyrights, and franchises. Any subsequent Transfer by a Permitted Transferee shall be subject to the terms of this Section 10.

11. Insurance; Waivers; Subrogation; Indemnity.

(a) Tenant’s Insurance. Effective as of the earlier of: (1) the date Tenant enters or occupies any portion of the Premises; or (2) the Initial Premises Commencement Date, and continuing throughout the Term, Tenant shall maintain the following insurance policies: (A) commercial general liability insurance in amounts of $3,000,000 per occurrence or, following the expiration of the Initial Term, such other amounts as Landlord may from time to time reasonably require (and, if the use and occupancy of the Premises include any activity or matter that is or may be excluded from coverage under a commercial general liability policy [e.g., the sale, service or consumption of alcoholic beverages], Tenant shall obtain such endorsements to the commercial general liability policy or otherwise obtain insurance to insure all liability arising from such activity or matter [including liquor liability, if applicable] in such amounts as Landlord may reasonably require), insuring Tenant, Landlord, Landlord’s property management company and Invesco against all liability for injury to or death of a person or persons or damage to property arising from the use and occupancy of the Premises and (without implying any consent by Landlord to the installation thereof) the installation, operation, maintenance, repair or removal of Tenant’s Off-Premises Equipment with an additional insured endorsement in form CG 20 26 11 85 or equivalent; (B)Automobile Liability covering any owned, non-owned, leased, rented or borrowed vehicles of Tenant with limits no less than $3,000,000 combined single limit for property damage and bodily injury; (C) All Risk Property insurance covering the full value of all Alterations and improvements and betterments in the Premises, naming Landlord and Landlord’s Mortgagee (as defined in Section 12(a)) as additional loss payees as their interests may appear; (D) All Risk Property insurance covering the full value of all furniture, trade fixtures and personal property (including property of Tenant or others) in the Premises or otherwise placed in the Project by or on behalf of a Tenant Party (including Tenant’s Off-Premises Equipment) it being understood that no lack or inadequacy of

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insurance by Tenant shall in any event make Landlord subject to any claim by virtue of any theft of or loss or damage to any uninsured or inadequately insured property; (E) contractual liability insurance sufficient to cover Tenant’s indemnity obligations hereunder (but only if such contractual liability insurance is not already included in Tenant’s commercial general liability insurance policy); (F) worker’s compensation insurance in amounts not less than statutorily required, and Employers’ Liability insurance with limits of not less than Three Million Dollars ($3,000,000); (G) business interruption insurance in an amount that will reimburse Tenant for direct or indirect loss of earnings attributable to all perils insured against under Section 11(a)(2)(C) or attributable to the prevention of access to the Building or Premises; (H) in the event Tenant performs any alterations or repairs in, on, or to the Premises, to the extent not covered by the All Risk Property insurance required under Section 11(a)(2)(D) hereinabove, Builder’s Risk Insurance on an All Risk basis (including collapse) on a completed value (non-reporting) form, or by endorsement including such coverage pursuant to Section 11(a)(2)(C) hereinabove, for full replacement value covering all work incorporated in the Building and all materials and equipment in or about the Premises; and (I) such other insurance or any changes or endorsements to the insurance required herein, including increased limits of coverage, as Landlord, or any mortgagee or lessor of Landlord, may reasonably require from time to time, but only in the event and to the extent such coverages are commonly required by like landlords of similar properties and coverage is commercially available in the insurance industry. Tenant’s insurance shall provide primary coverage to Landlord and shall not require contribution by any insurance maintained by Landlord, when any policy issued to Landlord provides duplicate or similar coverage, and in such circumstance Landlord’s policy will be excess over Tenant’s policy. Tenant shall furnish to Landlord certificates of such insurance, with an additional insured endorsement in form CG 20 26 11 85 or equivalent, and such other evidence satisfactory to Landlord of the maintenance of all insurance coverages required hereunder at least ten (10) days prior to the earlier of the Initial Premises Commencement Date or the date Tenant enters or occupies any portion of the Premises, and at least fifteen (15) days prior to each renewal of said insurance, and Tenant shall obtain a written obligation on the part of each insurance company to notify Landlord at least thirty (30) days before cancellation of any such insurance policies. All such insurance policies shall be in form, and issued by companies with a Best’s rating of A:VII or better, reasonably satisfactory to Landlord. If Tenant fails to comply with the foregoing insurance requirements or to deliver to Landlord the certificates or evidence of coverage required herein, and such failure continues for a period of two (2) Business Days following the date of written notice thereof from Landlord to Tenant, Landlord, in addition to any other remedy available pursuant to this Lease or otherwise, may, but shall not be obligated to, obtain such insurance and Tenant shall pay to Landlord on demand the premium costs thereof, plus an administrative fee of ten percent (10%) of such cost. It is expressly understood and agreed that the foregoing minimum limits of insurance coverage shall not limit the liability of Tenant for its acts or omissions as provided in this Lease. All of Tenant’s insurance policies may contain commercially reasonable deductibles and self-insured retentions.

(b) Landlord’s Insurance. Throughout the Term of this Lease, Landlord shall maintain, as a minimum, the following insurance policies: (1) property insurance for the Building’s replacement value (excluding property required to be insured by Tenant), less a commercially-reasonable deductible if Landlord so chooses; and (2) commercial general liability insurance in an amount of not less than $3,000,000. Landlord may, but is not obligated to, maintain such other insurance and additional coverages as it may deem necessary in its

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commercially reasonable discretion. Tenant shall pay its Proportionate Share of the cost of all commercially reasonable insurance carried by Landlord with respect to the Project or Complex, as applicable, as set forth on Exhibit C. The foregoing insurance policies and any other insurance carried by Landlord shall be for the sole benefit of Landlord and under Landlord’s sole control, and Tenant shall have no right or claim to any proceeds thereof or any other rights thereunder.

(c) No Subrogation. LANDLORD AND TENANT EACH WAIVES ANY CLAIM IT MIGHT HAVE AGAINST THE OTHER FOR ANY DAMAGE TO OR THEFT, DESTRUCTION, LOSS, OR LOSS OF USE OF ANY PROPERTY, TO THE EXTENT THE SAME IS INSURED AGAINST UNDER ANY INSURANCE POLICY THAT COVERS THE BUILDING, THE PREMISES, LANDLORD’S OR TENANT’S FIXTURES, PERSONAL PROPERTY, LEASEHOLD IMPROVEMENTS, OR BUSINESS, OR IS REQUIRED TO BE INSURED AGAINST UNDER THE TERMS HEREOF, REGARDLESS OF WHETHER THE NEGLIGENCE OF THE OTHER PARTY CAUSED SUCH LOSS (DEFINED BELOW). LANDLORD AND TENANT EACH HEREBY WAIVE ANY RIGHT OF SUBROGATION AND RIGHT OF RECOVERY OR CAUSE OF ACTION FOR INJURY INCLUDING DEATH OR DISEASE TO RESPECTIVE EMPLOYEES OF EITHER AS COVERED BY WORKER’S COMPENSATION (OR WHICH WOULD HAVE BEEN COVERED IF TENANT OR LANDLORD AS THE CASE MAY BE, WAS CARRYING THE INSURANCE AS REQUIRED BY THIS LEASE). EACH PARTY SHALL CAUSE ITS INSURANCE CARRIER TO ENDORSE ALL APPLICABLE POLICIES WAIVING THE CARRIER’S RIGHTS OF RECOVERY UNDER SUBROGATION OR OTHERWISE AGAINST THE OTHER PARTY.

(d) Indemnity. Intentionally deleted.

12. Subordination; Attornment; Notice to Landlord’s Mortgagee.

(a) Subordination. This Lease shall be subordinate to any deed of trust, mortgage, or other security instrument (each, a “Mortgage”), or any ground lease, master lease, or primary lease (each, a “Primary Lease”), that now or hereafter covers all or any part of the Premises (the mortgagee under any such Mortgage, beneficiary under any such deed of trust, or the lessor under any such Primary Lease is referred to herein as a “Landlord’s Mortgagee”). Notwithstanding the foregoing, the subordination of this Lease to future Mortgages shall be subject to Tenant’s receipt of a non-disturbance agreement reasonably acceptable to Tenant which provides in substance that so long as Tenant is not in default under the Lease past applicable cure periods, its use and occupancy of the Premises shall not be disturbed notwithstanding any default of Landlord under such Mortgage. Any Landlord’s Mortgagee may elect at any time, unilaterally, to make this Lease superior to its Mortgage, Primary Lease, or other interest in the Premises by so notifying Tenant in writing. The provisions of this Section shall be self-operative and no further instrument of subordination shall be required; however, in confirmation of such subordination, Tenant shall execute and return to Landlord (or such other party designated by Landlord) within ten (10) days after written request therefor such documentation, in recordable form if required, as a Landlord’s Mortgagee may reasonably request to evidence the subordination of this Lease to such Landlord’s Mortgagee’s Mortgage or

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Primary Lease (including a subordination, non-disturbance and attornment agreement) or, if the Landlord’s Mortgagee so elects, the subordination of such Landlord’s Mortgagee’s Mortgage or Primary Lease to this Lease.

(b) Attornment. Tenant shall attorn to any party succeeding to Landlord’s interest in the Premises, whether by purchase, foreclosure, deed in lieu of foreclosure, power of sale, termination of lease, or otherwise, upon such party’s request, and shall execute such agreements confirming such attornment as such party may reasonably request.

(c) Notice to Landlord’s Mortgagee. Tenant shall not seek to enforce any remedy it may have for any default on the part of Landlord without first giving written notice by certified mail, return receipt requested, specifying the default in reasonable detail, to any Landlord’s Mortgagee whose address has been given to Tenant, and affording such Landlord’s Mortgagee a reasonable opportunity to perform Landlord’s obligations (except the self-help repairs described in Section 8(b)) not to exceed sixty (60) days after the expiration of any applicable Landlord cure period hereunder.

(d) Landlord’s Mortgagee’s Protection Provisions . If Landlord’s Mortgagee shall succeed to the interest of Landlord under this Lease, Landlord’s Mortgagee shall not be: (1) liable for any act or omission of any prior lessor (including Landlord) excepting those of a continuing or ongoing nature; (2) bound by any rent or additional rent or advance rent which Tenant might have paid for more than one (1) month in advance to any prior lessor (including Landlord) unless consented to by Landlord’s Mortgagee, and all such rent shall remain due and owing, notwithstanding such advance payment; (3) bound by any security or advance rental deposit made by Tenant which is not delivered or paid over to Landlord’s Mortgagee and with respect to which Tenant shall look solely to Landlord for refund or reimbursement; (4) bound by any termination, amendment or modification of this Lease made without Landlord’s Mortgagee’s consent and written approval, except for those terminations, amendments and modifications permitted to be made by Landlord without Landlord’s Mortgagee’s consent pursuant to the terms of the loan documents between Landlord and Landlord’s Mortgagee; (5) subject to the defenses which Tenant might have against any prior lessor (including Landlord); and (6) subject to the offsets which Tenant might have against any prior lessor (including Landlord) except for those offset rights which (A) are expressly provided in this Lease, (B) relate to periods of time following the acquisition of the Building by Landlord’s Mortgagee, and (C) Tenant has provided written notice to Landlord’s Mortgagee and provided Landlord’s Mortgagee a reasonable opportunity to cure the event giving rise to such offset event not to exceed sixty (60) days after the expiration of Landlord’s cure period. Landlord’s Mortgagee shall have no liability or responsibility under or pursuant to the terms of this Lease or otherwise after it ceases to own an interest in the Building. Nothing in this Lease shall be construed to require Landlord’s Mortgagee to see to the application of the proceeds of any loan, and Tenant’s agreements set forth herein shall not be impaired on account of any modification of the documents evidencing and securing any loan. Landlord hereby confirms that as of the date of this Lease, there is no mortgage encumbering the Project.

13. Rules and Regulations. Tenant shall comply with the rules and regulations of the Building which are attached hereto as Exhibit E. Landlord may, from time to time, change such rules and regulations for the safety, care, or cleanliness of the Building and related facilities,

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provided that such changes are applicable to all tenants of the Building, will not unreasonably interfere with Tenant’s use of the Premises and are enforced by Landlord in a non-discriminatory manner. Tenant shall be responsible for the compliance with such rules and regulations by each Tenant Party.

14. Condemnation.

(a) Total Taking. If the entire Building or Premises are taken by right of eminent domain or conveyed in lieu thereof (a “Taking”), this Lease shall terminate as of the date of the Taking.

(b) Partial Taking - Tenant’s Rights. If any part of the Building becomes subject to a Taking and such Taking will prevent Tenant from conducting its business in the Premises in a manner reasonably comparable to that conducted immediately before such Taking for a period of more than one hundred eighty (180) days, then Tenant may terminate this Lease as of the date of such Taking by giving written notice to Landlord within thirty (30) days after the Taking, and Rent shall be apportioned as of the date of such Taking. In addition, Tenant may terminate the Lease by written notice given within thirty (30) days of the Taking if: (i) the portion of the Parking Area remaining following such Taking plus any additional parking area provided by Landlord from adjacent properties shall be less than eighty percent (80%) of the Parking Area immediately prior to the Taking; or (ii) all access points to the Premises from public roadways are taken, unless a reasonable alternate access point to a public roadway is provided by Landlord. If Tenant does not terminate this Lease, then Rent shall be abated on a reasonable basis as to that portion of the Premises rendered untenantable by the Taking.

(c) Partial Taking - Landlord’s Rights. If any material portion, but less than all, of the Building becomes subject to a Taking, or if Landlord is required to pay any material portion of the proceeds arising from a material Taking to a Landlord’s Mortgagee, then Landlord may terminate this Lease by delivering written notice thereof to Tenant within thirty (30) days after such Taking, and Rent shall be apportioned as of the date of such Taking. With respect to the foregoing, Landlord acknowledges and agrees that its right to terminate Tenant’s lease as a result of a Partial Taking allowed for in this subsection (c) shall be subject to the Landlord likewise terminating all other leases within the Building which it has a right to terminate as a result of such Partial Taking. If Landlord does not so terminate this Lease, then this Lease will continue, but if any portion of the Premises has been taken, Rent shall abate as provided in the last sentence of Section 14(b).

(d) Award. If any Taking occurs, then Landlord shall receive the entire award or other compensation for the Land, the Building, and other improvements taken; however, Tenant may separately pursue a claim (to the extent it will not reduce Landlord’s award) against the condemnor for the value of Tenant’s personal property which Tenant is entitled to remove under this Lease, moving costs, loss of business, and other claims it may have.

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15. Fire or Other Casualty.

(a) Repair Estimate. If the Premises or the Building are damaged by fire or other casualty (a “Casualty”), Landlord shall use good faith efforts to deliver to Tenant within sixty (60) days after such Casualty a good faith estimate (the “Damage Notice”) of the time needed to repair the damage caused by such Casualty.

(b) Tenant’s Rights. If a material portion of the Premises is damaged by Casualty such that Tenant is prevented from conducting its business in the Premises in a manner reasonably comparable to that conducted immediately before such Casualty and Landlord estimates that the damage caused thereby cannot be repaired within one hundred eighty (180) days after the occurrence of such Casualty event (the “Repair Period”), then Tenant may terminate this Lease by delivering written notice to Landlord of its election to terminate within thirty (30) days after the Damage Notice has been delivered to Tenant.

(c) Landlord’s Rights. If a Casualty damages the Premises or a material portion of the Building and: (1) Landlord and an independent third party contractor estimates that the damage to the Premises cannot be repaired within the Repair Period; (2) the damage to the Premises exceeds fifty percent (50%) of the replacement cost thereof (excluding foundations and footings), as estimated by Landlord, and such damage occurs during the last year of the Term; (3) regardless of the extent of damage to the Premises (provided the estimated costs to repair the damages is $500,000.00 or more), Landlord makes a good faith determination that restoring the Building would be uneconomical; or (4) Landlord is required to pay any insurance proceeds arising out of the Casualty to a Landlord’s Mortgagee, then Landlord may terminate this Lease by giving written notice of its election to terminate within thirty (30) days after the Damage Notice has been delivered to Tenant. With respect to the foregoing, Landlord acknowledges and agrees that its right to terminate Tenant’s lease as a result of the matters set forth in this subsection (c) shall be subject to the Landlord likewise terminating all other leases within the Building which it has a right to terminate as a result of such matters.

(d) Repair Obligation. If neither party elects to terminate this Lease following a Casualty, then Landlord shall, within a reasonable time after such Casualty, begin to repair the Premises and shall proceed with reasonable diligence to restore the Premises to substantially the same condition as they existed immediately before such Casualty; however, Landlord shall only be required to repair or replace: (i) the initial Work as described in Exhibit D; and (ii) any subsequent Alterations or betterments within the Premises to the extent insurance proceeds from Tenant’s insurance described in Section 11(a)(2)(C) are provided to Landlord, and Landlord shall not be required to repair or replace any furniture, equipment, trade fixtures or personal property of Tenant or others in the Premises or the Building. Notwithstanding the foregoing, Landlord’s obligation to repair or restore the Premises shall be limited to the extent of the insurance proceeds actually received by Landlord for the Casualty in question (plus the insurance deductible for such loss). If proceeds (plus any deductible) are inadequate to rebuild the Premises to substantially the same condition as they existed immediately before such Casualty (subject to the limitation set forth in (ii) above), and Landlord elects to not fund the necessary amounts to make up the difference, then Landlord shall provide written notice of such inadequacy to Tenant within ninety (90) days of the Casualty, and Tenant shall have the right to terminate the Lease upon written notice delivered to Landlord within ten (10) days following

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receipt of such notice. If this Lease is terminated under the provisions of this Section 15, Landlord shall be entitled to the full proceeds of the insurance policies providing coverage for all Alterations, improvements and betterments in the Premises (and, if Tenant has failed to maintain insurance on such items as required by this Lease, Tenant shall pay Landlord an amount equal to the proceeds Landlord would have received had Tenant maintained insurance on such items as required by this Lease).

(e) Abatement of Rent. If the Premises are damaged by Casualty, Rent for the portion of the Premises rendered untenantable by the damage shall be abated on a reasonable basis from the date of damage until the completion of Landlord’s repairs (or until the date of termination of this Lease by Landlord or Tenant as provided above, as the case may be). Notwithstanding the foregoing, in the event a Tenant Party caused such damage, an abatement shall occur only to the extent Landlord is entitled to receive rental interruption insurance proceeds covering such abated amounts.

16. Personal Property Taxes. Tenant shall be liable for all taxes levied or assessed against personal property, furniture, or fixtures placed by Tenant in the Premises or in or on the Building or Project. If any taxes for which Tenant is liable are levied or assessed against Landlord or Landlord’s property and Landlord elects to pay the same, or if the assessed value of Landlord’s property is increased by inclusion of such personal property, furniture or fixtures and Landlord elects to pay the taxes based on such increase, then Tenant shall pay to Landlord, within thirty (30) days following written request therefor, the part of such taxes for which Tenant is primarily liable hereunder.

17. Events of Default. Each of the following occurrences shall be an “Event of Default”:

(a) Payment Default. Tenant’s failure to pay Rent within five (5) calendar days after Tenant’s receipt of Landlord’s written notice that the same is due; provided, however, Landlord shall not be obligated to provide written notice of monetary default more than two (2) times in any calendar year, and each subsequent monetary default shall be an Event of Default if not received within five (5) days after the same is due.

(b) Abandonment. Tenant abandons the Premises or any substantial portion thereof, abandonment being defined as Tenant’s vacation of the Premises and failure to meet one (1) or more lease obligations;

(c) Estoppel/Financial Statement/Commencement Date Letter. Tenant fails to provide: (i) any estoppel certificate after Landlord’s written request therefor pursuant to Section 26(e); (ii) any financial statement after Landlord’s written request therefor pursuant to Section 26(q); or (iii) the Confirmation of Commencement Date in the form of Exhibit F as required by Section 3, and any such failure shall continue for five (5) calendar days after Landlord’s second (2^nd) written notice thereof to Tenant;

(d) Insurance. Tenant fails to procure, maintain and deliver to Landlord evidence of the insurance policies and coverages as required under Section 11(a) and such failure

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continues for a period of two (2) Business Days following the date of Landlord’s notice to Tenant thereof;

(e) Mechanic’s Liens. Tenant fails to pay and release of record, or diligently contest and bond around, any mechanic’s lien filed against any portion of the Premises or the Project for any work performed, materials furnished, or obligation incurred by or at the request of Tenant, within the time and in the manner required by Section 8(c);

(f) Other Defaults. Tenant’s failure to perform, comply with, or observe any other agreement or obligation of Tenant under this Lease and the continuance of such failure for a period of thirty (30) calendar days or more after Landlord has delivered to Tenant written notice thereof; provided, however, if such default is of the type which cannot reasonably be cured within thirty (30) days, then Tenant shall have such longer time as is reasonably necessary provided Tenant commences to cure within ten (10) days after receipt of written notice from Landlord and diligently prosecutes such cure to completion within sixty (60) days of such notice; and

(g) Insolvency. The filing of a petition by or against Tenant (the term “Tenant” shall include, for the purpose of this Section 17(g), any guarantor of Tenant’s obligations hereunder): (1) in any bankruptcy or other insolvency proceeding; (2) seeking any relief under any state or federal debtor relief law; (3) for the appointment of a liquidator or receiver for all or substantially all of Tenant’s property or for Tenant’s interest in this Lease; or (4) for the reorganization or modification of Tenant’s capital structure; however, if such a petition is filed against Tenant, then such filing shall not be an Event of Default unless Tenant fails to have the proceedings initiated by such petition dismissed within sixty (60) calendar days after the filing thereof.

18. Remedies. Upon any Event of Default, Landlord may, in addition to all other rights and remedies afforded Landlord hereunder or by law or equity, take any one or more of the following actions:

(a) Termination of Lease. Terminate this Lease by giving Tenant written notice thereof, in which event Tenant shall pay to Landlord the sum of: (1) all Rent accrued hereunder through the date of termination; (2) all amounts due under Section 19(a); and (3) an amount equal to (A) the total Rent that Tenant would have been required to pay for the remainder of the Term discounted to present value at a per annum rate equal to the Prime Rate (“Prime Rate” shall be the per annum interest rate publicly announced by a federally insured bank selected by Landlord in the state in which the Premises is located as such bank’s prime or base rate) minus one percent (1%), minus (B) the then present fair rental value of the Premises for such period, similarly discounted;

(b) Termination of Possession. Terminate Tenant’s right to possess the Premises without terminating this Lease by giving written notice thereof to Tenant, in which event Tenant shall pay to Landlord: (1) all Rent and other amounts accrued hereunder to the date of termination of possession; (2) all amounts due from time to time under Section 19(a); and (3) all Rent and other net sums required hereunder to be paid by Tenant during the remainder of the Term, diminished by any net sums thereafter received by Landlord through reletting the Premises

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during such period, after deducting all commercially reasonable costs incurred by Landlord in reletting the Premises. If Landlord elects to proceed under this Section 18(b), Landlord may remove all of Tenant’s property from the Premises and store the same in a public warehouse or elsewhere at the cost of, and for the account of, Tenant, without becoming liable for any loss or damage which may be occasioned thereby. Landlord shall use commercially reasonable efforts to relet the Premises on such terms as Landlord in its reasonable discretion may determine (including a term different from the Term, rental concessions, and alterations to, and improvement of, the Premises); however, Landlord shall not be obligated to expend funds in connection with reletting the Premises, nor to relet the Premises before leasing other portions of the Building or Complex, as applicable, and Landlord shall not be obligated to accept any prospective tenant proposed by Tenant unless such proposed tenant meets all of Landlord’s leasing criteria. Landlord shall not be liable for, nor shall Tenant’s obligations hereunder be diminished because of, Landlord’s failure to relet the Premises after utilizing such commercially reasonable efforts to relet or to collect rent due for such reletting. Tenant shall not be entitled to the excess of any consideration obtained by reletting over the Rent due hereunder. Reentry by Landlord in the Premises shall not affect Tenant’s obligations hereunder for the unexpired Term; rather, Landlord may, from time to time, bring an action against Tenant to collect amounts due by Tenant, without the necessity of Landlord’s waiting until the expiration of the Term. Unless Landlord delivers written notice to Tenant expressly stating that it has elected to terminate this Lease, all actions taken by Landlord to dispossess or exclude Tenant from the Premises shall be deemed to be taken under this Section 18(b). If Landlord elects to proceed under this Section 18(b), it may at any time elect to terminate this Lease under Section 18(a);

(c) Perform Acts on Behalf of Tenant. Perform any act Tenant is obligated to perform under the terms of this Lease (and enter upon the Premises in connection therewith if necessary) in Tenant’s name and on Tenant’s behalf, without being liable for any claim for damages therefor, and Tenant shall reimburse Landlord on demand for any expenses which Landlord may incur in thus effecting compliance with Tenant’s obligations under this Lease (including, but not limited to, collection costs and legal expenses), plus interest thereon at the Default Rate; or

(d) Alteration of Locks. Additionally, with or without notice, and to the extent permitted by Law, Landlord may alter locks or other security devices at the Premises to deprive Tenant of access thereto, and Landlord shall not be required to provide a new key or right of access to Tenant.

