DRS/A

Confidential Draft Submission #2 as submitted to the Securities and Exchange Commission on June 20, 2014.

This draft registration statement has not been publicly filed with the Securities and Exchange Commission and all information herein remains strictly confidential.

Registration Statement No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

ALARM.COM HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	7372	26-4247032
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

8150 Leesburg Pike Vienna, Virginia 22182

Tel: (877) 389-4033

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

Stephen Trundle

President and Chief Executive Officer Alarm.com Holdings, Inc. 8150 Leesburg Pike Vienna, Virginia 22182

Tel: (877) 389-4033

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

Copies to:

Eric Jensen Nicole Brookshire Peyton Worley Cooley LLP 500 Boylston Street Boston, Massachusetts 02116 (617) 937-2300 Mark T. Bettencourt Gregg L. Katz Goodwin Procter LLP Exchange Place 53 State Street Boston, Massachusetts 02109 (617) 570-1000

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

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended, check the following box.  ¨

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

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

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

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

Large Accelerated Filer  ¨ Accelerated Filer  ¨ Non-accelerated Filer  x Smaller Reporting Company  ¨

CALCULATION OF REGISTRATION FEE

Title of Securities Being Registered	Proposed Maximum Aggregate Offering Price(1)(2)	Amount of Registration Fee
Common Stock, $0.01 par value per share

(1) In accordance with Rule 457(o) under the Securities Act of 1933, as amended, the number of shares being registered and the proposed maximum offering price per share are not included in this table.

(2) Estimated solely for purposes of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. Includes the offering price of shares that the underwriters have the option to purchase to cover over-allotments, if any.

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

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

SUBJECT TO COMPLETION, DATED                     , 2014

                 Shares

ALARM.COM HOLDINGS, INC.

Common Stock

This is an initial public offering of common stock of Alarm.com Holdings, Inc.

Alarm.com is offering                      shares of common stock to be sold in the offering. The selling stockholders identified in this prospectus are offering                  additional shares of common stock. Alarm.com will not receive any of the proceeds from the sale of the                  shares being sold by the selling stockholders.

Prior to this offering, there has been no public market for our common stock. The initial public offering price of the common stock is expected to be between $         and $         per share. We intend to apply to list our common stock on the NASDAQ Global Market under the symbol “ALRM.”

We are an “emerging growth company” as defined under the U.S. federal securities laws and, as such, may elect to comply with certain reduced public company reporting requirements for this and future filings.

See “Risk Factors” beginning on page 15 to read about factors you should consider before buying shares of the common stock.

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

	Per Share	Total
Initial public offering price	$	$
Underwriting discount(1)	$	$
Proceeds, before expenses, to Alarm.com	$	$
Proceeds, before expenses, to the selling stockholders	$	$

⁽¹⁾ See the section of this prospectus titled “Underwriting” for a description of the compensation payable to the underwriters.

To the extent that the underwriters sell more than                  shares of common stock, the underwriters have the option to purchase up to an additional                  shares from Alarm.com at the initial public offering price less the underwriting discount.

The underwriters expect to deliver the shares against payment in New York, New York on                     , 2014.

Goldman, Sachs & Co. Credit Suisse BofA Merrill Lynch

Stifel Raymond James William Blair Imperial Capital

Prospectus dated                     , 2014

TABLE OF CONTENTS

PROSPECTUS SUMMARY	1
RISK FACTORS	15
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	43
USE OF PROCEEDS	45
DIVIDEND POLICY	46
CAPITALIZATION	47
DILUTION	49
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA	52
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	55
BUSINESS	90
MANAGEMENT	109
EXECUTIVE AND DIRECTOR COMPENSATION	116
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	129
PRINCIPAL AND SELLING STOCKHOLDERS	133
DESCRIPTION OF CAPITAL STOCK	136
SHARES ELIGIBLE FOR FUTURE SALE	142
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS	145
UNDERWRITING	149
LEGAL MATTERS	155
EXPERTS	155
WHERE YOU CAN FIND ADDITIONAL INFORMATION	155
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	F-1

Through and including                 , 2014 (the 25th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.

Neither we, the selling stockholders, nor the underwriters have authorized anyone to provide you with information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We take no responsibility for, and provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

For investors outside the United States: Neither we, nor the selling stockholders, nor any of the underwriters have done anything that would permit this offering, or possession or distribution of this prospectus, in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution of this prospectus outside of the United States.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our common stock, you should carefully read this entire prospectus, including our consolidated financial statements and the related notes and the information set forth under the sections titled “Risk Factors,” “Special Note Regarding Forward-Looking Statements,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in each case included in this prospectus. Unless the context otherwise requires, we use the terms “Alarm.com,” “company,” “our,” “us,” and “we” in this prospectus to refer to Alarm.com Holdings, Inc. and, where appropriate, our consolidated subsidiaries.

Overview

We are the leading cloud-based software platform powering the intelligently connected home. We have developed technology that makes the connected home broadly accessible to consumers and fundamentally changes the way they interact with their homes and businesses. Our multi-tenant software-as-a-service, or SaaS, platform allows home and business owners to intelligently secure and manage their properties and remotely interact with a broad array of connected devices through a single, intuitive interface. Our connected home platform currently has more than 2 million residential and small business subscribers, connects to more than 20 million devices, and processed more than 15 billion data points generated by those subscribers and devices in the last year alone, making Alarm.com the largest connected home platform.

Our solutions are delivered through an established network of over 4,000 trusted service providers, who are experts at selling, installing and supporting connected home solutions. Our technology platform was purpose built for the connected home ecosystem, including the consumers who use it, the service providers who sell, install and support it and the hardware partners whose connected devices are integrated into the platform.

We invented solutions that connect people in new ways with their property and devices, making them safer, smarter and more efficient. Our platform currently includes four primary solutions, which can be used individually or combined and integrated within a single user interface accessible through the web and mobile apps:

• Intelligent Automation.  Integrated home automation solution that allows users to easily and remotely connect and control devices and systems such as security systems, garage doors, lights, door locks, thermostats, electrical appliances, environmental sensors and other connected devices. The cloud-based platform uses data and sophisticated algorithms to learn activity patterns and recommend intelligent optimizations.

• Interactive Security.  Always-on intelligent security and awareness solution that operates through a dedicated, cellular connection to provide safe, reliable protection and withstand common vulnerabilities like line cuts, power outages and network connectivity issues. The solution includes a powerful mobile app, anytime alerts and customized triggers, and provides 24x7 emergency response through trusted and integrated service providers.

• Video Monitoring.  Video-as-a-service solution delivering on demand viewing, cloud-based video storage and intelligently triggered recording with anytime access. The comprehensive suite of video services includes live streaming, smart clip capture, high definition continuous recording and instant video alerts delivered to users through the web and mobile apps.

• Energy Management.  Sophisticated energy monitoring and management solution for controlling energy consumption and comfort. Web and mobile apps integrate with connected

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thermostats, power meters, lights, shades and appliances to control devices and manage temperature as well as provide real-time insights into home energy usage and efficiency. The intelligent platform delivers activity-based learning optimization as well as location-based adjustments for effortless energy management.

Homes and businesses are now ripe for reinvention, as most properties lack even basic automation and are still manually controlled. The intersection of four significant technology trends are making the intelligent, connected home now possible: broad adoption of mobile devices, the emergence of the “Internet of Things,” the power of big data and the extensibility of the cloud. Security systems, thermostats, door locks, video cameras, lights, garage doors, appliances and other devices that were once inert now have the potential to become sensor-enabled, intelligent and connected. According to Consumer Electronics Association reports dated December 2012 and September 2013, in September 2013, 61% of consumers surveyed expressed an interest in home automation, an increase from 37% in December 2012, reflecting consumers’ increasing demand for intuitive, connected and intelligent solutions in their homes and businesses.

Our innovative solutions offer a new experience for home and business owners. Here are some common examples of how subscribers use our platform:

• A person driving to work gets an alert as soon as she is a mile away from home, alerting her that she left her garage door open, and forgot to arm her security system. With one click in the Alarm.com app, the security system is armed and the garage door is closed.

• As a person heads to bed, he arms the security system with his Alarm.com app and the doors automatically lock, the lights turn off, the thermostat goes into energy savings mode, the shades close and the garage door closes.

• A business owner receives an alert from Alarm.com that the security system was disarmed and the front door opened at 8:00 a.m., letting her know the store opened on time. Later she receives an alert that the security system has not been armed by 10:00 p.m. and, with a glance at the Alarm.com app to see the door is locked and there has been no activity for over two hours, she instantly arms the system from her mobile app.

• As a person leaves home, his thermostat is automatically set to an efficiency mode when he is a pre-defined distance away from his home. When he is returning and is close to home, Alarm.com automatically adjusts the thermostat back to a comfort mode.

• A homeowner creates a unique access code using Alarm.com to grant access to the dog walker during certain times of the day and days of the week. If the dog walker fails to arrive as scheduled, an alert is sent. When the dog walker arrives, Alarm.com automatically sends an alert with a short video clip to the dog’s owner.

• With smart schedules, Alarm.com learns activity patterns over time by analyzing the sensor data within the home — door openings, motion activity, security system arming and thermostat adjustments. Combined with external information, such as weather and humidity data, Alarm.com recommends adjustments to thermostat schedules to optimize energy use without sacrificing comfort.

Our solutions are delivered through an extensive network of service providers, primarily comprised of security system dealers who are experts at delivering connected home solutions. According to a Consumer Electronics Association report dated December 2012, 62% of consumers stated that security was the primary driver for purchasing connected home automation products and services.

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Service providers that have a strong pedigree in security are best positioned to extend their offerings into the connected home and are now leading the distribution of connected home automation solutions.

We primarily generate revenue through our service providers who resell our services, and pay us monthly subscription fees on a per subscriber basis. Our service providers have indicated that they typically have three to five year service contracts with home or business owners, who we call subscribers. We believe that the length of these contracts, combined with our SaaS model and over a decade of operating experience, provides us with good visibility into our future operating results. In addition, we generate hardware and other revenue primarily by selling our service providers an Alarm.com cellular communication module that enables the managed cellular communication channel between the devices installed in the home or business and our cloud-based platform.

We have experienced significant growth since inception. We had twice as many subscribers as the next largest platform provider in North America as of December 2013, according to data from a Parks Associates report dated December 2013. We have increased the number of homes and businesses we served from 483,000 as of December 31, 2010, to over 2 million today. Additionally, we grew revenue at a 52% compound annual growth rate from December 31, 2010 to December 31, 2013.

For the year ended December 31, 2013, our revenue was $130.2 million, representing year-over-year revenue growth of 35%. For the first quarter of 2014, our revenue was $36.9 million, representing year-over-year revenue growth of 31%. For the year ended December 31, 2013, our subscription revenue was $82.6 million, representing year-over-year subscription revenue growth of 48%. For the first quarter of 2014, our subscription revenue was $25.2 million, representing year-over-year revenue growth of 43%. Our subscription revenue represented 63% of our total revenue for the year ended December 31, 2013 and 68% of our total revenue in the first quarter of 2014, and we expect it to continue increasing as a percentage of total revenue as our subscriber base grows. Hardware and other revenue accounted for 37% of our total revenue for the year ended December 31, 2013 and 32% of our total revenue in the first quarter of 2014. For the year ended December 31, 2013, and on a consolidated basis, we generated net income of $4.5 million and Adjusted EBITDA, a non-GAAP metric, of $28.3 million. For the first quarter of 2014, we generated net income of $4.3 million and Adjusted EBITDA of $8.8 million. Please see footnote 6 to the table contained in the section of this prospectus titled “Selected Consolidated Financial and Other Data” for a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting standards in the United States, or GAAP.

Key Trends Driving the Adoption of the Connected Home

The intersection of the following significant technology trends and consumer demand are driving mass adoption of connected home solutions.

• The Mobile Era.  The proliferation of smartphones and tablets has transformed the way people interact with applications and content in both their personal and professional lives, and consumers are increasingly demanding a similarly efficient and convenient mobile experience to intelligently control their homes.

• The Internet of Things.  There has been significant growth in the number of connected devices. According to a Gartner report dated March 2014, the Internet of Things is forecast to reach 26 billion installed units by 2020, up from 0.9 billion in 2009. This trend includes “things” in consumers’ homes and businesses such as security systems, thermostats, door locks, video cameras, lights, garage doors, water heaters and appliances. The ability to remotely manage, monitor and control devices using cloud-based applications and wireless technology is creating a large and fast growing market.

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• Big Data and Analytics Capabilities.  According to an IDC report dated April 2014, the volume of digital information created and replicated worldwide will grow approximately 39% annually from 4.4 trillion gigabytes in 2013 to 44 trillion gigabytes in 2020. As the network of physical objects accessed through the Internet continues to grow, there is an opportunity to leverage this data to transform the way consumers interact with their homes through real-time, adaptive and predictive analytics.

• Cloud Infrastructure.  Advances in cloud technologies have allowed a new generation of home security and automation software to be efficiently delivered as a service to the mass market, making it possible for consumers to afford such services without the requirement of expensive and quickly outdated physical hardware.

What Consumers Want

Consumers increasingly are seeking a connected home solution as a way to make their lives more convenient, efficient and secure. They expect:

• Persistent Awareness and Control.  Persistent awareness and control of everything that is happening inside and around their homes through one simple, easy-to-use mobile app on the device of their choice.

• Unified Experience.  A platform that seamlessly works with a broad range of connected devices enabling those devices to integrate with each other to create a unified connected home experience that is also affordable and easy to acquire.

• Adaptive Learning.  An intelligent system that adapts to their behavior and recommends optimizations to improve the safety and efficiency of their home.

• Trusted Provider.  A professionally configured or installed solution, monitored by a service provider that they can trust, because when it comes to their homes, consumers place a premium on their security and privacy.

What Connected Home Service Providers Want

Service providers are a critical part of allowing the benefits of the connected home to be rapidly and effectively delivered to consumers. They want:

• Integrated Solution.  To be able to market and sell comprehensive connected home solutions that are adaptable to varying consumer requirements.

• Compelling Return on Investment.  To distribute a solution that can expand their addressable market and increase customer revenue and retention.

• Low Delivery and Support Costs.  A solution that can be installed and maintained cost-effectively in any home with low ongoing support costs — for instance, by being able to service or update a solution remotely instead of having to send personnel onsite.

• Hardware Choice.  A flexible platform that can support multiple hardware devices and manufacturers and that is future-proof, integrating with new technologies.

• Enterprise Grade Solution.  Highly reliable platform provided by a proven partner with a trusted brand, first-class support and value-added services.

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Limitations of Existing and Legacy Products

Existing and legacy approaches to home automation generally have several limitations:

• Point Products.  Home control products are highly fragmented and made up of multiple disparate devices which provide only a single function and, if connected at all, require separate mobile apps.

• Closed Ecosystem.  Closed ecosystems with products that do not scale to support the expanding Internet of Things do not have an awareness of, or the ability to interact with, other devices in the home or business.

• Lack Intelligence.  These products are only able to respond to direct commands and lack the ability to apply any automated intelligence to create a more efficient and simplified experience.

• Not Future Proof.  Since most legacy products are not cloud-based, they cannot receive automatic updates of new software, and generally require physical hardware and software replacements once new features, devices or technologies are introduced. These replacements typically have to be done onsite.

• Overly Complex and Expensive.  Systems that attempt to integrate disparate point products in a closed network are highly complex and require a significant level of customization. As a result, these systems lack flexibility and are often cost prohibitive to acquire, service and update for most consumers.

Market Opportunity

We believe our addressable market is nearly every home and small business in the world. Our residential subscribers are typically owners of single-family homes, while our small business subscribers include retail businesses, restaurants, small-scale commercial facilities, offices of professional services providers and similar businesses. According to a Juniper Research report dated February 2014, the global opportunity for home automation and security, smart metering and smart health monitoring in the home is expected to grow from $5.8 billion in 2013 to $14.9 billion in 2018, representing a compound annual growth rate of 21%. Approximately 81% of the total market size in each period is attributable to the home automation and security market, which Juniper Research defines as a bundled solution, including camera, lighting, heating control, door locks and others. In the United States alone, according to a Parks Associates report dated December 2013, smart home controller penetration was only at 2.2% of households in 2013. We believe there is an opportunity for penetration rates to significantly increase, largely driven by the mass market adoption of connected home solutions. In addition, we believe there are commonalities between the residential and small business markets for these services including similar property size, service providers and benefits from security, awareness and control of devices in the property. Therefore, we believe that there will be a similar adoption trend by small businesses, which represents a sizable related opportunity.

Benefits of Our Solutions

Our platform powers the connected home through four primary solutions, which can be integrated within a single user experience: intelligent automation, interactive security, video monitoring and energy management. In addition, we provide a comprehensive suite of enterprise-grade business management solutions to our service providers.

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Benefits to Consumers

• Intuitive Experience.  We have designed our platform and user interface to be intuitive, simple and easy to operate, providing secure, intelligent control through a single user interface on any mobile device.

• Single Connected Platform.  Our cloud-based platform can be easily upgraded to incorporate new functionality and personalized to suit the individual consumer’s needs. In addition, a subscriber can easily expand his or her existing system by adding new devices and functionality.

• Reliable Network Communications.  Our platform utilizes a highly secure and reliable cellular connection, which avoids vulnerabilities of phone lines and wired networks, such as lines being cut, power outages or network connectivity issues.

• Persistent Awareness.  Our platform helps subscribers maintain an awareness of what is happening at their properties at all times. Whether or not the security system is armed, the platform continuously monitors activity on each sensor and analyzes that data to determine whether the subscriber should be notified.

• Intelligent and Actionable.  The continuous, multi-point awareness of our platform enables intelligent real-time monitoring, control of the home and adaptive learning.

• Broad Device Compatibility.  Our platform supports a wide variety of connected devices and communications protocols, allowing consumers to seamlessly connect and automate many devices they already own throughout the home, as well as add devices they purchase in the future.

• Accessible and Affordable.  Our platform provides an affordable alternative to expensive point products and legacy home control products, with minimal upfront expense.

• Trusted Provider of a Security Platform.  We have built a reputation and brand as a trusted, reliable and innovative technology provider. Our reputation is strengthened through our network of over 4,000 service providers, who have significant expertise in delivery of our platform.

Benefits to Service Providers

• New Revenue Generation Opportunities.  Our solutions help broaden our service providers’ offerings beyond traditional home security and monitoring to include comprehensive connected home solutions, allowing the service providers to access new revenue streams and drive incremental recurring monthly revenue.

• Expanded Set of Value-Added Services.  We provide a set of value-added services to our service providers, including training, marketing, installation and support tools and business intelligence analytics.

• Improved Service Provider Economics.  Our cloud-based platform provides improved customer economics by reducing delivery and support costs, allowing remote delivery of upgrades and increasing average monthly revenue. According to a Parks Associates report dated October 2013, consumers are willing to pay a 25% premium over the cost of a basic security system for a professionally monitored system that includes a home automation solution.

• Broad Device Interoperability.  We have an open platform supporting a wide range of communications protocols used in the home automation ecosystem, including Z-Wave, Wi-Fi and ZigBee, as well as cellular and broadband, allowing service providers to tailor their offerings to suit their customers now and in the future.

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Competitive Advantages

We believe the benefits we deliver to our subscribers and our service providers create a significant competitive advantage for us in the connected home market. In addition, we believe there are a number of other factors that contribute to our competitive advantage in the connected home market:

• Scale of Subscriber Base and Service Provider Coverage.  With over 2 million subscribers, over 4,000 service providers and more than 20 million connected devices, we believe the combination of the size of our subscriber base and established service provider network creates a competitive advantage for us and increases the challenge for competitors to replicate.

• Security Grade, Cloud-Based Architecture.  Our platform was built with life safety standards at the core, where the reliability standard is substantially higher than that required for home automation and energy management products. The cloud-based nature of our platform allows for real-time updates and upgrades and lets us rapidly innovate and deploy new solutions and features and support new devices.

• Highly Scalable Data Analytics Engine.  We processed more than 15 billion data points in and out of properties last year alone. This data drives persistent awareness and can keep subscribers informed in real-time, helping them intelligently manage their security, energy efficiency and devices in their properties.

• Trusted Brand.  We believe we have developed a trusted brand with both service providers and consumers for innovating and delivering connected home solutions. Our extensive service provider coverage enables us to utilize our marketing dollars efficiently nationwide to drive consumer referrals.

• Commitment to Innovation.  We are a pioneer in the connected home market and we continue to make significant investments in innovative research and development. Our investment has resulted in over 20 patents which help ensure that our technology is competitively differentiated and protected.

Growth Strategy

We intend to maintain our leadership position in the connected home market while continuing to innovate, add advanced capabilities and increase penetration of our connected home solutions. Our key growth strategies include:

• Drive Subscriber Growth and Add New Service Providers.  We will continue to invest in making our service providers successful in driving adoption of the connected home by building out our sales, marketing and training services for our service providers. In addition, we plan to continue to grow our network of service providers.

• Upgrade Traditional Security Customers to Our Connected Home Solutions.  We intend to leverage our status as a trusted provider and drive consumer interest in these services to enable our service providers to upgrade their legacy security customers to our connected home solutions.

• Continue to Invest in Our Platform.  As a pioneer in connected home solutions, we have made significant investments in building out our platform over the last 14 years. We are investing in adding new innovative solutions that take advantage of the growth of the Internet of Things and that will seamlessly connect devices such as appliances, wearable devices and automobiles to our platform.

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• Expand International Presence.  We are investing in international expansion because we believe there is a significant global market opportunity for our solutions. We believe that the strengths of our cloud-based architecture and that our capabilities with cellular communication technology will enable us to capitalize on opportunities worldwide.

• Expand Channels into the Home.  Today, most consumers purchase a connected home solution through a security or home automation service provider. As the connected home market continues to grow we believe other home services providers, such as heating, ventilation and air conditioning installers, property management companies and other services companies will be valuable complements to our current security service provider network.

Selected Risks Affecting Our Business

Our business is subject to a number of risks you should be aware of before making an investment decision. These risks are discussed more fully in “Risk Factors” beginning on page 16 and include:

• Our quarterly operating results have fluctuated in the past and are likely to continue to fluctuate, which could cause the price of our common stock to decline substantially.

• We may not sustain our percentage growth rate, and we may not be able to manage our future growth effectively.

• We are highly dependent on the proper and efficient functioning of our network operations centers and data back-up systems.

• We rely on our service provider network to acquire additional subscribers, and the inability of our service providers to attract additional subscribers or retain their current subscribers could adversely affect our operating results.

• An assertion by a third-party that we are infringing its intellectual property could subject us to costly and time-consuming litigation or expensive licenses that could harm our business and results of operations.

• The markets in which we participate are rapidly changing and highly competitive and many companies, including large technology companies, broadband and security service providers and other managed service providers, are actively targeting the home automation market. Our failure to differentiate ourselves and compete successfully with these companies would make it difficult for us to add and retain consumers, and would harm our business.

• Since we rely on third-party service providers and distributors to sell and install our solutions, we are dependent upon them to sell our solutions, and it is difficult for us to communicate with these subscribers, accurately forecast future sales and correctly predict consumer demands and service requirements.

• The connected home market is immature and volatile, and if it does not develop or if it develops more slowly than we expect, the growth of our business will be harmed.

• If our security measures are breached or fail and unauthorized access is obtained to consumers’ data, our service will be perceived as not being secure, our brand will be harmed and we will incur significant liabilities.

• Our future depends in part on the interests and influence of key stockholders.

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Corporate Information

We were founded in 2000 as a business unit within MicroStrategy Incorporated. We were incorporated in 2003 as a majority-owned subsidiary of MicroStrategy. MicroStrategy sold all of its interests in Alarm.com Incorporated in 2009 and we established Alarm.com Holdings, Inc. in connection with the sale transaction. Our principal executive offices are located at 8150 Leesburg Pike, Vienna, Virginia. Our telephone number is (877) 389-4033. Our website address is www.alarm.com. The information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our common stock.

“Alarm.com”, the Alarm.com logo, and other trademarks or service marks of Alarm.com Incorporated appearing in this prospectus are the property of Alarm.com Incorporated. This prospectus contains additional trade names, trademarks and service marks of others, which are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ^® or ^TM symbols.

Implications of Being an Emerging Growth Company

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from specified disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include:

• exemption from the auditor attestation requirement in the assessment of our internal controls over financial reporting;

• reduced disclosure obligations regarding executive compensation; and

• exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

We may take advantage of these provisions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1 billion in annual revenue, have more than $700 million in market value of our capital stock held by non-affiliates or issue more than $1 billion of non-convertible debt over a three-year period. We may choose to take advantage of some, but not all, of the available exemptions. We have taken advantage of some reduced reporting requirements in this prospectus. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

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The Offering

Common stock offered by us                      shares

Common stock offered by the selling stockholders                      shares

Common stock to be outstanding after this offering                      shares

Over-allotment option We have granted the underwriters an option, exercisable for 30 days after the date of this prospectus, to purchase up to an additional                      shares from us.

Use of proceeds We estimate that we will receive net proceeds of approximately $             million, assuming an initial public offering price of $             per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting the underwriter discounts and commissions and estimated offering expenses payable by us. The principal purposes of this offering are to increase our financial flexibility, create a public market for our common stock, and facilitate our future access to the capital markets. We also expect to use the net proceeds of this offering for working capital and other general corporate purposes. We may use a portion of the proceeds from this offering for acquisitions or strategic investments in complementary businesses or technologies, although we do not currently have any plans for any such acquisitions or investments. These expectations are subject to change. We will not receive any of the proceeds from the sale of shares to be offered by the selling stockholders. See the section of this prospectus titled “Use of Proceeds” for additional information.

Risk factors See the section of this prospectus titled “Risk Factors” and the other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.

Directed share program At our request, the underwriters have reserved for sale, at the initial public offering price, up to                      of the shares offered by this prospectus for sale to certain of our business associates and service providers as well as our directors, executive officers and other employees through a directed share program. If these business associates or service providers purchase shares through the directed share program, the number of shares available for sale to the general public will be reduced. Any reserved shares that are not purchased will be offered by the underwriters to the general public on the same terms as the other shares offered by this prospectus.

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Proposed NASDAQ Global Market Trading Symbol              “ALRM”

The number of shares of our common stock that will be outstanding after this offering is based on the number of shares outstanding as of May 31, 2014, and excludes:

• 3,363,357 shares of common stock issuable upon the exercise of options outstanding as of May 31, 2014, at a weighted-average exercise price of $2.41 per share;

•                      shares of our common stock reserved for future issuance pursuant to our 2014 Equity Incentive Plan, or 2014 Plan, which will become effective prior to the completion of this offering and will include provisions that automatically increase the number of shares of common stock reserved for issuance thereunder each year (including 349,462 shares of common stock reserved for issuance under our previously existing Amended and Restated 2009 Stock Incentive Plan, or the 2009 Plan, that will be added to the shares reserved under the 2014 Plan upon its effectiveness); and

• 118,881 shares of common stock issuable upon the exercise of common stock warrants that were outstanding as of May 31, 2014, at a weighted-average exercise price of approximately $1.20 per share.

Unless otherwise indicated, this prospectus reflects and assumes the following:

• a nine-for-one stock split of our common stock that occurred in June 2013 and resulted in a proportional adjustment to the conversion ratio of our preferred stock;

• the conversion of all of our outstanding shares of preferred stock into an aggregate of 35,017,884 shares of our common stock immediately prior to the completion of this offering;

• the filing and effectiveness of our amended and restated certificate of incorporation in Delaware and the adoption of our amended and restated bylaws, each of which will occur upon the completion of this offering;

• no exercise of outstanding options or warrants after May 31, 2014; and

• no exercise by the underwriters of their over-allotment option.

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Summary Consolidated Financial and Other Data

In the following tables, we provide our summary consolidated financial and other data. We derived the summary consolidated statements of operations data for the years ended December 31, 2011, 2012, and 2013 and our consolidated balance sheet data as of December 31, 2013 from our audited consolidated financial statements included elsewhere in this prospectus. We derived the summary consolidated statements of operations data for the three months ended March 31, 2013 and 2014 and our summary consolidated balance sheet data as of March 31, 2014 from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. We have prepared the unaudited consolidated financial statements on the same basis as the audited consolidated financial statements, and the unaudited consolidated financial statements include, in our opinion, all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of our financial position and results of operations for these periods. Our historical results are not necessarily indicative of the results to be expected in the future, and our operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2014. When you read this summary consolidated financial data, it is important that you read it together with the historical financial statements and related notes to those statements, as well as the sections of this prospectus titled “Selected Consolidated Financial and Other Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

	Year Ended December 31,									Three Months Ended March 31,
	2011			2012(7)			2013			2013			2014
										(unaudited)
	(in thousands, except share and per share data and number of subscribers)
Consolidated Statements of Operations Data:
Revenue:
Subscription revenue	$	32,161		$	55,655		$	82,620		$	17,579		$	25,204
Hardware and other revenue		32,898			40,820			47,602			10,450			11,647
Total revenue		65,059			96,475			130,222			28,029			36,851
Cost of revenue:(1)
Cost of subscription revenue		8,051			12,681			16,476			3,690			5,008
Cost of hardware and other revenue		21,102			28,773			38,482			7,568			8,993
Total cost of revenue		29,153			41,454			54,958			11,258			14,001
Operating expenses:
Sales and marketing(2)		5,819			13,232			21,467			3,638			5,096
General and administrative(2)		6,817			14,099			29,928			2,358			5,220
Research and development(2)		5,613			8,944			13,085			2,675			4,610
Amortization and depreciation		1,988			2,230			3,360			628			806
Total operating expenses		20,237			38,505			67,840			9,299			15,732
Operating income		15,669			16,516			7,424			7,472			7,118
Interest income / (expense), net		1			(307	)		(100	)		(70	)		11
Other income / (expense), net		—			—			(112	)		—			(59	)
Income before income taxes		15,670			16,209			7,212			7,402			7,070
Provision for income taxes		6,015			7,280			2,688			3,050			2,797
Net income		9,655			8,929			4,524			4,352			4,273
Dividends paid on redeemable convertible preferred stock		(18,998	)		(8,182	)		—			—			—
Cumulative dividend on redeemable convertible preferred stock		(3,317	)		(1,855	)		—			—			—
Deemed dividend to redeemable convertible preferred stock upon recapitalization		—			(138,727	)		—			—			—
Income allocated to participating securities		—			—			(4,402	)		(4,250	)		(4,125	)
Net (loss) income attributable to common stockholders	$	(12,660	)	$	(139,835	)	$	122		$	102		$	148
Per share information attributable to common stockholders:
Net (loss) income per share:
Basic	$	(19.76)		$	(108.55)		$	0.08		$	0.08		$	0.08
Diluted	$	(19.76)		$	(108.55)		$	0.04		$	0.04		$	0.04
Pro forma (unaudited):(3)
Basic							$	0.12					$	0.12
Diluted							$	0.12					$	0.11
Weighted average common shares outstanding:
Basic		640,850			1,288,162			1,443,469			1,252,755			1,869,370
Diluted		640,850			1,288,162			2,795,345			2,426,857			3,467,288
Pro forma (unaudited):(3)
Basic								36,461,353						36,887,254
Diluted								37,813,229						38,485,172
Other Financial and Operating Data:
Number of subscribers(4)		856,000			1,330,000			1,902,000			1,425,000			1,984,000
Subscription revenue renewal rate(5)		94%			94%			93%			91%			92%
Adjusted EBITDA(6)		$17,839			$20,505			$28,259			$8,264			$8,775

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	As of March 31, 2014
	Actual			Pro forma(8)		Pro forma as adjusted(9)
	(in thousands, except per share data)
	(unaudited)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	40,863		$	40,863	$
Working capital, excluding deferred revenue		39,051			39,051
Total assets		106,038			106,038
Redeemable convertible preferred stock		202,456			—
Total long-term obligations		14,258			14,258
Total stockholders’ (deficit) equity		(134,507	)		67,949
Cash dividends per common share		—			—

(1) Excludes amortization and depreciation.

(2) Includes stock-based compensation expense as follows:

	Year Ended December 31,						Three Months Ended March 31,
	2011		2012		2013		2013		2014
	(in thousands)
Sales and marketing	$	39	$	196	$	102	$	29	$	77
General and administrative		89		418		495		65		480
Research and development		54		1,145		244		70		231
Total stock-based compensation expense	$	182	$	1,759	$	841	$	164	$	788

(3) Pro forma basic and diluted net income per share represents net income divided by the pro forma weighted-average shares of common stock outstanding. Pro forma weighted-average shares outstanding reflects the conversion of preferred stock (using the if-converted method) into common stock as though the conversion had occurred as of the first day of the relevant period.

(4) We define our subscribers as the number of residential or commercial properties to which we delivered at least one of our offerings during the period. A subscriber who subscribes to one of our service level packages as well as one or more of our a la carte add-ons is counted as a single subscriber. The number of subscribers represents our total number of subscribers, rounded to the nearest thousand, on the last day of the applicable year.

(5) We measure our subscription revenue renewal rate on a trailing 12-month basis by dividing (a) the total subscription revenue recognized during the 12-month period from subscribers who were subscribers on the first day of the period, by (b) the total subscription revenue we would have recognized during the period from those same subscribers assuming no terminations, or service level upgrades or downgrades. Our subscriber renewal rate is expressed as an annualized percentage.

(6) We define Adjusted EBITDA as our net income before interest and other expense, income tax expense, amortization and depreciation expense, stock-based compensation expense, goodwill and intangible impairment charges, gain from the release of an acquisition-related contingent liability and legal costs incurred in connection with certain historical intellectual property litigation. We do not consider these items to be indicative of our core operating performance. The non-cash items include amortization and depreciation expense, stock-based compensation expense, goodwill and intangible impairment charges and gain from the release of an acquisition-related contingent liability. Please see footnote (6) to the table of the section of this prospectus titled “Selected Consolidated Financial and Other Data” for more information and for a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP.

(7) We conducted a recapitalization in July 2012. Please see Note 16 to our consolidated financial statements for additional information regarding this transaction.

(8) Reflects, on a pro forma basis, the conversion described in footnote (3) above.

(9) Reflects, on a pro forma basis, the conversion described in footnote (3) above and, on an as adjusted basis as of the balance sheet date, our sale of                  shares of common stock in this offering at an assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

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The pro forma as adjusted information presented in the summary balance sheet data is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase or decrease in the assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease pro forma as adjusted cash and cash equivalents, total assets and total stockholders’ equity by approximately $             million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions payable by us. We may also increase or decrease the number of shares we are offering. Each 1,000,000 share increase or decrease in the number of shares offered by us would increase or decrease pro forma as adjusted cash and cash equivalents, total assets and total stockholders’ equity by approximately $         million, assuming that the assumed initial price to public remains the same, and after deducting underwriting discounts and commissions payable by us.

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below, together with all of the other information in this prospectus, including our financial statements and related notes, before deciding whether to purchase shares of our common stock. If any of the following risks is realized, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the price of our common stock could decline, and you could lose part or all of your investment.

Risks Related to Our Business and Industry

Our quarterly results of operations have fluctuated and are likely to continue to fluctuate. As a result, we may fail to meet or exceed the expectations of investors or securities analysts, which could cause our stock price to decline.

Our quarterly revenue and results of operations may fluctuate as a result of a variety of factors, including revenue related to the product mix that we sell, including the relative sales related to our platform and solutions and other factors which are outside of our control. If our quarterly revenue or results of operations fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially. Fluctuations in our results of operations may be due to a number of factors, including:

• the portion of our revenue attributable to subscription versus hardware and other sales and the portion of our revenue attributable to standard subscribers versus other subscribers;

• fluctuations in demand, including due to seasonality, for our platform and solutions;

• changes in pricing by us in response to competitive pricing actions;

• our ability to increase, retain and incentivize the service providers that market, sell, install and support our platform and solutions;

• the ability of our hardware vendors to continue to manufacture high-quality products, and to supply sufficient products to meet our demands;

• the timing and success of introductions of new solutions, products or upgrades by us or our competitors and the entrance of new competitors;

• changes in our business and pricing policies or those of our competitors;

• the ability to accurately forecast revenue as we generally lack transparency to our revenue due to our reliance on our service provider network;

• our ability to control costs, including our operating expenses and the costs of the hardware we purchase;

• competition, including entry into the industry by new competitors and new offerings by existing competitors;

• our ability to successfully manage any future acquisitions of businesses;

• issues related to introductions of new or improved products such as shortages of prior generation products or short-term decreased demand for next generation products;

• the amount and timing of expenditures, including those related to expanding our operations, increasing research and development, introducing new solutions or paying litigation expenses;

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• the ability to effectively manage growth within existing and new markets domestically and abroad;

• changes in the payment terms for our platform and solutions;

• the strength of regional, national and global economies; and

• the impact of natural disasters or manmade problems such as terrorism.

Due to the foregoing factors and the other risks discussed in this prospectus, you should not rely on quarter-to-quarter comparisons of our results of operations as an indication of our future performance. You should not consider our recent revenue and Adjusted EBITDA growth or results of one quarter as indicative of our future performance.

We may not sustain our growth rate, and we may not be able to manage any future growth effectively.

We have experienced significant growth in a short period of time. Our revenue increased from $37.2 million in 2010 to $130.2 million in 2013. We do not expect to achieve similar growth rates in future periods. You should not rely on our operating results for any prior quarterly or annual periods as an indication of our future operating performance. If we are unable to maintain expected revenue growth in both absolute dollars and as a percentage of prior period revenue, our financial results could suffer and our stock price could decline.

Our future operating results depend to a large extent on our ability to successfully manage our anticipated expansion and growth. To manage our growth successfully and handle the responsibilities of being a public company, we believe we must effectively, among other things:

• maintain our relationships with existing service providers and add new service providers;

• increase our subscriber base and cross-sell additional solutions to our existing subscribers;

• add sales and marketing personnel;

• expand our international operations; and

• implement and improve our administrative, financial and operational systems, procedures and controls.

We intend to increase our investment in research and development, sales and marketing, and general and administrative functions and other areas to grow our business. We are likely to recognize the costs associated with these increased investments earlier than some of the anticipated benefits and the return on these investments may be lower, or may develop more slowly, than we expect, which could adversely affect our operating results.

If we are unable to manage our growth effectively, we may not be able to take advantage of market opportunities or develop new solutions or enhancements to our existing solutions and we may fail to satisfy subscriber and service provider requirements, maintain the quality of our solutions, execute on our business plan or respond to competitive pressures, which could result in our financial results suffering and a decline in our stock price.

We have experienced rapid growth in recent periods. If we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of service or address competitive challenges adequately.

We increased our number of full-time employees from 111 to 165 to 253 at December 31, 2011, 2012 and 2013, respectively. Our revenue increased from $65.1 million in 2011 to $96.5 million in 2012

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and to $130.2 million in 2013. Our growth has placed, and may continue to place, a significant strain on our managerial, administrative, operational, financial and other resources. We intend to further expand our overall business, customer base, headcount and operations. Creating a global organization and managing a geographically dispersed workforce will require substantial management effort and significant additional investment in our infrastructure. We will be required to continue to improve our operational, financial and management controls and our reporting procedures and we may not be able to do so effectively. As such, we may be unable to manage our expenses effectively in the future, which may negatively impact our gross profit or operating expenses in any particular quarter. If we fail to manage our anticipated growth and change in a manner that preserves the key aspects of our corporate culture, the quality of our solutions may suffer, which could negatively affect our brand and reputation and harm our ability to retain and attract service providers and consumers.

The markets in which we participate are highly competitive and many companies, including large technology companies, broadband and security service providers and other managed service providers, are actively targeting the home automation, security monitoring, video monitoring and energy management markets. If we are unable to compete effectively with these companies, our sales and profitability could be adversely affected.

We compete in several markets, including home automation, security monitoring, video monitoring and energy management. The markets in which we participate are highly competitive and competition may intensify in the future.

Our ability to compete depends on a number of factors, including:

• our platform and solutions’ functionality, performance, ease of use, reliability, availability and cost effectiveness relative to that of our competitors’ products;

• our success in utilizing new and proprietary technologies to offer solutions and features previously not available in the marketplace;

• our success in identifying new markets, applications and technologies;

• our ability to attract and retain service providers;

• our name recognition and reputation;

• our ability to recruit software engineers and sales and marketing personnel; and

• our ability to protect our intellectual property.

Consumers may prefer to purchase from their existing suppliers rather than a new supplier regardless of product performance or features. In the event a consumer decides to evaluate a new home automation, security monitoring, video monitoring or energy management solution, the consumer may be more inclined to select one of our competitors whose product offerings are broader than those that we offer.

Our current primary competitors include providers of other technology platforms for the connected home, including iControl Networks, Inc. and Honeywell International Inc. that sell to service providers such as cable operators and other home automation providers. In addition, our service providers compete with managed service providers, such as cable television, telephone and security companies like Comcast Corporation, AT&T Inc. and Time Warner Cable Inc., and providers of point products, including Nest Labs, Inc. (acquired by Google Inc.), which offers a thermostat, and DropCam, Inc., which offers video monitoring. Because our service providers compete with these entities, we consider them competitive. For example, several cable and telecommunications companies have introduced

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home automation and security services packages, including interactive security services, which are competitive with our platform and solutions. In addition, we may compete with other large technology companies that offer control capabilities among their products, applications and services, and have ongoing development efforts to address the broader connected home market. For example, Apple, Inc. recently announced an upcoming feature that will allow some manufacturers’ devices to be controlled through a service in the iOS operating system.

Most of our competitors have longer operating histories, greater name recognition, larger customer bases and significantly greater financial, technical, sales, marketing, distribution and other resources than we have. We expect to encounter new competitors as we enter new markets as well as increased competition, both domestically and internationally, from other established and emerging home automation, security monitoring, video monitoring and energy management companies as well as large technology companies. In addition, there may be new technologies that are introduced that reduce demand for our solutions or make them obsolete. Our current and potential competitors may also establish cooperative relationships among themselves or with third parties and rapidly acquire significant market share. Increased competition could also result in price reductions and loss of market share, any of which could result in lower revenue and negatively affect our ability to grow our business.

Aggressive business tactics by our competitors may reduce our revenue.

Increased competition in the markets in which we compete may result in aggressive business tactics by our competitors, including:

• selling at a discount;

• offering products similar to our platform and solutions on a bundled basis at no charge;

• announcing competing products combined with extensive marketing efforts;

• providing financing incentives to consumers; and

• asserting intellectual property rights irrespective of the validity of the claims.

Our service providers may switch and offer the products and services of competing companies, which would adversely affect our sales and profitability. Competition from other companies may also adversely affect our negotiations with service providers and suppliers, including, in some cases, requiring us to lower our prices. Opportunities to take market share using innovative products, services and sales approaches may also attract new entrants to the field. We may not be able to compete successfully with the offerings and sales tactics of other companies, which could result in the loss of service providers offering our platform and solutions and, as a result, our revenue and profitability could be adversely affected.

If we fail to compete successfully against our current and future competitors, or if our current or future competitors employ aggressive business tactics, including those described above, demand for our platform and solutions could decline, we could experience cancellations of our services to consumers, or we could be required to reduce our prices or increase our expenses.

The proper and efficient functioning of our network operations centers and data back-up systems is central to our solution.

Our solutions operate with a cloud-based architecture and we update our solutions regularly while our solutions are operating. If our solutions and/or upgrades fail to operate properly, our solutions could stop functioning for a period of time, which could put our subscribers at risk. Our ability to keep our business operating is highly dependent on the proper and efficient operation of our network operations centers and data back-up systems. Although our network operations centers have back-up computer and power systems, if there is a catastrophic event, natural disaster, terrorist attacks, security breach

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or other extraordinary event, we may be unable to provide our subscribers with uninterrupted monitoring service. Furthermore, because data back-up systems are susceptible to malfunctions and interruptions (including those due to equipment damage, power outages, human error, computer viruses, computer hacking, data corruption and a range of other hardware, software and network problems), we cannot guarantee that we will not experience data back-up failures in the future. A significant or large-scale malfunction or interruption of our network operations centers or data back-up systems could adversely affect our ability to keep our operations running efficiently. If a malfunction results in a wider or sustained disruption, it could have a material adverse effect on our reputation, business, financial condition, cash flows or results of operations.

We sell security and life safety solutions and if our solutions fail for any reason, we could be subject to liability and our business could suffer.

We sell security and life safety solutions, which are designed to secure the safety of our subscribers and their residences or business. If these solutions fail for any reason, including due to defects in our software, a carrier outage, a failure of our network operating center, a failure on the part of our service providers or user error, we could be subject to liability for such failures and our business could suffer.

Our platform and solutions may contain undetected defects in the software, infrastructure, third-party components or processes. If platform or our solutions suffer from defects, we could experience harm to our branded reputation, claims by our subscribers or service providers or lost revenue during the period required to address the cause of the defects. We may find defects in new or upgraded solutions, resulting in loss of, or delay in, market acceptance of our platform and solutions, which could harm our business, results of operations and financial condition.

Since solutions that enable our platform are installed by our service providers, if they do not install or maintain such solutions correctly, our platform and solutions may not function properly. If the improper installation or maintenance of our platform and solutions leads to service failures after introduction of, or an upgrade to, our platform or a solution, we could experience harm to our branded reputation, claims by our subscribers or service providers or lost revenue during the period required to address the cause of the problem. Further, we rely on our service providers to provide the primary source of support and ongoing service to our subscribers and, if our service providers fail to provide an adequate level of support and services to our subscribers, it could have a material adverse effect on our reputation, business, financial condition or results of operations.

Any defect in, or disruption to, our platform and solutions could cause consumers not to purchase additional solutions from us, prevent potential consumers from purchasing our platform and solutions or harm our reputation. Although our contracts with our service providers limit our liability to our service providers for these defects, disruptions or errors, we nonetheless could be subject to litigation for actual or alleged losses to our service providers or our subscribers, which may require us to spend significant time and money in litigation or arbitration, or to pay significant settlements or damages. Defending a lawsuit, regardless of its merit, could be costly, divert management's attention and affect our ability to obtain or maintain liability insurance on acceptable terms and could harm our business. Although we currently maintain some warranty reserves, we cannot assure you that these warranty reserves will be sufficient to cover future liabilities.

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We rely on our service provider network to acquire additional subscribers, and the inability of our service providers to attract additional subscribers or retain their current subscribers could adversely affect our operating results.

Substantially all of our revenue is generated through the sales of our platform and solutions by our service providers, and our service providers are responsible for subscriber acquisition, as well as providing customer service and technical support for our platform and solutions to the subscribers. We provide our service providers with specific training and programs to assist them in selling and providing support for our platform and solutions, but we cannot assure that these steps will be effective. In addition, we rely on our service providers to sell our platform and solutions into new markets in the intelligent and connected home space. If our service providers are unsuccessful in marketing, selling, and supporting our platform and solutions, our operating results could be adversely affected.

In order for us to maintain our current revenue sources and grow our revenues, we must effectively manage and grow relationships with our service providers. Recruiting and retaining qualified service providers and training them in our technology and solutions requires significant time and resources. If we fail to maintain existing service providers or develop relationships with new service providers, our revenue and operating results would be adversely affected. In addition, to execute on our strategy to expand our sales internationally, we must develop relationships with service providers that sell into these markets.

Any of our service providers may choose to offer a product from one of our competitors instead of our platform and solutions, elect to develop their own competing solutions or simply discontinue their operations with us. For example, we entered into a license agreement in November 2013 with one of our largest service providers pursuant to which we granted a license to use the intellectual property associated with our connected home solutions. Pursuant to this arrangement, this service provider will transition from selling our solutions directly to its customers to selling its own home automation product to its new customers. We will generate revenue from a monthly fee charged to the service provider on a per subscriber basis from sales of this service provider’s product; however, these monthly fees are less on a per subscriber basis than subscription revenue from our solutions. We will receive less revenue on a per subscriber basis from this service provider as compared to our overall subscriber base, which will result in a lower subscription revenue growth rate. We must also work to expand our network of service providers to ensure that we have sufficient geographic coverage and technical expertise to address new markets and technologies. While it is difficult to estimate the total number of available service providers in our markets, there are a finite number of service providers that are able to perform the types of technical installations required for our platform and solutions. In the event that we saturate the available service provider pool, or if market or other forces cause the available pool of service providers to decline, it may be increasingly difficult to grow our business. If we are unable to expand our network of service providers, our business could be harmed.

As consumers’ product and service options grow, it is important that we enhance our service provider footprint by broadening the expertise of our service providers, working with larger and more sophisticated service providers and expanding the mainstream solutions our service providers offer. If we do not succeed in this effort, our current and potential future service providers may be unable or unwilling to broaden their offerings to include our connected home solution, resulting in harm to our business.

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We receive a substantial portion of our revenue from a limited number of service providers, and the loss of, or a significant reduction in, orders from one or more of our major service providers would result in decreased revenue and profitability.

Our success is highly dependent upon establishing and maintaining successful relationships with a variety of channel service providers. We market and sell our platform and solutions through an all-channel assisted sales model and we derive substantially all of our revenue from these service providers. We generally enter into agreements with our service providers outlining the terms of our relationship, including service provider pricing commitments, installation, maintenance and support requirements, and our sales registration process for registering potential sales to subscribers. These contracts typically have an initial term of one year, with subsequent renewal terms of one year, and are terminable at the end of the initial term or renewal terms without cause upon written notice to the other party. In some cases, these contracts provide the service provider with the right to terminate prior to the expiration of the term without cause upon 30-days written notice, or, in the case of certain termination events, the right to terminate the contract immediately. While we have developed a network of over 4,000 service providers to sell, install and support our platform and solutions, we receive a substantial portion of our revenue from a limited number of channel partners. During the years ended December 31, 2011, 2012 and 2013, our 10 largest revenue service providers accounted for approximately 65.8%, 71.2% and 65.7% of our revenue. During the three months ended March 31, 2013 and 2014, our 10 largest revenue service providers accounted for approximately 65.8% and 67.5% of our revenue. Vivint, Inc. represented greater than 10% but not more than 20% of our revenue in 2011. Vivint, Inc. and Monitronics International, Inc. each represented greater than 10% but not more than 20% of our revenue in 2012 and 2013.

We anticipate that we will continue to be dependent upon a limited number of service providers for a significant portion of our revenue for the foreseeable future and, in some cases, a portion of our revenue attributable to individual service providers may increase in the future. The loss of one or more key service providers, a reduction in sales through any major service providers or the inability or unwillingness of any of our major service providers to pay for our platform and solutions would reduce our revenue and could impair our profitability.

We have relatively limited visibility regarding the consumers that ultimately purchase our solutions, and we often rely on information from third-party service providers to help us manage our business. If these service providers fail to provide timely or accurate information, our ability to quickly react to market changes and effectively manage our business may be harmed.

We sell our solutions through service providers. These service providers work with consumers to design, install, update and maintain their connected home installations and manage the relationship with our subscribers. While we are able to track orders from service providers and have access to certain information about the configurations of their Alarm.com systems that we receive through our platform, we also rely on service providers to provide us with information about the number of subscribers that have subscribed to our solutions, consumer behavior, product and system feedback, consumer demographics and buying patterns. We use this channel sell-through data, along with other metrics, to forecast our revenue, assess consumer demand for our solution, develop new solutions, adjust pricing and make other strategic business decisions. Channel sell-through data is subject to limitations due to collection methods and the third-party nature of the data and thus may not be complete or accurate. If we do not receive consumer information on a timely or accurate basis, or if we do not properly interpret this information, our ability to quickly react to market changes and effectively manage our business may be harmed.

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Consumers may choose to adopt point products that provide control of discrete home functions rather than adopting our connected home platform. If we are unable to increase market awareness of the benefits of our unified solution, our revenue may not continue to grow, or it may decline.

Many vendors have emerged, and may continue to emerge, to provide point products with advanced functionality for use in the home, such as a thermostat that can be controlled by an application on a smartphone. We expect more and more consumer electronic and consumer appliance products to be network-aware and connected — each very likely to have its own smart device (phone or tablet) application. Consumers may be attracted to the relatively low costs of these point products and the ability to expand their home control solution over time with minimal upfront costs, despite some of the disadvantages of this approach, these products may reduce demand for our connected home platform. If so, our service providers may switch and offer the point products and services of competing companies, which would adversely affect our sales and profitability. If a significant number of consumers in our target market choose to adopt point products rather than our connected home platform, then our business, financial condition and results of operations will be harmed, and we may not be able to achieve sustained growth or our business may decline.

Mergers or other strategic transactions involving our competitors could weaken our competitive position, which could adversely affect our ability to compete effectively and harm our results of operations.

Our industry is highly fragmented, and we believe it is likely that some of our existing competitors will consolidate or be acquired. In addition, some of our competitors may enter into new alliances with each other or may establish or strengthen cooperative relationships with systems integrators, third-party consulting firms or other parties. Any such consolidation, acquisition, alliance or cooperative relationship could adversely affect our ability to compete effectively and lead to pricing pressure and our loss of market share and could result in a competitor with greater financial, technical, marketing, service and other resources, all of which could harm our business, results of operations and financial condition.

We are dependent on our connected home solutions, and the lack of continued market acceptance of our connected home solutions would result in lower revenue.

Our connected home solutions account for substantially all of our revenue and will continue to do so for the foreseeable future. As a result, our revenue could be reduced by:

• any decline in demand for our connected home solutions;

• the failure of our connected home solutions to achieve continued market acceptance;

• the introduction of products and technologies that serve as a replacement or substitute for, or represent an improvement over, our connected home solutions;

• technological innovations or new communications standards that our connected home solutions does not address; and

• our inability to release enhanced versions of our connected home solutions on a timely basis.

We are vulnerable to fluctuations in demand for Internet-connected devices in general and interactive security systems in particular. If the market for connected home solutions grows more slowly than anticipated or if demand for connected home solutions does not grow as quickly as anticipated, whether as a result of competition, product obsolescence, technological change, unfavorable economic conditions, uncertain geopolitical environment, budgetary constraints of our consumers or other factors, we may not be able to continue to increase our revenue and earnings and our stock price would decline.

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A significant decline in our subscription revenue renewal rate would have an adverse effect on our business, financial condition, and operating results.

We generally bill our service providers based on the number of subscribers they have on our platform and the features being utilized by such subscribers on a monthly basis in advance. Subscribers could elect to terminate our services in any given month. If our efforts and our service providers’ efforts to satisfy our existing subscribers are not successful, we may not be able to retain them or sell additional functionality to them and, as a result, our revenue and ability to grow could be adversely affected. We track our subscription revenue renewal rates on an annualized basis, as reflected in the section of this prospectus titled “Management’s Discussion and Analysis — Key Metrics — Subscription Revenue Renewal Rate.” However, we may not be able to accurately predict future trends in subscription renewals and the resulting churn. Subscribers may choose not to renew their subscriptions for many reasons, including the belief that our service is not required for their needs or is otherwise not cost-effective, a desire to reduce discretionary spending, or a belief that our competitors’ services provide better value. Additionally, our subscribers may not renew for reasons entirely out of our control, such as moving a residence or the dissolution of their business, which is particularly common for small businesses. A significant increase in our churn would have an adverse effect on our business, financial condition, and operating results.

If we are unable to develop new solutions, sell our platform and solutions into new markets or further penetrate our existing markets, our revenue may not grow as expected.

Our ability to increase sales will depend in large part on our ability to enhance and improve our platform and solutions, introduce new solutions in a timely manner, sell into new markets and further penetrate our existing markets. The success of any enhancement or new solution or service depends on several factors, including the timely completion, introduction and market acceptance of enhanced or new solutions, the ability to maintain and develop relationships with service providers, the ability to attract, retain and effectively train sales and marketing personnel and the effectiveness of our marketing programs. Any new product or service we develop or acquire may not be introduced in a timely or cost-effective manner, and may not achieve the broad market acceptance necessary to generate significant revenue. Any new markets into which we attempt to sell our platform and solutions, including new vertical markets and new countries or regions, may not be receptive. Our ability to further penetrate our existing markets depends on the quality of our platform and solutions and our ability to design our platform and solutions to meet consumer demand.

We benefit from integration of our solutions with third-party security panel providers. If these developers choose not to partner with us, or are acquired by our competitors, our business and results of operations may be harmed.

Our solution is incorporated into the hardware of our third-party security panel providers. For example, our hardware panel partners produce control devices that deliver our platform services to subscribers. It may be necessary in the future to renegotiate agreements relating to various aspects of these solutions or other third parties. The inability to easily integrate with, or any defects in, any third-party solutions could result in increased costs, or in delays in new product releases or updates to our existing solutions until such issues have been resolved, which could have a material adverse effect on our business, financial condition, results of operations, cash flows and future prospects and could damage our reputation. In addition, if these third-party solution providers choose not to partner with us, choose to integrate their solutions with our competitors’ platforms, or are unable or unwilling to update their solutions in connection with our growth, our business, financial condition and results of operations could be harmed. Further, if third-party solution providers that we partner with or that we would benefit from partnering with are acquired by our competitors, they may choose not to offer their solutions on our platform, which could adversely impact our business, financial condition and results of operations.

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We rely on wireless carriers to provide access to wireless networks through which we provide our wireless alarm, notification and intelligent automation services, and any interruption of such access would impair our business.

We rely on wireless carriers to provide access to wireless networks for machine-to-machine data transmissions, which are an integral part of our services. Our wireless carriers may suspend wireless service to expand, maintain or improve their networks. Any suspension or other interruption of services would adversely affect our ability to provide our services to our service providers and subscribers and may adversely affect our reputation. In addition, the inability to maintain our existing contracts with our wireless carriers or enter into new contracts with such wireless carriers could have a material adverse effect on our business, financial condition and results of operations.

If we are unable to adapt to technological change, including maintaining compatibility with a wide range of devices, our ability to remain competitive could be impaired.

The market for connected home solutions is characterized by rapid technological change, frequent introductions of new products and evolving industry standards. Our ability to attract new subscribers and increase revenue from existing subscribers will depend in significant part on our ability to anticipate changes in industry standards, to continue to enhance our existing solutions or introduce new solutions on a timely basis to keep pace with technological developments, and to maintain compatibility with a wide range of connected devices in the home and business. We may change aspects of our operating system and may utilize open source technology in the future, which may cause difficulties including compatibility, stability and time to market. The success of this or any enhanced or new product or solution will depend on several factors, including the timely completion and market acceptance of the enhanced or new product or solution. Similarly, if any of our competitors implement new technologies before we are able to implement them, those competitors may be able to provide more effective products than ours, possibly at lower prices. Any delay or failure in the introduction of new or enhanced solutions could harm our business, results of operations and financial condition.

The technology we employ may become obsolete, and we may need to incur significant capital expenditures to update our technology.

Our industry is characterized by rapid technological innovation. Our platform and solutions interact with the hardware and software technology of systems and devices located at our subscribers’ property. We may be required to implement new technologies or adapt existing technologies in response to changing market conditions, consumer preferences or industry standards, which could require significant capital expenditures. For example, many of our service providers are currently working to upgrade our solutions that were installed using 2G wireless technology. It is also possible that one or more of our competitors could develop a significant technical advantage that allows them to provide additional or superior quality products or services, or to lower their price for similar products or services, which could put us at a competitive disadvantage. Our inability to adapt to changing technologies, market conditions or consumer preferences in a timely manner could materially and adversely affect our business, financial condition, cash flows or results of operations.

We depend on our suppliers, and the loss of any key supplier could materially and adversely affect our business, financial condition and results of operations.

Our hardware products depend on the quality of components that we procure from third-party suppliers. Reliance on suppliers, as well as industry supply conditions, generally involves several risks, including the possibility of defective parts, which can adversely affect the reliability and reputation of our platform and solutions, and a shortage of components and reduced control over delivery schedules

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and increases in component costs, which can adversely affect our profitability. We have several large hardware suppliers from which we procure hardware on a purchase order basis, including one supplier that supplies products that accounted for 73% of our hardware and other revenue in 2013. If these suppliers are unable to continue to provide a timely and reliable supply, we could experience interruptions in delivery of our platform and solutions to service providers, which could have a material adverse effect on our results of operations. If we were required to find alternative sources of supply, qualification of alternative suppliers and the establishment of reliable supplies could result in delays and a possible loss of sales, which could have a material adverse effect on our business, financial condition and results of operations.

Growth of our business will depend on market awareness and a strong brand, and any failure to develop, maintain, protect and enhance our brand would hurt our ability to retain or attract consumers.

We believe that building and maintaining market awareness, brand recognition and goodwill in a cost-effective manner is critical to our overall success in achieving widespread acceptance of our existing and future solutions and is an important element in attracting new service providers and subscribers. An important part of our business strategy is to increase service provider and consumer awareness of our brand and to provide marketing leadership, services and support to our service provider network. This will depend largely on our ability to continue to provide high-quality solutions, and we may not be able to do so effectively. While we may choose to engage in a broader marketing campaign to further promote our brand, this effort may not be successful. Our efforts in developing our brand may be hindered by the marketing efforts of our competitors and our reliance on our service providers and strategic partners to promote our brand. If we are unable to cost-effectively maintain and increase awareness of our brand, our business, results of operations and financial condition could be harmed.

We operate in the emerging and evolving connected home market, which may develop more slowly or differently than we expect. If the connected home market does not grow as we expect, or if we cannot expand our platform and solutions to meet the demands of this market, our revenue may decline, fail to grow or fail to grow at an accelerated rate, and we may incur additional operating losses.

The market for solutions that bring objects and systems not typically connected to the Internet, such as home automation, security monitoring, video monitoring and energy management solutions, into an Internet-like structure is in an early stage of development, and it is uncertain whether, how rapidly or how consistently this market will develop, and even if it does develop, whether our platform and solutions will be accepted into the markets in which we operate. Some consumers may be reluctant or unwilling to use our platform and solutions for a number of reasons, including satisfaction with traditional solutions, concerns about additional costs and lack of awareness of the benefits of our platform and solutions. Our ability to expand the sales of our platform and solutions into new markets depends on several factors, including the awareness of our platform and solutions, the timely completion, introduction and market acceptance of our platform and solutions, the ability to attract, retain and effectively train sales and marketing personnel, the ability to develop relationships with service providers, the effectiveness of our marketing programs, the costs of our platform and solutions and the success of our competitors. If we are unsuccessful in developing and marketing our platform and solutions into new markets, or if consumers do not perceive or value the benefits of our platform and solutions, the market for our platform and solutions might not continue to develop or might develop more slowly than we expect, either of which would harm our revenue and growth prospects.

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Risks of liability from our operations are significant.

The nature of the solutions we provide, including our interactive security solutions, potentially exposes us to greater risks of liability for employee acts or omissions or system failure than may be inherent in other businesses. Substantially all of our service provider agreements contain provisions limiting our liability to service providers and our subscribers in an attempt to reduce this risk. However, in the event of litigation with respect to these matters, we cannot assure you that these limitations will be enforced, and the costs of such litigation could have a material adverse effect on us. In addition, there can be no assurance that we are adequately insured for these risks. Certain of our insurance policies and the laws of some states may limit or prohibit insurance coverage for punitive or certain other types of damages or liability arising from gross negligence.

Failure to maintain the security of our information and technology networks, including information relating to our service providers, subscribers and employees, could adversely affect us.

We are dependent on information technology networks and systems, including the Internet, to process, transmit and store electronic information and, in the normal course of our business, we collect and retain certain information pertaining to our service providers, subscribers and employees, including credit card information for many of our service providers and certain of our subscribers. If security breaches in connection with the delivery of our solutions allow unauthorized third parties to access any of this data or obtain control of our subscribers’ systems, our reputation, business, results of operations and financial condition could be harmed.

The legal, regulatory and contractual environment surrounding information security, privacy and credit card fraud is constantly evolving and companies that collect and retain such information are under increasing attack by cyber-criminals around the world. A significant actual or potential theft, loss, fraudulent use or misuse of service provider, subscriber, employee or other personally identifiable data, whether by third parties or as a result of employee malfeasance or otherwise, non-compliance with our contractual or other legal obligations regarding such data or a violation of our privacy and security policies with respect to such data could result in loss of confidential information, damage to our reputation, early termination of our service provider contracts, significant costs, fines, litigation, regulatory investigations or actions and other liabilities or actions against us. Moreover, to the extent that any such exposure leads to credit card fraud or identity theft, we may experience a general decline in consumer confidence in our business, which may lead to an increase in attrition rates or may make it more difficult to attract new subscribers. Such an event could additionally result in adverse publicity and therefore adversely affect the market's perception of the security and reliability of our services. Security breaches of, or sustained attacks against, this infrastructure could create system disruptions and shutdowns that could result in disruptions to our operations. Techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target. As a result, we may be unable to anticipate these techniques or to implement adequate preventative measures. We cannot be certain that advances in cyber-capabilities or other developments will not compromise or breach the technology protecting the networks that access our platform and solutions. If any one of these risks materializes our business, financial condition, results of operations and cash flows could be materially and adversely affected.

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Our strategy includes pursuing acquisitions, and our potential inability to successfully integrate newly-acquired technologies, assets or businesses may harm our financial results. Future acquisitions of technologies, assets or businesses, which are paid for partially or entirely through the issuance of stock or stock rights, could dilute the ownership of our existing stockholders.

We have acquired businesses in the past. For example, we acquired EnergyHub, Inc. in 2013. We also believe part of our growth will be driven by acquisitions of other companies or their technologies, assets and businesses. Any acquisitions we complete will give rise to risks, including:

• incurring higher than anticipated capital expenditures and operating expenses;

• failing to assimilate the operations and personnel or failing to retain the key personnel of the acquired company or business;

• failing to integrate the acquired technologies, or incurring significant expense to integrate acquired technologies into our platform and solutions;

• disrupting our ongoing business;

• dissipating our management resources;

• failing to maintain uniform standards, controls and policies;

• incurring significant accounting charges;

• impairing relationships with employees, service providers or subscribers;

• finding that the acquired technology, asset or business does not further our business strategy, that we overpaid for the technology, asset or business or that we may be required to write off acquired assets or investments partially or entirely;

• failing to realize the expected synergies of the transaction;

• being exposed to unforeseen liabilities and contingencies that were not identified prior to acquiring the company; and

• being unable to generate sufficient revenue and profits from acquisitions to offset the associated acquisition costs.

Fully integrating an acquired technology, asset or business into our operations may take a significant amount of time. We may not be successful in overcoming these risks or any other problems encountered with acquisitions. To the extent we do not successfully avoid or overcome the risks or problems related to any such acquisitions, our results of operations and financial condition could be harmed. Acquisitions also could impact our financial position and capital needs, or could cause fluctuations in our quarterly and annual results of operations. Acquisitions could include significant goodwill and intangible assets, which may result in future impairment charges that would reduce our stated earnings. We may incur significant costs in our efforts to engage in strategic transactions and these expenditures may not result in successful acquisitions.

We expect that the consideration we might pay for any future acquisitions of technologies, assets or businesses could include stock, rights to purchase stock, cash or some combination of the foregoing. If we issue stock or rights to purchase stock in connection with future acquisitions, net income per share and then-existing holders of our common stock may experience dilution.

We may pursue business opportunities that diverge from our current business model, which may cause our business to suffer.

We may pursue business opportunities that diverge from our current business model, including expanding our platform and solutions and investing in new and unproven technologies. For example, in

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2013 we entered the energy management market through our acquisition of EnergyHub. We can offer no assurance that any such new business opportunities will prove to be successful. Among other negative effects, our pursuit of such business opportunities could reduce operating margins and require more working capital, materially and adversely affect our business, financial condition, results of operations and cash flows.

Evolving government and industry regulation and changes in applicable laws relating to the Internet and data privacy may increase our expenditures related to compliance efforts or otherwise limit the solutions we can offer, which may harm our business and adversely affect our financial condition.

As Internet commerce continues to evolve, federal, state or foreign agencies have adopted and could in the future adopt regulations covering issues such as user privacy and content. We are particularly sensitive to these risks because the Internet is a critical component of our SaaS business model. In addition, taxation of products or services provided over the Internet or other charges imposed by government agencies or by private organizations for accessing the Internet may be imposed. Any regulation imposing greater fees for Internet use or restricting information exchange over the Internet could result in a decline in the use of the Internet and the viability of Internet-based services, which could harm our business.