19. Payment by Tenant; Non-Waiver; Cumulative Remedies.

(a) Payment by Tenant. Upon any Event of Default, Tenant shall pay to Landlord all commercially reasonable costs incurred by Landlord (including court costs and reasonable attorneys’ fees and expenses) in: (1) obtaining possession of the Premises; (2) removing and storing Tenant’s or any other occupant’s property; (3) repairing, restoring, altering, remodeling, or otherwise putting the Premises into condition acceptable to a new tenant; (4) if Tenant is dispossessed of the Premises and this Lease is not terminated, reletting all or any part of the Premises (including brokerage commissions, cost of tenant finish work, and other costs incidental to such reletting); (5) performing Tenant’s obligations which Tenant failed to perform; and (6) enforcing, or advising Landlord of, its rights, remedies, and recourses arising

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out of the Event of Default. To the full extent permitted by Law, Landlord and Tenant agree the federal and state courts of the state in which the Premises are located shall have exclusive jurisdiction over any matter relating to or arising from this Lease and the parties’ rights and obligations under this Lease.

(b) No Waiver. Landlord’s acceptance of Rent following an Event of Default shall not waive Landlord’s rights regarding such Event of Default. No waiver by either party hereof of any violation or breach of any of the terms contained herein shall waive such party’s rights regarding any future violation of such term. Landlord’s acceptance of any partial payment of Rent shall not waive Landlord’s rights with regard to the remaining portion of the Rent that is due, regardless of any endorsement or other statement on any instrument delivered in payment of Rent or any writing delivered in connection therewith; accordingly, Landlord’s acceptance of a partial payment of Rent shall not constitute an accord and satisfaction of the full amount of the Rent that is due.

(c) Cumulative Remedies. Except as otherwise expressly set forth herein, any and all remedies set forth in this Lease: (1) shall be in addition to any and all other remedies the parties hereto may have at law or in equity; (2) shall be cumulative; and (3) may be pursued successively or concurrently as such party may elect. The exercise of any remedy by either party shall not be deemed an election of remedies or preclude such party from exercising any other remedies in the future.

20. Landlord’s Lien. Landlord acknowledges and agrees that Tenant shall have the right, at any time, to encumber all or any portion of its interest in and to any furniture, trade fixtures, equipment or other personalty located in the Premises with a lien to secure financing, and Landlord agrees to execute Landlord’s standard form lien waiver in connection with such financing.

21. Surrender of Premises. No act by Landlord shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept a surrender of the Premises shall be valid unless it is in writing and signed by Landlord. At the expiration or termination of this Lease, Tenant shall deliver to Landlord the Premises with all improvements located therein in good repair and condition, free of Hazardous Materials placed on the Premises during the Term, broom-clean, reasonable wear and tear (and condemnation and Casualty damage, as to which Section 14 and Section 15 shall control) excepted, and shall deliver to Landlord all keys to the Premises. Provided that Tenant has performed all of its obligations hereunder, Tenant may remove all unattached trade fixtures, furniture, and personal property placed in the Premises or elsewhere in the Building by Tenant (but Tenant may not remove any such item which was paid for, in whole or in part, by Landlord or any wiring or cabling unless Landlord requires such removal). Additionally, at Landlord’s option, Tenant shall (not later than ten (10) days after the expiration or earlier termination of the Lease) remove such alterations, additions (including stairs and bank vaults), improvements, trade fixtures, personal property, equipment, wiring, conduits, cabling and furniture (including Tenant’s Off-Premises Equipment) as Landlord may request. Tenant shall repair all damage caused by such removal. Notwithstanding the foregoing, Tenant shall only be required to remove cabling or wiring installed to serve the Premises if Tenant does not remove the existing cabling and wiring which is located in the Premises on the date of the Lease. All items not so removed shall, at Landlord’s option, be deemed to have been abandoned

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by Tenant and may be appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord at Tenant’s cost without notice to Tenant and without any obligation to account for such items; any such disposition shall not be considered a strict foreclosure or other exercise of Landlord’s rights in respect of the security interest granted under Section 20. The provisions of this Section 21 shall survive the expiration or earlier termination of the Lease.

22. Holding Over. If Tenant fails to vacate the Premises at the end of the Term, then Tenant shall be a tenant at sufferance and, in addition to all other damages and remedies to which Landlord may be entitled for such holding over: (a) Tenant shall pay, in addition to the other Rent, Base Rent equal to one hundred fifty percent (150%) of Tenant’s then-current Base Rent rate; and (b) Tenant shall otherwise continue to be subject to all of Tenant’s obligations under this Lease. The provisions of this Section 22 shall not be deemed to limit or constitute a waiver of any other rights or remedies of Landlord provided herein or at Law. If Tenant fails to surrender the Premises upon the termination or expiration of this Lease, in addition to any other liabilities to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless from all loss, costs (including reasonable attorneys’ fees) and liability resulting from such failure, including any claims made by any succeeding tenant founded upon such failure to surrender, and any lost profits to Landlord resulting therefrom. Notwithstanding the foregoing, if Tenant holds over with Landlord’s express written consent, then Tenant shall be a month-to-month tenant and Tenant shall pay, in addition to the other Rent, Base Rent equal to one hundred twenty-five percent (125%) of the Base Rent payable during the last month of the Term.

23. Certain Rights Reserved by Landlord. Provided that the exercise of such rights does not unreasonably interfere with Tenant’s occupancy of the Premises, Landlord shall have the following rights:

(a) Building Operations. To decorate and to make inspections, repairs, alterations, additions, changes, or improvements, whether structural or otherwise, in and about the Project or Complex, as applicable, or any part thereof; to enter upon the Premises (after giving Tenant at least twenty-four (24) hours notice thereof, which may be oral notice, except in cases of real or apparent emergency, in which case no notice shall be required) and, during the continuance of any such work, to temporarily close doors, entryways, public space, and corridors in the Building; to interrupt or temporarily suspend Building services and facilities; to change the name of the Building; and to change the arrangement and location of entrances or passageways, doors, and doorways, corridors, elevators, stairs, restrooms, or other public parts of the Building. Furthermore, notwithstanding any other provision contained herein to the contrary, Landlord shall use commercially reasonable efforts to not disturb the normal conduct of Tenant’s business in connection with any entry onto the Premises, and Landlord acknowledges and agrees that all entries into the Premises, whether addressed in this Section 23(a) or elsewhere in this Lease, shall be subject to the notice requirements as set forth in this Section 23(a);

(b) Security. To take such reasonable security measures as Landlord deems advisable (provided, however, that any such security measures are for Landlord’s own protection, and Tenant acknowledges that Landlord is not a guarantor of the security or safety of any Tenant Party and that such security matters are the responsibility of Tenant); including evacuating the Building for cause, suspected cause, or for drill purposes; temporarily denying

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. 26

access to the Building; and closing the Building after Normal Business Hours and on Sundays and Holidays, subject, however, to Tenant’s right to enter when the Building is closed after Normal Business Hours under such reasonable regulations as Landlord may prescribe from time to time;

(c) Repairs and Maintenance. To enter the Premises at all reasonable hours to perform Landlord’s repair and maintenance obligations and rights under the Lease; and

(d) Prospective Purchasers and Lenders. To enter the Premises at all reasonable hours to show the Premises to prospective purchasers or lenders; and

(e) Prospective Tenants. At any time during the last twelve (12) months of the Term or at any time following the occurrence of an Event of Default until such Event of Default is cured, to enter the Premises at all reasonable hours to show the Premises to prospective tenants.

24. Substitution Space. [Intentionally deleted]

25. Hazardous Materials.

(a) During the term of this Lease, Tenant shall comply with all Environmental Laws (as defined in Section 25(i) below) applicable to the operation or use of the Premises, will cause all other persons occupying or using the Premises to comply with all such Environmental Laws, will immediately pay or cause to be paid all costs and expenses incurred by reason of such compliance.

(b) Tenant shall not generate, use, treat, store, handle, release or dispose of, or permit the generation, use, treatment, storage, handling, release or disposal of Hazardous Materials (as defined in Section 25(i) hereof) on the Premises, or the Complex, or transport or permit the transportation of Hazardous Materials to or from the Premises or the Complex except for limited quantities of household cleaning products and office supplies used or stored at the Premises and required in connection with the routine operation and maintenance of the Premises, and in compliance with all applicable Environmental Laws.

(c) At any time and from time to time during the term of this Lease, Landlord may perform an environmental site assessment report concerning the Premises, prepared by an environmental consulting firm chosen by Landlord, indicating the presence or absence of Hazardous Materials caused or permitted by Tenant and the potential cost of any compliance, removal or remedial action in connection with any such Hazardous Materials on the Premises. Tenant shall grant and hereby grants to Landlord and its agents access to the Premises and specifically grants Landlord an irrevocable non-exclusive license to undertake such an assessment. If such assessment report indicates the presence of Hazardous Materials caused or permitted by Tenant, then such report shall be at Tenant’s sole cost and expense.

(d) Tenant will immediately advise Landlord in writing of any of the following upon Tenant’s becoming aware of same: (1) any pending or threatened Environmental Claim (as defined in Section 25(i) below) against Tenant relating to the Premises or the Complex; (2) any condition or occurrence on the Premises or the Complex that (a) results in

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noncompliance by Tenant with any applicable Environmental Law, or (b) could reasonably be anticipated to form the basis of an Environmental Claim against Tenant or Landlord or the Premises; (3) any condition or occurrence on the Premises or any property adjoining the Premises that could reasonably be anticipated to cause the Premises to be subject to any restrictions on the ownership, occupancy, use or transferability of the Premises under any Environmental Law; and (4) the actual or anticipated taking of any removal or remedial action by Tenant in response to the actual or alleged presence of any Hazardous Material on the Premises or the Complex. All such notices shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and Tenant’s response thereto. In addition, Tenant will provide Landlord with copies of all communications regarding the Premises with any governmental agency relating to Environmental Laws, all such communications with any person relating to Environmental Claims, and such detailed reports of any such Environmental Claim as may reasonably be requested by Landlord.

(e) To the best of Landlord’s actual knowledge, as of the date of the Lease there are no Hazardous Materials contamination of the Building or Complex in violation of any Environmental Laws. As used in this Lease, the term “Landlord’s actual knowledge” means the actual knowledge without inquiry or investigation of Terrell Boiko, the asset manager having responsibility for the management of the Complex.

(f) Tenant agrees to indemnify, defend and hold harmless the Indemnitees from and against all obligations (including removal and remedial actions), losses, claims, suits, judgments, liabilities, penalties, damages (including consequential and punitive damages), costs and expenses (including reasonable attorneys’ and consultants’ fees and expenses) of any kind or nature whatsoever that may at any time be incurred by, imposed on or asserted against such Indemnitees directly or indirectly based on, or arising or resulting from (a) the actual or alleged presence of Hazardous Materials on the Complex which is caused or permitted by Tenant or a Tenant Party and (b) any Environmental Claim relating in any way to Tenant’s operation or use of the Premises (the “Hazardous Materials Indemnified Matters”). The foregoing indemnity shall not include any Hazardous Materials that were located at the Premises or the Project on the Commencement Date, nor any Hazardous Materials placed on the Premises or Project by Landlord, its employees, agents, or contractors. The provisions of this Section 25 shall survive the expiration or sooner termination of this Lease.

(g) To the extent that the undertaking in the preceding paragraph may be unenforceable because it is violative of any law or public policy, Tenant will contribute the maximum portion that it is permitted to pay and satisfy under applicable Law to the payment and satisfaction of all Hazardous Materials Indemnified Matters incurred by the Indemnitees.

(h) All sums paid and costs incurred by Landlord with respect to any Hazardous Materials Indemnified Matter shall bear interest at the Default Rate from the date so paid or incurred until reimbursed by Tenant, and all such sums and costs shall be immediately due and payable on demand.

(i) “Hazardous Materials” means (i) petroleum or petroleum products, natural or synthetic gas, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, and radon gas; (ii) any substances defined as or included in the definition of

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“hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,” “contaminants” or “pollutants,” or words of similar import, under any applicable Environmental Law; and (iii) any other substance exposure which is regulated by any governmental authority; (b) “Environmental Law” means any federal, state or local statute, law, rule, regulation, ordinance, code, policy or rule of common law now or hereafter in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to the environment, health, safety or Hazardous Materials, including without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§ 9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. §§ 1801 et seq.; the Clean Water Act, 33 U.S.C. §§ 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et seq.; the Clean Air Act, 42 U.S.C. §§ 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300f et seq.; the Atomic Energy Act, 42 U.S.C. §§ 2011 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136 et seq.; the Occupational Safety and Health Act, 29 U.S.C. §§ 651 et seq.; and (c) “Environmental Claims” means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of non-compliance or violation, investigations, proceedings, consent orders or consent agreements relating in any way to any Environmental Law or any Environmental Permit, including without limitation (i) any and all Environmental Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law and (ii) any and all Environmental Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment.

26. Miscellaneous.

(a) Landlord Transfer. Landlord may transfer any portion of the Building and any of its rights under this Lease. If Landlord assigns its rights under this Lease, then Landlord shall thereby be released from any further obligations hereunder arising after the date of transfer, provided that the assignee assumes Landlord’s obligations hereunder in writing.

(b) Landlord’s Liability. The liability of Landlord (and its partners, shareholders or members) to Tenant (or any person or entity claiming by, through or under Tenant) for any default by Landlord under the terms of this Lease or any matter relating to or arising out of the occupancy or use of the Premises and/or other areas of the Building or Complex shall be limited to Tenant’s actual direct, but not consequential, damages therefor and shall be recoverable only from the interest of Landlord in the Building, and Landlord (and its partners, shareholders or members) shall not be personally liable for any deficiency. Additionally, to the extent allowed by Law, Tenant hereby waives any statutory lien it may have against Landlord or its assets, including without limitation, the Building.

(c) Force Majeure. Other than for Tenant’s obligations under this Lease that can be performed by the payment of money (e.g., payment of Rent and maintenance of insurance), whenever a period of time is herein prescribed for action to be taken by either party hereto, such party shall not be liable or responsible for, and there shall be excluded from the

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computation of any such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials, war, governmental laws, regulations, or restrictions, or any other causes of any kind whatsoever which are beyond the control of such party.

(d) Brokerage. Neither Landlord nor Tenant has dealt with any broker or agent in connection with the negotiation or execution of this Lease, other than as set forth in the Basic Lease Information (the “Brokers”). Tenant shall indemnify, defend and hold Landlord harmless from and against all costs, expenses, attorneys’ fees, liens and other liability for commissions or other compensation claimed by any broker or agent claiming the same by, through, or under Tenant other than the Brokers. Landlord shall compensate Landlord’s broker pursuant to a separate written agreement between such parties. Landlord’s broker shall compensate Tenant’s broker pursuant to a separate written agreement between such parties. The foregoing indemnity shall survive the expiration or earlier termination of the Lease.

(e) Estoppel Certificates. From time to time, Tenant shall furnish to any party designated by Landlord, within ten (10) days after Landlord has made a request therefor, a certificate signed by Tenant confirming and containing such factual certifications and representations as to this Lease as Landlord may reasonably request. Unless otherwise required by Landlord’s Mortgagee or a prospective purchaser or mortgagee of the Building, the initial form of estoppel certificate to be signed by Tenant is attached hereto as Exhibit G. Likewise, Landlord agrees that upon written request by Tenant, but not more than once in any twelve-month period, Landlord shall deliver to Tenant an estoppel certificate covering such matters with respect to the Lease as are reasonably requested by Tenant or any lender to Tenant.

(f) Notices. All notices and other communications given pursuant to this Lease shall be in writing and shall be: (1) mailed by first class, United States Mail, postage prepaid, certified, with return receipt requested, and addressed to the parties hereto at the address specified in the Basic Lease Information; (2) hand delivered to the intended addressee; (3) sent by a nationally recognized overnight courier service; or (4) sent by facsimile transmission during Normal Business Hours followed by a copy of such notice sent in another manner permitted hereunder. All notices shall be effective upon the earlier to occur of actual receipt, one (1) Business Day following deposit with a nationally recognized overnight courier service, or three (3) days following deposit in the United States mail. The parties hereto may change their addresses by giving notice thereof to the other in conformity with this provision.

(g) Separability. If any clause or provision of this Lease is illegal, invalid, or unenforceable under present or future laws, then the remainder of this Lease shall not be affected thereby and in lieu of such clause or provision, there shall be added as a part of this Lease a clause or provision as similar in terms to such illegal, invalid, or unenforceable clause or provision as may be possible and be legal, valid, and enforceable.

(h) Amendments; Binding Effect. This Lease may not be amended except by instrument in writing signed by Landlord and Tenant. No provision of this Lease shall be deemed to have been waived by Landlord unless such waiver is in writing signed by Landlord, and no custom or practice which may evolve between the parties in the administration of the terms hereof shall waive or diminish the right of Landlord to insist upon the performance by Tenant in strict accordance with the terms hereof. The terms and conditions contained in this

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Lease shall inure to the benefit of and be binding upon the parties hereto, and upon their respective successors in interest and legal representatives, except as otherwise herein expressly provided. This Lease is for the sole benefit of Landlord and Tenant, and, other than Landlord’s Mortgagee, no third party shall be deemed a third party beneficiary hereof.

(i) Quiet Enjoyment. Provided Tenant has performed all of its obligations hereunder, Tenant shall peaceably and quietly hold and enjoy the Premises for the Term, without hindrance from Landlord or any party claiming by, through, or under Landlord, but not otherwise, subject to the terms and conditions of this Lease.

(j) No Merger. There shall be no merger of the leasehold estate hereby created with the fee estate in the Premises or any part thereof if the same person acquires or holds, directly or indirectly, this Lease or any interest in this Lease and the fee estate in the leasehold Premises or any interest in such fee estate.

(k) No Offer. The submission of this Lease to Tenant shall not be construed as an offer, and Tenant shall not have any rights under this Lease unless Landlord executes a copy of this Lease and delivers it to Tenant.

(l) Entire Agreement. This Lease constitutes the entire agreement between Landlord and Tenant regarding the subject matter hereof and supersedes all oral statements and prior writings relating thereto. Except for those set forth in this Lease, no representations, warranties, or agreements have been made by Landlord or Tenant to the other with respect to this Lease or the obligations of Landlord or Tenant in connection therewith. The normal rule of construction that any ambiguities be resolved against the drafting party shall not apply to the interpretation of this Lease or any exhibits or amendments hereto.

(m) Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY LAW, LANDLORD AND TENANT EACH WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LITIGATION OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE ARISING OUT OF OR WITH RESPECT TO THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.

(n) Governing Law. This Lease shall be governed by and construed in accordance with the laws of the state in which the Premises are located.

(o) Recording. Tenant shall not record this Lease or any memorandum of this Lease without the prior written consent of Landlord, which consent may be withheld or denied in the sole and absolute discretion of Landlord, and any recordation by Tenant shall be a material breach of this Lease. Tenant grants to Landlord a power of attorney to execute and record a release releasing any such recorded instrument of record that was recorded without the prior written consent of Landlord, which power of attorney is coupled with an interest and is non-revocable during the Term.

(p) Joint and Several Liability. All unperformed obligations of Tenant hereunder not fully performed at the end of the Term shall survive the end of the Term, including

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payment obligations with respect to Rent and all obligations concerning the condition and repair of the Premises.

(q) Financial Reports. Within thirty (30) days after Landlord’s request, Tenant will furnish Tenant’s most recent audited financial statements (including any notes to them) to Landlord, or, if no such audited statements have been prepared, such other financial statements (and notes to them) as may have been prepared by an independent certified public accountant or, failing those, Tenant’s internally prepared financial statements. If Tenant is a publicly traded corporation, Tenant may satisfy its obligations hereunder by providing to Landlord Tenant’s most recent annual and quarterly reports. Tenant will discuss its financial statements with Landlord and, following the occurrence of an Event of Default hereunder, will give Landlord access to Tenant’s books and records in order to enable Landlord to verify the financial statements. Landlord will not disclose any aspect of Tenant’s financial statements that Tenant designates to Landlord as confidential except: (1) to Landlord’s Mortgagee or prospective mortgagees or purchasers of the Building (provided that any prospective purchasers must sign a confidentiality agreement reasonably acceptable to Tenant prior to viewing any financial reports provided by Tenant); (2) in litigation between Landlord and Tenant; and (3) if required by court order. Tenant shall not be required to deliver the financial statements required under this Section 26(q) more than once in any twelve (12) month period.

(r) Landlord’s Fees. Whenever Tenant requests Landlord to take any action not required of it hereunder or give any consent required or permitted under this Lease, Tenant will reimburse Landlord for Landlord’s reasonable, out-of-pocket costs payable to third parties and incurred by Landlord in reviewing the proposed action or consent, including reasonable attorneys’, engineers’ or architects’ fees, within thirty (30) days after Landlord’s delivery to Tenant of a statement of such costs. Tenant will be obligated to make such reimbursement without regard to whether Landlord consents to any such proposed action.

(s) Telecommunications. Tenant and its telecommunications companies, including local exchange telecommunications companies and alternative access vendor services companies, shall have no right of access to and within the Building, for the installation and operation of telecommunications systems, including voice, video, data, Internet, and any other services provided over wire, fiber optic, microwave, wireless, and any other transmission systems (“Telecommunications Services”), for part or all of Tenant’s telecommunications within the Building and from the Building to any other location without Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. All providers of Telecommunications Services shall be required to comply with the reasonable rules and regulations of the Building, applicable Laws and Landlord’s policies and practices for the Building. Tenant acknowledges that Landlord shall not be required to provide or arrange for any Telecommunications Services and that Landlord shall have no liability to any Tenant Party in connection with the installation, operation or maintenance of Telecommunications Services or any equipment or facilities relating thereto. Tenant, at its cost and for its own account, shall be solely responsible for obtaining all Telecommunications Services.

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(t) Representations and Warranties.

(i) Tenant represents and warrants to, and covenants with, Landlord that neither Tenant nor any of its respective constituent owners or affiliates currently are, or shall be at any time during the Term hereof, in violation of any laws relating to terrorism or money laundering (collectively, the “Anti-Terrorism Laws”), including without limitation Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (the “Executive Order”) and/or the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56) (the “USA Patriot Act”).

(ii) Tenant covenants with Landlord that neither Tenant nor any of its respective constituent owners or affiliates is or shall be during the Term hereof a “Prohibited Person,” which is defined as follows: (A) a person or entity that is listed in the Annex to, or is otherwise subject to, the provisions of the Executive Order; (B) a person or entity owned or controlled by, or acting for or on behalf of, any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; (C) a person or entity with whom Landlord is prohibited from dealing with or otherwise engaging in any transaction by any Anti-Terrorism Law, including without limitation the Executive Order and the USA Patriot Act; (D) a person or entity who commits, threatens or conspires to commit or support “terrorism” as defined in Section 3(d) of the Executive Order; (E) a person or entity that is named as a “specially designated national and blocked person” on the then-most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, http://www.treas.gov/offices/eotffc/ofac/sdn/t11sdn.pdf, or at any replacement website or other replacement official publication of such list; and (F) a person or entity who is affiliated with a person or entity listed in items (A) through (E), above.

(iii) At any time and from time-to-time during the Term, Tenant shall deliver to Landlord, within ten (10) days after receipt of a written request therefor, a written certification or such other evidence reasonably acceptable to Landlord evidencing and confirming Tenant’s compliance with this Section 26(t).

(u) Confidentiality. Intentionally deleted.

(v) Authority. Tenant (if a corporation, partnership or other business entity) hereby represents and warrants to Landlord that Tenant is a duly formed and existing entity qualified to do business in the state in which the Premises are located, that Tenant has full right and authority to execute and deliver this Lease, and that each person signing on behalf of Tenant is authorized to do so.

(w) List of Exhibits. All exhibits and attachments attached hereto are incorporated herein by this reference.

Exhibit A -	Outline of Premises
Exhibit B -	Description of the Land
Exhibit C -	Additional Rent, Taxes and Insurance

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. 33

Exhibit D -	Tenant Finish-Work
Exhibit E -	Building Rules and Regulations
Exhibit F -	Form of Confirmation of Commencement Date Letter
Exhibit G -	Form of Tenant Estoppel Certificate
Exhibit H -	Parking Agreement
Exhibit I -	Renewal Option
Exhibit J -	Right of First Refusal
Exhibit J-1 -	Offer Space
Exhibit K -	Termination Option
Exhibit L -	Rooftop Rights
Exhibit M -	Form of Letter of Credit
Exhibit N -	Janitorial Specifications
Exhibit O -	UPS/Generator
Exhibit P -	Restrictions on Building

LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE PREMISES ARE SUITABLE FOR TENANT’S INTENDED COMMERCIAL PURPOSE, AND TENANT’S OBLIGATION TO PAY RENT HEREUNDER IS NOT DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE PERFORMANCE BY LANDLORD OF ITS OBLIGATIONS HEREUNDER, AND, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, TENANT SHALL CONTINUE TO PAY THE RENT, WITHOUT ABATEMENT, DEMAND, SETOFF OR DEDUCTION, NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS DUTIES OR OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR IMPLIED.

[Signature page follows]

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. 34

This Lease is executed on the respective dates set forth below, but for reference purposes, this Lease shall be dated as of the date first above written. If the execution date is left blank, this Lease shall be deemed executed as of the date first written above.

LANDLORD:

	CENTREPORT TRINITY, LTD., a Texas limited partnership
	By:	CARDINAL CENTREPORT, LLC, a Texas limited liability company, its General Partner
		By:	INVESCO, INC., a Delaware corporation its Manager
			By:	INVESCO REAL ESTATE DIVISION
				By:	/s/ Kevin Johnson
				Name:	Kevin Johnson
				Title:	Vice President
TENANT:	RADIANT SYSTEMS, INC., a Georgia corporation
	By:	/s/ Mark Haidet
	Name:	Mark Haidet
	Title:	Chief Financial Officer

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. Signature Page

EXHIBIT A

OUTLINE OF PREMISES

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. A-1

EXHIBIT B

DESCRIPTION OF THE LAND

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. B-1

EXHIBIT C

ADDITIONAL RENT, TAXES, AND INSURANCE

1. Additional Rent. Tenant shall pay to Landlord the amount (per each rentable square foot in the Premises) (“Additional Rent”) by which the annual Operating Costs (defined below) per rentable square foot in the Building or Complex, as applicable, for each year of the Term exceed the annual Operating Costs per rentable square foot in the Building or Complex, as applicable, for calendar year 2006 (the “Base Year”). Notwithstanding the foregoing, for purposes of calculating the amount payable by Tenant under this Section 1, Operating Costs (with the exception of Uncontrollable Expenses (defined below)) per rentable square foot in the Building or Complex, as applicable, shall not exceed for any calendar year during the Term of this Lease, other than the first calendar year, the amount of Operating Costs per rentable square foot in the Building or Complex, as applicable, for the preceding calendar year plus six percent (6%). The term “Uncontrollable Expenses” means expenses relating to the cost of utilities, insurance, real estate taxes and other uncontrollable expenses (such as, but not limited to, increases in the minimum wage which may affect the cost of service contracts). Landlord may make a good faith estimate of the Additional Rent to be due by Tenant for any calendar year or part thereof during the Term. During each calendar year or partial calendar year of the Term after the Base Year, Tenant shall pay to Landlord, in advance concurrently with each monthly installment of Base Rent, an amount equal to the estimated Additional Rent for such calendar year or part thereof divided by the number of months therein. From time to time, Landlord may estimate and re-estimate the Additional Rent to be due by Tenant and deliver a copy of the estimate or re-estimate to Tenant. Thereafter, the monthly installments of Additional Rent payable by Tenant shall be appropriately adjusted in accordance with the estimations so that, by the end of the calendar year in question, Tenant shall have paid all of the Additional Rent as estimated by Landlord. Any amounts paid based on such an estimate shall be subject to adjustment as herein provided when actual Operating Costs are available for each calendar year. Operating Costs for the Base Year, for the purpose of comparisons of the Base Year with subsequent years only, shall be calculated so as to not include any of the following to the extent such components are not also included in the comparison year: market-wide labor-rate increases due to extraordinary circumstances, including boycotts and strikes; utility rate increases due to extraordinary circumstances, including conservation surcharges, boycotts, embargos or other shortages; or amortized costs relating to capital improvements (the foregoing items being collectively referred to as the “Extraordinary Operating Costs”). However, to the extent any such Extraordinary Operating Costs are also included in the comparison year, then, for the purposes of comparison to the Base Year, such Extraordinary Operating Costs shall also be included in the Base Year. Tenant shall not be obligated to pay the Additional Rent, Taxes or Insurance obligations set forth in this Exhibit C relating to the Must Take Space until the Must Take Space Commencement Date.

2. Operating Costs. The term “Operating Costs” shall mean all reasonable and customary expenses and disbursements (subject to the limitations set forth below) that Landlord incurs in connection with the ownership, operation, and maintenance of the Project or Complex, as applicable, determined in accordance with sound accounting principles consistently applied, including the following costs: (a) wages and salaries of all on-site employees at the level of Property Manager or below engaged in the management, operation, maintenance, repair or

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. C-1

security of the Project or Complex, as applicable (together with Landlord’s reasonable allocation of expenses of off-site employees who perform a portion of their services in connection with the operation, maintenance or security of the Project or Complex, as applicable), including taxes, insurance and benefits relating thereto; (b) all supplies and materials used in the operation, maintenance, repair, replacement, and security of the Project or Complex, as applicable; (c) costs for improvements made to the Project or Complex, as applicable which, although capital in nature, are (i) expected to reduce the normal Operating Costs (including all utility costs) of the Project or Complex, as applicable, as amortized using a commercially reasonable interest rate over the time period reasonably estimated by Landlord to recover the costs thereof taking into consideration the anticipated cost savings, as determined by Landlord using its good faith, commercially reasonable judgment, as well as (ii) capital improvements made in order to comply with any Law hereafter promulgated by any governmental authority or any interpretation hereafter rendered with respect to any existing Law, as amortized using a commercially reasonable interest rate over the useful economic life of such improvements as determined by Landlord in its reasonable discretion, as well as (iii) capital improvements made to improve the health and safety of the Building and its occupants, as amortized using a commercially reasonable interest rate over the useful economic life of such improvements as determined by Landlord in its reasonable discretion; (d) cost of all utilities; (e) repairs, replacements, and general maintenance of the Project or Complex, as applicable; (f) fair market rental and other costs with respect to the management office for the Building or Complex, if any; and (g) service, maintenance and management contracts with independent contractors for the operation, maintenance, management, repair, replacement, or security of the Project or Complex, as applicable. If the Building is part of a Complex, Operating Costs may be prorated among the Project and the other buildings of the Complex, as reasonably determined by Landlord.

Operating Costs shall not include costs for:

(1) Leasing commissions, attorneys’ fees and other expenses related to leasing tenant space and constructing improvements for the sole benefit of an individual tenant.

(2) Goods and services furnished to an individual tenant of the Building which are above building standard and which are separately reimbursable directly to Landlord in addition to Excess Operating Expenses.

(3) Repairs, replacements and general maintenance paid by insurance proceeds or condemnation proceeds.

(4) Except as expressly provided above, depreciation, amortization, interest payments on any encumbrances on the Property and the cost of capital improvements or additions.

(5) Costs of installing any specialty service, such as an observatory, broadcasting facility, luncheon club, or athletic or recreational club.

(6) Expenses for repairs or maintenance related to the Property which have been reimbursed to Landlord pursuant to warranties or service contracts.

(7) Costs (other than maintenance costs) of any art work (such as sculptures or paintings) used to decorate the Building.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. C-2

(8) Payments on indebtedness secured by liens against the Property, or costs of refinancing such indebtedness.

(9) Attorneys’ fees, costs and disbursements and other expenses incurred in connection with negotiations or disputes with tenants, other occupants, or prospective tenants or occupants.

(10) Landlord’s cost of electricity and other services that are sold to tenants and for which Landlord is entitled to be reimbursed by tenants as an additional charge or rental over and above the basic rent payable under the lease with such tenant (except, to the extent applicable, for tenants’ pro rata share of electricity for the Premises paid as part of Operating Costs).

(11) Expenses in connection with services or other benefits of a type which are not available to Tenant but which are provided to another tenant or occupant.

(12) Costs incurred due to violation by Landlord or any tenant of the terms and conditions of any lease.

(13) Any costs, fines or penalties incurred due to violations by Landlord of any governmental rule or authority.

(14) Costs incurred in the removal of asbestos or other substances considered to be detrimental to the health or the environment of occupants of the Building, except for costs incurred by Landlord to comply with any laws which are enacted after the effective date of this Lease.

(15) Costs associated with compliance with provisions of general building codes, which provisions were enacted prior to Tenant’s occupancy, whether such work is performed before or after the effective date of this Lease.

(16) Any management fees or asset management fees to the extent they exceed comparable fees in comparable buildings in the area.

(17) Costs and expenses attributable to the correction of any construction defects in the initial construction of the Building or the construction of any additions to the Building.

(18) Landlord’s general overhead except as it directly relates to the operation, management, maintenance, repair and security of the Building.

(19) Any compensation paid to clerks, attendants or other persons in commercial concessions operated by Landlord unless any income generated from such concessions is used to reduce Operating Expenses.

(20) Costs and expenses associated with the removal or encapsulation of asbestos or other hazardous or toxic substances.

(21) Any costs representing any amount paid for services and materials (including overhead and profit increments) to a related person, firm, or entity to the extent such amount

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. C-3

exceeds the amount that would be paid for such services or materials at the then existing market rates to an unrelated person, firm or corporation.

(22) Taxes and Insurance which are paid separately pursuant to Section 3 and 4, below.

3. Taxes. Tenant shall also pay Tenant’s Proportionate Share of any increase in Taxes for each year and partial year falling within the Term over the Taxes for the Base Year. Tenant shall pay Tenant’s Proportionate Share of Taxes in the same manner as provided above for Tenant’s Proportionate Share of Operating Costs. “Taxes” shall mean taxes, assessments, and governmental charges or fees whether federal, state, county or municipal, and whether they be by taxing districts or authorities presently taxing or by others, subsequently created or otherwise, and any other taxes and assessments (including non-governmental assessments for common charges under a restrictive covenant or other private agreement that are not treated as part of Operating Costs) now or hereafter attributable to the Project or Complex, as applicable (or its operation), excluding, however, penalties and interest thereon and federal and state taxes on income (if the present method of taxation changes so that in lieu of or in addition to the whole or any part of any Taxes, there is levied on Landlord a capital tax directly on the rents received therefrom or a franchise tax, assessment, or charge based, in whole or in part, upon such rents for the Project or Complex, as applicable, then all such taxes, assessments, or charges, or the part thereof so based, shall be deemed to be included within the term “Taxes” for purposes hereof). Taxes shall include the commercially reasonable costs of consultants retained in an effort to lower taxes and all costs incurred in disputing any taxes or in seeking to lower the tax valuation of the Project. For property tax purposes, to the extent allowed by Law, Tenant waives all rights to protest or appeal the appraised value of the Premises, as well as the Project and Complex, and all rights to receive notices of reappraisement.

4. Insurance. Tenant shall also pay Tenant’s Proportionate Share of any increases in Insurance for each year and partial year falling within the Term over the Insurance for the Base Year. Tenant shall pay Tenant’s Proportionate Share of Insurance in the same manner as provided above for Tenant’s Proportionate Share of Operating Costs. “Insurance” shall mean property, liability and other insurance coverages carried by Landlord in its commercially reasonable discretion, including without limitation deductibles and risk retention programs and an allocation of a portion of the cost of blanket insurance policies maintained by Landlord and/or its affiliates.

5. Operating Costs and Tax and Insurance Statement. By May 1 of each calendar year, or as soon thereafter as practicable, Landlord shall furnish to Tenant a statement of Operating Costs for the previous year, adjusted as provided in Section 6 of this Exhibit, and of the Taxes and Insurance for the previous year (the “Operating Costs, Tax and Insurance Statement”). If Tenant’s estimated payments of Operating Costs or Taxes or Insurance under this Exhibit C for the year covered by the Operating Costs, Tax and Insurance Statement exceed Tenant’s share of such items as indicated in the Operating Costs, Tax and Insurance Statement, then Landlord shall promptly credit or reimburse Tenant for such excess; likewise, if Tenant’s estimated payments of Operating Costs, Taxes or Insurance under this Exhibit C for such year are less than Tenant’s share of such items as indicated in the Operating Costs, Tax and Insurance Statement, then Tenant shall promptly pay Landlord such deficiency, notwithstanding that the

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. C-4

Term has expired and Tenant has vacated the Premises. Landlord and Tenant are knowledgeable and experienced in commercial transactions and agree that the provisions of this Lease for determining charges, amounts and additional rent payable by Tenant are commercially reasonable and valid even though such methods may not state a precise mathematical formula for determining such charges. ACCORDINGLY, TENANT VOLUNTARILY AND KNOWINGLY WAIVES ALL RIGHTS AND BENEFITS OF TENANT UNDER SECTION 93.012 OF THE TEXAS PROPERTY CODE.

Within one-hundred twenty (120) days (the “Audit Election Period”) after Landlord furnishes to Tenant the Operating Costs, Tax and Insurance Statement for any calendar year, Tenant may, at its expense during Landlord’s normal business hours, elect to audit Landlord’s Operating Costs, Taxes and Insurance for such calendar year only, subject to the following conditions: (1) there is no uncured Event of Default under this Lease; (2) the audit shall be prepared by an independent certified public accounting firm of recognized regional or national standing; (3) in no event shall any audit be performed by a firm retained on a “contingency fee” basis; (4) the audit shall commence within thirty (30) days after Landlord makes Landlord’s books and records available to Tenant’s auditor and shall conclude within sixty (60) days after commencement; (5) the audit shall be conducted where Landlord maintains its books and records and shall not unreasonably interfere with the conduct of Landlord’s business; and (6) Tenant and its accounting firm shall treat any audit in a confidential manner and shall each execute Landlord’s commercially reasonable confidentiality agreement for Landlord’s benefit prior to commencing the audit. Tenant shall deliver a copy of such audit to Landlord within five (5) business days of receipt by Tenant. This paragraph shall not be construed to limit, suspend, or abate Tenant’s obligation to pay Rent when due, including estimated Operating Costs, Taxes and Insurance. After verification, Landlord shall credit any overpayment determined by the audit report against the next Rent due and owing by Tenant or, if no further Rent is due, refund such overpayment directly to Tenant within thirty (30) days of determination. Likewise, Tenant shall pay Landlord any underpayment determined by the audit report within thirty (30) days of determination. The foregoing obligations shall survive the expiration or earlier termination of the Lease. If Tenant does not give written notice of its election to audit during the Audit Election Period, Landlord’s Operating Costs, Taxes and Insurance for the applicable calendar year shall be deemed approved for all purposes, and Tenant shall have no further right to review or contest the same except as otherwise expressly provided for below. If the audit proves that Landlord’s calculation of Operating Costs, Taxes and Insurance for the calendar year under inspection was overstated by more than five percent (5%) in the aggregate, then, after verification, Landlord shall pay Tenant’s actual reasonable out-of-pocket audit and inspection fees applicable to the review of said calendar year statement within thirty (30) days after receipt of Tenant’s invoice therefor.

6. Gross-Up. With respect to any calendar year or partial calendar year (including, but not limited to the Base Year) in which the Building or Complex, as applicable, is not occupied to the extent of 100% of the rentable area thereof, or Landlord is not supplying services to 100% of the rentable area thereof, the Operating for such period shall, for the purposes hereof, be increased to the amount which would have been incurred had the Building or Complex, as applicable, been occupied to the extent of 100% of the rentable area thereof and Landlord had been supplying services to 100% of the rentable area thereof.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. C-5

EXHIBIT D

TENANT FINISH-WORK: ALLOWANCE

(Landlord Performs the Work)

1. Acceptance of Premises. Except for the Landlord Work (hereinafter defined) and the performance of the Work described in this Exhibit, Tenant accepts the Premises in their “AS-IS” condition on the date that this Lease is entered into.

2. Space Plans.

(a) Preparation and Delivery. Tenant shall meet with a design consultant selected by Tenant and approved by Landlord, which approval shall not be unreasonably withheld (the “Architect”) to discuss the nature and extent of all improvements that Tenant proposes to install in the Premises and, at such meeting, provide the Architect with all necessary data and information needed by the Architect to prepare initial space plans therefor as required by this paragraph. On or before September 9, 2005 (the “Space Plans Delivery Deadline”), Tenant shall deliver to Landlord a space plan prepared by the Architect depicting improvements to be installed in the Premises (the “Space Plans”).

(b) Approval Process. Landlord shall notify Tenant whether it approves of the submitted Space Plans within five (5) Business Days after Tenant’s submission thereof. Landlord’s approval shall not be unreasonably withheld, conditioned or delayed. If Landlord disapproves of such Space Plans, then Landlord shall notify Tenant thereof specifying in reasonable detail the reasons for such disapproval, in which case Tenant shall, within three (3) Business Days after such notice, revise such Space Plans in accordance with Landlord’s objections and submit to Landlord for its review and approval. Landlord shall notify Tenant in writing whether it approves of the resubmitted Space Plans within three (3) Business Days after its receipt thereof. This process shall be repeated until the Space Plans have been finally approved by Landlord and Tenant. If Tenant fails to timely deliver such Space Plans, then each day after the Space Plans Delivery Deadline that such Space Plans are not delivered to Landlord shall be a Tenant Delay Day (defined below). If Landlord fails to respond to a request for consent within the time periods stated above, then Landlord shall be deemed to have consented to such request if Tenant sends a second request for consent after the time periods above (which notice shall have a heading in at least 12-point type, bold and all caps “FAILURE TO RESPOND SHALL RESULT IN DEEMED APPROVAL OF A TENANT REQUEST”) and Landlord fails to respond within three (3) Business Days after receipt of such second request.

3. Working Drawings.

(a) Preparation and Delivery. Tenant shall cause to be prepared final working drawings of all improvements to be installed in the Premises (including without limitation mechanical, electrical and plumbing drawings) and deliver the same to Landlord for its review and approval (which approval shall not be unreasonably withheld, delayed or conditioned) on or before October 1, 2005 (the “Working Drawings Delivery Deadline”). Such working drawings shall be prepared by Architect (whose fee shall be included in the Total Construction Costs [defined below]).

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. D-1

(b) Approval Process. Landlord shall notify Tenant whether it approves of the submitted working drawings within seven (7) Business Days after Tenant’s submission thereof. If Landlord disapproves of such working drawings, then Landlord shall notify Tenant thereof specifying in reasonable detail the reasons for such disapproval, in which case Tenant shall, within three (3) Business Days after such notice, revise such working drawings in accordance with Landlord’s objections and submit the revised working drawings to Landlord for its review and approval. Landlord shall notify Tenant in writing whether it approves of the resubmitted working drawings within three (3) Business Days after its receipt thereof. This process shall be repeated until the working drawings have been finally approved by Landlord and Tenant. If Tenant fails to timely deliver such working drawings, then each day after the Working Drawings Delivery Deadline that such working drawings are not delivered to Landlord shall be a Tenant Delay Day (defined below). If Landlord fails to respond to a request for consent within the time periods stated above, then Landlord shall be deemed to have consented to such request if Tenant sends a second request for consent after the time periods above (which notice shall have a heading in at least 12-point type, bold and all caps “FAILURE TO RESPOND SHALL RESULT IN DEEMED APPROVAL OF A TENANT REQUEST”) and Landlord fails to respond within three (3) Business Days after receipt of such second request. If the working drawings are not fully approved (or deemed approved) by both Landlord and Tenant by October 15, 2005, then each day after such time period that such working drawings are not fully approved (or deemed approved) by both Landlord and Tenant as a result of Tenant rather than Landlord caused delays shall constitute a Tenant Delay Day.

(c) Landlord’s Approval; Performance of Work. If any of Tenant’s proposed construction work will affect the Building’s Structure or the Building’s Systems, then the working drawings pertaining thereto must be approved by Landlord’s engineer. Landlord’s approval of such working drawings shall not be unreasonably withheld, provided that (1) they comply with all Laws, (2) the improvements depicted thereon do not adversely affect (in the reasonable discretion of Landlord) the Building’s Structure or the Building’s Systems (including the Building’s restrooms or mechanical rooms), the exterior appearance of the Building, or the appearance of the Building’s Common Areas or elevator lobby areas (if any), (3) such working drawings are sufficiently detailed to allow construction of the improvements in a good and workmanlike manner, and (4) the improvements depicted thereon conform to the reasonable rules and regulations promulgated from time to time by Landlord for the construction of tenant improvements (a copy of which has been delivered to Tenant). As used herein, “Working Drawings” shall mean the final working drawings approved by both Tenant and Landlord, as amended from time to time by any approved changes thereto, and “Work” shall mean all improvements to be constructed in accordance with and as indicated on the Working Drawings, together with any work required by governmental authorities to be made to other areas of the Building as a result of the improvements indicated by the Working Drawings (which additional work shall be subject to Tenant’s review and reasonable approval). Landlord’s approval of the Working Drawings shall not be a representation or warranty of Landlord that such drawings are adequate for any use or comply with any Law, but shall merely be the consent of Landlord thereto. Tenant shall, at Landlord’s request, sign the Working Drawings to evidence its review and approval thereof. After the Working Drawings have been approved, Landlord shall cause the Work to be performed in substantial accordance with the Working Drawings.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. D-2

4. Bidding of Work. Prior to commencing the Work, Landlord shall competitively bid the Work to four (4) contractors mutually acceptable to Tenant and Landlord, excluding Wilcox Construction. If the estimated Total Construction Costs (defined in Section 8 below) are expected to exceed the Construction Allowance (defined in Section 9 below), Tenant shall be allowed to review the submitted bids from such contractors to value engineer any of Tenant’s requested alterations. In such case, Tenant shall notify Landlord of any items in the Working Drawings that Tenant desires to change within five (5) Business Days after Landlord’s submission thereof to Tenant. If Tenant fails to notify Landlord of its election within such five (5) Business Day period, Tenant shall be deemed to have approved the bids. Within ten (10) Business Days following Landlord’s submission to Tenant of the initial construction bids under the foregoing provisions (if applicable), Tenant shall have completed all of the following items: (a) finalized with Landlord’s representative and the proposed contractor, the pricing of any requested revisions to the bids for the Work, and (b) approved in writing any overage in the Total Construction Costs in excess of the Construction Allowance, failing which each day after such ten (10) Business Day period shall constitute a Tenant Delay Day. All of the Work shall be performed under “Not to Exceed” price contracts.

5. Change Orders. Tenant may initiate changes in the Work. Each such change must receive the prior written approval of Landlord, such approval not to be unreasonably withheld or delayed; however, (1) if such requested change would adversely affect (in the reasonable discretion of Landlord) (a) the Building’s Structure or the Building’s Systems (including the Building’s restrooms or mechanical rooms), (b) the exterior appearance of the Building, or (c) the appearance of the Building’s Common Areas or elevator lobby areas (if any), or (2) if any such requested change would reasonably be expected to delay the Initial Premises Commencement Date (unless Tenant agrees such delay will be deemed Tenant Delay Days), Landlord may withhold its consent in its sole and absolute discretion. Tenant shall, upon completion of the Work, furnish Landlord with an accurate architectural “as-built” plan of the Work as constructed, which plan shall be incorporated into this Exhibit D by this reference for all purposes. If Tenant requests any changes to the Work described in the Space Plans or the Working Drawings, then such increased costs and any additional design costs incurred in connection therewith as the result of any such change shall be added to the Total Construction Costs.

6. Definitions. As used herein, a “Tenant Delay Day” shall mean each day of delay in the performance of the Work that occurs (a) because of Tenant’s failure to timely deliver or approve any required documentation such as the Space Plans or Working Drawings, (b) because Tenant fails to timely furnish any information or deliver or approve any required documents such as the Space Plans, Working Drawings (whether preliminary, interim revisions or final), pricing estimates, construction bids, and the like, (c) because of any change by Tenant to the Space Plans or Working Drawings, (d) because Tenant fails to attend any meeting with Landlord, the Architect, any design professional, or any contractor, or their respective employees or representatives, as may be required or scheduled hereunder in connection with the preparation or completion of any construction documents, such as the Space Plans, Working Drawings, or in connection with the performance of the Work, (e) because of any specification by Tenant of materials or installations in addition to or other than Landlord’s standard finish-out materials (provided, however, in no event shall the specification by Tenant of such non-standard materials or installations constitute a cause resulting in a Tenant Delay Day unless and except under

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. D-3

circumstances where Landlord advised Tenant at the time of its request of such non-standard materials or installations of the expected period of delay which may be caused thereby and provided Tenant the opportunity to withdraw its request for such non-standard materials or installations), or (f) because a Tenant Party otherwise directly delays completion of the Work. As used herein “Substantial Completion,” “Substantially Completed,” and any derivations thereof mean the Work in the Premises has been performed in substantial accordance with the Working Drawings, as reasonably determined by Landlord (other than any details of construction, mechanical adjustment or other similar matter, the noncompletion of which does not materially interfere with Tenant’s use or occupancy of the Premises) and the procurement of a certificate of substantial completion from the architect which prepared the Working Drawings and the issuance of a certificate of occupancy.

7. Walk-Through; Punchlist. When Landlord considers the Work in the Premises to be Substantially Completed, Landlord will notify Tenant and within five (5) Business Days thereafter, Landlord’s representative and Tenant’s representative shall conduct a walk-through of the Premises and identify any necessary touch-up work, repairs and minor completion items that are necessary for final completion of the Work. Neither Landlord’s representative nor Tenant’s representative shall unreasonably withhold his or her agreement on punchlist items. Landlord shall use reasonable efforts to cause the contractor performing the Work to complete all punchlist items within thirty (30) days after agreement thereon; however, Landlord shall not be obligated to engage overtime labor in order to complete such items.

8. Excess Costs. The entire out of pocket cost incurred by Landlord in performing the Work (including design of the Work and preparation of the Working Drawings, costs of construction labor and materials, electrical usage during construction, additional janitorial services, general tenant signage, related taxes and insurance costs, and the construction supervision fee referenced in Section 10 of this Exhibit, all of which costs are herein collectively called the “Total Construction Costs”) in excess of the Construction Allowance (hereinafter defined) shall be paid by Tenant. Notwithstanding the foregoing, Landlord shall be solely responsible for the cost of the Space Plans not to exceed $0.08 per rentable square foot of the Premises and such amount shall not be deducted from the Construction Allowance. Upon approval of the Working Drawings and selection of a contractor, Tenant shall promptly (a) execute a work order agreement prepared by Landlord which identifies such drawings and itemizes the Total Construction Costs and sets forth the Construction Allowance, and (b) pay to Landlord fifty percent (50%) of the amount by which Total Construction Costs exceed the Construction Allowance. Upon Substantial Completion of the Work and before Tenant occupies any portion of the Premises to conduct business therein, Tenant shall pay to Landlord an amount equal to the Total Construction Costs (as adjusted for any approved changes to the Work), less (1) the amount of the advance payment already made by Tenant, and (2) the amount of the Construction Allowance. In the event of default of payment of such excess costs, Landlord (in addition to all other remedies) shall have the same rights as for an Event of Default under the Lease.