Our platform and solutions enable us to collect, manage and store a wide range of data related to our subscribers’ intelligent automation, interactive security, video monitoring and energy management systems. A valuable component of our platform and solutions is our ability to analyze this data to present the user with actionable business intelligence. We obtain our data from a variety of sources, including our service providers, our subscribers and third-party providers. We cannot assure you that the data we require for our proprietary data sets will be available from these sources in the future or that the cost of such data will not increase. The United States federal government and various state governments have adopted or proposed limitations on the collection, distribution, storage and use of personal information. Several foreign jurisdictions, including the European Union and the United Kingdom, have adopted legislation (including directives or regulations) that is more rigorous governing data collection and storage than in the United States. If our privacy or data security measures fail to comply, or are perceived to fail to comply, with current or future laws and regulations, we may be subject to litigation, regulatory investigations or other liabilities. Further, in the event of a breach of personal information that we hold, we may be subject to governmental fines, individual claims, remediation expenses, and/or harm to our reputation. Moreover, if future laws and regulations limit our ability to use and share this data or our ability to store, process and share data over the Internet, demand for our platform and solutions could decrease, our costs could increase, and our results of operations and financial condition could be harmed.

Although we are not currently subject to the Health Insurance Portability and Accountability Act of 1996, and its implementing regulations, or HIPAA, which regulates the use, storage, and disclosure of personally identifiable health information, we may modify our platform and solutions to become HIPAA compliant. Becoming fully HIPAA compliant involves adopting and implementing privacy and security policies and procedures as well as administrative, physical and technical safeguards. Additionally, HIPAA compliance requires certain agreements with contracting partners to be in place and the appointment of a Privacy and Security Officer. Endeavoring to become HIPAA compliant may be costly both financially and in terms of administrative resources. It may take substantial time and require the assistance of external resources, such as attorneys, information technology, and/or other consultants. We would have to be HIPAA compliant to provide services for or on behalf of a health care provider or health plan pursuant to which patient information was exchanged. Thus, if we do not become fully HIPAA compliant, our expansion opportunities may be limited. Furthermore, it is possible that HIPAA may be expanded in the future to apply to certain of our platform and/or solutions as currently constituted.

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We rely on the performance of our senior management and highly skilled personnel, and if we are unable to attract, retain and motivate well-qualified employees, our business and results of operations could be harmed.

We believe our success has depended, and continues to depend, on the efforts and talents of senior management and key personnel, including Stephen Trundle, our Chief Executive Officer, and our senior information technology managers. Our future success depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled employees. Qualified individuals are in high demand, and we may incur significant costs to attract them. In addition, the loss of any of our senior management or key personnel could interrupt our ability to execute our business plan, as such individuals may be difficult to replace. If we do not succeed in attracting well-qualified employees or retaining and motivating existing employees, our business and results of operations could be harmed.

We provide minimum service level commitments to certain of our service providers, and our failure to meet them could cause us to issue credits for future subscriptions or pay penalties, which could harm our results of operations.

Certain of our service provider agreements currently, and may in the future, provide minimum service level commitments regarding items such as uptime, functionality or performance. If we are unable to meet the stated service level commitments for these service providers or suffer extended periods of service unavailability, we are or may be contractually obligated to provide these service providers with credits for future subscriptions, provide services at no cost or pay other penalties, which could adversely impact our revenue. We do not currently have any reserves on our balance sheet for these commitments.

We have already incurred and expect to incur a material amount of indebtedness, which could adversely affect our financial health.

We are party to a senior line of credit with Silicon Valley Bank, or SVB, which we refer to as our Credit Facility, that allows us to draw down an aggregate amount equal to $50.0 million. As of May 31, 2014, we had an outstanding balance of $6.7 million under our Credit Facility. This indebtedness and certain covenants and obligations contained in the related documentation could adversely affect our financial health and business and future operations by, among other things:

• making it more difficult for us to satisfy our obligations, including with respect to our indebtedness;

• increasing our vulnerability to adverse economic and industry conditions; and

• limiting our flexibility in planning for, or reacting to, changes in our business and in the industry in which we operate.

Furthermore, substantially all of our assets, including our intellectual property, secure our Credit Facility. If an event of default under the credit agreement occurs and is continuing, SVB may request the acceleration of the related indebtedness and foreclose on the security interests.

In addition, our Credit Facility restricts our ability to make dividend payments and requires us to maintain a certain leverage ratio, which may restrict our ability to invest in future growth. Any of the foregoing could have a material adverse effect on our business, financial condition or results of operations.

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

In the future, we may require additional capital to respond to business opportunities, challenges, acquisitions or unforeseen circumstances and may determine to engage in equity or debt financings or enter into credit facilities for other reasons. In the future, we may not be able to timely secure debt or equity financing on favorable terms or at all. Any debt financing obtained by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. If we raise additional funds through further issuances of equity, convertible debt securities or other securities convertible into equity, our existing stockholders could suffer significant dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences and privileges senior to those of holders of our common stock, including shares of common stock sold in this offering. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be limited.

Goodwill and other identifiable intangible assets represent a significant portion of our total assets, and we may never realize the full value of our intangible assets.

As of March 31, 2014, we had $24.0 million of goodwill and identifiable intangible assets. Goodwill and other identifiable intangible assets are recorded at fair value on the date of acquisition. We review such assets for impairment at least annually. Impairment may result from, among other things, deterioration in performance, adverse market conditions, adverse changes in applicable laws or regulations, including changes that restrict the activities of or affect the solutions we offer, challenges to the validity of certain registered intellectual property, reduced sales of certain products or services incorporating registered intellectual property, increased attrition and a variety of other factors. The amount of any quantified impairment must be expensed immediately as a charge to results of operations. Depending on future circumstances, it is possible that we may never realize the full value of our intangible assets. Any future determination of impairment of goodwill or other identifiable intangible assets could have a material adverse effect on our financial position and results of operations.

We may be subject to additional tax liabilities, which would harm our results of operations.

We are subject to income, sales, use, value added and other taxes in the United States and other countries in which we conduct business, which laws and rates vary greatly by jurisdiction. Certain jurisdictions in which we do not collect sales, use, value added or other taxes on our sales may assert that such taxes are applicable, which could result in tax assessments, penalties and interest, and we may be required to collect such taxes in the future. Significant judgment is required in determining our worldwide provision for income taxes. These determinations are highly complex and require detailed analysis of the available information and applicable statutes and regulatory materials. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be different from our historical tax practices, provisions and accruals. If we receive an adverse ruling as a result of an audit, or we unilaterally determine that we have misinterpreted provisions of the tax regulations to which we are subject, our tax provision, results of operations or cash flows could be harmed. In addition, liabilities associated with taxes are often subject to an extended or indefinite statute of limitations period. Therefore, we may be subject to additional tax liability (including penalties and interest) for a particular year for extended periods of time.

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Our business is subject to the risks of earthquakes, fire, power outages, floods and other catastrophic events, and to interruption by manmade problems such as terrorism or global or regional economic, political and social conditions.

A significant natural disaster, such as an earthquake, fire or a flood, or a significant power outage could harm our business, results of operations and financial condition. Natural disasters could affect our hardware vendors, our wireless carriers or our network operations centers. Further, if a natural disaster occurs in a region from which we derive a significant portion of our revenue, such as metropolitan areas in North America, consumers in that region may delay or forego purchases of our platform and solutions from service providers in the region, which may harm our results of operations for a particular period. In addition, terrorist acts or acts of war could cause disruptions in our business or the business of our hardware vendors, service providers, subscribers or the economy as a whole. More generally, these geopolitical, social and economic conditions could result in increased volatility in worldwide financial markets and economies that could harm our sales. Given our concentration of sales during the second and third quarters, any disruption in the business of our hardware vendors, service providers or subscribers that impacts sales during the second or third quarter could have a greater impact on our annual results. All of the aforementioned risks may be augmented if the disaster recovery plans for us, our service providers and our suppliers prove to be inadequate. To the extent that any of the above results in delays or cancellations of orders, or delays in the manufacture, deployment or shipment of our platform and solutions, our business, financial condition and results of operations would be harmed.

Downturns in general economic and market conditions and reductions in spending may reduce demand for our platform and solutions, which could harm our revenue, results of operations and cash flows.

Our revenue, results of operations and cash flows depend on the overall demand for our platform and solutions. Concerns about the systemic impact of a potential widespread recession, energy costs, geopolitical issues, the availability and cost of credit and the global housing and mortgage markets have contributed to increased market volatility, decreased consumer confidence and diminished growth expectations in the U.S. economy and abroad. The current unstable general economic and market conditions have been characterized by a dramatic decline in consumer discretionary spending and have disproportionately affected providers of solutions that represent discretionary purchases. While the decline in consumer spending has recently moderated, these economic conditions could still lead to continued declines in consumer spending over the foreseeable future, and may have resulted in a resetting of consumer spending habits that may make it unlikely that such spending will return to prior levels for the foreseeable future.

During weak economic times, the available pool of service providers may decline as the prospects for home building and home renovation projects diminish, which may have a corresponding impact on our growth prospects. In addition, there is an increased risk during these periods that an increased percentage of our service providers will file for bankruptcy protection, which may harm our reputation, revenue, profitability and results of operations. In addition, we may determine that the cost of pursuing any claim may outweigh the recovery potential of such claim. Likewise, consumer bankruptcies can detrimentally affect the business stability of our service providers. Prolonged economic slowdowns and reductions in new home construction and renovation projects may result in diminished sales of our platform and solutions. Further worsening, broadening or protracted extension of the economic downturn could have a negative impact on our business, revenue, results of operations and cash flows.

Failure to comply with laws and regulations could harm our business.

We conduct our business in the United States and are expanding internationally in various other countries. We are subject to regulation by various federal, state, local and foreign governmental

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agencies, including, but not limited to, agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, federal securities laws and tax laws and regulations.

We are subject to the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, the U.S. Travel Act, and possibly other anti-bribery laws, including those that comply with the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and other international conventions. Anti-corruption laws are interpreted broadly and prohibit our company from authorizing, offering, or providing directly or indirectly improper payments or benefits to recipients in the public or private-sector. Certain laws could also prohibit us from soliciting or accepting bribes or kickbacks. Our company has direct government interactions and in several cases uses third-party representatives, including dealers, for regulatory compliance, sales and other purposes in a variety of countries. These factors increase our anti-corruption risk profile. We can be held liable for the corrupt activities of our employees, representatives, contractors, partners and agents, even if we did not explicitly authorize such activity. Although we have implemented policies and procedures designed to ensure compliance with anti-corruption laws, there can be no assurance that all of our employees, representatives, contractors, partners, and agents will comply with these laws and policies.

We are also subject to data privacy and security laws, anti-money laundering laws (such as the USA PATRIOT Act), and import/export laws and regulations in the United States and in other jurisdictions.

Our global operations require us to import from and export to several countries, which geographically stretches our compliance obligations. Our platform and solutions are subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations, and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls. Exports of our platform and solutions must be made in compliance with these laws and regulations. If we fail to comply with these laws and regulations, we and certain of our employees could be subject to substantial civil or criminal penalties, including the possible loss of export or import privileges; fines, which may be imposed on us and responsible employees or managers; and, in extreme cases, the incarceration of responsible employees or managers. In addition, if our service providers fail to obtain appropriate import, export or re-export licenses or authorizations, we may also be adversely affected through reputational harm and penalties. Obtaining the necessary authorizations, including any required license, for a particular sale may be time-consuming, is not guaranteed and may result in the delay or loss of sales opportunities. In addition, changes in our platform or solutions or changes in applicable export or import laws and regulations may create delays in the introduction and sale of our platform and solutions in international markets, prevent our service providers with international operations from deploying our platform and solutions or, in some cases, prevent the export or import of our platform and solutions to certain countries, governments or persons altogether. Any change in export or import laws and regulations, shift in the enforcement or scope of existing laws and regulations, or change in the countries, governments, persons or technologies targeted by such laws and regulations, could also result in decreased use of our platform and solutions, or in our decreased ability to export or sell our platform and solutions to existing or potential service providers with international operations. Any decreased use of our platform and solutions or limitation on our ability to export or sell our platform and solutions would likely adversely affect our business, financial condition and results of operations.

In addition, our software contains encryption technologies, certain types of which are subject to U.S. and foreign export control regulations and, in some foreign countries, restrictions on importation and/or use. Any failure on our part to comply with encryption or other applicable export control requirements could result in financial penalties or other sanctions under the U.S. export regulations,

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including restrictions on future export activities, which could harm our business and operating results. Regulatory restrictions could impair our access to technologies needed to improve our platform and solutions and may also limit or reduce the demand for our platform and solutions outside of the United States.

Furthermore, U.S. export control laws and economic sanctions programs prohibit the shipment of certain products and services to countries, governments and persons that are subject to U.S. economic embargoes and trade sanctions. Even though we take precautions to prevent our platform and solutions from being shipped or provided to U.S. sanctions targets, our platform and solutions could be shipped to those targets or provided by third-parties despite such precautions. Any such shipment could have negative consequences, including government investigations, penalties and reputational harm. Furthermore, any new embargo or sanctions program, or any change in the countries, governments, persons or activities targeted by such programs, could result in decreased use of our platform and solutions, or in our decreased ability to export or sell our platform and solutions to existing or potential service providers, which would likely adversely affect our business and our financial condition.

Changes in laws that apply to us could result in increased regulatory requirements and compliance costs which could harm our business, financial condition and results of operations. In certain jurisdictions, regulatory requirements may be more stringent than in the United States. Noncompliance with applicable regulations or requirements could subject us to whistleblower complaints, investigations, sanctions, settlements, mandatory product recalls, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties or injunctions, suspension or debarment from contracting with certain governments or other customers, the loss of export privileges, multi-jurisdictional liability, reputational harm, and other collateral consequences. If any governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, results of operations and financial condition could be materially harmed. In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and an increase in defense costs and other professional fees. Enforcement actions and sanctions could further harm our business, results of operations, and financial condition.

From time to time, we are involved in legal proceedings as to which we are unable to assess our exposure and which could become significant liabilities in the event of an adverse judgment.

We are involved and have been involved in the past in legal proceedings from time to time. Companies in our industry have been subject to claims related to patent infringement and product liability, as well as contract and employment-related claims. We may not be able to accurately assess the risks related to these suits, and we may be unable to accurately assess our level of exposure. As a result of these proceedings, we have, and may be required to seek, licenses under patents or intellectual property rights owned by third parties, including open-source software and other commercially available software, which can be costly. For example, we have initiated and been involved with intellectual property litigation as a result of which we have entered into cross-license agreements relating to our and third-party intellectual property, and in one such case we initiated in 2013 and settled in January 2014, we incurred $11.2 million of legal expense in 2013.

Our business operates in a regulated industry.

Our business, operations and service providers are subject to various U.S. federal, state and local consumer protection laws, licensing regulation and other laws and regulations, and, to a lesser extent, similar Canadian laws and regulations. Our advertising and sales practices and that of our service provider network are subject to regulation by the U.S. Federal Trade Commission, or the FTC, in

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addition to state consumer protection laws. The FTC and the Federal Communications Commission have issued regulations that place restrictions on, among other things, unsolicited automated telephone calls to residential and wireless telephone subscribers by means of automatic telephone dialing systems and the use of prerecorded or artificial voice messages. If our service providers were to take actions in violation of these regulations, such as telemarketing to individuals on the “Do Not Call” registry, we could be subject to fines, penalties, private actions or enforcement actions by government regulators. Although we have taken steps to insulate ourselves from any such wrongful conduct by our service providers, and to require our service providers to comply with these laws and regulations, no assurance can be given that we will not be exposed to liability as result of our service providers’ conduct. Further, to the extent that any changes in law or regulation further restrict the lead generation activity of our service providers, these restrictions could result in a material reduction in subscriber acquisition opportunities, reducing the growth prospects of our business and adversely affecting our financial condition and future cash flows. In addition, most states in which we operate have licensing laws directed specifically toward the monitored security services industry. Our business relies heavily upon cellular telephone service to communicate signals. Cellular telephone companies are currently regulated by both federal and state governments. Changes in laws or regulations could require us to change the way we operate, which could increase costs or otherwise disrupt operations. In addition, failure to comply with any such applicable laws or regulations could result in substantial fines or revocation of our operating permits and licenses, including in geographic areas where our services have substantial penetration, which could adversely affect our business and financial condition. Further, if these laws and regulations were to change or if we fail to comply with such laws and regulations as they exist today or in the future, our business, financial condition and results of operations could be materially and adversely affected.

If the U.S. insurance industry were to change its practice of providing incentives to homeowners for the use of alarm monitoring services, we could experience a reduction in new subscriber growth or an increase in its subscriber attrition rate.

It has been common practice in the U.S. insurance industry to provide a reduction in rates for policies written on homes that have monitored alarm systems. There can be no assurance that insurance companies will continue to offer these rate reductions. If these incentives were reduced or eliminated, new homeowners who otherwise may not feel the need for alarm monitoring services would be removed from our potential subscriber pool, which could hinder the growth of our business, and existing subscribers may choose to disconnect or not renew their service contracts, which could increase our attrition rates. In either case, our results of operations and growth prospects could be adversely affected.

We face many risks associated with our plans to expand internationally, which could harm our business, financial condition, and operating results.

We anticipate that our efforts to expand internationally will entail the marketing and advertising of our platform, solutions and brand. While our platform and solutions are designed for ease of localization, subscribers in countries outside of the United States and Canada accounted for less than 1% of our revenue for the year ended December 31, 2013, and we do not have substantial experience localizing our platform and solutions into foreign languages. We also do not have substantial experience in selling our platform and solutions in international markets outside of the United States and Canada or in conforming to the local cultures, standards, or policies necessary to successfully compete in those markets, and we may be required to invest significant resources in order to do so. We may not succeed in these efforts or achieve our consumer acquisition, service provider expansion or other goals. In some international markets, consumer preferences and buying behaviors may be different, and we may use business or pricing models that are different from our traditional model to provide our platform and solutions to consumers in those markets or we may be unsuccessful in

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implementing the appropriate business model. Our revenue from new foreign markets may not exceed the costs of establishing, marketing, and maintaining our international offerings. In addition, the current instability in the eurozone could have many adverse consequences on our international expansion, including sovereign default, liquidity and capital pressures on eurozone financial institutions, reducing the availability of credit and increasing the risk of financial sector failures and the risk of one or more eurozone member states leaving the euro, resulting in the possibility of capital and exchange controls and uncertainty about the impact of contracts and currency exchange rates.

In addition, conducting expanded international operations subjects us to new risks that we have not generally faced in our current markets. These risks include:

• localization of our solutions, including the addition of foreign languages and adaptation to new local practices and regulatory requirements;

• lack of experience in other geographic markets;

• strong local competitors;

• the cost and burden of complying with, lack of familiarity with, and unexpected changes in, foreign legal and regulatory requirements, including more stringent privacy regulations;

• difficulties in managing and staffing international operations;

• fluctuations in currency exchange rates or restrictions on foreign currency;

• potentially adverse tax consequences, including the complexities of transfer pricing, value added or other tax systems, double taxation and restrictions and/or taxes on the repatriation of earnings;

• dependence on third parties, including commercial partners with whom we do not have extensive experience;

• increased financial accounting and reporting burdens and complexities;

• political, social, and economic instability, terrorist attacks, and security concerns in general; and

• reduced or varied protection for intellectual property rights in some countries.

Operating in international markets also requires significant management attention and financial resources. The investment and additional resources required to establish operations and manage growth in other countries may not produce desired levels of revenue or profitability.

Our software contains encryption technologies, certain types of which are subject to U.S. and foreign export control regulations and, in some foreign countries, restrictions on importation and/or use. Any failure on our part to comply with encryption or other applicable export control requirements could result in financial penalties or other sanctions under the U.S. export regulations, including restrictions on future export activities, which could harm our business and operating results. Regulatory restrictions could impair our access to technologies needed to improve our platform and solutions and may also limit or reduce the demand for our platform and solutions outside of the United States.

Risks Related to Our Intellectual Property

If we fail to protect our intellectual property and proprietary rights adequately, our business could be harmed.

We believe that proprietary technology is essential to establishing and maintaining our leadership position. We seek to protect our intellectual property through trade secrets, copyrights, confidentiality,

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non-compete and nondisclosure agreements, patents, trademarks, domain names and other measures, some of which afford only limited protection. We also rely on patent, trademark, trade secret and copyright laws to protect our intellectual property. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our technology or to obtain and use information that we regard as proprietary. Our means of protecting our proprietary rights may not be adequate or our competitors may independently develop similar or superior technology, or design around our intellectual property. In addition, the laws of some foreign countries do not protect our proprietary rights to as great an extent as the laws of the United States. Intellectual property protections may also be unavailable, limited or difficult to enforce in some countries, which could make it easier for competitors to capture market share. Our failure or inability to adequately protect our intellectual property and proprietary rights could harm our business, financial condition and results of operations.

To prevent substantial unauthorized use of our intellectual property rights, it may be necessary to prosecute actions for infringement and/or misappropriation of our proprietary rights against third parties. Any such action could result in significant costs and diversion of our resources and management's attention, and we cannot assure you that we will be successful in such action. Furthermore, many of our current and potential competitors have the ability to dedicate substantially greater resources to enforce their intellectual property rights than we do. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating our intellectual property.

An assertion by a third-party that we are infringing its intellectual property could subject us to costly and time-consuming litigation or expensive licenses that could harm our business and results of operations.

The industries in which we compete are characterized by the existence of a large number of patents, copyrights, trademarks and trade secrets, and by frequent litigation based on allegations of infringement or other violations of intellectual property rights. We have been involved with patent litigation suits in the past and we may be involved with and subject to similar litigation in the future to defend our intellectual property position. Given that our platform and solutions integrate with all aspects of the home, the risk that our platform and solutions may be subject to these allegations is exacerbated. As we seek to extend our platform and solutions, we could be constrained by the intellectual property rights of others. In addition, our service provider contracts may require us to indemnify them against certain liabilities they may incur as a result of our infringement of any third-party intellectual property.

We might not prevail in any intellectual property infringement litigation given the complex technical issues and inherent uncertainties in such litigation. Defending such claims, regardless of their merit, could be time-consuming and distracting to management, result in costly litigation or settlement, cause development delays or require us to enter into royalty or licensing agreements. For example, in 2013, we incurred $11.2 million in legal fees associated with intellectual property litigation that we asserted against a third-party and the related counterclaims. In addition, we currently have a limited portfolio of issued patents compared to our larger competitors, and therefore may not be able to effectively utilize our intellectual property portfolio to assert defenses or counterclaims in response to patent infringement claims or litigation brought against us by third parties. Further, litigation may involve patent holding companies or other adverse patent owners who have no relevant products or revenues and against which our potential patents provide no deterrence, and many other potential litigants have the capability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them. If our platform and solutions exceed the scope of in-bound licenses or violate any third-party proprietary rights, we could be required to withdraw those solutions from the market, re-develop those solutions or seek to obtain licenses from third parties,

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which might not be available on reasonable terms or at all. Any efforts to re-develop our platform and solutions, obtain licenses from third parties on favorable terms or license a substitute technology might not be successful and, in any case, might substantially increase our costs and harm our business, financial condition and results of operations. If we were compelled to withdraw any of our platform and solutions from the market, our business, financial condition and results of operations could be harmed.

We have indemnity obligations to certain of our service providers for certain expenses and liabilities resulting from intellectual property infringement claims regarding our platform and solutions, which could force us to incur substantial costs.

We have indemnity obligations to certain of our service providers for intellectual property infringement claims regarding our platform and solutions. As a result, in the case of infringement claims against these service providers, we could be required to indemnify them for losses resulting from such claims or to refund amounts they have paid to us. We expect that some of our service providers may seek indemnification from us in connection with infringement claims brought against them. In addition, we may elect to indemnify service providers where we have no contractual obligation to indemnity and we will evaluate each such request on a case-by-case basis. If a service provider elects to invest resources in enforcing a claim for indemnification against us, we could incur significant costs disputing it. If we do not succeed in disputing it, we could face substantial liability.

The use of open source software in our platform and solutions may expose us to additional risks and harm our intellectual property.

Some of our platform and solutions use or incorporate software that is subject to one or more open source licenses and we may incorporate open source software in the future. Open source software is typically freely accessible, usable and modifiable. Certain open source software licenses require a user who intends to distribute the open source software as a component of the user's software to disclose publicly part or all of the source code to the user's software. In addition, certain open source software licenses require the user of such software to make any derivative works of the open source code available to others on potentially unfavorable terms or at no cost.

The terms of many open source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and accordingly there is a risk that those licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to commercialize our platform and solutions. In that event, we could be required to seek licenses from third parties in order to continue offering our platform and solutions, to re-develop our platform and solutions, to discontinue sales of our platform and solutions or to release our proprietary software code under the terms of an open source license, any of which could harm our business. Further, given the nature of open source software, it may be more likely that third parties might assert copyright and other intellectual property infringement claims against us based on our use of these open source software programs. Litigation could be costly for us to defend, have a negative effect on our operating results and financial condition or require us to devote additional research and development resources to change our solutions.

Although we are not aware of any use of open source software in our platform and solutions that would require us to disclose all or a portion of the source code underlying our core solutions, it is possible that such use may have inadvertently occurred in deploying our platform and solutions. Additionally, if a third-party software provider has incorporated certain types of open source software into software we license from such third-party for our platform and solutions without our knowledge, we could, under certain circumstances, be required to disclose the source code to our platform and solutions. This could harm our intellectual property position and our business, results of operations and financial condition.

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Risks Related to Owning Our Common Stock and this Offering

Our share price may be volatile, and you may lose some or all of your investment.

The initial public offering price for the shares of our common stock will be determined by negotiations between us and the representative of the underwriters and may not be indicative of the market price of our common stock following this offering. The market price of our common stock may be highly volatile and may fluctuate substantially as a result of a variety of factors, some of which are related in complex ways, including:

• actual or anticipated fluctuations in our financial condition and operating results;

• variance in our financial performance from expectations of securities analysts;

• changes in the prices of our platform and solutions;

• changes in our projected operating and financial results;

• changes in laws or regulations applicable to our platform and solutions or marketing techniques;

• announcements by us or our competitors of significant business developments, acquisitions or new solutions;

• our involvement in any litigation;

• our sale of our common stock or other securities in the future;

• changes in senior management or key personnel;

• trading volume of our common stock;

• changes in the anticipated future size and growth rate of our market; and

• general economic, regulatory and market conditions.

Recently, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry fluctuations, as well as general economic, political, regulatory and market conditions, may negatively impact the market price of our common stock. If the market price of our common stock after this offering does not exceed the initial public offering price, you may lose some or all of your investment. In the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future, which could result in substantial costs and divert our management’s attention.

No public market for our common stock currently exists, and an active public trading market may not develop or be sustained following this offering.

No public market for our common stock currently exists. An active public trading market may not develop following the completion of this offering or, if developed, may not be sustained. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair value of your shares. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration. We cannot predict the prices at which our common stock will trade. It is

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possible that in one or more future periods our results of operations may be below the expectations of public market analysts and investors and, as a result of these and other factors, the price of our common stock may fall.

We are an “emerging growth company,” and any decision on our part to comply with certain reduced disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding an annual non-binding advisory vote on executive compensation and non-binding stockholder approval of any golden parachute payments not previously approved. If we choose not to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, our auditors will not be required to attest to the effectiveness of our internal control over financial reporting. As a result, investors may become less comfortable with the effectiveness of our internal controls and the risk that material weaknesses or other deficiencies in our internal controls go undetected may increase. If we choose to provide reduced disclosures in our periodic reports and proxy statements while we are an emerging growth company, investors would have access to less information and analysis about our executive compensation, which may make it difficult for investors to evaluate our executive compensation practices. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions and provide reduced disclosure. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be harmed. We will remain an “emerging growth company” for up to five years or such earlier time that we are no longer an emerging growth company. We will remain an emerging growth company until the earliest to occur of: the last day of the fiscal year in which we have more than $1.0 billion in annual revenue; the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates; the issuance, in any three-year period, by us of more than $1.0 billion in non-convertible debt securities; or the last day of the fiscal year ending after the fifth anniversary of our initial public offering.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we have chosen to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

As a result of becoming a public company, we will be obligated to develop and maintain a system of effective internal controls over financial reporting. We may not complete our analysis of our internal control over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may harm investor confidence in our company and, as a result, the value of our common stock.

We will be required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting in

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the second annual report we file with the SEC. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. However, our auditors will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act if we take advantage of the exemptions available to us through the JOBS Act.

We are in the very early stages of the costly and challenging process of compiling the system and process documentation necessary to perform the evaluation needed to comply with Section 404. In this regard, we will need to continue to dedicate internal resources, engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. As we transition to the requirements of reporting as a public company, we may need to add additional finance staff. We may not be able to remediate any future material weaknesses, or to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls are effective. If we are unable to assert that our internal control over financial reporting is effective, or if our auditors are unable to express an opinion on the effectiveness of our internal controls when they are required to issue such opinion, investors could lose confidence in the accuracy and completeness of our financial reports, which could harm our stock price.

If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our share price and trading volume could decline.

The trading market for our common stock will depend, in part, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If our financial performance fails to meet analyst estimates or one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price would likely decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

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

As a public company, we will incur increased legal, accounting and other costs not incurred as a private company. The Sarbanes-Oxley Act and related rules and regulations of the SEC, and the regulate the corporate governance practices of public companies. We expect that compliance with these requirements will increase our expenses and make some activities more time-consuming than they have been in the past when we were a private company. Such additional costs going forward could negatively affect our financial results.

We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

We do not intend to pay any cash dividends in the foreseeable future. We anticipate that we will retain all of our future earnings for use in the development of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

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Our future depends in part on the interests and influence of key stockholders.

Following this offering, our directors, executive officers and holders of more than 5% of our common stock, some of whom are represented on our board of directors, together with their affiliates will beneficially own             % of the voting power of our outstanding capital stock. As a result, these stockholders will, immediately following this offering, be able to determine the outcome of matters submitted to our stockholders for approval. This ownership could affect the value of your shares of common stock by, for example, these stockholders electing to delay, defer or prevent a change in corporate control, merger, consolidation, takeover or other business combination. This concentration of ownership may also adversely affect the market price of our common stock.

We may invest or spend the proceeds of this offering in ways with which you may not agree or in ways which may not yield a return.

A portion of the net proceeds from this offering may be used for general corporate purposes, including working capital. We may also use a portion of the net proceeds to acquire complementary businesses, products, services or technologies. However, we do not have any agreements or commitments for any acquisitions at this time. Our management will have considerable discretion in the application of the net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. The net proceeds may be invested with a view towards long-term benefits for our stockholders and this may not increase our operating results or market value. The failure by our management to apply these funds effectively may adversely affect the return on your investment.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.

Provisions in our certificate of incorporation and bylaws, as amended and restated in connection with this offering, may have the effect of delaying or preventing a change in control or changes in our management. Our amended and restated certificate of incorporation and amended and restated bylaws will include provisions that:

• authorize our board of directors to issue preferred stock, without further stockholder action and with voting liquidation, dividend and other rights superior to our common stock;

• require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent, and limit the ability of our stockholders to call special meetings;

• establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for director nominees;

• establish that our board of directors is divided into three classes, with directors in each class serving three-year staggered terms;

• require the approval of holders of two-thirds of the shares entitled to vote at an election of directors to adopt, amend or repeal our bylaws or amend or repeal the provisions of our certificate of incorporation regarding the election and removal of directors and the ability of stockholders to take action by written consent or call a special meeting;

• prohibit cumulative voting in the election of directors; and

• provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum.

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These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder. Any of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our common stock, and they could deter potential acquirers of our company, thereby reducing the likelihood that you would receive a premium for your common stock in an acquisition.

Our amended and restated certificate of incorporation will designate the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.

Pursuant to our amended and restated certificate of incorporation, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (3) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws or (4) any action asserting a claim governed by the internal affairs doctrine. Our amended and restated certificate of incorporation will further provide that any person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have notice of and consented to the foregoing provision. The forum selection clause in our amended and restated certificate of incorporation may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.

Future sales of our common stock in the public market could cause our share price to decline.

After this offering, there will be                  shares of our common stock outstanding, assuming no exercise of the underwriters’ over-allotment option. Sales of a substantial number of shares of our common stock in the public market after this offering, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. Of our issued and outstanding shares of our common stock, all of the shares sold in this offering will be freely transferrable without restrictions or further registration under the Securities Act, except for any shares acquired by our affiliates, as defined in Rule 144 under the Securities Act. The remaining                  shares outstanding after this offering will be restricted as a result of securities laws, lock-up agreements or other contractual restrictions that restrict transfers for 180 days after the date of this prospectus.

You will experience immediate and substantial dilution in the net tangible book value of the shares of common stock you purchase in this offering.

The initial public offering price of our common stock substantially exceeds the pro forma net tangible book value per share of our common stock, as of March 31, 2014, immediately after this offering. Therefore, if you purchase shares of our common stock in this offering, you will suffer immediate dilution of $         per share, or $         if the underwriters exercise their option in full, in net tangible book value after giving effect to the sale of common stock in this offering at an assumed public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. If outstanding options to purchase our common stock are exercised in the future, you will experience additional dilution.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve substantial risks and uncertainties. The forward-looking statements are contained principally in the sections of this prospectus entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” but are also contained elsewhere in this prospectus. In some cases, you can identify forward-looking statements by the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “predict,” “project,” “potential,” “should,” “will,” or “would,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this prospectus, we caution you that these statements are based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain. Forward-looking statements include statements about:

• our ability to continue to add new subscribers, maintain existing subscribers and sell new services to new and existing subscribers;

• our ability to add new service providers, maintain existing service provider relationships and increase the productivity of our service providers;

• the effects of increased competition as well as innovations by new and existing competitors in our market;

• our ability to adapt to technological change and effectively enhance, innovate and scale our solution;

• our ability to effectively manage or sustain our growth;

• potential acquisitions and integration of complementary business and technologies;

• our expected use of proceeds;

• our ability to maintain, or strengthen awareness of, our brand;

• perceived or actual security, integrity, reliability, quality or compatibility problems with our solutions, including related to security breaches in our subscribers’ systems, unscheduled downtime, or outages;

• statements regarding future revenue, hiring plans, expenses, capital expenditures, capital requirements and stock performance;

• our ability to attract and retain qualified employees and key personnel and further expand our overall headcount;

• our ability to develop relationships with service providers in order to expand internationally;

• our ability to stay abreast of new or modified laws and regulations that currently apply or become applicable to our business both in the United States and internationally;

• our ability to maintain, protect and enhance our intellectual property;

• costs associated with defending intellectual property infringement and other claims; and

• the future trading prices of our common stock and the impact of securities analysts’ reports on these prices.

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We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus.

You should refer to the “Risk Factors” section of this prospectus for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this prospectus will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. The Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act do not protect any forward-looking statements that we make in connection with this offering.

You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

This prospectus contains market data and industry forecasts that were obtained from industry publications. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified any third-party information. We believe the market position, market opportunity and market size information included in this prospectus is generally reliable.

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USE OF PROCEEDS

We estimate that the net proceeds from our issuance and sale of                  shares of our common stock in this offering will be approximately $         million, or approximately $         million if the underwriters exercise their over-allotment option in full, based upon an assumed initial public offering price of $             per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any of the proceeds from the sale of shares by the selling stockholders, although we will bear the costs, other than underwriting discounts and commissions, associated with those sales.

Each $1.00 increase or decrease in the assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease the net proceeds to us from this offering by approximately $         million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions payable by us. We may also increase or decrease the number of shares we are offering. Each 1,000,000 share increase or decrease in the number of shares offered by us would increase or decrease the net proceeds to us from this offering by approximately $             million, assuming that the assumed initial price to the public remains the same, and after deducting underwriting discounts and commissions payable by us. We do not expect that a change in the initial price to the public or the number of shares by these amounts would have a material effect on uses of the proceeds from this offering, although it may accelerate the time at which we will need to seek additional capital.

The principal purposes of this offering are to increase our financial flexibility, create a public market for our common stock, and facilitate our future access to the capital markets. We also expect to use the net proceeds from this offering for working capital and other general corporate purposes. We may use a portion of the proceeds from this offering for acquisitions or strategic investments in complementary businesses or technologies, although we do not currently have any plans for any such acquisitions or investments. We have not allocated specific amounts of net proceeds for any of these purposes.

The expected use of net proceeds from this offering represents our intentions based upon our present plans and business conditions. We cannot predict with certainty all of the particular uses for the proceeds of this offering or the amounts that we will actually spend on the uses set forth above. Accordingly, our management will have significant flexibility in applying the net proceeds of this offering. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business. Pending their use, we intend to invest the net proceeds of this offering in a variety of capital-preservation investments, including short- and intermediate-term, interest-bearing, investment-grade securities.

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DIVIDEND POLICY

We declared dividends on our common and preferred stock in the amount of $0.3067 per share of common stock on an as-converted basis in October 2011 and $0.2944 per share of common stock on an as-converted basis in December 2011, totaling approximately $19.9 million. We also declared and paid dividends on our common and preferred stock in the amount of $0.2589 per share of common stock on an as-converted basis in June 2012, totaling approximately $8.6 million.

We cannot provide any assurance that we will declare or pay cash dividends on our common stock in the future. We currently anticipate that we will retain all of our future earnings, if any, for use in the operation and expansion of our business and we do not anticipate paying cash dividends in the foreseeable future. Additionally, our ability to pay dividends on our common stock is limited by restrictions under the terms of the agreements governing our credit facility. Payment of future cash dividends, if any, will be at the discretion of the board of directors after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, the requirements of current or then-existing debt instruments and other factors the board of directors deems relevant.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and our capitalization as of March 31, 2014:

• on an actual basis; and

• on a pro forma as adjusted basis to reflect (1) the conversion of all outstanding shares of our preferred stock into 35,017,884 shares of common stock immediately prior to the completion of this offering, (2) our sale of                  shares of common stock in this offering at an assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, and (3) the filing of our amended and restated certificate of incorporation, which will become effective immediately prior to completion of this offering.

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

	As of March 31, 2014
	Actual			Pro Forma As Adjusted(1)
	(unaudited)
	(in thousands, except share and per share data)
Cash and cash equivalents	$	40,863		$
Debt	$	7,000		$
Redeemable convertible preferred stock, $0.001 par value; 6,991,090 shares authorized, 3,890,876 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma as adjusted		202,456
Stockholders’ (deficit) equity:
Preferred stock, $0.001 par value; no shares authorized, issued or outstanding, actual;                                               shares authorized, no shares issued or outstanding, pro forma as adjusted		—
Common stock, $0.01 par value; 100,000,000 shares authorized, 2,690,280 shares issued and outstanding, actual;                                               shares authorized,                      shares issued and outstanding, pro forma as adjusted		23
Additional paid-in capital		3,649
Treasury stock		(42	)
Accumulated other comprehensive income		88
Accumulated deficit		(138,225	)
Total stockholders’ (deficit) equity		(134,507	)
Total capitalization	$	74,949		$

(1) The pro forma as adjusted information set forth above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase or decrease in the assumed initial public offering price of $             per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease pro forma as adjusted cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $             million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions payable by us. We may also increase or decrease the number of shares we are offering. Each 1,000,000

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share increase or decrease in the number of shares offered by us would increase or decrease pro forma as adjusted cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $             million, assuming that the assumed initial price to public remains the same, and after deducting underwriting discounts and commissions payable by us.

The number of shares of our common stock shown as issued and outstanding on a pro forma as adjusted basis in the table above is based on the number of shares of our common stock outstanding as of March 31, 2014 and excludes:

• 3,324,923 shares of common stock issuable upon the exercise of options outstanding as of March 31, 2014, at a weighted-average exercise price of $2.22 per share;

•                      shares of our common stock reserved for future issuance pursuant to our 2014 Plan which will become effective prior to the completion of this offering and will include provisions that automatically increase the number of shares of common stock reserved for issuance thereunder each year (including 440,668 shares of common stock reserved for issuance under our previously existing 2009 Plan that will be added to the shares reserved under the 2014 Plan upon its effectiveness); and

• 118,881 shares of common stock issuable upon the exercise of common stock warrants that were outstanding as of March 31, 2014, at a weighted-average exercise price of approximately $1.20 per share.

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DILUTION

If you invest in our common stock, your interest will be diluted to the extent of the difference between the initial public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after the completion of this offering. Net tangible book value per share represents our total tangible assets (total assets less intangible assets) less our total liabilities and redeemable convertible preferred stock, divided by the number of shares of outstanding common stock.

As of March 31, 2014, our net tangible book value was $(158.6) million, or $(58.94) per share of common stock. The pro forma net tangible book value of our common stock as of March 31, 2014 was $43.9 million, or $1.16 per share, based on 37,708,164 shares of common stock outstanding. Pro forma net tangible book value per share represents our total tangible assets less our total liabilities, divided by the number of shares of outstanding common stock, after giving effect to the conversion of all of our outstanding shares of preferred stock into 35,017,884 shares of common stock immediately prior to the completion of this offering.

After giving effect to the receipt of the net proceeds from our sale of                      shares of common stock in this offering at an assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of March 31, 2014 would have been $         million, or $         per share. This represents an immediate increase in pro forma as adjusted net tangible book value of $         per share to our existing stockholders and an immediate dilution of $         per share to investors purchasing common stock in this offering.

The following table illustrates this dilution on a per share basis to new investors:

Assumed initial public offering price per share			$
Pro forma net tangible book value per share as of March 31, 2014	$	1.16
Increase in pro forma net tangible book value per share attributed to new investors purchasing shares from us in this offering
Pro forma as adjusted net tangible book value per share after giving effect to this offering
Dilution in pro forma as adjusted net tangible book value per share to new investors in this offering			$

The dilution information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase or decrease in the assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease the pro forma as adjusted net tangible book value per share by $         per share and the dilution per share to investors participating in this offering by $         per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions payable by us. We may also increase or decrease the number of shares we are offering. Each 1,000,000 share increase in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase the pro forma as adjusted net tangible book value per share by $         and decrease the dilution per share to investors participating in this offering by $        , assuming the assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions payable by us. Each 1,000,000 share decrease in the number

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of shares offered by us, as set forth on the cover page of this prospectus, would decrease the pro forma as adjusted net tangible book value per share after this offering by $         and increase the dilution per share to new investors participating in this offering by $        , assuming the assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions payable by us. The pro forma as adjusted information discussed above is illustrative only and will adjust based on the actual initial price to public and other terms of this offering determined at pricing.

If the underwriters exercise their option in full to purchase an additional              shares of our common stock in this offering, the pro forma as adjusted net tangible book value would increase to $         per share, representing an immediate increase to existing stockholders of $         per share and an immediate dilution of $         per share to investors participating in this offering.

The following table summarizes as of March 31, 2014, on the pro forma as adjusted basis described above, the number of shares of our common stock, the total consideration and the average price per share (1) paid to us by our existing stockholders and (2) to be paid by investors purchasing our common stock in this offering at an assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, before deducting underwriting discounts and commissions and estimated offering expenses payable by us.

	Shares Purchased			Total Consideration			Weighted-   Average Price   Per Share
	Number	Percent		Amount	Percent
Existing stockholders			%	$		%	$
New investors
Total			100.0%	$		100.0%	$

The foregoing table does not reflect the sales by existing stockholders in connection with sales made by them in this offering. Sales by the selling stockholders in this offering will reduce the number of shares held by existing stockholders to              shares, or     % of the total number of shares of our common stock outstanding after this offering, and will increase the number of shares held by new investors to              shares, or     % of the total number of shares of our common stock outstanding after this offering.

The tables and calculations above are based on the number of shares of our common stock outstanding as of March 31, 2014 and exclude:

• 3,324,923 shares of common stock issuable upon the exercise of options outstanding as of March 31, 2014, at a weighted-average exercise price of $2.22 per share;

•              shares of our common stock reserved for future issuance pursuant to our 2014 Plan, which will become effective prior to the completion of this offering and will include provisions that automatically increase the number of shares of common stock reserved for issuance thereunder each year (including 440,668 shares of common stock reserved for issuance under our previously existing 2009 Plan that will be added to the shares reserved under the 2014 Plan upon its effectiveness); and

• 118,881 shares of common stock issuable upon the exercise of common stock warrants that were outstanding as of March 31, 2014, at a weighted-average exercise price of approximately $1.20 per share.

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To the extent that options or warrants are exercised, new options or other securities are issued under our equity incentive plans, or we issue additional shares of common stock in the future, there will be further dilution to investors participating in this offering. In addition, we may choose to raise additional capital because of market conditions or strategic considerations, even if we believe that we have sufficient funds for our current or future operating plans. If we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.

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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

The following tables set forth our selected consolidated financial and other data. The following selected consolidated financial data for the years ended December 31, 2011, 2012 and 2013 and the selected consolidated balance sheet data as of December 31, 2012 and 2013 are derived from our audited consolidated financial statements included elsewhere in this prospectus. The following selected consolidated financial data for the year ended December 31, 2010 and the selected consolidated balance sheet data as of December 31, 2010 and 2011 are derived from our audited consolidated financial statements not included in this prospectus. The selected consolidated financial data for the three months ended March 31, 2013 and 2014 and the selected consolidated balance sheet data as of March 31, 2014 are derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. We have prepared the unaudited financial statements on the same basis as the audited financial statements, and the unaudited consolidated financial data include, in our opinion, all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair presentation of our financial position and results of operations for these periods. Our historical results are not necessarily indicative of the results to be expected in the future, and our operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2014.

The data should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in conjunction with the consolidated financial statements, related notes, and other financial information included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results to be expected in the future.

	Year Ended December 31,								Three Months Ended March 31,
	2010		2011		2012(7)		2013		2013		2014
									(unaudited)
	(in thousands, except share and per share data and number of subscribers)
Consolidated Statements of Operations Data:
Revenue:
Subscription revenue	$	17,085	$	32,161	$	55,655	$	82,620	$	17,579	$	25,204
Hardware and other revenue		20,135		32,898		40,820		47,602		10,450		11,647
Total revenue		37,220		65,059		96,475		130,222		28,029		36,851
Cost of revenue:(1)
Cost of subscription revenue		4,970		8,051		12,681		16,476		3,690		5,008
Cost of hardware and other revenue		12,115		21,102		28,773		38,482		7,568		8,993
Total cost of revenue		17,085		29,153		41,454		54,958		11,258		14,001
Operating expenses:
Sales and marketing(2)		2,482		5,819		13,232		21,467		3,638		5,096
General and administrative(2)		6,045		6,817		14,099		29,928		2,358		5,220
Research and development(2)		3,266		5,613		8,944		13,085		2,675		4,610
Amortization and depreciation		1,779		1,988		2,230		3,360		628		806
Total operating expenses		13,572		20,237		38,505		67,840		9,299		15,732
Operating Income		6,563		15,669		16,516		7,424		7,472		7,118
Interest income / (expense), net		15		1		(307)		(100)		(70)		11
Other income / (expense), net		—		—		—		(112)		—		(59)
Income before income taxes		6,578		15,670		16,209		7,212		7,402		7,070
Provision for income taxes		2,506		6,015		7,280		2,688		3,050		2,797
Net income		4,072		9,655		8,929		4,524		4,352		4,273
Dividends paid on redeemable convertible preferred stock		—		(18,998)		(8,182)		—		—		—
Cumulative dividend on redeemable convertible preferred stock		(3,081)		(3,317)		(1,855)		—		—		—
Deemed dividend to redeemable convertible preferred stock upon recapitalization		—		—		(138,727)		—		—		—
Income allocated to participating securities		(990)		—		—		(4,402)		(4,250)		(4,125)
Net income (loss) attributable to common stockholders	$	1	$	(12,660)	$	(139,835)	$	122	$	102	$	148

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	Year Ended December 31,								Three Months Ended March 31,
	2010		2011		2012(7)		2013		2013		2014
									(unaudited)
	(in thousands, except share and per share data and number of subscribers)
Per share information attributable to common stockholders:
Net (loss) income per share:
Basic	$	0.03	$	(19.76)	$	(108.55)	$	0.08	$	0.08	$	0.08
Diluted	$	—	$	(19.76)	$	(108.55)	$	0.04	$	0.04	$	0.04
Pro forma (unaudited):(3)
Basic							$	0.12			$	0.12
Diluted							$	0.12			$	0.11
Weighted average common shares outstanding:
Basic		9,585		640,850		1,288,162		1,443,469		1,252,755		1,869,370
Diluted		218,664		640,850		1,288,162		2,795,345		2,426,857		3,467,288
Pro forma (unaudited):(3)
Basic								36,461,353				36,887,254
Diluted								37,813,229				38,485,172
Other Financial and Operating Data:
Number of subscribers(4)		483,000		856,000		1,330,000		1,902,000		1,425,000		1,984,000
Subscription revenue renewal rate(5)		92%		94%		94%		93%		91%		92%
Adjusted EBITDA(6)	$	8,626	$	17,839	$	20,505	$	28,259	$	8,264	$	8,775

	As of December 31,										As of March 31,
	2010		2011			2012			2013		2014
											(unaudited)
	(in thousands, except per share data)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	14,474	$	16,817		$	41,920		$	33,583	$	40,863
Working capital, excluding deferred revenue		14,398		15,747			40,739			33,821		39,051
Total assets		48,980		58,507			87,545			99,487		106,038
Redeemable convertible preferred stock		35,117		35,117			202,456			202,456		202,456
Total long-term obligations		2,884		14,377			15,276			14,923		14,258
Total stockholders’ equity (deficit)		6,015		(3,188	)		(147,051	)		(140,690)		(134,507)
Cash dividends per common share		—		0.60			0.26			—		—

(1) Excludes amortization and depreciation.

(2) Includes stock-based compensation expense as follows:

	Year Ended December 31,								Three Months Ended March 31,
	2010		2011		2012		2013		2013		2014
	(in thousands)
Sales and marketing	$	16	$	39	$	196	$	102	$	29	$	77
General and administrative		181		89		418		495		65		480
Research and development		87		54		1,145		244		70		231
Total stock-based compensation expense	$	284	$	182	$	1,759	$	841	$	164	$	788

(3) Pro forma basic and diluted net income per share represents net income divided by the pro forma weighted-average shares of common stock outstanding. Pro forma weighted-average shares outstanding reflects the conversion of preferred stock (using the if-converted method) into common stock as though the conversion had occurred on the first day of the relevant period.

(4) We define our subscribers as the number of residential or commercial properties to which we delivered at least one of our offerings during the period. A subscriber who subscribes to one of our service level packages as well as one or more of our a la carte add-ons is counted as a single subscriber. The number of subscribers represents our number of subscribers, rounded to the nearest thousand, on the last day of the applicable year.

(5) We measure our subscription revenue renewal rate on a trailing 12-month basis by dividing (a) the total subscription revenue recognized during the 12-month period from subscribers who were subscribers on the first day of the period, by (b) total subscription revenue we would have recognized during the period from those same subscribers assuming no terminations, or service level upgrades or downgrades. Our subscriber renewal rate is expressed as an annualized percentage.

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(6) We define Adjusted EBITDA as our net income before interest and other expense, income tax expense, amortization and depreciation expense, stock-based compensation expense, goodwill and intangible impairment charges, gain from the release of an acquisition-related contingent liability and legal costs incurred in connection with certain historical intellectual property litigation. We do not consider these items to be indicative of our core operating performance. The non-cash items include amortization and depreciation expense, stock-based compensation expense, goodwill and intangible impairment charges and gain from the release of an acquisition-related contingent liability.

We have included Adjusted EBITDA in this prospectus because it is a key measure used by our management to understand and evaluate our core operating performance and trends and generate future operating plans, make strategic decisions regarding the allocation of capital, and investments in initiatives that are focused on cultivating new markets for our solutions. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA facilitates comparisons of our operating performance on a period-to-period basis and, in the case of exclusion of acquisition-related adjustments and historical legal expenses, excludes items that we do not consider to be indicative of our core operating performance. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are: (a) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (b) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (c) Adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation; (d) Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and (e) other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces its usefulness as a comparative measure.

Because of these and other limitations, you should consider Adjusted EBITDA alongside our other GAAP-based financial performance measures, net income and our other GAAP financial results. The following table presents a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP measure, for each of the periods indicated.

	Year Ended December 31,											Three Months Ended March 31,
	2010			2011			2012		2013			2013		2014
	(in thousands)
Net income	$	4,072		$	9,655		$	8,929	$	4,524		$	4,352	$	4,273
Adjustments:
Other (expense) / income		(15	)		(1	)		307		212			70		48
Income tax expense		2,506			6,015			7,280		2,688			3,050		2,797
Amortization and depreciation expense		1,779			1,988			2,230		3,360			628		806
Stock-based compensation expense		284			182			1,759		841			164		788
Goodwill and intangible asset impairment		—			—			—		11,266			—		—
Release of acquisition related contingent liability		—			—			—		(5,820	)		—		—
Litigation expense		—			—			—		11,188			—		63
Total adjustments		4,554			8,184			11,576		23,735			3,912		4,502
Adjusted EBITDA	$	8,626		$	17,839		$	20,505	$	28,259		$	8,264	$	8,775

(7) We conducted a recapitalization in July 2012. Please see Note 16 to our consolidated financial statements for additional information regarding this transaction.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and the related notes and other financial information included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section of this prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are the leading cloud-based software platform powering the intelligently connected home. We have developed technology that makes the connected home broadly accessible to consumers and fundamentally changed the way they interact with their homes and businesses. Our multi-tenant software-as-a-service, or SaaS, platform allows home and business owners to intelligently secure and manage their properties and remotely interact with a broad array of connected devices through a single, intuitive interface. Our connected home platform currently has more than 2 million residential and small business subscribers, connects to more than 20 million devices, and processed more than 15 billion data points generated by those subscribers and devices in the last year alone, making Alarm.com the largest connected home platform.

Our solutions are sold through an established network of over 4,000 trusted service providers, who are experts at selling, installing and supporting connected home solutions. Our technology platform was purpose-built for the connected home ecosystem, including the consumers who use it, the service providers who sell, install and support it and the hardware partners who integrate their connected devices. Our solutions are used by both home and small business owners, and we refer to this market as the connected home market.

We generate most of our revenue by selling solutions that enable homeowners and small business owners to intelligently connect, control and automate their properties, providing increased security, awareness and efficiency to their home or business through our subscription offering. Subscription revenue represented 49%, 58% and 63% of our revenue in 2011, 2012 and 2013, respectively, and 68% of our revenue in the first quarter of 2014. This comprehensive solution primarily includes Intelligent Automation, Interactive Security, Video Monitoring and Energy Management, which can be integrated together or provided on a standalone basis. Our established service provider network sells our SaaS solution and hardware products to residential and commercial end user customers, which we refer to as our subscribers. As of May 31, 2014, we had over 2 million subscribers, a substantial majority of which were residential.

We also generate revenue from the sale of hardware that enables our solutions, including cellular radio modules, video cameras, image sensors and peripherals. We have a rich history of innovation in cellular technology that enables our robust subscription offering. Hardware and other revenue represented 51%, 42% and 37% of our revenue in 2011, 2012 and 2013, respectively, and 32% of our revenue in the first quarter of 2014. We expect hardware and other revenue to continue to decline as a percentage of total revenue as we continue to grow our subscriber base.

We were founded in 2000 and set out to revolutionize the way people secure and interact with their homes and small businesses. In the decade before we launched our first solution in 2003, the security industry had been slow to innovate or adopt emerging technologies. We identified an

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opportunity to apply new technology, in this case two-way wireless data transmission, cloud computing technologies, and the rapid growth of Internet usage, to disrupt legacy security applications and from there built our technology to capitalize on the connected home opportunity. We believe we were the first company to launch a SaaS platform providing an interactive home security solution. In 2006, we transitioned our solution to the cellular wireless network to broaden our coverage footprint and utilize the most reliable channel available to offer our services. In 2010, we further expanded our intelligent, connected home and business platform to include our energy management and other home and business automation features. Over this period, we have established a cloud-based platform that supports a large variety of devices and communications protocols enabling continued scalability of our solution as technology and consumer preferences continue to evolve. We have also developed innovative and novel hardware components and devices, like our cellular communication module and image sensors, to efficiently deliver our connected home solutions at scale and rapidly introduce new features and capabilities. We believe this combination of our innovative hardware enabling our cloud-based connected home platform is a strategic advantage. We also partner with an ecosystem of hardware manufacturers for the breadth of devices connected on our platform.

To date, nearly all of our revenue growth has been organic. As part of our development efforts we make investments in companies that are developing technology complementary to our offerings and we continue to invest in developing new offerings for markets adjacent to our current markets.

We have experienced significant revenue and subscriber growth over the past three years. Our revenue increased from $65.1 million in 2011 to $96.5 million in 2012 and to $130.2 million in 2013. Our revenue increased from $28.0 million to $36.9 million in the first quarters of 2013 and 2014. Our subscription revenue increased from $32.2 million in 2011, to $55.7 million in 2012 and to $82.6 million in 2013. Our subscription revenue increased from $17.6 million to $25.2 million in the first quarters of 2013 and 2014. Our subscriber base increased from 856,000 subscribers in 2011 to 1.9 million in 2013, representing a compound annual growth rate of 49%. As of March 31, 2014, our subscriber base increased to 2.0 million subscribers. We generated net income of $9.7 million in 2011, $8.9 million in 2012 and $4.5 million in 2013, and Adjusted EBITDA, a non-GAAP measurement of operating performance, of $17.8 million in 2011, $20.5 million in 2012 and $28.3 million in 2013. We generated net income of $4.3 million and Adjusted EBITDA of $8.8 million in the first quarter of 2014. Please see footnote 6 to the table in the section of this prospectus titled “Selected Consolidated Financial and Other Data” for a discussion of the limitations of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, the most comparable GAAP measurement, for 2011, 2012, 2013, and the first quarters of 2013 and 2014.

Key Factors Affecting Our Performance

Our historical financial performance has been, and we expect our financial performance in the future to be, primarily driven by the following factors:

• Service Provider Network.  We have developed a network of over 4,000 service providers that sell, install and service our solutions. Our existing base of service providers represent over 30% of the estimated 13,000 security dealers in North America according to a Parks Associates report dated October 2013. In order for us to maintain our current revenue sources and grow our revenues, we must effectively manage and grow relationships with our service providers. Over the last decade, we have built an infrastructure that supports our service providers with sales and marketing tools, training, technical support, and access to aggregated data that helps service providers improve the performance of their business through targeting new customers, improving customer retention rates, and upselling new features. Recruiting and retaining qualified service providers and training them in our technology and solutions requires significant time and resources. We intend to continue to invest in these technologies, solutions and other resources that we believe will assist our

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service providers to grow their businesses by driving the creation of new subscribers as the overall connected home market expands. Additionally, we will leverage our sales and marketing efforts to grow our service provider base.

• Subscriber Growth.  Our subscriber base is a key indicator of our market penetration, growth and future revenue. We believe that we are positioned for future growth and that we have an opportunity to continue expanding our subscriber base in the coming years. In the United States alone, according to a Parks Associates report dated December 2013, smart home controller penetration was only at 2.2% of households in 2013. We believe there is an opportunity for penetration rates to significantly increase, largely driven by the mass market adoption of connected home solutions. The number of new subscribers signed may vary period to period for several reasons, including the effects of seasonality on our business due to a subset of our service providers who use a summer sales business model where they substantially increase the size of their sales force and execute the majority of their sales over the summer months. Our ability to continue to grow our subscriber base is also dependent upon our ability to compete within the increasingly competitive markets in which we participate, where large technology companies, broadband and security service providers, and other managed service providers, are actively targeting the connected home, security monitoring, video and energy management markets. We intend to continue to invest in enhancing and expanding our platform and solutions for both consumers and service providers, as well as introducing new, innovative products and services to further differentiate our solutions from our competitors’ products and services.

• Adoption of Connected Home Solutions.  We believe there is significant opportunity to increase the adoption rate of our intelligent home and business automation features. As of March 31, 2014, approximately one quarter of our subscribers have adopted two or more of our solutions, typically our interactive security solution combined with one of our other solutions. Subscribers who have adopted these other solutions are more engaged, have lower churn rates and generate a higher customer lifetime value for our service providers and for us. We also expect to be able to develop new features for sale and cross-sale as more devices are connected through our platform and more data is captured by our platform.

• Investing in Growth. We will continue to focus on long-term revenue growth. We believe that our market opportunity is large and underpenetrated and we will continue to invest significantly in sales and marketing to grow our service provider and subscriber base, drive additional revenue and grow internationally. We also expect to invest in research and development to enhance our platform and develop complementary solutions. To support our expected growth and our operation as a public company, we plan to invest in other operational and administrative functions. We expect to use the proceeds from this offering to fund these growth strategies.

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Key Metrics

We use the following key business metrics to help us monitor the performance of our business and to identify trends affecting our business: our number of subscribers, our subscription revenue renewal rate, and Adjusted EBITDA. We believe these metrics are useful to understanding the underlying trends in our business. The following table summarizes our key operating metrics for 2011, 2012 and 2013 and for our first quarters of 2013 and 2014.

	Year Ended December 31,						Three Months Ended March 31,
	2011		2012		2013		2013		2014
	(dollars in thousands)
Number of Subscribers at Period End		856,000		1,330,000		1,902,000		1,425,000		1,984,000
Subscription Revenue Renewal Rate		94%		94%		93%		91%		92%
Adjusted EBITDA	$	17,839	$	20,505	$	28,259	$	8,264	$	8,775

Number of Subscribers

We believe that the number of subscribers using our connected home solutions and our ability to expand our subscriber base is an indicator of the productivity of our service providers, the demand for our connected home solutions, and the pace at which the market for connected home solutions is growing. We define our subscribers as the number of residential or commercial properties to which we are delivering at least one of our solutions. A subscriber who subscribes to one of our service level packages as well as one or more of our a la carte add-ons is counted as one subscriber. The number of subscribers represents our number of subscribers, rounded to the nearest thousand, on the last day of the applicable year or quarter.

We classify our subscribers into two groups: standard subscribers, which represented approximately two-thirds of our total subscriber base as of December 31, 2013 and March 31, 2014, and other subscribers, which represented approximately one-third of our total subscriber base as of the same dates. For our standard subscribers, our service providers pay us on a per subscriber basis for access to our cloud-based connected home solution, to provide a supervised cellular network service to the home or business, and to deliver an enterprise back-end software service. Our other subscribers are comprised of: subscribers where we license our intellectual property, or IP subscriber, to a service provider on a monthly fee per subscriber basis, and carrier operated subscribers where the service provider utilizes its own cellular network or partners with a cellular network provider. As we continue to expand our business into new markets or acquire businesses with different business models as was the case with our acquisition of EnergyHub, in the future our other subscribers may include subscribers where we offer a basic service for no monthly fee with the option to upgrade to a premium service for a monthly fee or where we generate revenue from the subscriber by other means. We anticipate future subscriber growth will be generated by both standard and other subscribers, and we expect that in the near term the majority of our new subscribers will be standard subscribers.

Subscription Revenue Renewal Rate

We measure our subscription revenue renewal rate on a trailing 12-month basis by dividing (a) the total subscription revenue recognized during the 12-month period from subscribers who were subscribers on the first day of the period, by (b) total subscription revenue we would have recognized during the period from those same subscribers assuming no terminations, or service level upgrades or

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downgrades. Our subscription revenue renewal rate is expressed as an annualized percentage. We believe that subscription revenue renewal rate allows us to measure our ability to retain and grow our SaaS revenue and serves as an indicator of the lifetime value of our subscriber base.

Adjusted EBITDA

Adjusted EBITDA represents our net income before interest and other expense, income tax expense, amortization and depreciation expense, stock-based compensation expense, goodwill and intangible impairment charges, gain from the release of an acquisition-related contingent liability and legal costs incurred in connection with certain historical intellectual property litigation. We do not consider these items to be indicative of our core operating performance. The items which are non-cash include amortization and depreciation expense, stock-based compensation expense, goodwill and intangible impairment charges and gain from the release of an acquisition-related contingent liability.

Adjusted EBITDA is a key measure used by management to understand and evaluate our core operating performance and trends and generate future operating plans, make strategic decisions regarding the allocation of capital, and investments in initiatives that are focused on cultivating new markets for our solutions. In particular, the exclusion of certain expenses in calculating Adjusted EBITDA facilitates comparisons of our operating performance on a period-to-period basis and, in the case of exclusion of acquisition-related adjustments and certain historical legal expenses, excludes items that we do not consider to be indicative of our core operating performance. Adjusted EBITDA is not a measure calculated in accordance with GAAP. Please see footnote 6 to the table in the section of this prospectus titled “Selected Consolidated Financial and Other Data” for a discussion of the limitations of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, the most comparable GAAP measurement, for 2011, 2012 and 2013 and the first quarters of 2013 and 2014.

Basis of Presentation

Our fiscal year ends December 31. The key elements of our operating results include:

Revenue

We generate revenue primarily through the sale of subscriptions to our cloud-based connected home platform through our service provider channel. We also generate revenue from the sale of hardware products that enable our solutions.

Subscription Revenue

We generate our subscription revenue primarily from monthly fees charged to our service providers sold on a per subscriber basis for access to our cloud-based connected home platform and related solutions. Our fees per subscriber vary based upon the service plan and features utilized. We enter into contracts with our service providers that establish our pricing as well as other business terms and conditions. These contracts typically have an initial term of one year, with subsequent annual renewal terms. Our service providers typically enter into underlying contracts with their end-user customers, which we refer to as our subscribers, for their customers’ use of our solutions. Our service providers have indicated that those contracts generally range from three to five years in length.

We offer multiple service level packages for our solutions, including integrated solutions and a range of ala carte add-ons for additional features, such as video as a service or a connected thermostat. The price paid by our service providers each month for the delivery of our solutions is based on the combination of packages and add-ons enabled for each subscriber. We utilize tiered pricing plans where our service providers may receive pricing discounts driven by achieving and

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maintaining new subscriber creation rates, which represents the number of new subscribers they have added to our platform in a given period. Any such discounts are applied only to new subscribers that the service provider activates on a prospective basis. We recognize our subscription revenue on a monthly basis as we deliver our solutions to a subscriber. We classify our subscribers into two groups, standard subscribers and other subscribers. In general, our standard subscribers generate a higher monthly fee as compared to our other subscribers because standard subscribers utilize more of our solutions, including our supervised cellular network services. However, our standard subscribers generally generate a higher cost of sales as compared to our other subscribers because we bear the cost of payments to wireless network providers. Our subscription revenue is expected to increase in absolute dollars to the extent we increase the number of our subscribers. We anticipate future subscriber growth will be generated by both standard and other subscribers, and we expect that in the near term the majority of our new subscribers will be standard subscribers as we expect most of our service providers will continue to utilize more of our solutions, including our supervised cellular network services, and continue to create new standard subscribers. However, in the near term we also expect that the absolute number of IP subscribers within our other subscribers will increase which will result in a lower subscription revenue growth rate, because we entered into a license agreement in November 2013 with one of our largest service providers pursuant to which we granted a license to use the intellectual property associated with our connected home solutions. We expect this service provider will start generating IP subscribers in 2014. Pursuant to this arrangement, this service provider will transition from selling our solutions directly to its customers to selling its own home automation product to its new customers, and we will receive less revenue on a per subscriber basis from this service provider as compared to our overall subscriber base. Additionally, subscription revenue is expected to increase as a percentage of total revenue as we expect subscription revenue to grow at a higher rate than hardware and other revenue as our subscriber base grows.

Hardware and Other Revenue

We generate hardware and other revenue primarily from the sale of cellular radio modules that provide access to our cloud-based platform and, to a lesser extent, the sale of other devices, including video cameras, image sensors and other peripherals. We sell hardware to our service providers as well as distributors. The purchase of hardware occurs in a transaction that is separate and typically in advance of the purchase of our platform services. We recognize hardware and other revenue when the hardware is delivered to our service providers or distributors, net of a reserve for estimated returns. Our terms for hardware sales typically allow service providers to return hardware up to one year past the date of original sale. We expect our hardware and other revenue to remain flat in the short term but increase in the longer term as we expect the volume of sales of our cellular radio modules to increase as we support new lines of control panels as well as from the expected increase in the number of devices installed per home or business. We expect hardware and other revenue to decrease as a percent of total revenue as we anticipate such revenue to grow at a lower rate than subscription revenue.