9. Construction Allowance.

(a) Landlord shall provide to Tenant a construction allowance not to exceed $16.00 per rentable square foot in the Premises (the “Construction Allowance”) to be applied

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. D-4

toward the Total Construction Costs, as adjusted for any changes to the Work. Except as set forth below regarding the Direct Purchase Items, the Construction Allowance shall not be disbursed to Tenant in cash, but shall be applied by Landlord to the payment of the Total Construction Costs, if, as, and when the cost of the Work is actually incurred and paid by Landlord. The Construction Allowance shall be used for architectural and hard construction costs, which costs may include an uninterrupted power source system and generator (the “UPS”) (subject to the terms of Exhibit O and approval by Landlord of plans therefor). Upon the expiration or earlier termination of the Lease, the ownership of any portion of the UPS paid for out of the Construction Allowance shall at Landlord’s election belong to Landlord. Notwithstanding the foregoing, a portion of the Construction Allowance not to exceed: (i) $4.00 per rentable square foot in the Premises may be used to reimburse Tenant for costs of moving to the Premises and for the purchase and installation of data cabling in the Premises, as set forth below; and (ii) three percent (3%) of the Total Construction Costs may be used to pay a construction manager if Wilcox is selected as the general contractor as set forth in Section 10 below. It is anticipated that Tenant shall directly purchase the UPS (as defined above to include a generator) and the data cabling for the Premises (collectively, the “Direct Purchase Items”), the installation of which shall be coordinated by Landlord in connection with the Work, with the cost of such installation being included in the Total Construction Costs. Reimbursement of Tenant’s costs of the Direct Purchase Items and Tenant’s costs of moving (limited as set forth above) shall be made by Landlord within thirty (30) days of Landlord’s receipt of paid invoices for such items. The Construction Allowance must be used within six (6) months following the Initial Premises Commencement Date or shall be deemed forfeited with no further obligation by Landlord with respect thereto.

(b) In addition to the Construction Allowance, Landlord shall pay an amount not to exceed $7.50 per square foot in the Premises (the “Existing Lease Allowance”) directly to Tenant’s current landlord for rental obligations under its existing lease or towards a buy-out fee under such lease. The Existing Lease Allowance shall be available to Tenant on or after July 1, 2006 and must be used by March 1, 2007 or all rights thereto shall revert to Landlord. If Tenant is relieved of their rental obligation under the existing lease prior to October 1, 2007, any unused portion of the Existing Lease Allowance shall revert to Landlord.

10. Construction Management. Landlord or its Affiliate or agent shall supervise the Work, make disbursements required to be made to the contractor, and act as a liaison between the contractor and Tenant and coordinate the relationship between the Work, the Building and the Building’s Systems. In consideration for Landlord’s construction supervision services, Tenant shall pay to Landlord a construction supervision fee equal to three percent (3%) of the Total Construction Costs which are included in the general contractor’s contract. Notwithstanding the foregoing, if Tenant uses Wilcox Construction (“Wilcox”) as its general contractor, the construction supervision fee shall be waived by Landlord, and Tenant may use up to three percent (3%) of the Construction Allowance to pay Tenant’s construction manager.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. D-5

11. Construction Representatives. Landlord’s and Tenant’s representatives for coordination of construction and approval of change orders will be as follows, provided that either party may change its representative upon written notice to the other:

Landlord’s Representative:

Tracy Lyne

Wilcox Real Estate

14785 Preston Road

Suite 850

Dallas, TX 75254

Telephone: 972-759-7851

Telecopy: 972-759-7951

Tenant’s Representative:

Randy Thompson

Cushman & Wakefield of Texas, Inc.

15455 Dallas Parkway, #800

Addison TX, 75001

Telephone: 972-663-9600

12. Miscellaneous. To the extent not inconsistent with this Exhibit, Sections 8(a) and 21 of this Lease shall govern the performance of the Work and Landlord’s and Tenant’s respective rights and obligations regarding the improvements installed pursuant thereto.

13. Landlord Work. Landlord agrees to perform the following work (the “Landlord Work”), at Landlord’s sole cost and expense, prior to or in conjunction with the Work:

• Landlord will repair the column footings in the break room and along the West wall adjacent to the conference rooms. Assuming the wall stays in place, Landlord is responsible to repair the cracking in the perimeter drywall evident along the West and South exterior wall.

• Landlord will rework the caulk joint between the Building and the patio.

• Landlord shall repair any broken ceiling tiles or tiles damaged by water.

• As part of the Building shell, Landlord will repair where necessary any window blinds and will replace any that are irreparable or are missing.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. D-6

EXHIBIT E

BUILDING RULES AND REGULATIONS

The following rules and regulations shall apply to the Premises, the Building, the parking areas associated therewith, and the appurtenances thereto:

l. Sidewalks, doorways, and similar areas shall not be obstructed nor shall refuse, furniture, boxes or other items be placed therein by Tenant or its officers, agents, servants, and employees, or used for any purpose other than ingress and egress to and from the Premises, or for going from one part of the Building to another part of the Building. Canvassing, soliciting and peddling in the Building are prohibited.

2. Plumbing, fixtures and appliances shall be used only for purposes for which constructed, and no unsuitable material shall be placed therein. Damage resulting to any such fixtures or appliances or surrounding areas from misuse by Tenant shall be repaired at the sole cost and expense of Tenant, and Landlord shall not in any case be responsible therefor.

3. No signs, directories, posters, advertisements, or notices shall be painted or affixed on or to any windows or doors, or in corridors or other parts of the Building, except in such color, size and style, and in such places as shall be first approved in writing by Landlord. Landlord shall have the right to remove all unapproved signs without notice to Tenant, at the expense of Tenant.

4. Tenant shall not do, or permit anything to be done in or about the Building, or bring or keep anything therein, that will in any way increase the rate of fire or other insurance on the Building, or on property kept therein or otherwise increase the possibility of fire or other casualty.

5. Landlord shall have the power to prescribe the weight and position of heavy equipment or objects which may overstress any portion of the floor. All damage done to the Building by the improper placing of such heavy items will be repaired at the sole expense of Tenant.

6. Tenant shall notify the Landlord when safes or other heavy equipment are to be taken in or out of the Building, and the moving shall be done after written permission is obtained from Landlord on such conditions as Landlord shall require. Movement in or out of the Building of furniture or office equipment, or dispatch or receipt by Tenant of any bulky materials, merchandise or materials shall be restricted to such hours as Landlord shall designate. All such movement shall be under the supervision of Landlord and in the manner agreed between Tenant and Landlord by prearrangement before performance. Such prearrangement initiated by Tenant will include determination by Landlord, and subject to its decision and control, as to the time, method and routing of movement and as to limitations for safety or other concerns which may prohibit any article, equipment or any other item from being brought into the Building. Tenant is to assume all risk as to damage to articles moved and injury to person or public engaged or not engaged in such movement, including equipment, property and personnel of Landlord and other tenants if damaged or injured as a result of acts in connection with carrying out this service for Tenant from the time of entering the property to completion of work; and Landlord shall not be

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. E-1

liable for acts of any person engaged in, or any damage or loss to any of said property or persons resulting from any act in connection with such service performed for Tenant.

7. All deliveries must be made during normal working hours. Tenant shall make advance arrangements with Landlord to schedule move-ins or move-outs.

8. Tenant shall cooperate with Landlord’s employees in keeping the Premises neat and clean.

9. Tenant shall not cause or permit any improper noises in the Building, or allow any unpleasant odors to emanate from the Premises, or otherwise interfere, injure or unreasonably annoy in any way other tenants, or persons having business with them. Landlord shall have the right to prohibit smoking by tenants, their guests and employees within the Building and/or the Project, and to designate areas within the Building and/or Project as smoking areas, and Tenant agrees to cause all of its employees, guests and invitees to comply with Landlord’s requirements in this regard.

10. No animals or birds shall be brought into or kept in or about the Building other than seeing eye dogs.

11. No machinery of any kind, other than ordinary office machines and standard office kitchen equipment (i.e. microwaves and coffee machines) shall be operated in, on or about the Premises without the prior written consent of Landlord, nor shall Tenant use or keep in the Building any inflammable; or explosive fluid or substance (including inflammable Christmas trees and ornaments), or any illuminating materials. No space heaters or fans shall be operated in the Building.

12. No bicycles, motorcycles or similar vehicles will be allowed in the Building.

13. Except for hanging artwork, no nails, hooks, or screws shall be driven into or inserted in any load bearing walls or structural elements of the Building, except as approved by Building maintenance personnel.

14. Landlord has the right to evacuate the Building in the event of an emergency or catastrophe.

15. Except for Tenant’s employees and customers for on-site consumption, no other food and/or beverages shall be distributed from Tenant’s office without the prior written approval of the Landlord.

16. No additional locks shall be placed upon any doors without the prior written consent of Landlord. All necessary keys shall be furnished by Landlord, and the same shall be surrendered upon termination of this Lease, and Tenant shall then give Landlord or his agent an explanation of the combination of all locks on the doors or vaults. Tenant shall initially be given two (2) keys to the Premises by Landlord.

17. Tenant will not locate furnishings or cabinets adjacent to mechanical or electrical access panels so as to prevent operating personnel from routine or emergency access. Cost of

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. E-2

moving such furnishings for Landlord’s access will be paid by Tenant. The lighting will remain the exclusive charge of the Building designated personnel.

18. Tenant shall comply with such reasonable non-discriminating parking rules and regulations as may be posted and distributed from time to time.

19. No portion of the Building shall be used for the purpose of lodging rooms.

20. Prior written approval, which shall be at Landlord’s sole discretion, must be obtained for installation of window shades, blinds, drapes, or any other window treatment of any kind whatsoever, except that Landlord will provide Building Standard window coverings for all suites in accordance with the Work Letter. Landlord will control all internal lighting that may be visible from the exterior of the Building and shall have the right to change any unapproved lighting, at Tenant’s expense.

21. With respect to work being performed by Tenant in the Premises with the approval of Landlord, Tenant will refer all contractors, contractor’s representatives and installation technicians rendering any service to them to Landlord for Landlord’s reasonable supervision, approval and control before the performance of any contractual services. This provision shall apply to work performed in the Building including, but not limited to, installation of telephones, telegraph equipment, electrical devices and attachments, and any all installation of every nature affecting floors, walls, woodwork, trim, windows, ceilings, equipment and any other physical portion of the Building. All work in or on the Building shall comply with any and all codes.

22. Should Tenant require telegraphic, telephonic, annunciator or other communication service, Landlord will direct the electrician in writing where and how wires are to be introduced and placed and none shall be introduced or placed except as Landlord shall direct. At Landlord’s option Tenant shall remove all such wires and cables at the expiration of the Lease Term at Tenant’s sole cost and expense. Notwithstanding the foregoing, Tenant shall only be required to remove cabling or wiring installed to serve the Premises if Tenant does not remove the existing cabling and wiring which is located in the Premises on the date of the Lease. Electric current shall not be used for power in excess of standard office use or heating without Landlord’s prior written permission, such permission not to be unreasonably withheld. Landlord shall have the reasonable discretion as to which communication company or companies are permitted to enter the Building and service tenants in the Building.

23. Landlord will not be responsible for money, jewelry or other personal property lost or stolen in or from the Premises or public areas regardless of whether such loss or theft occurs when the area is locked against entry or not.

24. Subject to the terms of the Lease, Landlord reserves the right to close or limit access to the Building after Normal Business Hours, during emergencies, and at such other times as Landlord may deem appropriate in connection with the making of repairs to, operation or management of the Building.

25. Landlord reserves the right to rescind any of these rules, to grant variances with respect to these rules for any tenant as Landlord may deem appropriate with no requirement that

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. E-3

Landlord grant such a variance for Tenant or any other tenant so long as such variance does not interfere with Tenant’s quiet enjoyment of the Premises, and to make such other and further reasonable non-discriminatory rules and regulations as in its reasonable judgment shall from time to time be needed for the operation of the Building, which rules shall be binding upon all tenants upon delivery to such tenants of notice thereof in writing; provided such rules and regulations do not conflict with the terms and provisions of this Lease.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. E-4

EXHIBIT F

CONFIRMATION OF COMMENCEMENT DATE

            , 200_

Re: Lease Agreement (the “Lease”) dated             , 200__, between             , a             (“Landlord”), and             , a              (“Tenant”). Capitalized terms used herein but not defined shall be given the meanings assigned to them in the Lease.

Ladies and Gentlemen:

Landlord and Tenant agree as follows:

1. Condition of Premises. Tenant has accepted possession of the Premises pursuant to the Lease. Any improvements required by the terms of the Lease to be made by Landlord have been completed to the full and complete satisfaction of Tenant in all respects except for the punchlist items described on Exhibit A hereto (the “Punchlist Items”), and except for such Punchlist Items, Landlord has fulfilled all of its duties under the Lease with respect to such initial tenant improvements. Furthermore, Tenant acknowledges that the Premises are suitable for the Permitted Use.

2. Commencement Date. The Initial Premises Commencement Date of the Lease is             , 200__. The Must Take Space Commencement Date of the Lease is             , 20__.

3. Expiration Date. The Term is scheduled to expire on the last day of the                     full calendar month of the Term, which date is             , 200    .

4. Contact Person. Tenant’s contact person in the Premises is:

Attention:

Telephone:

Telecopy:

5. Ratification. Tenant hereby ratifies and confirms its obligations under the Lease, and represents and warrants to Landlord that it has no defenses thereto. Additionally, Tenant further confirms and ratifies that, as of the date hereof, (a) the Lease is and remains in good standing and in full force and effect, and (b) Tenant has no claims, counterclaims, set-offs or

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. F-1

defenses against Landlord arising out of the Lease or in any way relating thereto or arising out of any other transaction between Landlord and Tenant.

6. Binding Effect; Governing Law. Except as modified hereby, the Lease shall remain in full effect and this letter shall be binding upon Landlord and Tenant and their respective successors and assigns. If any inconsistency exists or arises between the terms of this letter and the terms of the Lease, the terms of this letter shall prevail. This letter shall be governed by the laws of the state in which the Premises are located.

Please indicate your agreement to the above matters by signing this letter in the space indicated below and returning an executed original to us.

Sincerely,

_______________________, a ______________

By:

Name:

Title:

Agreed and accepted:

[TENANT’S SIGNATURE BLOCK],

a ______________________________________

By:

Name:

Title:

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. F-2

EXHIBIT A

PUNCHLIST ITEMS

Please insert any punchlist items that remain to be performed by Landlord. If no items are listed below by Tenant, none shall be deemed to exist.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. F-3

EXHIBIT G

FORM OF TENANT ESTOPPEL CERTIFICATE

The undersigned is the Tenant under the Lease (defined below) between             , a             , as Landlord, and the undersigned as Tenant, for the Premises on the              floor(s) of the building located at             ,             and commonly known as             , and hereby certifies as follows:

1. The Lease consists of the original Lease Agreement dated as of             , 200            between Tenant and Landlord [‘s predecessor-in-interest] and the following amendments or modifications thereto (if none, please state “none”):                                                

                                                         .

The documents listed above are herein collectively referred to as the “Lease” and represent the entire agreement between the parties with respect to the Premises. All capitalized terms used herein but not defined shall be given the meaning assigned to them in the Lease.

2. The Lease is in full force and effect and has not been modified, supplemented or amended in any way except as provided in Section 1 above.

3. The Term commenced on                     , 200__, and the Term expires, excluding any renewal options, on                     , 200__, and Tenant has no option to purchase all or any part of the Premises or the Building or, except as expressly set forth in the Lease, any option to terminate or cancel the Lease.

4. Tenant currently occupies the Premises described in the Lease and Tenant has not transferred, assigned, or sublet any portion of the Premises nor entered into any license or concession agreements with respect thereto except as follows (if none, please state “none”):                                                                                                                                                                                                                                                       

                                                         .

5. All monthly installments of Base Rent, all Additional Rent and all monthly installments of estimated Additional Rent have been paid when due through             . The current monthly installment of Base Rent is $            .

6. All conditions of the Lease to be performed by Landlord necessary to the enforceability of the Lease have been satisfied and to Tenant’s actual knowledge Landlord is not in default thereunder. In addition, Tenant has not delivered any notice to Landlord regarding a default by Landlord thereunder.

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7. As of the date hereof, there are no existing defenses or offsets, or, to the undersigned’s knowledge, claims or any basis for a claim, that the undersigned has against Landlord and no event has occurred and no condition exists, which, with the giving of notice or the passage of time, or both, will constitute a default under the Lease.

8. No rental has been paid more than 30 days in advance and no security deposit has been delivered to Landlord except as provided in the Lease.

9. If Tenant is a corporation, partnership or other business entity, each individual executing this Estoppel Certificate on behalf of Tenant hereby represents and warrants that Tenant is a duly formed and existing entity qualified to do business in the state in which the Premises are located and that Tenant has full right and authority to execute and deliver this Estoppel Certificate and that each person signing on behalf of Tenant is authorized to do so.

10. There are no actions pending against Tenant under any bankruptcy or similar laws of the United States or any state.

11. Other than as approved by Landlord in writing and used in compliance with all applicable laws and incidental to the ordinary course of the use of the Premises, the undersigned has not used or stored any hazardous substances in the Premises.

12. All tenant improvement work to be performed by Landlord under the Lease has been completed in accordance with the Lease and has been accepted by the undersigned and all reimbursements and allowances due to the undersigned under the Lease in connection with any tenant improvement work have been paid in full.

Tenant acknowledges that this Estoppel Certificate may be delivered to Landlord, Landlord’s Mortgagee or to a prospective mortgagee or prospective purchaser, and their respective successors and assigns, and acknowledges that Landlord, Landlord’s Mortgagee and/or such prospective mortgagee or prospective purchaser will be relying upon the statements contained herein in disbursing loan advances or making a new loan or acquiring the property of which the Premises are a part and that receipt by it of this certificate is a condition of disbursing loan advances or making such loan or acquiring such property.

Executed as of             , 200_.

TENANT: _________________________________

a ________________________________________

By:

Name:

Title:

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. G-2

EXHIBIT H

PARKING AGREEMENT

1. Parking Spaces. During the Lease Term, Tenant shall be entitled to use the parking spaces designated in Section 7(c) of the Lease.

2. Rules and Regulations. Use of the parking facilities shall be subject to such commercially reasonable non-discriminatory rules and regulations as may be established from time to time by Landlord. The following rules and regulations are in effect until notice is given to Tenant of any change:

(a) Cars must be parked entirely within the painted stall lines.

(b) All directional signs and arrows must be observed.

(c) The speed limit shall be five (5) miles per hour.

(d) Parking is prohibited in areas not striped for parking, aisles, areas where “no parking” signs are posted, in cross hatched areas and in such other areas as may be reasonably designated by Landlord or Landlord’s agent(s) including, but not limited to, areas designated as “Visitor Parking” or reserved spaces not rented under this Agreement.

(e) Every parker is required to park and lock his or her own car. All responsibility for damage to cars or persons or loss of personal possessions is assumed by the parker.

(f) Spaces which are designated for small, intermediate or full-sized cars shall be so used. No intermediate or full-sized cars shall be parked in parking spaces limited to compact cars.

3. No Liability of Landlord. Tenant acknowledges that it will be entitled to the use of a parking space or spaces only, and that Landlord shall have no liability for any damage or loss to Tenant’s motor vehicle, or any vehicle parked in any parking space herein rented pursuant to authorization from Tenant or to any contents in any such vehicle, caused by the elements, third parties, traffic accident or collision in the parking facility, or any other agency or cause. Landlord shall not be responsible for security of the parking facilities or for policing or directing traffic other than normal and usual signs and traffic lane markings. Under no circumstances shall Landlord be construed to be a bailee of any vehicle or contents thereof.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. H-1

EXHIBIT I

RENEWAL OPTION

Subject to the provisions of this Exhibit I, Tenant may renew this Lease (“Renewal Option”) for one (1) additional period of five (5) years, by delivering written notice of the exercise thereof to Landlord not earlier than twelve (12) months nor later than nine (9) months before the expiration of the Term. The Base Rent payable for each month during such extended Term shall be the prevailing rental rate at the commencement of such extended Term, determined as provided for below (the “Prevailing Rental Rate”). If Tenant timely renews the Lease, then, on or before the commencement date of the extended Term, Landlord and Tenant shall execute an amendment to this Lease extending the Term on the same terms provided in this Lease, except as follows:

(a) Base Rent shall be adjusted to the Prevailing Rental Rate;

(b) Tenant shall have no further renewal option unless expressly granted by Landlord in writing; and

(c) Landlord shall lease to Tenant the Premises in their then-current condition, and Landlord shall not provide to Tenant any allowances (e.g., moving allowance, construction allowance, and the like) or other tenant inducements, unless expressly granted by Landlord in writing.

Tenant’s rights under this Exhibit shall terminate if: (1) this Lease or Tenant’s right to possession of the Premises is terminated; (2) Tenant assigns any of its interest in this Lease to any party other than a Permitted Transferee; or (3) Tenant fails to timely exercise its option under this Exhibit, time being of the essence with respect to Tenant’s exercise thereof; or (4) Landlord reasonably believes that Tenant will not be able to perform under the Lease because of Tenant’s financial condition; or (5) there are two (2) or more monetary Events of Default during the final twelve (12) months before the expiration of the Term (in which event any exercised option shall be null and void).

As used in this Lease, the term “Prevailing Rental Rate” shall mean the then prevailing monthly rental rate per square foot of space comparable in use, area and location to the space for which the Prevailing Rental Rate is being determined and being leased for a duration comparable for which such space is leased for periods commencing on or about the commencement of the term of such space. The Prevailing Rental Rate shall be determined by taking into consideration comparable fact situations during the prior 12-month period or any more recent relevant period in comparable buildings in Centreport, submarket of Dallas/Ft. Worth, Texas. Landlord shall notify Tenant of Landlord’s determination of the Prevailing Rental Rate within fifteen (15) days after receipt of Tenant’s Renewal Option election notice. If Tenant agrees with Landlord’s determination of the Prevailing Rental Rate, then, such determination by Landlord shall constitute the Prevailing Rental Rate. If Tenant disagrees with Landlord’s determination of the Prevailing Rental Rate, Tenant shall notify Landlord of Tenant’s disagreement within fifteen (15) days after Tenant’s receipt of Landlord’s notice of its determination of the Prevailing Rental Rate. If Tenant so notifies Landlord, that Landlord’s determination of the Prevailing Rental Rate

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. I-1

is not acceptable to Tenant, Landlord and Tenant shall, during the fifteen (15) day period after Tenant’s notice, attempt to agree on the Prevailing Rental Rate. If Landlord and Tenant are unable to agree, then the Prevailing Rental Rate shall be determined as provided below: Landlord and Tenant shall each select an expert (as hereinafter described) within fifteen (15) days after the expiration of the aforementioned fifteen (15) day period. Such expert shall be independent and experienced in leasing similar-class space in the Centreport submarket of Dallas/Ft. Worth, Texas, and shall be instructed to form their opinions based on the criteria specified above. Both experts so selected shall within ten (10) days after their selection, select a third (3rd) expert who shall also meet the same qualifications. The three (3) experts so selected shall within fifteen (15) days after the selection of the third (3rd) expert each independently formulate their opinion of the Prevailing Rental Rate for the space and period in question. The three (3) opinions shall then be averaged and such average shall be the Prevailing Rental Rate; provided, however, that if any experts opinion is more than five percent (5%) greater or less than the middle opinion, then such greater or lesser opinion (or both if each is more a variance from the middle opinion than five percent (5%)), shall be disregarded and the remaining number of opinions shall be added together with the sum thereof divided by the remaining number of opinions and the quotient thereof shall be the Prevailing Rental Rate. The determination of the Prevailing Rental Rate by the three (3) experts (or such lesser number of experts as may be applicable in accordance with the above provisions) shall be binding upon Landlord and Tenant. Landlord and Tenant shall each pay for the services of its expert and shall share equally in the cost of the third expert.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. I-2

EXHIBIT J

RIGHT OF FIRST REFUSAL

Landlord shall provide, and hereby grants, to Tenant, a right of first refusal with respect to the approximately 15,000 rentable square foot space located at the southernmost section of the building located at 14760 Trinity Blvd. (the “Adjacent Building”) as identified on Exhibit J-1 hereof (subject to the substitution right set forth below, the “Refusal Space”), on the following terms and conditions, so long as there does not exist an Event of Default hereunder at the time Landlord delivers Landlord’s Notice of Terms (as defined below):

(i) At such time as Landlord receives a third party proposal or offer for leasing the Refusal Space which Landlord is willing to accept, Landlord shall provide Tenant a written notice (“Landlord’s Notice of Terms”) describing the financial terms and conditions of the proposed lease between Landlord and the prospective tenant. Landlord shall have the right to have multiple bona fide proposals or offers outstanding at any one time, so long as Landlord delivers a Landlord’s Notice of Terms with respect to each such bona fide proposal or offer. If Landlord receives a proposal or offer which includes space in excess of the Refusal Space, then Landlord shall have the right upon written notice to Tenant to substitute for the Refusal Space identified on Exhibit J-1 other space within the building located at 14760 Trinity Blvd. containing 15,000 rentable square feet of contiguous space, provided such alternate Refusal Space is available for lease at the time of such substitution. In the event no such alternative space is available, Tenant shall have the right to lease only the Refusal Space itself as opposed to the full space subject to the third party proposal or offer.

(ii) The deadline for Tenant to exercise its right to lease the Refusal Space (the “Exercise Deadline”) shall be five (5) Business Days from the receipt of Landlord’s Notice of Terms. If Tenant fails to timely provide written notice of exercise to Landlord prior to the Exercise Deadline (time being of the essence in giving such notice), or provides notice that it does not wish to lease the Refusal Space, then Landlord shall have the right to lease the Refusal Space to the subject prospective bona fide tenant or an affiliate of such prospective bona fide tenant at any time within one hundred eighty (180) days following the date of Landlord’s Notice of Terms on substantially the same terms and conditions contained in Landlord’s Notice of Terms.