Hardware and other revenue also includes activation fees charged to service providers for activation of a subscriber account on our platform. We record activation fees initially as deferred revenue and we recognize these fees on a straight-line basis over an estimated life of the subscriber relationship, which is currently ten years. Hardware and other revenue also includes fees paid by service providers for lead referrals.

Cost of Revenue

Our cost of subscription revenue primarily includes the amounts paid to wireless network providers and, to a lesser extent, the costs of running our network operating centers. Our cost of hardware and other revenue primarily includes cost of raw materials and amounts paid to our third-party

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manufacturer for production and fulfillment of our cellular radio modules and image sensors, and procurement costs for our video cameras, which we purchase from an original equipment manufacturer, and other devices.

We record the cost of subscription revenue as expenses are incurred, which corresponds to the delivery period of our subscription services to our subscribers. We record the cost of hardware and other revenue when the hardware and other services are delivered to the service provider, which is when title transfers. Our cost of revenue excludes amortization and depreciation.

To the extent that we are able to increase revenue without increasing cost of revenue on a percentage basis, we intend to invest those cost efficiencies back into growing our subscriber base.

Operating Expenses

Our operating expenses consist of sales and marketing, general and administrative, research and development, and amortization and depreciation expenses. Salaries, bonuses, stock-based compensation, benefits and other personnel related costs are the most significant components of each of these expense categories. We include stock-based compensation expense in connection with the grant of stock options in the applicable operating expense category based on the respective equity award recipient’s function. We grew from 68 employees at January 1, 2011 to 279 employees at March 31, 2014, and we expect to continue to hire new employees to support future growth of our business.

Sales and Marketing Expense.  Sales and marketing expense consists primarily of personnel and related expenses for our sales, account management, service provider and sales support and marketing teams, including salaries, bonuses, stock-based compensation, benefits, travel, and commissions.

The number of employees in sales and marketing functions grew from 16 at January 1, 2011 to 111 at March 31, 2014. We expect to continue to invest in our sales and marketing activities to expand our business both domestically and internationally and, as a result, expect our sales and marketing expense to increase in absolute dollars and as a percentage of our total revenue in the short term. We intend to increase the size of our sales force to provide additional support to our existing service provider base to drive their productivity in selling our solutions as well as to enroll new service providers in North America and in international markets. We also intend to increase our marketing spend to support our service providers’ efforts to enroll new subscribers and to enable our service providers to expand the adoption of our solutions.

General and Administrative Expense.  General and administrative expense consists primarily of personnel and related expenses for our administrative, legal, information technology, human resources, finance and accounting personnel, including salaries, bonuses, stock-based compensation, benefits and other personnel costs. Additional expenses included in this category are legal costs incurred to defend and license our intellectual property and non-personnel costs, such as travel related expenses, rent, subcontracting and professional fees, audit fees, tax services, as well as insurance expenses. Also included in general and administrative expenses are valuation gains or losses on contingent liabilities and goodwill and intangible assets arising from acquisitions.

The number of employees in general and administrative functions grew from 20 at January 1, 2011 to 38 at March 31, 2014. We expect our general and administrative expense to decrease on absolute dollar basis and as a percentage of our total revenue in 2014 due to the settlement of certain intellectual property litigation we initiated against a third party with respect to which we incurred approximately $11.2 million in legal fees in 2013. We anticipate that we will incur additional costs for personnel and professional services

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related to preparation to become and operate as a public company. Such costs include increases in our finance and legal personnel, additional external legal and audit fees and expenses and costs associated with compliance with the Sarbanes-Oxley Act of 2002 and other regulations governing public companies. We also expect to incur increased costs for directors’ and officers’ liability insurance and an enhanced investor relations function. Additionally, we expect to relocate our corporate headquarters as our existing office space will not accommodate our anticipated growth in headcount. We will likely relocate our headquarters before our current lease expires in May 2016. We expect that our facilities expenses will increase in the near term as we expand the amount of square footage under lease. We may also incur additional expenses if we move our headquarters to a commercial space with a higher rental rate, and if we are unable to sublease our current headquarters.

Research and Development Expense.  Research and development expense consists primarily of personnel and related expenses for our employees working on our product development and software and device engineering teams, including salaries, bonuses, stock-based compensation, benefits and other personnel costs. Also included are non-personnel costs such as consulting and professional fees to third-party development resources.

The number of employees in research and development functions grew from 32 at January 1, 2011 to 130 at March 31, 2014. Our research and development efforts are focused on innovating new features and enhancing the functionality of our platform and the solutions we offer to our service providers and our subscribers. We will also continue to invest in our efforts to extend our platform to adjacent markets internationally. We expect research and development expenses to continue to increase on an absolute basis and as a percentage of revenue in the short term as our ability to continue to innovate is critical to maintaining our competitive position.

Amortization and Depreciation Expense.  Amortization and depreciation expense primarily consists of amortization of intangible assets originating from our acquisitions as well as our internally-developed capitalized software. Our depreciation expense is related to investments in property and equipment. Acquired intangible assets include developed technology, customer related intangibles, trademarks and trade names. We expect that in the near term that amortization and depreciation may fluctuate based on our acquisition activity, development of our platform and capitalized expenditures.

Interest Income / (Expense), Net

Interest income / (expense), net primarily consists of interest income earned on our cash and cash equivalents and our notes receivable as well as interest expense associated with our debt facilities.

Other Income / (Expense), Net

Other income / (expense), net consists of our portion of the income or loss with respect to minority investments by us in other businesses accounted for under the equity method and gain or loss on the fair value of our available-for-sale investments.

Provision for Income Taxes

We are subject to U.S. federal, state and local income taxes as well as foreign income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. As a result, we recognize tax liabilities based on estimates of whether additional taxes will be due. Our effective tax rate differs from the statutory rate primarily due to the tax impact of state taxes, goodwill impairment, non-deductible transaction costs, and non-deductible meals and entertainment, offset by non-taxable contingent consideration remeasurement gain.

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Results of Operations

The following table sets forth our selected consolidated statements of operations data:

	Year Ended December 31,								Three Months Ended March 31,
	2011		2012			2013			2013			2014
									(unaudited)
	(in thousands)
Consolidated Statements of Operations Data:
Revenue:
Subscription revenue	$	32,161	$	55,655		$	82,620		$	17,579		$	25,204
Hardware and other revenue		32,898		40,820			47,602			10,450			11,647
Total revenue		65,059		96,475			130,222			28,029			36,851
Cost of revenue:(1)
Cost of subscription revenue		8,051		12,681			16,476			3,690			5,008
Cost of hardware and other revenue		21,102		28,773			38,482			7,568			8,993
Total cost of revenue		29,153		41,454			54,958			11,258			14,001
Operating expenses:
Sales and marketing(2)		5,819		13,232			21,467			3,638			5,096
General and administrative(2)		6,817		14,099			29,928			2,358			5,220
Research and development(2)		5,613		8,944			13,085			2,675			4,610
Amortization and depreciation		1,988		2,230			3,360			628			806
Total operating expenses		20,237		38,505			67,840			9,299			15,732
Operating income		15,669		16,516			7,424			7,472			7,118
Interest income / (expense), net		1		(307	)		(100	)		(70	)		11
Other income / (expense), net		—		—			(112	)		—			(59	)
Income before income taxes		15,670		16,209			7,212			7,402			7,070
Provision for income taxes		6,015		7,280			2,688			3,050			2,797
Net income	$	9,655	$	8,929		$	4,524		$	4,352		$	4,273

(1) Excludes amortization and deprecation.

(2) Operating expenses include stock-based compensation expense as follows:

	Year Ended December 31,						Three Months Ended March 31,
	2011		2012		2013		2013		2014
	(in thousands)
Stock-based compensation expense data:
Sales and marketing	$	39	$	196	$	102	$	29	$	77
General and administrative		89		418		495		65		480
Research and development		54		1,145		244		70		231
Total stock-based compensation expense	$	182	$	1,759	$	841	$	164	$	788

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The following table sets forth our selected consolidated statements of operations data expressed as a percentage of total revenue:

	Year Ended December 31,									Three Months Ended March 31,
	2011			2012			2013			2013			2014
Consolidated Statements of Operations Data (as a percentage of total revenue):
Revenue:
Subscription revenue		49	%		58	%		63	%		63	%		68	%
Hardware and other revenue		51			42			37			37			32
Total revenue		100			100			100			100			100
Cost of revenue:(1)
Cost of subscription revenue		12			13			13			13			14
Cost of hardware and other revenue		32			30			30			27			24
Total cost of revenue		45			43			42			40			38
Operating expenses:
Sales and marketing		9			14			16			13			14
General and administrative		10			15			23			8			14
Research and development		9			9			10			10			13
Amortization and depreciation		3			2			3			2			2
Total operating expenses		31			40			52			33			43
Operating Income		24	%		17	%		6	%		27	%		19	%
Interest income / (expense), net		—			—			—			—			—
Other income / (expense), net		—			—			—			—			—
Income before provision for income taxes		24			17			6			26			19
Provision for income taxes		9			8			2			11			8
Net income		15	%		9	%		3	%		16	%		12	%

(1) Excludes amortization and depreciation.

The following table sets forth the components of cost of revenue as a percentage of revenue:

	Year Ended December 31,			Three Months Ended March 31,
	2011	2012	2013	2013	2014
Cost of subscription revenue as a percentage of subscription revenue	25%	23%	20%	21%	20%
Cost of hardware and other revenue as a percentage of hardware and other revenue	64%	70%	81%	72%	77%
Total cost of revenue as a percentage of total revenue	45%	43%	42%	40%	38%

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Comparison of Three Months Ended March 31, 2014 to March 31, 2013

Revenue

	Three Months Ended March 31,				% Change
	2013		2014
	(in thousands)
Revenue:
Subscription revenue	$	17,579	$	25,204		43	%
Hardware and other revenue		10,450		11,647		11	%
Total revenue	$	28,029	$	36,851		31	%

The increase in total revenue from the first quarter of 2013 to the first quarter of 2014 was primarily the result of a $7.6 million, or 43%, increase in our subscription revenue and a $1.2 million, or 11%, increase in our hardware and other revenue. The increase in our subscription revenue from the first quarter of 2013 to the first quarter of 2014 was primarily attributable to growth in our subscriber base from 1.4 million subscribers on March 31, 2013 to 2.0 million subscribers on March 31, 2014. The increase in our hardware and other revenue from the first quarter of 2013 to the first quarter of 2014 was primarily attributable to a $0.4 million increase in revenue from sales of our cellular radio modules which resulted from a 21% increase in the volume of cellular radio modules sold, partially offset by a decline in the average price of cellular radio modules, a $0.4 million increase in revenue from sales of our video cameras which resulted from a 17% increase in the volume of video cameras sold, partially offset by a decline in the average price of video cameras, and to a lesser extent, an increase in the volume of sales of our image sensors.

Cost of Revenue

	Three Months Ended March 31,				% Change
	2013		2014
	(in thousands)
Cost of revenue(1):
Cost of subscription revenue	$	3,690	$	5,008		36	%
Cost of hardware and other revenue		7,568		8,993		19	%
Total cost of revenue	$	11,258	$	14,001		24	%

⁽¹⁾  Excludes amortization and depreciation.

The increase in cost of revenue from the first quarter of 2013 to the first quarter of 2014 was primarily the result of a $1.4 million increase in hardware costs and a $1.3 million increase in subscription costs. The increase in subscription costs from the first quarter of 2013 to the first quarter of 2014 related primarily to our higher subscription revenue as a result of the increase in the average number of subscribers, partially offset by lower average carrier costs on a per subscriber basis. The increase in hardware and other costs from the first quarter of 2013 to the first quarter of 2014 related primarily to our higher hardware and other revenue as well as a higher average cost per unit for our video cameras due to the release of new video camera models that include expanded functionality, at a higher cost point to us.

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Sales and Marketing Expense

	Three Months Ended March 31,						% Change
	2013			2014
	(in thousands)
Sales and marketing	$	3,638		$	5,096			40	%
% of total revenue		13	%		14	%

The increase in sales and marketing expense from the first quarter of 2013 to the first quarter of 2014 was primarily due to increased consumer marketing activities, as well as additional sales and marketing efforts for our service providers. Our personnel and related costs, including salary, benefits, stock-based compensation and employee travel expense, increased $0.9 million compared to the same period in the prior year. Sales and marketing expense for the first quarter of 2014 also included a $0.5 million increase due to activities related to our Other segment. The number of employees in our sales and marketing teams increased from 79 at March 31, 2013 to 111 at March 31, 2014.

General and Administrative Expense

	Three Months Ended March 31,						% Change
	2013			2014
	(in thousands)
General and administrative	$	2,358		$	5,220			121	%
% of total revenue		8	%		14	%

The increase in general and administrative expense from the first quarter of 2013 to the first quarter of 2014 was primarily due to an increase in legal fees, employee compensation and professional fees to support our growth. Our legal expenses increased $0.6 million primarily due to our expanding business and to a lesser extent from intellectual property litigation we initiated in 2013 and settled in January 2014. Our personnel and related costs increased $0.9 million over the same period, primarily from increased stock-based compensation and to a lesser extent increased salary and benefits. General and administrative expense for the first quarter of 2014 also increased $0.9 million due to activities related to our Other segment. The number of employees in general and administrative functions increased from 20 at March 31, 2013 to 38 at March 31, 2014.

Research and Development Expense

	Three Months Ended March 31,						% Change
	2013			2014
	(in thousands)
Research and development	$	2,675		$	4,610			72	%
% of total revenue		10	%		13	%

The increase in research and development expense from the first quarter of 2013 to the first quarter of 2014 was primarily due to a $1.1 million increase in salary and related costs due to growth in the number of employees in research and development functions. Research and development expense for the first quarter of 2014 also increased by $0.6 million primarily related to personnel and related expense for our Other segment. The number of employees in research and development functions increased from 79 at March 31, 2013 to 130 at March 31, 2014.

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Amortization and Depreciation Expense

	Three Months Ended March 31,						% Change
	2013			2014
	(in thousands)
Amortization and depreciation	$	628		$	806			28	%
% of total revenue		2	%		2	%

The increase in amortization and depreciation expense from the first quarter of 2013 to the first quarter of 2014 was primarily due to a $0.1 million increase in amortization expense related to customer-related intangibles, developed technology and trade name intangibles arising from our acquisition of EnergyHub in May 2013. Additionally, we experienced a $0.1 million increase in depreciation expense primarily due to additional computer equipment and from the expansion of our headquarters to accommodate our growth in headcount, as well as the purchase of equipment for our network operations centers.

Interest Income / (Expense), Net

	Three Months Ended March 31,						% Change
	2013			2014
	(in thousands)
Interest income / (expense), net(1)	$	(70	)	$	11			NM	%
% of total revenue(1)		NM	%		NM	%

⁽¹⁾  Not meaningful.

The increase in interest income / (expense), net was due to interest earned on notes receivable from businesses in which we have invested resulting from the increase in the notes receivable balances outstanding during the first quarter of 2014 compared to the first quarter of 2013.

Other Income / (Expense), Net

	Three Months Ended March 31,						% Change
	2013			2014
	(in thousands)
Other income / (expense), net	$	—		$	(59	)		NM	%
% of total revenue		NM	%		NM	%

The increase in other income / (expense), net was due to a minority investment by us in another business that is in the start-up phase of its operations. We expect that this investment will continue to incur losses. We did not have any such investments in the first quarter of 2013.

Provision for Income Taxes

	Three Months Ended March 31,						% Change
	2013			2014
	(in thousands)
Provision for income taxes	$	3,050		$	2,797			(8	)%
% of total revenue		11	%		8	%

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Our effective tax rate decreased from 41% in the first quarter of 2013 to 40% in the first quarter of 2014, primarily due to interest and penalties recorded in the first quarter of 2013.

Comparison of Years Ended December 31, 2013 to December 31, 2012 and December 31, 2012 to December 31, 2011

Revenue

	Year Ended December 31,						% Change
	2011		2012		2013		2012 vs.     2011			2013 vs.     2012
	(in thousands)
Revenue
Subscription revenue	$	32,161	$	55,655	$	82,620		73	%		48	%
Hardware and other revenue		32,898		40,820		47,602		24	%		17	%
Total revenue	$	65,059	$	96,475	$	130,222		48	%		35	%

2013 Compared to 2012

The increase in total revenue from 2012 to 2013 was primarily the result of a $27.0 million, or 48%, increase in our subscription revenue and a $6.8 million, or 17%, increase in our hardware and other revenue. The increase in our subscription revenue from 2012 to 2013 was primarily attributable to growth in our subscriber base, including the full year revenue impact from subscribers we added in 2012, as well as the increase of our subscriber base from 1.3 million subscribers on December 31, 2012 to 1.9 million subscribers on December 31, 2013. The increase in our hardware and other revenue from 2012 to 2013 was primarily attributable to a $4.6 million increase in revenue from sales of video cameras which resulted from a 48% increase in the volume of video cameras sold as well as an increase in the average price paid per video camera and to a lesser extent, an increase in the volume of sales of our cellular radio modules.

2012 Compared to 2011

The increase in total revenue from 2011 to 2012 was primarily the result of a $23.5 million, or 73%, increase in our subscription revenue and a $7.9 million, or 24%, increase in our hardware and other revenue. The increase in our subscription revenue from 2011 to 2012 was primarily attributable to growth in our subscriber base, specifically recognizing including the full year revenue impact from subscribers we added in 2011, as well as the increase of our subscriber base from 0.9 million subscribers on December 31, 2011 to 1.3 million subscribers on December 31, 2012. The increase in our hardware and other revenue from 2011 to 2012 was primarily attributable to a $3.8 million increase in revenue from sales of video cameras which resulted from a 115% increase in the volume of video cameras sold, and to a lesser extent, an increase in the volume of sales of our cellular radio modules and image sensors.

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Cost of Revenue

	Year Ended December 31,						% Change
	2011		2012		2013		2012 vs. 2011			2013 vs. 2012
	(in thousands)
Cost of revenue(1)
Cost of subscription revenue	$	8,051	$	12,681	$	16,476		58	%		30	%
Cost of hardware and other revenue		21,102		28,773		38,482		36	%		34	%
Total cost of revenue	$	29,153	$	41,454	$	54,958		42	%		33	%

⁽¹⁾  Excludes amortization and depreciation.

2013 Compared to 2012

The increase in cost of revenue from 2012 to 2013 was primarily the result of a $9.7 million increase in hardware costs and a $3.8 million increase in subscription costs. The increase in subscription costs from 2012 to 2013 related primarily to our higher subscription revenue partially offset by lower average carrier costs per subscriber. The increase in hardware and other costs from 2012 to 2013 related primarily to our higher hardware and other revenue as well as slightly higher average cost per unit for our cellular radio modules due to our release of our 3G enabled cellular radios.

2012 Compared to 2011

The increase in cost of revenue from 2011 to 2012 was primarily the result of a $7.7 million increase in hardware costs and a $4.6 million increase in subscription costs. The increase in subscription costs from 2011 to 2012 related primarily to our higher subscription revenue partially offset by lower average carrier costs per subscriber. The increase in hardware and other costs from 2011 to 2012 was primarily due to our higher hardware and other revenue and, to a lesser extent, an increase in the average cost per unit for our cellular radio modules.

Sales and Marketing Expense

	Year Ended December 31,						% Change
	2011		2012		2013		2012 vs.       2011			2013 vs.       2012
	(in thousands)
Sales and marketing	$	5,819	$	13,232	$	21,467		127	%		62	%
% of total revenue		9%		14%		16%

2013 Compared to 2012

The increase in sales and marketing expense from 2012 to 2013 was primarily due to a $4.6 million increase in advertising and marketing costs from increased consumer marketing activities and additional agency fees, as well as additional sales and marketing efforts to support our service providers, including costs associated with industry conferences. In addition, due to an increase in the number of employees in our sales force, service provider and sales support and marketing teams from 67 at December 31, 2012 to 102 at December 31, 2013 to support these initiatives, our personnel and related costs, including salary, benefits, stock-based compensation and employee travel expense, increased $4.2 million over the same period. Sales and marketing expense in 2013 also included a $0.5 million increase due to activities related to our start-up initiatives.

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2012 Compared to 2011

The increase in sales and marketing expense from 2011 to 2012 was primarily due to a $3.3 million increase in advertising and marketing costs from additional agency fees, as well as additional sales and marketing efforts to support our service providers. In addition, due to an increase in the number of employees in our sales force, service provider and sales support and marketing teams from 43 at December 31, 2011 to 67 at December 31, 2012, to support these initiatives, our personnel and related costs, including salary, benefits, stock-based compensation and employee travel expense, increased $3.0 million over the same period. Sales and marketing expense in 2012 also included a $0.7 million increase due to activities related to our start-up initiatives.

General and Administrative Expense

	Year Ended December 31,						% Change
	2011		2012		2013		2012 vs.       2011			2013 vs.       2012
	(in thousands)
General and administrative	$	6,817	$	14,099	$	29,928		107	%		112	%
% of total revenue		10%		15%		23%

2013 Compared to 2012

The increase in general and administrative expense from 2012 to 2013 was primarily due to $11.2 million of legal expenses related to intellectual property litigation we initiated in 2013 and settled in early 2014 and a $11.3 million loss on goodwill and intangible asset impairment related to our EnergyHub acquisition, partially offset by a $5.8 million gain on the release of a contingent earn-out liability related to the acquisition. Exclusive of these amounts, general and administrative expense decreased by $0.8 million, from $14.1 million in 2012 to $13.3 million in 2013, primarily from decreases in fees to professionals to support our administrative functions and decreases in discretionary compensation. General and administrative expense in 2013 also increased $1.9 million due to activities related to our start-up initiatives.

2012 Compared to 2011

The increase in general and administrative expense from 2011 to 2012 was primarily due to a warrant termination payment of $3.1 million, which we recorded as compensation expense, and legal and professional services fees which increased by $2.5 million due to our recapitalization in July 2012. General and administrative expense in 2012 also included a $0.4 million increase due to activities related to our start-up initiatives.

Research and Development Expense

	Year Ended December 31,									% Change
	2011			2012			2013			2012 vs.       2011			2013 vs.       2012
	(in thousands)
Research and development	$	5,613		$	8,944		$	13,085			59	%		46	%
% of total revenue		9	%		9	%		10	%

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2013 Compared to 2012

The increase in research and development expense from 2012 to 2013 was primarily due to a $2.9 million increase in salary and related costs due to growth in the number of employees in research and development functions, which increased from 78 at December 31, 2012 to 117 at December 31, 2013. Research and development expense in 2013 also increased by $1.1 million primarily related to personnel and related expense for our start-up initiatives.

2012 Compared to 2011

The increase in research and development expense from 2011 to 2012 was primarily due to a $3.1 million increase in salary and related costs due to growth in the number of employees in research and development functions, which increased from 48 at December 31, 2011 to 78 at December 31, 2012. Research and development expense in 2012 also increased by $0.5 million primarily related to personnel and related expenses for our start-up initiatives.

Amortization and Depreciation Expense

	Year Ended December 31,						% Change
	2011		2012		2013		2012 vs.       2011			2013 vs.       2012
	(in thousands)
Amortization and depreciation	$	1,988	$	2,230	$	3,360		12	%		51	%
% of total revenue		3%		2%		3%

2013 Compared to 2012

The increase in amortization and depreciation expense from 2012 to 2013 was primarily due to a $0.6 million increase in amortization expense related to customer related intangibles, developed technology and trade name intangibles arising from the acquisition of EnergyHub in May 2013, and a $0.4 million increase in leasehold improvement and computer depreciation from the expansion of our headquarters to accommodate our growth in headcount, as well as the purchase of equipment for our network operations centers.

2012 Compared to 2011

The increase in amortization and depreciation expense from 2011 to 2012 was primarily due to capital expenditures due to the growth of our operations and employee base.

Interest Income / (Expense), Net

	Year Ended December 31,									% Change
	2011			2012			2013			2012 vs.       2011			2013 vs.       2012
	(in thousands)
Interest income / (expense), net(1)	$	1		$	(307)		$	(100	)		NM	%		NM	%
% of total revenue(1)		NM	%		NM	%		NM	%

⁽¹⁾  Not meaningful.

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2013 Compared to 2012

The decrease in interest expense, net was due to lower average borrowings outstanding as well as interest income of $0.1 million earned on notes receivable outstanding during 2013.

2012 Compared to 2011

The increase in interest expense, net was due to higher average borrowings outstanding during 2012. We did not have any borrowings outstanding from January 1, 2011 through December 20, 2011, on which date we incurred $10.0 million in debt.

Other Income / (Expense), Net

	Year Ended December 31,									% Change
	2011			2012			2013			2012 vs.       2011			2013 vs.       2012
	(in thousands)
Other income / (expense), net	$	—		$	—		$	(112	)		NM	%		NM	%
% of total revenue		NM	%		NM	%		NM	%

2013 Compared to 2012

The increase in other income/(expense) was due to a minority investment by us in another business that is in the start-up phase of its operations. We expect that this investment will continue to incur losses. We did not have any such investments in 2011.

Provision for Income Taxes

	Year Ended December 31,						% Change
	2011		2012		2013		2012 vs.       2011			2013 vs.       2012
	(in thousands)
Provision for income taxes	$	6,015	$	7,280	$	2,688		21	%		(63	)%
% of total revenue		9%		8%		2%

2013 Compared to 2012

Our effective tax rate decreased from 45% in 2012 to 37% in 2013, primarily due to non-deductible transaction costs incurred during 2012, accounting for approximately 6% of the 2012 effective tax rate. Items unfavorably impacting the 2013 rate included non-deductible goodwill impairment and non-deductible meals and entertainment, which were fully offset by a non-taxable gain on the release of an acquisition-related contingent liability.

2012 Compared to 2011

Our effective tax rate increased from 38% in 2011 to 45% in 2012, primarily due to non-deductible transaction costs incurred during 2012 related to the sale of our Series B preferred stock and related equity restructuring in 2012.

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Segment Information

We have two reportable segments: Alarm.com and Other, as determined by the information that our chief executive officer, who is our chief operating decision maker, uses to make strategic goals and operating decisions. Our Alarm.com segment represents our cloud-based platform for the connected home and related connected home solutions. This segment contributed over 99% of our revenue in each of 2011, 2012 and 2013 and the first quarters of 2013 and 2014. Our Other segment includes the results of EnergyHub, an energy efficiency and demand response service provider we acquired in May 2013, as well as start-up initiatives focused on researching and developing home and commercial automation, energy management and independent living products and services in adjacent markets. See Note 18 to our consolidated financial statements for additional information with respect to our reportable operating segments. The consolidated subsidiaries that make up our Other segment are in the investment stage and have incurred significant operating expenses relative to their revenue. Included in our Other segment in the third quarter of 2013 is an $11.3 million impairment of EnergyHub’s goodwill and intangibles partially offset by a $5.8 million gain on the release of an earn-out contingent consideration liability. Our Other segment grew from 6 employees at January 1, 2011 to 49 employees at March 31, 2014.

	Year Ended December 31,
Segment Information	2011						2012					2013
(in thousands)	Alarm.com		Other		Total		Alarm.com	Other		Total		Alarm.com		Other		Total
Revenue	$	65,059		—	$	65,059	$96,372		$103		$96,475		$129,014		$1,208		$130,222
Operating expenses		19,082		1,155		20,237	35,529		2,976		38,505		55,340		12,500		67,840

	Three Months Ended March 31,
Segment Information	2013						2014
(in thousands)	Alarm.com		Other		Total		Alarm.com		Other		Total
Revenue		$27,891		$138		$28,029		$36,393		$458		$36,851
Operating expenses		8,448		851		9,299		12,778		2,954		15,732

Liquidity and Capital Resources

Working Capital, Excluding Deferred Revenue

The following table summarizes our cash, cash equivalents, accounts receivable and working capital, which we define as current assets minus current liabilities excluding deferred revenue, for the periods indicated:

	As of December 31,				As of March 31,
	2012		2013		2014
	(in thousands)
Cash and cash equivalents	$	41,920	$	33,583	$	40,863
Accounts receivable, net		10,246		16,579		15,327
Working capital, excluding deferred revenue		40,739		33,821		39,051

Our cash and cash equivalents as of March 31, 2014 are available for working capital purposes. We do not enter into investments for trading purposes, and our investment policy is to invest any excess cash in short term, highly liquid investments that limit the risk of principal loss; therefore, our cash and cash equivalents are held in demand deposit accounts that generate very low returns.

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Working Capital and Capital Expenditure Requirements

We believe our existing cash and cash equivalents and our future cash flows from operating activities will be sufficient to meet our anticipated cash needs for at least the next 12 months. Over the next twelve months, we expect our capital expenditure requirements to be approximately $9 million to $11 million, including approximately $6 million to $8 million anticipated for leasehold improvements related to our intention to relocate our corporate headquarters. Our future working capital and capital expenditure requirements will depend on many factors, including the rate of our revenue growth, the amount and timing of our investments in human resources and capital equipment, future acquisitions and investments, and the timing and extent of our introduction of new solutions and platform and solution enhancements. To the extent our cash and cash equivalents and cash flows from operating activities are insufficient to fund our future activities, we may need to borrow additional funds through our bank credit arrangements or raise funds from public or private equity or debt financings. If we raise additional funds through the incurrence of indebtedness, such indebtedness would likely have rights that are senior to holders of our equity securities and could contain covenants that restrict our operations. Any additional equity financing would be dilutive to our stockholders.

Sources of Liquidity

As of March 31, 2014, we had $40.9 million in cash and cash equivalents. We consider all highly liquid instruments purchased with an original maturity from the date of purchase of three months or less to be cash equivalents.

To date, we have principally financed our operations through cash generated by operating activities and, to a lesser extent, from the sale of capital stock. We have raised $27.7 million in net cash primarily from the sale of preferred stock and, to a lesser extent, from the proceeds of sales of common stock and stock option exercises.

In May 2014, we entered into a $50 million revolving credit facility, or the 2014 facility, with SVB, as administrative agent, and a syndicate of lenders to finance working capital and certain permitted acquisitions and investments. As of May 8, 2014, $6.7 million was outstanding on the 2014 facility and was used to repay debt outstanding under our term loan facility with SVB that was terminated on the same day, and $43.3 million remained available for borrowing under the 2014 facility as of such date. The 2014 facility contains various financial and other covenants that require us to maintain a maximum consolidated coverage ratio and a fixed charge coverage ratio, and limit our capacity to incur other indebtedness, liens, make certain payments including dividends, and enter into other transactions. The 2014 facility is secured by substantially all of our assets, including our intellectual property. As of May 31, 2014, we were in compliance with all covenants under the 2014 facility. The 2014 facility is discussed in more detail below under “—Debt Obligations.”

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Historical Cash Flows

The following table sets forth our cash flows for 2011, 2012 and 2013 and the three months ended March 31, 2013 and 2014:

	Year Ended December 31,									Three Months Ended March 31,
	2011			2012			2013			2013			2014
	(in thousands)
Cash flows from operating activities	$	13,610		$	16,123		$	10,654		$	3,952		$	5,936
Cash flows (used in) investing activities		(2,302	)		(2,808	)		(18,431	)		(3,956	)		(726	)
Cash flows (used in) / from financing activities		(8,965	)		11,788			(560	)		(375	)		2,070

Operating Activities

Cash flows from operating activities have typically been generated from our net income and by changes in our operating assets and liabilities, particularly from accounts receivable and accounts payable and accrued expenses, adjusted for non-cash expense items such as amortization of intangibles, and a reserve for hardware product returns.

For the first quarter of 2014, cash flows from operating activities were $5.9 million, an increase of $2.0 million from the first quarter of 2013, primarily from the increase in cash flows from operating assets and liabilities as the result of increased collection of accounts receivable and also due to lower balances of inventory compared to the same period in 2013. The cash flows from operating activities consisted of cash generated by our $4.3 million of net income and $2.0 million of adjustments for non-cash items partially reduced by $0.3 million of changes in operating assets and liabilities. Adjustments for non-cash items in the first quarter of 2014 included $0.8 million for amortization and depreciation, $0.4 million for reserve for product returns and $0.8 million for stock-based compensation. Adjustments for non-cash items in the first quarter of 2013 included $0.6 million for amortization and depreciation and $0.4 million for reserve for product returns.

For 2013, cash flows from operating activities were $10.7 million, a decrease of $5.5 million from 2012, and resulted primarily from cash generated by our $4.5 million of net income and $10.5 million of adjustments for non-cash items. This decrease in cash flows from operating assets and liabilities was primarily the result of increases in accounts receivable due to an increase in sales and higher balances of inventory and other long-term assets at year end. Adjustments for non-cash items included $3.4 million for amortization and depreciation, $1.8 million for reserve for product returns and $11.3 million impairment for goodwill and intangible assets from our EnergyHub acquisition, partially offset by a $5.8 million gain from the release of the contingent liability from the EnergyHub acquisition related earn-out in 2013.

For 2012, cash flows from operating activities were $16.1 million, an increase of $2.5 million compared to 2011, and resulted primarily from cash generated by our $8.9 million net income and $3.7 million of adjustments for non-cash items. Adjustments for non-cash items primarily consisted of $2.2 million for amortization and depreciation, $1.5 million of reserve for product returns and $1.8 million for stock-based compensation. Included in stock-based compensation in 2012 was a $1.4 million charge for the repurchase of common shares held by employees for amounts in excess of fair value as part of the Series B preferred stock transaction and related tender offer where we offered to

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repurchase a certain number of shares owned by stockholders, including employees who owned shares as a result of option exercises. The increase in cash from operating assets and liabilities was primarily from the increase in cash provided by working capital as the result of an increase in cash collections from subscriber receivables and lower balance of inventory at year end.

For 2011, cash flows from operating activities were $13.6 million, primarily from cash generated by net income of $9.7 million and $3.7 million of adjustments for non-cash items. Adjustments for non-cash items primarily consisted of $2.0 million for amortization and depreciation and $1.1 million of reserve for product returns.

Our allowance for doubtful accounts was $0.5 million, $0.6 million and $0.3 million for 2011, 2012 and 2013, respectively. Our allowance for doubtful accounts was $0.5 million for the first quarter of 2014.

Investing Activities

Our investing activities include acquisitions, capital expenditures, minority equity investments in companies, notes receivable issued to companies with offerings complementary to ours, and payments made to license intellectual property. Our capital expenditures have primarily been for general business use, including leasehold improvements as we have expanded our office space to accommodate our growth in headcount, computer equipment used internally, and expansion of our network operations centers.

During the first quarter of 2014, our cash used in investing activities totaled $0.7 million. Of that amount, we paid $0.6 million for capital expenditures and advanced $0.1 million for a loan. We made this loan to a service provider to provide capital to finance the creation of subscriber accounts. During the first quarter of 2013, we paid $0.5 million for capital expenditures and made $3.4 million of investments in a company to invest in the development of devices that may connect to our cloud-based platform.

During 2013, our cash used in investing activities totaled $18.4 million. Of that amount, we paid $8.1 million, net of cash received, to acquire EnergyHub. Additionally, we invested in companies that are complementary, consisting of $4.5 million in investments and $1.5 million in loans. We made these investments to create solutions that will leverage our cloud platform in adjacent markets, to invest in the development of devices that may connect to our cloud based platform, or in a service provider to finance the creation of subscriber accounts. We also paid $2.3 million for capital expenditures.

During 2012, our cash used in investing activities totaled $2.8 million. Of that amount, we paid $1.3 million for capital expenditures, invested $0.3 million in a minority position in a company, used $0.3 million to advance a short-term loan to a company with offerings complementary to ours, net of repayments, and paid $1.0 million to acquire patent licenses.

During 2011, our cash used in investing activities totaled $2.3 million, including $1.1 million used for capital expenditures, and $1.3 million paid to acquire patent licenses.

Financing Activities

Cash generated by financing activities include proceeds from the sale of preferred stock and common stock, borrowings under credit facilities, and proceeds from the issuance of common stock from employee option exercises. Cash used in financing activities includes repurchases of preferred stock and common stock, dividends paid on our preferred stock and common stock, and repayments of debt under our credit facilities.

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During the first quarter of 2014, our cash from financing activities totaled $2.1 million, primarily consisting of $1.5 million of proceeds from the early exercise of employee stock-based awards. These proceeds are recorded as liabilities until the underlying equity award is vested as we have the ability to buy back unvested equity awards from employees that terminate service. We also received $0.4 million in proceeds from the exercise of vested employee stock options, recorded a $0.7 million of tax benefit from stock-based awards and repaid $0.5 million of borrowings under our term loan. During the first quarter of 2013, we repaid $0.4 million of borrowings under our term loan and there were no exercises of stock options.

During 2013, net cash used in financing activities totaled $0.6 million, primarily consisting of $1.5 million in repayments on our prior credit facility, partially offset by $0.8 million in aggregate proceeds from sales of common stock and stock option exercises.

During 2012, net cash provided by financing activities totaled $11.8 million. We generated $136.5 million from the sale of Series B preferred stock. $113.7 million of the proceeds were used to repurchase preferred shares from existing stockholders, $2.2 million of the proceeds were used to repurchase common shares from existing stockholders, $2.6 million was used to pay transaction expenses and $18.0 million was used for general corporate purposes. Additional uses of cash for financing activities in 2012 principally included $8.6 million in dividends paid to holders of preferred stock and common stock, and $1.0 million for repayments on our prior credit facility, partially offset by $0.3 million in aggregate proceeds from sales of common stock and stock option exercises.

During 2011, net cash used in financing activities totaled $9.0 million, including $20.0 million in dividends paid to holders of preferred stock and common stock, partially offset by $10.0 million in borrowings on our prior credit facility and $0.6 million in aggregate proceeds from sales of common stock and stock option exercises.

Debt Obligations

Prior Facility

In February 2010, we entered into a working line of credit through a loan and security agreement with SVB. The loan agreement was first amended in April 2011, and amended a second time in December 2011, which we refer to as the amended loan agreement. Under the terms of the amended loan agreement, we could borrow the lesser of 80% of the face value of our eligible accounts receivable plus 50% of our unrestricted cash and cash equivalents, or $10.0 million. The line of credit accrued interest at a rate equal to SVB’s prime rate when our fixed charge coverage ratio is equal to or greater than 2.50 to 1.00, or SVB’s prime rate plus 0.50% when our fixed charge coverage ratio is less than 2.50 to 1.00. The amended loan agreement required us to maintain a minimum liquidity ratio of 1.00:1.00, as well as a fixed charge coverage ratio of not less than 1.50:1.00. We have made no borrowing against the line of credit and we were in compliance with each of these covenants as of December 31, 2013 and March 31, 2014.

In December 2011, when we entered into the amended loan agreement with SVB, we also put a term loan facility in place and borrowed $10.0 million under the term loan facility that is being repaid in 60 monthly installments of principal and accrued interest. The outstanding principal balance on the term loan accrues interest at a rate equal to either SVB’s prime rate when our fixed charge coverage ratio is equal to or greater than 2.50 to 1.00, or SVB’s prime rate plus 0.75% when our fixed charge coverage ratio is less than 2.50 to 1.00. As of December 31, 2013, the effective interest rate on the term loan was 3.25%. The term loan facility matures on December 1, 2016. As of December 31, 2013 and March 31, 2014, $7.5 million and $7.0 million remained outstanding under the term loan facility.

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The amended loan agreement required us to comply with certain financial and non-financial covenants, including a requirement to maintain a minimum liquidity ratio of 1.00:1.00, as well as a fixed charge coverage ratio of not less than 1.50:1.00, and we were in compliance with each of these covenants as of December 31, 2013 and March 31, 2014. Our line of credit and term loan facility with SVB was secured by substantially all of our assets, including intellectual property.

2014 Facility

On May 8, 2014, we repaid all of the outstanding principal and interest under the amended loan agreement and replaced this facility with a $50 million revolving credit facility, or the 2014 facility, with SVB, as administrative agent, and a syndicate of lenders. We utilized $6.7 million under this facility to repay in full our indebtedness under the prior facility. The 2014 facility includes an option to increase the borrowing capacity available under the 2014 facility to $75.0 million with the consent of the lenders. The 2014 facility is available to us to finance working capital and certain permitted acquisitions and investments, and is secured by substantially all of our assets, including intellectual property. The 2014 facility matures in May 2017.

The outstanding principal balance on the 2014 facility accrues interest at a rate equal to either (1) the Eurodollar Base Rate, or LIBOR, plus an applicable margin based on our consolidated leverage ratio, or (2) the higher of (a) the Wall Street Journal prime rate and (b) the Federal Funds rate plus 0.50% plus an applicable margin based on our consolidated leverage ratio, or ABR, at our option. Borrowings under LIBOR rates accrue interest at LIBOR plus 2.25%, LIBOR plus 2.5%, and LIBOR plus 2.75% when our consolidated leverage ratio is less than or equal to 1.00:1.00, greater than or equal to 1.00:1.00 but less than 2.00:1.00, and greater than 2.00:1.00, respectively. Borrowings under ABR rates accrue interest at ABR plus 1.25%, ABR plus 1.5%, and ABR plus 1.75% when our consolidated leverage ratio is less than or equal to 1.00:1.00, greater than or equal to 1.00:1.00 but less than 2.00:1.00, and greater than 2.00:1.00, respectively. The 2014 facility also carries an unused line commitment fee of 0.20% to 0.25% depending on our consolidated leverage ratio.

The 2014 facility contains various financial and other covenants that require us to maintain a maximum consolidated leverage ratio not to exceed 2.50:1.00 and a consolidated fixed charge coverage ratio of at least 1.25:1.00. As of May 31, 2014, we were in compliance with all covenants under the 2014 facility.

Contractual Obligations

The following table discloses aggregate information about our material contractual obligations and periods in which payments were due as of December 31, 2013. Future events could cause actual payments to differ from these estimates.

	Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years		Total
	(in thousands)
Credit facility; including interest	$	2,237	$	5,733	$	—	$	—	$	7,970
Operating leases		1,558		2,923		280		—		4,761
Other long-term liabilities		—		169		—		—		169
Total	$	3,795	$	8,825	$	280	$	—	$	12,900

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The commitment amounts in the table above are associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. The table does not include obligations under agreements that we can cancel without a significant penalty.

Off-Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. We do not engage in off-balance sheet financing arrangements. In addition, we do not engage in trading activities involving non-exchange traded contracts.

Seasonality

We have historically experienced seasonality in our revenue as a result of a subset of our service providers who use a summer sales business model where they substantially increase the size of their sales force and sell the majority of our connected home subscriptions over the summer months. Because a small number of our largest service providers have utilized a summer business model in the past, our revenue has generally been higher in the second and third quarters of the year. As we continue to expand our service provider base and add new service providers who do not rely heavily on a summer business model, we generally expect these seasonal trends to decline and become less prominent in the future.

Critical Accounting Policies and Significant Judgments and Estimates

Our consolidated financial statements are prepared in accordance with GAAP. The preparation of our consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses. We base our estimates and assumptions on historical experience and other factors that we believe to be reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates. Our most critical accounting policies are summarized below. See Note 2 to our consolidated financial statements for a description of our other significant accounting policies.

Revenue Recognition and Deferred Revenue

We derive our revenue from two primary sources: the sale of subscriptions to our cloud-based connected home platform solutions and the sale of hardware products that enable our solutions. We sell our hardware and platform solutions to service providers that resell our hardware and solutions to end-users, which we refer to as our subscribers. We also sell our hardware to distributors who resell the hardware to service providers. We enter into contracts with our service providers that establish pricing for access to our connected home platform solutions and for the sale of hardware. These contracts typically have an initial term of one year, with subsequent renewal terms of one year. Our service providers typically enter into underlying contracts with our subscribers, which our service providers have indicated range from three to five years in length.

Our hardware includes cellular radio modules that enable access to our cloud-based platform, as well as video cameras, image sensors and other peripherals. Our service providers purchase our hardware in anticipation of installing the hardware in a subscriber’s home or business when they create a new subscriber account, or for use in an existing subscriber’s property. The purchase of hardware

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occurs in a transaction that is separate and typically in advance of the purchase of our platform services. Service providers transact with us to purchase our platform solutions and resell our solutions to a new subscriber, or to upgrade or downgrade the solutions of an existing subscriber, at which time the subscriber’s access to our platform solutions is enabled and the delivery of the services commences.

We recognize revenue with respect to our solutions when all of the following conditions are met:

• Persuasive evidence of an arrangement exists;

• Delivery to the customer, which may be either a service provider, distributor or subscriber; has occurred or service has been rendered;

• Fees are fixed or determinable; and

• Collection of the fees is reasonably assured.

We consider a signed contract with a service provider to be persuasive evidence that an agreement exists, and the fees to be fixed and determinable if the fees are contractually agreed to with our service providers. Collectability is evaluated based on a number of factors, including a credit review of new service providers, and the payment history of existing service providers. If collectability is not reasonably assured, revenue is deferred until collection becomes reasonably assured, which is generally upon the receipt of payment.

Subscription Revenue

We generate our subscription revenue primarily from monthly fees charged to our service providers sold on a per subscriber basis for access to our cloud-based connected home platform and the related solutions. Our fees per subscriber vary upon the service plan and features utilized. We enter into contracts with our service providers that establish our pricing as well as other business terms and conditions. These contracts typically have an initial term of one year, with subsequent renewal terms of one year.

Under negotiated terms in our contractual arrangements with our service providers, we are entitled to, and recognize revenue based on, a subscription fee that is billed in advance of the month of service. We have demonstrated that we can sell our subscription offering on a stand-alone basis, as it can be sold separately from hardware and activation services. As there is no minimum required initial service term nor is there a stated renewal term in our contractual arrangements, we recognize revenue over the period of service, which is monthly. Our service providers incur and pay the same monthly fee per subscriber account for the entire period a subscriber account is active.

We offer multiple service level packages for our solutions, including a range of solutions and a range of a la carte add-ons for additional features, such as video as a service or a connected thermostat. The price paid by our service providers each month for the delivery of our solutions is based on the combination of packages and add-ons enabled for each subscriber. We utilize tiered pricing plans where our service providers may receive pricing discounts driven by achieving and maintaining new subscriber creation rates, which represents the number of new subscribers they have added to our platform in a given period. Any such discounts are applied only to new subscribers that the service provider activates on a prospective basis.

Hardware and Other Revenue

We generate hardware and other revenue primarily from the sale of cellular radio modules that provide access to our cloud-based platform and, to a lesser extent, the sale of other devices, including

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video cameras, image sensors and peripherals. We recognize hardware and other revenue when the hardware is received by our service provider or distributor, net of a reserve for estimated returns. Our terms for hardware sales to our service providers and distributors typically allow for returns for up to one year. We apply our estimate as a percentage of sales monthly as a reserve against revenue and currently reserve approximately 3–4% of sales to account for this provision. We established this reserve estimate based on our historical data for actual hardware returns. We evaluate our hardware reserve on a quarterly basis or if there is an indication of a significant changes in the pattern of returns. Historically, our returns of hardware have not significantly differed from our estimated reserve.

Hardware and other revenue also includes activation fees charged to service providers for activation of a subscriber account on our platform. Our service providers use services on our platform to assist in the installation of subscribers. This installation marks the beginning of the subscription to our platform and on occasion, we earn activation revenue for fees charged for this service. The activation fee is non-refundable, separately negotiated and specified in our contractual arrangements with our service providers and is charged to the service provider for each subscriber activated on our platform under such arrangement. Activation fees are not offered on a stand-alone basis separate from our subscription offering and are billed and received at the beginning of the subscription arrangement. We record activation fees initially as deferred revenue and we recognize these fees ratably over the expected term of the subscriber account which we estimate is ten years based on our annual attrition rate. The portion of these activation fees included in current and long-term deferred revenue as of our balance sheet date represents the amounts that will be recognized ratably as revenue over the following twelve months, or longer as appropriate, until the ten-year expected term is complete. Hardware and other revenue also includes fees paid by service providers for lead referrals.

Stock-Based Compensation

Stock options awarded to employees, directors and non-employee third parties are measured at fair value at each grant date. We consider what we believe to be comparable publicly traded companies, discounted free cash flows, and an analysis of our enterprise value in estimating the fair value of our common stock. We account for stock-based compensation awards based on the fair value of the award as of the grant date. We recognize stock-based compensation expense using the accelerated attribution method, net of estimated forfeitures, in which compensation cost for each vesting tranche in an award is recognized ratably from the service inception date to the vesting date for that tranche. Options subject to service-based vesting generally vest 20% one year from the date of the grant, and monthly thereafter, over a period of five years.

Stock-based compensation cost is measured on the grant date, based on the estimated fair value of the award using a Black-Scholes pricing model and recognized as an expense over the employee’s requisite service period on an accelerated attribution basis. We recorded stock-based compensation expense of $0.2 million, $1.8 million and $0.8 million for 2011, 2012 and 2013. We recorded stock-based compensation expense of $0.2 million and $0.8 million for the three months ended March 31, 2013 and 2014. At December 31, 2013, we had $5.3 million of total unrecognized stock-based compensation expense, net of estimated forfeitures, related to stock option grants that will be recognized over a weighted-average period of 1.8 years. At March 31, 2014, we had $4.7 million of total unrecognized stock-based compensation expense, net of estimated forfeitures, related to stock option grants that will be recognized over a weighted-average period of 1.7 years. We expect to continue to grant stock options in the future, and to the extent that we do, our stock-based compensation expense recognized in future periods will likely increase.

We account for stock-based compensation arrangements with non-employees using a fair value approach. The fair value of these options is measured using the Black-Scholes option pricing model reflecting the same assumptions as applied to employee options in each of the reported periods, other

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than the expected life, which is assumed to be the remaining contractual life of the option. The compensation costs of these arrangements are subject to remeasurement over the vesting terms as earned.

Key Assumptions

Our Black-Scholes option-pricing model requires the input of highly subjective assumptions, including the fair value of the underlying common stock, the expected volatility of the price of our common stock, the expected term of the option, risk-free interest rates and the expected dividend yield of our common stock. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future.

In determining the fair value of stock options granted, the following assumptions were used in the Black-Scholes option pricing model for awards granted in the periods indicated:

	Year Ended, December 31,									Three Months Ended March 31,
	2011			2012			2013			2014
Volatility		47.4 – 48.1	%		53.2 – 54.7	%		44.1 – 47.6	%		49.6	%
Expected term (years)		6.3			6.3			3.3 – 6.3			5.6
Risk-free interest rate		1.2 – 2.0	%		0.8 – 0.9	%		0.9 – 1.9	%		1.7	%
Dividend rate		—			—			—			—

Common Stock Valuations

The fair value of our common stock underlying stock options has historically been determined by our board of directors, with assistance from management, based upon information available at the time of grant. Given the absence of a public trading market for our common stock, and in accordance with the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation, or the Practice Aid, our board of directors has exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of our common stock at each grant date. These factors included:

• contemporaneous third-party valuations of our company and our securities;

• our results of operations and other financial metrics;

• our stage of development and business strategy;

• the financial condition and operating results of publicly-owned companies with similar lines of business and their historical volatility;

• the prices of shares of our preferred stock sold to investors in arm’s length transactions, and the rights, preferences and privileges of our preferred stock relative to our common stock;

• external market conditions, both in the United States and globally, that could affect companies in the technology sector;

• the likelihood of a liquidity event such as an initial public offering, a merger or the sale of our company; and

• the current lack of marketability of our common stock as a private company.

The per share estimated fair value of our common stock in the table below represents the determination by our board of directors of the fair value of our common stock as of the date of grant,

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taking into consideration the various objective and subjective factors described above, including the conclusions, if applicable, of valuations of our common stock. There are significant judgments and estimates inherent in these valuations. If we had made different assumptions than those described below, the fair value of the underlying common stock and amount of our stock-based compensation expense could have differed. Following the closing of this initial public offering, the fair value per share of our common stock for purposes of determining stock-based compensation will be the closing price of our common stock as reported on the applicable grant date.

Based on an assumed initial public offering price of $         per share, the midpoint of the price range set forth on the cover page of this prospectus, the intrinsic value of stock options outstanding at March 31, 2014 was $         million, of which $         million and $         million related to stock options that were vested and unvested, respectively, at that date.

The following table summarizes stock options granted from January 1, 2013 through the date of this prospectus:

Grant Date	Number of Shares of Common Stock Underlying Options Granted		Exercise Price Per Share of Common Stock		Estimated Fair Value Per Share of Common Stock (1)
April 22, 2014		102,000	$	8.08	$	8.08
February 26, 2014		38,850		4.00		8.08
December 30, 2013		380,000		4.00		7.18
December 23, 2013		664,450		4.00		7.18
May 22, 2013		270,000		2.95		4.35

⁽¹⁾  In the spring of 2014, we undertook retrospective valuations of the fair value of our common stock as of the grant dates and the values reflected in this column represent our estimated fair value per share of common stock in accordance with such retrospective valuations.

Contemporaneous Valuation Approaches

In valuing our common stock, our board of directors determined the equity value of our business by utilizing a combination of two valuation approaches, an income approach and a market approach.

The income approach estimates the fair value of a company based on the present value of the company’s future estimated cash flows and the value of the company beyond the forecast period. These future values are discounted to their present values to reflect the risks inherent in the company achieving these estimated cash flows. Significant inputs of the income approach (in addition to our estimated future cash flows themselves) include the discount rate, the long-term growth rate assumed in the terminal value and the normalized long-term operating margin. To estimate the value of cash flows after the defined projection period, a terminal value, which represents the value of the estimated perpetual cash flows, was also calculated. The horizon value is based upon a perpetuity growth model whereby it is assumed that free cash flows grow into perpetuity at varying declining rates over a set period before stabilizing at a long-term growth rate.

The market approach estimates the fair value of a company by applying market multiples of comparable publicly traded companies in the same industry or similar lines of business. The market multiples are based on key metrics implied by the price investors have paid for publicly traded companies. Given our significant focus on investing in and growing our business, we primarily utilized the revenue multiple and earnings before interest, taxes, amortization and depreciation expense, or EBITDA,

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multiple when performing valuation assessments under the market approach. When considering which companies to include in our comparable industry peer companies, we focused on U.S.-based publicly traded companies with businesses similar to ours. The selection of our comparable industry peer companies requires us to make judgments as to the comparability of these companies to us. We considered a number of factors including business description, business size, market share, revenue model, development stage and historical results of operations. We then analyzed the business and financial profiles of the selected companies for relative similarities to us and, based on this assessment, we selected our comparable industry peer companies. Several of the comparable industry peer companies are our competitors and are generally larger than us in terms of total revenue and assets.

Historically, the valuation reports prepared for us were based on the income approach. Due to the limited comparability with the guideline firms, a market approach was performed to assess the reasonableness of the income approach conclusions. For valuations starting in December 2013, the valuation reports were prepared using the market approach. For each valuation, the equity value was then allocated to the common stock using the either the Option Pricing Method, or OPM, or the Probability Weighted Expected Return Method, or PWERM.

The OPM treats common stock and convertible preferred stock as call options on a company’s enterprise value with exercise prices based on the liquidation preferences of the convertible preferred stock. Under this method, the common stock only has value if the funds available for distribution to stockholders exceed the value of the liquidation preference at the time of an assumed liquidity event. The value assigned to the common stock is the remaining value after preferred stock is liquidated. The OPM prices the call option using the Black-Scholes model. The OPM model is used when the range of possible future outcomes is difficult to predict.

The PWERM relies on a forward-looking analysis to predict the possible future value of the company. Under this method, discrete future outcomes, including initial public offering, or IPO, and non-IPO scenarios, are weighted based on our estimate of the probability of each scenario. The PWERM is used when discrete future outcomes can be predicted with reasonable certainty based on a probability distribution.

For valuations starting in December 2013, we began using the Hybrid Method to determine the common stock value. The Hybrid Method uses similar discrete events as included in the PWERM, but in addition to these discrete events the OPM is also used. The Hybrid Method is useful when certain discrete future outcomes can be predicted but also accounts for less certainty than the OPM model.

February and April 2014 Grants

In estimating the fair value of our common stock in April 2014 to set the exercise price of such options, our board of directors reviewed and considered a contemporaneous valuation analysis for our common stock. Our board of directors determined a fair market value of $8.08, which was retroactively applied to the February 2014 grants for financial reporting purposes, given the short period of time between the valuation dates. The following considerations were used to complete the retrospective valuation using the Hybrid PWERM analysis, which determined an enterprise value: (1) liquidity events were weighted as 60% for an initial public offering and 40% to a merger, acquisition or continuation as a private company, (2) a discount rate of 13.5% based on an estimated cost of capital, (3) a lack of marketability discount of 15.0%, (4) a short term growth rate of 23.4%, (5) a terminal growth rate of 3.0%, (6) benchmark revenue and EBITDA multiples, and (7) an estimated initial public offering date of September 30, 2014. The increase in valuation from December 2013 was primarily driven by changes in management’s assumption regarding the probability of initial public offering.

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Retrospective Valuations

In connection with the preparation of the financial statements necessary for the filing of the registration of which this prospectus forms a part, in the Spring of 2014 we undertook retrospective valuations of the fair value of our common stock as of May 2013 and December 2013 for financial reporting purposes. In our retrospective analysis, we utilized the Hybrid Method approach to estimate the enterprise value of our company and the fair value of our common stock in accordance with the Practice Aid.

December 2013 Grants

At the time our board of directors approved the option grants, our board of directors reviewed and considered a contemporaneous valuation for our common stock and determined the estimated fair market value of $4.00 per common share. Subsequently, a retrospective valuation analysis was completed in early 2014 that indicated a fair value per share of common stock of $7.18, which was retroactively applied to the December 2013 grants for financial reporting purposes. The following considerations were used to complete the retrospective valuation using the Hybrid PWERM analysis, which determined an enterprise value: (1) liquidity events were weighted as 40% for an initial public offering and 60% to a merger, acquisition or continuation as a private company, (2) a discount rate of 13.5% based on an estimated cost of capital, (3) a lack of marketability discount of 15.0%, (4) a short term growth rate of 23.4%, (5) a terminal growth rate of 3.0%, (6) benchmark revenue and EBITDA multiples, and (7) and an estimated initial public offering date of September 30, 2014. The increase in valuation from May 2013 was primarily driven by the company’s continued growth and strength of core operating performance, as well as the increase in valuations of peer group companies.

May 2013 Grants

At the time our board of directors approved the option grants, our board of directors reviewed and considered a contemporaneous valuation for our common stock and determined the estimated fair market value of $2.95 per common share. Subsequently, a retrospective valuation analysis was completed in early 2014 that indicated a fair value per share of common stock of $4.35, which was retroactively applied to the May 2013 grants for financial reporting purposes. The following considerations were used to complete the retrospective valuation using the Hybrid PWERM analysis, which determined an enterprise value: (1) liquidity events were weighted as 15% for an initial public offering and 85% to a merger, acquisition or continuation as a private company, (2) a discount rate of 16.5% based on an estimated cost of capital, (3) a lack of marketability discount of 15.0%, (4) a short term growth rate of 23.4%, (5) a terminal growth rate of 3.0%, (6) benchmark revenue and EBITDA multiples, and (7) an estimated initial public offering date of September 30, 2014.

Business Combinations

We are required to allocate the purchase price of acquired companies to the identifiable tangible and intangible assets acquired and liabilities assumed at the acquisition date based upon their estimated fair values. Goodwill as of the acquisition date represents the excess of the purchase consideration of an acquired business over the fair value of the underlying net tangible and intangible assets acquired net of liabilities assumed. This allocation and valuation require management to make significant estimates and assumptions, especially with respect to long-lived and intangible assets.

Critical estimates in valuing intangible assets include but are not limited to estimates about future expected cash flows from customer contracts, customer lists, proprietary technology and non-competition agreements, the acquired company’s brand awareness and market position, assumptions about the period of time the brand will continue to be used in our solutions, as well as expected costs

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to develop the in-process research and development into commercially viable products and estimated cash flows from the projects when completed, and discount rates. Our estimates of fair value are based upon assumptions we believe to be reasonable, but which are inherently uncertain and unpredictable. Assumptions may be incomplete or inaccurate, and unanticipated events and circumstances may occur.

Other estimates associated with the accounting for these acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed.

Goodwill and Intangibles

Goodwill represents the excess of (1) the aggregate of the fair value of consideration transferred in a business combination, over (2) the fair value of assets acquired, net of liabilities assumed. Goodwill is not amortized, but is subject to annual impairment tests. Goodwill is reviewed for impairment at least annually and is tested at the reporting unit level using a two-step approach. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and step two is required to measure the amount of the impairment, if any. Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation and the residual fair value after this allocation is the implied fair value of the reporting unit goodwill. If the carrying value of goodwill exceeds the implied fair value, an impairment charge would be recorded to operating expenses in the period the determination is made. If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed. We perform our annual impairment review of goodwill on October 1 and when a triggering event occurs between annual impairment tests.

In connection with our annual impairment testing, we performed a quantitative review of goodwill of our Alarm.com reporting unit. The estimated fair value of the Alarm.com reporting unit exceeded its carrying value by a margin in excess of 100%.

We determined that a potential strategic partnership agreement which was expected to contribute a material amount of revenue over the earn-out period was no longer expected to be executed. Therefore, EnergyHub’s revenue over the earn-out period was expected to be materially less than originally estimated at the time of the acquisition. Revenue from this potential strategic partnership represented a material percentage of the revenue growth assumptions included in the forecast used to assign fair value to the customer relationships, developed technology and trade name. We considered this to be a triggering event and we prepared a step 1 and step 2 analysis of goodwill and intangibles to determine if an impairment had occurred and the amount of the impairment. Under step one of the impairment analysis, EnergyHub was valued using the discounted cash flow method. To estimate the value of our total invested capital, the debt-free after tax cash flows for EnergyHub were discounted by a required rate of return for an investor. We used the guideline company method to check the reasonableness of this value. The total invested capital was compared to our carrying value to determine whether goodwill was impaired as indicated when the carrying value of EnergyHub is higher than the estimated value. The carrying value of the definite lived intangible assets (customer related, developed technology and trade name intangibles) were compared to the sum of our pre-tax and undiscounted cash flows. The impairment of the goodwill and the intangibles of $11.3 million is recorded in general and administrative expenses for the year ended December 31, 2013 on our consolidated statement of operations. There were no impairments of long-lived assets during the three months ended March 31, 2013 or 2014.

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Accounting for Income Taxes

We account for income taxes under the asset and liability method as required by accounting standards codification, or ASC 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that are included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. During 2013, in connection with the EnergyHub acquisition, we acquired significant net operating losses, a deferred tax asset, which we recorded at its expected realizable value. Based on our historical and expected future taxable earnings, we believe it is more likely than not that we will realize all of the benefit of the existing deferred tax assets at December 31, 2012, December 31, 2013 and March 31, 2014. Accordingly, we have not recorded a valuation allowance in any of those years.

We are subject to income taxes in the U.S. and other foreign jurisdictions. Significant judgment is required in evaluating uncertain tax positions. We record uncertain tax positions in accordance with ASC 740-10 on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) with respect to those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority.

Qualitative and Quantitative Disclosures about Market Risk

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates, as well as to a lesser extent, foreign exchange rates and inflation.

Interest Rate Risk

We are primarily exposed to changes in short-term interest rates with respect to our cost of borrowing under our credit facilities with SVB. We monitor our cost of borrowing under our various facilities, taking into account our funding requirements, and our expectation for short-term rates in the future. As of December 31, 2013, an increase or decrease in the interest rate on our SVB facilities by 100 basis points would increase or decrease our interest expense by $75,000, respectively. As of March 31, 2014, an increase or decrease in the interest rate on our SVB facilities by 100 basis points would increase or decrease our interest expense by $70,000, respectively.

Foreign Currency Exchange Risk

Substantially all of our revenue and operating expenses are denominated in U.S. dollars, therefore, we do not believe that our exposure to foreign currency exchange risk is material to our business, financial condition or results of operations. If a significant portion of our revenue and operating expenses were to become denominated in currencies other than U.S. dollars, we may not be able to effectively manage this risk, and our business, financial condition and results of operations could be adversely affected by translation and by transactional foreign currency conversions.

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Inflation Risk

We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.

Recent Accounting Pronouncements

On May 28, 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” which affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The guidance supersedes the revenue recognition guidance in Topic 605, “Revenue Recognition”, and most industry-specific guidance throughout the Industry Topics of the Codification. The guidance also supersedes some cost guidance included in Subtopic 605-35, “Revenue Recognition – Contract-Type and Production-Type Contracts”. ASU 2014-9 is effective for annual periods, and interim periods within those years, beginning after December 15, 2016. Early application is not permitted. An entity is required to apply the amendments using one of the following two methods: i) retrospectively to each prior period presented with three possible expedients: a) for completed contracts that begin and end in the same reporting period no restatement is required, b) for completed contract with variable consideration an entity may use the transaction price at completion rather than restating estimated variable consideration amounts in comparable reporting periods and c) for comparable reporting periods before date of initial application reduced disclosure requirements related to transaction price; ii) retrospectively with the cumulative effect of initially applying the amendment recognized at the date of initial application with additional disclosures for the differences of the prior guidance to the reporting periods compared to the new guidance and an explanation of the reasons for significant changes. We are required to adopt ASU 2014-09 in the first quarter of 2017 and we are currently assessing the impact of this pronouncement on our financial statements.

On April 10, 2014, the FASB issued ASU 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” which amends the definition of a discontinued operation in ASC 205-20 and requires entities to provide additional disclosures about discontinued operations as well as disposal transactions that do not meet the discontinued operations criteria. The guidance narrowed the definition of a discontinued operations for disposal of a component or group of components that represents a strategic shift that has or will have a major impact on an entity’s operations or financial results. The guidance also expands the scope to include equity method investments and businesses, that upon initial acquisition, qualify as held for sale. The expanded disclosure requirements include statement of financial position and statement of cash flows disclosures for all comparative periods. The ASU is effective prospectively for all disposals (or classifications as held for sale) in periods beginning on or after December 15, 2014 with early adoption permitted. We are required to adopt ASU 2014-08 in the first quarter of 2015 and these provisions are not expected to have a material impact on our financial statements.

On July 18, 2013, the FASB issued ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force),” which requires an entity to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss, or NOL, carryforward, or similar tax loss or tax credit carryforward, rather than as a liability when (1) the uncertain tax position would reduce the NOL or other carryforward under the tax law of the applicable jurisdiction and (2) the entity intends to use the deferred tax asset for that purpose. The ASU does not require new recurring disclosures. ASU 2013-11 is effective for annual periods, and interim periods within those years, beginning after December 15, 2013. The amendments are to be applied to all

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unrecognized tax benefits that exist as of the effective date and may be applied retrospectively to each prior reporting period presented. We adopted this pronouncement in the first quarter of 2014, and it did not have a material impact on our financial statements.

On February 5, 2013, the FASB issued ASU 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income,” which requires entities to disclose additional information about items reclassified out of accumulated other comprehensive income, or AOCI. The requirements include by component disclosures of changes in AOCI balances along with the related income tax benefit or expense and significant items reclassified out of AOCI. ASU 2013-2 is effective for annual periods, and interim periods within those years, beginning after December 15, 2012, and the amendments are to be applied prospectively. We adopted this pronouncement in the first quarter of 2013 and it did not have a material impact on our financial statements.

Emerging Growth Company Status

Section 107 of the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to “opt out” of such extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

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BUSINESS

Overview

We are the leading cloud-based software platform powering the intelligently connected home. We have developed technology that makes the connected home broadly accessible to consumers and fundamentally changes the way they interact with their homes and businesses. Our multi-tenant software-as-a-service, or SaaS, platform allows home and business owners to intelligently secure and manage their properties and remotely interact with a broad array of connected devices through a single, intuitive interface. Our connected home platform currently has more than 2 million residential and small business subscribers, connects to more than 20 million devices, and processed more than 15 billion data points generated by those subscribers and devices in the last year alone, making Alarm.com the largest connected home platform.

Our solutions are delivered through an established network of over 4,000 trusted service providers, who are experts at selling, installing and supporting connected home solutions. Our technology platform was purpose built for the connected home ecosystem, including the consumers who use it, the service providers who sell, install and support it and the hardware partners whose connected devices are integrated into the platform. Our solutions are used by both home and small business owners, and we refer to this market as the connected home market.