(iii) If Landlord does not enter into a new lease for the Refusal Space with such prospective bona fide tenant or an affiliate of such prospective bona fide tenant within such one hundred eighty (180) day period or if the terms are modified so that they are not substantially the same terms and conditions contained in Landlord’s Notice of Terms, Landlord must again provide Tenant a Landlord’s Notice of Terms and Tenant shall have the right set forth hereinabove prior to Landlord being entitled to lease all or a portion of such Refusal Space. For purposes of this subsection (iii), any lease entered into with the subject prospective bona fide tenant or an affiliate of such prospective bona fide tenant shall be deemed to contain substantially the same terms and conditions as those contained in Landlord’s Notice of Terms if the Effective Rental Rate in such lease entered into with a third party is not less than 90% of the Effective Rental Rate per

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. J-1

Landlord’s Notice of Terms. As used herein, the term “Effective Rental Rate” shall mean the dollar amount per square foot computed as follows: (i) total Base Rent over the term described in the proposal or offer, (ii) less the amount of any tenant improvement allowance or the cost of any tenant improvements to be installed by Landlord, (iii) less the amount of any free rent, moving expenses, lease assumption payments and other concessions to be provided by Landlord, (iv) divided by the number of years in the term, and (v) further divided by the number of square feet in the premises in question.

(iv) If Tenant timely exercises this right of first refusal, Landlord and Tenant shall enter into an amendment to this Lease within twenty (20) days after Tenant exercises its right with respect to the Refusal Space, containing terms and conditions identical to those specified in Landlord’s Notice of Terms except as follows:

(a) If Landlord’s Notice of Terms provides for a Refusal Space Term of more than seven (7) years, then Tenant may elect to either: (i) lease the Refusal Space for the number of years set forth in Landlord’s Notice of Terms; or (ii) lease the Refusal Space for a term of not less than seven (7) years. If the Refusal Space Term set forth in Landlord’s Notice of Terms (as may be modified in accordance with the foregoing sentence) is longer than the remaining Term on the existing Premises, then Tenant shall have the right to either: (i) extend the Term of the Lease for the existing Premises to be coterminous with the Term of the Refusal Space; or (ii) not extend the Term of the Lease for the existing Premises such that there are different Lease termination dates for the existing Premises and the Refusal Space. If the Term of the Refusal Space set forth in Landlord’s Notice of Terms (as may be modified as set forth above) is shorter than the remaining Term on the existing Premises, then Tenant shall have the right to either: (i) take the Refusal Space for the Term set forth in Landlord’s Notice of Terms; or (ii) extend the Term of the Refusal Space to be coterminous with the Term of the Lease for the existing Premises. If Tenant extends the term of the Lease for the existing Premises in accordance with any of the foregoing provisions, the Base Rent for the existing Premises for such extended term shall be the Prevailing Rental Rate determined in accordance with the procedures as set forth in Exhibit I.

(b) If the Term of the Lease with respect to the Refusal Space is less than the term set forth in Landlord’s Notice of Terms, then any tenant improvement allowance set forth in Landlord’s Notice of Terms shall be reduced on a pro rata basis (for example, if the term set forth in Landlord’s Notice of Terms is ten (10) years and the Term of the Lease with respect to the Refusal Space is five (5) years, and the improvement allowance set forth in Landlord’s Notice of Terms is $10.00/rsf, then the improvement allowance for the Refusal Space shall be $5.00/rsf).

(c) The rentable square footage of the Premises shall be revised to include the rentable square footage contained in the Refusal Space, and Additional Rent, Taxes, Insurance, Tenant’s Proportionate Share, and any other matters affected by the rentable square footage of the Premises shall be adjusted accordingly.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. J-2

Tenant’s rights under this Exhibit shall terminate if: (a) this Lease or Tenant’s right to possession of the Premises is terminated; (b) Tenant assigns any of its interest in this Lease to a party other than a Permitted Transferee or sublets any portion of the Premises in excess of 5,000 square feet to a party other than a Permitted Transferee; or (c) fee title to 14760 Trinity Blvd. has been transferred and is no longer held by Landlord or its affiliate (however, as a matter of clarification, it is acknowledged and agreed that under circumstances where the title to the Building and the title to 14760 Trinity Blvd. are transferred to the same or affiliated parties, the Tenant’s rights under this Exhibit shall continue to remain an effect).

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. J-3

EXHIBIT J-1

REFUSAL SPACE

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. J-1-1

EXHIBIT K

TERMINATION OPTION

Tenant shall have the option to terminate this Lease effective as of the last day of the ninetieth (90th) month of the Lease Term (the “Termination Date”), provided Tenant gives written notice thereof to Landlord not less than twelve (12) months prior to the Termination Date (the “Termination Notice”) and provided Tenant is not in default under the Lease at the time of the giving of such notice. Additionally, Tenant’s right to terminate hereunder is conditioned upon the payment in full by Tenant, within thirty (30) days of the date Tenant delivers notice to Landlord that it is exercising its termination right hereunder, of the unamortized cost of the Construction Allowance and all leasing commissions paid in connection with this Lease (using an interest rate of 9% per annum and an amortization period of one hundred twenty-six (126) months) (collectively, the “Termination Payment”). Landlord shall advise Tenant of Landlord’s calculation of the amount of the subject Termination Payment within ten (10) days following its receipt of the subject Termination Notice. After Landlord’s receipt of the Termination Payment, and so long as Tenant has surrendered the Premises in the condition required under this Lease, neither party shall have any rights, liabilities or obligations under this Lease for the period accruing after the Termination Date, except those which, by the provisions of this Lease, expressly survive the termination of this Lease. If Tenant fails to timely give the Termination Notice or to timely pay the Termination Payment and fails to pay all rent accruing from the time of notification of Termination through the ninetieth (90th) month as and when due, time being of the essence in connection with such notice and payment, then the termination right under this Exhibit K shall be null and void.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. K-1

EXHIBIT L

ROOFTOP RIGHTS

During the Term of this Lease, Tenant shall have the right to install, maintain and operate a microwave, satellite, or other communication antenna (collectively, the “Equipment”) on the roof of the Building at no additional rent to Tenant, subject to the following terms and conditions:

a. Tenant shall provide Landlord such information as Landlord shall reasonably request regarding the Equipment, including plans and specifications of the Equipment and the proposed installation and placement of the Equipment. The Equipment and the proposed installation and placement shall be subject to Landlord’s approval, not to be unreasonably withheld, and in no event shall the Equipment or the installation thereof require any structural reinforcement of the Building or the roof, interfere with Building systems, or interfere with other antennas or communications equipment or other equipment or structures now located on the roof of the Building.

b. If Landlord approves the information set forth in (a) above, Landlord shall provide Tenant with written notice of its consent to the installation. If Landlord disapproves of any of the information set forth in (a) above, it shall describe with particularity those matters requiring adjustment. In the event of such disapproval, Tenant shall resubmit the information set forth in (a) above which has been modified to satisfy Landlord’s reasonable objections.

c. The Equipment shall be installed by a contractor approved in advance by Landlord, such approval not to be unreasonably withheld, which contractor will obtain such commercially reasonable insurance as may be required by Landlord. Failure of the contractor to obtain and maintain such insurance shall be a default under this Lease. Landlord shall have the right to inspect the installation and any maintenance of the Equipment.

d. If the installation of the Equipment damages the roof or any other portion of the Building in any manner, Tenant shall be responsible for repairing such damage at its cost and expense. Tenant hereby indemnifies, defends and holds Landlord harmless from any loss, damage, liability or cause of action resulting from Tenant’s installation, maintenance and operation of the Equipment.

e. The installation, maintenance and operation of the Equipment shall be pursuant to all of the terms and conditions of this Lease, as amended hereby. Tenant shall obtain and maintain any additional insurance that Landlord may reasonably require with respect to the installation and operation of the Equipment and furnish Landlord with copies of such insurance policies.

f. Any additional electrical usage required by the installation, maintenance or operation of the Equipment shall be paid by Tenant on demand. Landlord shall have the right at Tenant’s expense to install a separate meter to measure such electrical usage. Landlord

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. L-1

shall have the right to cause Tenant to relocate the Equipment if required by applicable law. Landlord shall have the right to perform maintenance and repairs on the roof and shall use reasonable efforts to avoid disrupting Tenant’s operation of the Equipment. In the event Landlord causes damage to the Equipment as a result of its performing maintenance and/or repairs on the roof, Landlord shall promptly cause the Equipment to be repaired at its expense.

g. Tenant shall be responsible for compliance of the Equipment with all applicable laws and ordinances, including regulations of the Federal Communication Commission, zoning laws, rerecorded restrictions affecting the Building and Building insurance requirements. Tenant acknowledges that Landlord has made no representations or warranties to Tenant that the Equipment is permitted under applicable zoning ordinances. Tenant shall furnish evidence to Landlord of the compliance of the Equipment with the applicable zoning ordinances prior to and following installation. Landlord shall cooperate with Tenant in obtaining all necessary permits to operate the Equipment, at no cost to Landlord.

h. At the expiration or earlier termination of this Lease, Tenant shall remove the Equipment at its expense and repair the roof in a manner reasonably satisfactory to Landlord. If at any other time Tenant desires to remove the Equipment from the roof, Tenant shall hire a contractor approved in advance in writing by Landlord to remove the Equipment, such approval not to be unreasonably withheld. Tenant shall be responsible for repairing the roof and for all damages that may occur to the Building or property of other tenants due to such removal, at its own cost and expense, and hereby indemnifies Landlord for the same.

i. Tenant shall have access to the roof twenty-four (24) hours a day, subject to such reasonable security procedures as may be required by Landlord. Use of the roof shall be at Tenant’s sole risk, and Landlord shall not be responsible for injury to Tenant, its employees, agents or contractors in connection with such usage.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. L-2

EXHIBIT M

FORM OF LETTER OF CREDIT

Irrevocable Standby Letter of Credit No.             

Place and Date of Issue:	Date and Place of Expiry:
[city, state],__________, 20___	_________, 20___ in [city, state]
Applicant:	Advising Bank:
	Not Applicable
_________________________
_________________________
_________________________
Beneficiary:	Amounts: USD ______________________________________
[insert landlord information]	(______________ Thousand and no/100)
_________________________
_________________________
_________________________

Gentlemen:

We hereby establish our Irrevocable Letter of Credit in your favor available by Beneficiary’s sight drafts drawn on                                       accompanied by the original of this Letter of Credit and the following document:

Written statement executed by any officer of the named Beneficiary, that (i) an Event of Default by Tenant exists under that certain                      Lease between Tenant and                     , dated             , 20         (as amended to date, the “Lease”), and (ii) such default exists beyond any applicable cure period provided in the Lease for such default, if any.

Special Conditions:

Draft must be marked: “Drawn under                                                    Letter of Credit No.                     .”

We hereby engage with you that all drafts drawn under and in compliance with all the terms and conditions of this Letter of Credit will be duly honored if drawn and presented for payment between the hours of 8:00 am and 4:00 pm Monday through Friday on a day when                                                                                             is open for business at [address, city, state] on or before the expiration of this Letter of Credit.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. M-1

This Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (1993 Revisions), International Chamber of Commerce Publication 500, as the same may be revised from time to time.

(Name of Bank and signature of officer)

OFFICE LEASE AGREEMENT

CentrePort/Radiant Systems, Inc. M-2

DAL:566415.8

EXHIBIT N

JANITORIAL SPECIFICATIONS

A.     LOBBY
Empty all waste receptacles	Daily
Empty and damp wipe ashtrays; clean cigarette urns, smooth sand and replace as necessary	Daily
Dust all horizontal surfaces	Daily
Dust all furniture, fixtures, equipment and accessories	Daily
Clean and polish all drinking fountains	Daily
Dust and wipe all telephones including ear and mouth piece	Daily
Vacuum walk-off mats	Daily
Fully vacuum all carpets from wall to wall	Daily
Dust mop all hard surface floors with treated dust mop	Daily
Dust all low and high reach areas	Weekly
Spot clean all horizontal and vertical surfaces removing fingerprints, smudges and stains	Weekly
Spot clean carpeting	Weekly
Clean and oil all wood doors, on both sides, and wipe away excess oil	Monthly
B.     TENANT AREAS
Vacuum carpeted floors	Daily
Spot clean carpet	Daily
Empty all waste receptacles and remove trash to designated area	Daily
Dust and wipe all telephones including ear and mouth piece	Daily
Dust and spot clean all furniture, fixtures, equipment and accessories	Daily
Spot clean all horizontal and vertical surfaces removing fingerprints, smudges and stains	Daily
Spot clean all partition glass	Daily
Dust high and low areas (e.g. pictures, clocks, partition tops, etc.)	Weekly
Damp wipe furniture and lint brush fabric furniture	Quarterly

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. N-1

Dust all venetian blinds	Quarterly
Clean and oil all wood doors, on both sides, and wipe away excess oil	Quarterly
C.     TENANT AREA TILE FLOORS
Dust mop	Daily
Damp mop entire area	Daily
Spray buff floors	Weekly
Machine scrub and apply two coats of floor finish	.Quarterly
Strip and refinish floors	Annually
D.     EXECUTIVE OFFICE AREAS
Vacuum carpeted floors wall-to-wall, spot clean and edge. All plush carpet to be pattern vacuumed	Daily
Empty all waste receptacles and remove trash to designated area	Daily
Dust and spot clean all furniture, fixtures, equipment and accessories	Daily
Dust high and low areas (e.g., pictures, clocks, partition tops, etc.)	Daily
Spot clean all horizontal and vertical surfaces removing fingerprints, smudges and stains	Daily
Spot clean all partition glass	Daily
Damp wipe all non-wood furniture and lint brush fabric furniture	Weekly
Polish all wood furniture and conference tables using approved polish	Weekly
Dust and wipe all telephones including ear and mouth piece	Daily
Dust all Venetian blinds	Monthly
Clean and oil all wood doors, on both sides, and wipe away excess oil	Monthly
E.     EXECUTIVE AREA TILE FLOORS
Dust mop	Daily
Damp mop entire area	Daily
Spray buff floors	Weekly
Machine scrub and apply two coats of floor finish	Monthly
Strip and refinish floors	Annually

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. N-2

F.     RESTROOMS
Refill all dispensers, empty trash, clean and sanitize all restroom fixtures, wipe all counters, clean mirrors, wipe chrome spot wipe partitions, sweep and damp mop floors using a germicidal cleaner	Daily
Wash all restroom partitions on both sides	Weekly
Machine scrub all restroom floors using germicidal detergent	Monthly
Dust and clean all return air vents	Monthly
Hard Floors-
-Dust and spot mop	Daily
-Spray Buff	Weekly
-Machine scrub & apply two coats of wax	Monthly
-Strip & Refinish	Quarterly
Wash walls	Quarterly
G.     ELEVATOR CARS (IF APPLICABLE)	Quarterly
Clean and polish elevator bright work	Daily
Detail clean threshold plates removing all visible so 1	Daily
Hard Floors-
-Dust and spot mop	Daily
-Spray Buff	Weekly
-Machine scrub & apply two coats of wax	Monthly
-Strip & Refinish	Quarterly
Completely clean and vacuum carpeted elevator	Daily
Dust ceiling light lenses	Daily
Hot water extract carpeting	Quarterly

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. N-3

H.     BREAK/LUNCH ROOMS/ COFFEE STATIONS
Empty all waste receptacles and remove trash to designated area	Daily
Empty and damp wipe ashtrays	Daily
Clean and wipe sinks and counters	Daily
Vacuum carpeted floors, spot clean and edge	Daily
Dust mop all hard surface floors with treated dust mop	Daily
Damp mop entire area	Daily
Spray buff hard surface floors	Weekly
Dust high and low areas (pictures, clocks, partition tops etc.)	Weekly
Damp wipe all chairs	Weekly
Machine scrub hard surface floors and apply one coat of finish, allow to dry. then buff	Monthly
Dust all venetian blinds	Quarterly
Strip hard surface floor and recoat with three coats of floor finish	Quarterly
I.      COMPUTER ROOMS
Empty all waste receptacles and remove trash to designated area	Daily
Dust mop all hard surface floors with treated dust mop	Daily
Dust high and low areas (e.g., pictures, clocks, partition tops, etc.)	Weekly
Remove all marks from raised floor tiles	Monthly
J.      STAIRWELLS (IF APPLICABLE)
Pick up all obvious litter, including cigarette butts	Daily
Dust mop stairs, dust railings, ledges and spot clear	Weekly
Damp mop stairs, dust railings, ledges and spot clear	Monthly
Dust all pipes, lights, and signage	Quarterly

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. N-4

K.     ENTRANCES
Empty and damp wipe ashtrays: clean cigarette urns, smooth sand	Daily
Dust all horizontal surfaces	Daily
Dust all furniture fixtures equipment and accessories	. Daily
Vacuum walk-off mats	Daily
Dust mop all hard surface floors with treated dust mop	Daily
Spot mop entire area	Daily
Clean and polish bright metal work	Daily
Clean both sides of glass doors	Daily
Clean revolving door glass and side glass, wipe metal framing clean	Daily
Detail clean threshold plates removing all visible soil	Weekly
L.     EXTERIOR ENTRANCES AND WALKS
Police area and remove all litter, cigarette butts, etc	Daily
Sweep walkways, curbs, and plaza	Weekly
M.    JANITOR CLOSETS
Clean and arrange all equipment in janitor closet each night; empty vacuum cleaner bags, check belts; sweep and spot mop floor	Daily
N.     NOTES ON SPECIFICATIONS
•      “Daily” tasks are those performed 5 days per week.
•      “Horizontal surfaces” are those above 2 ft. and below 6 ft. of the floor.
•      Only washable walls are to be spot cleaned.
•      MSDS sheets will be kept on site and available for review upon request.
•      The cleaning supervisor will report any tenants or others who may have interfered with the crew’s ability to perform the above tasks by working late.
•      Carpet extraction, and special floor work done outside of the agreed schedule, is done at an additional charge.
•      Quality control inspections are to be performed on an agreed upon schedule, but not less than monthly.
•      Any reported deficiency in the performance of these specifications will be corrected within 24 hours.
•      A weekly Janitorial inspection must be conducted with the Property Manager.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. N-5

EXHIBIT O

UPS/GENERATOR

During the term of this Lease, Tenant shall have the right to install, maintain and operate a UPS System and back-up generator (the “Generator”) in the Premises in a location mutually agreeable to Landlord and Tenant at no additional rent, subject to the following terms and conditions:

a) Tenant shall provide Landlord such information as Landlord shall request regarding the Generator, including plans and specifications of the Generator and the proposed installation and placement of the Generator. The Generator and the proposed installation and placement shall be subject to Landlord’s approval, not to be unreasonably withheld. Landlord reserves the right to require secondary containment or other Hazardous Materials protections in connection with the installation and use of the Generator.

b) Unless installed as part of the Initial Work under Exhibit D, the Generator shall be installed by a contractor approved in advance by Landlord, such approval not to be unreasonably withheld, which contractor will obtain such insurance as may be reasonably required by Landlord. Failure of the contractor to obtain and maintain such insurance shall be a default under this Lease. Landlord shall have the right to inspect the installation and any maintenance of the Generator. The installation, maintenance and use of the Generator shall be subject to Section 25 of the Lease, including without limitation the indemnification provisions of the Lease. Tenant’s insurance policies shall be endorsed as necessary to include the use and operation of the Generator, and Tenant shall reimburse Landlord for any additional insurance coverage required by its insurer or lender in connection with such Generator.

c) Any additional utility usage required by the installation, maintenance or operation of the Generator shall be paid by Tenant. Landlord shall have the right to cause Tenant to relocate the Generator in the event that in Landlord’s reasonable determination the operation of such Generator interferes with the Building, if necessary in connection with any repairs, or if required by applicable law. Landlord shall reimburse Tenant for the reasonable out-of-pocket costs incurred in connection with such relocation. Landlord shall have the right to perform maintenance and repairs on the area upon which the Generator is located and shall use reasonable efforts to avoid disrupting Tenant’s operation of the Generator, provided that Landlord shall not be responsible for the cost of any repairs to the Generator.

d) Tenant shall be responsible for compliance of the Generator with all applicable laws and ordinances, including regulations of the Environmental Protection Agency, zoning laws, and Building insurance requirements. Tenant acknowledges that Landlord has made no representations or warranties to Tenant that the Generator is permitted under applicable zoning ordinances.

e) At the expiration or earlier termination of this Lease, unless Landlord elects to retain the Generator, Tenant shall remove the Generator at its expense and repair the area upon

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. 0-1

which it was located in a manner reasonably satisfactory to Landlord. If Tenant fails to timely remove same, Landlord may do so at Tenant’s cost. At any time during the Term of the Lease or at expiration of the Lease, provided Landlord has a reasonable suspicion that Hazardous Materials contamination may have been caused by the Generator, Landlord shall have the right to have an environmental report prepared at Tenant’s cost to determine any Hazardous Materials contamination that may have been caused by such Generator.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. 0-2

EXHIBIT P

RESTRICTION ON BUILDING

Landlord acknowledges and agrees that throughout the Term, as may be extended under the terms of this Lease, Landlord shall not lease space in the Adjacent Building (as defined in Exhibit J) to the following companies: Micros, Squirrel, or Positouch.

The restriction described above shall apply only as long as all of the following conditions exist: (i) Landlord owns fee title to the Adjacent Building; and (ii) Tenant is occupying the Premises for purposes of operating its business.

OFFICE LEASE AGREEMENT CentrePort/Radiant Systems, Inc. P-1

EX-10.10

Exhibit 10.10

RADIANT LEASE AGREEMENT FOR 1727 KIRBY PARKWAY

ARTICLE 1.00 BASIC LEASE TERMS

1.01 Parties. This lease agreement (“Lease”) is entered into this 3^rd day of January, 2006, by and between the following Lessor and Lessee:

Jeff Goldstein Investment Partnership, a Tennessee general partnership (“Lessor”)

Radiant Systems, Inc., a Georgia corporation (“Lessee”)

1.02 Leased Premises. Lessor is the owner in fee simple of approximately 1.68 acres in Shelby County, Tennessee, which real property is more particularly described on Exhibit “A” attached hereto and incorporated herein by this reference (the “Land”), and is commonly known as 1727 Kirby Parkway, Memphis, Tennessee 38138. The Land is improved with a two story office building (the “Building”) containing approximately 28,792 rentable square feet, together with related parking, driveways, landscaping and similar improvements.

In consideration of the rents, terms, provisions and covenants of this Lease, Lessor hereby leases, lets and demises to Lessee that portion of the Building containing approximately 22,678 rentable square feet and being more particularly outlined on Exhibit “B” attached hereto and incorporated herein by this reference (“leased premises”), together with the non-exclusive right to use, in common with Lessor and the other lessees of the Building, free of charge, areas of the project (as hereinafter defined) and/or Building intended for the common use of all lessees of the Building, including, but not limited to, the parking areas, driveways, landscaped areas, and approximately 629 square feet on the first floor of the Building containing hallways and restrooms (the “common areas”), as the common areas may exist from time to time. Lessor represents and warrants to Lessee that to the best of Lessor’s actual knowledge, the aforementioned square footages are correct and have been calculated utilizing current BOMA Standards. Lessor has, on or before the date hereof, provided Lessee with a copy of said BOMA calculations. Lessor shall, upon the written request of Lessee, received within one (1) year of the commencement date, cause the rentable square footage of the leased premises to be verified by an architect selected by Lessor and approved by Lessee (which approval shall not be unreasonably withheld or delayed) in accordance with BOMA standard methods of measurement. The cost of such remeasurement shall be borne by Lessee. If such measurement results in a change in the rentable square footage of the leased premises, the base rent, additional rent, taxes, insurance, Lessee’s Proportionate Share (as hereinafter defined) and any other matters affected by the rentable square footage of the leased premises shall be adjusted accordingly. If there is a change in the rentable square footage of the leased premises, Lessee shall within fifteen (15) days after Lessor’s written request, execute and return a lease amendment confirming the necessary adjustment.

Lessee shall also have the right, subject to Lessor’s prior approval, and at no extra charge, to install satellite dishes, antennae, and other similar equipment on the roof of the Building.

1.03 Term and Option Terms. Subject to and upon the conditions set forth herein, the term of this Lease shall commence on January 3, 2006, (the “commencement date”) and shall terminate on December 31, 2010. Lessee shall have two (2) options to extend the term of the Lease for additional terms of three (3) years each provided Lessee shall give Lessor one hundred eighty (180) days notice prior to the expiration of the initial term (or first option term) of its election to exercise such option and provided further that Lessee is not in default of the Lease at the time of such exercise (beyond any applicable notice and cure period).