We invented solutions that connect people in new ways with their property and devices, making them safer, smarter and more efficient. Our platform currently includes four primary solutions, which can be used individually or combined and integrated within a single user interface accessible through the web and mobile apps:

• Intelligent Automation.  Integrated home automation solution that allows users to easily and remotely connect and control devices and systems such as security systems, garage doors, lights, door locks, thermostats, electrical appliances, environmental sensors and other connected devices. The cloud-based platform uses data and sophisticated algorithms to learn activity patterns and recommend intelligent optimizations.

• Interactive Security.  Always-on intelligent security and awareness solution that operates through a dedicated, cellular connection to provide safe, reliable protection and withstand common vulnerabilities like line cuts, power outages and network connectivity issues. The solution includes a powerful mobile app, anytime alerts and customized triggers, and provides 24x7 emergency response through trusted and integrated service providers.

• Video Monitoring.  Video-as-a-service solution delivering on demand viewing, cloud-based video storage and intelligently triggered recording with anytime access. The comprehensive suite of video services includes live streaming, smart clip capture, high definition continuous recording and instant video alerts delivered to users through the web and mobile apps.

• Energy Management.  Sophisticated energy monitoring and management solution for controlling energy consumption and comfort. Web and mobile apps integrate with connected thermostats, power meters, lights, shades and appliances to control devices and manage temperature as well as provide real-time insights into home energy usage and efficiency. The intelligent platform delivers activity-based learning optimization as well as location-based adjustments for effortless energy management.

Homes and businesses are now ripe for reinvention, as most properties lack even basic automation and are still manually controlled. The intersection of four significant technology trends are making the intelligent, connected home now possible: broad adoption of mobile devices, the emergence of the “Internet of Things,” the power of big data and the extensibility of the cloud. Security

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systems, thermostats, door locks, video cameras, lights, garage doors, appliances and other devices that were once inert now have the potential to become sensor-enabled, intelligent and connected. According to Consumer Electronics Association reports dated December 2012 and September 2013, in September 2013, 61% of consumers surveyed expressed an interest in home automation, an increase from 37% in December 2012, reflecting consumers’ increasing demand for intuitive, connected and intelligent solutions in their homes and businesses.

Our innovative solutions offer a new experience for home and business owners. Here are some common examples of how subscribers use our platform:

• A person driving to work gets an alert as soon as she is a mile away from home, alerting her that she left her garage door open, and forgot to arm her security system. With one click in the Alarm.com app, the security system is armed and the garage door is closed.

• As a person heads to bed, he arms the security system with his Alarm.com app and the doors automatically lock, the lights turn off, the thermostat goes into energy savings mode, the shades close and the garage door closes.

• A business owner receives an alert from Alarm.com that the security system was disarmed and the front door opened at 8:00 a.m., letting her know the store opened on time. Later she receives an alert that the security system has not been armed by 10:00 pm and, with a glance at the Alarm.com app to see the door is locked and there has been no activity for over two hours, she instantly arms the system from her mobile app.

• As a person leaves home, his thermostat is automatically set to an efficiency mode when he is a pre-defined distance away from his home. When he is returning and is close to home, Alarm.com automatically adjusts the thermostat back to a comfort mode.

• A homeowner creates a unique access code using Alarm.com to grant access to the dog walker during certain times of the day and days of the week. If the dog walker fails to arrive as scheduled, an alert is sent. When the dog walker arrives, Alarm.com automatically sends an alert with a short video clip to the dog’s owner.

• With smart schedules, Alarm.com learns activity patterns over time by analyzing the sensor data within the home — door openings, motion activity, security system arming and thermostat adjustments. Combined with external information, such as weather and humidity data, Alarm.com recommends adjustments to thermostat schedules to optimize energy use without sacrificing comfort.

Small businesses have many of the same needs as residential customers. Security, energy management, awareness of activity in the property, video monitoring and the need to be connected anywhere at anytime are all highly applicable to the small business market. The service provider who is delivering the solution often services both residential homes and small businesses.

Our solutions are delivered through an extensive network of service providers, primarily comprised of security system dealers who are experts at delivering connected home solutions. According to a Consumer Electronics Association report dated December 2012, 62% of consumers stated that security was the primary driver for purchasing connected home automation products and services. To help drive adoption, we have developed powerful tools enabling our service providers to more effectively sell, install and manage our connected home solutions. We believe that the combination of our solutions and our service providers with their strong pedigree in security is the most effective way to drive mass market adoption of the connected home.

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We believe our addressable market is nearly every home and small business. According to a Juniper Research report dated February 2014, the global opportunity for home automation and security, smart metering and smart health monitoring in the home is expected to be $14.9 billion in 2018. We believe the major technology trends of cloud computing, the Internet of Things, Mobile Access and Big Data will dramatically change the technology landscape for devices in the home and for small businesses. These trends have already made connected services and devices broadly available and affordable for households and small businesses across North America. These large technology trends are making these connected services and devices accessible and relevant to households and small businesses worldwide.

We primarily generate revenue through our service providers who resell our services, and pay us monthly subscription fees on a per subscriber basis. Our service providers have indicated that they typically have three to five year service contracts with home or business owners, who we call subscribers. We believe that the length of these contracts, combined with our SaaS model and over a decade of operating experience, provides us with good visibility into our future operating results. In addition, we generate hardware and other revenue primarily by selling our service providers an Alarm.com cellular communication module that enables the managed cellular communication channel between the devices installed in the home or business and our cloud-based platform.

We have experienced significant growth since inception. We had twice as many subscribers as the next largest platform provider in North America as of December 2013, according to data from a Parks Associates report dated December 2013. We have increased the number of homes and businesses we served from 483,000 as of December 31, 2010, to over 2 million today. Additionally, we grew revenue at a 52% compound annual growth rate from December 31, 2010 to December 31, 2013.

For the year ended December 31, 2013, our revenue was $130.2 million, representing year-over-year revenue growth of 35%. For the first quarter of 2014, our revenue was $36.9 million, representing a year-over-year revenue growth of 31%. For the year ended December 31, 2013, our subscription revenue was $82.6 million, representing year-over-year subscription revenue growth of 48%. For the first quarter of 2014, our subscription revenue was $25.2 million, representing year-over-year revenue growth of 43%. Our subscription revenue represented 63% of our total revenue for the year ended December 31, 2013 and 68% of our total revenue in the first quarter of 2014, and we expect it to continue increasing as a percentage of total revenue as our subscriber base grows. Hardware and other revenue accounted for 37% of our total revenue for the year ended December 31, 2013 and 32% of our total revenue in the first quarter of 2014. For the year ended December 31, 2013, and on a consolidated basis, we generated net income of $4.5 million and Adjusted EBITDA, a non-GAAP metric, of $28.3 million. For the first quarter of 2014, we generated net income of $4.3 million and Adjusted EBITDA of $8.8 million. Please see footnote 6 to the table contained in the section of this prospectus titled “Selected Consolidated Financial and Other Data” for a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measures calculated and presented in accordance with GAAP.

Key Trends Driving the Adoption of the Connected Home

The intersection of the following significant technology trends and consumer demand are driving mass adoption of connected home solutions.

The Mobile Era.  The proliferation of smartphones and tablets has transformed the way people interact with applications and content in both their personal and professional lives. Today, mobile apps have become the preferred method for users to communicate and manage their lives. According to an IDC report dated June 2013, more than 1.4 billion smartphones and tablets are expected to be shipped in 2014. According to an IDC report dated June 2013, 88 billion mobile apps were downloaded worldwide in 2013, representing a 102% compound annual growth rate from 11 billion downloads in

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2010. Having benefitted from this transformation, consumers are increasingly demanding a similarly efficient and convenient mobile experience to intelligently control their homes.

The Internet of Things.  There has been significant growth in the number of connected devices. According to a Gartner report dated March 2014, the Internet of Things is forecast to reach 26 billion installed units by 2020, up from 0.9 billion in 2009. This trend includes “things” in consumers’ homes and businesses such as security systems, thermostats, door locks, video cameras, lights, garage doors, water heaters and appliances. The ability to remotely manage, monitor and control devices using cloud-based applications and wireless technology is creating a large and fast growing market.

Big Data and Analytics Capabilities.  According to an IDC report dated April 2014, the volume of digital information created and replicated worldwide will grow approximately 39% annually from 4.4 trillion gigabytes in 2013 to 44 trillion gigabytes in 2020. As the network of physical objects accessed through the Internet continues to grow, there is an opportunity to leverage this data to transform the way consumers interact with their homes through real-time, adaptive and predictive analytics. A cloud-enabled platform solution with robust data analytics capabilities is best positioned to collect, process and analyze massive amounts of otherwise unusable information into actionable data for superior insight into intelligent automation, interactive security, video monitoring and energy management.

Cloud Infrastructure.  Fundamental advances in cloud technologies enabling efficient scale have allowed a new generation of home security and automation software to be delivered as a service to the mass market. These advances have made it possible for consumers to afford such services without the requirement of expensive and quickly outdated physical hardware to be purchased and set up on location. The advancement in mobile access speeds allows for more sophisticated services in the property that can be conveniently managed through a mobile device. These advances have also made it possible for service providers to install and support such services in a cost effective manner.

As a result of these technology advancements, it is now possible to offer an integrated connected home that can be managed anywhere and on any device at a price that makes it accessible to millions of consumers.

What Consumers Want

Consumers increasingly are seeking a connected home solution as a way to make their lives more convenient, efficient and secure. Consumers want persistent awareness and control of everything that is happening inside and around their homes through one simple, easy-to-use mobile app on the device of their choice. Consumers want a platform that seamlessly works with a broad range of connected devices that will enable those devices to integrate with each other to create a unified connected home experience that is also affordable and easy to acquire. Consumers want a highly flexible and configurable solution that can automate their homes based on their individual lifestyle and preferences and that is designed to be seamlessly upgraded to incorporate new functionality as new technology comes on to the market. In addition, consumers seek an intelligent system that adapts to their behavior and recommends optimizations to improve the safety and efficiency of their home. Consumers want their connected home solution to be professionally configured or installed and monitored by a service provider that they can trust because when it comes to their homes, consumers place a premium on their privacy. They demand that their service providers do not sell their data or use it to target them with advertisements.

What Connected Home Service Providers Want

Service providers are a critical part of allowing the benefits of the connected home to be rapidly and effectively delivered to consumers. Service providers expect to be able to market and upsell comprehensive connected home solutions that are adaptable to varying consumer requirements.

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Service providers seek to distribute a solution that can expand their addressable market and increase customer revenue and retention. Service providers demand a solution that can be installed and maintained cost-effectively in any home with low ongoing support costs. For example, service providers benefit from being able to service or update a solution remotely instead of having to send personnel onsite. Service providers want a flexible solution that can support multiple hardware devices and manufacturers and that is future proof, integrating with new technologies. As service providers are integrating connected home solutions and the platform that delivers them as a part of their core business, it is critical that such a platform is highly reliable and provided by a proven partner with a trusted brand, first-class support and value-added services.

Limitations of Existing and Legacy Products

Existing and legacy approaches to home automation generally have several limitations:

• Point Products.  Home control products are highly fragmented and made up of multiple disparate devices which provide only a single function. In general, each device can only be controlled inside the home or, if it is connected at all, controlled by a separate mobile app, requiring the user to manage multiple, disconnected user interfaces.

• Closed Ecosystem.  Closed ecosystems do not scale to support the expanding Internet of Things. In addition, products that operate in a closed ecosystem do not have an awareness of, or the ability to interact with, other devices in the home or business. For example, existing LED lighting solutions do not integrate with other connected devices such as smart thermostats.

• Lack Intelligence.  These products are only able to respond to direct commands and are not able to act independently on the user’s behalf based on activity happening in and around the home. Because devices in the home were historically unable to communicate with each other, the consumer lacked the ability to apply any automated intelligence to create a more efficient and simplified experience.

• Not Future Proof.  Since most legacy products are not cloud-based, they cannot receive automatic updates of new software, and risk becoming obsolete. These static offerings generally require physical hardware and software replacements once new features, devices or technologies are introduced. These replacements typically have to be done onsite.

• Overly Complex and Expensive.  Systems that attempt to integrate disparate point products in a closed network are highly complex and require a significant level of customization. As a result, these systems lack flexibility and are often cost prohibitive to acquire, service and update for most consumers.

We believe that the combination of strong market trends, consumers’ and service providers’ requirements and the limitations of legacy products has created a significant market opportunity for Alarm.com. We believe our platform positions us to meet growing consumer demand and capitalize on this market opportunity.

Market Opportunity

We believe our addressable market is nearly every home and small business in the world. Our residential subscribers are typically owners of single-family homes, while our small business subscribers include retail businesses, restaurants, small-scale commercial facilities, offices of professional services providers and similar businesses. According to a Juniper Research report dated February 2014, the global opportunity for home automation and security, smart metering and smart health monitoring in the home is expected to grow from $5.8 billion in 2013 to $14.9 billion, representing a compound annual growth rate of 21%. Approximately 81% of the total market size in each period is attributable to the home automation and security market, which Juniper Research defines as a bundled solution, including camera, lighting, heating control, door locks and others. In the

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United States alone, according to a Parks Associates report dated December 2013, smart home controller penetration was only at 2.2% of households in 2013. We believe there is an opportunity for penetration rates to significantly increase, largely driven by the mass market adoption of connected home solutions. In addition, we believe there are commonalities between the residential and small business markets for these services including similar property size, service providers and benefits from security, awareness and control of devices in the property. Therefore, we believe that there will be a similar adoption trend by small businesses, which represents a sizable related opportunity.

Benefits of Our Solutions

Our platform powers the connected home through four primary solutions, which can be integrated within a single user experience: intelligent automation, interactive security, video monitoring and energy management. In addition, we provide a comprehensive suite of enterprise-grade business management solutions to our service providers.

Benefits to Consumers

Our solutions offer consumers the following benefits:

• Intuitive Experience.  We have designed our platform and user interfaces to be intuitive, simple and easy to operate without training or significant support. Our platform can be accessed through any mobile device and provides secure, intelligent control through a single user interface.

• Single Connected Platform.  Our cloud-based platform provides consumers with a single point of integrated control that can be easily upgraded to incorporate new functionality and personalized to suit the individual consumer’s needs. For example, when we introduced our geo-services offering, our subscribers automatically received this new service. In addition, a subscriber can easily expand his or her existing system by adding new devices and functionality.

• Reliable Network Communications.  Unlike competing products connected to the home by phone lines or wired networks, which can be susceptible to common vulnerabilities, such as lines being cut, power outages or network connectivity issues, our platform utilizes a highly secure, highly reliable and dedicated cellular connection.

• Persistent Awareness.  Our platform helps subscribers maintain an awareness of what is happening at their properties at all times. Whether or not the security system is armed, the platform continuously monitors activity on each sensor and analyzes that data to determine whether the subscriber should be notified.

• Intelligent and Actionable.  The continuous, multi-point awareness of our platform enables intelligent real-time monitoring, control of the home and adaptive learning. For example, the adaptive learning capability of our platform leverages all of the data collected from activity in the home to understand activity patterns and recommend optimized thermostat schedules to optimize for comfort and efficiency.

• Broad Device Compatibility.  Our platform supports a wide variety of connected devices and communications protocols, giving consumers greater freedom of choice. Consumers can seamlessly connect and automate many devices they already own throughout the home, as well as add devices they purchase in the future, and have the confidence that those devices will interoperate seamlessly.

• Accessible and Affordable.  Our platform provides an affordable alternative to expensive point products and legacy home control products, with minimal upfront expense.

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• Trusted Provider of a Security Platform.  We have built a reputation and brand as a trusted, reliable and innovative technology provider. We respect the privacy of our subscribers and do not sell their data. Our reputation is strengthened through our network of over 4,000 service providers, who have significant expertise in delivery of our platform.

Benefits to Service Providers

Our solutions offer service providers the following benefits:

• New Revenue Generation Opportunities.  Our solutions help broaden our service providers’ offerings beyond traditional home security and monitoring to include comprehensive connected home solutions, allowing the service providers to access new revenue streams and drive incremental recurring monthly revenue. We provide frequent training and development programs to ensure our service provider network is aware of our latest solutions.

• Expanded Suite of Value-Added Services.  We provide a suite of value-added services to our service providers, including training, marketing, installation, support tools and business intelligence analytics. This superior support helps service providers manage the changing technology landscape and allows them to more efficiently target, acquire, install and support customers on our platform.

• Improved Service Provider Economics.  Our cloud-based platform provides improved customer economics by reducing delivery and support costs, allowing remote delivery of upgrades and increasing average monthly revenue. For example, our AirFX tool enables our service providers to support and upgrade a subscriber’s hardware or software remotely eliminating the need to dispatch a technician to perform an in-person service call. In addition, our service providers are able to charge a higher fee since, according to a Parks Associates report dated October 2013, consumers are willing to pay a 25% premium over the cost of a basic security system for a professionally monitored system that includes a home automation solution.

• Broad Device Interoperability.  We have an open platform which allows service providers to respond to consumer demands for new devices. Furthermore, our platform supports broadly adopted communications protocols used in the home automation ecosystem, including Z-Wave, Wi-Fi and ZigBee, as well as cellular and broadband, giving our service providers a wide device selection to tailor their offerings to suit their customers now and in the future.

Competitive Advantages

We believe the benefits we deliver to our subscribers and our service providers create a significant competitive advantage for us in the connected home market. In addition, we believe there are a number of other factors that contribute to our competitive advantage in the connected home market:

• Scale of Subscriber Base and Service Provider Coverage.  We currently have over 2 million subscribers. We had twice as many subscribers as the next largest platform provider in North America as of December 2013 according to data from a Parks Associates report dated December 2013. In addition to our large subscriber base, we have over 4,000 service providers and more than 20 million connected devices. We believe the combination of the size of our subscriber base and established service provider network creates a competitive advantage for us and increases the challenge for competitors to replicate.

• Security Grade, Cloud-Based Architecture.  We built our platform with a cloud-based multi-tenant, fail-safe architecture that allows for real-time updates and upgrades. Our platform was built from the ground up with life safety standards at the core, where the

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reliability standard is substantially higher than that required for home automation and energy management systems. The cloud-based nature of our platform allows us to rapidly innovate and deploy new solutions and features and support new devices.

• Highly Scalable Data Analytics Engine.  We processed more than 15 billion data points in and out of properties last year alone. This data drives persistent awareness and can keep subscribers informed in real-time, helping them intelligently manage their security, energy efficiency and devices in their properties. As the demand shifts towards more intelligence-based features, we believe our data and proprietary analytics serve as a sustainable competitive advantage.

• Trusted Brand.  Given our leading position in the connected home, we believe we have developed a trusted brand with both service providers and consumers for innovating and delivering connected home solutions. We have developed considerable brand awareness and trust with our service providers. Our extensive service provider coverage enables us to utilize our marketing dollars efficiently nationwide to drive consumer referrals to our service providers.

• Commitment to Innovation.  We are a pioneer in the connected home market and we continue to make significant investments in innovative research and development. Our investment has resulted in over 20 patents which help ensure that our technology is competitively differentiated and protected.

Growth Strategy

We intend to maintain our leadership position in the connected home market while continuing to innovate, add advanced capabilities and increase penetration of our connected home solutions. Our key growth strategies include:

• Drive Subscriber Growth and Add New Service Providers.  We will continue to focus on making our service providers successful in driving adoption of the connected home. We have made significant investments in sales and marketing services and training for our service providers to promote the advantages and opportunities associated with the connected home. We will continue to invest in building out this infrastructure for our service providers to become more productive in selling our solutions to new customers. In addition, we plan to continue to grow our network of service providers.

• Upgrade Traditional Security Customers to Our Connected Home Solutions.  We believe there is a significant opportunity for our service providers to expand adoption of our connected home solutions within their customer base. We intend to leverage our status as a trusted provider and drive consumer interest in these services to enable our service providers to upgrade their legacy security customers to our connected home solutions.

• Continue to Invest in Our Platform.  As a pioneer in connected home solutions, we have made significant investments in building out our platform over the last 14 years. We intend to invest heavily in developing our platform to add new innovative offerings and broaden our solutions. As the Internet of Things grows and more “things” become connected, such as appliances, wearable devices and automobiles, we are building technology and partnerships to connect these devices to our platform.

• Expand International Presence.  We are investing in international expansion because we believe there is a significant global market opportunity for our solutions. We recently initiated product launches and partnerships in Latin America, including Brazil, Chile, Colombia and Mexico, and intend to soon initiate launches in other countries such as New Zealand, South Africa and Turkey. According to a Telecommunication Development Bureau report dated April 2014, cellular is expected to have 96% global penetration versus 32% for broadband by

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the end of 2014. We believe our cloud-based architecture and our cellular communication technology will enable us to capitalize on opportunities worldwide.

• Expand Channels into the Home.  Today, most consumers purchase a connected home solution through a security or home automation service provider. As the connected home market continues to grow we believe other home services providers will seek to participate in the market and may complement our current partner ecosystem. We intend to partner with these other providers, which may include heating, ventilation and air conditioning installers, property management companies and other services companies.

Our Solutions and Integrated Platform

We offer a comprehensive platform to power the connected home that primarily includes the following solutions: Intelligent Automation, Interactive Security, Video Monitoring and Energy Management. These solutions are delivered through our cloud-based platform enabling a breadth of connected home solutions, which can be integrated together or provided on a standalone basis.

Consumer Solutions

Intelligent Automation

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Our intelligent automation solution integrates the growing Internet of Things into a meaningful unified experience for our users. It connects, integrates and controls the devices in the home or business such as security systems, garage doors, lights, door locks, thermostats, electrical appliances, environmental sensors and other connected devices. It learns activity patterns from all devices to recommend intelligent optimization to improve the safety and efficiency of the home. The capabilities associated with this solution include:

^¡  Anywhere Access and Control.  Remote management and control of connected devices including security systems, thermostats, door locks, video cameras, lights, garage doors, water heaters, appliances and other connected devices.

^¡  Intelligent Rules.  Intelligent rules running locally and in the cloud automatically control connected devices based on various triggers including security and sensor events, time/day schedules, user location and weather.

^¡  Flexible and Personal.  Highly flexible rules, triggers and schedules allow customization and personalization of all the connected devices in the home or business. Subscribers can create automation rules by device, user, time of day and day of week to fit any schedule or lifestyle or have the system automatically make adjustments based on conditions like location and weather.

^¡  Environmental Monitoring.  A variety of environmental sensors can be integrated into the solution to provide monitoring and remote control of key home or business systems such as water sensors, water valves, sump pumps and gas sensors. For example, integration with these devices enables early detection and curtailment of leaks that can lead to major water damage and waste. In addition, we provide remote monitoring and control of gas sensors, which can enable early detection of gas leaks (e.g. natural gas, or carbon monoxide) for life safety applications.

Interactive Security

Our interactive security solution provides an always-on intelligent security and awareness service through a dedicated, cellular, two-way connection to the home or business. This solution includes customized triggers and smart schedules to connect the system to door locks, garage doors and other connected security devices, and 24x7 emergency response through trusted and integrated service providers. The capabilities associated with this solution include:

^¡  Alarm Transmission.  Transmission of alarm signals from the subscriber property through the Alarm.com platform to a third-party central monitoring station staffed 24/7 with live operators who can initiate emergency police/fire response.

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^¡  Persistent Awareness.  Always-on monitoring of sensors whether the security system is armed or disarmed.

^¡  Mobile Control.  Remote security system management and control through the web and mobile apps for subscribers.

^¡  Instant Alerts.  Real-time system alerts for any type of system event activity through push notifications, SMS, email and voice.

^¡  Managed Access.  User access tools to manage who can access the protected property through the local security system or through remote user interfaces.

Video Monitoring

Our video monitoring solution provides live streaming, smart clip capture, high definition continuous recording and instant video alerts delivered through our mobile app or on the web. The capabilities associated with this solution include:

^¡  Live Streaming.  Subscribers can securely access live video of their property through the web and mobile apps.

^¡  Smart Clip Capture.  Video clips can be automatically recorded when there is motion activity or when the security system reports an event (e.g. an alarm, door opening, etc.).

^¡  Secure Cloud Storage.  Video clips are immediately uploaded to the platform for secure storage and subscriber access.

^¡  Instant Video Alerts.  Smart clips can be automatically sent via SMS, push notifications or email the instant they are recorded.

^¡  Continuous HD Recording.  24x7 onsite recording is enabled through our Stream Video Recorder, or SVR, and can be played back securely, from anywhere, through the web and mobile user interfaces.

^¡  Location-Based Recording Schedules.  Location-based rules enable enhanced privacy settings through automatic adjustments to recording schedules based on the subscriber’s location. For example, when everyone is out of the home, all cameras can record all activity, and when they return, certain cameras, like those in the living room or kitchen, can automatically pause recording for privacy purposes.

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Energy Management

Our energy management solution provides enhanced energy monitoring and management through increased awareness of energy usage at the whole home and individual device level, intelligent control of thermostats (which drive HVAC energy consumption), lights and sophisticated automation rules to sustain savings over time. Web and mobile apps integrate with connected thermostats, power meters, lights, shades and appliances to control devices and manage temperature as well as provide real-time insights into home energy usage and efficiency. The capabilities associated with this solution include:

^¡  Smart Thermostat Schedules.  System activity patterns are analyzed over time to recommend a more energy efficient thermostat schedule that can maximize efficiency during periods when the property is not likely to be occupied.

^¡  Energy Usage Monitoring.  Real-time and historical energy usage data at the whole-home or business and individual device level gives users greater insight into the property’s energy consumption profile to drive more efficient use of energy-consuming devices in and around the home or business.

^¡  Thermodynamic Modeling.  Each home or business has a unique fingerprint with respect to energy usage for heating and cooling. Our algorithms analyze HVAC data, weather information and other factors to determine the unique heating and cooling attributes of a property and use this as a foundation for smarter thermostat programming and other energy efficiency recommendations.

^¡  Geo-Service.  The location of subscribers can be used to further calibrate and optimize thermostat settings, enabling effortless energy management with changes happening automatically without need for a user action or rigid schedule.

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^¡  Demand Response.  Homes and businesses with connected thermostats and other connected appliances can be accessed to reduce power consumption during peak demand periods. Our acquisition of EnergyHub in 2013 brought us an existing demand response software platform and relationships with energy utilities; these utilities can leverage connected thermostats across our platform to improve the results of their demand response events.

In addition to our primary solutions, we continue to add capabilities and functionality to our platform. For example, we recently launched a new solution, Wellness, in January 2014. This solution gathers data from various types of sensors over time to learn the home patterns of daily living, and identify anomalies that may indicate a problem. Real-time alerts notify family members and other care providers when critical anomalies are detected or an emergency takes place. This enables people who are older or have disabilities to live at home safely and independently for a longer period of time. Our extensible cloud-based platform allows us to continue to innovate and integrate compelling new solutions.

Service Provider Solutions

In addition to the solutions we offer consumers, we also offer a comprehensive suite of enterprise-grade business management solutions to our service providers to help them grow their businesses and manage their customer base.

• Service Provider Portal. Our permission-based online portal offers always-available access to a set of marketing, sales, training and support tools and information.

^¡  Service Provider Website.  Our online resource provides a comprehensive set of tools for service providers to activate and manage their Alarm.com customer accounts, order equipment, access invoices and billing, remotely program customer systems using AirFX, obtain sales and marketing services, training, etc.

• Installation and Support. Our installation and support tools and apps help our service providers more efficiently install and service their connected home customers.

^¡  MobileTech Application.  Our installation resources include a mobile app designed for our service providers’ technicians to facilitate the successful installation and programming of equipment while on site at their customer’s property.

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^¡  AirFX Remote Programming.  This collection of remote system management tools available through the service provider website enables service providers to make changes to a subscriber’s system programming without the need to send a service technician to the subscriber property. This saves the subscriber and the service provider time and money, and greatly increases subscriber satisfaction because service requests can be handled immediately.

• Business Management.  Our services can be deeply integrated with a service provider’s and offers increased business insight into their customer base and key business health metrics.

^¡  Web Services.  Our service providers are able to integrate their existing customer account management tools with our platform using our web services. This integration means service provider personnel can seamlessly perform functions like customer account creation, system status updates, system programming and service plan upgrades through a unified interface.

^¡  Business Intelligence.  Our powerful business intelligence tools provide service providers with key insights into the performance of their Alarm.com subscriber account base. Service providers are able to access key operational metrics related to account plan adoption, attrition, and service quality to help them grow their business more and improve customer retention.

• Sales, Marketing & Training.  Our comprehensive customer lifecycle sales and marketing services are available to help effectively promote and sell the connected home.

^¡  Marketing Portal.  Our online portal offers anytime access to a broad suite of marketing and sales tools. These include co-brandable assets like mobile optimized websites, landing pages, lead capture, social media, email, videos, image library, collateral, direct mail and event material as well as services like direct mail campaigns, email campaigns, CRM programs and print and ship services.

^¡  Alarm.com Academy.  Our online training offers courses through a learning management system where service providers can access training on the full suite of Alarm.com solutions. This online option is offered in addition to our in-person, hands on training programs.

Our Technology

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Cloud Services Platform

Since our inception, we have utilized a multi-tenant SaaS platform architecture to enable rapid innovation in a highly scalable environment that is designed to deliver our solutions as a hosted service for security and connected home applications. Our platform is architected to scale and leverages various proprietary cloud-based applications built by our technology team to support the needs of our service providers and subscribers. Because security and life safety are a key part of our service offering, our standards for reliability must be high and all of our solutions, not just those focused on security, are architected to meet these rigorous standards.

The Alarm.com Cloud Services Platform manages communication in and out of the property through the Communications Supervisor, intelligently directs alerts and notifications through the Notifications Engine, manages the user defined activity through the Rules Engine, and processes and stores video through our Video Processor and Video Storage. Additionally the platform enables device integration through the Partner APIs and offers service providers extensive services through our Enterprise Tools.

Our internal engineering teams have designed and developed our core technology. As a leader in the connected home industry, we believe we have the most capable and robust implementation of a connected home cloud service platform.

Operations

We operate our services platform through two fully redundant network operation centers located in Phoenix, Arizona and Ashburn, Virginia. Each is designed to run the entire platform independent of the other.

Hardware and Manufacturing

We are involved in the design and manufacturing of various types of hardware that are used to enable our solutions, including the following:

• Cellular Communication Modules.  We offer various cellular communication modules that are tightly integrated with the security system control panel and other automation control device in the subscriber’s home or business. These modules, designed by our device engineering team and manufactured in the United States by a contract manufacturing partner, provide a dedicated and fully managed two-way cellular connection from the subscriber’s property to our cloud platform modules. The modules run our proprietary firmware that enables:

^¡  Real-time analysis of system events reported by security sensors and other devices at the property.

^¡  Execution of automation rules at the property.

^¡  Management of all the logic that determines whether a message should be transmitted to our cloud platform for further processing.

• Image Sensor.  Our image sensor is a wireless, battery-operated, passive infrared motion sensor that is capable of capturing images based on various system triggers to be transmitted via our dedicated cellular communication path to our cloud platform.

^¡  Images can be viewed securely by the subscriber through web and mobile user interfaces, and can be sent automatically to the subscriber through SMS and email when triggered by an alarm or other high priority system event.

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^¡  Our image sensors are designed by our device engineering team and manufactured in the United States by a contract manufacturing partner.

• Video Cameras.  We offer a suite of high definition, Internet protocol, or IP, video cameras to enable our video monitoring services. The cameras are available in various indoor and outdoor versions with optional night vision, wireless and power over Ethernet, or PoE, communication features. We also offer a network video recording device, the SVR, for on-premise, continuous video recording that is seamlessly connected to the cloud platform for remote playback through the user interfaces. Our video cameras and SVRs are specified for our platform by our product management and software engineering teams, and are developed and manufactured by an original design manufacturer, or ODM, in Taiwan. Our video service also enables third-party analog cameras to be integrated into our platform.

Research and Development

We invest substantial resources in research and development to enhance our platform, solutions and technology infrastructure, develop new capabilities, conduct quality assurance testing and improve our core technology. We expect to continue to expand the capabilities of our technology in the future and to invest significantly in continued research and development efforts. Our research and development of new products and services is a multidisciplinary effort that requires the focus of our Product Management, Program Management, Software Engineering, Hardware Engineering, Quality Engineering, Configuration Management, and Network Operations teams, each of which is focused on the core research and development mission. As of March 31, 2014, we had a total of 130 employees engaged in research and development functions. For the years ended December 31, 2011, 2012 and 2013, our total research and development expenses were $5.6 million, $8.9 million and $13.1 million, respectively.

Service Provider Network

Our solutions are sold, installed and serviced by a network of professional, licensed service providers. We have developed an extensive professional service provider channel in North America consisting of over 4,000 service providers. Our service provider network is highly effective at account creation, installation and ongoing monitoring and has extended the traditional home security business model to include connected home and business services. We believe this highly trusted, established network is a core strategic strength that enables an efficient, scalable customer acquisition model and allows us to focus on technology innovation.

Our service providers today are primarily licensed and authorized security dealers ranging from small, local providers to larger regional providers to national service providers with thousands of employees. With a strong reputation for trust and established practice of in-home installation and ongoing professional monitoring, our service providers are driving the adoption of connected home solutions through their established businesses and now serve as connected home solution providers. Our channels increasingly include new providers in the intelligent automation, HVAC and property management markets as well as service providers in international markets.

The traditional security and home automation market is highly fragmented with over 13,000 dealers nationally. According to the February 2014 Barnes Buchanan Conference Report, the top 5 service providers represented 38% of all industry recurring monthly revenue in 2013. The distribution of revenue among our service providers is reflective of the industry overall. Vivint, Inc. represented greater than 10% but not more than 20% of our revenue in 2011. Vivint, Inc. and Monitronics International, Inc. each represented greater than 10% but not more than 20% of our revenue in 2012 and 2013.

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Sales and Marketing

Our sales team is centrally organized with inside and outside regional account management teams responsible for territories across North America. The goal of our sales team is to help our service providers be successful in selling, installing and supporting the full suite of our solutions. Our sales team is also responsible for recruiting additional service providers to Alarm.com. We also have a business development team dedicated to developing new service provider and distribution relationships in international markets.

Our marketing team is focused on empowering our service providers to most effectively promote and sell our connected home solutions. We have developed a high value, highly scalable marketing services platform to serve the breadth of our service providers both large and small. We design, develop and provide end-to-end marketing services through our integrated marketing solution, which includes tools and content for end-to-end lifecycle marketing to build awareness, create interest, drive trials, activate subscribers, develop the ongoing customer relationship and drive upsell. This solution is highly scalable and flexible with smaller service providers leveraging the full suite of marketing services and larger service providers adopting specific elements to enhance their existing marketing activities. We also provide comprehensive training through our Alarm.com Academy that includes sales and marketing and technical training courses through in-person classes and an always-available online learning management system.

Additionally, we manage targeted consumer marketing campaigns on behalf of our service provider network to increase awareness of the connected home, raise overall awareness and preference for Alarm.com solutions and drive prospective customers to our service providers.

We believe our sales and marketing approach enables us to expand our breadth of service providers, provide highly custom services and scale quickly with only incremental costs. As of March 31, 2014, we had a total of 111 employees engaged in sales and marketing functions.

Service Provider Support

We have a dedicated service operations team that strives to deliver an exceptional service experience to our service providers and our subscribers. We support the full suite of software and hardware on the Alarm.com platform through a highly trained and experienced team of United States based professionals using a tiered structure to efficiently escalate and resolve issues of varying complexity. This structure enables us to scale our organization in line with service provider and subscriber growth while building on our reputation as a source for answers in the connected home industry. We offer support via phone, web ticketing, and email for our service providers and maintain a commitment to industry-leading response times. While we primarily support our service providers and in turn the service providers provide support to their customers, who are our subscribers, we are committed to delivering a great end user experience. To that end, subscribers may sometimes reach us directly with service concerns or questions, and we either assist the subscriber directly or, when appropriate, route the subscriber to his or her applicable service provider for additional assistance. Our staff is multilingual and we continue to grow our language capabilities to support our emerging international initiatives.

Our Competition

The market for connected home solutions is fragmented, highly competitive and constantly evolving. We expect competition to continue from existing competitors as well as potential new market entrants. Our current primary competitors include providers of other technology platforms for the connected home, including iControl Networks, Inc. and Honeywell International Inc. that sell to dealers such as cable operators and other home automation providers. In addition, our service providers

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compete with managed service providers, such as cable television, telephone and security companies like Comcast Corporation, AT&T Inc. and Time Warner Cable Inc., as well as providers of point products, including Nest Labs, Inc. (acquired by Google Inc.), which offers a thermostat, and DropCam, Inc., which offers video monitoring. Because our service providers compete with these entities, we consider them competitive.

In addition, we may in the future compete with other large technology companies that offer control capabilities among their products, applications and services, and have ongoing development efforts to address the broader connected home market. For example, Apple, Inc. recently announced an upcoming feature that will allow some manufacturers’ devices to be controlled through a service in the iOS operating system. Such companies may have longer operating histories, significantly greater financial, technical, marketing, distribution or other resources and greater name recognition than we do. In some instances, we may have commercial partnerships with technology or services providers in the connected home market with whom we may otherwise compete and our relationships with both our competitors and partners may change through time.

We expect to encounter new competitors as we enter new markets as well as increased competition, both domestically and internationally, from other established and emerging security, home automation and energy management companies. Our current and potential competitors may also establish cooperative relationships among themselves or with third parties and rapidly acquire significant market share.

We believe the principal competitive factors in the connected home market include the following:

• simplicity and ease of use;

• ability to offer persistent awareness, control and intelligent automation;

• breadth of features and functionality provided on the connected home platform;

• flexibility of the solutions and ability to personalize for the individual consumer;

• compatibility with a wide selection of third-party devices;

• pricing, affordability and accessibility;

• sales reach and local installation and support capabilities; and

• brand awareness and reputation.

We believe that we compete favorably with respect to each of these factors. In addition, we believe that our cloud-based software platform, connected home solutions and proven scalability help further differentiate us from competitors. Nevertheless, many of our competitors have substantially greater financial, technical and other resources, greater name recognition, larger sales and marketing budgets and broader distribution channels than we do.

Our Intellectual Property

Our success and ability to compete effectively depend in part on our ability to protect our proprietary technology and to establish and adequately protect our intellectual property rights. To accomplish these objectives, we rely on a combination of patent, trademark, copyright and trade secret laws in the United States and other jurisdictions, as well as license agreements, confidentiality agreements and other contractual protections.

As of March 31, 2014, we owned 23 issued United States patents that are scheduled to expire between 2021 and 2031. We continue to file patent applications and as of March 31, 2014, we had 22 pending utility patent applications and 9 provisional patent applications filed in the United States. We also had 5 pending patent applications in Canada. The claims for which we have sought patent protection

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apply to both our platform and solutions. Our patent and patent applications generally apply to the features and functions of our platform, and solutions and the applications associated with our platform. We also have, and may be required to seek, licenses under patents or intellectual property rights owned by third parties, including open-source software and other commercially available software.

We also rely on several registered and unregistered trademarks to protect our brand. We have nine registered trademarks in the United States, including Alarm.com and the Alarm.com logo and design, and three registered trademarks in Canada.

We seek to protect our intellectual property rights by requiring our employees and independent contractors involved in development to enter into agreements acknowledging that all inventions, trade secrets, works of authorship, developments, concepts, processes, improvements and other works generated by them on our behalf are our intellectual property, and assigning to us any rights, including intellectual property rights, that they may claim in those works.

We expect that products in our industry may be subject to third-party infringement lawsuits as the number of competitors grows and the functionality of products in different industry segments overlaps. We have brought infringement claims against third parties in the past and may do so in the future to defend our intellectual property position. In addition, from time to time, we may face claims by third parties that we infringe upon or misappropriate their intellectual property rights, and we may be found to be infringing upon or to have misappropriated such rights. We cannot assure you that we are not infringing or violating any third-party intellectual property rights. Such claims may be made by competitors or other entities. In the future, we, or our service providers or subscribers, may be the subject of legal proceedings alleging that our solutions or underlying technology infringe or violate the intellectual property rights of others.

Our Culture of Innovation and Our Employees

We believe having a strong company culture and our core values are critical to our success and they are fundamental strengths and strategic assets for the company. We continue to recruit and hire exceptionally talented employees and are proud of the company culture we have been able to cultivate. We are focused on constant technological innovation to change the way people interact with the things around them and to improve our solution for our service providers and subscribers. Our culture is built on a foundation that encourages creativity through entrepreneurship, empowerment and open dialogue to continually innovate and improve our technology, solutions, brand and partnerships. As of March 31, 2014, we had 279 full-time employees.

Our Facilities

Our corporate headquarters are located in Vienna, Virginia, where we lease approximately 36,400 square feet of commercial space under a lease that expires in May 2016. We use this space for sales and marketing, research and development, customer service and administrative purposes. We also have offices in Bloomington, Minnesota, Denver, Colorado and Fort Lauderdale, Florida, and own a demonstration home in Falls Church, Virginia. We and our subsidiaries use these properties for sales and training, research and development, technical support and administrative purposes.

Our Legal Proceedings

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, we believe would individually or in the aggregate have a material adverse effect on our business, results of operations, financial condition or cash flows.

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MANAGEMENT

Executive Officers, Key Employees and Directors

The following table sets forth information concerning our executive officers, key employees and directors as of May 31, 2014:

Name	Age	Position(s)
Executive Officers
Stephen Trundle	45	President, Chief Executive Officer and Director
Jennifer Moyer	43	Chief Financial Officer
Jeffrey Bedell	45	Chief Strategy and Innovation Officer
David Hutz	37	Chief Systems Architect
Jean-Paul Martin	53	Chief Technology Officer and Co-Founder
Daniel Ramos	45	Senior Vice President of Corporate Development
Key Employees
Reed Grothe	57	Senior Vice President of Business Development
Jay Kenny	42	Vice President of Marketing
Daniel Kerzner	38	Chief Product Officer
Donald Natale	50	Vice President of Sales
Alison Slavin	35	Senior Vice President, Creation Lab and Co-Founder
Non-Employee Directors
Ralph Terkowitz(1)(2)	63	Chairman of the Board of Directors
Donald Clarke(1)	56	Director
Timothy McAdam(2)(3)	47	Director
Hugh Panero(1)	58	Director
Mayo Shattuck(3)	59	Director

(1) Member of the audit committee.

(2) Member of the compensation committee.

(3) Member of the nominating and corporate governance committee.

Executive Officers

Stephen Trundle has served as our President and Chief Executive Officer since May 2003 and as a member of our board of directors since October 2003. Previously, Mr. Trundle served in various positions with MicroStrategy Incorporated, including as Vice President of Technology and Chief Technology Officer. Mr. Trundle holds an A.B. in Engineering and an A.B. in Government from Dartmouth College. Our board of directors believes that Mr. Trundle’s extensive knowledge of our business and prior industry experience with technology companies qualifies him to serve on our board of directors.

Jennifer Moyer has served as our Chief Financial Officer since April 2009. Prior to joining us, Ms. Moyer served as Chief Operating Officer for Washingtonpost.Newsweek Interactive Company, LLC, the online publishing subsidiary of The Washington Post Company from 2006 to 2008. Ms. Moyer also has served as the Assistant Controller of The Washington Post Company. Prior to that, Ms. Moyer worked at Price Waterhouse LLP as an auditor. Ms. Moyer holds a BBA in Accounting from Temple University.

Jeffrey Bedell has served as our Chief Strategy and Innovation Officer since April 2013. Mr. Bedell served as Chief Technology Officer at MicroStrategy Incorporated from 2001 to October 2012 as well as Executive Vice President of Technology from 2007 to March 2013. Mr. Bedell holds a B.A. in Religion from Dartmouth College.

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David Hutz has served as our Chief Systems Architect since February 2006. Prior to joining us, Mr. Hutz served as Lead Architect at Thomson Financial Publishing Inc. from 2001 to 2004 and Chief Systems Architect at Strategy.com, a business unit of MicroStrategy Incorporated, from 1999 to 2001. Mr. Hutz holds a B.A. and M.S. in Applied Math and Economics from Harvard University.

Jean-Paul Martin, one of our founders, has served as our Chief Technology Officer since March 2000. Prior to joining us, Mr. Martin served as a Software Architect with MicroStrategy Incorporated. Mr. Martin has also served as Chief Technology Officer of Media Cybernetics Inc., which provided image processing and analysis software used in medical, industrial, forensic and remote sensing applications. Mr. Martin holds a B.Sc/M.Sc in Electrical Engineering and Robotics from the Universite Paul Sabatier (Toulouse III, France).

Daniel Ramos has served as our Senior Vice President of Corporate Development since June 2007. Prior to joining us, Mr. Ramos served as Principal Deputy General Counsel for the U.S. Air Force, Department of Defense. Prior to his service with the Air Force, Mr. Ramos was the Vice President of Legal and Business Planning at The Away Network, a business unit of Orbitz Worldwide, Inc. Before joining The Away Network, he was a senior transactional attorney with the law firm of Shaw Pittman LLP (now Pillsbury Winthrop Shaw Pittman LLP). Mr. Ramos holds an A.B. in Government from Harvard University and a J.D. from Stanford Law School.

Key Employees

Reed Grothe has served as our Senior Vice President of Business Development since April 2010. Prior to joining us, Mr. Grothe served as Senior Vice President of Sales and Marketing for the pro audio division of Harman International Industries, Incorporated from 2006 to 2010 and as the Chief Global Sales Officer of Gibson Guitar Corp. from 2004 to 2006. Prior to joining Gibson, Mr. Grothe served as Senior Vice President and General Manager as well as Vice President of Global Sales at GE Security, now under the umbrella of United Technologies Corporation. Mr. Grothe holds a B.S. in Business Administration from the Carlson School of Management at the University of Minnesota.

Jay Kenny has served as our Vice President of Marketing since October 2010. Prior to joining us, Mr. Kenny worked for Microsoft Corporation in the Windows, Bing and Corporate Marketing Groups from 2004 to 2010. Prior to that, Mr. Kenny worked for several start up technology companies including Trilogy Software, Inc, Openshelf.com, Inc. and Zygon Systems Ltd. from 1996 to 2001. Mr. Kenny holds a B.A. in Philosophy from Georgetown University and an M.B.A. from Goizueta Business School, Emory University.

Daniel Kerzner has served as our Chief Product Officer since December 2013. Prior to joining us, from April 2013 to December 2013, Mr. Kerzner served as the Chief Executive Officer of Emotive Communications Inc., a software company. From March 2010 to April 2013, Mr. Kerzner served as Senior Vice President and General Manager of Mobile at MicroStrategy Incorporated. From July 2009 to February 2010, Mr. Kerzner was the Regional Director for PJM Interconnection at EnerNOC, Inc. Prior to this position, Mr. Kerzner was Vice President of Platform and Emerging Technologies at MicroStrategy. Mr. Kerzner holds a B.A. in Computer Engineering from Dartmouth College and an M.B.A. from The Wharton School.

Donald Natale has served as our Vice President of Sales since June 2006. Prior to us, Mr. Natale served as Vice President of Dealer Sales for GE Security, now under the umbrella of United Technologies Corporation. Mr. Natale also has served as Vice President of Sales for Sequel Technologies, LLC, Territory Manager for Interactive Technologies Incorporated, and Sales Manager for Rollins Protective Services Company. Mr. Natale holds a B.A. in Criminal Justice from Edinboro University.

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Alison Slavin, one of our founders, has served as our Senior Vice President, Creation Lab since February 2014. Prior to that, from 2000 to January 2014 Ms. Slavin served as our Vice President of Product Management. Ms. Slavin holds a B.A. in Philosophy from Harvard University.

Non-Employee Directors

Ralph Terkowitz has served as chairman of our board of directors since January 2009. Since 2004, Mr. Terkowitz has served as a general partner at ABS Capital Partners L.P., a venture capital firm. Prior to ABS Capital, Mr. Terkowitz was an officer of the The Washington Post Company, a diversified media and education company, and the founder and CEO of, among others, DigitalInk Co. (now Washingtonpost.Newsweek Interactive Company, LLC) and Kenexa BrassRing, Inc. From 1998 to 2004, Mr. Terkowitz served on the board of directors of MicroStrategy Incorporated, a publicly traded business intelligence software company. Mr. Terkowitz currently serves on the board of directors of several privately held companies. Mr. Terkowitz is also on the board of Cornell’s for-profit online education business, e-Cornell. Mr. Terkowitz serves on the not-for-profit Board of Governors of the Johns Hopkins Packard Center and Johns Hopkins Brain Science Institute. Mr. Terkowitz holds an A.B. in Chemistry from Cornell University and an M.S. in Chemical Physics from the University of California, Berkeley. Our board of directors believes that Mr. Terkowitz’s investment and operations experience and his service on the board of directors of public and private companies qualifies him to serve on our board of directors.

Donald Clarke has served as a member of our board of directors since May 2014. Mr. Clarke currently serves as the Chief Financial Officer for Plex Systems, Inc., a privately held cloud technology company. Prior to joining Plex, from March 2008 to March 2013, Mr. Clarke served as the Chief Financial Officer for Eloqua, Inc., a publicly-held marketing automation company. Prior to working at Eloqua, Mr. Clarke was Chief Financial Officer at both Cloakware, Inc., a privately-held security solutions company, from August 2006 to February 2008 and at Visual Networks, Inc., a publicly-held application and network management solutions company, from July 2004 to March 2006. Mr. Clarke is a member of the American Institute of Certified Public Accountants and holds a B.A. in Accounting from Virginia Polytechnic Institute and State University. Our board of directors believes that Mr. Clarke’s experience in operations, strategy, accounting and financial management at both publicly and privately held companies qualifies him to serve on our board of directors.

Timothy McAdam has served as a member of our board of directors since July 2012. Mr. McAdam is a General Partner of Technology Crossover Ventures, L.P. and has been in the venture capital industry since 1991. Mr. McAdam holds a B.A. in Classics from Dartmouth College and an M.B.A. from the Stanford Graduate School of Business. Our board of directors believes Mr. McAdam’s experience in building technology companies and his expertise as an investor in such companies qualifies him to serve on our board of directors.

Hugh Panero has served as a member of our board of directors since August 2010. From February 2012 to February 2013, Mr. Panero served as the Chief Executive Officer of Popdust, Inc., a digital music-oriented platform. From 2008 to 2011, Mr. Panero was a Venture Partner with New Enterprise Associates, Inc. (NEA) where he focused on consumer technology opportunities. Mr. Panero was the co-founder of XM Satellite Radio Inc. and served as its Chief Executive Officer from 1998 to 2007. Mr. Panero holds a B.A. in Government and Sociology from Clark University and an M.B.A. from Baruch College. Our board of directors believes that Mr. Panero’s experience with entrepreneurial companies and executive management of technology companies qualifies him to serve on our board of directors.

Mayo Shattuck has served as a member of our board of directors since May 2014. Mr. Shattuck is currently the Chairman of the Board of Exelon Corporation and previously he served as the Executive Chairman of Exelon from March 2012 to February 2013. From 2001 until its acquisition by Exelon,

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Mr. Shattuck served as the President and Chief Executive Officer of Constellation Energy Group, Inc. Mr. Shattuck was previously at Deutsche Bank AG, where he served as Chairman of the Board of Deutsche Bank Alex. Brown and, during his tenure, served as Global Head of Investment Banking and Global Head of Private Banking. From 1997 to 1999, he served as Vice Chairman of Bankers Trust Corporation, which merged with Deutsche Bank in June 1999. From 1991 until 1997, Mr. Shattuck was President and Chief Operating Officer and a Director of Alex. Brown Inc., which merged with Bankers Trust in September 1997. Mr. Shattuck currently serves on the board of directors of Gap Inc. and is chairman of its audit and finance committee. Mr. Shattuck also serves as a director for Capital One Financial Corporation, where he is chairman of its compensation committee. Mr. Shattuck holds a B.A. in Economics from Williams College and an M.B.A. from Stanford University. Our board of directors believes that Mr. Shattuck’s broad experience in operations and strategy at both publicly and privately held companies qualifies him to serve on our board of directors.

Family Relationships

There are no family relationships among any of our executive officers or directors.

Board Composition

Our board of directors currently consists of six members. Each director is currently elected to the board of directors for a one-year term, to serve until the election and qualification of a successor director at our annual meeting of stockholders, or until the director’s earlier removal, resignation or death.

All of our directors currently serve on the board of directors pursuant to the voting provisions of a stockholders’ agreement between us and several of our stockholders. This agreement will terminate upon the completion of this offering, after which there will be no further contractual obligations regarding the election of our directors. See the section of this prospectus titled “Related Party Transactions” for a description of this agreement.

In accordance with our amended and restated certificate of incorporation, which will become effective immediately prior to completion of this offering, our board of directors will be divided into three classes with staggered three-year terms. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following election. Our directors will be divided among the three classes as follows:

• Class I, which will consist of                  and                 , and whose term will expire at our first annual meeting of stockholders to be held after the completion of this offering;

• Class II, which will consist of                  and                 , and whose term will expire at our second annual meeting of stockholders to be held after the completion of this offering; and

• Class III, which will consist of                  and                 , and whose term will expire at our third annual meeting of stockholders to be held after the completion of this offering.

Our amended and restated bylaws, which will become effective upon completion of this offering, will provide that the authorized number of directors may be changed only by resolution approved by a majority of our board of directors. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors.

The division of our board of directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control.

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Director Independence

Our board of directors has undertaken a review of the independence of the directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each director concerning such director’s background, employment and affiliations, including family relationships, our board of directors determined that Messrs. Terkowitz, Clarke, McAdam, Panero and Shattuck, representing five of our six directors, are “independent directors” as defined under applicable stock exchange rules and the independence requirements contemplated by Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act. In making these determinations, our board of directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances that our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director and the transactions involving them described in the section of this prospectus titled “Certain Relationships and Related Party Transactions.”

Board Committees

Our board of directors has established an audit committee and a compensation committee and intends to form a nominating and corporate governance committee in connection with this offering, each of which has the composition and responsibilities described below. From time to time, the board may establish other committees to facilitate the management of our business.

Audit Committee

Our audit committee consists of three directors, Messrs. Clarke, Panero and Terkowitz. The composition of our audit committee meets the requirements for independence under current listing standards of the NASDAQ Stock Market and SEC rules and regulations. Each member of our audit committee meets the financial literacy requirements of the listing standards of the NASDAQ Stock Market. Mr. Clarke is the chairman of the audit committee and our board of directors has determined that Mr. Clarke is an audit committee “financial expert” as defined by Item 407(d) of Regulation S-K under the Securities Act. The principal duties and responsibilities of our audit committee include, among other things:

• selecting a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;

• helping to ensure the independence and performance of the independent registered public accounting firm;

• discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results;

• developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;

• reviewing our policies on risk assessment and risk management;

• reviewing related party transactions;

• obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes our internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and

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• approving (or, as permitted, pre-approving) all audit and all permissible non-audit services, other than de minimis non-audit services, to be performed by the independent registered public accounting firm.

Our audit committee will operate under a written charter, to be effective immediately prior to the completion of this offering that satisfies the applicable rules of the SEC and the listing standards of the NASDAQ Stock Market.

Compensation Committee

Our compensation committee consists of two directors, Messrs. Terkowitz and McAdam, each of whom is a non-employee member of our board of directors as defined in Rule 16b-3 under the Exchange Act and an outside director as that term is defined in Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code. Mr. Terkowitz is the chairman of the compensation committee. The composition of our compensation committee meets the requirements for independence under current listing standards of the NASDAQ Stock Market and SEC rules and regulations. The principal duties and responsibilities of our compensation committee include, among other things:

• reviewing and approving, or recommending that our board of directors approve, the compensation of our executive officers;

• reviewing and recommending to our board of directors the compensation of our directors;

• reviewing and approving, or recommending that our board of directors approve, the terms of compensatory arrangements with our executive officers;

• administering our stock and equity incentive plans;

• reviewing and approving, or recommending that our board of directors approve, incentive compensation and equity plans; and

• reviewing and establishing general policies relating to compensation and benefits of our employees and reviewing our overall compensation philosophy.

Our compensation committee will operate under a written charter, to be effective immediately prior to the completion of this offering, that satisfies the applicable rules of the SEC and the listing standards of the NASDAQ Stock Market.

Nominating and Corporate Governance Committee

The nominating and corporate governance committee, which will be established prior to the completion of this offering, will consist of two directors, Messrs. McAdam and Shattuck. Mr. McAdam is the chairman of the nominating and corporate governance committee. The composition of our nominating and governance committee meets the requirements for independence under current listing standards of the NASDAQ Stock Market and SEC rules and regulations. The nominating and corporate governance committee’s responsibilities include, among other things:

• identifying, evaluating and selecting, or recommending that our board of directors approve, nominees for election to our board of directors and its committees;

• evaluating the performance of our board of directors and of individual directors;

• considering and making recommendations to our board of directors regarding the composition of our board of directors and its committees;

• reviewing developments in corporate governance practices;

• evaluating the adequacy of our corporate governance practices and reporting;

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• developing and making recommendations to our board of directors regarding corporate governance guidelines and matters; and

• overseeing an annual evaluation of the board’s performance.

Our nominating and governance committee will operate under a written charter, to be effective immediately prior to the completion of this offering, that satisfies the applicable rules of the SEC and the listing standards of the NASDAQ Stock Market.

Code of Business Conduct and Ethics

In connection with this offering, we intend to adopt a Code of Business Conduct and Ethics, or the Code of Conduct, applicable to all of our employees, executive officers and directors. Following the completion of this offering, the Code of Conduct will be available on our website at www.alarm.com. The nominating and corporate governance committee of our board of directors will be responsible for overseeing the Code of Conduct and must approve any waivers of the Code of Conduct for employees, executive officers and directors. We expect that any amendments to the Code of Conduct, or any waivers of its requirements, will be disclosed on our website.

Compensation Committee Interlocks and Insider Participation

None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board of directors or compensation committee. None of the members of our compensation committee is an officer or employee of our company, nor have they ever been an officer or employee of our company.

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EXECUTIVE AND DIRECTOR COMPENSATION

2013 Summary Compensation Table

The following table sets forth information regarding compensation earned during the year ended December 31, 2013 by our named executive officers, which include our principal executive officer and the next four most highly compensated executive officers in 2013.

Name and Principal Position	Salary ($)		Bonus ($)		Option Awards ($)(1)		All Other   Compensation   ($)(2)		Total ($)
Stephen Trundle(3)		210,000		237,500		1,688,575		3,000		2,139,075
President and Chief Executive Officer
Jennifer Moyer		225,000		25,000		178,337		3,000		431,337
Chief Financial Officer
Jeffrey Bedell(4)		212,958		182,311		650,899		—		1,046,168
Chief Strategy and Innovation Officer
David Hutz		285,313		35,000		156,045		3,000		479,358
Chief Systems Architect
Jean-Paul Martin		250,000		25,000		133,752		3,000		411,752
Chief Technology Officer

(1) This column reflects the full grant date fair value for options granted during the year as measured pursuant to ASC Topic 718 as stock-based compensation in our consolidated financial statements. Unlike the calculations contained in our financial statements, this calculation does not give effect to any estimate of forfeitures related to service-based vesting, but assumes that the named executive officer will perform the requisite service for the award to vest in full. The assumptions we used in valuing options are described in Note 17 to our consolidated financial statements included in this prospectus.

(2) Represents match of contributions to our 401(k) savings plan, which we provide to all eligible employees.

(3) Mr. Trundle is also a member of our board of directors but does not receive any additional compensation in his capacity as a director.

(4) Mr. Bedell joined the Company in April 2013 and his cash compensation reflects a partial year of service.

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Outstanding Equity Awards as of December 31, 2013

The following table sets forth certain information about outstanding equity awards granted to our named executive officers that remain outstanding as of December 31, 2013.

	Option Awards(1)											Stock Awards
Name	Grant Date		Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable			Option Exercise Price(2) ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($)
Stephen Trundle		12/30/2013		380,000		—	(3)		4.00		12/29/2023		—		—
		7/11/2012		21,871		55,322	(4)		3.89		7/10/2022		—		—
		6/30/2009		38,609		77,176	(4)		0.41		6/29/2019		—		—
Jennifer Moyer		12/23/2013		40,000		—	(5)		4.00		12/22/2023		—		—
		7/11/2012		6,698		16,945	(4)		3.89		7/10/2022		—		—
		1/12/2010		7,914		7,962	(4)		0.41		1/14/2020		—		—
		6/30/2009		38,228		19,111	(4)		0.41		6/29/2019		—		—
Jeffrey Bedell		5/22/2013		—		270,000	(6)		2.95		5/21/2023		—		—
		—		—		—			—		—		238,500		(7)
David Hutz		12/23/2013		35,000		—	(8)		4.00		12/22/2023		—		—
		7/11/2012		6,571		16,622	(4)		3.89		7/10/2022		—		—
		9/26/2011		8,100		9,900	(4)		1.20		9/25/2021		—		—
		1/15/2010		10,725		5,574	(4)		0.41		1/14/2020		—		—
		6/30/2009		65,853		15,804	(4)		0.41		6/29/2019		—		—
Jean-Paul Martin		12/23/2013		30,000		—	(9)		4.00		12/22/2023		—		—
		7/11/2012		33,532		84,818	(4)		3.89		7/10/2022		—		—
		6/30/2009		392,588		77,176	(4)		0.41		6/29/2019		—		—

(1) All of the option awards listed in the table above were granted under our 2009 Plan, the terms of which are described below under “— Equity Incentive Plans.” We have a right to repurchase at the fair market value on the date of repurchase all shares of common stock acquired upon the exercise of a stock option, regardless of vesting, within 90 days of termination of the recipient’s continuous service with us.

(2) All of the option awards listed in the table above were granted with a per share exercise price equal to the fair market value of one share of our common stock on the date of grant, as determined in good faith by our board of directors with the assistance of a third-party valuation expert.

(3) The option is fully exercisable from the date of grant and vests with respect to 20% of the shares on the one year anniversary of the grant and with respect to 1/48th of the remaining shares on the first day of each month thereafter over the following four years, subject to the recipient’s continuous service with us through the vesting date. In the event of certain triggering events, including a change of control transaction or public offering of our common stock pursuant to a registration statement under the Securities Act, the option shall accelerate and vest in full fifteen days prior to such triggering event. Any unvested shares acquired upon an “early exercise” are subject to our right to repurchase that lapses according to the vesting schedule of the option. As of December 31, 2013, 380,000 shares were unvested. On March 11, 2014, Mr. Trundle purchased 60,000 unvested shares.

(4) The option vests with respect to 20% of the shares on the one year anniversary of the grant and with respect to 1/48th of the remaining shares on the first day of each month thereafter over the following four years, subject to the recipient’s continuous service with us through the vesting date.

(5) The option is fully exercisable from the date of grant and vests with respect to 20% of the shares on the one year anniversary of the grant and with respect to 1/48^th of the remaining shares on the first day of each month thereafter over the following four years, subject to the recipient’s continuous service with us through the vesting date. Any unvested shares acquired upon an “early exercise” are subject to our right to repurchase that lapses according to the vesting schedule of the option. As of December 31, 2013, 40,000 shares were unvested. On February 26, 2014, Ms. Moyer purchased 6,000 unvested shares.

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(6) The option vests with respect to 20% of the shares on the one year anniversary of the grant and with respect to 1/48th of the remaining shares on the first day of each month thereafter over the following four years, subject to the recipient’s continuous service with us through the vesting date. In January 2014, the board of directors amended this award such that it became immediately exercisable. Any unvested shares acquired upon an “early exercise” are subject to our right to repurchase that lapses according to the vesting schedule of the option. On March 10, 2014, Mr. Bedell purchased 180,000 unvested shares.

(7) The market price of our common stock is based on an assumed initial public offering price of $                 per share, the midpoint of the price range set forth on the cover page of this prospectus.

(8) The option is fully exercisable from the date of grant and vests with respect to 20% of the shares on the one year anniversary of the grant and with respect to 1/48th of the remaining shares on the first day of each month thereafter over the following four years, subject to the recipient’s continuous service with us through the vesting date. Any unvested shares acquired upon an “early exercise” are subject to our right to repurchase that lapses according to the vesting schedule of the option. As of December 31, 2013, 35,000 shares were unvested. On February 28, 2014, Mr. Hutz purchased 8,748 unvested shares.

(9) The option is fully exercisable from the date of grant and vests with respect to 20% of the shares on the one year anniversary of the grant and with respect to 1/48th of the remaining shares on the first day of each month thereafter over the following four years, subject to the recipient’s continuous service with us through the vesting date. Any unvested shares acquired upon an “early exercise” are subject to our right to repurchase that lapses according to the vesting schedule of the option. As of December 31, 2013, 30,000 shares were unvested.

Employment Arrangements

The initial terms and conditions of employment for each of our named executive officers are set forth in employee offer letters. Each of our named executive officers is an at will employee. The following table sets forth the current base salaries and fiscal year 2014 bonus target of our named executive officers:

Named Executive Officer	Fiscal Year 2014 Salary ($)		Fiscal Year 2014 Bonus Target ($)
Stephen Trundle		210,000		250,000
Jennifer Moyer		225,000		25,000
Jeffrey Bedell		285,000		250,000
David Hutz		285,000		35,000
Jean-Paul Martin		265,000		25,000

In addition, Stephen Trundle received a stock option for 380,000 shares of our common stock under our Amended and Restated 2009 Stock Incentive Plan, or 2009 Plan, that provides for 100% acceleration of vesting and lapse of our repurchase right with respect to shares acquired by early exercising such option upon a triggering event which is the first to occur of the following (1) a change of control as defined in the 2009 Plan, (2) a transaction that results in any person other than existing stockholders owning more than 25% of the voting power of the company, (3) a public offering of our common stock pursuant to an effective registration statement under the Securities Act or (4) the date on which the directors of the company as of January 1, 2014 no longer constitute a majority of the board of directors. Under the 2009 Plan, a change of control is defined as (a) the liquidation, dissolution or winding up of the company, whether voluntary or involuntary, (b) a merger or consolidation of the company with or into another entity in which the company is not the surviving entity, (c) a sale of all or substantially all of the assets of the company to another person or entity, or (d) any transaction which results in any person or entity other than existing stockholders owning more than 50% of the combined voting power of all classes of stock of the company. This option, and any unvested shares acquired upon early exercise of this option, will accelerate and vest in full 15 days prior to the scheduled consummation of this offering.

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In May 2013, Mr. Bedell purchased 238,500 shares of our common stock at a purchase price of approximately $2.95 per share. These shares are subject to our right of repurchase at the original purchase price in the event Mr. Bedell is terminated prior to April 2, 2017 for any reason other than death or disability. Our repurchase right with respect to the shares expires automatically upon a change of control or the initial public offering of our common stock pursuant to an effective registration statement under the Securities Act. Pursuant to the terms of the repurchase agreement, a change of control includes (i) the acquisition by any person of more than 50% of our then outstanding voting securities, (ii) a change in the composition of our board of directors within any twelve month period resulting in the persons who were directors immediately before the beginning of such period ceasing to constitute at least a majority of the board of directors, (iii) approval by our stockholders of a reorganization, merger or consolidation resulting in the stockholders immediately prior to such transaction ceasing to own at least 50% of our voting securities, (iv) the sale, transfer or assignment of all or substantially all of our assets to a third-party, (v) such time when Steven Trundle is no longer a member of our board of directors and is no longer an employee of ours, or (vi) the acquisition by any person, other than a current stockholder of ours, of more voting securities than held at such time by any other stockholder.

Our named executive officers are not entitled to any severance benefits upon a termination of employment.

Equity Incentive Plans

2014 Equity Incentive Plan

We expect that our board of directors will adopt and our stockholders will approve prior to the completion of this offering our 2014 Equity Incentive Plan, or 2014 Plan. We do not expect to utilize our 2014 Plan until after the completion of this offering, at which point no further grants will be made under our 2009 Plan, as described below under “Amended and Restated 2009 Stock Incentive Plan.” No awards have been granted and no shares of our common stock have been issued under our 2014 Plan.

Stock Awards.    The 2014 Plan will provide for the grant of incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, or the Code, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, and other forms of equity compensation (collectively, stock awards). Additionally, the 2014 Plan provides for the grant of performance cash awards. Incentive stock options may be granted only to employees. All other awards may be granted to employees, including officers, and to non-employee directors and consultants.