1.04 Base Rent. Base rent is Thirty Four Thousand Seventeen and no/100ths Dollars ($34,017.00) per month during the period January 3, 2006 until December 31, 2006, and monthly base rent shall increase by three and one-half percent (3.5%) each calendar year thereafter as follows:

            January 1, 2007 - December 31, 2007         $35,208.00 per month

            January 1, 2008 - December 31, 2008         $36,440.00 per month

Radiant Lease for 1727 Kirby Parkway Page 1 of 19

            January 1, 2009 - December 31, 2009         $37,715.00 per month

            January 1, 2010 - December 31, 2010         $39,035.00 per month

The base rent payable for each month during the extended or option term shall be the prevailing rental rate (the “Prevailing Rental Rate”) at the commencement of such extended or option term. As used in this Lease, the term “Prevailing Rental Rate” shall mean the then prevailing monthly rental rate per square foot of space comparable in use, area and location to the space for which the Prevailing Rental Rate is being determined and being leased for a duration comparable for which such space is leased for periods commencing on or about the commencement of the term of such space. The Prevailing Rental Rate shall be determined by taking into consideration comparable fact situations during the prior 12-month period or any more recent relevant period in comparable buildings in Memphis, Tennessee. Lessor shall notify Lessee of Lessor’s determination of the Prevailing Rental Rate within fifteen (15) days after receipt of Lessee’s renewal election notice. If Lessee agrees with Lessor’s determination of the Prevailing Rental Rate, then, such determination by Lessor shall constitute the Prevailing Rental Rate. If Lessee disagrees with Lessor’s determination of the Prevailing Rental Rate, Lessee shall notify Lessor of Lessee’s disagreement within fifteen (15) days after Lessee’s receipt of Lessor’s notice of its determination of the Prevailing Rental Rate. If Lessee so notifies Lessor, that Lessor’s determination of the Prevailing Rental Rate is not acceptable to Lessee, Lessor and Lessee shall, during the fifteen (15) day period after Lessee’s notice, attempt to agree on the Prevailing Rental Rate. If Lessor and Lessee are unable to agree, then the Prevailing Rental Rate shall be determined as provided below: Lessor and Lessee shall each select an expert (as hereinafter described) within fifteen (15) days after the expiration of the aforementioned fifteen (15) day period. Such expert shall be independent and experienced in leasing similar-class space in Memphis, Tennessee, and shall be instructed to form their opinions based on the criteria specified above. Both experts so selected shall within ten (10) days after their selection, select a third (3rd) expert who shall also meet the same qualifications. The three (3) experts so selected shall within fifteen (15) days after the selection of the third (3rd) expert each independently formulate their opinion of the Prevailing Rental Rate for the space and period in question. The three (3) opinions shall then be averaged and such average shall be the Prevailing Rental Rate; provided, however, that if any experts opinion is more than five percent (5%) greater or less than the middle opinion, then such greater or lesser opinion (or both if each is more a variance from the middle opinion than five percent (5%)), shall be disregarded and the remaining number of opinions shall be added together with the sum thereof divided by the remaining number of opinions and the quotient thereof shall be the Prevailing Rental Rate. The determination of the Prevailing Rental Rate by the three (3) experts (or such lesser number of experts as may be applicable in accordance with the above provisions) shall be binding upon Lessor and Lessee. Lessor and Lessee shall each pay for the services of its expert and shall share equally in the cost of the third expert.

1.05 Addresses.

Lessor’s Address:	Lessee’s Address:
1580 West Massey Rd.	3925 Brookside Parkway
Memphis, Tennessee 38120	Alpharetta, Georgia 30022
Phone:	Phone:
Fax:	Fax: (770) 360-7627
Email:	Email:

1.06 Permitted Use. General Office Use.

ARTICLE 2.00 RENT

2.01 Base Rent. Lessee agrees to pay monthly as base rent during the term of this Lease the sum of money set forth in section 1.04 of this Lease, which amount shall be payable to Lessor at the address shown above.

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One monthly installment of rent shall be due and payable on the date of execution of this Lease by Lessee for the first month’s rent and a like monthly installment shall be due and payable on or before the first day of each calendar month succeeding the commencement date during the term of this Lease; provided, if the commencement date should be a date other than the first day of a calendar month, the monthly rental set forth above shall be prorated to the end of that calendar month, and all succeeding installments of rent shall be payable on or before the first day of each succeeding calendar month during the term of this Lease. Lessee shall pay, as additional rent, all other sums due under this Lease.

2.02 Operating Expenses. The term “operating expenses” includes all reasonable and customary expenses and disbursements (subject to the limitations set forth below) that Lessor incurs during the term of this Lease in connection with the ownership, operation, and maintenance of the project, determined in accordance with sound accounting principles consistently applied, including, but not limited to, the following: (a) maintenance, repair and replacement costs; (b) electricity, fuel, water, sewer, gas and other utility charges; (c) security; (d) window washing and janitorial services; (e) trash and snow removal; (f) landscaping and pest control; (g) management fees (if any), but only to the extent such fees are comparable to fees in comparable buildings in the area; (h) wages and benefits payable to employees of Lessor or others (at the level of property manager or below) whose duties are directly connected with the operation and maintenance of the Building; (i) all services, supplies, repairs, replacements or other expenses for maintaining and operating the project, including parking and common areas; (j) all real property taxes and installments of special assessments, including dues and assessments by means of reciprocal easements, deed restrictions and/or owners’ associations which accrue against the Building of which the leased premises are a part during the term of this Lease including the commercially reasonable cost of proceedings contesting any real estate appraisal or assessment; (k) and all insurance premiums Lessor is required to pay or deems commercially reasonably necessary to pay related to the Building, including fire, casualty and extended coverage (including flood and earthquake coverage) and public liability insurance with respect to the project. The term operating expenses does not include the following: (i) repairs, restoration or other work occasioned by fire, wind, the elements or other casualty or condemnation if Lessor’s insurance proceeds or condemnation proceeds covers such loss; (ii) penalties and interest on taxes or income and franchise taxes of Lessor; (iii) interest or principal payments (or other payments) on any mortgage or other indebtedness of Lessor, or costs of refinancing such indebtedness; (iv) capital expenses related to the Building or the cost of capital improvements or additions; (v) management, accounting, legal, or brokerage fees incurred by Lessor, or other expenses related to leasing tenant space or constructing improvements for the sole benefit of an individual tenant; (vi) costs associated with conforming the Building to present and future laws, ordinances and building codes, including, but not limited to, environmental, health and safety laws; (vii) any depreciation allowance or expense; (viii) expenses for repairs or maintenance related to the project which have been reimbursed to Lessor pursuant to warranties or service contracts; (ix) expenses for repairs, alterations, and general maintenance necessitated by the negligence or willful misconduct of Lessor or any other tenant of the Building; (x) any cost or expense associated with Mr. Kummerer and/or any maintenance employee to be engaged by Lessee in accordance with section 5.05 below; and (xi) any other expense which is not a fair and reasonable direct operating expense of the Building, or under generally accepted accounting principles, consistently applied, would not be considered a normal maintenance, repair, management or operating expense of the Building.

In the event Lessor elects not to contest any re-assessment or re-appraisal of real property taxes, Lessor shall give Lessee notice of such election at least thirty (30) days prior to the last day to file such proceeding and Lessee shall have the right to file a contest to such re-appraisal or re-assessment on behalf of Lessor, at Lessee’s expense; provided, however, that in the event of any abatement of such taxes, the reasonable cost and expense of the proceedings shall be a first charge against any recovery. Lessor agrees to cooperate with Lessee in any such contest.

2.03 Additional Rent. Lessee shall pay to Lessor, as additional rent hereunder (“additional rent”), Lessee’s Proportionate Share of the amount by which the annual operating expenses for each year of the term exceeds the annual operating expenses for calendar year 2005 (the “Base Year”). The Lessee’s Proportionate Share (herein so called) shall be the percentage obtained by dividing (a) the number of rentable square feet in the Building as stated above by (b) the rentable square feet in the Building with respect to the charge being prorated at the time a respective charge was incurred. Operating expenses for

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the Base Year, for the purpose of comparisons of the Base Year with subsequent years only, shall be calculated so as to not include any cost incurred by Lessor (or Synchronics, Inc.) in connection with Louis Kummerer, the maintenance employee of Synchronics, Inc. referenced in section 5.05 below, such costs to include, but not be limited to, Mr. Kummerer’s salary, benefits and associated payroll costs.

Lessor shall make a good faith estimate of the additional rent to be due by Lessee for any calendar year or part thereof during the term. During each calendar year or partial calendar year of the term, Lessee shall pay to Lessor, in advance concurrently with each monthly installment of base rent, an amount equal to the estimated additional rent for such calendar year or part thereof divided by the number of months therein. From time to time, Lessor may estimate and re-estimate the additional rent to be due by Lessee and deliver a copy of the estimate or re-estimate to Lessee. Thereafter, the monthly installments of additional rent payable by Lessee shall be appropriately adjusted in accordance with the estimations so that, by the end of the calendar year in question, Lessee shall have paid all of the additional rent as estimated by Lessor. Any amounts paid based on such an estimate shall be subject to adjustment as herein provided when actual operating expenses are available for each calendar year.

By January 31 of each calendar year, or as soon thereafter as practicable, Lessor shall furnish to Lessee a statement of operating expenses for the previous year. If Lessee’s estimated payments of operating expenses exceed Lessee’s share of actual operating expenses, then Lessor shall promptly credit or reimburse Lessee for such excess; likewise, if Lessee’s estimated payments of operating expenses for such year are less than Lessee’s share of actual operating expenses, then Lessee shall promptly pay Lessor such deficiency, notwithstanding that the term has expired and Lessee has vacated the leased premises.

Within sixty (60) days after Lessor furnishes to Lessee the actual statement of operating expenses for the previous year, Lessee may, at its expense, during Lessor’s normal business hours, elect to audit Lessor’s books and records. Lessor shall cooperate fully with such audit. After verification, Lessor shall credit any overpayment determined by the audit report against the next rent due and owning by Lessee or, if no further rent is due, refund such overpayment directly to Lessee within thirty (30) days of determination. Likewise, Lessee shall pay Lessor any underpayment determined by the audit report within thirty (30) days of determination. The foregoing obligations shall survive the expiration or earlier termination of the Lease. If the audit proves that Lessor’s calculation of operating expenses for the calendar year under inspection was overstated by more than five percent (5%) in the aggregate, then, after verification, Lessor shall pay Lessee’s reasonable out-of-pocket audit and inspection fees for said audit within thirty (30) days after receipt of Lessee’s invoice therefor.

2.04 Late Payment Charge. Other remedies for nonpayment of rent notwithstanding, if the monthly rental payment is not received by Lessor on or before the tenth (10^th) day of the month for which the rent is due, or if any other payment due Lessor by Lessee is not received by Lessor on or before the tenth (10^th) day of the month next following the month in which Lessee was invoiced, a late payment charge of five (5%) percent of such past due amount shall become due and payable in addition to such amounts owed under this Lease, said amount shall accrue from such 10^th day through the date of payment.

2.05 Increase in Insurance Premiums. If an increase in any insurance premiums paid by Lessor for the Building is caused by Lessee’s use of the leased premises in a manner other than as set forth in section 1.06, or if Lessee vacates the leased premises and thereby causes an increase in such premiums, then Lessee shall pay as additional rent the amount of such increase to Lessor.

2.06 Security Deposit. None required.

2.07 Holding Over. In the event that Lessee does not vacate the leased premises upon the expiration or termination of this Lease, Lessee shall be a tenant at will for the holdover period and all of the terms and provisions of this Lease shall be applicable during that period, except that Lessee shall pay Lessor as base rent for the period of such holdover an amount equal to one hundred fifty percent (150%) of Lessee’s then current base rent. During such holdover period, Lessee agrees to vacate and deliver the leased premises to Lessor upon Lessee’s receipt of notice from Lessor to vacate. The rental payable during the holdover period

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shall be payable to Lessor on demand. No holding over by Lessee, whether with or without the consent of Lessor, shall operate to extend the term of this Lease.

ARTICLE 3.00 OCCUPANCY AND USE

3.01 Use. Lessee warrants and represents to Lessor that the leased premises shall be used and occupied by Lessee only for the purpose as set forth in section 1.06. Lessee shall occupy the leased premises, conduct its business and control its agents, employees, invitees and visitors in such a manner as is lawful, reputable and will not create a nuisance. Lessee shall not permit any operation which emits any offensive odor or matter which intrudes into other portions of the Building, use any apparatus or machine which makes undue noise or causes vibration in any portion of the Building or otherwise interfere with, annoy or disturb any other lessee in its normal business operations or Lessor in its management of the Building. Lessee shall neither permit any waste on the leased premises nor allow the leased premises to be used in any way which would, in the reasonable opinion of Lessor, be extra hazardous on account of fire or which would in any way increase or render void the fire insurance on the Building.

3.02 Signs. No sign of any type or description shall be erected, placed or painted in or about the leased premises or Land except those signs submitted to Lessor in writing and approved by Lessor in writing.

3.03 Compliance with Laws, Rules and Regulations. Lessee, at Lessee’s sole cost and expense, shall comply in all material respects with all laws, ordinances, orders, rules and regulations of state, federal, municipal or other agencies or bodies having jurisdiction over Lessee’s specific use, condition or occupancy of the leased premises. Notwithstanding the foregoing, Lessor shall bear the risk of complying with Title III of the Americans With Disabilities Act of 1990, any state laws governing handicapped access or architectural barriers, and all rules, regulations, and guidelines promulgated under such laws, as amended from time to time, as same affect the Building (including the leased premises) and the Land. Lessee will comply with the rules and regulations of the Building which are set forth on Schedule 1 attached to this Lease. Lessor shall have the right to change and amend the rules and regulations in any reasonable manner as may be deemed advisable for the safety, care, cleanliness, preservation of good order and operation or use of the Building or the leased premises, provided that such changes and amendments are applicable to all tenants of the Building, will not unreasonably interfere with Lessee’s use of the leased premises and are enforced by Lessor in a non-discriminatory manner. If a change or amendment materially affects Lessee (as determined by Lessee in the exercise of its reasonable business judgment), then Lessor shall obtain Lessee’s prior written consent to such change or amendment prior to implementation of same. All changes and amendments to the rules and regulations of the Building will be sent by Lessor to Lessee in writing and shall thereafter be carried out and observed by Lessee.

3.04 Warranty of Possession. Lessor warrants that it has the right and authority to execute this Lease, and Lessee, upon payment of the required rents and subject to the terms, conditions, covenants and agreements contained in this Lease, shall peaceably and quietly hold and enjoy and have possession of the leased premises during the full term of this Lease as well as any extension or renewal thereof, without hindrance from Lessor or any party claiming by, through, or under Lessor.

3.05 Inspection. Lessor or its authorized agents shall at any and all reasonable times have the right to enter the leased premises (after giving Lessee at least twenty-four hours notice thereof, which may be oral notice, except in cases of real or apparent emergency, in which case no notice shall be required) to inspect the same, to supply building maintenance and other services to be provided by Lessor, to show the leased premises to prospective purchasers, and to alter, improve or repair the leased premises or any other portion of the Building if such alteration, repair, or improvement is the responsibility of Lessor hereunder. Lessee hereby waives any claim for damages for injury or inconvenience to or interference with Lessee’s business, any loss of occupancy or use of the leased premises, and any other loss occasioned thereby. Lessor shall at all times have and retain a key with which to unlock all of the doors in, upon and about the leased premises and operate the security system, if any. Lessee shall not change Lessor’s lock system or in any other manner prohibit Lessor from entering the leased premises. Lessor shall have the right to use any and all means which

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Lessor may deem proper to open any door in an emergency without liability therefor. Notwithstanding the foregoing, in no event shall Lessor be entitled to make any alterations, repairs or improvements which would reasonably be expected to have any material adverse effect upon Lessee’s business operations, and all entries into the leased premises shall be conducted in such manner so as to minimize any interruption with Lessee’s business operations.

3.06 Intentionally omitted.

ARTICLE 4.00 UTILITIES AND SERVICE

4.01 Building Services. Lessor shall provide water and electricity hook-ups for Lessee during the term of this Lease, but Lessee shall pay for all utilities incurred by Lessee and relating to the leased premises. Lessee shall pay all telephone charges incurred by Lessee and relating to the leased premises. Lessor shall insure Lessee hot and cold water at those points of supply provided for general use with other lessees in the Building, central heating and air conditioning, routine maintenance and electric lighting service for the parking areas and other common areas of the Building, and janitorial service in accordance with section 4.03 below. Should any of the equipment or machinery break down, or for any cause cease to function properly, Lessor shall use reasonable diligence to repair the same promptly, but Lessee shall have no claim for rebate of rent on account of any interruption in service occasioned from the repairs. Lessor acknowledges and agrees that all services provided by Lessor to Lessee shall be provided to a standard at least equivalent to such services as are provided at other comparable office buildings in Memphis, Tennessee . Notwithstanding any other provision contained in this Lease to the contrary, Lessor acknowledges and agrees that, in the event any of the services required to be provided by Lessor under this Lease are not provided for a period of five (5) consecutive days as a result of a condition within Lessor’s reasonable control, then all rent due hereunder shall abate from the end of said five day period until such time as all such services are resumed. Furthermore, in the event Lessor fails to provide any such service for a period of twenty (20) consecutive days as a result of a condition within Lessor’s reasonable control, then, Lessee shall have the right to terminate this Lease. Lessor reserves the right from time to time to make changes in the utilities and services provided by Lessor to the Building, so long as such changes do not adversely affect Lessee’s business operations at the leased premises.

4.02 Theft or Burglary. Lessor shall not be liable to Lessee for losses to Lessee’s property or personal injury caused by criminal acts or entry by unauthorized persons into the leased premises or the Building, unless caused by Lessor’s negligence or willful misconduct.

4.03 Janitorial Service. Lessor shall furnish janitorial services to the leased premises and public areas of the Building no less than five (5) times per week during the term of this Lease, excluding holidays. Lessor shall also provide janitorial service to kitchens or storage areas included in the leased premises.

4.04 Window Coverings. Lessor shall furnish and install window coverings on all exterior windows to maintain a uniform exterior appearance. Lessee shall not remove or replace these window coverings or install any other window covering which would affect the exterior appearance of the Building. Lessee may install lined or unlined over draperies on the interior sides of the Lessor furnished window coverings for interior appearance or to reduce light transmission, provided such over draperies do not affect the exterior appearance of the Building or affect the operation of the Building’s heating, ventilating and air conditioning systems.

ARTICLE 5.00 REPAIRS AND MAINTENANCE

5.01 Lessor Repairs. Lessor shall not be required to make any improvements, replacements or repairs of any kind or character to the leased premises or the Building during the term of this Lease except as are set forth in this section. Lessor shall maintain in good repair and working order, make repairs to and perform

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maintenance upon (a) the roof, foundation, and structural elements of the Building, (b) the common areas; (c) mechanical (including HVAC), electrical, plumbing and fire/life safety systems serving the Building, and (d) the exterior windows of the Building. With respect to the foregoing, Lessor acknowledges and agrees that all such maintenance shall be performed to a standard at least equivalent to the maintenance standards then being maintained for other comparable office buildings in Memphis, Tennessee. Provided Lessor complies with all requirements of this Lease related to such repair and maintenance work, Lessor shall not be liable to Lessee, except as expressly provided in this Lease, for any damage or inconvenience, and Lessee shall not be entitled to any abatement or reduction of rent by reason of any repairs, alterations or additions made by Lessor under this Lease.

5.02 Lessee Repairs. Lessee shall, at its sole cost and expense, perform all maintenance and repairs to the leased premises that are not Lessor’s express responsibility under this Lease, and shall keep the leased premises in good condition and repair, ordinary wear and tear and casualty and condemnation excepted. Lessee’s repair obligations include, without limitation, repairs to: (a) floor covering and/or raised flooring; (b) interior partitions; (c) doors; and (d) the interior side of demising walls. Notwithstanding the foregoing, Lessee shall, at its own cost and expense, repair or replace any damage or injury to all or any part of the Building caused by any act or omission of Lessee or Lessee’s agents, employees, invitees, licensees or visitors; provided, however, if Lessee fails to make the repairs or replacements promptly, Lessor may, at its option, make such repairs or replacements, and the costs of such repairs or replacements shall be charged to Lessee as additional rent and shall become payable by Lessee with the payment of the rent next due hereunder.

5.03 Request for Repairs. All requests for repairs or maintenance that are the responsibility of Lessor pursuant to any provision of this Lease must be made in writing to Lessor at the address in section 1.05.

5.04 Lessee Damages. Lessee shall not allow any waste to be committed by Lessee or Lessee’s agents or employees, on any portion of the leased premises or Building, and at the termination of this Lease, by lapse of time or otherwise, Lessee shall deliver the leased premises to Lessor in as good condition as existed at the commencement date of this Lease, ordinary wear and tear and casualty and condemnation excepted. The cost and expense of any repairs necessary to restore the condition of the leased premises as specified in the immediately preceding sentence shall be borne by Lessee.

5.05 Maintenance Employee. Lessee shall employ, with Lessor’s approval, such full or part-time maintenance personnel as may be necessary to provide the general maintenance and repair functions for the Building, including the common areas, as are presently provided by Louis Kummerer as an employee of Synchronics, Inc. All costs associated with such person (collectively the “Maintenance Employee Costs”), including salary, benefits, and associated payroll costs (FICA, FUTA, and the like) shall be paid by Lessee. Lessor shall reimburse to Lessee, on a monthly basis, an amount equal to the Maintenance Employee Costs incurred by Lessee for the applicable month less Lessee’s Proportionate Share of such Maintenance Employee Costs. In accordance with the provisions of section 2.03 of this Lease, the parties will estimate the amount of the Lessor’s anticipated monthly reimbursement and reduce the estimated monthly payments of additional rent to be paid by Lessee to Lessor under such section. The parties will take into account the actual amount of such costs allocable to the Lessee and Lessor, respectively, in connection with the January 31 reconciliation described in section 2.03. It shall be Lessor’s responsibility to provide Lessee’s maintenance employee with access to all portions of the Building, including those portions of the Building occupied by other lessees. Prior to the commencement date, Lessor shall provide Lessee with (a) the written consent of all such lessees, authorizing Lessee’s maintenance employee to enter the space occupied by such lessees to perform the maintenance and repair work contemplated in this section 5.05; and (b) the keys to each such lessee’s space.

5.06 Lessee as Manager of Project. Since Lessee will initially occupy approximately 78% of the Building, Lessor and Lessee may subsequently agree that, in order to facilitate efficient operation of the project, Lessee shall perform certain limited property management functions. To the extent the parties determine that such an arrangement is advantageous, then such arrangement shall be memorialized in either an amendment to this Lease or in a separate written agreement between the parties.

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ARTICLE 6.00 ALTERATIONS AND IMPROVEMENTS

6.01 Lessor Improvements. None.

6.02 Lessee Improvements. Lessee shall not make or allow to be made any alterations or physical additions in or to the leased premises without first obtaining the written consent of Lessor, which consent shall not be unreasonably withheld, conditioned or delayed, except for alterations of a cosmetic nature such as painting, wallpapering, hanging pictures and installing carpeting as well as installation of unattached, movable trade fixtures which may be installed without drilling, cutting or otherwise defacing the leased premises. Any alterations, physical additions or improvements to the leased premises made by Lessee shall at once become the property of Lessor and shall be surrendered to Lessor upon the termination of this Lease; provided, however, Lessor, at its option, may require Lessee to remove any physical additions and/or repair any alterations in order to restore the leased premises to the condition existing at the time Lessee took possession (reasonable wear and tear and casualty and condemnation excepted), all costs of removal and/or alterations to be borne by Lessee. With respect to the foregoing, Lessor agrees to advise Lessee at the time of its approval of each alteration or physical addition requiring Lessor’s approval hereunder as to whether Lessor will require the removal thereof. In no event shall Lessee be required to remove any cabling or wiring installed to serve the leased premises. This clause shall not apply to unattached trade fixtures, moveable equipment or furniture and personal property owned by Lessee, which may be removed by Lessee at the end of the term of this Lease if Lessee is not then in default beyond any applicable notice and cure period.

6.03 Mechanics Lien. Lessee will not permit any mechanic’s or materialman’s lien(s) or other lien to be placed upon the leased premises or the Building and, except as provided in section 5.05, nothing in this Lease shall be deemed or construed in any way as constituting the consent or request of Lessor, express or implied, by inference or otherwise, to any person for the performance of any labor or the furnishing of any materials to the leased premises, or any part thereof, nor as giving Lessee any right, power, or authority to contract for or permit the rendering of any services or the furnishing of any materials that would give rise to any mechanic’s, materialman’s or other lien against the leased premises. In the event any such lien is attached to the leased premises, and Lessee fails to timely take either action set forth in subclause (a) or (b) below of this section, then, in addition to any other right or remedy of Lessor, Lessor may, but shall not be obligated to obtain the release of or otherwise discharge the same. Any amount paid by Lessor for any of the aforesaid purposes shall be paid by Lessee to Lessor on demand as additional rent. If such a lien is filed, then Lessee shall, within ten (10) days after Lessor has delivered notice of the filing thereof to Lessee (or such earlier time period as may be necessary to prevent the forfeiture of the leased premises, the Building, the Land or any interest of Lessor therein or the imposition of a civil or criminal fine with respect thereto), either: (a) pay the amount of the lien and cause the lien to be released of record; or (b) diligently contest such lien and deliver to Lessor a bond or other security reasonably satisfactory to Lessor.

ARTICLE 7.00 CASUALTY AND INSURANCE

7.01 Substantial Destruction. If the leased premises should be totally destroyed by fire or other casualty, or if the leased premises should be damaged so that rebuilding or repairs cannot reasonably be completed within one hundred eighty (180) days after the occurrence of such casualty (as estimated by Lessor in the exercise of its reasonable business judgment), then Lessee may, at its option, terminate this Lease, in which event the rent shall be abated for the unexpired portion of the Lease, effective as of the date of the damage; provided, however, in the event such damage occurs during the last year of the initial term of the Lease (or any extension term), then this Lease shall terminate, and rent shall be abated for the unexpired portion of the Lease, effective as of the date of the damage. Lessor shall notify Lessee of Lessor’s estimate of the time it will take to effectuate such rebuilding or repair as soon after such damage occurs as is possible.

7.02 Partial Destruction. If the leased premises should be partially damaged by fire or other casualty, and rebuilding or repairs can reasonably be completed within one hundred eighty (180) days after the occurrence of such casualty (as estimated by Lessor in the exercise of its reasonable business judgment), this Lease

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shall not terminate, and Lessor shall at its sole risk and expense proceed with reasonable diligence to rebuild or repair the leased premises or other improvements to substantially the same condition in which they existed prior to the damage. If the leased premises are to be rebuilt or repaired and are untenantable in whole or in part following the damage, and the damage or destruction was not caused or contributed to by the act or negligence of Lessee, its agents, employees, invitees or those for whom Lessee is responsible, the rent payable under this Lease during the period for which the leased premises are untenantable shall be adjusted to such an extent as may be fair and reasonable under the circumstances. In the event that Lessor fails to complete the necessary repairs or rebuilding within one hundred eighty (180) days from the date of such damage, Lessee may at its option terminate this Lease by delivering written notice of termination to Lessor, whereupon all rights and obligations under this Lease shall cease to exist. Lessor shall notify Lessee of Lessor’s estimate of the time it will take to effectuate such rebuilding or repair as soon after such damage occurs as is possible.

7.03 Property Insurance. Lessor shall at all times during the term of this Lease maintain a policy or policies of property insurance with the premiums paid in advance, issued by and binding upon some solvent insurance company reasonably acceptable to Lessee, insuring the Building against all risk of physical loss in an amount equal to the full replacement cost of the Building structure and its improvements as of the date of the loss; provided, however, Lessor shall not be obligated in any way or manner to insure any personal property (including, but not limited to, any furniture, machinery, goods or supplies) of Lessee upon or within the leased premises, any fixtures installed or paid for by Lessee upon or within the leased premises, or any improvements which Lessee may construct on the leased premises. Lessee shall have no right in or claim to the proceeds of any policy of insurance maintained by Lessor even though the cost of such insurance is borne by Lessee as set forth in Article 2.00.

7.04 Waiver of Subrogation. Anything in this Lease to the contrary notwithstanding, Lessor and Lessee hereby waive and release each other of and from any and all right of recovery, claim, action or cause of action, against each other, their agents, officers and employees, for any loss or damage that may occur to the leased premises, the Building, improvements to the Building of which the leased premises are a part, or personal property within the Building, by reason of fire or the elements, regardless of cause or origin, including negligence of Lessor or Lessee and their agents, officers and employees, to the extent the same is insured against under any insurance policy, or is required to be insured against under the terms hereof. Lessor and Lessee each hereby waive any right of subrogation and right of recovery or cause of action for injury including death or disease to respective employees of either as covered by worker’s compensation. Lessor and Lessee agree immediately to give their respective insurance companies which have issued policies of insurance, written notice of the terms of the mutual waivers contained in this section, and to have the insurance policies properly endorsed, if necessary, to prevent the invalidation of the insurance coverages by reason of the mutual waivers.

7.05 Hold Harmless. Except to the extent caused by or occurring as a result of the default of Lessor hereunder, or the negligence of Lessor or any of its officers, directors, employees, members, managers or agents, Lessor shall not be liable to Lessee’s employees, agents, invitees, licensees or visitors, or to any other person, for an injury to person or damage to property on or about the project caused by (a) any act or omission of Lessee, its agents, servants or employees, or of any other person entering upon the project under express or implied invitation by Lessee, or (b) caused by the improvements located on the project becoming out of repair, to the extent said repair is the responsibility of Lessee hereunder, or (c) the failure or cessation of any service provided by Lessor (including security service and devices), to the extent such failure or cessation is caused by the action or inaction of Lessee, or (d) caused by leakage of gas, oil, water or steam or by electricity emanating from the leased premises as a result of the action or inaction of Lessee. Subject to section 7.04, Lessee agrees to indemnify and hold harmless Lessor of and from any loss, attorney’s fees, expenses or claims arising out of any such damage or injury.

Subject to section 7.04, Lessor shall indemnify, defend and hold harmless Lessee from and against any and all claims, demands, liabilities, causes of action, suits, judgments, damages and expenses (including attorneys’ fees) and all losses and damages arising from (i) the negligence or willful misconduct of Lessor or

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its respective officers, directors, employees, members, managers or agents, and (ii) Lessor’s failure to perform its obligations under this Lease.

Subject to section 7.04, Lessee shall indemnify, defend and hold harmless Lessor from and against any and all claims, demands, liabilities, causes of action, suits, judgments, damages and expenses (including attorneys’ fees) and all losses and damages arising from (i) the negligence or willful misconduct of Lessee or its respective officers, directors, employees, members, managers or agents, and (ii) Lessee’s failure to perform its obligations under this Lease.

The indemnities under this section 7.05 shall survive the termination or expiration of this Lease.

7.06 Liability Insurance. Lessor shall obtain and keep in force at all times during the term of this Lease, comprehensive general liability insurance including property damage on an occurrence basis with limits of not less than Five Million Dollars ($5,000,000.00) combined single limit insuring Lessor and Lessee against any liability arising out of the ownership, use, occupancy or maintenance of the project. The limit of said insurance shall not, however, limit the liability of the Lessor or Lessee hereunder.

ARTICLE 8.00 CONDEMNATION

8.01 Substantial Taking. If all or a substantial part of the leased premises or Building or parking areas are taken for any public or quasi-public use under any governmental law, ordinance or regulation, or by right of eminent domain or by purchase in lieu thereof, and the taking would prevent or materially interfere with the use of the leased premises for the purpose for which it is then being used, this Lease shall terminate and the rent shall be abated during the unexpired portion of this Lease effective on the date physical possession is taken by the condemning authority. Lessee shall have no claim to the condemnation award or proceeds in lieu thereof; however, Lessee may separately pursue a claim (to the extent it will not reduce Lessor’s award) against the condemnor for the value of Lessee’s personal property which Lessee is entitled to remove under this Lease, moving costs, loss of business, and other claims it may have.

8.02 Partial Taking. If a portion of the leased premises, Building or parking areas shall be taken for any public or quasi-public use under any governmental law, ordinance or regulation, or by right of eminent domain or by purchase in lieu thereof, and this Lease is not terminated as provided in section 8.01 above, Lessor shall at Lessor’s sole risk and expense, with reasonable diligence, restore and reconstruct the Building and other improvements on the leased premises to the extent necessary to make it reasonably tenantable. The rent payable under this Lease during the unexpired portion of the term shall be adjusted to such an extent as may be fair and reasonable under the circumstances. Lessee shall have no claim to the condemnation award or proceeds in lieu thereof; however, Lessee may separately pursue a claim (to the extent it will not reduce Lessor’s award) against the condemnor for the value of Lessee’s personal property which Lessee is entitled to remove under this Lease, moving costs, loss of business, and other claims it may have.

ARTICLE 9.00 ASSIGNMENT OR SUBLEASE

9.01 Lessor Assignment. Lessor shall have the right to sell, transfer or assign, in whole or in part, its rights and obligations under this Lease and in the Building, provided that the assignee assumes Lessor’s obligations hereunder in writing. Any such sale, transfer or assignment shall operate to release Lessor from any and all liabilities under this Lease arising after the date of such sale, assignment or transfer.

9.02 Lessee Assignment. Except as expressly set forth below, Lessee shall not assign, in whole or in part, this Lease, or allow it to be assigned, in whole or in part, by operation of law or otherwise (including without limitation by transfer of a majority interest of its stock, merger, or dissolution, which transfer of majority interest of stock, merger or dissolution shall be deemed an assignment) or mortgage or pledge the same, or sublet the leased premises, in whole or in part, without the prior written consent of Lessor, which consent will

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not be unreasonably withheld, delayed or conditioned, and in no event shall any such assignment or sublease ever release Lessee or any guarantor from any obligation or liability hereunder. No assignee or sublessee of the leased premises or any portion thereof may assign or sublet the leased premises or any portion thereof, without the written consent of Lessor, which consent will not be unreasonably withheld, delayed or conditioned. Notwithstanding the foregoing, Lessee may assign or sublet all or part of its interest in this Lease or all or part of the leased premises to the following types of entities without the written consent of Lessor (a “Permitted Transfer”): (a) an affiliate of Lessee; (b) any corporation, limited partnership, limited liability partnership, limited liability company or other business entity in which or with which Lessee, or its corporate successors or assigns, is merged or consolidated, in accordance with applicable statutory provisions governing merger and consolidation of business entities; (c) any corporation, limited partnership, limited liability partnership, limited liability company or other business entity acquiring all or substantially all of Lessee’s assets; and (d) a collateral assignment or other pledge of or creation of a security interest in Lessee’s interest in the Lease, which collateral assignment or pledge or security interest is made in connection with a financing transaction (including a sale/leaseback or other financing vehicle) wherein Lessee or an affiliate of Lessee is a borrower, or a financing transaction in connection with a merger, consolidation or acquisition contemplated in subclause (b) or (c) above. For purposes of this section 9.02, an “affiliate” means any person or entity which, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the party in question.

9.03 Conditions of Assignment. Except with respect to a Permitted Transfer, if Lessee desires to assign or sublet all or any part of the leased premises, it shall so notify Lessor at least thirty (30) days in advance of the date on which Lessee desires to make such assignment or sublease. Lessee shall provide Lessor with a copy of the proposed assignment or sublease and such information as Lessor might reasonably request concerning the proposed sublessee or assignee to allow Lessor to make informed judgments as to the financial condition, reputation, operations and general desirability of the proposed sublessee or assignee. Within fifteen (15) days after Lessor’s receipt of Lessee’s proposed assignment or sublease and all required information concerning the proposed sublessee or assignee, Lessor shall have the following options: (1) consent to the proposed assignment or sublease, or (2) refuse to consent to the proposed assignment or sublease, which refusal to consent shall not be made unreasonably and shall be deemed to have been exercised unless Lessor gives Lessee written notice providing otherwise within said fifteen (15) day period. Upon the occurrence of an event of default (after passage of all applicable notice and cure periods), if all or any part of the leased premises are then assigned or sublet, Lessor, in addition to any other remedies provided by this Lease or provided by any law, may, at its option, collect directly from the assignee or sublessee all rents becoming due to Lessee by reason of the assignment or sublease. Any collection directly by Lessor from the assignee or sublessee shall not be construed to constitute a novation or a release of Lessee or any guarantor from the further performance of its obligations under this Lease.

9.04 Subordination. Lessee accepts this Lease subject to and subordinate to any recorded mortgage or deed of trust lien presently existing or hereafter created upon the Building or Land and to all existing recorded restrictions, covenants, easements and agreements with respect to the Building or Land. In that regard, Lessor herewith warrants and represents to Lessee that, as of the date of this Lease, there is no recorded mortgage or deed of trust lien encumbering the Building or the Land. Notwithstanding the foregoing, the subordination of this Lease to future mortgages or deeds of trust shall be subject to Lessee’s receipt of a non-disturbance agreement reasonably acceptable to Lessee which provides in substance that so long as Lessee is not in default under the Lease past applicable notice and cure periods, its use and occupancy of the leased premises shall not be disturbed notwithstanding any default of Lessor under such mortgage or deed of trust. The provisions of this section shall be self-operative and no further instrument of subordination shall be required; however, in confirmation of such subordination, Lessee shall execute and return to Lessor (or such other party designated by Lessor) within the (10) days after written request therefor such documentation, in recordable form if required, as Lessor’s mortgagee may reasonably request to evidence the subordination of this Lease. If the interests of Lessor under this Lease shall be transferred by reason of foreclosure or other proceedings for enforcement of any first mortgage or deed of trust lien on the leased premises, Lessee shall be bound to the transferee (sometimes called the “Purchaser”), under the terms, covenants and conditions of this Lease for the balance of the term remaining, including any extensions or renewals, with the same force and effect as if the Purchaser were Lessor under this Lease, and, if requested by the Purchaser, Lessee

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agrees to attorn to the Purchaser, including the first mortgagee under any such mortgage if it be the Purchaser, as its Lessor.

9.05 Estoppel Certificates. Lessee agrees to furnish, from time to time, within ten (10) days after receipt of a request from Lessor or Lessor’s mortgagee, a statement certifying, if applicable, the following: Lessee is in possession of the leased premises; the leased premises are acceptable; the Lease is in full force and effect; the Lease is unmodified; Lessee claims no present charge, lien, or claim of offset against rent; the rent is paid for the current month, but is not prepaid for more than one month and will not be prepaid for more than one month in advance; there is no existing default by reason of some act or omission by Lessor; and such other matters as may be reasonably required by Lessor or Lessor’s mortgagee. Lessee’s failure to deliver such statement, in addition to being a default under this Lease, shall be deemed to establish conclusively that this Lease is in full force and effect except as declared by Lessor, that Lessor is not in default of any of its obligations under this Lease, and that Lessor has not received more than one month’s rent in advance.

Likewise, Lessor agrees that upon written request by Lessee, Lessor shall deliver to Lessee an estoppel certificate covering such matters with respect to the Lease as are reasonably requested by Lessee or any lender to Lessee.

ARTICLE 10.00 LIENS

10.01 Landlord’s Lien. Lessor acknowledges and agrees that Lessee shall have the right, at any time, to encumber all or any portion of its interest in and to any furniture, trade fixtures, equipment or other personalty located in the leased premises with a lien to secure financing, and Lessor agrees to execute such customary Landlord’s lien waiver or other agreement as Lessee’s lender may reasonably require in connection with such financing.

ARTICLE 11.00 DEFAULT AND REMEDIES

11.01 Default by Lessee. The following shall be deemed to be events of default by Lessee: (1) Lessee shall fail to pay when due any installment of rent or any other payment required pursuant to this Lease including the failure to pay Lessee’s Proportionate Share of operating expenses, or any part thereof; (2) Lessee shall abandon any substantial portion of the leased premises; (3) Lessee shall fail to comply with any term, provision or covenant of this Lease, other than the payment of rent; (4) Lessee shall file a petition or be adjudged bankrupt or insolvent under any applicable federal or state bankruptcy or insolvency law or admit that it cannot meet its financial obligations as they become due; or a receiver or trustee shall be appointed for all or substantially all of the assets of Lessee; or Lessee shall make a transfer in an effort to defraud creditors or shall make an assignment for the benefit of creditors; however, if such a petition is filed against Lessee, then such filing shall not be an event of default unless Lessee fails to have the proceedings initiated by such petition dismissed within sixty (60) calendar days after the filing thereof; or (5) Lessee shall do or permit to be done any act which results in a lien being filed against the leased premises or the Building and/or project of which the leased premises are a part, and Lessee fails to pay and/or contest said lien within the time and in the manner required by section 6.03.

11.02 Remedies for Lessee’s Default. Upon the occurrence of any event of default set forth in this Lease and Lessee’s failure to cure such default within the applicable cure period set out in section 11.03 below, Lessor shall have the option to pursue any one of more of the remedies set forth herein without any notice or demand (1) to the extent permitted by applicable law, Lessor may enter upon and take possession of the leased premises, by picking or changing locks if necessary, and lock out, expel or remove Lessee and any other person who may be occupying all or any part of the leased premises without being liable for any claim for damages, and relet the leased premises on behalf of the Lessee and receive the rent directly by reason of the reletting. Lessee agrees to pay Lessor on demand any deficiency that may arise by reason of any reletting of the leased premises; further, Lessee agrees to reimburse Lessor for any commercially reasonable expenditures made by it in order to relet the leased premises, after utilizing commercially reasonable efforts to

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relet, including, but not limited to, remodeling and repair costs; (2) perform any act Lessee is obligated to do under the terms of this Lease. Lessee agrees to reimburse Lessor on demand for any commercially reasonable expenses which Lessor may incur in effecting compliance with Lessee’s obligations under this Lease; further, Lessee agrees that Lessor shall not be liable for any damages resulting to Lessee from effecting compliance with Lessee’s obligations under this Lease caused by the negligence of Lessor; (3) Lessor may terminate this Lease, in which event Lessee shall immediately surrender the leased premises to Lessor, and if Lessee fails to surrender the leased premises, Lessor may, without prejudice to any other remedy which it may have for possession or arrearages in rent, and to the extent permitted by applicable law, enter upon and take possession of the leased premises, by picking or changing locks if necessary, and lock out, expel or remove Lessee and any other person who may be occupying all or any part of the leased premises, by reason of the termination of this Lease under this section, whether through inability to relet the leased premises on satisfactory terms or otherwise. Notwithstanding any other remedy set forth in this Lease, in the event Lessor has made rent concessions of any type or character, or waived any base rent, and Lessee fails to take possession of the leased premises on the commencement date or otherwise defaults at any time during the term of this Lease, the rent concessions, including any waived base rent, shall be canceled and the amount of the base rent or other rent concessions shall be due and payable immediately as if no rent concessions or waiver of any base rent had ever been granted. A rent concession or waiver of the base rent shall not relieve Lessee of any obligation to pay any other charge due and payable under this Lease including without limitation any sum due under section 2.03. Notwithstanding anything contained in this Lease to the contrary, this Lease may be terminated by Lessor only by mailing or delivering written notice of such termination to Lessee, and no other act or omission of Lessor shall be construed as a termination of this Lease.

11.03 Cure. Lessee shall have five (5) days after receipt of a written notice of default from Lessor to cure any default involving the payment of money to Lessor and fifteen (15) days from receipt of such written notice to cure any default not involving the payment of money; provided, however, that if the term condition, covenant or obligation to be performed by Lessee is of such nature that the same cannot reasonably be performed within such fifteen (15) day period, such default shall be deemed to have been cured if Lessee commences such performance within said fifteen (15) day period and thereafter diligently undertakes to complete the same, and in fact, completes same within thirty (30) days after notice.

11.04 Cumulative Remedies. Any and all remedies set forth in this Lease (a) shall be in addition to any and all other remedies the parties hereto may have at law or in equity; (b) shall be cumulative; and (c) may be pursued successively or concurrently as such party may elect. The exercise of any remedy by either party shall not be deemed an election of remedies or preclude such party from exercising any other remedies in the future.

11.05 Lessee’s Self-Help Right. Notwithstanding any other language contained in this Lease to the contrary, Lessor acknowledges and agrees that in the event Lessor fails to perform any of its obligations under this Lease within fifteen (15) days of its receipt of notice from Lessee, Lessee shall have the right to cure Lessor’s default and charge Lessor for Lessee’s reasonable actual out of pocket cost thereof. Furthermore, in addition to the rights set forth above, in the event emergency repairs are needed to elements of the leased premises for which Lessor is responsible under the Lease in order to prevent imminent damage to Lessee’s property or business operations, then, under such circumstances, if Lessor has failed to commence and thereafter diligently pursue such repairs within a reasonable period following its receipt of Lessee’s notice of the need thereof, Lessee shall have the right to cure Lessor’s nonperformance and charge Lessor Lessee’s reasonable, actual out of pocket cost thereof. If Lessor fails to reimburse Lessee such cost within thirty (30) days of demand therefor, Lessee shall have the right to deduct same from any installments of base rent and other amounts payable to Lessor under this Lease. Such deduction by Lessee shall not be deemed a breach of Lessee’s covenant to pay rent.

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ARTICLE 12.00 RIGHT OF FIRST OFFER AND OPTION TO LEASE

12.01 Right of First Offer. During the term of this Lease (and any extension term), provided Lessee is not then in default under this Lease (beyond any applicable notice and cure period), Lessee shall have the right (the “Right of First Offer”) to lease the approximately 2,730 square feet of space identified on Exhibit “B” as “Expansion Space” and the approximately 2,935 square feet of space currently occupied by Payment Transaction Solutions, Inc. (collectively, the “First Offer Space”), in its then as-is condition, on the following terms and conditions:

(a) Subject to the terms and conditions of this Article, after all or a portion of the First Offer Space has or will “become available” for leasing by Lessor, Lessor shall not lease to another lessee all or any portion of the First Offer Space without first offering Lessee the right to lease such available First Offer Space. For purposes of the foregoing, space shall be deemed to “become available” when the lease for any current tenant of all or a portion of the First Offer Space expires or is otherwise terminated, and space shall not be deemed to “become available” if such space is assigned or sublet by the current tenant or occupant or re-let by the current tenant or occupant by renewal, extension or by renegotiation of its lease or by entering into a direct lease with Lessor.

(b) Lessor’s offer to Lessee to lease such available First Offer Space shall be in writing and shall include, as the base rent for such available First Offer Space, the then-prevailing rental rate on a per square foot of rentable area basis as then announced by Lessor for the Building, but without any allowances for tenant improvements or other concessions. Lessee shall have five (5) days after receipt of Lessor’s notice to respond in writing as to whether or not Lessee desires to lease all or any portion of such available First Offer Space at the base rent stated by Lessor in its written notice. If Lessee elects not to lease any of the available First Offer Space or fails to respond within such five (5) day period, then Lessor shall thereafter have the right to lease such available First Offer Space to any other party at any time upon such terms and conditions as Lessor deems appropriate, and this Right of First Offer shall automatically terminate as to such available First Offer Space (but not as to the remaining First Offer Space) and Lessee shall have no further right to lease such portion of the First Offer Space regardless of when the same may become available. If Lessee elects during such five (5) day period to lease only a portion of the available First Offer Space, then Lessor shall thereafter have the right to lease the remaining portion of the available First Offer Space (but not the remaining First Offer Space not then being offered) to any other party at any time upon such terms and conditions as Lessor deems appropriate, and this Right of First Offer shall automatically terminate as to such available First Offer Space only, and Lessee shall have no further right to lease the remainder of such available First Offer Space regardless of when the same may become available. In the event Lessee desires to lease less than all the available First Offer Space, then Lessee shall designate the portion Lessee so desires in its response to Lessor’s notice as set forth above and Lessor shall, thereafter, determine the number of square feet of rentable area within such space as so designated by Lessee consistent with Lessor’s then current practice for calculating square feet of rentable area for other portions of the Building.

(c) If Lessee elects to lease all or any portion of such available First Offer Space, the base rent for such First Offer Space, for purposes of Article 11 of this Lease, shall be an amount equal to the base rent set forth in Lessor’s notice as set forth above, and shall be subject to adjustment pursuant to such Lessor’s notice. Base rent for such available First Offer Space shall commence on the earlier to occur of (i) the date such available First Offer Space is delivered to Lessee broom clean, free of lessees or other occupants, and in its then as-is condition; or (ii) the date lessee first occupies such available First Offer Space. Except as expressly set forth to the contrary in this Lease, from and after the date Lessee is required to pay base rent hereunder with respect to such available First Offer Space, all other terms and conditions of this Lease shall apply to such First Offer Space and such First Offer Space shall be deemed to be a part of the leased premises for the remainder of the term of the Lease (and any extension term).

Within thirty (30) days after the commencement of base rent for any First Offer Space as set forth above, Lessor and Lessee shall enter into a written amendment to this Lease setting forth the commencement date of base rent for such space, the location and square footage of such space, the annual rent for such space and the increased “Lessee’s Proportionate Share.”

Notwithstanding the foregoing, the Right of First Offer shall not apply when the proposed lessee of such available First Offer Space is Lessor, a partner of Lessor, an affiliate of Lessor, or an affiliate of any

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partner of Lessor (a “Lessor Related Entity”); provided, however, such Right of First Offer shall apply if a Lessor Related Entity assigns or sublets all or a portion of such First Offer Space to an entity that is not a Lessor Related Entity. For purposes of this section 12.01, an “affiliate” means any person or entity which, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the party in question.

12.02 Option to Lease. Lessor hereby grants to Lessee the exclusive option to lease approximately 2,730 square feet of space in the Building, which space is identified on Exhibit “B” as “Expansion Space” (the “Expansion Space”), which option may be exercised at any time commencing on the commencement date and expiring on January 31, 2006, on the terms and conditions set forth in this section 12.02. Lessee may exercise such option by giving Lessor written notice thereof on or before said date. Within ten (10) business days after Lessee’s exercise of such option, Lessor and Lessee shall execute a lease for the Expansion Space, which lease shall be substantially upon the same terms and conditions as contained in this Lease, except (a) the commencement date shall be as agreed to by the parties, with such lease being co-terminus with this Lease (including any options to extend the term of this Lease), (b) base rent for the initial term shall be as set forth below and base rent for any extended or option term shall be the Prevailing Rental Rate and shall be calculated as provided in section 1.04, and (c) such other changes as may be agreed to by the parties. In lieu of executing a new lease with respect to the Expansion Space, Lessor and Lessee may execute an amendment to this Lease adding the Expansion Space to the “leased premises” and making such other amendments to this Lease as contemplated in this section 12.02.

The monthly base rent for the Expansion Space shall be as follows:

Commencement date – December 31, 2006 - $2,730.00 per month

January 1, 2007 – December 31, 2007 -           $2,826.00 per month

January 1, 2008 – December 31, 2008 -           $2,924.00 per month

January 1, 2009 – December 31, 2009 -           $3,027.00 per month

January 1, 2010 – December 31, 2010 -           $3,133.00 per month

ARTICLE 13.00 DEFINITIONS

13.01 Abandon. “Abandon” means the vacating of all or a substantial portion of the leased premises by Lessee, and failure to meet one (1) or more lease obligations.

13.02 Act of God or Force Majeure. An “act of God” or “force majeure” is defined for purposes of this Lease as strikes, lockouts, sitdowns, material or labor restrictions by any governmental authority, unusual transportation delays, riots, floods, washouts, explosions, earthquakes, fire, storms, weather (including wet grounds or inclement weather which prevents construction), acts of the public enemy, wars, insurrection and any other cause not reasonably within the control of Lessor and which by the exercise of due diligence Lessor is unable, wholly or in part, to prevent or overcome.

13.03 Project. “Project” as used in this Lease means the Building, the Land and the other improvements now or hereinafter constructed on the Land, including, but not limited to, the parking areas, driveways and landscaping.