Share Reserve.    Initially, the aggregate number of shares of our common stock that may be issued pursuant to stock awards under the 2014 Plan after the 2014 Plan becomes effective is the sum of (1)                 shares, (2) the number of shares reserved for issuance under our 2009 Plan at the time our 2014 Plan becomes effective, and (3) any shares subject to stock options or other stock awards granted under our 2009 Plan that would have otherwise returned to our 2009 Plan (such as upon the expiration or termination of a stock award prior to vesting). Additionally, the number of shares of our common stock reserved for issuance under our 2014 Plan will automatically increase on January 1 of each year, beginning on January 1, 2015 (assuming the 2014 Plan becomes effective before such date) and continuing through and including January 1, 2023, by         % of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our board of directors. The maximum number of shares that may be issued upon the exercise of incentive stock options under our 2014 Plan is                  shares.

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No person may be granted stock awards covering more than                  shares of our common stock under our 2014 Plan during any calendar year pursuant to stock options, stock appreciation rights and other stock awards whose value is determined by reference to an increase over an exercise or strike price of at least 100% of the fair market value on the date the stock award is granted. Additionally, no person may be granted in a calendar year a performance stock award covering more than                 shares or a performance cash award having a maximum value in excess of $            . Such limitations are designed to help assure that any deductions to which we would otherwise be entitled with respect to such awards will not be subject to the $1,000,000 limitation on the income tax deductibility of compensation paid to any covered executive officer imposed by Section 162(m) of the Code.

If a stock award granted under the 2014 Plan expires or otherwise terminates without being exercised in full, or is settled in cash, the shares of our common stock not acquired pursuant to the stock award again will become available for subsequent issuance under the 2014 Plan. In addition, the following types of shares under the 2014 Plan may become available for the grant of new stock awards under the 2014 Plan: (1) shares that are forfeited to or repurchased by us prior to becoming fully vested; (2) shares withheld to satisfy income or employment withholding taxes; or (3) shares used to pay the exercise or purchase price of a stock award. Shares issued under the 2014 Plan may be previously unissued shares or reacquired shares bought by us on the open market. As of the date hereof, no awards have been granted and no shares of our common stock have been issued under the 2014 Plan.

Administration.    Our board of directors, or a duly authorized committee thereof, has the authority to administer the 2014 Plan. Our board of directors may also delegate to one or more of our officers the authority to (1) designate employees (other than other officers) to be recipients of certain stock awards, and (2) determine the number of shares of common stock to be subject to such stock awards. Subject to the terms of the 2014 Plan, our board of directors or the authorized committee, referred to herein as the plan administrator, determines recipients, dates of grant, the numbers and types of stock awards to be granted and the terms and conditions of the stock awards, including the period of their exercisability and vesting schedule applicable to a stock award. Subject to the limitations set forth below, the plan administrator will also determine the exercise price, strike price or purchase price of awards granted and the types of consideration to be paid for the award.

The plan administrator has the authority to modify outstanding awards under our 2014 Plan. Subject to the terms of our 2014 Plan, the plan administrator has the authority to reduce the exercise, purchase or strike price of any outstanding stock award, cancel any outstanding stock award in exchange for new stock awards, cash or other consideration, or take any other action that is treated as a repricing under generally accepted accounting principles, with the consent of any adversely affected participant.

Stock Options.    Incentive and nonstatutory stock options are granted pursuant to stock option agreements adopted by the plan administrator. The plan administrator determines the exercise price for a stock option, within the terms and conditions of the 2014 Plan, provided that the exercise price of a stock option generally cannot be less than 100% of the fair market value of our common stock on the date of grant. Options granted under the 2014 Plan vest at the rate specified by the plan administrator.

The plan administrator determines the term of stock options granted under the 2014 Plan, up to a maximum of 10 years. Unless the terms of an option holder’s stock option agreement provide otherwise, if an option holder’s service relationship with us, or any of our affiliates, ceases for any reason other than disability, death or cause, the option holder may generally exercise any vested options for a period of three months following the cessation of service. The option term may be extended in the event that exercise of the option following such a termination of service is prohibited by applicable securities laws or our insider trading policy. If an option holder’s service relationship with us

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or any of our affiliates ceases due to disability or death, or an optionholder dies within a certain period following cessation of service, the optionholder or a beneficiary may generally exercise any vested options for a period of 12 months in the event of disability and 18 months in the event of death. In the event of a termination for cause, options generally terminate immediately. In no event may an option be exercised beyond the expiration of its term.

Acceptable consideration for the purchase of common stock issued upon the exercise of a stock option will be determined by the plan administrator and may include (1) cash, check, bank draft or money order, (2) a broker- assisted cashless exercise, (3) the tender of shares of our common stock previously owned by the optionholder, (4) a net exercise of the option if it is an nonqualified stock option, and (5) other legal consideration approved by the plan administrator.

Unless the plan administrator provides otherwise, options generally are not transferable except by will, the laws of descent and distribution, or pursuant to a domestic relations order. An optionholder may designate a beneficiary, however, who may exercise the option following the option holder’s death.

Tax Limitations on Incentive Stock Options.    The aggregate fair market value, determined at the time of grant, of our common stock with respect to incentive stock options that are exercisable for the first time by an optionholder during any calendar year under all of our stock plans may not exceed $100,000. Options or portions thereof that exceed such limit will generally be treated as nonqualified stock options. No incentive stock option may be granted to any person who, at the time of the grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power or that of any of our affiliates unless (1) the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant, and (2) the term of the incentive stock option does not exceed five years from the date of grant.

Restricted Stock Awards.    Restricted stock awards are granted pursuant to restricted stock award agreements adopted by the plan administrator. Restricted stock awards may be granted in consideration for (1) cash, check, bank draft or money order, (2) services rendered to us or our affiliates, or (3) any other form of legal consideration. Common stock acquired under a restricted stock award may, but need not, be subject to a share repurchase option in our favor in accordance with a vesting schedule to be determined by the plan administrator. Rights to acquire shares under a restricted stock award may be transferred only upon such terms and conditions as set by the plan administrator. Except as otherwise provided in the applicable award agreement, restricted stock unit awards that have not vested will be forfeited upon the participant’s cessation of continuous service for any reason.

Restricted Stock Unit Awards.    Restricted stock unit awards are granted pursuant to restricted stock unit award agreements adopted by the plan administrator. Restricted stock unit awards may be granted in consideration for any form of legal consideration. A restricted stock unit award may be settled by cash, delivery of stock, a combination of cash and stock as deemed appropriate by the plan administrator, or in any other form of consideration set forth in the restricted stock unit award agreement. Additionally, dividend equivalents may be credited in respect of shares covered by a restricted stock unit award. Except as otherwise provided in the applicable award agreement, restricted stock units that have not vested will be forfeited upon the participant’s cessation of continuous service for any reason.

Stock Appreciation Rights.    Stock appreciation rights are granted pursuant to stock appreciation grant agreements adopted by the plan administrator. The plan administrator determines the strike price for a stock appreciation right, which generally cannot be less than 100% of the fair market value of our common stock on the date of grant. Upon the exercise of a stock appreciation right, we will pay the

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participant an amount equal to (1) the excess of the per share fair market value of our common stock on the date of exercise over the strike price, multiplied by (2) the number of shares of common stock with respect to which the stock appreciation right is exercised. A stock appreciation right granted under the 2014 Plan vests at the rate specified in the stock appreciation right agreement as determined by the plan administrator.

The plan administrator determines the term of stock appreciation rights granted under the 2014 Plan, up to a maximum of ten years. Unless the terms of a participant’s stock appreciation right agreement provides otherwise, if a participant’s service relationship with us or any of our affiliates ceases for any reason other than cause, disability or death, the participant may generally exercise any vested stock appreciation right for a period of three months following the cessation of service. The stock appreciation right term may be further extended in the event that exercise of the stock appreciation right following such a termination of service is prohibited by applicable securities laws. If a participant’s service relationship with us, or any of our affiliates, ceases due to disability or death, or a participant dies within a certain period following cessation of service, the participant or a beneficiary may generally exercise any vested stock appreciation right for a period of 12 months in the event of disability and 18 months in the event of death. In the event of a termination for cause, stock appreciation rights generally terminate immediately upon the occurrence of the event giving rise to the termination of the individual for cause. In no event may a stock appreciation right be exercised beyond the expiration of its term.

Performance Awards.    If certain material terms of the 2014 Plan are approved by our stockholders after we are publicly traded, the 2014 Plan permits the grant of performance-based stock and cash awards that may qualify as performance-based compensation that is not subject to the $1,000,000 limitation on the income tax deductibility of compensation paid to a covered executive officer imposed by Section 162(m) of the Code. To help assure that the compensation attributable to performance-based awards will so qualify, our compensation committee can structure such awards so that stock or cash will be issued or paid pursuant to such award only after the achievement of certain pre-established performance goals during a designated performance period.

The performance goals that may be selected include one or more of the following: (1) earnings (including earnings per share and net earnings); (2) earnings before interest, taxes and depreciation; (3) earnings before interest, taxes, depreciation and amortization; (4) total stockholder return; (5) return on equity or average stockholders’ equity; (6) return on assets, investment, or capital employed; (7) stock price; (8) margin (including gross margin); (9) income (before or after taxes); (10) operating income; (11) operating income after taxes; (12) pre-tax profit; (13) operating cash flow; (14) sales or revenue targets; (15) increases in revenue or product revenue; (16) expenses and cost reduction goals; (17) improvement in or attainment of working capital levels; (18) economic value added (or an equivalent metric); (19) market share; (20) cash flow; (21) cash flow per share; (22) share price performance; (23) debt reduction; (24) implementation or completion of projects or processes; (25) subscriber satisfaction; (26) stockholders’ equity; (27) capital expenditures; (28) debt levels; (29) operating profit or net operating profit; (30) workforce diversity; (31) growth of net income or operating income; (32) billings; and (33) to the extent that an award is not intended to comply with Section 162(m) of the Code, other measures of performance selected by our board of directors.

The performance goals may be based on a company-wide basis, with respect to one or more business units, divisions, affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise (1) in the award agreement at the time the award is granted or (2) in such other document setting forth the performance goals at the time the goals are established, we will appropriately make adjustments in the method of calculating the attainment of performance goals as follows: (a) to exclude restructuring and/or other nonrecurring charges; (b) to exclude

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exchange rate effects, as applicable, for non-U.S. dollar denominated goals; (c) to exclude the effects of changes to generally accepted accounting principles; (d) to exclude the effects of any statutory adjustments to corporate tax rates; and (e) to exclude the effects of any “extraordinary items” as determined under generally accepted accounting principles. In addition, we retain the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of the goals. The performance goals may differ from participant to participant and from award to award.

Other Stock Awards.    The plan administrator may grant other awards based in whole or in part by reference to our common stock. The plan administrator will set the number of shares under the stock award and all other terms and conditions of such awards.

Changes to Capital Structure.    In the event that there is a specified type of change in our capital structure, such as a stock split or recapitalization, appropriate adjustments will be made to (1) the class and maximum number of shares reserved for issuance under the 2014 Plan, (2) the class and maximum number of shares by which the share reserve may increase automatically each year, (3) the class and maximum number of shares that may be issued upon the exercise of incentive stock options, (4) the class and maximum number of shares subject to stock awards that can be granted in a calendar year (as established under the 2014 Plan pursuant to Section 162(m) of the Code) and (5) the class and number of shares and exercise price, strike price, or purchase price, if applicable, of all outstanding stock awards.

Corporate Transactions.    In the event of certain specified significant corporate transactions, the plan administrator has the discretion to take any of the following actions with respect to stock awards:

• arrange for the assumption, continuation or substitution of a stock award by a surviving or acquiring entity or parent company;

• arrange for the assignment of any reacquisition or repurchase rights held by us to the surviving or acquiring entity or parent company;

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

• arrange for the lapse of any reacquisition or repurchase right held by us;

• cancel or arrange for the cancellation of the stock award in exchange for such cash consideration, if any, as our board of directors may deem appropriate; or

• make a payment equal to the excess of (1) the value of the property the participant would have received upon exercise of the stock award over (2) the exercise price otherwise payable in connection with the stock award.

Our plan administrator is not obligated to treat all stock awards, even those that are of the same type, in the same manner.

Under the 2014 Plan, a corporate transaction is generally the consummation of (1) a sale or other disposition of all or substantially all of our consolidated assets, (2) a sale or other disposition of at least 90% of our outstanding securities, (3) a merger, consolidation or similar transaction following which we are not the surviving corporation, or (4) a merger, consolidation or similar transaction following which we are the surviving corporation but the shares of our common stock outstanding immediately prior to such transaction are converted or exchanged into other property by virtue of the transaction.

Change in Control.    The plan administrator may provide, in an individual award agreement or in any other written agreement between a participant and us that the stock award will be subject to additional acceleration of vesting and exercisability in the event of a change in control. Under the 2014

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Plan, a change in control is generally (1) the acquisition by a person or entity of more than 50% of our combined voting power other than by merger, consolidation or similar transaction; (2) a consummated merger, consolidation or similar transaction immediately after which our stockholders cease to own more than 50% of the combined voting power of the surviving entity; or (3) a consummated sale, lease or exclusive license or other disposition of all or substantially all of our consolidated assets.

Amendment and Termination.    Our board of directors has the authority to amend, suspend, or terminate our 2014 Plan, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. No incentive stock options may be granted after the tenth anniversary of the date our board of directors adopted our 2014 Plan.

Amended and Restated 2009 Stock Incentive Plan

Our board of directors approved our Amended and Restated 2009 Stock Incentive Plan, or 2009 Plan, which became effective in July 2009. As of May 31, 2014, 3,490,205 shares of our common stock have been issued pursuant to the exercise of options granted under our 2009 Plan, options to purchase 3,363,357 shares of our common stock were outstanding at a weighted-average exercise price of $2.41 per share, and 349,462 shares remained available for future grant under our 2009 Plan. Following this offering, no further grants will be made under our 2009 Plan and all outstanding stock awards granted under our 2009 Plan will continue to be governed by the terms of our 2009 Plan.

Stock Awards.  Our 2009 Plan provides for the grant of incentive stock options, nonqualified stock options and restricted stock, collectively stock awards, to our employees, including officers, non-employee directors and consultants.

Our 2009 Plan provides for the grant of incentive stock options to our employees, and for the grant of nonstatutory stock options and restricted stock awards to our employees, officers, directors or consultants or advisors currently providing services to us. Incentive stock options may only be granted to employees. All other stock awards may be granted to employees, officers, directors or consultants or advisors currently providing services to us.

Share Reserve.  The aggregate number of shares of our common stock reserved for issuance pursuant to stock awards under the 2009 Plan is 7,203,024 shares, subject to adjustment as provided in the 2009 Plan.

Administration.  Our board of directors, or a duly authorized committee thereof, each referred to herein as the plan administrator, has the authority to administer the 2009 Plan. Subject to the terms of the 2009 Plan, the plan administrator determines recipients, dates of grant, the numbers and types of stock awards to be granted and the terms and conditions of the stock awards, including the period of their exercisability and vesting schedule applicable to a stock award. Subject to the limitations set forth below, the plan administrator will also determine the exercise price, strike price or purchase price of awards granted and the types of consideration to be paid for the award.

The plan administrator has the authority to modify outstanding awards under our 2009 Plan. Subject to the terms of the 2009 Plan, our board of directors has full authority and discretion to interpret the plan and prescribe and rescind rules and regulations related to it.

Stock Options.  Incentive and nonqualified stock options are granted pursuant to stock option agreements adopted by the plan administrator. The plan administrator determines the exercise price for a stock option, within the terms and conditions of the 2009 Plan, provided that the exercise price of an option generally cannot be less than 100% of the fair market value of our common stock on the date of grant. Options granted under the 2009 Plan vest at the rate specified by the plan administrator.

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The plan administrator determines the term of stock options granted under the 2009 Plan, up to a maximum of 10 years. Unless the terms of an option holder’s stock option agreement provide otherwise, if an option holder’s service relationship with us, or any of our affiliates, ceases for any reason other than disability or death, the option holder may generally exercise any vested options for a period of 30 days following the cessation of service. If an option holder’s service relationship with us or any of our affiliates ceases due to disability or death, the option holder or a beneficiary may generally exercise any vested options for a period of 12 months. In no event may an option be exercised beyond the expiration of its term.

Acceptable consideration for the purchase of common stock issued upon the exercise of a stock option will be determined by the plan administrator and may include cash, cash equivalents or such other form as provided in the stock option agreement.

Unless the plan administrator provides otherwise, options generally are not transferable or assignable except by will or the laws of descent and distribution. Nonqualified stock options may be transferred to certain family members and trusts as provided for by the stock option agreement.

Tax Limitations on Incentive Stock Options.  The aggregate fair market value, determined at the time of grant, of our common stock with respect to incentive stock options that are exercisable for the first time by an optionholder during any calendar year under all of our stock plans may not exceed $100,000. Options or portions thereof that exceed such limit will generally be treated as nonqualified stock options. No incentive stock option may be granted to any person who, at the time of the grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power or that of any of our affiliates unless (1) the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant, and (2) the term of the incentive stock option does not exceed five years from the date of grant.

Changes to Capital Structure.  In the event that there is a specified type of change in our capital structure, such as a stock split or recapitalization, appropriate adjustments will be made to (1) the number of shares available for future grants under the 2009 Plan, and (2) the number of shares covered by, and the exercise price of, each outstanding option.

Corporate Transactions.  In the event of a reorganization, merger or consolidation of the company that does not result in a change of control, the stock awards shall continue and shall pertain to that number of shares of common stock that a holder of the number of shares of common stock subject to the award would have been entitled to immediately following such reorganization, merger or consolidation, with a proportionate adjustment in the exercise price. In the event of a merger, consolidation, or sale of assets or stock of the company that results in a change of control, our board of directors may take either of the following two actions with respect to outstanding stock awards: (1) fifteen days prior to the consummation of the change in control, accelerate the date of exercise of all outstanding options or (2) cancel any outstanding awards and pay to the holder an amount in cash or securities equal to the excess of the price paid to the holders of shares of common stock over the exercise price of the award.

Change in Control.  The plan administrator may provide that the stock award will be subject to additional acceleration of vesting and exercisability in the event of a change in control. Under the 2009 Plan, a change of control is defined as (1) the liquidation, dissolution or winding up of the company, whether voluntary or involuntary, (2) a merger or consolidation of the company with or into another entity in which the company is not the surviving entity, (3) a sale of all or substantially all of the assets of the company to another person or entity, or (4) any transaction which results in any person or entity other than existing stockholders owning more than 50% of the combined voting power of all classes of stock of the company.

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Amendment and Termination.  The 2009 Plan will terminate in 2019. However, our board of directors has the authority to amend, suspend, or terminate our 2009 Plan. As noted above, in connection with this offering, our 2009 Plan will be terminated and no further awards will be granted thereunder. All outstanding awards under the 2009 Plan will continue to be governed by their existing terms.

401(k) Plan

We maintain a tax-qualified retirement plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees are able to defer eligible compensation subject to applicable annual Code limits. Our plan has a discretionary match and we have determined for 2014 that the company will match employee contributions at 100% up to 6% of earnings with an annual maximum employer contribution of $3,000. Employees’ pre-tax contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions. Employees are immediately and fully vested in their contributions. Employer match contributions vest over 6 years with a graded schedule of 0%, 20%, 40%, 60%, 80% and 100% per service year. The 401(k) plan is intended to be qualified under Section 401(a) of the Code with the 401(k) plan’s related trust intended to be tax exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to the 401(k) plan and earnings on those contributions are not taxable to the employees until distributed from the 401(k) plan.

Limitations on Liability and Indemnification Matters

Upon completion of this offering, our amended and restated certificate of incorporation will contain provisions that limit the liability of our current and former directors for monetary damages to the fullest extent permitted by Delaware law. Delaware law provides that directors of a corporation will not be personally liable for monetary damages for any breach of fiduciary duties as directors, except liability for:

• any breach of the director’s duty of loyalty to the corporation or its stockholders;

• any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

• unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or

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

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

Our amended and restated certificate of incorporation and our amended and restated bylaws will provide that we are required to indemnify our directors to the fullest extent permitted by Delaware law. Our amended and restated bylaws will also provide that, upon satisfaction of certain conditions, we are required to advance expenses incurred by a director in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of Delaware law. Our amended and restated bylaws will also provide our board of directors with discretion to indemnify our officers and employees when determined appropriate by the board. We have entered and expect to continue to enter into agreements to indemnify our directors, executive officers and other employees as determined by the board of directors. With certain exceptions, these agreements provide for indemnification for related expenses including, among other things, attorneys’ fees, judgments, fines and settlement amounts incurred by any of these individuals in any action or proceeding. We believe

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that these bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain customary directors’ and officers’ liability insurance.

The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions. At present, there is no pending litigation or proceeding involving any of our directors, officers or employees for which indemnification is sought and we are not aware of any threatened litigation that may result in claims for indemnification.

Rule 10b5-1 Sales Plans

Our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or executive officer when entering into the plan, without further direction from them. The director or executive officer may amend a Rule 10b5-1 plan in some circumstances and may terminate a plan at any time. Our directors and executive officers also may buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material nonpublic information subject to compliance with the terms of our insider trading policy. Prior to 180 days after the date of this offering, subject to potential extension or early termination, the sale of any shares under such plan would be subject to the lock-up agreement that the director or executive officer has entered into with the underwriters.

Non-Employee Director Compensation

Historically, we have provided a combination of annual cash and equity-based compensation to our independent directors who are not employees or affiliated with our largest venture capital investors for the time and effort necessary to serve as a member of our board of directors. We grant options to such independent directors upon joining our board of directors and from time to time thereafter, in each case subject to yearly vesting over one or three years. On November 23, 2010, our board of directors granted Hugh Panero an option for 73,494 shares of our common stock at an exercise price of $0.47 per share. On July 11, 2012, our board of directors granted Mr. Panero an option for 9,801 shares of our common stock at an exercise price of $3.89 per share. Each of the foregoing option grants vests, subject to continued service with us, as to one-third of the shares over three years, measured from the date of grant. On December 23, 2013, our board of directors granted Hugh Panero an option for 2,000 shares of our common stock at an exercise price of $4.00 per share. This option grant vests in full one year from the date of grant. In addition, Mr. Panero receives an annual fee of $25,000.

Other than the cash compensation and option grants listed above, our directors are not currently entitled to receive any compensation in connection with their service on our board of directors, except for reimbursement of direct expenses incurred in connection with attending meetings of the board or committees thereof.

We expect that our board of directors will adopt a director compensation policy for non-employee directors to be effective upon the completion of this offering.

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2013 Director Compensation Table

The following table sets forth information regarding the compensation earned for service on our board of directors during the year ended December 31, 2013 by our directors who were not also our employees. Stephen Trundle, our President and Chief Executive Officer, is also a member of our board of directors, but does not receive any additional compensation for his service as a director. Mr. Trundle’s compensation as an executive officer is set forth below under the section of this prospectus titled “Executive and Director Compensation — 2013 Summary Compensation Table.”

Name	Fees Earned or Paid in     Cash ($)		Option Awards ($)(1)(2)		Total ($)
Ralph Terkowitz		—		—		—
Donald Clarke(3)		—		—		—
Timothy McAdam		—		—		—
Hugh Panero		25,000		7,686		32,686
Mayo Shattuck(4)		—		—		—

(1) This column reflects the full grant date fair value for options granted during the year as measured pursuant to Accounting Standards Codification, or ASC, Topic 718 as stock-based compensation in our financial statements. Unlike the calculations contained in our financial statements, this calculation does not give effect to any estimate of forfeitures related to service-based vesting, but assumes that the director will perform the requisite service for the award to vest in full. The assumptions we used in valuing options are described in Note 17 to our consolidated financial statements included in this prospectus.

(2) The table below shows the aggregate number of option awards outstanding for each of our non-employee directors as of December 31, 2013:

Name	Option Awards (#)
Ralph Terkowitz		—
Donald Clarke		—
Timothy McAdam		—
Hugh Panero		60,797(a)
Mayo Shattuck		—

(a) Of the outstanding option awards, 54,263 shares are immediately exercisable and 52,263 shares are fully vested. Of the 8,534 unvested shares, 3,267 shares shall vest on July 11, 2014, 2,000 shares shall vest on December 23, 2014 and 3,267 shares shall vest on July 11, 2015.

(3) Mr. Clarke was appointed to our board of directors in May 2014.

(4) Mr. Shattuck was appointed to our board of directors in May 2014.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The following is a summary of transactions since January 1, 2011 to which we have been a participant in which the amount involved exceeded or will exceed $120,000, and in which any of our then directors, executive officers or holders of more than 5% of any class of our capital stock at the time of such transaction, or any members of their immediate family, had or will have a direct or indirect material interest, other than compensation arrangements which are described under the section of this prospectus titled “Executive and Director Compensation.”

Sales of Series B Preferred Stock

In July 2012, we sold an aggregate of 1,809,685 shares of our Series B preferred stock at a price of $75.44 per share, for an aggregate price of approximately $136.5 million. The following table summarizes purchases of shares of our Series B preferred stock by our directors, executive officers and holders of more than 5% of any class of our capital stock as of the date of such transaction:

Related Party	Series B Preferred Stock (#)		As Converted to Common Stock (#)(2)		Aggregate Purchase Price ($)
					(in thousands)
Entities affiliated with TCV(1)		1,803,057		16,227,513	$	136,022

(1) Includes 1,179,416 shares purchased by TCV VII, L.P., 612,498 shares purchased by TCV VII (A), L.P. and 11,143 shares purchased by TCV Member Fund, L.P. Timothy McAdam, a member of our board of directors, is a Class A Director of Technology Crossover Management VII, Ltd. and a limited partner of Technology Crossover Management VII, L.P. and TCV Member Fund, L.P.

(2) In June 2013, we effected a nine-for-one stock split of our common stock that resulted in a proportional adjustment to the conversion ratio of our preferred stock.

Recapitalization Transaction

In July 2012, immediately prior to the closing of the Series B preferred stock financing described above, we implemented a recapitalization whereby each of our existing stockholders exchanged all of their shares of common stock for a combination of Series B-1 preferred stock and common stock and exchanged all of their shares of Series A preferred stock for a combination of Series B-1 preferred stock and Series A preferred stock. The following table summarizes exchanges made by our directors, executive officers and holders of more than 5% of any class of our capital stock as of the date of such transaction:

	Before Exchange				After Exchange
Related Party	Common     Stock (#)		Series A         Preferred         Stock (#)		Common     Stock (#)		Series A     Preferred     Stock (#)		Series B-1     Preferred     Stock (#)
Entities affiliated with ABS Capital Partners(1)		—		3,075,750		—		1,750,176		1,325,574
Stephen Trundle(2)		385,785		305,903		219,519		174,066		150,310
Jennifer Moyer		109,638		—		62,379		—		5,250
David Hutz		85,797		1,750		48,816		996		4,862
Jean-Paul Martin		180,000		4,000		102,420		2,276		10,343
Hugh Panero		24,498		—		13,932		—		1,173
Daniel Ramos		191,097		1,500		108,738		854		9,796

(1) Includes 2,764,043 shares of Series A preferred stock exchanged by ABS Capital Partners V, L.P., 143,065 shares of Series A preferred stock exchanged by ABS Capital Partners V-A, L.P. and 168,642 shares of Series A preferred stock exchanged by ABS Capital Partners V Offshore, L.P. Ralph Terkowitz, a member of our board of directors, is a managing member of ABS Partners V L.L.C.

(2) Includes 305,903 shares of Series A preferred exchanged by Backbone Partners, LLC. Mr. Trundle has voting and dispositive power over all of the outstanding membership interests of Backbone Partners, LLC.

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Repurchases of our Common and Preferred Stock

Between July and August 2012, we repurchased an aggregate of 1,507,111 shares of our Series B-1 preferred stock for $75.44 per share and 258,174 shares of our common stock from certain of our stockholders for $8.38 per share, for an aggregate price of approximately $115.9 million. The following table summarizes repurchases from our directors, executive officers and holders of more than 5% of any class of our capital stock as of the date of such transaction:

Related Party	Common     Stock (#)		Series B-1 Preferred Stock (#)		Total as Converted to Common Stock (#)(3)		Aggregate Purchase Price ($)
							(in thousands)
Entities affiliated with ABS Capital Partners(1)		—		1,325,574		11,930,166		100,001
Stephen Trundle(2)		—		86,461		778,149		6,523
Jennifer Moyer		9,810		5,250		57,060		478
David Hutz		9,243		4,862		53,001		444
Jean-Paul Martin		121,995		10,343		215,082		1,803
Hugh Panero		—		1,173		10,557		88
Daniel Ramos		16,470		9,796		104,634		877

(1) Includes 1,191,236 shares of Series B-1 preferred stock repurchased from ABS Capital Partners V, L.P., 61,657 shares of Series B-1 preferred stock repurchased from ABS Capital Partners V-A, L.P. and 72,681 shares of Series B-1 preferred stock repurchased from ABS Capital Partners V Offshore, L.P. Ralph Terkowitz, a member of our board of directors, is a managing member of ABS Partners V L.L.C.

(2) Includes 67,988 shares of Series B-1 preferred stock repurchased from Backbone Partners, LLC. Mr. Trundle has voting and dispositive power over all of the outstanding membership interests of Backbone Partners, LLC.

(3) In June 2013, we effected a nine-for-one stock split of our common stock that resulted in a proportional adjustment to the conversion ratio of our preferred stock.

Stockholders’ Agreement

We are a party to an amended and restated stockholders’ agreement, or stockholders’ agreement, with certain holders of our preferred stock and certain holders of our common stock, including entitles affiliated with ABS Capital Partners, entities affiliated with TCV, Backbone Partners, LLC, Stephen Trundle, Jennifer Moyer, David Hutz, Jean-Paul Martin, Hugh Panero and Daniel Ramos. The stockholders’ agreement, among other things:

• grants certain of these stockholders a right of first refusal with respect to sales of our shares by us;

• provides for the voting of shares with respect to the constituency of our board of directors;

• grants us rights of first refusal with respect to proposed transfers of our securities by specified stockholders;

• grants secondary rights of refusal and right of co-sale to certain of these stockholders with respect to proposed transfers of our securities by specified stockholders; and

• grants certain of these stockholders inspection and information rights.

The provisions of the stockholders’ agreement will terminate immediately before the completion of this offering.

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Registration Rights Agreement

We are a party to an amended and restated registration rights agreement, or registration rights agreement, with certain holders of our preferred stock and certain holders of our common stock, including entitles affiliated with ABS Capital Partners, entities affiliated with TCV, Backbone Partners, LLC, David Hutz, Jean-Paul Martin and Daniel Ramos. The registration rights agreement, among other things, grants these stockholders specified registration rights with respect to shares of our common stock issued or issuable upon conversion of the shares of preferred stock held by them. For more information regarding the registration rights provided in this agreement, please refer to the section of this prospectus titled “Description of Capital Stock—Registration Rights.”

Employment Offer Letters

We have entered into offer letters with our executive officers. For more information regarding these agreements with our named executive officers, see the section of this prospectus titled “Executive and Director Compensation.”

Stock Option Grants, Stock Awards and Warrants to Directors and Executive Officers

We have granted stock options and stock awards to our certain of our directors and executive officers. For more information regarding the stock options and stock awards granted to our directors and named executive officers see the section of this prospectus titled “Executive and Director Compensation.”

In September 2010, we issued Mr. Trundle a warrant to purchase 750,015 shares of our common stock with an exercise price of $0.001 per share, which was amended in July 2012 to provide for certain cash payments if certain triggering events did not occur within a specific period of time. In January 2013, such triggering events had not yet occurred and we paid Mr. Trundle $3.1 million in connection with the termination of this warrant.

Indemnification Agreements

We plan to enter into indemnification agreements with each of our directors and our executive officers in connection with this offering. The indemnification agreements and our certificate of incorporation and bylaws require us to indemnify our directors and executive officers to the fullest extent permitted by Delaware law. For more information regarding these agreements, see “Executive and Director Compensation — Limitations on Liability and Indemnification Matters.”

Related Person Transaction Policy

Prior to this offering, we have not had a formal policy regarding approval of transactions with related parties. Prior to the completion of this offering, we expect to adopt a related person transaction policy that sets forth our procedures for the identification, review, consideration and approval or ratification of related person transactions. The policy will become effective immediately upon the execution of the underwriting agreement for this offering. For purposes of our policy only, a related person transaction is a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we and any related person are, were or will be participants in which the amount involves exceeds $120,000. Transactions involving compensation for services provided to us as an employee or director are not covered by this policy. A related person is any executive officer, director or beneficial owner of more than 5% of any class of our voting securities, including any of their immediate family members and any entity owned or controlled by such persons.

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Under the policy, if a transaction has been identified as a related person transaction, including any transaction that was not a related person transaction when originally consummated or any transaction that was not initially identified as a related person transaction prior to consummation, our management must present information regarding the related person transaction to our audit committee, or, if audit committee approval would be inappropriate, to another independent body of our board of directors, for review, consideration and approval or ratification. The presentation must include a description of, among other things, the material facts, the interests, direct and indirect, of the related persons, the benefits to us of the transaction and whether the transaction is on terms that are comparable to the terms available to or from, as the case may be, an unrelated third party or to or from employees generally. Under the policy, we will collect information that we deem reasonably necessary from each director, executive officer and, to the extent feasible, significant stockholder to enable us to identify any existing or potential related-person transactions and to effectuate the terms of the policy.

In addition, under our Code of Business Conduct and Ethics, which we intend to adopt in connection with this offering, our employees and directors have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest.

In considering related person transactions, our audit committee, or other independent body of our board of directors, will take into account the relevant available facts and circumstances including, but not limited to:

• the risks, costs and benefits to us;

• the impact on a director’s independence in the event that the related person is a director, immediate family member of a director or an entity with which a director is affiliated;

• the availability of other sources for comparable services or products; and

• the terms available to or from, as the case may be, unrelated third parties or to or from employees generally.

The policy requires that, in determining whether to approve, ratify or reject a related person transaction, our audit committee, or other independent body of our board of directors, must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, our best interests and those of our stockholders, as our audit committee, or other independent body of our board of directors, determines in the good faith exercise of its discretion.

All of the transactions described above were entered into prior to the adoption of the written policy, but all were approved by our board of directors considering similar factors to those described above.

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PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth the beneficial ownership of our common stock as of May 31, 2014, as adjusted to reflect the sale of common stock offered by us and the selling stockholders in this offering, for:

• each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our common stock;

• each of our named executive officers;

• each of our directors;

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

• each of the selling stockholders.

The percentage ownership information shown in the table prior to this offering is based upon 37,760,936 shares of common stock outstanding as of May 31, 2014, after giving effect to the conversion of all outstanding shares of preferred stock into 35,017,884 shares of our common stock. The percentage ownership information shown in the table after this offering is based upon shares outstanding, assuming the sale of                  shares of our common stock by us in the offering and no exercise of the underwriters’ over-allotment option. The percentage ownership information shown in the table after this offering if the underwriters’ over-allotment option is exercised in full is based upon                  shares outstanding, assuming the sale of                  shares of our common stock by us pursuant to the underwriters’ option.

We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, the rules include shares of common stock issuable pursuant to the exercise of stock options or warrants that are either immediately exercisable or exercisable on or before July 30, 2014, which is 60 days after May 31, 2014. These shares are deemed to be outstanding and beneficially owned by the person holding those options or warrants for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them, subject to applicable community property laws.

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Except as otherwise noted below, the address for persons listed in the table is c/o Alarm.com Holdings, Inc., 8150 Leesburg Pike, Vienna, Virginia 22182.

	Shares Beneficially Owned Prior to this Offering					Number of Shares Offered	Shares Beneficially Owned After this Offering			Number of Shares to be Sold if Underwriters’ Option is Exercised in Full	Shares Beneficially Owned After this Offering if Underwriters’ Option is Exercised in Full
Name of Beneficial Owner	Shares		Percentage				Shares	Percentage			Shares	Percentage
5% or greater stockholders:
Entities affiliated with Technology Crossover Ventures(1)		16,227,513		43.0	%				%				%
Entities affiliated with ABS Capital Partners(2)		15,751,584		41.7
Backbone Partners, LLC(3)		2,141,235		5.7
Named Executive Officers and Directors:
Stephen Trundle(4)		3,157,605		8.3
Jennifer Moyer(5)		216,566		*
Jeffrey Bedell(6)		508,500		1.3
Donald Clarke(7)		30,000		*
David Hutz(8)		198,397		*
Jean-Paul Martin(9)		670,008		1.7
Timothy McAdam(10)		16,227,513		43.0
Hugh Panero(11)		71,462		*
Mayo Shattuck(12)		30,000		*
Ralph Terkowitz(13)		15,751,584		41.7
All current executive officers and directors as a group (11 persons)(14)		37,182,984		95.1	%				%				%
Other Selling Stockholders:(15)

* Represents beneficial ownership of less than 1%.

(1) Includes (a) 10,614,744 shares of common stock held by TCV VII, L.P., (b) 5,512,482 shares of common stock held by TCV VII (A), L.P., and (c) 100,287 shares of common stock held by TCV Member Fund, L.P. Technology Crossover Management VII, Ltd., or TCM VII, as a general partner of TCV Member Fund, L.P. and the general partner of Technology Crossover Management VII, L.P., which is the direct general partner of each of TCV VII, L.P. and TCV VII (A), L.P., may be deemed to have the sole voting and dispositive power over the shares held by TCV VII, L.P., TCV VII (A), L.P. and TCV Member Fund, L.P. Jay Hoag, Richard Kimball, Jon Reynolds, Jr., John Drew, Robert Trudeau, Christopher Marshall, Timothy McAdam, John Rosenberg, and David Yuan are the Class A Directors of TCM VII and limited partners of Technology Crossover Management VII, L.P. and TCV Member Fund, L.P. and share voting and dispositive power over the shares held by TCV VII, L.P., TCV VII (A), L.P. and TCV Member Fund, L.P. The address of the entities affiliated with Technology Crossover Ventures, or TCV, is 528 Ramona Street, Palo Alto, California 94301.

(2) Includes (a) 14,155,263 shares of common stock held by ABS Capital Partners V, L.P., (b) 732,672 shares of common stock held by ABS Capital Partners V-A, L.P., and (c) 863,649 shares of common stock held by ABS Capital Partners V Offshore, L.P. ABS Partners V L.L.C., or ABS Partners, is the general partner of ABS Partners V, L.P., or ABS Partners V, which is the general partner of ABS Capital Partners V, L.P., ABS Capital Partners V-A, L.P. and ABS Capital Partners V Offshore, L.P., collectively referred to as the ABS Funds. Donald Hebb, Jr., Phillip Clough, John Stobo, Jr., Mark Anderson, Stephanie Carter, Frederic Emry III, Ashoke Goswami, James Stevenson, Ralph Terkowitz, Timothy Weglicki and Laura Witt, or the ABS Managers, are the managing members of ABS Partners. The ABS Managers, as the managing members of ABS Partners V, share voting and dispositive power over the shares held by the ABS Funds. None of the ABS Managers acting alone have voting or dispositive power over the shares held by the ABS Funds. The address of the entities affiliated with ABS Capital Partners is 400 East Pratt Street, Suite 910, Baltimore, Maryland 21202.

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(3) Stephen Trundle has voting and dispositive power over all of the outstanding membership interests of Backbone Partners, LLC and has sole voting and dispositive power over the shares held by Backbone Partners, LLC.

(4) Includes (a) 389,469 shares of common stock issuable upon the exercise of options exercisable within 60 days of May 31, 2014 and (b) the shares described in footnote (3) above.

(5) Includes 112,997 shares of common stock issuable upon the exercise of options exercisable within 60 days of May 31, 2014.

(6) Includes 90,000 shares of common stock issuable upon the exercise of options exercisable within 60 days of May 31, 2014.

(7) Includes 30,000 shares of common stock issuable upon the exercise of options exercisable within 60 days of May 31, 2014.

(8) Includes 42,373 shares of common stock issuable upon the exercise of options exercisable within 60 days of May 31, 2014.

(9) Includes 547,104 shares of common stock issuable upon the exercise of options exercisable within 60 days of May 31, 2014.

(10) Consists of shares of common stock held by the Technology Crossover Ventures entities describe in footnote (1) above.

(11) Includes 3,267 shares of common stock issuable upon the exercise of options exercisable within 60 days of May 31, 2014

(12) Includes 30,000 shares of common stock issuable upon the exercise of options exercisable within 60 days of May 31, 2014.

(13) Consists of shares of common stock held by the ABS Capital Partners entities described in footnote (2) above.

(14) Includes 35,847,816 shares of common stock held by all current executive officers and directors as a group and 1,335,168 shares that all current executive officers and directors as a group have the right to acquire from us within 60 days of May 31, 2014 pursuant to the exercise of stock options.

(15) Further information to be provided upon filing of an amendment to this registration statement.

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DESCRIPTION OF CAPITAL STOCK

The following description of our capital stock, certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws, as each will be in effect upon the completion of this offering, and certain provisions of Delaware law are summaries. You should also refer to the amended and restated certificate of incorporation and the amended and restated bylaws, which are filed as exhibits to the registration statement of which this prospectus is part. We refer in this section to our amended and restated certificate of incorporation and amended and restated bylaws that we intend to adopt in connection with this offering as our certificate of incorporation and bylaws, respectively.

General

Upon the completion of this offering, our certificate of incorporation will authorize us to issue up to                                          shares of common stock, $0.01 par value per share, and                                          shares of preferred stock, $0.001 par value per share, all of which shares of preferred stock will be undesignated. Our board of directors may establish the rights and preferences of the preferred stock from time to time. As of May 31, 2014, after giving effect to the conversion of all outstanding preferred stock into shares of our common stock in connection with the completion of the offering, there would have been 37,760,936 shares of common stock issued and outstanding, held of record by 96 stockholders.

Common Stock

Voting Rights

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

Dividends

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

Liquidation

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

Rights and Preferences

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

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Preferred Stock

All currently outstanding shares of preferred stock will be converted to common stock upon the completion of this offering.

Following the completion of this offering, our board of directors will have the authority, without further action by our stockholders, to issue up to                      shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, to fix the rights, preferences and privileges of the shares of each wholly unissued series and any qualifications, limitations or restrictions thereon, and to increase or decrease the number of shares of any such series, but not below the number of shares of such series then outstanding.

Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our common stock. The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of us and may adversely affect the market price of our common stock and the voting and other rights of the holders of our common stock. It is not possible to state the actual effect of the issuance of any shares of preferred stock on the rights of holders of common stock until the board of directors determines the specific rights attached to that preferred stock.

We have no present plans to issue any shares of preferred stock.

Options

As of May 31, 2014, options to purchase an aggregate of 3,363,357 shares of common stock were outstanding under our 2009 Plan at a weighted average exercise price of $2.41 per share. For additional information regarding the terms of our 2009 Plan, see the section of this prospectus titled “Executive and Director Compensation — Equity Incentive Plans — Amended and Restated 2009 Stock Incentive Plan.”

Warrants

As of May 31, 2014, two warrants for the purchase of an aggregate of 118,881 shares of our common stock were outstanding at a weighted average exercise price of $1.20 per share. These warrants will expire 15 or 30 days following the completion of this offering.

The warrants contain a provision for the adjustment of the exercise price and the number of shares issuable upon the exercise of the applicable warrant in the event of certain stock dividends, stock splits, reorganizations, reclassifications and consolidations.

Registration Rights

After our initial public offering, certain holders of shares of our common stock, including those shares of our common stock that will be issued upon conversion of our preferred stock in connection with this offering, will be entitled to certain rights with respect to registration of such shares under the Securities Act pursuant to the terms of the registration rights agreement. These shares are collectively referred to herein as registrable securities. The holders of these registrable securities possess registration rights pursuant to the terms of the registration rights agreement and are described in additional detail below.

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The registration rights agreement provides the holders of registrable securities with demand, piggyback and S-3 registration rights as described more fully below. As of May 31, 2014, an aggregate of 35,645,284 registrable securities were entitled to these demand, piggyback and S-3 registration rights.

Demand Registration Rights

At any time beginning 180 days following the effective date of this registration statement, any holder of 5% or more of our registrable securities then outstanding has the right to demand that we file a registration statement under the Securities Act covering at least 5% of the then outstanding registrable securities (or such lesser percentage of registrable securities having an anticipated offering price, net of underwriting discounts and commissions, of at least $15.0 million). These registration rights are subject to specified conditions and limitations, including the right of the underwriters, if any, to limit the number of shares included in any such registration under specified circumstances. Each eligible holder has the right to make at least one such demand and certain holders have the right to make up to three such demands each. Upon such a request, we will be required to file a registration statement within 90 days covering all or such portion of the registrable securities as requested by all the holders of the registrable securities.

Piggyback Registration Rights

At any time after the completion of this offering, if we propose to register any of our securities under the Securities Act in connection with the public offering of our securities, the holders of our registrable securities then outstanding will each be entitled to notice of the registration and will be entitled to include their shares of common stock in any such registration statement. These piggyback registration rights are subject to specified conditions and limitations, including the right of the underwriters to limit the number of shares included in any such registration under specified circumstances, provided that such limitation does not reduce the amount of securities of such holders that are included in the offering below 30% of the total amount of securities included in such offering.

Registration on Form S-3

At any time we are qualified to file a registration statement on Form S-3, any holder of 5% or more of our registrable securities then outstanding has the right to demand that we file a registration statement on Form S-3 covering all or such portion of the registrable securities as requested by all the holders of the registrable securities, provided that such requested registration has an aggregate offering price, net of any underwriting discounts or commissions, of at least $15.0 million and we have not already effected two registrations on Form S-3 within the preceding 12-month period. The right to have such shares registered on Form S-3 is further subject to other specified conditions and limitations.

Expenses of Registration

We will pay all expenses relating to any demand, piggyback or Form S-3 registration, other than underwriting discounts and commissions, subject to specified conditions and limitations.

Termination of Registration Rights

The registration rights will terminate as to a particular holder of registrable securities when such holder, together with any affiliates, holds 1% or less of our outstanding common stock and such shares can be sold in any 3-month period without registration and without volume or manner of sale restrictions under Rule 144 of the Securities Act.

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Anti-Takeover Provisions

Anti-Takeover Statute

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

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

• upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, those shares owned (1) by persons who are directors and also officers and (2) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

• on or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 ²⁄₃% of the outstanding voting stock that is not owned by the interested stockholder.

In general, Section 203 defines a “business combination” to include the following:

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

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

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

• any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; or

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

In general, Section 203 defines an “interested stockholder” as an entity or person who, together with the person’s affiliates and associates, beneficially owns, or within three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation.

Anti-Takeover Effects of Certain Provisions of our Certificate of Incorporation and Bylaws to be in Effect Upon the Completion of this Offering

Our certificate of incorporation will provide for our board of directors to be divided into three classes with staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. Because our stockholders do not have cumulative voting rights, stockholders holding

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a majority of the shares of common stock outstanding will be able to elect all of our directors. Our certificate of incorporation and bylaws will also provide that directors may be removed by the stockholders only for cause upon the vote of 66 ²⁄₃% or more of our outstanding common stock. Furthermore, the authorized number of directors may be changed only by resolution of the board of directors, and vacancies and newly created directorships on the board of directors may, except as otherwise required by law or determined by the board, only be filled by a majority vote of the directors then serving on the board, even though less than a quorum.

Our certificate of incorporation and bylaws will also provide that all stockholder actions must be effected at a duly called meeting of stockholders and will eliminate the right of stockholders to act by written consent without a meeting. Our bylaws will also provide that only our chairman of the board, chief executive officer or the board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors may call a special meeting of stockholders.

Our bylaws will also provide that stockholders seeking to present proposals before our annual meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide timely advance notice in writing, and, subject to applicable law, will specify requirements as to the form and content of a stockholder’s notice.

Our certificate of incorporation and bylaws will provide that the stockholders cannot amend many of the provisions described above except by a vote of 66 ²⁄₃% or more of our outstanding common stock.

The combination of these provisions will make it more difficult for our existing stockholders to replace our board of directors as well as for another party to obtain control of us by replacing our board of directors. Since our board of directors has the power to retain and discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect a change in management. In addition, the authorization of undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change our control.

These provisions are intended to enhance the likelihood of continued stability in the composition of our board of directors and its policies and to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to reduce our vulnerability to hostile takeovers and to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and may have the effect of delaying changes in our control or management. As a consequence, these provisions may also inhibit fluctuations in the market price of our stock that could result from actual or rumored takeover attempts. We believe that the benefits of these provisions, including increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure our company, outweigh the disadvantages of discouraging takeover proposals, because negotiation of takeover proposals could result in an improvement of their terms.

Choice of Forum

Our certificate of incorporation to be in effect upon the completion of this offering will provide that the Court of Chancery of the State of Delaware will be the exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty owed by and of our directors, officers or employees to us or our stockholders; any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our certificate of incorporation or our bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine. Several lawsuits have been filed in Delaware challenging the enforceability of similar choice of forum provisions and it is possible that a court determines such provisions are not enforceable.

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Transfer Agent and Registrar

The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC. The transfer agent’s address is 6201 15^th Avenue, Brooklyn, NY 11219.

Listing

We intend to apply for listing of our common stock on the NASDAQ Global Market under the trading symbol “ALRM.”

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, no public market existed for our common stock, and although we expect that our common stock will be approved for listing on the NASDAQ Global Market, we cannot assure investors that there will be an active public market for our common stock following this offering. We cannot predict what effect, if any, sales of our shares in the public market or the availability of shares for sale will have on the market price of our common stock. Future sales of substantial amounts of common stock in the public market, including shares issued upon exercise of outstanding options or warrants, or the perception that such sales may occur, however, could adversely affect the market price of our common stock and also could adversely affect our future ability to raise capital through the sale of our common stock or other equity-related securities at times and prices we believe appropriate.

Based on our shares outstanding as of May 31, 2014, upon completion of this offering,                  shares of our common stock will be outstanding, or                  shares of common stock if the underwriters exercise their over-allotment option in full.

All of the shares of common stock sold in this offering will be freely tradable without restrictions or further registration under the Securities Act, except for any shares sold to our “affiliates,” as that term is defined under Rule 144 under the Securities Act. The remaining                 outstanding shares of common stock held by existing stockholders are “restricted securities,” as that term is defined in Rule 144 under the Securities Act. Restricted securities may be sold in the public market only if the offer and sale is registered under the Securities Act or if the offer and sale of those securities qualifies for exemption from registration, including exemptions provided by Rules 144 and 701 promulgated under the Securities Act.

As a result of lock-up agreements and market standoff provisions described below and the provisions of Rules 144 and 701, the restricted securities will be available for sale in the public market as follows:

•                  shares will be eligible for immediate sale upon the completion of this offering; and

• approximately                 shares will be eligible for sale upon expiration of lock-up agreements and market standoff provisions described below, beginning 180 days after the date of this prospectus, subject in certain circumstances to the volume, manner of sale and other limitations under Rule 144 and Rule 701.

We may issue shares of our common stock from time to time for a variety of corporate purposes, including in capital-raising activities through future public offerings or private placements, in connection with exercise of stock options and warrants, vesting of restricted stock units and other issuances relating to our employee benefit plans and as consideration for future acquisitions, investments or other purposes. The number of shares of our common stock that we may issue may be significant, depending on the events surrounding such issuances. In some cases, the shares we issue may be freely tradable without restriction or further registration under the Securities Act; in other cases, we may grant registration rights covering the shares issued in connection with these issuances, in which case the holders of the common stock will have the right, under certain circumstances, to cause us to register any resale of such shares to the public.

Rule 144

In general, persons who have beneficially owned restricted shares of our common stock for at least six months, and any affiliate of the company who owns either restricted shares of our common stock, are entitled to sell their securities without registration with the SEC under an exemption from registration provided by Rule 144 under the Securities Act.

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Non-Affiliates

Any person who is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale may sell an unlimited number of restricted securities under Rule 144 if:

• the restricted securities have been held for at least six months, including the holding period of any prior owner other than one of our affiliates;

• we have been subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale; and

• we are current in our Exchange Act reporting at the time of sale.

Any person who is not deemed to have been an affiliate of ours at the time of, or at any time during the three months preceding, a sale and has held the restricted securities for at least one year, including the holding period of any prior owner other than one of our affiliates, will be entitled to sell an unlimited number of restricted securities without regard to the length of time we have been subject to Exchange Act periodic reporting or whether we are current in our Exchange Act reporting.

Affiliates

Persons seeking to sell restricted securities who are our affiliates at the time of, or any time during the three months preceding, a sale, would be subject to the restrictions described above. They are also subject to additional restrictions, by which such person would be required to comply with the manner of sale and notice provisions of Rule 144 and would be entitled to sell within any three-month period only that number of securities that does not exceed the greater of either of the following:

• 1% of the number of shares of our common stock then outstanding, which will equal approximately                 shares immediately after the completion of this offering based on the number of shares outstanding as of May 31, 2014; or

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

Rule 701

In general, under Rule 701 a person who purchased shares of our common stock pursuant to a written compensatory plan or contract and who is not deemed to have been one of our affiliates during the immediately preceding 90 days may sell these shares in reliance upon Rule 144, but without being required to comply with the notice, manner of sale or public information requirements or volume limitation provisions of Rule 144. Rule 701 also permits affiliates to sell their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144. All holders of Rule 701 shares, however, are required to wait until 90 days after the date of this prospectus before selling such shares pursuant to Rule 701. As of May 31, 2014, 1,052,702 shares of our outstanding common stock had been issued in reliance on Rule 701 as a result of exercises of stock options and issuance of restricted stock. However, substantially all Rule 701 shares are subject to lock-up agreements as described below and in the section of this prospectus titled “Underwriting” and will become eligible for sale upon the expiration of the restrictions set forth in those agreements.

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Form S-8 Registration Statements

As of May 31, 2014 options to purchase an aggregate 3,363,357 of our common stock were outstanding. As soon as practicable after the completion of this offering, we intend to file with the SEC one or more registration statements on Form S-8 under the Securities Act to register the shares of our common stock that are issuable pursuant to our equity incentive plans. See the section of this prospectus titled “Executive and Director Compensation — Equity Incentive Plans” for a description of our equity incentive plans. These registration statements will become effective immediately upon filing. Shares covered by these registration statements will then be eligible for sale in the public markets, subject to vesting restrictions, any applicable lock-up agreements described below and Rule 144 limitations applicable to affiliates.

Lock-Up Agreements

In connection with this offering, we, our directors and officers, and substantially all of the holders of equity securities outstanding immediately prior to this offering, including all of the selling stockholders, have agreed, subject to certain exceptions, not to offer, sell, or transfer any common stock or securities convertible into or exchangeable for our common stock for 180 days after the date of this prospectus without the prior written consent of Goldman, Sachs & Co. on behalf of the underwriters.

The agreements do not contain any pre-established conditions to the waiver by Goldman, Sachs & Co. on behalf of the underwriters of any terms of the lock-up agreements. Any determination to release shares subject to the lock-up agreements would be based on a number of factors at the time of determination, including but not necessarily limited to the market price of the common stock, the liquidity of the trading market for the common stock, general market conditions, the number of shares proposed to be sold, contractual obligations to release certain shares subject to the lock-up agreements in the event any such shares are released, subject to certain specific limitations and thresholds, and the timing, purpose and terms of the proposed sale.

In addition to the restrictions contained in the lock-up agreements described above, we have entered into agreements with certain of our security holders, including our registration rights agreement and our standard forms of option agreements under our equity incentive plans, that contain market stand-off provisions imposing restrictions on the ability of such security holders to offer, sell or transfer our equity securities for a period of 180 days following the date of this prospectus.

Registration Rights

Upon the completion of this offering, the holders of 35,645,284 shares of our common stock, or their transferees, will be entitled to specified rights with respect to the registration of the offer and sale of their shares under the Securities Act. Registration of the offer and sale of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of the registration. See the section of this prospectus titled “Description of Capital Stock — Registration Rights” for additional information.

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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS

The following is a general discussion of the material U.S. federal income tax consequences of the acquisition, ownership and disposition of our common stock by “Non-U.S. Holders” (as defined below). This discussion is a summary for general information purposes only and does not consider all aspects of U.S. federal income taxation that may be relevant to particular Non-U.S. Holders in light of their individual circumstances or to certain types of Non-U.S. Holders subject to special tax rules, including partnerships or other pass-through entities for U.S. federal income tax purposes, banks, financial institutions or other financial services entities, broker-dealers, insurance companies, tax-exempt organizations, regulated investment companies, real estate investment trusts, controlled foreign corporations, passive foreign investment companies, corporations that accumulate earnings to avoid U.S. federal income tax, persons who use or are required to use mark-to-market accounting, persons that hold our shares as part of a “straddle,” a “hedge” or a “conversion transaction,” certain former citizens or permanent residents of the United States, or investors in pass-through entities. In addition, this summary does not address, except to the extent discussed below, the effects of any applicable gift or estate tax, and this summary does not address the potential application of the Medicare contribution tax, the alternative minimum tax, or any tax considerations that may apply to Non-U.S. Holders of our common stock under state, local or non-U.S. tax laws and any other U.S. federal tax laws.

This summary is based on the Internal Revenue Code of 1986, as amended, or the Code, and applicable Treasury Regulations, rulings, administrative pronouncements and decisions as of the date of this registration statement, all of which are subject to change or differing interpretations at any time with possible retroactive effect. We have not sought, and will not seek, any ruling from the Internal Revenue Service, or the IRS, with respect to the tax consequences discussed herein, and there can be no assurance that the IRS will not take a position contrary to the tax consequences discussed below or that any position taken by the IRS would not be sustained. This discussion assumes that a Non-U.S. Holder will hold our common stock as a capital asset within the meaning of the Code (generally, property held for investment). For purposes of this discussion, the term “Non-U.S. Holder” means a beneficial owner of our shares that is not a partnership (or entity or arrangement treated as a partnership for U.S. federal income tax purposes) and is not:

• an individual who is a citizen or resident of the United States;

• a corporation created or organized in the United States or under the laws of the United States or of any state thereof or the District of Columbia;

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

• a trust if (1) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons have the authority to control all of the trust’s substantial decisions or (2) the trust has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.

If a partnership (or entity or arrangement treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of our common stock, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding our shares, you should consult your tax advisor regarding the tax consequences of the purchase, ownership, and disposition of our common stock.

PROSPECTIVE INVESTORS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE PARTICULAR U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF ACQUIRING, OWNING AND DISPOSING OF OUR COMMON STOCK, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER ANY STATE, LOCAL OR FOREIGN TAX LAWS AND ANY OTHER U.S. FEDERAL TAX LAWS.

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Distributions on Our Common Stock

In general, distributions, if any, paid to a Non-U.S. Holder (to the extent paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles) will constitute dividends and be subject to U.S. withholding tax at a rate equal to 30% of the gross amount of the dividend, or a lower rate prescribed by an applicable income tax treaty, unless the dividends are effectively connected with a trade or business carried on by the Non-U.S. Holder within the United States. Any distribution not constituting a dividend (because such distribution exceeds our current and accumulated earnings and profits) will be treated first as reducing the Non-U.S. Holder’s basis in its shares of common stock, but not below zero, and to the extent it exceeds the Non-U.S. Holder’s basis, as capital gain (see “Gain on Sale, Exchange or Other Taxable Disposition of Common Stock” below).

A Non-U.S. Holder who claims the benefit of an applicable income tax treaty generally will be required to satisfy certain certification and other requirements prior to the distribution date. Such Non-U.S. Holders must generally provide the withholding agent with a properly executed IRS Form W-8BEN claiming an exemption from or reduction in withholding under an applicable income tax treaty. If tax is withheld in an amount in excess of the amount applicable under an income tax treaty, a refund of the excess amount may generally be obtained by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under an applicable income tax treaty.

Dividends that are effectively connected with a Non-U.S. Holder’s conduct of a U.S. trade or business (and, if required by an applicable income tax treaty, attributable to a U.S. permanent establishment or fixed base of the Non-U.S. Holder) generally will not be subject to U.S. withholding tax if the Non-U.S. Holder files the required forms, including IRS Form W-8ECI with the withholding agent, but instead generally will be subject to U.S. federal income tax on a net income basis at the regular graduated rates in the same manner as if the Non-U.S. Holder were a resident of the United States. A corporate Non-U.S. Holder that receives effectively connected dividends may be subject to an additional branch profits tax at a rate of 30%, or a lower rate prescribed by an applicable income tax treaty.

Gain on Sale, Exchange or Other Disposition of Our Common Stock

In general, a non-U.S. holder will not be subject to any U.S. federal income tax or withholding tax on any gain realized upon such holder’s sale, exchange or other disposition of shares of our common stock unless:

(1) the gain is effectively connected with a trade or business carried on by the Non-U.S. Holder within the United States (and, if required by an applicable income tax treaty, attributable to a U.S. permanent establishment or fixed base of the Non-U.S. Holder);

(2) the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met; or

(3) we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the Non-U.S. Holder held the common stock, and, in the case where shares of our common stock are regularly traded on an established securities market, the Non-U.S. Holder owns, or is treated as owning, more than five percent of our common stock at any time during the foregoing period.

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Net gain realized by a Non-U.S. Holder described in clause (1) above generally will be subject to U.S. federal income tax in the same manner as if the Non-U.S. Holder were a resident of the United States. Any gains of a corporate Non-U.S. Holder described in clause (1) above may also be subject to an additional “branch profits tax” at a 30% rate, or such lower rate as may be specified by an applicable income tax treaty.

Gain realized by an individual Non-U.S. Holder described in clause (2) above will be subject to a flat 30% tax, which gain may be offset by U.S. source capital losses, even though the individual is not considered a resident of the United States.

For purposes of clause (3) above, a corporation is a United States real property holding corporation if the fair market value of its United States real property interests equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business. We believe that we are not, and we do not anticipate that we will become, a United States real property holding corporation.

U.S. Federal Estate Tax

The estate of an individual Non-U.S. Holder is generally subject to U.S. federal estate tax on property having a U.S. situs. Because we are a U.S. corporation, our common stock will be U.S. situs property and therefore will be included in the taxable estate of an individual Non-U.S. Holder decedent, unless an applicable estate tax treaty between the United States and the decedent’s country of residence provides otherwise.

Information Reporting and Backup Withholding

Generally, we must report annually to the IRS and to each Non-U.S. Holder the amount of dividends paid, the name and address of the recipient, and the amount, if any, of tax withheld. These information reporting requirements apply even if withholding was not required because the dividends were effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States or withholding was reduced by an applicable income tax treaty. Under applicable income tax treaties or other agreements, the IRS may make its reports available to the tax authorities in the Non-U.S. Holder’s country of residence.

Dividends paid to a Non-U.S. Holder that is not an exempt recipient generally will be subject to backup withholding, currently at a rate of 28%, unless the Non-U.S. Holder certifies to the payor as to its foreign status, which certification may generally be made on IRS Form W-8BEN or other appropriate version of IRS Form W-8.

Proceeds from the sale or other disposition of common stock by a Non-U.S. Holder effected by or through a U.S. office of a broker will generally be subject to information reporting and backup withholding, currently at a rate of 28%, unless the Non-U.S. Holder certifies to the withholding agent under penalties of perjury as to, among other things, its name, address and status as a Non-U.S. Holder or otherwise establishes an exemption. Payment of disposition proceeds effected outside the United States by or through a non-U.S. office of a non-U.S. broker generally will not be subject to information reporting or backup withholding if the payment is not received in the United States. Information reporting, but generally not backup withholding, will apply to such a payment if the broker has certain connections with the United States unless the broker has documentary evidence in its records that the beneficial owner thereof is a Non-U.S. Holder and specified conditions are met or an exemption is otherwise established.

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Backup withholding is not an additional tax. Any amount withheld under the backup withholding rules from a payment to a Non-U.S. Holder that results in an overpayment of taxes generally will be refunded, or credited against the holder’s U.S. federal income tax liability, if any, provided that the required information is timely furnished to the IRS.

Foreign Accounts

A U.S. federal withholding tax of 30% may apply to dividends and the gross proceeds of a disposition of our common stock paid to a “foreign financial institution” (as specially defined under applicable rules) unless such institution enters into an agreement with the U.S. government to withhold on certain payments and to collect and provide to the U.S. tax authorities substantial information regarding certain U.S. account holders of such institution (which includes certain equity holders of such institution, as well as certain account holders that are foreign entities with U.S. owners). This U.S. federal withholding tax of 30% will also apply to payments of dividends and the gross proceeds of a disposition of our common stock paid to a non-financial foreign entity unless such entity either certifies it does not have any substantial U.S. owners or provides the withholding agent with a certification identifying substantial direct and indirect U.S. owners of the entity. The withholding tax described above will not apply if the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from the rules. Under certain circumstances, a Non-U.S. Holder might be eligible for refunds or credits of such taxes. The U.S. has entered into agreements with certain countries that modify these general rules for entities located in those countries. Prospective investors are encouraged to consult with their own tax advisors regarding the possible implications of this legislation on their investment in our common stock.

The withholding provisions described above will generally apply to payments of dividends made on or after July 1, 2014 and to payments of gross proceeds from a sale or other disposition of common stock on or after January 1, 2017.

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UNDERWRITING

The company, the selling stockholders and the underwriters named below have entered into an underwriting agreement with respect to the shares being offered. Subject to certain conditions, each underwriter has severally agreed to purchase the number of shares indicated in the following table. Goldman, Sachs & Co., Credit Suisse Securities (USA) LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting as the representatives of the underwriters.

Underwriters	Number of Shares
Goldman, Sachs & Co.
Credit Suisse Securities (USA) LLC
Merrill Lynch, Pierce, Fenner & Smith                  Incorporated
Stifel, Nicolaus & Company, Incorporated
Raymond James & Associates, Inc.
William Blair & Company, LLC
Imperial Capital, LLC
Total

The underwriters are committed to take and pay for all of the shares being offered, if any are taken, other than the shares covered by the option described below unless and until this option is exercised.

The underwriters have an option to buy up to an additional                  shares from the company to cover sales by the underwriters of a greater number of shares than the total number set forth in the table above. They may exercise that option for 30 days. If any shares are purchased pursuant to this option, the underwriters will severally purchase shares in approximately the same proportion as set forth in the table above.

The following tables show the per share and total underwriting discounts and commissions to be paid to the underwriters by us and the selling stockholders. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase                  additional shares of our common stock.

Paid by the Company
	No Exercise	Full Exercise
Per Share	$	$
Total	$	$
Paid by the Selling Stockholders
	No Exercise	Full Exercise
Per Share	$	$
Total	$	$

Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount of up to $         per share from the initial public offering price. After the initial offering of the shares, the representatives may change the offering price and the other selling terms. The offering of the shares by the underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.

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We, our officers, directors, and holders of substantially all of our outstanding capital stock, including the selling stockholders, have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of their common stock or securities convertible into or exchangeable for shares of common stock during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of Goldman, Sachs & Co. This agreement does not apply to any existing employee benefit plans. See the section of this prospectus titled “Shares Eligible for Future Sale—Lock-Up Agreements” for a discussion of certain transfer restrictions.

Prior to the offering, there has been no public market for the shares. The initial public offering price has been negotiated among us and the representatives. Among the factors to be considered in determining the initial public offering price of the shares, in addition to prevailing market conditions, will be our historical performance, estimates of our business potential and earnings prospects, an assessment of our management and the consideration of the above factors in relation to market valuation of companies in related businesses.

We intend to apply to list our common stock on the NASDAQ Global Market under the symbol “ALRM.”

In connection with the offering, the underwriters may purchase and sell shares of common stock in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering, and a short position represents the amount of such sales that have not been covered by subsequent purchases. A “covered short position” is a short position that is not greater than the amount of additional shares for which the underwriters’ option described above may be exercised. The underwriters may cover any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to cover the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase additional shares pursuant to the option described above. “Naked” short sales are any short sales that create a short position greater than the amount of additional shares for which the option described above may be exercised. The underwriters must cover any such naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of common stock made by the underwriters in the open market prior to the completion of the offering.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

Purchases to cover a short position and stabilizing transactions, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of our stock, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of our common stock. As a result, the price of our common stock may be higher than the price that otherwise might exist in the open market. The underwriters are not required to engage in these activities and may end any of these activities at any time. These transactions may be effected on NYSE, NASDAQ NMS or relevant exchange, in the over-the-counter market or otherwise.

The underwriters do not expect sales to discretionary accounts to exceed five percent of the total number of shares offered.

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

We have agreed to pay the filing fees incident to, and the fees and disbursements of counsel for the underwriters in connection with, any required review by the Financial Industry Regulatory Authority, or FINRA, in connection with this offering in an amount not to exceed $            .

We and the selling stockholders have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act.

Relationships

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. Certain of the underwriters and their respective affiliates have provided, and may in the future provide, a variety of these services to the issuer and to persons and entities with relationships with the issuer, for which they received or will receive customary fees and expenses.

In the ordinary course of their various business activities, the underwriters and their respective affiliates, officers, directors and employees may purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to our assets, securities and/or instruments (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with us. The underwriters and their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments.

Directed Share Program

At our request, the underwriters have reserved for sale, at the initial public offering price, up to                  of the shares offered by this prospectus for sale to certain of our business associates and service providers as well as our directors, executive officers and other employees through a directed share program. If these business associates or service providers purchase shares through the directed share program, the number of shares available for sale to the general public will be reduced. Any reserved shares that are not purchased will be offered by the underwriters to the general public on the same terms as the other shares offered by this prospectus.

Selling Restrictions

European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State), each underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date) it has not made and will not make an offer of shares to the public in that Relevant Member State prior to the publication of a prospectus in relation to the shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority

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in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of shares to the public in that Relevant Member State at any time:

(a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;

(c) to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the representatives for any such offer; or

(d) in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of shares to the public” in relation to any shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe for the shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

United Kingdom

Each underwriter has represented and agreed that:

(a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act, or the FSMA) received by it in connection with the issue or sale of the shares in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer; and

(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom.

Hong Kong

The shares may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which

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are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

Singapore

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore, or the SFA, (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the shares are subscribed or purchased under Section 275 by a relevant person which is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for six months after that corporation or that trust has acquired the shares under Section 275 except: (1) to an institutional investor under Section 274 of the SFA or to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.

Japan

The securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan, or the Financial Instruments and Exchange Law, and each underwriter has agreed that it will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan.

Switzerland

The shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering or marketing material relating to the offering, the Company, the shares have been or will be filed with or approved by any Swiss regulatory authority. In

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particular, this document will not be filed with, and the offer of shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA (FINMA), and the offer of shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (“CISA”). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of shares.

Dubai International Financial Centre

This prospectus relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (“DFSA”). This prospectus is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for the prospectus. The shares to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the shares offered should conduct their own due diligence on the shares. If you do not understand the contents of this prospectus you should consult an authorized financial advisor.

Australia

No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission (“ASIC”), in relation to the offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the “Corporations Act”), and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.

Any offer in Australia of the shares may only be made to persons (the “Exempt Investors”) who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the shares without disclosure to investors under Chapter 6D of the Corporations Act.

The shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring shares must observe such Australian on-sale restrictions.

This prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.

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LEGAL MATTERS

The validity of the shares of common stock being offered by this prospectus will be passed upon for us by Cooley LLP, Boston, Massachusetts. Goodwin Procter LLP, Boston, Massachusetts, is representing the underwriters.

EXPERTS

The consolidated financial statements of Alarm.com Holdings, Inc. as of December 31, 2012 and 2013, and for each of the three years in the period ended December 31, 2013, included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

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

You can read our SEC filings, including the registration statement, over the internet at the SEC’s website at www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facilities at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of these documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.

Upon completion of this offering, we will be subject to the information reporting requirements of the Exchange Act, and we will file reports, proxy statements and other information with the SEC. These reports, proxy statements and other information will be available for inspection and copying at the public reference room and web site of the SEC referred to above. We also maintain a website at www.alarm.com, at which you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. However, the information contained in or accessible through our website is not part of this prospectus or the registration statement of which this prospectus forms a part, and investors should not rely on such information in making a decision to purchase our common stock in this offering.

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ALARM.COM HOLDINGS, INC.

Index to Consolidated Financial Statements

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Statements of Operations for the years ended December 31, 2011, 2012 and 2013	F-3
Consolidated Statements of Comprehensive Income for the years ended December 31, 2011, 2012 and 2013	F-4
Consolidated Balance Sheets as of December 31, 2012 and 2013	F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2012 and 2013	F-6
Consolidated Statements of Equity for the years ended December 31, 2011, 2012 and 2013	F-7
Notes to the Consolidated Financial Statements for the years ended December 31, 2011, 2012 and 2013	F-8
Condensed Consolidated Statements of Operations for the three months ended March 31, 2013 and 2014 (unaudited)	F-44
Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2013 and 2014 (unaudited)	F-45
Condensed Consolidated Balance Sheets as of December 31, 2013 and March 31, 2014 (unaudited)	F-46
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2013 and 2014 (unaudited)	F-47
Condensed Consolidated Statement of Equity for the three months ended March 31, 2014 (unaudited)	F-48
Notes to the Condensed Consolidated Financial Statements for the three months ended March 31, 2013 and 2014 (unaudited)	F-49
Schedule II Valuation and Qualifying Accounts and Reserves	F-68

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Alarm.com Holdings, Inc.:

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Alarm.com Holdings, Inc. and its subsidiaries at December 31, 2012 and 2013, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2013 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

McLean, Virginia

May 14, 2014

F-2

ALARM.COM HOLDINGS, INC.

Consolidated Statements of Operations

(in thousands, except share and per share data)

	Year Ended December 31,
	2011		2012		2013
Revenue:
Subscription revenue	$	32,161	$	55,655	$	82,620
Hardware and other revenue		32,898		40,820		47,602
Total revenue		65,059		96,475		130,222
Cost of revenue:(1)
Cost of subscription revenue		8,051		12,681		16,476
Cost of hardware and other revenue		21,102		28,773		38,482
Total cost of revenue		29,153		41,454		54,958
Operating expenses:
Sales and marketing		5,819		13,232		21,467
General and administrative		6,817		14,099		29,928
Research and development		5,613		8,944		13,085
Amortization and depreciation		1,988		2,230		3,360
Total operating expenses		20,237		38,505		67,840
Operating income		15,669		16,516		7,424
Interest income / (expense), net		1		(307)		(100)
Other income / (expense), net		—		—		(112)
Income before income taxes		15,670		16,209		7,212
Provision for income taxes		6,015		7,280		2,688
Net income		9,655		8,929		4,524
Dividends paid on redeemable convertible preferred stock		(18,998)		(8,182)		—
Cumulative dividend on redeemable convertible preferred stock		(3,317)		(1,855)		—
Deemed dividend to redeemable convertible preferred stock upon recapitalization		—		(138,727)		—
Income allocated to participating securities		—		—		(4,402)
Net (loss) income attributable to common stockholders	$	(12,660)	$	(139,835)	$	122
Per share information attributable to common stockholders:
Net (loss) income per share:
Basic	$	(19.76)	$	(108.55)	$	0.08
Diluted	$	(19.76)	$	(108.55)	$	0.04
Pro forma (unaudited):
Basic					$	0.12
Diluted					$	0.12
Weighted average common shares outstanding:
Basic		640,850		1,288,162		1,443,469
Diluted		640,850		1,288,162		2,795,345
Pro forma (unaudited):
Basic						36,461,353
Diluted						37,813,229

(1) Exclusive of amortization and depreciation shown below.

See accompanying notes to the consolidated financial statements.

F-3

ALARM.COM HOLDINGS, INC.

Consolidated Statements of Comprehensive Income

(in thousands)

	Year ended December 31,
	2011		2012		2013
Net income	$	9,655	$	8,929	$	4,524
Other comprehensive income, net of tax:
Unrealized gain on available for sale securities		—		—		56
Other comprehensive income		—		—		56
Total comprehensive income	$	9,655	$	8,929	$	4,580

See accompanying notes to the consolidated financial statements.

F-4

ALARM.COM HOLDINGS, INC.

Consolidated Balance Sheets

(in thousands, except share and per share data)

	December 31,
	2012		2013
Assets
Current assets:
Cash and cash equivalents	$	41,920	$	33,583
Accounts receivable, net		10,246		16,579
Inventory		1,538		2,518
Deferred tax assets		1,983		1,059
Other current assets		981		1,717
Total current assets		56,668		55,456
Property and equipment, net		2,572		3,586
Intangible assets, net		6,923		5,962
Goodwill		18,480		18,480
Deferred tax assets		687		5,546
Marketable securities		—		2,208
Other assets		2,215		8,249
Total Assets	$	87,545	$	99,487
Liabilities, redeemable convertible preferred stock and stockholders’ deficit
Current liabilities:
Accounts payable and accrued expenses	$	12,944	$	15,870
Accrued compensation		1,485		3,765
Deferred revenue		859		1,163
Current portion of long-term debt		1,500		2,000
Total current liabilities		16,788		22,798
Deferred revenue		7,173		8,488
Long-term debt		7,500		5,500
Other liabilities		679		935
Total Liabilities		32,140		37,721
Commitments and contingencies (Note 12)
Redeemable convertible preferred stock
Series B redeemable convertible preferred stock, $0.001 par value, 1,809,685 shares authorized, 1,809,685 shares issued and outstanding as of December 31, 2012 and 2013, liquidation preference of $191,132 as of December 31, 2013.		136,523		136,523
Series B-1 redeemable convertible preferred stock, $0.001 par value, 1,669,680 shares authorized, 82,934 shares issued and outstanding as of December 31, 2012 and 2013, liquidation preference of $8,759 as of December 31, 2013.		6,265		6,265
Series A redeemable convertible preferred stock, $0.001 par value, 3,511,725 shares authorized, 1,998,257 issued and outstanding as of December 31, 2012 and 2013, liquidation preference of $22,458 as of December 31, 2013.		59,668		59,668
Stockholders’ deficit
Common stock, $0.01 par value, 100,000,000 shares authorized, 1,251,333 and 1,657,433 shares issued and outstanding as of December 31, 2012, and December 31, 2013.		13		17
Additional paid-in capital		—		1,777
Treasury stock (35,523 shares at cost of $1.20 per share)		(42)		(42)
Accumulated other comprehensive income		—		56
Accumulated deficit		(147,022)		(142,498)
Total Stockholders’ Deficit		(147,051)		(140,690)
Total Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit	$	87,545	$	99,487

See accompanying notes to the consolidated financial statements.

F-5

ALARM.COM HOLDINGS, INC.

Consolidated Statements of Cash Flows

(in thousands)

	Year ended December 31,
	2011		2012		2013
Cash flows from operating activities:
Net income	$	9,655	$	8,929	$	4,524
Adjustments to reconcile net income to net cash from operating activities:
Provision for doubtful accounts		318		107		592
Reserve for product returns		1,069		1,537		1,781
Amortization on patents		101		202		201
Amortization and depreciation		1,988		2,230		3,360
Deferred income taxes		315		(1,636)		(2,004)
Tax benefit from stock based awards		(272)		(511)		(160)
Undistributed losses from equity investees		—		—		112
Stock-based compensation		182		1,759		841
Goodwill and intangible asset impairment		—		—		11,266
Gain on release of contingent liability		—		—		(5,820)
Other, net		—		—		330
Changes in operating assets and liabilities (net of business acquisitions):
Accounts receivable, net		(5,992)		(3,986)		(8,678)
Inventory		(1,102)		(22)		(1,412)
Other assets		(102)		(286)		(1,038)
Accounts payable and accrued expenses		4,871		4,927		5,169
Deferred revenue		2,614		2,811		1,618
Other liabilities		(35)		62		(28)
Cash flows from operating activities		13,610		16,123		10,654
Cash flows used in investing activities:
Business acquisition, net of cash acquired		—		—		(8,148)
Additions to property and equipment		(1,110)		(1,322)		(2,275)
Investments in cost and equity method investees		—		(300)		(4,516)
Purchases of licenses to patents		(1,250)		(1,000)		—
Issuances of notes receivable		—		(250)		(1,492)
Payments received on notes receivable		58		64		—
Purchase of available for sale security		—		—		(2,000)
Cash flows used in investing activities		(2,302)		(2,808)		(18,431)
Cash flows (used in) / from financing activities
Proceeds from term loan		10,000		—		—
Repayments of term loan		—		(1,000)		(1,500)
Dividends paid to common stockholders		(892)		(414)		—
Dividends paid to redeemable convertible preferred stock holders		(18,998)		(8,182)		—
Repurchases of common stock		—		(2,209)		(5)
Issuance of ownership units in subsidiary		75		—		—
Issuances of common stock from equity based plans		578		255		785
Tax benefit from stock-based awards		272		511		160
Proceeds from issuance of preferred stock		—		136,524		—
Payment for repurchase of preferred stock		—		(113,697)		—
Cash flows (used in) / from financing activities		(8,965)		11,788		(560)
Net increase / (decrease) in cash and cash equivalents		2,343		25,103		(8,337)
Cash and cash equivalents at beginning of the period		14,474		16,817		41,920
Cash and cash equivalents at end of the period	$	16,817	$	41,920	$	33,583
Supplemental disclosures:
Cash paid for interest	$	9	$	296	$	274
Cash paid for income taxes, net of refunds	$	5,201	$	9,201	$	6,204
Non-cash investing and financing activities:
Conversion of note receivable into cost method investment	$	—	$	—	$	250
Cumulative dividends on participating securities	$	3,317	$	1,855	$	—
Deemed dividend to participating securities upon recapitalization	$	—	$	138,727	$	—

See accompanying notes to the consolidated financial statements.

F-6

ALARM.COM HOLDINGS, INC.

Consolidated Statements of Equity

(in thousands)

	New Common Stock				Old Common Stock				Additional Paid-In- Capital		Treasury Stock		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income		Total Stockholders’ Equity (Deficit)
	Shares		Amount		Shares		Amount
Balance, January 1, 2011		—	$	—		219	$	2	$	519	$	—	$	5,494	$	—	$	6,015
Common stock issued in connection with equity based plans		—		—		1,406		14		564		—		—		—		578
Stock-based compensation expense		—		—		—		—		182		—		—		—		182
Tax benefit from stock-based awards		—		—		—		—		272		—		—		—		272
Dividends paid to common stockholders		—		—		—		—		(216)		—		(676)		—		(892)
Dividends paid to Redeemable Convertible Preferred Stockholders		—		—		—		—		(1,321)		—		(17,677)		—		(18,998)
Net income		—		—		—		—		—		—		9,655		—		9,655
Balance, December 31, 2011		—	$	—		1,625	$	16	$	—	$	—	$	(3,204)	$	—	$	(3,188)
Common stock issued in connection with equity based plans		599		6		10		—		249		—		—		—		255
Stock-based compensation expense		—		—		—		—		1,759		—		—		—		1,759
Tax benefit from stock-based awards		—		—		—		—		511		—		—		—		511
Cancellation of Old Common Stock and Conversion to Series B-1 Preferred and New Common Stock in recapitalization		910		9		(1,600)		(16)		(354)		—		(5,424)		—		(5,785)
New common stock repurchased		(258)		(2)		—		—		(2,165)		—		—		—		(2,167)
Cancellation of Old Series A Preferred and Conversion to Series B-1 Preferred and New Series A Preferred in recapitalization		—		—		—		—		—		—		(138,727)		—		(138,727)
Treasury stock repurchased		—		—		(35)		—		—		(42)		—		—		(42)
Dividends paid to Common Stockholders		—		—		—		—		—		—		(414)		—		(414)
Dividends paid to Redeemable Convertible Preferred Stockholders		—		—		—		—		—		—		(8,182)		—		(8,182)
Net income		—		—		—		—		—		—		8,929		—		8,929
Balance, December 31, 2012		1,251	$	13		—	$	—	$	—	$	(42)	$	(147,022)	$	—	$	(147,051)
Common stock issued in connection with equity based plans		408		4		—		—		781		—		—		—		785
Stock-based compensation expense		—		—		—		—		841		—		—		—		841
Tax benefit from stock-based awards		—		—		—		—		160		—		—		—		160
Common stock repurchased		(2)		—		—		—		(5)		—		—		—		(5)
Other comprehensive income		—		—		—		—		—		—		—		56		56
Net income		—		—		—		—		—		—		4,524		—		4,524
Balance, December 31, 2013		1,657	$	17		—	$	—	$	1,777	$	(42)	$	(142,498)	$	56	$	(140,690)

See accompanying notes to the consolidated financial statements

F-7

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements

December 31, 2011, 2012 and 2013

Note 1. Company Overview

Alarm.com Holdings, Inc. (referred herein as “Alarm.com”, the “Company”, or “we”) is a cloud-based software platform powering the intelligently connected home. Our multi-tenant software-as-a-service (“SaaS”) platform allows home and business owners to intelligently secure and manage their properties and remotely interact with a broad array of connected devices through a single, intuitive interface. Our solution is delivered through an established network of thousands of authorized and licensed service providers. Our four primary solutions are intelligent automation, interactive security, video monitoring and energy management, which can be used individually or integrated into a single user interface. We derive revenue from the sale of our software as a service over our integrated platform, hardware, activation fees and other revenue. Our fiscal year ends on December 31st.

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation

Our consolidated financial statements include our accounts and those of our majority-owned and controlled subsidiaries after elimination of intercompany accounts and transactions. Equity investments over which we are able to exercise significant influence but do not control the investee are accounted for using the equity method.

We determine whether we have a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity (“VIE”). Voting interest entities are entities that have sufficient equity and provide equity investor voting rights that give them power to make significant decisions relating to the entity’s operations. The usual condition for a controlling financial interest in a voting interest entity is ownership of a majority voting interest. In VIEs, a controlling financial interest is attained through means other than voting rights and the entities lack one or more of the characteristics of a voting entity.

We account for our unconsolidated investments in businesses under the cost or equity method dependent on factors such as percent ownership and factors that would determine significant influence. Our cost method investments are recorded at cost with no change in fair value unless there are events or circumstances present that would have a significant adverse effect on the fair value of the investment. Equity method investments are recorded at cost and adjusted to record our share of the company’s undistributed gains and losses in our consolidated statements of operations. We evaluate our equity method investments for impairment whenever events or circumstances indicate that carrying amount of such investments may not be recoverable.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our estimates, judgments and assumptions are continually evaluated based on available information and experience. Because of the use of estimates inherent in the financial reporting process, actual results could differ from those estimates. Estimates are used when accounting for revenue recognition,

F-8

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

allowances for doubtful accounts receivable, allowance for hardware returns, estimates of obsolete inventory, long-term incentive compensation, stock-based compensation, income taxes, legal reserves and goodwill and intangible assets.

Unaudited Pro Forma Presentation

In the event that an initial public offering of our common stock, or IPO, is completed, all shares of the Company’s outstanding redeemable convertible preferred stock will automatically convert into common stock.

The unaudited pro forma net income per share attributable to common stockholders for the year ended December 31, 2013 assumes the conversion of all outstanding shares of redeemable convertible preferred stock into an aggregate of 35,017,884 shares of common stock upon the completion of the IPO as of January 1, 2013 or at the time of issuance, if later.

Reclassification

We have reclassified financial information in the years ended December 31, 2011 and 2012 to align with the presentation of our financial statements for the year ended December 31, 2013.

Revision

During the preparation of the financial statements for the year ended December 31, 2013, we identified errors in 2011 and 2012 related to timing of revenue and expense recognition and accounting for awards of subsidiary stock. We revised the 2011 and 2012 financial statements to correct these errors, which were immaterial both individually and in the aggregate and increased net income by $125,000 and $119,000, respectively.

Comprehensive Income (Loss)

Other comprehensive income or loss refers to gains and losses that are recorded as a separate element of stockholders’ equity (deficit) and are excluded from net income. We did not have any items of comprehensive income or loss other than net income for the years ended December 31, 2011 and 2012. For the year ended December 31, 2013, comprehensive income includes unrealized gains and losses on available for sale investments.

Cash and Cash Equivalents

We consider all highly liquid instruments purchased with an original maturity from the date of purchase of three months or less to be cash equivalents. We have invested approximately $17.5 million and $29.6 million, respectively, in cash equivalents in the form of money market funds with one financial institution. We consider these money market funds to be Level 1 financial instruments.

Accounts Receivable

Accounts receivable are principally derived from sales to customers located in the United States and Canada. Our sales in Canada are transacted in U.S. dollars. Our accounts receivable are stated at estimated realizable value. We utilize the allowance method to provide for doubtful accounts based on management’s evaluation of the collectability of the amounts due. Our estimate is based on historical collection experience and a review of the current status of accounts receivable. Each of our service providers are evaluated for creditworthiness through a credit review process at the inception of the arrangement or if risk indicators arise during our arrangement at such other time. Our terms for

F-9

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

hardware sales to our service providers and distributors typically allow for returns for up to one year. We apply our estimate as a percentage of sales monthly, based on historical data, as a reserve against revenue to account for our provision for returns. We have not experienced write-offs for uncollectible accounts or sales returns that have differed significantly from our estimates.

Inventory

Our inventory, which is primarily comprised of the raw materials used to produce our wireless communications network enabled radios, home automation system parts and peripherals, is stated at the lower of cost or market, and is charged to cost of sales on a first in, first out (“FIFO”) basis. We periodically evaluate our inventory quantities for obsolescence based on criteria such as customer demand and changing technology and record an obsolescence write down when necessary.

Marketable Securities

Our investments in marketable equity securities consist of available for sale securities, which are stated at fair value, with unrealized gains and temporary unrealized losses reported as a component of other comprehensive income net of tax, until realized. When realized, we recognize gains and losses on the sales of the securities on a specific identification method and include the realized gains or losses in other income in the consolidated statements of operations. We include interest, dividends, and amortization of premium or discount on securities classified as available for sale in other income in the consolidated statements of operations. We also evaluate our available for sale securities to determine whether a decline in fair value is other than temporary. Should the decline be considered other than temporary, we write down the cost of the security and include the loss in earnings. Available for sale securities are classified as either short-term or long-term based on management’s intention of when to sell the securities or maturity date, if applicable.

Internal-Use Software

We capitalize the costs related to the design of internal-use software related to the development of our platform during the application development stage of the projects. The costs are primarily comprised of salaries, benefits and stock-based compensation expense of the projects’ engineers and product development teams. Our internally developed software is reported at cost less accumulated amortization. Amortization begins once the project is ready for its intended use, which is usually when the code goes into production in weekly software builds on our platform. We amortize the asset on a straight-line basis over a period of three years, which is the estimated useful life. We utilize continuous agile development methods to update our software for our SaaS multi-tenant platform on a weekly basis, which primarily consists of bug-fixes and user interface changes. We evaluate whether a project should be capitalized if it adds significant functionality to our platform. Maintenance activities or minor upgrades are expensed in the period performed.

Revenue Recognition and Deferred Revenue

We derive our revenue from two primary sources, the sale of subscriptions to our cloud-based connected home platform solutions and the sale of hardware products that enable our solutions. We sell our hardware and platform solutions to service providers that resell our hardware and solutions to end-users, which we refer to as our subscribers. We also sell our hardware to distributors who resell the hardware to service providers. We enter into contracts with our service providers that establish pricing for access to our connected home platform solutions and for the sale of hardware. These

F-10

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

contracts typically have an initial term of one year, with subsequent automatic renewal terms of one year. Our service providers typically enter into underlying contracts with our subscribers, which our service providers have indicated range from three to five years in length.

Our hardware includes cellular radio modules that enable access to our cloud-based platform, as well as video cameras, image sensors and other peripherals. Our service providers purchase our hardware in anticipation of installing the hardware in a subscriber’s home or business when they create a new subscriber account, or for use in an existing subscriber’s property. The purchase of hardware occurs in a transaction that is separate and typically in advance of the purchase of our platform services. Service providers transact with us to purchase our platform solutions and resell our solutions to a new subscriber, or to upgrade or downgrade the solutions of an existing subscriber, at which time the subscriber’s access to our platform solutions is enabled and the delivery of the services commences. The purchase of hardware and the purchase of our platform solutions are separate transactions as, at the point of sale of the hardware, the service provider is not obligated to purchase a platform solution for the hardware sold, and the level and duration of platform solutions, if any, to be provided through the hardware sold cannot be determined.

We recognize revenue with respect to our solutions when all of the following conditions are met:

• Persuasive evidence of an arrangement exists;

• Delivery to the customer, which may be either a service provider, distributor or subscriber; has occurred or service has been rendered;

• Fees are fixed or determinable; and

• Collection of the fees is reasonably assured.

We consider a signed contract with a service provider to be persuasive evidence that an agreement exists, and the fees to be fixed or determinable if the fees are contractually agreed to with our service providers. Collectability is evaluated based on a number of factors, including a credit review of new service providers, and the payment history of existing service providers. If collectability is not reasonably assured, revenue is deferred until collection becomes reasonably assured, which is generally upon the receipt of payment.

Subscription Revenue

We generate our subscription revenue primarily from the monthly fees charged to our service providers sold on a per subscriber basis for access to our cloud-based connected home platform and the related solutions. Our fees per subscriber vary upon the service plan and features utilized.

Under negotiated terms in the agreements with our service providers, we are entitled to receive and we recognize revenue based on a subscription fee that is billed at the beginning of each month. We recognize subscription revenue monthly as the services are delivered.

We offer multiple service level packages for our solutions and a range of a la carte add-ons for additional features, such as video as a service or a connected thermostat. The subscription fee paid by our service providers each month for the delivery of our solutions is based on the combination of packages and add-ons enabled for each subscriber. We utilize tiered pricing plans where our service providers may receive pricing discounts driven by achieving and maintaining new subscriber creation

F-11

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

rates, which represent the number of new subscribers they have added to our platform in a given period. Any such discounts are applied only to new subscribers that the service provider activates on a prospective basis.

Hardware and Other Revenue

We generate hardware and other revenue primarily from the sale of cellular radio modules that provide access to our cloud-based platform and other devices. We recognize hardware and other revenue when the hardware is delivered to our service provider or distributor, net of a reserve for estimated returns. Amounts due from the sale of hardware are payable in accordance with the terms of our agreements with our service providers or distributors, and are not contingent on resale to end users, or to service providers in the case of sales of hardware to distributors. Our terms for hardware sales sold directly to either service providers or distributors typically allow for the return of hardware up to one year past the date of sale. Our distributors sell directly to our service providers under terms between the two parties. We record a percentage of hardware and other revenue based on historical returns, as a reserve against revenue for hardware returns. We evaluate our hardware reserve on a quarterly basis, or sooner if there is an indication of a change in return experience.

Hardware and other revenue also includes activation fees charged to service providers for activation of a new subscriber account on our platform, as well as fees paid by service providers for lead referrals. The activation fee is non-refundable, separately negotiated and specified in our contractual arrangements with our service providers and is charged to the service provider for each subscriber activated on our platform. Activation fees are not offered on a stand-alone basis separate from our subscription offering. We record activation fees initially as deferred revenue and recognize these fees as revenue ratably over the expected life of the subscriber account, which we estimate to be ten years based on our historical annual attrition rates. The portion of these activation fees included in current and long-term deferred revenue as of our balance sheet date represents the amounts that will be recognized ratably as revenue over the following twelve months, or longer as appropriate, until the ten-year expected term is complete. The current and long-term balance for deferred revenue for activation fees was $7.5 million and $9.3 million as of December 31, 2012 and 2013.

Cost of Revenue

Our cost of subscription revenue primarily includes the amounts paid to wireless network providers and, to a lesser extent, the costs of running our network operation centers which are expensed as incurred. Our cost of hardware and other revenue primarily includes cost of raw materials and amounts paid to our third-party manufacturer for production and fulfillment of our cellular radio modules and image sensors, and procurement costs for our video cameras, which we purchase from an original equipment manufacturer, and other devices. We carry our inventory at lower cost or market and the cost is charged to cost of sales on a FIFO basis when the inventory is shipped from our manufacturer. Our cost of revenue excludes amortization and depreciation.

Fair Value Measurements

The accounting standard for fair value measurements provides a framework for measuring fair value and requires disclosures regarding fair value measurements. Fair value is defined as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the

F-12

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

measurement date. This accounting standard established a fair value hierarchy, which requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs:

Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date;

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for similar assets and liabilities, either directly or indirectly; quoted prices in markets that are not active; and

Level 3 — Unobservable inputs supported by little or no market activity.

The carrying amount of financial assets, including cash and cash equivalents, accounts receivable and accounts payable approximates fair value because of the short maturity and liquidity of those instruments.

Assets and Liabilities Measured at Fair Value on a Recurring Basis — We have an available-for-sale investment and derivatives that we record at fair value on a recurring basis.

Assets Measured at Fair Value on a Nonrecurring Basis — We measure certain assets, including property and equipment, goodwill, intangible assets, cost and equity method investments at fair value on a nonrecurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired.

Concentration of Credit Risk and Significant Service Providers

The financial instruments that potentially subject us to concentrations of credit risk consists principally of cash and cash equivalents, marketable securities and accounts receivables. All of our cash and cash equivalents are held at financial institutions that management believes to be of high credit quality. Our cash and cash equivalent accounts may exceed federally issued limits at times. We have not experienced any losses on cash and cash equivalents to date. To manage accounts receivable risk, we evaluate the credit worthiness of our service providers and maintain an allowance for doubtful accounts. The majority of our accounts receivable balance is made up of our service providers in North America. We assess the concentrations of credit risk with respect to accounts receivables based on one industry and geographic region and feel that our reserve for uncollectible accounts is appropriate based on our history and this concentration.

Stock-Based Compensation

We compensate our executive officers, board of directors and our employees with incentive stock-based compensation plans. When granted, awards are governed by the 2009 Stock Incentive Plan, as amended, which provides for the awards to be valued at their grant date fair value. We record stock-based compensation expense using the accelerated attribution method, net of estimated forfeitures, in which compensation cost for each vesting tranche in an award is recognized ratably from the service inception date to the vesting date for that tranche. Our equity awards generally vest over five years and are settled in Alarm.com Holdings, Inc. common stock. During 2011, 2012 and 2013, we recognized compensation expense of $0.2 million, $1.8 million and $0.8 million, and associated income tax benefit of $0.3 million, $0.5 million and $0.2 million, respectively, in connection with our stock-based compensation plans.

F-13

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

Business Combinations

The purchase price of an acquisition is allocated to the assets acquired, including intangible assets, and liabilities assumed, based on their respective fair values at the acquisition date. Acquisition-related costs are expensed as incurred. The excess of the cost of an acquired entity over the net of the amounts assigned to the assets acquired and liabilities assumed is recognized as goodwill. The net assets and results of operations of an acquired entity are included in our consolidated financial statements from the acquisition date.

Impairment of Long-Lived Assets

We evaluate the recoverability of our long-lived assets including finite lived intangible assets for impairment whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of long-lived assets, including finite lived intangible assets, are measured by comparison of the carrying amount of the asset to the future undiscounted cash flows the asset is expected to generate. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset.

Goodwill

We review goodwill and indefinite-lived intangible assets at least annually, as of October 1, for possible impairment. Goodwill and indefinite-lived intangible assets are reviewed for possible impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit or indefinite-lived intangible asset below its carrying value. We test our goodwill at the reporting unit level. We initially assess qualitative factors to determine if it is necessary to perform the two-step goodwill impairment review or indefinite-lived intangible asset quantitative impairment review. We review the goodwill for impairment using the two-step process and the indefinite-lived intangible assets using the quantitative process if, based on our assessment of the qualitative factors, we determine that it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying value, or if we decide to bypass the qualitative assessment. We review the carrying value of goodwill and indefinite-lived intangible assets utilizing a discounted cash flow model and we use the guideline company method to assess the reasonableness of the method. We make assumptions regarding estimated future cash flows, discount rates, long-term growth rates and market values to determine each reporting unit’s and indefinite-lived intangible asset’s estimated fair value. If these estimates or related assumptions change in the future, we may be required to record impairment charges.

Advertising Costs

We expense advertising costs as incurred. Advertising costs totaled $0.7 million, $4.1 million and $8.2 million for the years ended December 31, 2011, 2012 and 2013. Advertising costs are included within sales and marketing expenses on our consolidated statements of operations.

Accounting for Income Taxes

We account for income taxes under the asset and liability method as required by accounting standards codification, or ASC 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that are included in the

F-14

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

We are subject to income taxes in the United States. Significant judgment is required in evaluating uncertain tax positions. We record uncertain tax positions in accordance with ASC 740-10 on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position, and (2) with respect to those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority. We record interest and penalties as a component of our income tax provision.

Earnings per Share (“EPS”)

Our basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period.

Our diluted net income (loss) per share is calculated by giving effect to all potentially dilutive common stock when determining the weighted-average number of common shares outstanding. For purposes of the diluted net income (loss) per share calculation, options to purchase common stock and redeemable convertible preferred stock are considered to be potential common stock.

We have issued securities other than common stock that participate in dividends (“participating securities”), and therefore utilize the two-class method to calculate net income (loss) per share. These participating securities include redeemable convertible preferred stock. The two-class method requires a portion of net income to be allocated to the participating securities to determine the net income attributable to common stockholders. Net income attributable to the common stockholders is equal to the net income less dividends paid on preferred stock, assumed periodic cumulative preferred stock dividends and deemed dividends on preferred stock in the recapitalization with any remaining earnings allocated in accordance with the bylaws between the outstanding common and preferred stock as of the end of each period.

Recent Accounting Pronouncements

On February 5, 2013, the FASB issued ASU 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income,” which requires entities to disclose additional information about items reclassified out of accumulated other comprehensive income (“AOCI”). The requirements include by component disclosures of changes in AOCI balances along with the related income tax benefit or expense and significant items reclassified out of AOCI. ASU 2013-2 is effective for annual periods, and interim periods within those years,

F-15

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

beginning after December 15, 2012, and the amendments are to be applied prospectively. We adopted this pronouncement in the first quarter of 2013 and it did not have a material impact on our financial statements.

Not yet adopted

On July 18, 2013, the FASB issued ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force),” which requires an entity to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss (“NOL”) carryforward, or similar tax loss or tax credit carryforward, rather than as a liability when (1) the uncertain tax position would reduce the NOL or other carryforward under the tax law of the applicable jurisdiction and (2) the entity intends to use the deferred tax asset for that purpose. The ASU does not require new recurring disclosures. ASU 2013-11 is effective for annual periods, and interim periods within those years, beginning after December 15, 2013. The amendments are to be applied to all unrecognized tax benefits that exist as of the effective date and may be applied retrospectively to each prior reporting period presented. While early adoption is permitted, we plan to adopt the new requirements in our reporting for the first quarter of our fiscal year 2014. We do not expect that the adoption of this provision will have a material impact on our financial statements as we have no uncertain tax positions as of December 31, 2013.

Note 3. Accounts Receivable, Net

The components of accounts receivable are as follows (in thousands):

	December 31,
	2012		2013
Accounts receivable	$	11,732	$	17,835
Allowance for doubtful accounts		(580)		(304)
Allowance for product returns		(906)		(952)
Accounts receivable, net	$	10,246	$	16,579

For the years ended December 31, 2011, 2012 and 2013, we recorded $1.1 million, $1.5 million and $1.8 million reserve for product returns in our hardware and other revenue. For the years ended December 31, 2011, 2012 and 2013, we recorded a $0.3 million, $0.1 million and a $0.6 million provision for doubtful accounts receivable. Historically, we have not experienced write-offs for uncollectible accounts or sales returns that have differed significantly from our estimates.

Note 4. Inventory

The components of inventory are as follows (in thousands):

	December 31,
	2012		2013
Raw materials	$	1,454	$	2,420
Finished goods		84		98
Total inventory	$	1,538	$	2,518

F-16

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

For the year ended December 31, 2013, we recorded $0.4 million to write-down inventory to its net realizable value after it was determined to be impaired. There were no such charges in the year ended December 31, 2012.

Note 5. Investments in Other Entities

Cost Method Investment in Connected Home Service Provider

On September 4, 2012, we purchased 20,000 of Series A Convertible Preferred Membership Units of a Brazilian connected home solutions provider for $15.00 per unit, or $300,000, for a 12.2% interest on a fully diluted basis in this entity. On June 26, 2013, we entered into an agreement with the same company to purchase 2,667 of Series B Convertible Preferred Membership Units at $26.22 per unit, or $70,000, which brought our aggregate interest to 12.4% on a fully diluted basis. The entity will resell our products and services to residential and commercial customers in Brazil. Based upon the level of equity investment at risk, the connected home service provider is a Variable Interest Entity (“VIE”). We do not control the marketing, sales, installation, or customer maintenance functions of the entity and therefore do not direct the activities of the entity that most significantly impact its economic performance. We have determined that we are not the primary beneficiary of the entity and do not consolidate the connected home services provider. We account for this investment using the cost method. As of December 31, 2013, the fair value of this cost method investment was not estimated as there were no events or changes in circumstances that may have had a significant adverse effect on the fair value of the investment. The $370,000 investment balance is included in other long-term assets in our consolidated balance sheets.

Loans to and Investments in a Platform Partner

On October 31, 2012, we entered into an agreement with a platform partner to lend $250,000 in the form of a bridge loan secured by a convertible promissory note (the “2012 Note”). Our platform partner produces connected devices that are integrated into our connected home platform, and we entered into the loan agreement and the subsequent investments described below to provide capital in order to bring our platform partner’s devices to market and integrate them onto our connected home platform. Under the terms of the 2012 Note, the entire principal balance becomes due on the earlier of October 31, 2013, or the date on which our platform partner completes a qualified financing event. Additionally, the 2012 Note automatically converts into the preferred stock of our platform partner if that entity completes a qualified financing event within 180 days of the 2012 Note issuance date. If the 2012 Note automatically converts into preferred stock, the conversion price will equal the lowest per-share selling price at which shares of preferred stock are issued in a qualified financing. Interest on the 2012 Note accrues at a rate of 8.0% per annum and all unpaid interest is payable upon the earlier of the maturity date or the conversion date. The 2012 Note is included in other current assets in our consolidated balance sheet as of December 31, 2012.

On January 17, 2013, the 2012 Note plus accrued interest was automatically converted in a qualified financing event where we paid $3.5 million in cash to purchase 3,548,820 shares of the platform partner’s Series A convertible preferred shares, or an 18.7% interest on an as-converted and fully diluted basis. The terms of our investment in the convertible preferred shares included a freestanding option to make an additional investment in the platform partner. Based upon the level of equity investment at risk, the platform partner is a VIE. We do not control the product design, software development, manufacturing, marketing, or sales functions of the entity and therefore we do not direct

F-17

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

the activities the entity that most significantly impact its economic performance. We have determined that we are not the primary beneficiary of the entity and do not consolidate the platform partner. We recorded the option at its initial fair value of $0.2 million. The option did not meet the definition of a derivative (i.e., the underlying is private company stock that is not readily convertible into cash) and, therefore it is not measured at fair value at each reporting period. We recorded the investment in the Series A convertible preferred shares at its initial fair value of $3.5 million and account for it as a cost method investment. As of December 31, 2013, the fair value of our cost method investments was not estimated as there were no events or changes in circumstances that may have had a significant adverse effect on the fair value of the investment. As of December 31, 2013, the cost method investments are recorded in other long-term assets on our consolidated balance sheet.

On July 24, 2013, we loaned the same platform partner $2.0 million in the form of a secured convertible note (the “2013 Note”). The 2013 Note bears interest at 6.0% per annum, and principal and any accrued but unpaid interest is due and payable on the earlier of (1) January 19, 2015 or (2) immediately prior to a change in control. The 2013 Note is accounted for as an available for sale security and is recorded at fair value in marketable securities in our consolidated balance sheet. The initial fair value of the 2013 Note was $1.9 million. The fair value of the 2013 Note at December 31, 2013 was $2.1 million, including $53,000 of accrued interest receivable, and in 2013 we recorded an unrealized gain of $92,000, net of tax of $36,000, in other comprehensive income. The 2013 Note converts automatically into equity at a 12.5% discount from the price per share at which new shares of capital stock are issued by the platform provider in a qualified financing. The automatic conversion feature is an embedded derivative that required bifurcation from the 2013 Note. It was recorded at its initial fair value of $0.1 million in other non-current assets and is remeasured at fair value each reporting period with changes recorded in other income / (expense), net. At December 31, 2013, the fair value of the automatic conversion feature was $125,000, and we recorded a gain of $63,000 in 2013 other income / (expense), net. Under the terms of the 2013 Note, if our platform partner repays the note before the maturity date and completes a qualified financing within 6 months of the repayment, we have the option to purchase capital stock at a 12.5% discount from the price per share in a qualified financing. This option to purchase capital stock at a discount is a freestanding derivative that is remeasured at fair value each reporting period with changes recorded in other income / (expense), net. We estimate the fair value of this option at inception and at December 31, 2013 to be minimal because we consider the probability of our platform partner prepaying the 2013 Note and entering into a qualified financing to be remote. Additionally, if no qualified financing occurs, we can elect to convert the 2013 Note and any unpaid accrued interest into our platform partner’s preferred stock.

Note 6. Acquisitions

EnergyHub Acquisition

On May 7, 2013, in accordance with the Agreement and Plan of Merger, we completed our purchase of 100% of the stock of EnergyHub, Inc. (“EnergyHub”), a developer of software and hardware solutions focused on helping consumers, utilities, and service providers reduce energy consumption through EnergyHub’s demand response and energy efficiency platform. We paid $8.3 million in cash in initial consideration and established a contingent liability of $5.8 million for earn-out considerations to be paid to the former owners. We included the results of EnergyHub’s operations since its acquisition date in the Other segment in our consolidated financial statements. EnergyHub represented $0.4 million of revenue and $4.4 million of net loss for the year ended December 31, 2013.

F-18

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

The table below sets forth the consideration transferred to EnergyHub stockholders and the estimated fair value of tangible and intangible net assets received in the acquisition:

	2013
	(in thousands)
Calculation of Consideration:
Cash paid, net of working capital adjustment	$	8,263
Estimated contingent consideration liability		5,820
Total consideration	$	14,083
Estimated Tangible and Intangible Net Assets:
Current assets	$	173
Other long-term assets		32
Customer related intangible		4,420
Developed technology		2,320
Trade name		860
Deferred tax asset - long-term		4,755
Current liabilities		(337)
Deferred tax liability - long-term		(2,949)
Goodwill		4,809
Total estimated tangible and intangible net assets	$	14,083

Goodwill of $4.8 million represents the value of expected synergies between us and EnergyHub and is calculated as the total consideration less tangible and intangible net assets, including the value of acquired workforce. We estimate that goodwill will not be deductible for tax purposes. Our estimate of the fair value of tangible and intangible net assets was developed using a multi-period excess earnings method for customer-related intangibles and the relief from royalty method for the developed technology intangible. Significant estimates used in the valuation included revenue growth rates, expense and contributory asset charges, royalty rates and the discount rate.

Management determined the estimated fair value of the contingent earn-out payments to be $5.8 million. Payment of the earn-out consideration is principally contingent upon EnergyHub achieving certain agreed upon revenue targets during 2013 through 2015 and, if EnergyHub achieves those targets, we would be required to make payments at the end of 2013, 2014 and 2015 up to a maximum amount of $16.8 million. See “Impairment” below for a discussion of the treatment of the earn-out in 2013 through 2015.

Fair Value of Net Assets Acquired and Intangibles

In accordance with ASC 805, the assets and liabilities of EnergyHub we acquired were recorded at their respective fair values as of May 7, 2013, the date of the acquisition.

Customer Relationships

The customer relationship intangible was recorded separate from goodwill based on determination of the length, strength and contractual nature of the relationship that EnergyHub shared with its customers. We valued this customer relationship information using the multi-period excess earnings

F-19

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

method, an income approach. We used several assumptions in the income approach, including revenue growth, a customer retention rate of 75 percent, operating expenses, charge for contributory assets and trade name, and a 24 percent discount rate used to calculate the present value of the cash flows. The customer relationships, valued at $4.4 million, are being amortized on a straight-line basis over the estimated useful life of 4.5 years.

Developed Technology

Developed technology recorded separately from goodwill consists of intellectual property such as proprietary software used internally for revenue producing activities. EnergyHub’s proprietary software, Mercury, is offered for sale on a subscription hosted basis to customers and has an established revenue stream. The developed technology was valued by applying the relief from royalty method, an income approach. We used several assumptions in the relief from royalty method, including revenue growth, a royalty rate of 7 percent, and a 24 percent discount rate used to calculate the present value of cash flows. The developed technology, valued at $2.3 million, is being amortized on a straight-line basis over an estimated useful life of 7.5 years.

Trade Name

The EnergyHub trade name was recorded separate from goodwill based on an evaluation of the importance of the trade name and the brand recognition in the market, the importance of the trade name to the EnergyHub’s customers, and the amount of revenue associated with the trade name. In developing the estimated fair value, we valued the trade name utilizing the relief from royalty method, an income approach. Significant assumptions used in the relief from royalty method were revenue growth, royalty rate, and the discount rate to calculate the present value of cash flows. The trade name, valued at $0.9 million, is being amortized on a straight-line basis over the estimated useful life of 7 years.

Unaudited Pro forma Information

The following pro forma data is presented as if EnergyHub was included in our historical consolidated statement of operations beginning January 1, 2012.

	Pro forma Year ended December 31,
	2012		2013
Revenue	$	97,966	$	130,726
Net Income		6,128		5,652

Impairment and Earnout Obligation

A triggering event occurred in September 2013 that indicated an impairment of intangibles and goodwill had occurred related to our EnergyHub reporting unit. We determined that a potential strategic partnership agreement which was expected to contribute a material amount of revenue over the earn-out period was no longer expected to be executed. Therefore, EnergyHub’s revenue over the earn-out period was expected to be materially less than originally estimated at the time of the acquisition. Revenue from this potential strategic partnership represented a material percentage of the revenue growth assumptions included in the forecast used to assign fair value to the customer relationships,

F-20

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

developed technology and trade name. As a result, we prepared an interim review of the carrying value of goodwill and other intangible assets. The business failed step one of the goodwill impairment test, and we performed step two to determine the amount of the impairments. Under step one of the impairment analysis, EnergyHub was valued using the discounted cash flow method. To estimate the value of our total invested capital, the debt-free after tax cash flows for EnergyHub were discounted by a 25 percent required rate of return. We used the guideline company method to assess the reasonableness of this value. The total invested capital was compared to our carrying value to determine whether goodwill was impaired as indicated when the carrying value of EnergyHub is higher than the estimated value. The carrying value of the finite lived intangible assets (customer related, developed technology and trade name intangibles) were compared to the sum of our pre-tax and undiscounted cash flows, and we determined that the goodwill and intangible assets were impaired. We recognized an impairment charge for goodwill of $4.8 million and intangible assets of $6.5 million, which are recorded in general and administrative expense for the year ended December 31, 2013 in our consolidated statement of operations. Due to the triggering event, EnergyHub’s revenue results were expected to be materially less than the revenue targets established in the earn-out agreement. Therefore we determined that the earn-out fair value was zero for 2013 through 2015. We recorded a $5.8 million gain on the release of the contingent liability in general and administrative expense for the year ended December 31, 2013 in our consolidated statement of operations.

Note 7. Property and Equipment

Furniture and fixtures, computer software and equipment and leasehold improvements are recorded at cost and presented net of depreciation. Furniture and fixtures and computer software and equipment are depreciated straight-line over lives ranging from three to five years. Internally developed internal-use software is amortized on a straight-line basis over a three year period. During the application development phase we categorize capitalized costs in our construction in progress account until the build is put into production and we move the asset to internal-use software. Leasehold improvements are amortized on a straight-line basis over the shorter of the lease terms or the asset lives.

The components of property and equipment are as follows (in thousands):

	December 31,
	2012		2013
Furniture and fixtures	$	634	$	906
Computer software and equipment		1,518		2,530
Internal-use software		—		135
Construction in progress		33		235
Leasehold improvements		2,144		2,811
Total property and equipment	$	4,329	$	6,617
Accumulated depreciation		(1,757)		(3,031)
Property and equipment, net	$	2,572	$	3,586

Depreciation expense related to property and equipment for the years ended December 31, 2011, 2012 and 2013 was $0.5 million, $0.8 million and $1.3 million. Amortization expense related to internal-use software was $16,000 for the year ended December 31, 2013.

F-21

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

Note 8. Other Assets

Patent licenses

From time to time, we enter into agreements to license patents. We have $2.3 million in patent licenses related to such agreements, which are being amortized over 11 years, the estimated remaining lives of the United States patents licensed in the agreements. The net balance for December 31, 2012 and 2013 was $1.9 million and $1.7 million. Amortization expense on patent licenses was $0.1 million, $0.2 million and $0.2 million for the years ended December 31, 2011, 2012 and 2013 and is included in cost of subscription revenue in our consolidated statements of operations.

Loan to a Distribution Partner

On July 25, 2013, we entered into a revolving loan agreement with a distribution partner. The distribution partner is also a service provider with whom we have a standard agreement to resell our connected home service and hardware. We evaluate the credit quality of our distribution partner for purposes of the revolving loan agreement using the same methods that we employ to evaluate its creditworthiness as a service provider, including a credit review at the inception of the arrangement and if risk indicators arise. At the inception of the loan agreement, we determined the credit quality of our distribution partner to be good. No risk indicators have arisen to cause us to change that assessment.

Under the terms of the revolving loan agreement, we agreed to loan our distribution partner up to $2.8 million, with the proceeds of the loan used to finance the creation of new customer accounts that use our products and services. The amount that our distribution partner may draw down on the loan is based on the number of its qualifying new subscriber accounts created each month. The loan bears interest at a rate of 8.0% per annum, and requires monthly interest payments, with the entire principal balance due on the loan maturity date, July 24, 2018. The balance outstanding under the loan is collateralized by the subscriber accounts owned by our distribution partner, as well as all of the physical assets and accounts receivable associated with those subscriber accounts. As of December 31, 2013, our distribution partner has borrowed $1.5 million under this loan agreement, and this note receivable is included in other long-term assets on our consolidated balance sheets.

Note 9. Marketable Securities

Additional information on available for sale security balances are provided in the following table (in thousands):

	December 31, 2013
	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Convertible note receivable from our platform partner	$	1,938	$	92	$	—	$	2,030
Automatic conversion feature		62		63		—		125
	$	2,000	$	155	$	—	$	2,155

There were no realized gains or losses on available for sale securities in 2011, 2012 or 2013. Amortized cost represents the cost basis of the investment as of the purchase date. There have been no proceeds or gains from the sale of available for sale securities during the years ended

F-22

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

December 31, 2011, 2012 or 2013. There have been no other-than-temporary impairment recognized in accumulated other comprehensive income in 2011, 2012, and 2013. There is approximately $53,000 of accrued interest included in marketable securities on our consolidated balance sheet as of December 31, 2013.

Note 10. Goodwill and Intangible Assets

The components of goodwill by operating segment are outlined below for the years ended December 31, 2012 and 2013 (in thousands):

	Alarm.com		Other		Total
Balance as of January 1, 2012	$	18,480	$	—	$	18,480
Goodwill acquired		—		—		—
Balance as of December 31, 2012		18,480		—		18,480
Goodwill acquired		—		4,809		4,809
Goodwill impaired		—		(4,809)		(4,809)
Balance as of December 31, 2013	$	18,480	$	—	$	18,480

The $4.8 million of acquired goodwill in the other segment was related to the acquisition of EnergyHub in May 2013. See Note 6 for additional information regarding this acquisition.

There were no impairments of goodwill during the years ended December 31, 2011 and 2012. In the third quarter of 2013, we experienced a triggering event related to EnergyHub, which resulted in testing goodwill for impairment and subsequently recording a $4.8 million impairment charge in general and administrative expense in the consolidated statement of operations for the year ended December 31, 2013. See Note 6 for additional information regarding the impairment.

The following table reflects changes in the net carrying amount of the components of intangible assets for the years ended December 31, 2012 and 2013 (in thousands):

	Customer Relationships		Developed Technology		Trade Name		Total
Balance as of January 1, 2012	$	6,089	$	2,081	$	212	$	8,382
Intangible assets acquired		—		—		—		—
Amortization		(855)		(504)		(100)		(1,459)
Balance as of December 31, 2012		5,234		1,577		112		6,923
Intangible assets acquired		4,420		2,320		860		7,600
Intangible assets impaired		(3,794)		(1,970)		(693)		(6,457)
Amortization		(1,289)		(654)		(161)		(2,104)
Balance as of December 31, 2013	$	4,571	$	1,273	$	118	$	5,962

For the years ended December 31, 2011, 2012 and 2013, we recorded $1.6 million, $1.5 million and $2.1 million of amortization related to our intangible assets. There were no impairments of long-lived assets during the years ended December 31, 2011 and 2012. During the third quarter of 2013, we experienced a triggering event related to EnergyHub and recorded a impairment charge to long-lived assets of $6.5 million classified within general and administrative expense in the consolidated statement of operations for the year ended December 31, 2013.

F-23

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

The following tables reflect the weighted average remaining life and carrying value of finite-lived intangible assets as of December 31, 2012 and 2013 (in thousands):

	Year Ended December 31, 2012
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Weighted- average Remaining Life
Customer relationships	$	8,549	$	(3,315)	$	5,234		6.3
Developed technology		3,535		(1,958)		1,577		3.1
Trade name		500		(388)		112		1.3
Total intangible assets	$	12,584		$    (5,661)	$	6,923
	Year Ended December 31, 2013
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Weighted- average   Remaining Life
Customer relationships	$	8,759		$    (4,188)	$	4,571		5.1
Developed technology		3,755		(2,482)		1,273		2.2
Trade name		615		(497)		118		2.5
Total intangible assets	$	13,129		$    (7,167)	$	5,962

The following table reflects the future estimated amortization expense for intangible assets (in thousands):

Year ending December 31,	Amortization
2014	$	1,554
2015		1,541
2016		1,053
2017		855
2018 and thereafter		959
	$	5,962

Note 11. Fair Value Measurements

The following presents our assets measured at fair value on a recurring basis as of December 31, 2012 and 2013 (in thousands):

	Fair Value Measurements on a Recurring Basis December 31, 2012
	Level 1		Level 2		Level 3		Total
Money market account	$	17,500	$	—	$	—	$	17,500
	$	17,500	$	—	$	—	$	17,500

F-24

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

	Fair Value Measurements on a Recurring Basis December 31, 2013
	Level 1		Level 2		Level 3		Total
Money market account	$	29,600	$	—	$	—	$	29,600
Convertible note receivable		—		—		2,030		2,030
Automatic conversion feature		—		—		125		125
	$	29,600	$	—	$	2,155	$	31,755

The money market account is included in our cash and cash equivalents in our consolidated balance sheets as of December 31, 2012 and 2013. The automatic conversion feature, convertible note receivable and related accrued interest are included in marketable securities in our consolidated balance sheet as of December 31, 2013.

In 2013, we recognized a gain of $63,000 on the change in fair value on the automatic conversion feature, which is recorded in other income / expense, net in the consolidated statement of operations. We recorded an unrealized gain of $92,000, net of $36,000 taxes, on the change in fair value of the convertible note receivable, which is included as a component of other comprehensive income. We valued the automatic conversion feature at inception and year end using an option pricing model that considered the probability of conversion upon a qualified financing and conversion on maturity. The other inputs in this model included the strike price, enterprise value, asset volatility, and the risk-free interest rate. We valued the convertible note receivable at inception and at each reporting period by discounting the principal plus accrued interest at maturity using a discount rate of 11.0% at inception and 10.4% at December 31, 2013.

At December 31, 2013, we estimated the fair value of the convertible note receivable and the automatic conversion feature using a 40% probability of conversion upon a qualified financing and a 60% probability of conversion upon maturity. For the sensitivity of the fair value measurement, a 10% change in the probability of either event would result in a $13,000 change in the estimated fair value of the convertible note receivable and a $31,000 change in the fair value of the automatic conversion feature, respectively.

We monitor the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. There were no transfers between Levels 1, 2 or 3 during the years ended December 31, 2011, 2012 and 2013. We also monitor the value of the investments for other-than-temporary impairment on a quarterly basis. No other-than-temporary impairments occurred during the years ended December 31, 2011, 2012 and 2013.

For the year ended December 31, 2013, we recorded a goodwill impairment charge of $4.8 million and other long-lived assets impairment charge of $6.5 million. The remeasurement of the goodwill and other long-lived assets is classified as a Level 3 fair value assessment due to the significance of unobservable inputs developed in the determination of fair value.

F-25

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

Note 12. Debt, Commitments and Contingencies

The debt, commitments and contingencies described below are currently in effect and would require us, or our subsidiaries, to make payments to third parties under certain circumstances.

Debt

Line of Credit

We had access to a working line of credit through a one year Loan and Security Agreement (“the Agreement”) with Silicon Valley Bank (“the Bank”) that expires on December 1, 2016 at which time the principal amount of all advances, unpaid interest and all other obligations related to the line shall become due and payable. The amount of borrowings available under the Agreement is 80% of the face value of our eligible accounts receivable plus 50% of our unrestricted cash and cash equivalents maintained with the Bank or the Bank’s Affiliates, up to the credit limit of $10.0 million, and an interest rate either the Bank’s prime rate when our fixed charge coverage ratio is equal to or greater than 2.50 to 1.00, or the Bank’s prime rate plus 0.50% when our fixed charge coverage ratio is less than 2.50 to 1.00. Upon the event of our default, the line of credit will bear interest at a rate that is 4.00% above the otherwise applicable interest rate. The Agreement assesses a fee of 0.25% on the unused portion of the line of credit. The Agreement requires us to comply with certain financial and non-financial covenants including, a minimum liquidity ratio of 0.90:1.00 during the first three months of 2012 and a minimum liquidity ratio of 1.00:1.00 for all other periods, as well as a Fixed Charge Coverage Ratio of not less than 1.50:1.00. During the year ended December 31, 2012, we made no borrowings against the line of credit and were in compliance with all financial and non-financial covenants other than a covenant to provide the Bank with audited financial statements by June 30, 2013. The Bank waived this requirement and extended the reporting deadline to October 4, 2013. During the year ended December 31, 2013, we made no borrowings against the line of credit and were in compliance with all financial and non-financial covenants.

Term Loan

We also have a Loan & Security Agreement with the Bank. We borrowed $10.0 million under a Term Loan (“Term Loan”) that will be repaid in sixty (60) monthly installments of principal and accrued interest. Principal payments are due as follows: twelve payments of $83,333 due monthly in 2012, followed by twelve payments of $125,000 due on the first day of each calendar month in 2013, followed by twelve payments of $166,667 due monthly in 2014, followed by twelve payments of $208,333 due monthly in 2015, followed by twelve payments of $250,000 due monthly in 2016. The outstanding principal balance on the Term Loan accrues interest at a rate equal to either the Bank’s prime rate when our fixed charge coverage ratio is equal to or greater than 2.50 to 1.00, or the Bank’s prime rate plus 0.75% when our fixed charge coverage ratio is less than 2.50 to 1.00. During 2011, 2012 and 2013, the effective interest rate on the Term Loan was 3.25%. The Term Loan includes a variable interest rate that approximates market and, as such, we determined that the carrying amount of the Term Loan approximates its fair value. Upon the event of our default, the Term Loan will bear interest at a rate that is 4.00% above the otherwise applicable interest rate. We have the option to prepay the Term Loan without penalty provided that the Term Loan has been outstanding two or more years. The Term Loan terminates on the date of the last required principal payment, which is December 1, 2016.

We are required to comply with certain financial and non-financial covenants, including a requirement to maintain a minimum liquidity ratio of 0.90:1.00 during the first three months of 2012 and

F-26

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

a minimum liquidity ratio of 1.00:1.00 for all other periods, as well as a fixed charge coverage ratio of not less than 1.50:1.00. During the year ended December 31, 2012 and 2013, we were in compliance with all financial and non-financial covenants other than a covenant to provide the Bank with audited financial statements by June 30, 2013. The Bank waived this requirement and extended the reporting deadline to October 4, 2013.

The carrying value of our term loan at December 31, 2012 and 2013 approximates fair value.

On May 8, 2014, we repaid all of the outstanding principal and interest under the loan agreement and replaced this facility with a $50.0 million revolving credit facility (the “2014 Facility”) with Silicon Valley Bank, as administrative agent, and a syndicate of lenders. We utilized $6.7 million under this facility to repay in full our indebtedness under the Term Loan. The 2014 Facility includes an option to increase the borrowing capacity available under the 2014 Facility to $75.0 million with the consent of the lenders. The 2014 Facility is available to us to finance working capital and certain permitted acquisitions and investments, and is secured by substantially all of our assets, including intellectual property. The 2014 Facility matures in May 2017.

The outstanding principal balance on the 2014 Facility accrues interest at a rate equal to either (1) the Eurodollar Base Rate, or LIBOR, plus an applicable margin based on our consolidated leverage ratio, or (2) the higher of (a) the Wall Street Journal prime rate and (b) the Federal Funds rate plus 0.50% plus an applicable margin based on our consolidated leverage ratio, or ABR, at our option. Borrowings under LIBOR rates accrue interest at LIBOR plus 2.25%, LIBOR plus 2.5%, and LIBOR plus 2.75% when our consolidated leverage ratio is less than or equal to 1.00:1.00, greater than or equal to 1.00:1.00 but less than 2.00:1.00, and greater than 2.00:1.00, respectively. Borrowings under ABR rates accrue interest at ABR plus 1.25%, ABR plus 1.5%, and ABR plus 1.75% when our consolidated leverage ratio is less than or equal to 1.00:1.00, greater than or equal to 1.00:1.00 but less than 2.00:1.00, and greater than 2.00:1.00, respectively. The 2014 Facility also carries an unused line commitment fee of 0.20% to 0.25% depending on our consolidated leverage ratio.

The 2014 facility contains various financial and other covenants that require us to maintain a maximum consolidated leverage ratio not to exceed 2.50:1.00 and a consolidated fixed charge coverage ratio of at least 1.25:1.00.

Commitments and Contingencies

Repurchase of Subsidiary Units

In September 2012, we formed a subsidiary to develop and market home and commercial energy management devices and services. We granted an award of subsidiary stock to the founder and president. The terms of the award for the founder, who is also our employee, require a payment in cash on either the third or the fourth anniversary from the date the subsidiary first makes its products and services commercially available, which as of December 31, 2013, was not considered probable to occur and therefore, we have not recorded a liability related to this commitment.

In February 2011, we formed a subsidiary to offer residential and commercial door access devices and services that can be remotely programmed and controlled. We granted an award of subsidiary stock awards to the founder and president. The terms of the award for the founder, who is our employee, require a payment in cash on between the fourth and sixth anniversary of the date that the

F-27

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

subsidiary’s products and services first become commercially available, which was determined to be June 1, 2013. We have recorded a liability of $0.2 million related to this commitment.

Leases

We lease office space and office equipment under non-cancelable operating leases with various expiration dates through 2018. Rent expense was $0.5 million, $0.7 million and $1.2 million for the years ended December 31, 2011, 2012 and 2013.

The following table presents future minimum lease payments under the non-cancelable operating leases at December 31, 2013 (in thousands):

Year ending December 31,	Rent Expense
2014	$	1,558
2015		1,460
2016		1,105
2017		358
2018		280
2019 and thereafter		—
	$	4,761

Indemnification Agreements

We have various agreements where we may be obligated to indemnify the other party to the agreement with respect to certain matters. Generally, these indemnification provisions are included in contracts arising in the normal course of business. Although it is not possible to predict the maximum potential amount of future payments that may become due under these indemnification agreements, we do not believe any potential liability that might arise from such indemnity provisions is probable or material.

Legal Proceedings

From time to time, we and are subsidiaries are involved in various legal proceedings that arise in the ordinary course of business. In 2013, we incurred $11.2 million in legal fees associated with intellectual property litigation that we asserted against a third party and the related counterclaims. We settled the lawsuit in 2014. We are not a party to any lawsuit or proceeding that, in the opinion of management, is reasonably possible or probable of having a material adverse effect on its financial position, results of operations or cash flows.

We reserve for contingent liabilities based on ASC 450, “Contingencies,” when it is determined that a liability, inclusive of defense costs, is probable and reasonably estimable. Litigation is subject to many factors that are difficult to predict, so there can be no assurance that, in the event of a material unfavorable result in one or more claims, we will not incur material costs.

Note 13. 401(k) Defined Contribution Plan

We adopted the Alarm.com Holdings 401(k) Plan (“the Plan”) on April 30, 2009. All of our employees are eligible to participate in the Plan and we match 50% of employee contributions up to

F-28

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

6% of salary and up to a $3,000 maximum Company match per year. We recognized costs of $0.1 million, $0.2 million and $0.3 million for the years ended December 31, 2011, 2012 and 2013 related to our matching contributions.

Note 14. Significant Service Providers

During the years ended December 31, 2011, 2012 and 2013, our 10 largest revenue service providers accounted for approximately 65.8%, 71.2% and 65.7% of our revenue. Two of our service providers individually represented greater than 10% but not more than 20% of our revenue for the year ended December 31, 2011. Three of our service providers individually represented greater than 10% but not more than 20% of our revenue for the year ended December 31, 2012. Two of our service providers individually represented greater than 10% but not more than 20% of our revenue for the year ended December 31, 2013.

Trade accounts receivable from three service providers totaled $1.3 million, $1.6 million and $2.4 million as of December 31, 2012. No other individual service provider represented more than 10% of total accounts receivable as of December 31, 2012. Trade accounts receivable from three service providers totaled $1.8 million, $2.5 million and $3.2 million, as of December 31, 2013. No other individual service provider represented more than 10% of accounts receivable as of December 31, 2013.

Note 15. Income Taxes

The components of our income tax expense for the years ended December 31, 2011, 2012 and 2013 are as follows (in thousands):

	December 31,
		2011		2012		2013
Current
Federal	$	5,038	$	8,163	$	3,965
State		968		1,290		878
		6,006		9,453		4,843
Deferred
Federal		10		(1,982)		(1,919)
State		(1)		(191)		(236)
		9		(2,173)		(2,155)
	$	6,015	$	7,280	$	2,688

F-29

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

The difference between the income tax expense at the Federal statutory rate and income tax expense in the accompanying consolidated statements of operations is as follows:

	December 31,
	2011		2012		2013
Federal statutory rate		35.0%		35.0%		35.0%
State income tax expense, net of Federal benefit		3.9		4.3		4.7
Nondeductible transaction costs		—		5.6		0.4
Goodwill and intangible impairment		—		—		23.3
Release of acquisition related contingent liability		—		—		(28.2)
Nondeductible meals & entertainment		0.3		0.5		2.2
Other		(0.8)		(0.5)		(0.1)
		38.4%		44.9%		37.3%

The components of our net deferred tax assets (liabilities) are as follows (in thousands):

	December 31,
	2012		2013
Deferred tax assets, current
Warrant expense	$	1,195	$	—
Provision for doubtful accounts		477		615
Accrued expenses		311		444
		1,983		1,059
Deferred tax assets, non-current
Deferred revenue		1,757		2,586
Deferred rent		304		297
Stock-based compensation		220		576
Acquisition costs		115		106
Net operating losses		—		4,410
		2,396		7,975
Total deferred tax assets		4,379		9,034
Deferred tax liabilities, non-current
Intangible assets and prepaid patent licenses		(906)		(1,485)
Depreciation		(803)		(891)
Unrealized gains		—		(53)
Total deferred tax liabilities		(1,709)		(2,429)
Net deferred tax assets	$	2,670	$	6,605

At December 31, 2013, we had U.S. net operating loss carryforwards of approximately $11.4 million, which are scheduled to begin to expire in 2030. The net operating loss carryforwards arose in connection with the EnergyHub acquisition (see Note 6). Utilization of net operating loss carryforwards may be subject to annual limitations due to the ownership change limitations as provided by the Internal Revenue Code of 1986, as amended.

F-30

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

A valuation allowance is recognized if, based on the weight of available evidence, both positive and negative, it is more likely than not that some portion, or all, of net deferred tax assets will not be realized. Based on our historical and expected future taxable earnings, we believe it is more likely than not that we will realize all of the benefit of the existing deferred tax assets at December 31, 2012 and 2013. Accordingly, we have not recorded a valuation allowance as of December 31, 2012 and 2013.