13.04 Commencement Date. “Commencement date” shall be the date set forth in section 1.03.

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ARTICLE 14.00 MISCELLANEOUS

14.01 Waiver. Failure of either party to declare an event of default immediately upon its occurrence, or delay in taking any action in connection with an event of default (after the passage of any applicable notice and cure period), shall not constitute a waiver of the default, but such party shall have the right to declare the default at any time and take such actions as is lawful or authorized under this Lease. Pursuit of any one or more of the remedies set forth in Article 11.00 above shall not preclude pursuit of any one or more of the other remedies provided elsewhere in this Lease or provided by law, nor shall pursuit of any remedy constitute forfeiture or waiver of any rent or damages accruing to such party by reason of the violation of any terms, provisions or covenants of this Lease. Failure by either party to enforce one or more of the remedies provided upon an event of default (after the passage of any applicable notice and cure period) shall not be deemed or construed to constitute a waiver of the default or of any other violation or breach of any of the terms, provisions and covenants contained in this Lease.

14.02 Act of God. Neither Lessor nor Lessee shall be required to perform any covenant or obligation in this Lease, or be liable in damages to the other, so long as the performance or non-performance of the covenant or obligation is delayed, caused or prevented by an act of God, force majeure or by the other party hereto.

14.03 Attorney’s Fees. In the event either party defaults in the performance of any of the terms, covenants, agreements or conditions contained in this Lease and places in the hands of an attorney the enforcement of all or any part of this Lease, the collection of any rent due or to become due or recovery of the possession of the leased premises, the non-prevailing party in any such action agrees to pay to the party prevailing in such action the costs associated with such action, including reasonable attorney’s fees for the services of the attorney, whether suit is actually filed or not.

14.04 Successors. This Lease shall be binding upon and inure to the benefit of Lessor and Lessee and their respective heirs, personal representatives, successors and assigns. It is hereby covenanted and agreed that should Lessor’s interest in the leased premises cease to exist for any reason during the term of this Lease, then notwithstanding the happening of such event this Lease nevertheless shall remain unimpaired and in full force and effect, and Lessee hereunder agrees to attorn to the then owner of the leased premises. This Lease is for the sole benefit of Lessor and Lessee, and no third party shall be deemed a third party beneficiary hereof.

14.05 Rent Tax. If applicable in the jurisdiction where the leased premises are situated, Lessee shall pay and be liable for all rental, sales and use taxes or other similar taxes, if any, levied or imposed by any city, state, county or other governmental body having authority, such payments to be in addition to all other payments required to be paid to Lessor by Lessee under the terms of this Lease. Any such payment shall be paid concurrently with the payment of the rent, additional rent, operating expenses or other charge upon which the tax is based as set forth above.

14.06 Captions. The captions appearing in this Lease are inserted only as a matter of convenience and in no way define, limit, construe or describe the scope or intent of any section.

14.07 Notice. All rent and other payments required to be made by Lessee shall be payable to Lessor at the address set forth in section 1.05, or at any other address within the United States as Lessor may specify from time to time by written notice given pursuant to this section. All payments required to be made by Lessor to Lessee shall be payable to Lessee at the address set forth in section 1.05, or at any other address within the United States as Lessee may specify from time to time by written notice given pursuant to this section. Any notice or document required or permitted to be delivered by the terms of this Lease shall be deemed to be delivered (whether or not actually received) (a) two (2) days after it is deposited in the United States Mail, postage prepaid, certified mail, return receipt requested, addressed to the parties at the respective addresses set forth in section 1.05; (b) on the date it is sent via telefax, or e-mail, or (c) on the first business day following delivery to a reputable overnight delivery service (i.e. Federal Express, UPS, etc.).

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14.08 Submission of Lease. Submission of this Lease to Lessee for signature does not constitute a reservation of space or an option to lease. This Lease is not effective until execution by and delivery to both Lessor and Lessee.

14.09 Authority. If Lessee executes this Lease as a corporation, each of the persons executing this Lease on behalf of Lessee does hereby personally represent and warrant that Lessee is a duly authorized and existing corporation, that Lessee is qualified to do business in the state in which the leased premises are located, that the corporation has full right and authority to enter into this Lease, and that each person signing on behalf of the corporation is authorized to do so. Lessor warrants and represents to Lessee that Lessor is a duly formed and existing Tennessee general partnership, qualified to do business in Tennessee and that Lessor has full right and authority to execute and deliver this Lease, and that each person signing on behalf of Lessor is authorized to do so.

14.10 Severability. If any provision of this Lease or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Lease and the application of such provisions to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

14.11 Lessor’s Liability. If Lessor shall be in default under this Lease and, if as a consequence of such default, Lessee shall recover a money judgment against Lessor, such judgment shall be satisfied only out of the right, title and interest of Lessor in the Building and the Land as the same may then be encumbered and neither Lessor nor any person or entity comprising Lessor shall be liable for any deficiency. In no event shall Lessee have the right to levy execution against any property of Lessor nor any person or entity comprising Lessor other than its interest in the Building and Land as herein expressly provided.

14.12 Indemnity. Neither Lessor nor Lessee has dealt with any broker or agent in connection with the negotiation or execution of this Lease. Lessor agrees to indemnify and hold harmless Lessee from and against any liability or claim, whether meritorious or not, arising with respect to any broker whose claim arises by, through or on behalf of Lessor. Lessee agrees to indemnify and hold harmless Lessor from and against any liability or claim, whether meritorious or not, arising with respect to any broker whose claim arises by, through or on behalf of Lessee. This indemnity shall survive the termination or expiration of the Lease.

14.13 Governing Law. This Lease shall be governed by and construed in accordance with the laws of the state of Tennessee.

14.14 Approvals and Consents. Whenever the Lease requires Lessee to obtain the permission, approval or consent of Lessor, Lessor agrees that its permission, approval or consent shall not be unreasonably withheld, conditioned or delayed. Lessor further agrees that when exercising its discretionary rights under the Lease, Lessor will at all times act reasonably.

14.15 Memorandum of Lease. Upon the request of either party, the other party agrees to execute and record a memorandum of this Lease in the appropriate deed records.

ARTICLE 15.00 AMENDMENT AND LIMITATION OF WARRANTIES

15.01 Entire Agreement. IT IS EXPRESSLY AGREED BY LESSEE, AS A MATERIAL CONSIDERATION FOR THE EXECUTION OF THIS LEASE, THAT THIS LEASE IS THE ENTIRE AGREEMENT OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND THAT THERE WERE NO VERBAL REPRESENTATIONS, WARRANTIES, UNDERSTANDINGS, STIPULATIONS, AGREEMENTS OR PROMISES PERTAINING TO THIS LEASE NOT INCORPORATED IN WRITING IN THIS LEASE.

15.02 Amendment. THIS LEASE MAY NOT BE ALTERED, WAIVED, AMENDED OR EXTENDED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY LESSOR AND LESSEE.

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15.03 Limitation of Warranties. LESSOR AND LESSEE EXPRESSLY AGREE THAT THERE ARE AND SHALL BE NO IMPLIED WARRANTIES OF MERCHANTABILITY, HABITABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING OUT OF THIS LEASE, AND THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY SET FORTH IN THIS LEASE.

ARTICLE 16.00 OTHER PROVISIONS

16.01 Hazardous Materials.

(a) Environmental Protection. During the term of this Lease, Lessee shall not cause or permit to occur:

(i) any violation by Lessee, its agents or contractors, of any present or future federal, state or local law, ordinance or regulation related to environmental conditions in or about the leased premises, including, but not limited to, improvements or alterations made to the leased premises at any time by Lessee, its agents or contractors, or

(ii) the use, generation, release, manufacture, refining, production, processing, storage or disposal by Lessee, its agents or contractors, of any “Hazardous Substances” (as hereinafter defined) in or about the leased premises, or the transportation to or from the leased premises by Lessee, its agents or contractors, of any Hazardous Substances, except for limited quantities of household cleaning products and office supplies used or stored at the leased premises and required in connection with the routine operation and maintenance of the leased premises, and in compliance with all applicable environmental laws.

During the term of this Lease, Lessee, at its expense, shall comply in all material respects with each present and future federal, state and local law, ordinance and regulation related to environmental conditions in or about the leased premises or Lessee’s use of the leased premises, including, without limitation, all reporting requirements and the performance of any cleanups required by any governmental authorities. Lessee shall indemnify, defend and hold harmless Lessor and its employees from and against all fines, suits, actions, damages, liabilities, costs and expenses (including attorney’s and consultant’s fees) asserted against or sustained by any such person or entity and arising out of or in any way connected with Lessee’s failure to comply with its obligations under this section 16.01, which obligations shall survive the expiration or termination of this Lease.

(b) Hazardous Substances. As used in this section 16.01, “Hazardous Substances” shall include, without limitation, flammable, explosives, radioactive materials, asbestos containing materials (ACMs), polychlorinated biphenyls toxicity, pollutants, containments, hazardous wastes, toxic substances, petroleum and petroleum products, chlorofluorocarbons (CFSs) and substances declared to be hazardous or toxic under any present or future federal, state or local law, ordinance or regulation.

(c) Existing Hazardous Substances; Mold. Lessor hereby represents and warrants to Lessee that, as of the date of its execution of this Lease, to Lessor’s knowledge (after due inquiry), there exists no Hazardous Substances in the Building or on the Land, nor does there exist a violation of any environmental laws within the Building or on the Land, nor does there exist any contamination of toxic mold or toxic mold spores in the Building. Furthermore, Lessor acknowledges and agrees that notwithstanding any other provision contained in the Lease to the contrary, Lessor, rather than Lessee, shall be solely responsible for the remediation of any Hazardous Substances within the Building or on the Land or violations of any environmental laws relating to the Building or the Land which predates this Lease. Furthermore, in no event shall Lessee have any liability for any Hazardous Substances or violations of any environmental laws unless and except to the extent such Hazardous Substances or violations are caused by, or arise as a result of, the actions or inactions of Lessee or its agents or contractors. Furthermore, Lessor acknowledges and agrees that in no event shall Lessee have any indemnification obligations to Lessor arising from or related to any mold conditions which arise as a result of the heating, ventilation or air conditioning system serving the Building, or as a result of the structural condition of the Building or the roof, as Lessor shall remain solely responsible for any such mold conditions.

Radiant Lease for 1727 Kirby Parkway Page 18 of 19

[SIGNATURES APPEAR ON NEXT PAGE]

Radiant Lease for 1727 Kirby Parkway Page 19 of 19

Lessor:	JEFF GOLDSTEIN INVESTMENT PARTNERSHIP, a Tennessee general partnership
	By:	/s/ Jeff Goldstein
		Jeff Goldstein, Managing Partner

Lessee:	RADIANT SYSTEMS, INC.
	By:	/s/ Mark Haidet
	Name:	Mark Haidet
	Its:	Chief Financial Officer

Radiant Lease for 1727 Kirby Parkway Page 20 of 19

SCHEDULE 1

OFFICE RULES AND REGULATIONS

1. Lessor agrees to furnish Lessee sufficient keys without charge. Additional keys will be furnished at a nominal charge. Lessee shall not change locks or install additional locks on doors without prior written consent of Lessor. Lessee shall not make or cause to make duplicates of keys procured from Lessor without prior approval of Lessor. All keys to leased premises shall be surrendered to Lessor upon termination of this Lease.

2. Lessee will refer all contractor’s representatives and installation technicians rendering any service on or to the leased premises for Lessee to Lessor for Lessor’s approval before performance of any contractual service. Lessee’s contractors and installation technicians shall comply with Lessor’s rules and regulations pertaining to construction and installation. This provision shall apply to all work performed on or about the leased premises or project, including installation of telephones, telegraph equipment, electrical devices and attachments and installations of any nature affecting floors, walls, woodwork, trim, windows, ceilings and equipment or any other physical portion of the leased premises or project.

3. Lessee shall not at any time occupy any part of the leased premises or project as sleeping or lodging quarters.

4. Lessee shall not place, install or operate on the leased premises or in any part of the Building any engine, stove or machinery (other than normal office machines and standard office kitchen equipment, such as microwaves and coffee machines), or conduct mechanical operations or cook thereon or therein (other than as may occur in a microwave or coffee machine), or place or use in or about the leased premises or project any explosives, gasoline, kerosene, oil, acids, caustics, or any flammable, explosive or hazardous material without written consent of Lessor.

5. Lessor will not be responsible for lost or stolen personal property, equipment, money or jewelry from the leased premises or the project regardless of whether such loss occurs when the area is locked against entry or not.

6. No dogs, cats, fowl, or other animals shall be brought into or kept in or about the leased premises or project, other than seeing eye dogs.

7. None of the parking, plaza, recreation or lawn areas, entries, passages, doors, elevators, hallways or stairways shall be blocked or obstructed or any rubbish, litter, trash, or material of any nature placed, emptied or thrown into these areas, nor shall such areas be used by Lessee’s agents, employees or invitees at any time for purposes inconsistent with their designation by Lessor.

8. The water closets and other water fixtures shall not be used for any purpose other than those for which they were constructed, and any damage resulting to them from misuse or by the defacing or injury of any part thereof shall be borne by the person who shall occasion it. No person shall waste water by interfering with the faucets or otherwise.

9. No person shall disturb occupants of the Building by the use of any radios, record players, tape recorders, musical instruments, the making of unseemly noises or any unreasonable use.

10. Nothing shall be thrown out of the windows of the Building or down the stairways or other passages.

11. Lessee and its employees, agents, and invitees shall park their vehicles only in those parking areas designated by Lessor. If requested by Lessor, Lessee shall furnish Lessor with state automobile license numbers of Lessee’s vehicles and its employees’ vehicles within five days after taking possession of the leased premises and shall notify Lessor of any changes within five days after such change occurs. Lessee shall not leave any vehicle in a state of disrepair (including without limitation, flat tires, out of date inspection

Radiant Lease for 1727 Kirby Parkway Page 1 of 2

stickers or license plates) on the leased premises or project. If Lessee or its employees, agents or invitees park their vehicles in areas other than the designated parking areas or leave any vehicle in a state of disrepair, Lessor, after giving written notice to Lessee of such violation, shall have the right to remove such vehicle at Lessee’s expense.

12. Parking in a parking garage or area shall be in compliance with all reasonable and non-discriminating parking rules and regulations including any sticker or other identification system established by Lessor. Failure to observe the rules and regulations shall terminate Lessee’s right to use the parking garage or area and subject the vehicle in violation of the parking rules and regulations to removal and impoundment. No termination of parking privileges or removal of impoundment of a vehicle shall create any liability on Lessor or be deemed to interfere with the Lessee’s right to possession of its leased premises. Vehicles must be parked entirely within the stall lines and all directional signs, arrows and posted speed limits must be observed. Parking is prohibited in areas not striped for parking, in aisles, where “No Parking” signs are posted, on ramps, in cross hatched areas, and in other areas as may be designated by Lessor. Parking stickers or other forms of identification supplied by Lessor shall remain the property of Lessor and not the property of Lessee and are not transferable. Every person is required to park and lock his vehicles; the safety of such vehicle, and its contents, is assumed by the owner of the vehicle or its driver.

13. Movement in or out of the Building of furniture or office supplies and equipment, or dispatch or receipt by Lessee of any merchandise or materials which requires use of elevators or stairways, or movement through the Building entrances or lobby, shall be restricted to hours designated by Lessor. All such movement shall be under supervision of Lessor and carried out in the manner agreed between Lessee and Lessor by prearrangement before performance. Such prearrangement will include determination by Lessor of time, method, and routing of movement and limitations imposed by safety or other concerns which may prohibit any article, equipment or any other item from being brought into the Building. Lessee assumes, and shall indemnify Lessor against, all risks and claims of damage to persons and properties arising in connection with any said movement.

14. Lessor shall not be liable for any damages from the stoppage of elevators for necessary or desirable repairs or improvements or delays of any sort or duration in connection with the elevator service.

15. Lessee shall not lay floor covering within the leased premises without written approval of the Lessor. The use of cement or other similar adhesive materials not easily removed with water is expressly prohibited. Lessor requires the use of carpet protectors at all desk areas in order to maintain the carpet in good condition and prevent abnormal wear.

16. Lessee agrees to cooperate and assist Lessor in the prevention of canvassing, soliciting and peddling within the Building or project.

17. Lessor reserves the right to exclude from the Building or project, between the hours of 6:00 p.m. and 7:00 a.m. on weekdays and at all hours on Saturday, Sunday and legal holidays, all persons who are not known to the Building or project security personnel and who do not present a pass to the Building signed by the Lessee. Each Lessee shall be responsible for all persons for whom he supplies a pass.

18. It is Lessor’s desire to maintain in the Building or project the highest standard of dignity and good taste consistent with comfort and convenience for lessees. Any action or condition not meeting this high standard should be reported directly to Lessor. Your cooperation will be mutually beneficial and sincerely appreciated. Lessor reserves the right to make such other and further reasonable and non-discriminating rules and regulations as in its judgment may from time to time be necessary, for the safety, care and cleanliness of the leased premises and for the preservation of good order therein.

Radiant Lease for 1727 Kirby Parkway Page 2 of 2

EXHIBIT “A”

Commencing at a point in the west line of Kirby Parkway (106 foot right-of-way), said point being 1,224.92 feet north of the tangent intersection with the north line of Poplar Avenue, as measured along said west line; thence North 00 degrees 00 minutes 00 seconds West a distance of 289.74 feet to a point; thence South 00 degrees 00 minutes 00 seconds West a distance of 23.00 feet to a chisel mark (found), the true POINT OF BEGINNING; thence South 00 degrees 00 minutes 00 seconds East, and with the west line of Kirby Centre P.U.D. (Plat Book 84, Page 37), a distance of 72.03 feet (c=72.00’) to a chisel mark (found); thence North 89 degrees 34 minutes 14 seconds East (c=North 90 degrees 00 minutes 00 seconds East), and with a north line of Kirby Centre, a distance of 30.69 feet (c=32.50’) to an iron rod (found); thence South 00 degrees 18 minutes 11 seconds West (c=South 00 degrees 00 minutes 00 seconds West), and with the west line of Kirby Centre P.U.D., a distance of 140.00 feet to an iron rod (found); thence North 89 degrees 41 minutes 53 seconds West (c=North 90 degrees 00 minutes 00 seconds West), and with a north line of Kirby Centre, a distance of 44.99 feet to an iron rod (found); thence South 00 degrees 00 minutes 00 seconds East, and with the west line of Kirby Centre, a distance of 51.18 feet (c=51.68’) to an iron rod (set) in the north line of Revised Phase 2, Poplar Ridge Center SC-1 Shopping Center Plan (Plat Book 84, Page 31); thence South 88 degrees 07 minutes 43 seconds West (c=South 87 degrees 56 minutes 31 seconds West), and with said north line, a distance of 257.79 feet (c=258.24’) to an iron rod (found) in the east line of the Poplar Place L.P. property (W63174); thence North 00 degrees 34 minutes 36 seconds East (c=North 00 degrees 07 minutes 14 seconds East), and with said east line, a distance of 277.61 feet (c=277.69’) to a cotton picker spindle (set) in the south line of the Kirby Office Condo property (Master Deed T6 4980); thence South 89 degrees 31 minutes 33 seconds East (c=89 degrees 52 minutes 04 seconds East), and with said south line, a distance of 78.00 feet to a cotton picker spindle (set); thence South 00 degrees 28 minutes 27 seconds West (c=South 00 degrees 07 minutes 56 seconds West) a distance of 4.65 feet to a cotton picker spindle (set); thence South 89 degrees 39 minutes 29 seconds East (c=S 90 degrees 00 minutes 00 seconds East), and with said south line, a distance of 191.94 feet to the POINT OF BEGINNING.

TOGETHER WITH all easements and appurtenances thereto, including, but not limited to;

(a) access, parking and utility easements contained in that certain Reciprocal Easement Agreement recorded as Instrument No. S9 6866, Register’s Office of Shelby County, Tennessee, as same may be amended from time to time;

(b) access and utility easements contained in Section 10.03 of that certain Master Deed of Kirby Office Condominium recorded as Instrument No. T5 4950, Shelby County Register of Deeds, as same may be amended; and

(c) access and parking easements contained in that certain Cross Easement and Maintenance Agreement recorded as Instrument No. V4 5025, aforesaid records.

EXHIBIT “B”

[ATTACH PLAN OF BUILDING AND DENOTE LEASED PREMISES AND EXPANSION SPACE]

EX-10.31

Exhibit 10.31

EMPLOYMENT ARRANGEMENTS WITH EXECUTIVE OFFICERS

Following is a description of the employment arrangements for each of Radiant’s executive officers. None of the executive officers has an employment agreement with Radiant.

The following table sets forth each executive officer’s current base salary and the cash bonus paid by Radiant to each executive officer in 2005.

Name and Position	Current Base Salary		2005 Cash Bonus
Alon Goren Chairman of the Board and Chief Technology Officer	$	250,000	$	132,500
John H. Heyman Chief Executive Officer and Director		300,000		222,500
Mark E. Haidet Chief Financial Officer		212,000		100,330
Andrew S. Heyman Chief Operating Officer		267,000		209,153

The executive officers are entitled to all benefits generally made available to Radiant’s employees.

Radiant’s employees, including its executive officers, are eligible to receive stock-based incentive compensation under Radiant’s 2005 Long-Term Incentive Plan, a copy of which is filed as Exhibit 10.7 to Radiant’s Annual Report on Form 10-K for the year ended December 31, 2005.

All Radiant employees, including executive officers, are required to sign a Confidentiality and Non-Solicitation Agreement. The agreements restrict the ability of the executive officers to compete with Radiant during their employment and for a period of two years thereafter, restrict solicitation of customers and employees following employment with Radiant, and provide for ownership and assignment of intellectual property rights to Radiant. Each agreement has an indefinite term, but the employee may terminate employment with Radiant at any time.

Radiant maintains a 401(k) Profit Sharing Plan (the “401(k) Plan”) which is intended to be a tax-qualified defined contribution plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”). In general, all Radiant employees, working at least 20 hours per week, and who have attained age 21 are eligible to participate on the first of the month following their hire date. The 401(k) Plan includes a salary deferral arrangement pursuant to which participants may contribute, subject to certain Code limitations, a minimum of 1% and a maximum of 80% of their salary on a pre-tax basis (up to $14,000 per year). Subject to certain Code limitations, Radiant may make both matching and additional contributions at the discretion of the Board of Directors each year. A separate account is maintained for each participant in the 401(k) Plan. The portion of a participant’s account attributable to his or her own contributions is 100% vested. Distributions from the 401(k) Plan may be made in the form of a lump-sum cash payment or in installment payments. The following table sets forth the 401(k) Plan matching contributions made by Radiant to each executive officer in 2005.

Name and Position	401(k) Plan Matching Contribution
John H. Heyman Chief Executive Officer and Director	$	4,261
Mark E. Haidet Chief Financial Officer		3,180

EX-10.32

Exhibit 10.32

DIRECTOR COMPENSATION ARRANGEMENTS

Radiant’s present policy is not to pay any cash compensation to its directors, other than to the Audit Committee Chairman, who receives a $5,000 annual retainer. Each non-employee director receives an automatic grant of options to purchase 10,000 shares of Radiant’s common stock on the last business day of each year. Each non-employee director is also reimbursed for travel and other expenses incurred in connection with the performance of his or her duties.

In addition, all new non-employee directors receive a one-time grant of an option to purchase 25,000 shares of Radiant’s common stock at an exercise price equal to the fair market value of such stock on the date of grant, which options vest over a period of three years. All such options expire, unless previously exercised or terminated, ten years from the date of grant.

Radiant’s non-management directors are also eligible to receive additional stock option grants under Radiant’s Non-Management Directors’ Stock Option Plan, in the discretion of Radiant’s Board of Directors.

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF THE REGISTRANT

Radiant Systems Central Europe, Inc.

Radiant Systems International, Inc.

Estorelink.Com, Inc.

RetailEnterprise, LLC

Radiant Enterprise Software LLC

Radiant Systems Asia-Pacific Pty Ltd.

Radiant Systems Retail Solutions Pte Ltd.

Radiant Systems s.r.o.

Radiant Systems Retail Solutions, S.L.

Radiant Systems UK Limited

Radiant Hospitality Systems, Ltd.

RADS Holding Corp.

MenuLink Computer Solutions, Inc.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-102221 on Form S-3 and in Registration Statement’s No.’s 333-23237, 333-41327, 333-62157 and 333-71892 of Radiant Systems, Inc. on Forms S-8 of our reports dated March 1, 2006, relating to the financial statements and financial statement schedule of Radiant Systems, Inc and management’s report on the effectiveness of internal control over financial reporting, appearing in this Annual Report on Form 10-K of Radiant Systems, Inc for the year ended December 31, 2005.

/s/ DELOITTE & TOUCHE LLP

Atlanta, Georgia

March 1, 2006

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, John H. Heyman, certify that:

1. I have reviewed this annual report on Form 10-K of Radiant Systems, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 5d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: March 1, 2006	/s/ JOHN H. HEYMAN
	John H. Heyman, Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Mark E. Haidet, certify that:

1. I have reviewed this annual report on Form 10-K of Radiant Systems, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: March 1, 2006	/s/ MARK E. HAIDET
	Mark E. Haidet, Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, John H. Heyman, do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the foregoing Annual Report of the Company:

(1) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, 15 U.S.C. 78 m or 78o(d), and

(2) the information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 1, 2006	/s/ JOHN H. HEYMAN
	John H. Heyman, Chief Executive Officer

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Mark E. Haidet, do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the foregoing Annual Report of the Company:

(1) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, 15 U.S.C. 78 m or 78o(d), and

(2) the information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 1, 2006	/s/ MARK E. HAIDET
	Mark E. Haidet, Chief Financial Officer