We apply guidance for uncertainty in income taxes that requires the application of a more likely than not threshold to the recognition and de-recognition of uncertain tax positions. If the recognition threshold is met, this guidance permits us to recognize a tax benefit measured at the largest amount of the tax benefit that, in our judgment, is more likely than not to be realized upon settlement. For the years ended December 31, 2011, 2012 and 2013, we had no unrecorded tax benefits for uncertain tax positions.

We file income tax returns in the United States. We are no longer subject to U.S. Federal income tax examinations for years prior to 2010, with the exception that operating loss carryforwards generated prior to 2010 may be subject to tax audit adjustment. We are generally no longer subject to state and local income tax examinations by tax authorities for years prior to 2009.

Note 16. Redeemable Convertible Preferred Stock and Stockholders’ (Deficit) Equity

Series B Investment

On July 11, 2012 (the “Series B Investment Date”), we sold 1,803,057 shares of Series B redeemable convertible preferred stock (“Series B Preferred”) to investment funds associated with Technology Crossover Ventures (“TCV”) for $136.0 million, or $75.44 per share (the “Series B Transaction”). As a condition of the Series B Transaction, we agreed to repurchase and existing stockholders agreed to sell (the “Initial Selling Shareholders”), 1,470,720 shares of Series B-1 Redeemable Convertible Preferred Stock (see “Plan of Corporate Reorganization and Recapitalization,” below) for $75.44 per share and 25,713 shares of Common Stock, for $8.38 per share. We used $111.2 million of the proceeds from the Series B Transaction to repurchase shares from the Initial Selling Stockholders on the Series B Investment Date; $4.7 million of the proceeds to repurchase shares from existing stockholders under the terms of an offer to repurchase stock (see “Repurchase Offer”, below); $2.6 million of the proceeds to pay transaction related expenses, including banking, legal and accounting fees; and $17.6 million of the proceeds were to be used for general corporate purposes.

On July 31, 2012, we sold 6,628 shares of Series B Preferred for $0.5 million, or $75.44 per share, to another investor. All of the proceeds were to be used for general corporate purposes.

Plan of Corporate Reorganization and Recapitalization

On July 11, 2012, we amended our Certificate of Incorporation to create and authorize the issuance of four classes of stock, including 10,000,000 authorized shares of common stock (“New Common”) with a par value of $0.01 per share, 3,511,725 authorized shares of Series A redeemable convertible preferred stock (“New Series A”) with a par value of $0.001 per share, 1,809,685 authorized shares of Series B redeemable convertible preferred stock with a par value of $0.001, and 1,669,680 authorized shares of Series B-1 redeemable convertible preferred stock (“Series B-1”) with a par value of $0.001 per share. Additionally, immediately prior to completing the Series B Transaction,

F-31

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

we implemented a plan of corporate reorganization and recapitalized the company (the “Recapitalization”). On July 11, 2012, the Recapitalization Date, 100% of the then outstanding shares of Series A redeemable convertible preferred stock (“Old Series A”) were cancelled and 43.10% of the cancelled Old Series A shares were replaced by Series B-1 shares and 56.90% of the cancelled Old Series A shares were replaced with New Series A shares. Also on the Recapitalization Date, 100% of the then outstanding shares of common stock (“Old Common”) were cancelled and 43.10% of the cancelled Old Common shares were replaced by Series B-1 shares and 56.90% of the cancelled Old Common shares were replaced with New Common shares. In lieu of issuing any fractional shares, all new shares issued under the Recapitalization were rounded down and we paid $75.44, on a whole share basis, to cancel any fractional Old Series A shares and Series B-1 shares, and $3.33, on whole share basis, to cancel any fractional Old Common shares. On July 11, 2012, we issued 1,590,152 shares of Series B-1 Redeemable Convertible Preferred stock (“Series B-1”) in connection with our reorganization and Recapitalization. Also on that date, we repurchased 1,470,720 shares of Series B-1 stock from stockholders for $111.0 million, or $75.44 per share, as a condition of closing the Series B Transaction. Immediately after our Repurchase Offer closed on July 31, 2012, we repurchased an additional 36,391 shares of Series B-1 stock from stockholders for $2.7 million, or $75.44 per share.

Deemed Dividend on Redeemable Convertible Preferred Stock

As a result of the recapitalization, we transferred $138.7 million of value from the common stockholders to the holders of the redeemable convertible preferred stock as a deemed dividend. We calculated the deemed dividend as the difference between the fair value of the securities before and after Recapitalization, measured on the Recapitalization Date. The deemed dividend is included in net loss attributable to common stockholders used to calculate basic and diluted net loss per share for the year ended December 31, 2012 (see Note 19).

Repurchase Offer

On June 30, 2012, we initiated an offer to repurchase stock from existing stockholders (“Repurchase Offer”) whereby we offered to repurchase from each stockholder up to 43.10% of the total of the number of shares owned by each stockholder, plus 43.10% of the number of shares of common stock underlying vested stock options held by each stockholder, less any shares repurchased by the us on the Series B Investment Date. We offered to repurchase eligible shares of Series B-1 and New Series A for $75.44 per share and eligible shares of New Common for $8.38 per share. Stockholders who chose to participate in the Repurchase Offer were required to sell their shares in the following order: (1) Series B-1 shares, then (2) any combination of New Series A shares and New Common shares owned on June 30, 2012, and then (3) any Common shares issued on the exercise of vested stock options between June 30, 2012 and July 31, 2012. Immediately after the Repurchase Offer expired on July 31, 2012, we repurchased 268,852 total shares, including 36,391 shares of Series B-1 and 232,461 shares of New Common, respectively, for $4.7 million. We recorded stock-based compensation expense of $1.4 million for the amount paid to repurchase New Common shares from employees that was in excess of the fair value of the New Common shares. All repurchased shares were cancelled.

The following disclosures regarding the liquidation preferences, dividends, voting rights, redemption and conversion features of our equity securities are based upon the Amended and Restated Certificate of Incorporation dated July 12, 2012 subsequent to the Company’s reorganization and Recapitalization.

F-32

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

Redeemable Convertible Preferred Stock

Summary of Activity

The following table presents a summary of activity for our redeemable convertible preferred stock issued and outstanding for the years ended December 31, 2011, 2012 and 2013 (in thousands):

	SERIES B Redeemable Convertible Preferred Stock				SERIES B-1 Redeemable Convertible Preferred Stock				NEW SERIES A Redeemable Convertible Preferred Stock				OLD SERIES A Redeemable Convertible Preferred Stock				Total Amount
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount
Balance, January 1, 2011		—	$	—		—	$	—		—	$	—		3,512	$	35,117	$	35,117
Balance, December 31, 2011		—		—		—		—		—		—		3,512		35,117		35,117
Cancellation of Old Common Stock and Conversion to Series B-1 Preferred and New Common Stock in recapitalization		—		—		77		5,785		—		—		—		—		5,785
Cancellation of Old Series A Preferred and Conversion to Series B-1 Preferred and New Series A Preferred in recapitalization		—		—		1,513		114,176		1,998		59,668		(3,512)		(35,117)		138,727
Issuance of Series B Preferred Stock		1,810		136,523		—		—		—		—		—		—		136,523
Series B-1 Preferred Stock repurchased		—		—		(1,507)		(113,696)		—		—		—		—		(113,696)
Balance, December 31, 2012		1,810		136,523		83		6,265		1,998		59,668		—		—		202,456
Balance, December 31, 2013		1,810	$	136,523		83	$	6,265		1,998	$	59,668		—	$	—	$	202,456

Series A Redeemable Convertible Preferred Stock

On February 13, 2009, we issued 3,166,212 shares of Series A Redeemable Convertible Preferred stock (“Old Series A”) in connection with the acquisition of Alarm.com. This included 336,725 shares of Old Series A issued to the sellers of Alarm.com and 2,829,487 shares of Old Series A issued to an investor in exchange for cash paid to the sellers of Alarm.com on behalf of us.

On February 13, 2009, we also issued 70,000 shares of Old Series A to an investor at a price of $10.00 per share, in exchange for $700,000 in cash. The proceeds were used to fund our general working capital requirements.

On March 7, 2009, we issued 275,513 additional shares of Old Series A at a price of $10.00 per share. The proceeds from the sale were used to fund our general working capital requirements.

On July 11, 2012, we cancelled 3,511,725 shares of Old Series A and issued 1,998,257 New Series A Redeemable Convertible Preferred shares in connection with our reorganization and Recapitalization.

F-33

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

Liquidation Preferences

In the event of our liquidation or dissolution, the holders of New Series A shares will be paid out of the assets available before distribution or any payment is made to holders of New Common Stock, but after satisfaction of the liquidation preferences of the Series B Preferred and Series B-1 shareholders. The liquidation preference is the greater of (1) the original issue price of the preferred stock plus a New Series A Additional Preference equal to 8.0% per annum on the original issue price accruing on a daily basis from the original issuance date and until the date such New Series A shares are liquidated, plus accrued and unpaid dividends, or (2) the amount that would have been paid had all the preferred stock holders been converted into New Common Stock.

Voting Rights

New Series A shareholders are entitled to cast the number of votes equal to the number of whole shares of New Common Stock into which the New Series A shares are convertible as of the record date of the vote. Certain of our actions, including mergers and acquisitions, dissolution, issuance of stock, declaration of dividends, the origination of debt, or amendments to our governing documents, requires the consent of a majority of the New Series A shareholders, and Series B Preferred shareholders, voting as separate classes.

Conversion

Each share of New Series A stock shall be convertible at the option of the holder at any time and without the payment of additional consideration, into an equal number of shares of New Common Stock. The initial conversion price is $10.00 (“New Series A Conversion Price”) per share. The conversion price will be adjusted if we issue additional shares of our capital stock and the consideration per share is less than the New Series A Conversion Price in effect immediately prior to the issuance of the additional shares. On June 14, 2013, in conjunction with a nine-for-one forward split of its New Common shares, we amended its Certificate of Incorporation and adjusted the conversion price of the Company’s New Series A Preferred shares to $1.11111111 per share. All outstanding shares of New Series A stock shall be converted automatically into New Common Stock on a one-for-one basis immediately upon the closing of an initial public offering of stock in which aggregate gross proceeds from the offering exceed $75.0 million.

Redemption

In the event of certain capital transactions deemed to be liquidation events, the New Series A stockholders may require the redemption of all outstanding New Series A shares, subject to and following payment in full of the amounts payable to Series B Preferred and Series B-1 stockholders. In the event that the available proceeds from a liquidation event, or other available funds, are not sufficient to redeem all outstanding shares of New Series A stock, we shall redeem a pro rata portion of each stockholder’s New Series A stock and we shall redeem the remaining shares as soon as adequate funds are available.

Series B Redeemable Convertible Preferred Stock

On July 11, 2012, we issued 1,803,057 shares of Series B redeemable convertible preferred stock (“Series B Preferred”) to investment funds associated with an investor at a price of $75.44 per share, or $136.0 million.

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ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

On July 31, 2012, we sold 6,628 shares of Series B Preferred for $0.5 million, or $75.44 per share to another investor. All of the proceeds were used for general corporate purposes.

Dividend Preferences

In the event we declare a dividend, the Series B Preferred stockholders are entitled to receive dividends for each outstanding share of Series B Preferred on a pari passu basis with other shareholders, plus additional dividends equal to the declared dividend (the “Additional Dividends”). The Additional Dividends will be payable until such time as the Series B Preferred stockholders have been paid cumulative Additional Dividends in an aggregate amount equal to two fifths (0.40) times the original issue price of the Series B Preferred shares.

Liquidation Preferences

In the event of our liquidation or dissolution, the holders of Series B Preferred shares, along with holders of Series B-1 shares, will be paid out of the assets available before distribution or any payment is made to holders of New Series A or New Common Stock. The liquidation preference is the greater of (1) a per share amount equal to one and two fifths (1.4) times the original issue price per share, plus any declared but unpaid dividends, less any Series B Preferred Additional Dividends previously paid, or (2) the amount that would have been paid had all the preferred stockholders been converted into New Common Stock.

Voting Rights

Series B Preferred stockholders are entitled to cast the number of votes equal to the number of whole shares of New Common Stock into which the Series B Preferred shares are convertible as of the record date of the vote. Certain actions of us, including mergers and acquisitions, dissolution, issuance of stock, declaration of dividends, the origination of debt, or amendments to our governing documents, requires the consent of a majority of the New Series A stockholders, and Series B Preferred shareholders, voting as separate classes.

Conversion

Each share of Series B Preferred stock shall be convertible at the option of the holder at any time and without the payment of additional consideration, into an equal number of shares of New Common Stock. The initial conversion price was $75.44 (“Series B Preferred Conversion Price”) per share. The conversion price will be adjusted if we issue additional shares of our capital stock and the consideration per share is less than the Series B Preferred Conversion Price in effect immediately prior to the issuance of the additional shares. In the event Series B Preferred stock is converted to our New Common Stock in connection with an initial public offering of the Company’s stock, the number of New Common shares to be issued depends in part on the initial public offering price of our common stock (the “IPO Price”). If our IPO Price is less than the Series B Preferred per share liquidation preference, or $11.74, then the number of common shares issued upon conversion will be equal to the Series B Preferred Conversion Price multiplied by a fraction equal to the IPO Price divided by the Series B liquidation preference per share. On June 14, 2013, in conjunction with a nine-for-one forward split of its New Common shares, we amended our Certificate of Incorporation and adjusted the conversion price of our B-1 Preferred shares to $8.38222222 per share. All outstanding shares of Series B Preferred stock shall be converted automatically into New Common Stock immediately upon the closing of an initial public offering of stock in which aggregate gross proceeds from the offering exceed $75.0 million.

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ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

Redemption

In the event of certain capital transactions deemed to be liquidation events, the Series B Preferred stockholders may require the redemption of all outstanding Series B Preferred shares. In the event that the available proceeds from a liquidation event, or other available funds, are not sufficient to redeem all outstanding shares of Series B Preferred stock, we shall redeem a pro rata portion of each stockholder’s Series B Preferred stock along with a pro rata portion of each stockholder’s Series B-1 shares, on a pari passu basis, and we shall redeem the remaining shares as soon as adequate funds are available.

Dividend Preferences

In the event we declares a dividend, the Series B-1 stockholders are entitled to receive dividends for each outstanding share of Series B-1 on a pari passu basis with other stockholders, plus Additional Dividends equal to the declared dividend. The Additional Dividends will be payable until such time the Series B-1 stockholders have been paid cumulative Additional Dividends in an aggregate amount equal to two fifths (0.40) times the original issue price of the Series B-1 shares.

Liquidation Preferences

In the event of our liquidation or dissolution, the holders of Series B-1 shares, along with holders of Series B Preferred shares, will be paid out of the assets available before distribution or any payment is made to holders of New Series A or New Common Stock. The liquidation preference is the greater of (1) a per share amount equal to one and two fifths (1.4) times the original issue price per share, plus any declared but unpaid dividends, less any Series B-1 Preferred Additional Dividends previously paid, or (2) the amount that would have been paid had all the preferred stockholders been converted into New Common Stock.

Conversion

Each share of Series B-1 stock shall be convertible at the option of the holder at any time and without the payment of additional consideration, into an equal number of shares of New Common Stock. The initial conversion price is $75.44 (“Series B-1 Conversion Price”) per share. The conversion price will be adjusted if the Company issues additional shares of the Company’s stock and the consideration per share is less than the Series B-1 Conversion Price in effect immediately prior to the issuance of the additional shares. In the event Series B-1 stock is converted to our New Common Stock in connection with an initial public offering of the Company’s stock, the number of New Common shares to be issued depends in part on the initial public offering price of our common stock (the “IPO Price”). If our IPO Price is less than the Series B-1 per share liquidation preference, or $11.74, then the number of common shares issued upon conversion will be equal to the Series B-1 Conversion Price multiplied by a fraction equal to the IPO Price divided by the Series B-1 liquidation preference per share. On June 14, 2013, in conjunction with a nine-for-one forward split of its New Common shares, the Company amended its Certificate of Incorporation and adjusted the conversion price of the Company’s Series B-1 Preferred shares to $8.38222222 per share. All outstanding shares of Series B-1 stock shall be converted automatically into New Common Stock immediately upon the closing of an initial public offering of stock in which aggregate gross proceeds from the offering exceed $75.0 million.

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ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

Redemption

In the event of certain capital transactions deemed to be liquidation events, the Series B-1 stockholders may require the redemption of all outstanding Series B-1 shares. In the event that the available proceeds from a liquidation event, or other available funds, are not sufficient to redeem all outstanding shares of Series B-1 stock, we shall redeem a pro rata portion of each shareholder’s Series B-1 stock along with a pro rata portion of each stockholder’s Series B Preferred shares, on a pari passu basis, and we shall redeem the remaining shares as soon as adequate funds are available.

Dividends

On June 12, 2012, we declared a dividend of $0.26 per common share and $2.33 per preferred share payable to all common and preferred shareholders of record on June 12, 2012. The total dividend amount of $8.6 million was paid on June 14, 2012.

We declared and paid two dividends in 2011. On October 28, 2011, we declared a dividend of $0.31 per common share and $2.76 per preferred share payable to all stockholders of record on November 9, 2011, which was paid on November 14, 2011. On December 20, 2011, we declared a dividend of $0.29 per common share and $2.65 per preferred share to all stockholders of record on December 22, 2011, which was paid on December 23, 2011. The Series A Preferred stockholders waived their right as it related to this dividend to receive payment of their cumulative accrued unpaid dividends and as such, common stockholders and Series A preferred stockholders participated in each of the dividends on an equal per share basis and the cumulative unpaid dividend on New Series A preferred stock remains outstanding and continues to accrue.

9-for-1 Stock Split

On June 14, 2013, we amended our Certificate of Incorporation increasing the number of authorized shares of Common Stock from 10,000,000 to 100,000,000, adjusting the conversion price of our New Series A Preferred shares to $1.11111111 per share, and adjusting the conversion price of our Series B Preferred shares and Series B-1 shares to $8.38222222 per share. Additionally, our board of directors approved a nine-for-one New Common Stock split in which each share of New Common Stock outstanding was split into nine shares of Common Stock, and the exercise price of each stock option issued and outstanding under the 2009 Stock Incentive Plan (see Note 17) was adjusted to reflect the effect of the nine-for-one stock split. All numbers of per common share data in the accompanying consolidated financial statements have been retroactively adjusted to reflect this stock split for all periods presented.

Note 17. Stock-Based Compensation

Stock Options

We issue stock options through our 2009 Stock Incentive Plan (the “Incentive Plan”), under which stock options may be granted to our officers, directors, key employees, consultants and other persons performing services for us. Stock options have been granted at exercise prices as determined by the board of directors to officers and employees of the Company. These stock options vest over a five year period and each option, if not exercised or terminated, expires on the tenth anniversary of the grant date. As of December 31, 2013, there were 7,203,024 common shares reserved for issuance and 473,568 shares available to be issued under the Incentive Plan.

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ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

The Incentive Plan allows for the granting of options that may be exercised before the options have vested. Unvested shares issued as a result of early exercise are subject to repurchase by us upon termination of employment or services at the original exercise price. At December 31, 2012 and 2013, there were no such unvested shares of common stock outstanding subject to our right of repurchase.

We account for stock-based compensation awards based on the fair value of the award as of the grant date. We recognize stock-based compensation expense using the accelerated attribution method, net of estimated forfeitures, in which compensation cost for each vesting tranche in an award is recognized ratably from the service inception date to the vesting date for that tranche.

The following table summarizes the components of stock-based compensation expense (in thousands):

	Year Ended December 31,
	2011		2012		2013
Stock options	$	182	$	310	$	787
Repurchase of common stock from employees		—		1,449		—
Compensation related to the sale of common stock		—		—		54
Total equity based compensation expense	$	182	$	1,759	$	841
Tax benefit recognized	$	272	$	511	$	160

Stock-based compensation expense is included in the following line items in the accompanying consolidated statements of operations (in thousands):

	Year Ended December 31,
	2011		2012		2013
Sales and marketing	$	39	$	196	$	102
General and administrative		89		418		495
Research and development		54		1,145		244
Total stock-based compensation expense	$	182	$	1,759	$	841

We value our stock options using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including the risk-free interest rate, expected term, expected stock price volatility and dividend yield. The risk-free interest rate assumption is based upon observed interest rates for constant maturity U.S. Treasury securities consistent with the expected term of our stock options. The expected term represents the period of time the stock options are expected to be outstanding and is based on the “simplified method.” Under the “simplified method,” the expected term of an option is presumed to be the mid-point between the vesting date and the end of the contractual term. We use the “simplified method” due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected term of the stock options. Expected volatility is based on historical volatilities for publicly traded stock of comparable companies over the estimated expected term of the stock options. We had not declared, paid or intended to pay a cash dividend prior to the issuance of stock options in 2011, and therefore the dividend rate was assumed to be zero. We paid approximately $19.9 million and $8.6 million in dividends to holders of Old Series A

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ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

and Old Common in 2011 and 2012, respectively. The dividends declared and paid in 2012 were in anticipation of the sale of Series B redeemable convertible preferred stock (“Series B Preferred”), which we completed in July 2012 (see Note 16). Subsequent to the sale of Series B Preferred, we have not declared, or paid, nor do we intend to pay a cash dividend. As such, we assume that the dividend rate is zero.

The following table summarizes the assumptions used for estimating the fair value of stock options granted for the years ended December 31:

	2011	2012	2013
Volatility	47.4% - 48.1%	53.2% - 54.7%	44.1% - 47.6%
Expected term	6.3 years	6.3 years	3.3 years - 6.3 years
Risk-free interest rate	1.2% - 2.0%	0.8% - 0.9%	0.9% - 1.9%
Dividend rate	0.0%	0.0%	0.0%

The following table summarizes the stock option activity for the year ended December 31, 2013:

	Number of Options		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2012		3,198,951		$1.34		7.7		$4,544
Granted		1,314,450		3.78
Exercised		(169,175)		0.48				652
Forfeited		(16,095)		2.19
Cancelled		(2,388)		1.11
Outstanding at December 31, 2013		4,325,743		$2.11		7.7		$21,929
Vested and expected to vest at December 31, 2013		4,214,024		$2.10		7.7		$21,420
Exercisable at December 31, 2013		1,663,936		$0.89		6.3		$10,458

The weighted average grant date fair value for our stock options granted during the years ended December 31, 2011, 2012 and 2013 was $0.56, $1.29, and $4.02, respectively. The total fair value of stock options vested during the years ended December 31, 2011, 2012 and 2013 was $0.2 million, $0.2 million and $0.5 million, respectively. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2011, 2012 and 2013 was $0.9 million, $1.5 million and $0.7 million, respectively. As of December 31, 2013, the total compensation cost related to nonvested awards not yet recognized was $5.3 million, which will be recognized over a weighted average period of 1.8 years.

F-39

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

Warrants

In 2010, we issued performance based warrants to two of our executive officers that gives these individuals the right to purchase up to 841,896 shares of our common stock in the aggregate if certain performance targets and market conditions are achieved. In 2012, the we issued an additional performance based warrant to an executive officer that gives that executive officer the right to purchase up to 27,000 shares of our common stock if certain performance targets and market conditions are achieved.

The first performance based warrant for 750,015 shares of our common stock has an initial exercise price of $0.001 per share and two separate tranches of shares become exercisable upon the occurrence of a triggering event, which is defined as: (1) a change in control event that results in any person or entity (other than our stockholders immediately prior to the transaction) owning more than 50% of the combined voting power of all classes of our capital stock, (2) a sale of substantially all of our assets, (3) an initial public offering, or (4) a liquidation or other dissolution of the Company. Upon the occurrence of a triggering event, the number of shares that become exercisable under the warrant is determined by the amount of cash consideration received by ABS Capital Partners, one of our stockholders, as a result of such triggering event. On July 11, 2012, we modified the terms of the performance-based warrant to provide for a $3.1 million cash payment in the event that a triggering event has not occurred on or before January 3, 2013. We considered this to be an equity to cash-settled liability modification and recorded $3.1 million in compensation expense, included within general and administrative expense, on the modification date. The award was included in accounts payable and accrued expenses as at December 31, 2012 and settled for $3.1 million on January 3, 2013.

The second performance based warrant for 91,881 shares of our common stock has an exercise price of $0.41 per share and becomes exercisable if our enabled independent living products and services subsidiary achieves minimum annual revenue targets.

The third performance based warrant for 27,000 shares of our common stock has an exercise price of $3.89 per share and becomes exercisable if there is a change in control of either us or its Building 36 subsidiary or if we complete an initial public offering. If the warrant becomes exercisable, the number of shares that become exercisable is based upon the achievement of certain minimum annual revenue and Adjusted EBITDA targets, not to exceed a maximum of 27,000 shares.

As of December 31, 2011, 2012 and 2013, none of the warrants which remained outstanding were exercisable as the performance requirements had not been met. In 2012, we recorded $3.1 million, which is included in general and administrative expense in the accompanying consolidated statement of operations, related to a warrant termination payment that was paid to an executive officer in January 2013. We did not record expense associated with the performance-based warrants during the years ended December 31, 2011, and 2013.

Common Stock Purchases

On May 22, 2013, we sold 238,500 shares of our common stock to one of our executive officers for $0.7 million, or $2.95 per share, an amount below fair value. Under the terms of the sale, we have the right to repurchase all of the shares for $2.95 per share if the executive officer’s employment with us is terminated prior to April 2, 2017.

F-40

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

Note 18. Segment Information

We have two reportable segments:

• Alarm.com segment

• Other segment

Our chief operating decision maker is the chief executive officer. Management determined that the operational data used by the chief operating decision maker is that of the two reportable segments. Management bases strategic goals and decisions on these segments and the data presented below is used to measure financial results. Our Alarm.com segment represents our cloud-based platform for the connected home and related solutions. This segment contributed over 99% of our revenue in 2011, 2012 and 2013. Our Other segment includes the results of EnergyHub, an energy efficiency and demand response service provider which we acquired in May 2013, as well as start-up initiatives focused on researching and developing home and commercial automation, energy management and independent living products and services in adjacent markets.

Management evaluates the performance of its segments and allocates resources to them based on operating income on a pre-tax basis. The reportable segment operational data is presented in the table below as of and for the years ended December 31 (in thousands):

Segment Information	Year ended December 31, 2011
	Alarm.com		Other		Total
Revenue	$	65,059	$	—	$	65,059
Operating income / (loss)		16,822		(1,153)		15,669
Total assets		58,093		244		58,337
	Year ended December 31, 2012
	Alarm.com		Other		Total
Revenue	$	96,372	$	103	$	96,475
Operating income / (loss)		19,489		(2,973)		16,516
Total assets		84,165		3,380		87,545
	Year ended December 31, 2013
	Alarm.com		Other		Total
Revenue	$	129,014	$	1,208	$	130,222
Operating income / (loss)		19,685		(12,261)		7,424
Total assets		89,334		9,553		99,487

We derived substantially all revenue from the United States, with only 3.9% of our total revenue for the year ended December 31, 2013 derived from Canada. Substantially all our long lived assets were in the United States as of December 31, 2012 and 2013.

F-41

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

Note 19. Earnings Per Share

Basic and Diluted Earnings Per Share

Diluted net loss per common share is the same as basic net loss per common share for the years ended December 31, 2011 and 2012 because the effects of potentially dilutive items were anti-dilutive due to our net loss attributable to common stockholders. The following securities have been excluded from the calculation of weighted average common shares outstanding because the effect is anti-dilutive for the years ended December 31:

	Year Ended December 31,
	2011		2012		2013
Redeemable convertible preferred stock:
Series A		3,511,725		1,998,257		1,998,257
Series B		—		1,809,685		1,809,685
Series B-1		—		82,934		82,934
Stock options		3,037,527		3,198,951		—

The components of basic and diluted EPS are as follows (in thousands, except share and per share amounts):

	Year Ended December 31,
	2011		2012		2013
Net income	$	9,655	$	8,929	$	4,524
Less: dividends paid on redeemable convertible preferred stock		(18,998)		(8,182)		—
Less: cumulative dividends on redeemable convertible preferred stock		(3,317)		(1,855)		—
Less: deemed dividend to redeemable convertible preferred stock upon recapitalization		—		(138,727)		—
Less: income allocated to participating securities		—		—		(4,402)
Net (loss) income available for common stockholders (A)	$	(12,660)	$	(139,835)	$	122
Weighted average common shares outstanding - basic (B)		640,850		1,288,162		1,443,469
Dilutive effect of stock options		—		—		1,351,876
Weighted average common shares outstanding - diluted (C)		640,850		1,288,162		2,795,345
Earnings per share:
Basic (A/B)	$	(19.76)	$	(108.55)	$	0.08
Diluted (A/C)	$	(19.76)	$	(108.55)	$	0.04

F-42

ALARM.COM HOLDINGS, INC.

Notes to the Consolidated Financial Statements—(Continued)

December 31, 2011, 2012 and 2013

Pro Forma Net Income Per Share (unaudited)

The denominator used in computing pro forma net income per share for the year ended December 31, 2013 has been adjusted to assume the conversion of all outstanding shares of redeemable convertible preferred stock into common stock as of the beginning of the year or at the time of issuance, if later.

	Year Ended December 31, 2013
	Basic		Diluted
Numerator (in thousands):
Pro forma net income attributable to common stockholders	$	4,524	$	4,524
Denominator:
Weighted average common shares outstanding		1,443,469		2,795,345
Plus: conversion of redeemable convertible preferred stock to common stock		35,017,884		35,017,884
Pro forma weighted average common shares outstanding		36,461,353		37,813,229
Pro forma net income per share	$	0.12	$	0.12

There were no stock options excluded from diluted pro forma net income per share for anti-dilution.

Note 20. Related Party Transaction

One of our executive officers exercised options in December 2013. We calculate and process the employee income tax and withholding through our normal payroll process and subsequently receive payment from the employee for tax. There was $0.1 million outstanding as of December 31, 2013 because of the timing of the processing. We subsequently received the tax owed to us by the executive officer.

Note 21. Subsequent Events

2014 Facility

On May 8, 2014, we repaid all of the outstanding principal and interest under the amended loan agreement and replaced this facility with a $50.0 million revolving credit facility, or the “2014 Facility”, with Silicon Valley Bank, as administrative agent, and a syndicate of lenders. See Note 12 for additional information.

We evaluated subsequent events through May 14, 2014, the date on which our financial statements were issued.

F-43

ALARM.COM HOLDINGS, INC.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

	Three Months Ended March 31,
	2013		2014
Revenue:
Subscription revenue	$	17,579	$	25,204
Hardware and other revenue		10,450		11,647
Total revenue		28,029		36,851
Cost of revenue:(1)
Cost of subscription revenue		3,690		5,008
Cost of hardware and other revenue		7,568		8,993
Total cost of revenue		11,258		14,001
Operating expenses:
Sales and marketing		3,638		5,096
General and administrative		2,358		5,220
Research and development		2,675		4,610
Amortization and depreciation		628		806
Total operating expenses		9,299		15,732
Operating income		7,472		7,118
Interest income / (expense), net		(70)		11
Other income / (expense), net		—		(59)
Income before income taxes		7,402		7,070
Provision for income taxes		3,050		2,797
Net income		4,352		4,273
Income allocated to participating securities		(4,250)		(4,125)
Net income attributable to common stockholders	$	102	$	148
Per share information attributable to common stockholders:
Net income per share:
Basic	$	0.08	$	0.08
Diluted	$	0.04	$	0.04
Proforma (unaudited):
Basic			$	0.12
Diluted			$	0.11
Weighted average common shares outstanding:
Basic		1,252,755		1,869,370
Diluted		2,426,857		3,467,288
Proforma (unaudited):
Basic				36,887,254
Diluted				38,485,172

(1) Exclusive of amortization and depreciation shown below.

See accompanying notes to the unaudited condensed consolidated financial statements.

F-44

ALARM.COM HOLDINGS, INC.

Condensed Consolidated Statements of Comprehensive Income

(in thousands)

(unaudited)

	Three Months Ended March 31,
	2013		2014
Net income	$	4,352	$	4,273
Other comprehensive income, net of tax:
Unrealized gain on available for sale securities		—		32
Other comprehensive income		—		32
Total comprehensive income	$	4,352	$	4,305

See accompanying notes to the unaudited condensed consolidated financial statements.

F-45

ALARM.COM HOLDINGS, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)

	As of December 31,		As of March 31,
	2013		2014		2014
					Pro Forma (Note 2)
Assets
Current assets:
Cash and cash equivalents	$	33,583	$	40,863	$	40,863
Accounts receivable, net		16,579		15,327		15,327
Inventory		2,518		2,499		2,499
Deferred tax assets		1,059		1,173		1,173
Other current assets		1,717		1,799		1,799
Total current assets		55,456		61,661		61,661
Property and equipment, net		3,586		3,789		3,789
Intangible assets, net		5,962		5,565		5,565
Goodwill		18,480		18,480		18,480
Deferred tax assets		5,546		5,802		5,802
Marketable securities		2,208		2,320		2,320
Other assets		8,249		8,421		8,421
Total Assets	$	99,487	$	106,038	$	106,038
Liabilities, redeemable convertible preferred stock and stockholders’ (deficit) equity
Current liabilities:
Accounts payable and accrued expenses	$	15,870	$	17,657	$	17,657
Accrued compensation		3,765		2,828		2,828
Deferred revenue		1,163		1,221		1,221
Current portion of long-term debt		2,000		2,125		2,125
Total current liabilities		22,798		23,831		23,831
Deferred revenue		8,488		8,728		8,728
Long-term debt		5,500		4,875		4,875
Other liabilities		935		655		655
Total Liabilities		37,721		38,089		38,089
Commitments and contingencies (Note 10)
Redeemable convertible preferred stock
Series B redeemable convertible preferred stock, $0.001 par value, 1,809,685 shares authorized, 1,809,685 shares issued and outstanding as of December 31, 2013 and March 31, 2014 and no shares issued and outstanding as of March 31, 2014 pro forma, liquidation preference of $191,132 as of March 31, 2014.		136,523		136,523		—
Series B-1 redeemable convertible preferred stock, $0.001 par value, 1,669,680 shares authorized, 82,934 shares issued and outstanding as of December 31, 2013 and March 31, 2014 and no shares issued and outstanding as of March 31, 2014 pro forma, liquidation preference of $8,759 as of March 31, 2014.		6,265		6,265		—
Series A redeemable convertible preferred stock, $0.001 par value, 3,511,725 shares authorized, 1,998,257 issued and outstanding as of December 31, 2013 and March 31, 2014 and no shares issued and outstanding as of March 31, 2014 pro forma, liquidation preference of $22,901 as of March 31, 2014.		59,668		59,668		—
Stockholders’ (deficit) equity
Common stock, $0.01 par value, 100,000,000 shares authorized, 1,657,433 2,690,280 and 37,708,164 shares issued as of December 31, 2013, March 31, 2014 and March 31, 2014 pro forma and 1,657,433, 2,273,007 and 37,290,891 shares outstanding as of December 31, 2013, March 31, 2014 and March 31, 2014 pro forma.		17		23		373
Additional paid-in capital		1,777		3,649		205,755
Treasury stock (35,523 shares at cost of $1.20 per share)		(42)		(42)		(42)
Accumulated other comprehensive income		56		88		88
Accumulated deficit		(142,498)		(138,225)		(138,225)
Total Stockholders’ (Deficit) Equity		(140,690)		(134,507)		67,949
Total Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ (Deficit) Equity	$	99,487	$	106,038	$	106,038

See accompanying notes to the unaudited condensed consolidated financial statements.

F-46

ALARM.COM HOLDINGS, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Three Months Ended March 31,
	2013		2014
Cash flows from operating activities:
Net income	$	4,352	$	4,273
Adjustments to reconcile net income to net cash from operating activities:
Provision for doubtful accounts		140		186
Reserve for product returns		395		434
Amortization on patent		50		50
Amortization and depreciation		628		806
Deferred income taxes		142		322
Tax benefit from stock based awards		—		(691)
Undistributed losses from equity investees		—		90
Stock-based compensation		164		788
Other, net		—		(29)
Changes in operating assets and liabilities (net of business acquisitions):
Accounts receivable, net		(3,503)		632
Inventory		(544)		19
Other assets		(192)		(331)
Accounts payable and accrued expenses		1,777		(630)
Deferred revenue		543		297
Other liabilities		—		(280)
Cash flows from operating activities		3,952		5,936
Cash flows used in investing activities:
Additions to property and equipment		(510)		(611)
Investments in cost and equity method investees		(3,446)		—
Issuances of notes receivable		—		(115)
Cash flows used in investing activities		(3,956)		(726)
Cash flows (used in) / from financing activities
Repayments of term loan		(375)		(500)
Repurchases of common stock		—		(3)
Proceeds from early exercise of share-based awards		—		1,480
Issuances of common stock from equity based plans		—		402
Tax benefit from stock-based awards		—		691
Cash flows (used in) / from financing activities		(375)		2,070
Net increase / (decrease) in cash and cash equivalents		(379)		7,280
Cash and cash equivalents at beginning of the period		41,920		33,583
Cash and cash equivalents at end of the period	$	41,541	$	40,863
Supplemental disclosures:
Non-cash investing and financing activities:
Conversion of note receivable into cost method investment	$	250	$	—

See accompanying notes to the unaudited condensed consolidated financial statements.

F-47

ALARM.COM HOLDINGS, INC.

Condensed Consolidated Statement of Equity

(in thousands)

(unaudited)

					Additional Paid-In-Capital		Treasury Stock		Accumulated Deficit		Accumulated Other Comprehensive Income		Total Stockholders’ Deficit
	Common Stock
	Shares		Amount
Balance, January 1, 2014		1,657	$	17	$	1,777	$	(42)	$	(142,498)	$	56	$	(140,690)
Common stock issued in connection with equity based plans		617		6		396		—		—		—		402
Stock-based compensation expense		—		—		788		—		—		—		788
Tax benefit from stock-based awards		—		—		691		—		—		—		691
Common stock repurchased		(1)		—		(3)		—		—		—		(3)
Other comprehensive income		—		—		—		—		—		32		32
Net income		—		—		—		—		4,273		—		4,273
Balance, March 31, 2014		2,273	$	23	$	3,649	$	(42)	$	(138,225)	$	88	$	(134,507)

See accompanying notes to the unaudited condensed consolidated financial statements

F-48

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements

March 31, 2013 and 2014

(unaudited)

Note 1. Company Overview

Alarm.com Holdings, Inc. (referred herein as “Alarm.com”, the “Company”, or “we”) is a cloud-based software platform powering the intelligently connected home. Our multi-tenant software-as-a-service (“SaaS”) platform allows home and business owners to intelligently secure and manage their properties and remotely interact with a broad array of connected devices through a single, intuitive interface. Our solution is delivered through an established network of thousands of authorized and licensed service providers. Our four primary solutions are intelligent automation, interactive security, video monitoring and energy management, which can be used individually or integrated into a single user interface. We derive revenue from the sale of our software as a service over our integrated platform, hardware, activation fees and other revenue.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts and results of operations of the Company and its majority owned and controlled subsidiaries. All intercompany balances and transactions have been eliminated in the accompanying unaudited condensed consolidated financial statements.

These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all the information and footnotes required by GAAP for annual financial statements. They should be read together with our audited consolidated financial statements and notes thereto contained herein for the year ended December 31, 2013. The condensed balance sheet data as of December 31, 2013 was derived from our audited financial statements, but does not include all disclosures required by GAAP.

In the opinion of management, these condensed consolidated financial statements include all normal recurring adjustments necessary for a fair statement of the results of operations, financial position and cash flows. The results of operations for the three months ended March 31, 2014 are not necessarily indicative of the results that can be expected for the entire fiscal year ending December 31, 2014.

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from these estimates. Estimates are used in the accounting for revenue recognition, allowances for doubtful accounts receivable, allowance for hardware returns, estimates of obsolete inventory, long-term incentive compensation, stock-based compensation, income taxes, legal reserves and goodwill and intangible assets.

F-49

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

Concentration of Credit Risk and Significant Service Providers

The financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents, marketable securities and accounts receivables. All of our cash and cash equivalents are held at financial institutions that management believes to be of high credit quality. Our cash and cash equivalent accounts may exceed federally issued limits at times. We have not experienced any losses on cash and cash equivalents to date. To manage accounts receivable risk, we evaluate the credit worthiness of our service providers and maintain an allowance for doubtful accounts. The majority of our accounts receivable balance is made up of our service providers in North America. We assess the concentrations of credit risk with respect to accounts receivables based on one industry and geographic region and feel that our reserve for uncollectible accounts is appropriate based on our history and this concentration.

During the three months ended March 31, 2013 and 2014, our 10 largest revenue service providers accounted for approximately 65.8% and 67.5% of our revenue. Two of our service providers individually represented greater than 10% but not more than 20% of our revenue for the three months ended March 31, 2013. Three of our service providers individually represented greater than 10% but not more than 20% of our revenue for the three months ended March 31, 2014.

Trade accounts receivable from three service providers totaled $1.8 million, $2.5 million and $3.2 million, as of December 31, 2013. No other individual service provider represented more than 10% of accounts receivable as of December 31, 2013. Trade accounts receivable from three service providers totaled $3.3 million, $1.8 million and $1.5 million, as of March 31, 2014. No other individual service provider represented more than 10% of accounts receivable as of March 31, 2014.

Unaudited Pro Forma Presentation

In the event that an initial public offering of our common stock, or IPO, is completed, all shares of the Company’s outstanding redeemable convertible preferred stock will automatically convert into common stock. The unaudited pro forma stockholders’ equity as of March 31, 2014 gives effect to the automatic conversion of all outstanding shares of redeemable convertible preferred stock into an aggregate of 35,017,884 shares of common stock.

The unaudited pro forma net income per share attributable to common stockholders for the three months ended March 31, 2014 assumes the conversion of all outstanding shares of redeemable convertible preferred stock into an aggregate of 35,017,884 shares of common stock upon the completion of the IPO as of January 1, 2013 or at the time of issuance, if later.

The pro forma financial information does not give effect to any proceeds from a qualifying initial public offering of our common stock.

Recent Accounting Pronouncements

Adopted

On July 18, 2013, the FASB issued ASU No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward

F-50

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

Exists (a consensus of the FASB Emerging Issues Task Force),” which requires an entity to present an unrecognized tax benefit as a reduction of a deferred tax asset for a net operating loss, or NOL, carryforward, or similar tax loss or tax credit carryforward, rather than as a liability when (1) the uncertain tax position would reduce the NOL or other carryforward under the tax law of the applicable jurisdiction and (2) the entity intends to use the deferred tax asset for that purpose. The ASU does not require new recurring disclosures. ASU 2013-11 is effective for annual periods, and interim periods within those years, beginning after December 15, 2013. The amendments are to be applied to all unrecognized tax benefits that exist as of the effective date and may be applied retrospectively to each prior reporting period presented. We adopted this pronouncement in the first quarter of 2014, and it did not have a material impact on our financial statements.

Not yet adopted

On May 28, 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” which affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The guidance supersedes the revenue recognition guidance in Topic 605, “Revenue Recognition”, and most industry-specific guidance throughout the Industry Topics of the Codification. The guidance also supersedes some cost guidance included in Subtopic 605-35, “Revenue Recognition – Contract-Type and Production-Type Contracts”. ASU 2014-9 is effective for annual periods, and interim periods within those years, beginning after December 15, 2016. Early application is not permitted. An entity is required to apply the amendments using one of the following two methods: i) retrospectively to each prior period presented with three possible expedients: a) for completed contracts that begin and end in the same reporting period no restatement is required; b) for completed contract with variable consideration an entity may use the transaction price at completion rather than restating estimated variable consideration amounts in comparable reporting periods; and c) for comparable reporting periods before date of initial application reduced disclosure requirements related to transaction price; ii) retrospectively with the cumulative effect of initially applying the amendment recognized at the date of initial application with additional disclosures for the differences of the prior guidance to the reporting periods compared to the new guidance and an explanation of the reasons for significant changes. We are required to adopt ASU 2014-09 in the first quarter of 2017 and we are currently assessing the impact of this pronouncement on our financial statements.

On April 10, 2014, the FASB issued ASU 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” which amends the definition of a discontinued operation in ASC 205-20 and requires entities to provide additional disclosures about discontinued operations as well as disposal transactions that do not meet the discontinued operations criteria. The guidance narrowed the definition of a discontinued operations for disposal of a component or group of components that represents a strategic shift that has or will have a major impact on an entity’s operations or financial results. The guidance also expands the scope to include equity method investments and businesses, that upon initial acquisition, qualify as held for sale. The expanded disclosure requirements include statement of financial position and statement of cash flows disclosures for all comparative periods. The ASU is effective prospectively for all disposals (or classifications as held for sale) in periods beginning on or after December 15, 2014 with early adoption permitted. We are required to adopt ASU 2014-08 in the first quarter of 2015 and these provisions are not expected to have a material impact on our financial statements.

F-51

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

Note 3. Trade Receivables

The components of accounts receivable are as follows (in thousands):

	December 31, 2013		March 31, 2014
Accounts receivable	$	17,835	$	16,996
Allowance for doubtful accounts		(304)		(490)
Allowance for product returns		(952)		(1,179)
Accounts receivable, net	$	16,579	$	15,327

For each of the three months ended March 31, 2013 and 2014, we recorded a $0.4 million reserve for product returns in our hardware and other revenue. For the three months ended March 31, 2013 and 2014, we recorded a $0.1 million and a $0.2 million provision for doubtful accounts receivable. Historically, we have not experienced write-offs for uncollectible accounts or sales returns that have differed significantly from our estimates.

During the three months ended March 31, 2014, we entered into financing agreements with certain customers of a business in our Other segment with payment terms on trade receivables of greater than one year for hardware sales. As of March 31, 2014, $0.2 million of trade receivables was outstanding under these agreements and recorded in other assets on our condensed consolidated balance sheet.

Note 4. Inventory

The components of inventory are as follows (in thousands):

	December 31, 2013		March 31, 2014
Raw materials	$	2,420	$	2,416
Finished goods		98		83
Total inventory	$	2,518	$	2,499

There were no adjustments necessary to record inventory at net realizable value for the three months ended March 31, 2013 and 2014.

Note 5. Investments in Other Entities

Cost Method Investment in Connected Home Service Provider

On September 4, 2012, we purchased 20,000 of Series A Convertible Preferred Membership Units of a Brazilian connected home solutions provider for $15.00 per unit, or $300,000, for a 12.2% interest on a fully diluted basis in this entity. On June 26, 2013, we entered into an agreement with the same company to purchase 2,667 of Series B Convertible Preferred Membership Units at $26.22 per unit, or $70,000, which brought our aggregate interest to 12.4% on a fully diluted basis. The entity will resell our products and services to residential and commercial customers in Brazil. Based upon the level of equity investment at risk, the connected home service provider is a Variable Interest Entity (“VIE”). We do not control the marketing, sales, installation, or customer maintenance functions of the entity and

F-52

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

therefore do not direct the activities of the entity that most significantly impact its economic performance. We have determined that we are not the primary beneficiary of the entity and do not consolidate the connected home services provider. We account for this investment using the cost method. As of December 31, 2013 and March 31, 2014, the fair value of this cost method investment was not estimated as there were no events or changes in circumstances that may have had a significant adverse effect on the fair value of the investment. The $370,000 investment balance is included in other long-term assets in our condensed consolidated balance sheets as of December 31, 2013 and March 31, 2014.

Loans to and Investments in a Platform Partner

On October 31, 2012, we entered into an agreement with a platform partner to lend $250,000 in the form of a bridge loan secured by a convertible promissory note (the “2012 Note”). Our platform partner produces connected devices that are integrated into our connected home platform, and we entered into the loan agreement and the subsequent investments described below to provide capital in order to bring our platform partner’s devices to market and integrate them onto our connected home platform. On January 17, 2013, the 2012 Note plus accrued interest at 8.0% per annum was automatically converted in a qualified financing event where we paid $3.5 million in cash to purchase 3,548,820 shares of the platform partner’s Series A convertible preferred shares, or an 18.7% interest on an as-converted and fully diluted basis. The terms of our investment in the convertible preferred shares included a freestanding option to make an additional investment in the platform partner. Based upon the level of equity investment at risk, the platform partner is a VIE. We do not control the product design, software development, manufacturing, marketing, or sales functions of the entity and therefore we do not direct the activities the entity that most significantly impact its economic performance. We have determined that we are not the primary beneficiary of the entity and do not consolidate the platform partner. We recorded the option at its initial fair value of $0.2 million. The option did not meet the definition of a derivative (i.e., the underlying is private company stock that is not readily convertible into cash) and, therefore it is not measured at fair value at each reporting period. We recorded the investment in the Series A convertible preferred shares at its initial fair value of $3.5 million and account for it as a cost method investment. As of December 31, 2013 and March 31, 2014, the fair value of our cost method investments was not estimated as there were no events or changes in circumstances that may have had a significant adverse effect on the fair value of the investment. The cost method investments are recorded in other long-term assets on our consolidated balance sheet.

On July 24, 2013, we loaned the same platform partner $2.0 million in the form of a secured convertible note (the “2013 Note”). The 2013 Note bears interest at 6.0% per annum, and principal and any accrued but unpaid interest is due and payable on the earlier of (1) January 19, 2015 or (2) immediately prior to a change in control. The 2013 Note is accounted for as an available for sale security and is recorded at fair value in marketable securities in our consolidated balance sheet. The initial fair value of the 2013 Note was $1.9 million. The fair value of the 2013 Note as of December 31, 2013 was $2.1 million including $53,000 of accrued interest receivable. The fair value of the 2013 Note as of March 31, 2014 was $2.1 million including $82,000 of accrued interest receivable. For the three months ended March 31, 2013 and 2014 we recorded $0 and $52,000 unrealized gain, net of tax of $20,000 in other comprehensive income.

The 2013 Note converts automatically into equity at a 12.5% discount from the price per share at which new shares of capital stock are issued by the platform provider in a qualified financing. The automatic conversion feature is an embedded derivative that required bifurcation from the 2013 Note. It

F-53

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

was recorded at its initial fair value of $0.1 million in other non-current assets and is remeasured at fair value each reporting period with changes recorded in other income / (expense), net. As of December 31, 2013 and March 31, 2014, the fair value of the automatic conversion feature was $125,000 and $156,000. We recorded a gain of $0 and $31,000 in other income / (expense), net for the three months ended March 31, 2013 and 2014.

Under the terms of the 2013 Note, if our platform partner repays the note before the maturity date and completes a qualified financing within 6 months of the repayment, we have the option to purchase capital stock at a 12.5% discount from the price per share in a qualified financing. This option to purchase capital stock at a discount is a freestanding derivative that is remeasured at fair value each reporting period with changes recorded in other income / (expense), net. Additionally, if no qualified financing occurs, we can elect to convert the 2013 Note and any unpaid accrued interest into our platform partner’s preferred stock. We estimate the fair value of this option at inception and at March 31, 2014 to be minimal because we consider the probability of our platform partner prepaying the 2013 Note and entering into a qualified financing to be remote.

Note 6. Loan to a Distribution Partner

On July 25, 2013, we entered into a revolving loan agreement with a distribution partner. The distribution partner is also a service provider with whom we have a standard agreement to resell our connected home service and hardware. We evaluate the credit quality of our distribution partner for purposes of the revolving loan agreement using the same methods that we employ to evaluate its creditworthiness as a service provider, including a credit review at the inception of the arrangement and if risk indicators arise. At the inception of the loan agreement, we determined the credit quality of our distribution partner to be good. No risk indicators have arisen to cause us to change that assessment.

Under the terms of the revolving loan agreement, we agreed to loan our distribution partner up to $2.8 million, with the proceeds of the loan used to finance the creation of new customer accounts that use our products and services. The amount that our distribution partner may draw down on the loan is based on the number of its qualifying new subscriber accounts created each month. The loan bears interest at a rate of 8.0% per annum, and requires monthly interest payments, with the entire principal balance due on the loan maturity date, July 24, 2018. The balance outstanding under the loan is collateralized by the subscriber accounts owned by our distribution partner, as well as all of the physical assets and accounts receivable associated with those subscriber accounts. As of December 31, 2013 and March 31, 2014, our distribution partner had borrowed $1.5 million and $1.6 million under this loan agreement, and this note receivable is included in other long-term assets on our condensed consolidated balance sheets.

F-54

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

Note 7. Marketable Securities

Additional information on available for sale security balances are provided in the following tables (in thousands):

	December 31, 2013
	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Convertible note receivable from our platform partner	$	1,938	$	92	$	—	$	2,030
Automatic conversion feature		62		63		—		125
	$	2,000	$	155	$	—	$	2,155

	March 31, 2014
	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Convertible note receivable from our platform partner	$	1,938	$	144	$	—	$	2,082
Automatic conversion feature		62		94		—		156
	$	2,000	$	238	$	—	$	2,238

For the three months ended March 31, 2013 and 2014, there were no realized gains or losses, no proceeds or gains from sale and no other than temporary impairment recognized in comprehensive income for available for sale securities. Amortized cost represents the cost basis of the investment as of the purchase date. There is approximately $53,000 and $82,000 of accrued interest included in marketable securities on our condensed consolidated balance sheet as of December 31, 2013 and March 31, 2014. As of December 31, 2013 and March 31, 2014, unrealized gains included in accumulated other comprehensive income was $92,000 and $144,000, net of tax of $36,000 and $56,000, respectively. There were no reclassifications from accumulated other comprehensive income for the three months ended March 31, 2014.

Note 8. Goodwill and Intangible Assets

The components of goodwill by operating segment are outlined below for the three months ended March 31, 2014 (in thousands):

	Alarm.com		Other		Total
Balance as of December 31, 2013	$	18,480	$	—	$	18,480
Goodwill acquired		—		—		—
Balance as of March 31, 2014	$	18,480	$	—	$	18,480

There were no impairments of goodwill during the three months ended March 31, 2013 or 2014.

F-55

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

The following table reflects changes in the net carrying amount of the components of intangible assets for the three months ended March 31, 2014 (in thousands):

	Customer relationships		Developed technology		Tradename		Total
Balance as of December 31, 2013	$	4,571	$	1,273	$	118	$	5,962
Amortization		(231)		(144)		(22)		(397)
Balance as of March 31, 2014	$	4,340	$	1,129	$	96	$	5,565

For the three months ended March 31, 2013 and 2014, we recorded $0.4 million and $0.4 million of amortization related to our intangible assets.

In May 2013, we acquired EnergyHub, a developer of software and hardware solutions focused on helping consumers, utilities, and service providers reduce energy consumption through a demand response and energy efficiency platform. We recorded goodwill, customer relationships, developed technology and tradename intangibles, as well as a liability for contingent consideration at acquisition date fair value less charges for impairment in the third quarter of 2013 as the result of a triggering event. As of December 31, 2013 and March 31, 2014, the contingent consideration was estimated to have a fair value of $0 subsequent to the triggering event. We included the results of EnergyHub’s operations since its acquisition date in the Other segment in our consolidated financial statements. EnergyHub’s operations represented $0.1 million of revenue and $0.5 million of net loss for the three months ended March 31, 2014. There were no impairments of long-lived assets during the three months ended March 31, 2013 or 2014.

The following tables reflect the weighted average remaining life and carrying value of finite-lived intangible assets as of December 31, 2013 and March 31, 2014 (in thousands):

	December 31, 2013
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Weighted- average Remaining Life
Customer relationships	$	8,759	$	(4,188)	$	4,571		5.1
Developed technology		3,755		(2,482)		1,273		2.2
Tradename		615		(497)		118		2.5
Total intangible assets	$	13,129	$	(7,167)	$	5,962

F-56

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

	March 31, 2014
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value		Weighted- average Remaining Life
Customer relationships	$	8,759	$	(4,419)	$	4,340		4.9
Developed technology		3,755		(2,626)		1,129		2.0
Tradename		615		(519)		96		2.2
Total intangible assets	$	13,129	$	(7,564)	$	5,565

Note 9. Fair Value Measurements

We have categorized our financial instruments into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Financial assets and liabilities recorded in the accompanying condensed consolidated balance sheets are categorized based on the inputs in the valuation techniques as follows:

Level 1 — Financial assets and liabilities whose values are based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

Level 2 — Financial assets and liabilities whose values are based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 — Financial assets and liabilities whose values are based on unobservable inputs for the asset or liability.

F-57

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

The following presents our assets measured at fair value on a recurring basis as of December 31, 2013 and March 31, 2014 (in thousands):

	Fair Value Measurements on a Recurring Basis December 31, 2013
	Level 1		Level 2		Level 3		Total
Money market account	$	29,600	$	—	$	—	$	29,600
Convertible note receivable		—		—		2,030		2,030
Automatic conversion feature		—		—		125		125
	$	29,600	$	—	$	2,155	$	31,755

	March 31, 2014
	Level 1		Level 2		Level 3		Total
Money market account	$	36,506	$	—	$	—	$	36,506
Convertible note receivable		—		—		2,082		2,082
Automatic conversion feature		—		—		156		156
	$	36,506	$	—	$	2,238	$	38,744

The money market account is included in our cash and cash equivalents in our condensed consolidated balance sheets. The automatic conversion feature, convertible note receivable and related accrued interest are included in marketable securities in our condensed consolidated balance sheets.

During the three months ended March 31, 2014, we recognized a gain of $31,000 on the change in fair value on the automatic conversion feature, which is recorded in other income / expense, net in the condensed consolidated statement of operations. We recorded an unrealized gain of $52,000, net of $20,000 in taxes, on the change in fair value of the convertible note receivable, which is included as a component of other comprehensive income. We valued the automatic conversion feature at inception and each reporting period using an option pricing model that considered the probability of conversion upon a qualified financing and conversion on maturity. The other inputs in this model included the strike price, enterprise value, asset volatility, and the risk-free interest rate. We valued the convertible note receivable at inception and at each reporting period by discounting the principal plus accrued interest at maturity using a discount rate of 11.0% at inception, 10.4% at December 31, 2013 and 9.9% at March 31, 2014.

At December 31, 2013, we estimated the fair value of the convertible note receivable and the automatic conversion feature using a 40% probability of conversion upon a qualified financing and a 60% probability of conversion upon maturity. For the sensitivity of the fair value measurement, a 10% change in the probability of either event would result in a $13,000 change in the estimated fair value of the convertible note receivable and a $31,000 change in the fair value of the automatic conversion feature, respectively.

At March 31, 2014, we estimated the fair value of the convertible note receivable and the automatic conversion feature using a 50% probability of conversion upon a qualified financing and a 50% probability of conversion upon maturity. For the sensitivity of the fair value measurement, a 10%

F-58

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

change in the probability of either event would result in a $14,000 change in the estimated fair value of the convertible note receivable and a $31,000 change in the fair value of the automatic conversion feature, respectively.

We monitor the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. There were no transfers between Levels 1, 2 or 3 during the three months ended March 31, 2013 and 2014. We also monitor the value of the investments for other-than-temporary impairment on a quarterly basis. No other-than-temporary impairments occurred during the three months ended March 31, 2013 and 2014.

Note 10. Debt, Commitments and Contingencies

The debt, commitments and contingencies described below are currently in effect and would require us, or our subsidiaries, to make payments to third parties under certain circumstances.

Debt

Line of Credit

During the year ended December 31, 2013 and the three months ended March 31, 2014, we made no borrowings against the line of credit and were in compliance with all financial and non-financial covenants.

Term Loan

During the year ended December 31, 2013 and three months ended March 31, 2014, we were in compliance with all financial and non-financial covenants.

The carrying value of our term loan of $7.5 million at December 31, 2013 and $7.0 million at March 31, 2014 approximates fair value.

On May 8, 2014, we repaid all of the outstanding principal and interest under the loan agreement and replaced this facility with a $50.0 million revolving credit facility (the “2014 Facility”) with Silicon Valley Bank, as administrative agent, and a syndicate of lenders. We utilized $6.7 million under this facility to repay in full our indebtedness under the Term Loan. The 2014 Facility includes an option to increase the borrowing capacity available under the 2014 Facility to $75.0 million with the consent of the lenders. The 2014 Facility is available to us to finance working capital and certain permitted acquisitions and investments, and is secured by substantially all of our assets, including intellectual property. The 2014 Facility matures in May 2017.

The outstanding principal balance on the 2014 Facility accrues interest at a rate equal to either (1) the Eurodollar Base Rate, or LIBOR, plus an applicable margin based on our consolidated leverage ratio, or (2) the higher of (a) the Wall Street Journal prime rate and (b) the Federal Funds rate plus 0.50% plus an applicable margin based on our consolidated leverage ratio, or ABR, at our option. Borrowings

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ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

under LIBOR rates accrue interest at LIBOR plus 2.25%, LIBOR plus 2.5%, and LIBOR plus 2.75% when our consolidated leverage ratio is less than or equal to 1.00:1.00, greater than or equal to 1.00:1.00 but less than 2.00:1.00, and greater than 2.00:1.00, respectively. Borrowings under ABR rates accrue interest at ABR plus 1.25%, ABR plus 1.5%, and ABR plus 1.75% when our consolidated leverage ratio is less than or equal to 1.00:1.00, greater than or equal to 1.00:1.00 but less than 2.00:1.00, and greater than 2.00:1.00, respectively. The 2014 Facility also carries an unused line commitment fee of 0.20% to 0.25% depending on our consolidated leverage ratio. The 2014 facility contains various financial and other covenants that require us to maintain a maximum consolidated leverage ratio not to exceed 2.50:1.00 and a consolidated fixed charge coverage ratio of at least 1.25:1.00.

Commitments and Contingencies

Repurchase of Subsidiary Units

In September 2012, we formed a subsidiary to develop and market home and commercial energy management devices and services. We granted an award of subsidiary stock to the founder and president. The terms of the award for the founder, who is also our employee, require a payment in cash on either the third or the fourth anniversary from the date the subsidiary first makes its products and services commercially available, which as of December 31, 2013 and March 31, 2014, was not considered probable to occur and therefore, we have not recorded a liability related to this commitment.

In February 2011, we formed a subsidiary to offer residential and commercial door access devices and services that can be remotely programmed and controlled. We granted an award of subsidiary stock awards to the founder and president. The terms of the award for the founder, who is our employee, require a payment in cash on between the fourth and sixth anniversary of the date that the subsidiary’s products and services first become commercially available, which was determined to be June 1, 2013. We have recorded a liability of $0.2 million related to the commitment as of December 31, 2013 and March 31, 2014.

Leases

We lease office space and office equipment under non-cancelable operating leases with various expiration dates through 2018. Rent expense was $0.2 million and $0.4 million for the three months ended March 31, 2013 and 2014.

Indemnification Agreements

We have various agreements where we may be obligated to indemnify the other party to the agreement with respect to certain matters. Generally, these indemnification provisions are included in contracts arising in the normal course of business. Although it is not possible to predict the maximum potential amount of future payments that may become due under these indemnification agreements, we do not believe any potential liability that might arise from such indemnity provisions is probable or material.

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ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

Legal Proceedings

From time to time, we are involved in various legal proceedings that arise in the ordinary course of business. In 2013, we incurred $11.2 million in legal fees associated with intellectual property litigation that we asserted against a third party and the related counterclaims. We settled the lawsuit in the first quarter of 2014. We are not a party to any lawsuit or proceeding that, in the opinion of management, is reasonably possible or probable of having a material adverse effect on its financial position, results of operations or cash flows.

We reserve for contingent liabilities based on ASC 450, “Contingencies,” when it is determined that a liability, inclusive of defense costs, is probable and reasonably estimable. Litigation is subject to many factors that are difficult to predict, so there can be no assurance that, in the event of a material unfavorable result in one or more claims, we will not incur material costs.

Note 11. Income Taxes

For purposes of interim reporting, the Company estimates its annual effective income tax rate in accordance with ASC 740-270, Interim Reporting. This rate is applied to the pre-tax book income of the entities expected to be benefited during the year. Discrete items that impact the tax provision are recorded in the period incurred.

The Company’s effective income tax rates were 41% and 40% for the three months ended March 31, 2013 and 2014, respectively. Our effective tax rate differs from the statutory rate primarily due to the impact of state taxes and nondeductible meal and entertainment expenses.

A valuation allowance is recognized if, based on the weight of available evidence, both positive and negative, it is more likely than not that some portion, or all, of net deferred tax assets will not be realized. Based on our historical and expected future taxable earnings, we believe it is more likely than not that we will realize all of the benefit of the existing deferred tax assets at December 31, 2013, and March 31, 2014. Accordingly, we have not recorded a valuation allowance as of December 31, 2013 or March 31, 2014.

We apply guidance for uncertainty in income taxes that requires the application of a more likely than not threshold to the recognition and de-recognition of uncertain tax positions. If the recognition threshold is met, this guidance permits us to recognize a tax benefit measured at the largest amount of the tax benefit that, in our judgment, is more likely than not to be realized upon settlement. For the three months ended March 31, 2014, we had no unrecorded tax benefits for uncertain tax positions.

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ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

Note 12. Redeemable Convertible Preferred Stock

Summary of Activity

The following table presents a summary of activity for our redeemable convertible preferred stock issued and outstanding for the three months ended March 31, 2014 (in thousands):

	SERIES B Redeemable Convertible Preferred Stock				SERIES B-1 Redeemable Convertible Preferred Stock				SERIES A Redeemable Convertible Preferred Stock				Total Amount
	Shares		Amount		Shares		Amount		Shares		Amount
Balance, December 31, 2013		1,810	$	136,523		83	$	6,265		1,998	$	59,668	$	202,456
Balance, March 31, 2014		1,810	$	136,523		83	$	6,265		1,998	$	59,668	$	202,456

Note 13. Stock-Based Compensation

Stock Options

We issue stock options through our 2009 Stock Incentive Plan (the “2009 Incentive Plan”), under which stock options may be granted to our officers, directors, key employees, consultants and other persons performing services for us. Stock options have been granted at exercise prices as determined by the board of directors to officers and employees of the Company. These stock options vest over a five year period and options, if not exercised or forfeited, expires on the tenth anniversary of the grant date. As of March 31, 2014, there were 7,203,024 common shares reserved for issuance and 440,668 shares available to be issued under the 2009 Incentive Plan.

We allow employees to exercise options granted under the 2009 Incentive Plan prior to vesting. The unvested shares issued as a result of early exercise are subject to repurchase by us upon termination of employment or services at the original exercise price. The proceeds initially are recorded as an accrued liability from the early exercise of stock options and are reclassified to common stock as our repurchase right lapses. As of December 31, 2013, there were no shares of common stock issued for stock options exercised prior to vesting. As of March 31, 2014, there were 417,273 shares of common stock issued for stock options exercised prior to vesting. During the three months ended March 31, 2014, there were no repurchases of shares of common stock related to early exercised unvested stock options due to employee terminations. As of December 31, 2013 and March 31, 2014, we recorded $0 and $1.5 million in accounts payable and accrued expenses on the condensed consolidated balance sheets for the unvested shares issued with repurchase rights.

The following table summarizes the components of stock-based compensation expense (in thousands):

	Three Months Ended March 31,
	2013		2014
Stock options	$	164	$	767
Compensation related to the sale of common stock		—		21
Total equity based compensation expense	$	164	$	788
Tax benefit recognized	$	—	$	691

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ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

Stock-based compensation expense is included in the following line items in the accompanying condensed consolidated statements of operations (in thousands):

	Three Months Ended March 31,
	2013		2014
Sales and marketing	$	29	$	77
General and administrative		65		480
Research and development		70		231
Total stock-based compensation expense	$	164	$	788

The following table summarizes the assumptions used for estimating the fair value of stock options granted during the three months ended March 31, 2014:

Volatility	49.6	%
Expected term	5.6 years
Risk-free interest rate	1.7	%
Dividend rate	0.0	%

There were no grants of stock options during the three months ended March 31, 2013.

The following table summarizes the stock option activity for the three months ended March 31, 2014:

	Number of Options		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2013		4,325,743	$	2.11		7.7	$	21,929
Granted		38,850		4.00
Exercised		(1,033,720)		1.82				6,296
Forfeited		(5,173)		3.36
Cancelled		(777)		1.43
Outstanding at March 31, 2014		3,324,923	$	2.22		7.6	$	19,481
Vested and expected to vest at March 31, 2014		3,226,379	$	2.20		7.5	$	18,969
Exercisable at March 31, 2014		1,310,359	$	1.02		6.2	$	9,249

The weighted average grant date fair value for our stock options granted during the three months ended March 31, 2014 was $5.31. The total fair value of stock options vested during the three months ended March 31, 2013 and 2014 was $45,000 and $0.1 million, respectively. The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2013 and 2014 was $5,000 and $6.3 million, respectively. As of March 31, 2014, the total compensation cost related to nonvested awards not yet recognized was $4.7 million, which will be recognized over a weighted average period of 1.7 years.

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ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

Warrants

In 2010, we issued performance based warrants to two of our executive officers that gives these individuals the right to purchase up to 841,896 shares of our common stock in the aggregate if certain performance targets and market conditions are achieved. In 2012, we issued an additional performance based warrant to an executive officer that gives that executive officer the right to purchase up to 27,000 shares of our common stock if certain performance targets and market conditions are achieved.

The first performance based warrant for 750,015 shares of our common stock has an initial exercise price of $0.001 per share and two separate tranches of shares become exercisable upon the occurrence of a triggering event, which is defined as: (1) a change in control event that results in any person or entity (other than our stockholders immediately prior to the transaction) owning more than 50% of the combined voting power of all classes of our capital stock, (2) a sale of substantially all of our assets, (3) an initial public offering, or (4) a liquidation or other dissolution of the Company. Upon the occurrence of a triggering event, the number of shares that become exercisable under the warrant is determined by the amount of cash consideration received by ABS Capital Partners, one of our stockholders, as a result of such triggering event. On July 11, 2012, we modified the terms of the performance-based warrant to provide for a $3.1 million cash payment in the event that a triggering event has not occurred on or before January 3, 2013. We considered this to be an equity to cash-settled liability modification and recorded $3.1 million in compensation expense on the modification date. The award was settled for $3.1 million on January 3, 2013.

The second performance based warrant for 91,881 shares of our common stock has an exercise price of $0.41 per share and becomes exercisable if our enabled independent living products and services subsidiary achieves minimum annual revenue targets.

The third performance based warrant for 27,000 shares of our common stock has an exercise price of $3.89 per share and becomes exercisable if there is a change in control of either us or its Building 36 subsidiary or if we complete an initial public offering. If the warrant becomes exercisable, the number of shares that become exercisable is based upon the achievement of certain minimum annual revenue and Adjusted EBITDA targets, not to exceed a maximum of 27,000 shares.

As of December 31, 2013 and March 31, 2014, none of the warrants which remained outstanding were exercisable as the performance requirements had not been met. We did not record expense associated with the performance-based warrants during the three months ended March 31, 2013 and 2014.

Note 14. Segment Information

We have two reportable segments:

• Alarm.com segment

• Other segment

Our chief operating decision maker is the chief executive officer. Management determined that the operational data used by the chief operating decision maker is that of the two reportable segments.

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ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

Management bases strategic goals and decisions on these segments and the data presented below is used to measure financial results. Our Alarm.com segment represents our cloud-based platform for the connected home and related solutions. This segment contributed over 99% of our revenue for the three months ended March 31, 2013 and 2014. Our Other segment includes the results of EnergyHub, an energy efficiency and demand response service provider, which we acquired in May 2013, as well as start-up initiatives focused on researching and developing home and commercial automation, energy management and independent living products and services in adjacent markets.

Management evaluates the performance of its segments and allocates resources to them based on operating income on a pre-tax basis. The reportable segment operational data is presented in the table below as of and for the three months ended March 31 (in thousands):

	Three Months Ended March 31,
Segment Information	2013						2014
	Alarm.com		Other		Total		Alarm.com		Other		Total
Revenue	$	27,891	$	138	$	28,029	$	36,393	$	458	$	36,851
Operating income / (loss)		8,281		(809)		7,472		10,034		(2,916)		7,118

	As of December 31, 2013						As of March 31, 2014
	Alarm.com		Other		Total		Alarm.com		Other		Total
Total Assets		89,334		9,553		99,487		95,492		10,546		106,038

We derived substantially all revenue from the United States for the three months ended March 31, 2013 and 2014. Substantially all our long lived assets were in the United States as of March 31, 2013 and 2014.

Note 15. Earnings Per Share

Earnings per Share (“EPS”)

Our basic net income per share attributable to common stockholders is calculated by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period.

Our diluted net income per share is calculated by giving effect to all potentially dilutive common stock when determining the weighted-average number of common shares outstanding. For purposes of the diluted net income per share calculation, options to purchase common stock, redeemable convertible preferred stock, and unvested shares issued upon the early exercise of options are considered to be potential common stock.

We have issued securities other than common stock that participate in dividends (“participating securities”), and therefore utilize the two-class method to calculate net income per share. These participating securities include redeemable convertible preferred stock and unvested shares issued upon the early exercise of options which are subject to repurchase, both of which have rights to participate in any dividends declared on our common stock. The two-class method requires a portion of net income to be allocated to the participating securities to determine the net income attributable to common stockholders.

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ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

Basic and Diluted Earnings Per Share

The following securities have been excluded from the calculation of weighted average common shares outstanding because the effect is anti-dilutive for the three months ended March 31:

	Three Months Ended March 31,
	2013		2014
Redeemable convertible preferred stock:
Series A		1,998,257		1,998,257
Series B		1,809,685		1,809,685
Series B-1		82,934		82,934
Common stock subject to repurchase		—		417,273

The components of basic and diluted EPS are as follows (in thousands, except share and per share amounts):

	Three Months Ended March 31,
	2013		2014
Net income	$	4,352	$	4,273
Less: income allocated to participating securities		(4,250)		(4,125)
Net income available for common stockholders (A)	$	102	$	148
Weighted average common shares outstanding- basic (B)		1,252,755		1,869,370
Dilutive effect of stock options		1,174,102		1,597,918
Weighted average common shares outstanding - diluted (C)		2,426,857		3,467,288
Earnings per share:
Basic (A/B)	$	0.08	$	0.08
Diluted (A/C)	$	0.04	$	0.04

Pro Forma Net Income Per Share

The denominator used in computing pro forma net income per share for the three months ended March 31, 2014 has been adjusted to assume the conversion of all outstanding shares of redeemable convertible preferred stock into common stock as of January 1, 2013 or at the time of issuance, if later.

	Three Months Ended March 31, 2014
	Basic		Diluted
Numerator (in thousands):
Net income	$	4,273	$	4,273
Less: income allocated to participating securities		(14)		(14)
Pro forma net income attributable to common stockholders	$	4,259	$	4,259
Denominator:
Weighted average common shares outstanding		1,869,370		3,467,288
Plus: conversion of redeemable convertible preferred stock to common stock		35,017,884		35,017,884
Pro forma weighted average common shares outstanding		36,887,254		38,485,172
Pro forma net income per share	$	0.12	$	0.11

There were no stock options excluded from diluted pro forma net income per share for anti-dilution.

F-66

ALARM.COM HOLDINGS, INC.

Notes to the Condensed Consolidated Financial Statements—(Continued)

March 31, 2013 and 2014

(unaudited)

Note 16. Subsequent Events

2014 Facility

On May 8, 2014, we repaid all of the outstanding principal and interest under the amended loan agreement and replaced this facility with a $50.0 million revolving credit facility, or the “2014 Facility”, with Silicon Valley Bank, as administrative agent, and a syndicate of lenders. See Note 10 for additional information.

We evaluated subsequent events through June 20, 2014, the date on which our financial statements were issued.

F-67

Schedule II – Valuation and Qualifying Accounts and Reserves

Alarm.com Holdings, Inc.

Schedule II

Valuation and Qualifying Accounts and Reserves

(In thousands)

Description	Balance at Beginning of Year		Additions Charged Against (Credited to) Revenue		Additions Charged to Other Accounts		Deductions		Balance at End of Year
Year ended December 31, 2011
Allowance for doubtful accounts	$	(286)			$	(318)	$	64	$	(537)
Allowance for hardware returns		(738)		(1,069)				1,181		(550)
Year ended December 31, 2012
Allowance for doubtful accounts		(537)				(107)		64		(580)
Allowance for hardware returns		(550)		(1,537)				1,181		(906)
Year ended December 31, 2013
Allowance for doubtful accounts		(580)				(592)		868		(304)
Allowance for hardware returns		(906)		(1,781)				1,735		(952)

F-68

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.    Other Expenses of Issuance and Distribution.

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

	Amount to be   Paid
SEC registration fee	$	*
FINRA filing fee		*
NASDAQ Global Market initial listing fee		*
Blue sky fees and expenses		*
Printing and engraving		*
Legal fees and expenses		*
Accounting fees and expenses		*
Transfer agent and registrar fees		*
Miscellaneous fees and expenses		*
Total		*

 * To be filed by amendment.

Item 14.    Indemnification of Directors and Officers.

We are incorporated under the laws of the State of Delaware. Section 102 of the Delaware General Corporation Law permits a corporation to eliminate the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his or her duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit.

Section 145 of the Delaware General Corporation Law provides that a corporation has the power to indemnify a director, officer, employee or agent of the corporation and certain other persons serving at the request of the corporation in related capacities against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlements actually and reasonably incurred by the person in connection with an action, suit or proceeding to which he is or is threatened to be made a party by reason of such position, if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

As permitted by the Delaware General Corporation Law, our certificate of incorporation and bylaws provide that: (1) we are required to indemnify our directors to the fullest extent permitted by the Delaware General Corporation Law; (2) we may, in our discretion, indemnify our officers, employees and agents as set forth in the Delaware General Corporation Law; (3) we are required, upon

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satisfaction of certain conditions, to advance all expenses incurred by our directors in connection with certain legal proceedings; (4) the rights conferred in the bylaws are not exclusive; and (5) we are authorized to enter into indemnification agreements with our directors, officers, employees and agents.

We have entered into agreements with our directors that require us to indemnify them against expenses, judgments, fines, settlements and other amounts that any such person becomes legally obligated to pay (including with respect to a derivative action) in connection with any proceeding, whether actual or threatened, to which such person may be made a party by reason of the fact that such person is or was a director or officer of us or any of our affiliates, provided such person acted in good faith and in a manner such person reasonably believed to be in, or not opposed to, our best interests. The indemnification agreements also set forth certain procedures that will apply in the event of a claim for indemnification thereunder. At present, no litigation or proceeding is pending that involves any of our directors or officers regarding which indemnification is sought, nor are we aware of any threatened litigation that may result in claims for indemnification.

We maintain a directors’ and officers’ liability insurance policy. The policy insures directors and officers against unindemnified losses arising from certain wrongful acts in their capacities as directors and officers and reimburses us for those losses for which we have lawfully indemnified the directors and officers. The policy contains various exclusions.

In addition, the underwriting agreement filed as Exhibit 1.1 to this Registration Statement provides for indemnification by the underwriters of us and our officers and directors for certain liabilities arising under the Securities Act, or otherwise. Our registration rights agreement with certain stockholders also provides for cross-indemnification in connection with the registration of our common stock on behalf of such investors.

Item 15.    Recent Sales of Unregistered Securities.

The following list sets forth information regarding all unregistered securities issued by us since January 1, 2011 through the date of the prospectus that is a part of this registration statement:

Issuances of Common Stock and Options and Warrants to Purchase Common Stock

From January 1, 2011 through the date of this prospectus, we have granted under our 2009 Plan options to purchase an aggregate of 2,620,305 shares of our common stock to employees, consultants and directors, having exercise prices ranging from $1.11 to $8.08 per share. Of these, options to purchase an aggregate of 52,122 shares have been cancelled without being exercised. During the period from January 1, 2011 through the date of this registration statement, an aggregate of 3,307,956 shares of our common stock were issued upon the exercise of stock options under the 2009 Plan, at exercise prices between $0.41 and $4.00 per share, for aggregate proceeds of approximately $2.9 million.

The offers, sales and issuances of the securities described in the preceding paragraph were deemed to be exempt from registration under Rule 701 promulgated under the Securities Act, or Rule 701, in that the transactions were by an issuer not involving any public offering or under Section 4(a)(2) of the Securities Act or under compensatory benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of such securities were our employees, directors or consultants and received the securities under our equity incentive plans. Appropriate legends were affixed to the securities issued in these transactions.

In November 2012, we issued a common stock warrant for 27,000 shares of our common stock with an exercise price of approximately $3.89 per share to an employee in reliance on Section 4(2) of

II-2

the Securities Act. The recipient of the warrant represented his intention to acquire the warrant for investment only and not with a view to or for sale in connection with any distribution thereof. The recipient had adequate access, through his relationship with us, to information about us. The sales of these securities were made without any general solicitation or advertising.

In May 2013, we issued 238,500 shares of our common stock to an executive officer at a per share price of $2.95 in reliance on Section 4(2) of the Securities Act. The executive officer represented his intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the securities issued in this transaction. The executive officer had adequate access, through his relationship with us, to information about us.

Issuances of Preferred Stock

In July 2012, we issued an aggregate of 1,809,685 shares of our Series B preferred stock to 5 accredited investors at a per share price of $75.44, for aggregate consideration of approximately $136.5 million. Upon the completion of this offering, these shares will convert into approximately 16,287,165 shares of common stock. Immediately prior to the closing of the Series B preferred stock financing, we exchanged an aggregate of 3,511,725 shares of outstanding Series A Preferred stock and 1,599,516 shares of outstanding common stock for 1,590,045 shares of Series B-1 preferred stock, 1,998,257 shares of Series A preferred stock and 910,323 shares of common stock.

The offers, sales and issuances of the securities described in the preceding paragraph were deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act or Rule 506 of Regulation D promulgated thereunder as a transaction by an issuer not involving a public offering. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions was either an accredited investor within the meaning of Rule 501 of Regulation D under the Securities Act or had adequate access, through employment, business or other relationships, to information about us.

Item 16.    Exhibits and Financial Statement Schedules.

(a)    Exhibits

Exhibit Number	Description of Document
1.1†	Form of Underwriting Agreement.
2.1	Agreement and Plan of Merger by and among the Registrant, Energyhub Holdings, Inc. and Shareholder Representative Services LLC, as stockholder representative, dated May 3, 2013.
3.1	Amended and Restated Certificate of Incorporation of Alarm.com Holdings, Inc., as amended and as currently in effect.
3.2†	Form of Amended and Restated Certificate of Incorporation to be effective upon completion of this offering.
3.3	Amended and Restated Bylaws of Alarm.com Holdings, Inc., as currently in effect.
3.4†	Form of Amended and Restated Bylaws to be effective upon completion of this offering.

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Exhibit Number	Description of Document
4.1†	Form of common stock certificate of the Registrant.
4.2	Amended and Restated Registration Rights Agreement by and among the Registrant and certain of its stockholders, dated July 11, 2012.
5.1†	Opinion of Cooley LLP.
10.1	Deed of Lease between Registrant and 8150 Leesburg Pike, L.L.C., dated April 21, 2009, as amended July 21, 2010, April 28, 2011, January 10, 2012, June 5, 2012, December 7, 2012, March 12, 2013 and May 29, 2013.
10.2 +	Amended and Restated 2009 Stock Incentive Plan, Form of Stock Option Agreement and Form of Early Exercise Notice and Restricted Stock Purchase Agreement thereunder
10.3 +†	Form of 2014 Equity Incentive Plan.
10.4 +†	Form of Incentive Stock Option Agreement under 2014 Equity Incentive Plan.
10.5 +†	Form of Nonqualified Stock Option Agreement under 2014 Equity Incentive Plan.
10.6 +†	Non-Employee Director Compensation Plan to be in effect upon the completion of this offering.
10.7 +†	Form of Indemnification Agreement by and between Registrant and each of its directors and executive officers.
10.8†	Senior Secured Credit Facilities Credit Agreement by and among the Registrant, Alarm.com Incorporated, Silicon Valley Bank, Bank of America, N.A. and the several lenders from time to time parties thereto, dated May 8, 2014.
21.1	Subsidiaries of the Registrant.
23.1†	Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.
23.2†	Consent of Cooley LLP (included in Exhibit 5.1).
24.1†	Power of Attorney. Reference is made to the signature page hereto.

† To be filed by amendment.

+ Indicates management contract or compensatory plan.

Item 17.    Undertakings.

The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and

II-4

contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Vienna, Virginia, on the              day of             , 2014.

ALARM.COM HOLDINGS, INC.
By:
	Stephen Trundle
	President, Chief Executive Officer and Director

KNOW ALL BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Stephen Trundle and Jennifer Moyer, and each of them, his true and lawful agent, proxy and attorney-in-fact, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to (1) act on, sign and file with the Securities and Exchange Commission any and all amendments (including post-effective amendments) to this registration statement together with all schedules and exhibits thereto and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, together with all schedules and exhibits thereto, (2) act on, sign and file such certificates, instruments, agreements and other documents as may be necessary or appropriate in connection therewith, (3) act on and file any supplement to any prospectus included in this registration statement or any such amendment or any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and (4) take any and all actions which may be necessary or appropriate to be done, as fully for all intents and purposes as he might or could do in person, hereby approving, ratifying and confirming all that such agent, proxy and attorney-in-fact or any of his substitutes may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
Stephen Trundle	President, Chief Executive Officer and Director (Principal Executive Officer)	, 2014
Jennifer Moyer	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	, 2014
Ralph Terkowitz	Chairman of the Board of Directors	, 2014
Donald Clarke	Director	, 2014
Timothy McAdam	Director	, 2014
Hugh Panero	Director	, 2014
Mayo Shattuck	Director	, 2014

II-6

EXHIBIT INDEX

Exhibit Number	Description of Document
1.1†	Form of Underwriting Agreement.
2.1	Agreement and Plan of Merger by and among the Registrant, Energyhub Holdings, Inc. and Shareholder Representative Services LLC, as stockholder representative, dated May 3, 2013.
3.1	Amended and Restated Certificate of Incorporation of Alarm.com Holdings, Inc., as amended and as currently in effect.
3.2†	Form of Amended and Restated Certificate of Incorporation to be effective upon completion of this offering.
3.3	Amended and Restated Bylaws of Alarm.com Holdings, Inc., as currently in effect.
3.4†	Form of Amended and Restated Bylaws to be effective upon completion of this offering.
4.1†	Form of common stock certificate of the Registrant.
4.2	Amended and Restated Registration Rights Agreement by and among the Registrant and certain of its stockholders, dated July 11, 2012.
5.1†	Opinion of Cooley LLP.
10.1	Deed of Lease between Registrant and 8150 Leesburg Pike, L.L.C., dated April 21, 2009, as amended July 21, 2010, April 28, 2011, January 10, 2012, June 5, 2012, December 7, 2012, March 12, 2013 and May 29, 2013.
10.2 +	Amended and Restated 2009 Stock Incentive Plan, Form of Stock Option Agreement and Form of Early Exercise Notice and Restricted Stock Purchase Agreement thereunder
10.3 +†	Form of 2014 Equity Incentive Plan.
10.4 +†	Form of Incentive Stock Option Agreement under 2014 Equity Incentive Plan.
10.5 +†	Form of Nonqualified Stock Option Agreement under 2014 Equity Incentive Plan.
10.6 +†	Non-Employee Director Compensation Plan to be in effect upon the completion of this offering.
10.7 +†	Form of Indemnification Agreement by and between Registrant and each of its directors and executive officers.
10.8†	Senior Secured Credit Facilities Credit Agreement by and among the Registrant, Alarm.com Incorporated, Silicon Valley Bank, Bank of America, N.A. and the several lenders from time to time parties thereto, dated May 8, 2014.
21.1	Subsidiaries of the Registrant.
23.1†	Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.
23.2†	Consent of Cooley LLP (included in Exhibit 5.1).
24.1†	Power of Attorney. Reference is made to the signature page hereto.

† To be filed by amendment.

+ Indicates management contract or compensatory plan.

EX-2

Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

ALARM.COM HOLDINGS, INC.,

ENERGYHUB HOLDINGS, INC.,

ENERGYHUB, INC.

AND

SHAREHOLDER REPRESENTATIVE SERVICES LLC,

AS STOCKHOLDER REPRESENTATIVE

MAY 3, 2013

TABLE OF CONTENTS

ARTICLE I MERGER		2
1.1	The Merger	2
1.2	Effective Time; Effect of the Merger	3
1.3	Certificate and Bylaws of the Surviving Corporation	3
1.4	Directors and Officers of the Surviving Corporation	3
1.5	Conversion of Capital Stock	3
1.6	Exchange of Certificates	4
1.7	Dissenting Shares	5
ARTICLE II MERGER CONSIDERATION		6
2.1	Merger Consideration	6
2.2	Payments on the Closing Date	6
2.3	Merger Consideration Adjustment	7
2.4	Earn-Out Payments	9
2.5	Alarm Covenants/Vesting of Earnout Payment	12
2.6	Escrow Agreement	14
ARTICLE III CLOSING AND TERMINATION		14
3.1	Closing Date	14
3.2	Termination of Agreement	14
3.3	Procedure Upon Termination; Effect of Termination	15
3.4	Closing Deliveries	15
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY		17
4.1	Organization and Good Standing	17
4.2	Authorization of Agreement	18
4.3	Conflicts; Consents of Third Parties	18
4.4	Capitalization	18
4.5	Subsidiaries	19
4.6	Financial Statements; Books and Records; Accounts Receivable	19
4.7	No Undisclosed Liabilities	20
4.8	Absence of Certain Developments	20
4.9	Taxes	22
4.10	Real Property	23
4.11	Title; Sufficiency	24
4.12	Intellectual Property	24
4.13	Contracts and Agreements	27
4.14	Employees; Compensation	28
4.15	Employee Benefits Plans	29
4.16	Labor	31
4.17	Litigation	31
4.18	Compliance with Laws; Permits	31
4.19	Environmental Matters	32
4.20	Insurance	32

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4.21	Significant Customers and Suppliers	32
4.22	Certain Payments	33
4.23	Affiliate Transactions	33
4.24	Banking Facilities	33
4.25	Products Liability	33
4.26	Financial Advisors	34
4.27	Voting Requirements	34
4.28	Disclosure	34
4.29	No Limitation	34
ARTICLE V [INTENTIONALLY OMITTED]		34
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF ALARM AND THE MERGER SUB		34
6.1	Organization and Good Standing	34
6.2	Authorization of Agreement	35
6.3	Conflicts; Consents of Third Parties	35
6.4	Litigation	35
6.5	Financial Advisors	35
6.6	Sufficiency of Funds	36
ARTICLE VII COVENANTS		36
7.1	Access to Information	36
7.2	Conduct of the Business Pending the Closing	36
7.3	Consents and Approvals	37
7.4	Further Assurances	37
7.5	Publicity	37
7.6	Tax Matters	37
7.7	Employee Stock Options	40
7.8	Continued Employment of Employees	40
7.9	Termination of Benefit Plans	40
7.10	Maintenance of Directors and Officers Liability Insurance	40
7.11	Stockholder Approval of the Merger	41
ARTICLE VIII CONDITIONS TO CLOSING		41
8.1	Conditions Precedent to Obligations of Alarm and the Merger Sub	41
8.2	Conditions Precedent to Obligations of the Company	42
8.3	Frustration of Closing Conditions	42
ARTICLE IX INDEMNIFICATION		43
9.1	Survival of Representations and Warranties	43
9.2	Indemnification of Alarm Indemnified Parties	43
9.3	Indemnification of Stockholders	44
9.4	Certain Limitations	45
9.5	Indemnification Procedures	46
9.6	Right of Setoff	47
9.7	Tax Treatment of Indemnity Payments	48
9.8	Exclusive Remedy	48

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ARTICLE X INTENTIONALLY OMITTED		48
ARTICLE XI MISCELLANEOUS		48
11.1	Payment of Sales, Use, Transfer or Similar Taxes	48
11.2	Expenses	48
11.3	Submission to Jurisdiction; Consent to Service of Process; Waiver of Jury Trial	48
11.4	Entire Agreement; Amendments and Waivers	49
11.5	Governing Law	50
11.6	Notices	50
11.7	Severability	51
11.8	Binding Effect; Assignment	51
11.9	Counterparts	51
11.10	Intentionally Omitted	51
11.11	Other Definitional and Interpretive Matters	51
11.12	Intentionally Omitted	53
11.13	Non-recourse	53
11.14	Stockholder Representative	53
ANNEX A DEFINITIONS		1

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AGREEMENT AND PLAN OF MERGER

Agreement And Plan Of Merger, dated as of May 3, 2013 (the “Agreement”), by and among Alarm.com Holdings, Inc., a Delaware corporation (“Alarm”), EnergyHub Holdings, Inc. (“Merger Sub”), EnergyHub, Inc., a Delaware corporation (the “Company”) and Shareholder Representative Services LLC, a Colorado limited liability company, solely in its capacity as Stockholder Representative.

WITNESSETH:

WHEREAS, the holders of Series B Preferred Stock of the Company identified on Exhibit A hereto (the “Series B Holders”) own all of the issued and outstanding shares of Series B Preferred Stock, $0.001 par value, of the Company (the “Series B Shares”);

WHEREAS, the holders of Series A Preferred Stock of the Company identified on Exhibit B hereto (the “Series A Holders”) own all of the issued and outstanding shares of Series A Preferred Stock, $0.001 par value, of the Company (the “Series A Shares”);

WHEREAS, the holders of Common Stock of the Company identified on Exhibit C hereto (the Common Holders”, collectively with the Series A Holders and the Series B Holders, the “Stockholders” and each individually, a “Stockholder”) own all of the issued and outstanding shares of Common Stock, $0.001 par value, of the Company (the “Common Shares”);

WHEREAS, the Company, as borrower, entered into those certain Subordinated Convertible Promissory Notes effective as of November 16, 2012 in the aggregate principal amount of $500,000.00 (the “2012 Convertible Notes”) with Point 406 Ventures I, L.P., Point 406 Ventures I-A, L.P., Physic Ventures, L.P., and Acadia Woods Partners, LLC (the “2012 Convertible Note Holders”);

WHEREAS, as of the date hereof, the obligations outstanding under the 2012 Convertible Notes (including outstanding principal and accrued and unpaid interest) equals $518,520.55;

WHEREAS, the Company, as borrower, entered into that certain Subordinated Convertible Promissory Note effective as of December 10, 2012 in the aggregate principal amount of $1,802.67 and those certain Subordinated Convertible Promissory Notes effective as of January 16, 2013 in the aggregate principal amount of $498,197.33 (collectively, the “2013 Convertible Notes”) with Kate Gottfried, New York City Investment Fund, LLC, Point 406 Ventures I, L.P., Point 406 Ventures I-A, L.P., Physic Ventures, L.P., and Acadia Woods Partners, LLC (the “2013 Convertible Note Holders”);

WHEREAS, as of the date hereof, the obligations outstanding under the 2013 Convertible Notes (including outstanding principal and accrued and unpaid interest) equals $511,850.24;

WHEREAS, on the date hereof, each of the 2012 Convertible Note Holders and 2013 Convertible Note Holders has entered into a Convertible Note Election, Termination and Release Agreement terminating each of the 2012 Convertible Notes and 2013 Convertible Notes and requiring payoff of the applicable convertible note at or immediately prior to the Closing (as

1.

defined below) of the transactions contemplated by this Agreement in an amount equal to the outstanding principal amount and all accrued and unpaid interest thereon plus a premium equal to 200% of the sum the outstanding principal amount and all accrued and unpaid interest thereon;

WHEREAS, on the terms and subject to the conditions set forth in this Agreement, Alarm desires to cause Merger Sub to merge with and into the Company, with the Company being the surviving corporation in accordance with the Delaware General Corporation Law (“DGCL”) and an wholly-owned subsidiary of Alarm (the “Merger”);

WHEREAS, pursuant to the Merger, each issued and outstanding share of Series A Preferred Stock and Series B Preferred Stock, other than certain Shares as provided in Section 1.7, will be converted into the right to receive its ratable portion of the Merger Consideration;

WHEREAS, the respective Boards of Directors of the Merger Sub and the Company have unanimously determined that this Agreement and the transactions contemplated hereunder, including the Merger, are advisable, fair to and in the best interest of their respective stockholders, and such Boards of Directors have unanimously approved this Agreement and the agreements contemplated hereunder, including the Merger, on the terms and subject to the conditions set forth in this Agreement; and

WHEREAS, certain terms used in this Agreement are defined in Annex A.

Now, Therefore, in consideration of the premises and the mutual covenants and agreements hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I

MERGER

1.1 The Merger.

Upon the terms and subject to the conditions contained herein, on the Closing Date, the parties hereto shall cause the Merger to be consummated by the Company executing and delivering a Certificate of Merger, substantially in the form attached hereto as Exhibit D (the “Certificate of Merger”), which shall be filed at Closing with the Secretary of State of the State of Delaware in accordance with the DGCL. Subject to the terms and conditions of this Agreement, at the Effective Time, the Merger Sub shall be merged with an into the Company in accordance with, and with the effects provided in, the applicable provisions of the DGCL, and the Company shall be the surviving corporation resulting from the Merger (sometimes hereinafter referred to as the “Surviving Corporation”) and, as a result, shall become a wholly-owned subsidiary of Alarm, shall continue to be governed by the laws of the State of Delaware and shall succeed to and assume all of the rights and obligations of the Merger Sub, and the separate corporate existence of the Merger Sub shall cease.

2.

1.2 Effective Time; Effect of the Merger.

(a) The Merger shall become effective upon the Certificate of Merger having been accepted for filing by the Secretary of State of the State of Delaware (the “Effective Time”).

(b) The Merger shall have the effects set forth in this Agreement, the Certificate of Merger and the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all the properties, rights, privileges, powers and franchises of the Company and the Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and the Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation.

1.3 Certificate and Bylaws of the Surviving Corporation.

(a) The certificate of incorporation of the Merger Sub, as in effect immediately prior to the Effective Time shall be the certificate of incorporation of the Surviving Company until amended in accordance with the provisions thereof and applicable Law; provided, however, that as of the Effective Time the certificate of incorporation shall provide that the name of the Surviving Corporation is “EnergyHub, Inc.”.

(b) The bylaws of the Merger Sub, as in effect immediately prior to the Effective Time, shall be the bylaws of the Surviving Company until amended in accordance with the provisions thereof and applicable Law; provided, however, that as of the Effective Time the bylaws shall provide that the name of the Surviving Corporation is “EnergyHub, Inc.”.

1.4 Directors and Officers of the Surviving Corporation.

(a) The directors of the Merger Sub immediately prior to the Effective Time shall be the directors of the Surviving Corporation immediately following the Effective Time, until their respective successors are duly elected or appointed and qualified or their earlier death, resignation or removal in accordance with the certificate of incorporation and bylaws of the Surviving Corporation.

(b) The officers of the Merger Sub immediately prior to the Effective Time shall be the officers of the Surviving Corporation immediately following the Effective Time until their respective successors are duly appointed and qualified or their earlier death, resignation or removal in accordance with the certificate of incorporation and bylaws of the Surviving Corporation.

1.5 Conversion of Capital Stock.

At the Effective Time, by virtue of the Merger and without any action on the part of the holders of any securities of the Merger Sub or the Company:

(a) Each share of capital stock of the Merger Sub issued and outstanding immediately prior to the Effective Time shall be automatically converted into and become one (1) validly issued, fully paid and nonassessable share of common stock, par value $0.001 per share, of the Surviving Corporation.

3.

(b) All shares of capital stock that are owned by the Company as treasury stock immediately prior to the Effective Time shall be automatically canceled and shall cease to exist and no consideration shall be delivered in exchange therefor.

(c) Each share of Series A Preferred Stock (other than (i) shares to be canceled pursuant Section 1.5(b) and (ii) any Dissenting Shares) issued and outstanding immediately prior to the Effective Time shall be automatically converted into the right to receive an amount in cash equal to the Series A Preferred Per Share Merger Consideration. As of the Effective Time, all such shares of Series A Preferred Stock shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist.

(d) Each share of Series B Preferred Stock (other than (1) shares to be canceled pursuant Section 1.5(b) and (ii) any Dissenting Shares) issued and outstanding immediately prior to the Effective Time shall be automatically converted into the right to receive an amount in cash equal to the Series B Preferred Per Share Merger Consideration applicable to such share. As of the Effective Time, all such shares of Series B Preferred Stock shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist.

(e) Each share of Common Stock (other than (i) shares to be canceled pursuant Section 1.5(b) and (ii) any Dissenting Shares) issued and outstanding immediately prior to the Effective Time shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist. Common Holders will receive no consideration for such shares of Common Stock.

1.6 Exchange of Certificates.

(a) The Escrow Agent shall serve as the paying agent for the Merger. At or prior to the Closing, Alarm, the Company, the Stockholder Representative and the Escrow Agent shall enter into the Escrow Agreement. On the Closing Date, Alarm shall deliver to the Escrow Agent (i) that portion of the Merger Consideration payable pursuant to Section 2.5 hereof and (ii) the Escrow Amount.

(b) Prior to the Closing, the Company shall distribute to each Stockholder a letter of transmittal in the form attached hereto as Exhibit E (each, a “Letter of Transmittal”). Each Stockholder may deliver an executed Letter of Transmittal, together with its certificates representing capital stock of the Company (the “Certificates”), to the Company no less than one (1) Business Day prior to Closing, to be held in escrow by the Company until the Closing. If such Stockholder has complied with the foregoing and the Company shall have delivered the same to the Escrow Agent prior to the Effective Time, the Escrow Agent shall deliver to each Stockholder who so delivers the Letter of Transmittal prior to the Closing and cause to be issued, without interest, the consideration payable in respect of such shares of capital stock in accordance with Section 1.5 promptly following the Closing Date and the Certificates so surrendered shall forthwith be canceled. If a Stockholder has not complied with the foregoing, the Escrow Agent shall deliver, and cause to be issued without interest, the consideration payable in respect of such shares of capital stock in accordance with Section 1.5 promptly upon receipt of an executed Letter of Transmittal and Certificates from such Stockholder and the Certificates so surrendered shall forthwith be canceled. Until so surrendered, outstanding Certificates shall be deemed from and after the Effective Time, for all corporate purposes, to evidence only the ownership of the consideration payable in respect of such shares of capital stock in accordance with Section 1.5.

4.

(c) If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if reasonably required by the Surviving Corporation, the posting by such Person of a bond, in such reasonable amount as the Surviving Corporation may direct, as indemnity against any claim that may be made against it with respect to such Certificate, the Surviving Corporation will pay, in exchange for such lost, stolen or destroyed Certificate, the applicable consideration to be paid in respect of the shares formerly represented by such Certificate, as contemplated herein.

(d) Neither Alarm nor the Surviving Corporation shall be liable to any Stockholder for any consideration delivered in respect of any share of the Company’s capital stock to a public official pursuant to any abandoned property, escheat or other similar law.

(e) The Surviving Corporation shall be entitled to deduct and withhold from any amount otherwise payable to any Person pursuant to this Agreement such amounts as are required to be deducted and withheld with respect to the making of such payment under any Tax Law. To the extent such amounts are so withheld and paid over to the appropriate taxing authority, the withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding were made.

1.7 Dissenting Shares.

Notwithstanding any provision of this Agreement to the contrary, if required by the DGCL, but only to the extent required thereby, shares of capital stock of the Company which are issued and outstanding immediately prior to the Effective Time and which are held by holders of such shares of capital stock of the Company who have properly exercised appraisal rights with respect thereto in accordance with the DGCL (the “Dissenting Shares”) shall not be exchangeable for the right to receive the consideration set forth in Section 1.5, and holders of such shares of capital stock shall be entitled to receive payment of the appraised value of such shares of capital stock in accordance with the provisions of the DGCL unless and until such holders fail to perfect or effectively withdraw or lose their rights to appraisal and payment under the DGCL, If, after the Effective Time, any such holder fails to perfect or effectively withdraws or loses such right, subject to the DGCL, such shares of capital stock shall thereupon be treated as if they had been converted into and to have become exchangeable for, at the Effective Time, the right to receive the applicable consideration set forth in Section 1.5, without any interest thereon, in accordance with Article I. The Company shall give Alarm (i) prompt notice of any written demands for appraisal, withdrawals of demands for appraisal and any other related instruments received by the Company and (ii) the opportunity to participate in all negotiations and proceedings with respect to demands for appraisal. The Company shall not, except with the prior written consent of Alarm, voluntarily make any payment with respect to any demands for appraisal or settle or offer to settle any such demand.

5.

ARTICLE II

MERGER CONSIDERATION

2.1 Merger Consideration.

The aggregate consideration for the shares of capital stock of the Company shall be an amount equal to (such total being referred to herein as the “Merger Consideration”):

(a) $8,500,000 (the “Base Consideration”), as adjusted pursuant to Section 2.3(a);

(b) plus, the Stockholder Earnout Payment (as defined below) that is payable to the Stockholders but only to the extent that such payments become due and payable in accordance with the terms of Section 2.4 or Section 2.5 hereof with respect to certain post-closing performance standards;

(c) as applicable, plus, the WC Underpayment, or minus, the WC Overpayment;

(d) minus, any amounts paid pursuant to Section 2.2(a) and (b) and

(e) minus, any amounts paid to Alarm or withheld from the Earnout Payments to the Sellers in accordance with Article IX and the Escrow Agreement.

2.2 Payments on the Closing Date.

At the Closing, Alarm shall, or shall cause the Merger Sub to, pay:

(a) 11.18% of the Base Consideration, as adjusted pursuant to Section 2.3(a) but in no event less than $850,000 (the “Base Escrow Amount”), to the Escrow Agent to be held in accordance with the terms of Section 2.6 and the form of Escrow Agreement attached as Exhibit F;

(b) to those Persons entitled thereto, as set forth on Schedule 2.2(b) (which such schedule shall also contain the wire instructions for each such Person):

(i) the amount of outstanding principal, accrued and unpaid interest and any pre-payment penalties, break fees or other fees owing under the Credit Agreement as of the Closing (assuming full repayment and termination of the Credit Agreement at the Closing);

(ii) the amount of outstanding principal, accrued and unpaid interest and an pre-payment penalties, break fees or other fees owing under the 2012 Convertible Notes and the 2013 Convertible Notes;

(iii) the amount of $1,000 to each holder of at least 2,000 shares of Common Stock in consideration for the releases provided in the Letter of Transmittal;

6.

(iv) to the extent not paid prior to the Closing Date and not reflected in the Net Working Capital calculation in Section 2.3, or directly paid by the Stockholders, all of the fees and expenses of the Stockholders and the Company payable in connection with the negotiation, execution and delivery of this Agreement or the transactions contemplated hereby, including, without limitation, fees and expenses of counsel and any financial advisors;

(v) amounts due and payable at Closing ,pursuant to the Company’s employee retention plan;

(vi) the amount of $10,317 to the Company to pay for the premiums related to the insurance policy purchased pursuant to Section 7.10; and

(vii) the amount to fund the Stockholder Representative Fund pursuant to Section 11.14(d) and the engagement fee to the Stockholder Representative in the amount of $45,000.

(c) the remaining amount of the Base Consideration, as adjusted pursuant to Section 2.3(a), payable pursuant to Section 2.1 (after deduction pursuant to Sections 2.2(a) and (b)) shall be paid by wire transfer of immediately available United States funds to the Escrow Agent and which funds shall be disbursed by the Escrow Agent in accordance with Section 1.5 above, upon satisfaction of the requirements set forth in Section 1.6 above, to the Series A Holders and Series B Holders, as applicable.

2.3 Merger Consideration Adjustment.

(a) The Merger Consideration will be adjusted as of the Closing Date as follows:

(i) If on the Closing Date, the Company’s cash on hand exceeds the sum of the Company’s total debt outstanding under the Convertible Notes and Credit Agreement, the Base Consideration will be increased by the amount of such excess. If on the Closing Date, the Company’s cash on hand is less than the sum of the Company’s total debt outstanding under the Convertible Notes and Credit Agreement, the Base Consideration will be decreased by the amount of such shortfall; and

(ii) If on the Closing Date, the Estimated Net Working Capital (as defined below) of the Company, exclusive of the items covered in (i) above, exceeds the Target Net Working Capital (as defined below), the Base Consideration will be increased by the amount of the excess. If on the Closing Date, the Estimated Net Working Capital of the Company is less than the Target Net Working Capital, the Base Consideration will be decreased by the amount of such shortfall. The Company shall deliver to Alarm not less than three (3) Business Days prior to the anticipated Closing Date an estimated balance sheet of the Company prepared as of a date within three (3) Business Days of the anticipated Closing Date that sets forth a good faith estimate of the Closing Net Working Capital as of the anticipated Closing Date determined in accordance with the definition of “Net Working Capital” (the “Estimated Net Working Capital”) and which estimate is consented to by Alarm, which consent shall not be unreasonably withheld.

7.

(b) Within ninety (90) days following the Closing Date, Alarm shall, or shall cause the Surviving Corporation to, prepare and deliver to the Stockholder Representative a statement of the Net Working Capital as of the end of the Business Day immediately preceding the Closing Date (the “Closing Net Working Capital”). “Net Working Capital” means the amount by which accounts receivable, pre-paid expenses, inventory and other current assets, calculated in accordance with GAAP, exceeds accounts payable, accrued expenses, warrant liability if such warrant liability exists post-Closing, deferred revenues to the extent the Company is obligated to provide services post-Closing and, to the extent not paid directly by Alarm pursuant to Section 2.2(b)(iii) hereof, the fees and expenses of the Stockholders and the Company payable in connection with the negotiation, execution and delivery of this Agreement or the transactions contemplated hereby, (including, without limitation, fees and expenses of counsel and any financial advisors) but excluding cash on hand and total debt outstanding under the Convertible Notes and Credit Agreement, calculated in accordance with GAAP.

(c) The Stockholder Representative shall, within thirty (30) days of Alarm’s delivery of the statement of Closing Net Working Capital, deliver a written notice to Alarm of any disagreement with Alarm’s calculation of Closing Net Working Capital, which notice shall specify those items or amounts as to which the Stockholder Representative disagrees, and the Stockholders shall be deemed to have agreed with all other items and amounts contained in Alarm’s statement of Closing Net Working Capital. If the Stockholder Representative fails to properly object in writing to the calculation of Closing Net Working Capital within that thirty (30) day period, the Stockholders will be deemed conclusively to have agreed to Alarm’s calculation, which shall be final and binding upon the Stockholders.

(d) If a notice of disagreement shall be duly delivered pursuant to Section 2.3(c), Alarm and the Stockholder Representative shall, during the fifteen (15) days following such delivery, use their commercially reasonable, good faith efforts to reach agreement on the disputed items or amounts in order to determine, as may be required, the amount of Closing Net Working Capital, which amount shall not be less than the amount thereof shown in Alarm’s calculation delivered pursuant to Section 2.3(b) nor more than the amount thereof shown in the Stockholder Representative’s calculation delivered pursuant to Section 2.3(c). If, during such period, the Stockholder Representative and Alarm are unable to reach such agreement, they shall promptly thereafter cause BDO Seidman (the “Accounting Referee”) to review this Agreement and the disputed items or amounts for the purpose of calculating Closing Net Working Capital. In making such calculation, the Accounting Referee shall consider only those still unresolved items or amounts in Alarm’s calculation of Closing Net Working Capital as to which the Stockholder Representative has duly objected in accordance with Section 2.3(c). The Accounting Referee shall deliver to the Stockholder Representative and Alarm, as promptly as practicable (but in any case no later than thirty (30) days from the date of engagement of the Accounting Referee), a report setting forth such calculation. Such report shall be final and binding upon the Stockholders and Alarm. The cost of such review and report shall be borne by the party (in the case of the Stockholder Representative, solely on behalf of the Stockholders) whose determination of the Closing Net Working Capital (as set forth in the statement submitted by Alarm pursuant to Section 2.3(b) or in the Stockholder Representative’s notice of disagreement delivered in accordance with Section 2.3(c)) was farthest from the determination of the Final Net Working Capital (as defined below) determined by the Accounting Referee or equally if the determination of the Final Net Working Capital by the Accounting Referee is equidistant between the determinations of the parties.

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(e) Each party hereto shall, and shall cause their respective representatives to, cooperate and assist, to the extent requested by another party hereto, in the preparation of the calculation of Closing Net Working Capital and in the conduct of the review referred to in this Section 2.3, including the making available to the extent reasonably necessary of books, records, work papers and appropriate personnel.

(f) If Final Net Working Capital (as defined below) exceeds Estimated Net Working Capital: (i) the Merger Consideration shall be increased by such excess (the “WC Underpayment”), and (ii) Alarm shall pay, within ten (10) business days of the determination of the Final Net Working Capital, to the Escrow Agent the amount of the WC Underpayment, in the manner provided in Section 2.2(c). If the Final Net Working Capital is less than the Estimated Net Working Capital (such deficiency being referred to as the “WC Overpayment”): (i) the Merger Consideration shall be decreased by the WC Overpayment; and (ii) the amount of the WC Overpayment shall be released from the Escrow Amount to Alarm pursuant to the Escrow Agreement. “Final Net Working Capital” means Closing Net Working Capital: (1) as shown in Alarm’s calculation thereof if no notice of disagreement with respect thereto is duly delivered pursuant to Section 2.3(c); or (2) if such a notice of disagreement is delivered, then: (A) as agreed by the Stockholder Representative and Alarm pursuant to Section 2.3(d) or (B) in the absence of such agreement, as shown in the Accounting Referee’s calculation delivered pursuant to Section 2.3(d); provided, however, that in no event shall Final Net Working Capital be less than Alarm’s calculation of Closing Net Working Capital or more than the Stockholder Representative’s calculation of Closing Net Working Capital delivered pursuant to Section 2.3(c).

2.4 Earn-Out Payments.

(a) Stockholders shall be entitled to receive additional payments which may be earned and become payable as follows (each, an “Earnout Payment”, and collectively, the “Earnout Payments”):

(i) $4.5 million (subject to adjustment as set forth in Section 2.4(b) below) if (1) the Company exceeds $3.4 million in Total Revenue (as defined below) for the year ended December 31, 2013; and (2) the Company’s actual 2013 Software Revenue (as defined below) represents at least 37% of the Company’s Total Revenue for the same period; provided, however, if 2013 Software Revenue meets or exceeds the absolute dollar projections set forth in Schedule 2.4(e), subject to the sliding scale adjustments provided for in Section 2.4(b), for 2013 Software Revenue but falls below 37% of the Company’s 2013 Total Revenue due solely to an increase in Total Revenue above the projections for 2013 set forth on Schedule 2.4(e) then Section 2.4(a)(i) shall be satisfied.

(ii) $2.5 million (subject to adjustment as set forth in Section 2.4(b) below) if (1) the Company exceeds $5.5 million in Total Revenue (as defined below) for the year ended December 31, 2014; and (2) the Company’s actual 2014 Software Revenue (as defined below) represents at least 63% of the Company’s Total Revenue for the same period; provided,

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however, if 2014 Software Revenue meets or exceeds the absolute dollar projections set forth in Schedule 2.4(e), subject to the sliding scale adjustments provided for in Section 2.4(b), for 2014 Software Revenue but falls below 63% of the Company’s 2014 Total Revenue due solely to an increase in Total Revenue above the projections for 2014 set forth on Schedule 2.4(e) then Section 2.4(a)(ii) shall be satisfied.

(iii) $7.0 million (subject to adjustment as set forth in Section 2.4(b) below) if (1) the Company exceeds $11.4 million in Total Revenue (as defined below) for the year ended December 31, 2015; (2) the Company’s actual 2015 Software Revenue (as defined below) represents at least 72% of the Company’s Total Revenue for the same period; and (3) each of the Company’s EBITDA and Cash Flow are positive for 2015 (the “2015 Earnout Payment”); provided, however, if 2015 Software Revenue meets or exceeds the absolute dollar projections set forth in Schedule 2.4(e), subject to the sliding scale adjustments provided for in Section 2.4(b), for 2015 Software Revenue but falls below 72% of the Company’s 2015 Total Revenue due solely to an increase in Total Revenue above the projections for 2015 set forth on Schedule 2.4(e) then Section 2.4(a)(iii) shall be satisfied; provided, further, that the 2015 Earnout Payment, if any, shall be reduced dollar for dollar for each dollar of debt or cash funding actually provided to the Company by Alarm or an Affiliate of Alarm or any third party at the request of the Company pursuant to and in accordance with the Rolling Forecasts (as defined below) in excess of $3.0 million between the Closing Date and December 31, 2015; provided, further, that such reduction in the 2015 Earnout Payment calculated in this subsection (iii), if any, shall be offset dollar for dollar for each dollar the Company exceeds, on a cumulative basis, EBITDA targets for years 2013 through 2015, as set forth on Schedule 2.4(e).

(iv) If the requirements of subsection (iii) above are met, the entire $14.0 million Earnout Payment (subject to any adjustments set forth in subsection (iii) above) will be considered earned less any amounts previously paid pursuant to subsections (i) and (ii).

(b) Each applicable Earnout Payment shall be adjusted on a sliding scale percentage basis pursuant to the methodology set forth on Schedule 2.4(b); provided, however, in no event shall the aggregate Earnout Payments exceed $16.8 million.

(c) The parties agree that (i) during the term of the Escrow Agreement, 10% of any Earnout Payment earned pursuant to this Section 2.4 shall be delivered to the Escrow Agent pursuant to the Escrow Agreement; (ii) 15% of any Earnout Payment earned pursuant to this Section 2.4 shall be paid to the Company to be allocated to the employees of the Company as determined by the Board of Directors of the Company in consultation with the President of the Company; and (iii) 75% of any Earnout Payments earned pursuant to this Section 2.4, or in the event the Escrow Agreement has been terminated, the remainder of the Earnout Payments not retained pursuant to subsection (ii) above (in either event, inclusive of any fees due to Ackrell Capital, LLC), shall be paid to the Escrow Agent for distribution to the Stockholders in accordance with the Escrow Agreement (the “Stockholder Earnout Payment”). Any delivery of funds to the Escrow Agent pursuant to this Section 2.4 shall be made in immediately available funds within ten (10) Business Days following the determination of the applicable Final Earnout Payment. In the event that Alarm fails to deliver the Final Earnout Payment to the Escrow Agent when due, it shall also pay interest on the Final Earnout Payment at a rate of four (4)% per annum.

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(d) Within forty-five (45) days after the issuance of Alarm’s audited financial statements for the applicable fiscal year, Alarm shall prepare and deliver to the Stockholder Representative a calculation of the applicable Earnout Payment describing in reasonable detail the manner in which Alarm has calculated the Earnout Payment. The Stockholder Representative shall, within thirty (30) days of Alarm’s delivery of the calculation of the applicable Earnout Payment, deliver a written notice to Alarm of any disagreement with Alarm’s calculation of the applicable Earnout Payment, which notice shall specify those items or amounts as to which the Stockholder Representative disagrees, and the Stockholders shall be deemed to have agreed with all other items and amounts contained in Alarm’s calculation of the applicable Earnout Payment. If the Stockholder Representative fails to properly object in writing to the calculation of applicable Earnout Payment within that thirty (30) day period, the Stockholders will be deemed conclusively to have agreed to Alarm’s calculation, which shall be final and binding upon the Stockholders. If a notice of disagreement shall be duly delivered pursuant to this Section 2.4(d), Alarm and the Stockholder Representative shall, during the fifteen (15) days following such delivery, use their commercially reasonable, good faith efforts to reach agreement on the disputed items or amounts in order to determine, as may be required, the amount of the applicable Earnout Payment, which amount shall not be less than the amount thereof shown in Alarm’s calculation more than the amount thereof shown in the Stockholder Representative’s calculation. If, during such period, the Stockholder Representative and Alarm are unable to reach such agreement, they shall promptly thereafter cause the Accounting Referee to review this Agreement and the disputed items or amounts for the purpose of calculating the applicable Earnout Payment. In making such calculation, the Accounting Referee shall consider only those still unresolved items or amounts in Alarm’s calculation of the applicable Earnout Payment as to which the Stockholder Representative has duly objected in accordance with Section 2.4(d). The Accounting Referee shall deliver to the Stockholder Representative and Alarm, as promptly as practicable (but in any case no later than thirty (30) days from the date of engagement of the Accounting Referee), a report setting forth such calculation. Such report shall be final and binding upon the Stockholders and Alarm. The cost of such review and report shall be borne by the party (in the case of the Stockholder Representative, solely on behalf of the Stockholders) whose determination of the applicable Earnout Payment (as set forth in the statement delivered by Alarm pursuant to Section 2.4(d) or in the Stockholder Representative’s notice of disagreement) was farthest from the determination of the applicable Final Earnout Payment (as defined below) determined by the Accounting Referee or equally if the determination of the applicable Final Earnout Payment by the Accounting Referee is equidistant between the determinations of the parties.

(e) For purposes of this Section 2.4, the following definitions shall apply: (i) “Cash Flow” shall mean cash flow generated from the Company’s operations, determined in accordance with GAAP, less cash used for capital expenditures; (ii) “EBITDA” shall mean the Company’s earnings from operations before interest, taxes, depreciation and amortization, calculated as if it were being operated as a separate and independent corporation and in accordance with GAAP as consistently applied by Alarm as determined by the firm of independent certified public accountants engaged by Alarm for purposes of its own audit but excluding any corporate overhead or other intercompany charges between the Company and

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Alarm (or any of its Affiliates) except those which have been agreed to in advance by the President of the Company pursuant to an intercompany services agreement and any costs associated with benefits directly attributable to the Company; (iii) “Final Earnout Payment” means with respect to each Earnout Payment, the Earnout Payment: (1) as shown in Alarm’s calculation thereof if no notice of disagreement with respect thereto is duly delivered pursuant to Section 2.4(d); or (2) if such a notice of disagreement is delivered, then: (A) as agreed by the Stockholder Representative and Alarm pursuant to Section 2.4(d) or (B) in the absence of such agreement, as shown in the Accounting Referee’s calculation delivered pursuant to Section 2.4(d); provided, however, that in no event shall any Final Earnout Payment be less than Alarm’s calculation of the applicable Earnout Payment or more than the Stockholder Representative’s calculation of the applicable Earnout Payment delivered pursuant to Section 2.4(d); (iv) “Software Revenue” shall mean revenue, as determined in accordance with GAAP, derived from the Company’s energy management and demand response software platform only if such related software is hosted on servers controlled by the Company, including but not limited to: (A) platform and software service and license fees for use of Company’s platform, and (B) revenue received for demand response aggregation, energy efficiency, and grid stability services, and (C) premium and other service or subscription fees for customers with devices connected to or controlled by or with accounts on Company’s platform, and shall expressly exclude any revenue derived from non-core software, including consulting, advertising, promotion and one-time data services; (v) “Total Revenue” shall mean the total revenue of the Company for the applicable period as determined in accordance with GAAP; and (vi) “Total Revenue Operating Projections” shall mean the Total Revenue projections for the applicable year set forth in the projections attached as Schedule 2.4(e).

(f) Each party hereto shall, and shall cause their respective representatives to, cooperate and assist, to the extent reasonably requested by another party hereto, including, without limitation, the Stockholder Representative, in the preparation of the calculation of Earnout Payment and in the conduct of the review referred to in this Section 2.4, including the making available to the extent reasonably necessary of books, records, work papers and appropriate personnel. At the request of the Stockholder Representative, the Chief Financial Officer of Alarm shall be available for quarterly conference calls during which the Chief Financial Officer shall provide the Stockholder Representative with a report on the progress toward the achievement of the various thresholds set forth in this Section 2.4.

2.5 Alarm Covenants/Vesting of Earnout Payment.

(a) The parties agree that they will work together in good faith and use commercially reasonable efforts to achieve the Earnout Payments and will not take or cause or require the Company to take any actions in bad faith in order to materially and adversely impact or obstruct the achievement of the thresholds necessary to earn the Earnout Payments; provided, however, that Alarm has no obligation to operate the Company in order to maximize the amount of any Earnout Payment. In furtherance thereof, Alarm agrees that the Company will be operated as an independent wholly-owned subsidiary of Alarm under the EnergyHub name during the Earnout Period.

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(b) From the Closing through the final determination of the Stockholders’ entitlement to the Earnout Payments and the payment thereof (the “Earnout Period”), Alarm will fund the working capital and cash flow needs of the Company in the ordinary course of business in accordance with the following: On a quarterly basis, the President of the Company will provide Alarm with six month rolling forecasts (the “Rolling Forecasts”) setting forth his good faith estimate of the anticipated funding requirements necessary to implement the business plan of the Company consistent with the projections attached as Schedule 2.4(e) and in such detail as agreed upon by the Company and Alarm. The initial six month Rolling Forecast is attached hereto as Exhibit G to this Agreement and Alarm shall fund such amount at the Closing. So long as the aggregate amount of cash funds provided by Alarm to the Company during the Earnout Period has not exceeded $3,000,000, Alarm agrees to fund the second six month period in amounts consistent with the Rolling Forecast applicable to such period. Thereafter, so long as the Company has achieved at least 70% of its Total Revenue projections as set forth on Schedule 2.4(e) for the prior twelve-month period and the aggregate amount of cash funds provided by Alarm to the Company during the Earnout Period has not exceeded $3,000,000, Alarm agrees to provide the anticipated funding requirements for the succeeding six month period as set forth in the Rolling Forecasts. For clarification purposes, in no event shall Alarm be obligated to fund the Company (i) if, after the initial twelve-month period, the Company fails to achieve at least 70% of its Total Revenue projections as set forth on Schedule 2.4(e) for the prior twelve-month period or (ii) if Alarm has provided, or as a result of the applicable funding request will provide, in excess of $3,000,000 in the aggregate to the Company.

(c) The parties agree that during the Earnout Period, Seth Frader-Thompson so long as he is the President of the Company, Stephen Trundle and an individual to be named by Alarm shall be members of the Board of Directors of the Company; provided, however, in the event Stephen Trundle resigns from the board, Alarm shall be entitled to name his successor; provided, further, Alarm may increase the size of the board in its sole discretion with the vacancies created by any such increase in size to be filled by designees of Alarm.

(d) During the Earnout Period, Alarm shall cause the Company to retain Seth Frader-Thompson, Joshua Oberwetter, Andrew Martin and Matt Johnson (collectively, the “Key Employees”) as senior management of the Company unless the Company and Stockholder Representative, after consultation with Seth Frader-Thompson, mutually agree to terminate or remove such employees from their positions or the Board of Directors of the Company terminates such Key Employees for Cause. Alarm further agrees to cause the Company to use reasonable efforts to preserve the role and responsibility of the President; provided that if Seth Frader-Thompson leaves the Company or is otherwise unable to fulfill his responsibilities as President, Alarm shall be free to adjust the roles and responsibilities of the remaining employees as it determines in good faith to be necessary or advisable to carry out and increase the business of the Company.

(e) During the Earnout Period, subject to the funding limitations set forth in Section 2.5(b), above, Alarm agrees to keep the products and business lines of the Company substantially as historically operated and as contemplated by the business plans as of the Closing Date.

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2.6 Escrow Agreement.

On the Closing Date, Alarm shall pay (or cause to be paid), by wire transfer of immediately available funds, the Base Escrow Amount to the Escrow Agent, to be held in escrow to satisfy any claims by (i) Alarm for satisfaction of any Merger Consideration Adjustment pursuant to Section 2.3; or (ii) Alarm Indemnified Persons pursuant to Section 9.2. The Escrow Agreement shall direct the Escrow Agent to allocate the Escrow Amount among all of the Stockholders in accordance with the applicable respective percentages set forth on Schedule 2.6 (the “Applicable Percentage”) and, to the extent any amounts included in the Escrow Amount represent funds due to participants in the Employee Retention Plan pursuant to the schedule to the Employee Retention Plan, shall direct the Escrow Agent to allocate such funds to the Company and/or Alarm for payment through the Company’s or Alarm’s payroll processing service or system, subject to applicable withholding tax, if and when due, to such participants. If the Stockholders become obligated (whether through mutual agreement between Alarm and the Stockholder Representative, as a result of a final non-appealable judicial determination or otherwise finally determined in accordance with the terms hereof or the terms of the Escrow Agreement) to provide an adjustment payment, indemnification or another payment pursuant to or in accordance with the terms of this Agreement, Alarm and the Stockholder Representative shall, if necessary for the release of funds from the escrow, execute joint written instructions to the Escrow Agent to disburse the appropriate amounts from the Escrow Amount in accordance with the terms of this Agreement and the Escrow Agreement.

ARTICLE III

CLOSING AND TERMINATION

3.1 Closing Date.

Subject to the satisfaction of the conditions set forth in Sections 8.1 and 8.2 (or waiver in writing by the party entitled to waive such conditions), the closing of the transactions contemplated hereunder, including the Merger (the “Closing”) shall take place at the offices of Nelson Mullins Riley & Scarborough LLP, 201 17th Street, Atlanta Georgia (or at such other place as the parties may designate in writing) at 10:00 a.m. (local time) on the third Business Day after the satisfaction or waiver of each condition to the Closing set forth in Article VIII (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions), unless another time or date, or both, are agreed to in writing by the parties hereto. The date on which the Closing shall be held is referred to in this Agreement as the “Closing Date”.

3.2 Termination of Agreement.

This Agreement may be terminated prior to the Closing as follows:

(a) by mutual written consent of the Company, Alarm and the Merger Sub;

(b) the Company may terminate this Agreement by giving written notice to Alarm and the Merger Sub at any time prior to the Closing if (i) Alarm and/or the Merger Sub has breached any covenant, representation or warranty in any material respect contained in this Agreement and such breach has not been cured within twenty (20) days following the delivery of

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notice of such breach to Alarm and the Merger Sub (so long the Company is then in material breach of any covenant, representation or warranty contained in this Agreement); or (ii) if the Closing shall not have occurred on or before June 30, 2013 (the “Expiration Date”), by reason of the failure of any condition precedent under Section 8.2 (unless the failure results primarily from the Company’s breach of any representation, warranty or covenant contained in this Agreement);

(c) Alarm and the Merger Sub may terminate this Agreement by giving written notice to the Company at any time prior to the Closing: (i) if the Company has breached any covenant, representation or warranty in any material respect contained in this Agreement and such breach has not been cured within twenty (20) days following the delivery of notice of such breach to the Company (so long as Alarm and/or the Merger Sub is not then in material breach of any covenant, representation or warranty contained in this Agreement); or (ii) if the Closing shall not have occurred on or before the Expiration Date, by reason of the failure of any condition precedent under Section 8.1 (unless the failure results primarily from Alarm’s breach of any representation, warranty or covenant contained in this Agreement); or

(d) by the Company, Alarm or the Merger Sub if there shall be in effect a final nonappealable Order of a Governmental Body of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby; it being agreed that the parties hereto shall use commercially reasonable efforts to appeal any adverse determination which is not nonappealable (and pursue such appeal with reasonable diligence).

3.3 Procedure Upon Termination; Effect of Termination.

(a) In the event of termination and abandonment of this Agreement pursuant to Section 3.2, written notice thereof shall forthwith be given to the non-abandoning party, and subject to the notice and cure periods set forth in Section 3.2, this Agreement shall terminate, and the transactions contemplated hereunder shall be abandoned, without further action by Alarm, the Merger Sub or the Company.

(b) In the event that this Agreement is validly terminated in accordance with Section 3.2, then the parties shall be relieved of their duties and obligations arising under this Agreement after the date of such termination and such termination shall be without liability to the parties; provided, that no such termination shall relieve any party hereto from liability for any willful breach of this Agreement and, provided, further, that the obligations of the parties set forth in Section 7.5 (Confidentiality), Section 7.6 (Publicity) and Article XI (Miscellaneous) shall survive any such termination and shall be enforceable hereunder.

3.4 Closing Deliveries.

(a) At the Closing, the Company shall deliver, or cause to be delivered, to Alarm and/or the Merger Sub the following:

(i) intentionally omitted.

(ii) certificates referred to in Sections 8.1(a) and 8.1(b);

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(iii) written resignations of directors and officers of the Company, other than the individuals set forth on Schedule 3.4(a)(iii);

(iv) an appropriate receipt and release evidencing the termination of the Debt on Schedule 3.4(a)(iv), together with evidence of arrangements to deliver UCC-3 termination statements or similar documents evidencing the termination of all Liens held by the lenders under the Debt on Schedule 3.4(a)(iv), in form and substance reasonably satisfactory to Alarm;

(v) evidence in form and substance reasonably satisfactory to Alarm and its counsel that all mortgages, security interests, collateral assignments and other Liens (other than Permitted Exceptions) on any of the properties or assets of the Company shall have been released, discharged and terminated;

(vi) a counterpart of the Escrow Agreement, duly executed by the Stockholder Representative;

(vii) evidence in form and substance reasonably satisfactory to Alarm and its counsel that the Series B Documents have been terminated in full;

(viii) evidence in form and substance reasonably satisfactory to Alarm and its counsel that all options and the Company’s stock option plan have been terminated in full, and each shall no longer have any force or effect;

(ix) evidence in form and substance reasonably satisfactory to Alarm and its counsel that all warrants to purchase capital stock of the Company have been terminated in full, and each shall no longer have any force or effect;

(x) evidence in form and substance reasonably satisfactory to Alarm and its counsel that the agreements identified on Schedule 3.4(a)(x) have been terminated in full and no longer have any force or effect;

(xi) a certificate of the Secretary or Assistant Secretary of the Company, dated as of the Closing Date, certifying as to the incumbency of any officer or representative executing any Company Document on behalf of the Company, the resolutions of the Company’s Board of Directors and the Stockholders approving the transactions contemplated by the Company Documents, and such other customary matters as Alarm and its counsel may reasonably request;

(xii) evidence that all of the Company’s employees have entered into Alarm’s standard Work Product Assignment and Confidentiality Agreement;

(xiii) a compact disc (Which shall be permanent and accessible, without the need for any password, with readily and commercially available software) containing in electronic format, all documents posted to the datasite maintained by Ackrell Capital, LLC on behalf of the Company as of the Closing;

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(xiv) the Stockholder Consent, executed and delivered in accordance with Section 7.11, a copy of the Section 228(e) notice in connection therewith, a copy of which shall have been delivered to each Stockholder of the Company who has not signed the Stockholder Consent in accordance with the DGCL;

(xv) Letters of Transmittal executed by holders of at least 98% of the outstanding capital stock of the Company, including the Holders of 100% of the outstanding Series A Preferred Stock and Series B Preferred Stock, including affidavits from each Stockholder who is a U.S. person under Code Section 1445 and the regulations thereunder affirming that such Stockholder is not a “foreign person” within the meaning of Section 1.1445-2(b) of the Treasury Regulations and, on behalf of each Stockholder who is not a U.S. person under Code Section 1445 and the regulations thereunder, an affidavit from the Company pursuant to Code Section 1445 and Treasury Regulation Section 1.897-2(h) and 1.145-2(c)(3) affirming that the Company is not a U.S. real property holding corporation;

(xvi) any other deliverable contemplated in Section 8.1.

(b) At Closing, Alarm and the Merger Sub, as applicable, shall deliver, or cause to be delivered the following:

(i) evidence of the wire transfers referred to in Section 2.2;

(ii) the certificates referred to in Sections 8,2(a) and 8.2(b);

(iii) a counterpart of the Escrow Agreement, duly executed by Alarm; and

(iv) any other deliverable contemplated in Section 8.2.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Alarm and the Merger Sub, as of the date hereof and again as of the Closing Date, that:

4.1 Organization and Good Standing.

The Company is a corporation duly organized, validly existing and in good standing under the laws of Delaware and has all requisite power and authority to conduct its business as now conducted and to own and operate its assets as now owned and operated by it. The Company is duly qualified or authorized to do business as a foreign company and is in good standing under the laws of each jurisdiction in which it owns or leases real property and each other jurisdiction in which the conduct of its business or the ownership of its assets requires such qualification or authorization (which jurisdictions are set forth on Schedule 4.1), except where the failure to be so qualified, authorized or in good standing would not, individually or in the aggregate, have a Material Adverse Effect. True, correct and complete copies of the Organizational Documents of the Company, as currently in effect, have been delivered to Alarm.

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4.2 Authorization of Agreement.

The Company has all requisite power and authority to execute and deliver this Agreement and each other agreement, document, instrument or certificate contemplated by this Agreement or to be executed by the Company in connection with the consummation of the transactions contemplated by this Agreement (collectively with this Agreement, the “Company Documents”), and to consummate the transactions and perform its obligations as contemplated thereby. The execution, delivery and performance of the Company Documents and the consummation of the transactions contemplated thereby have been duly authorized by all requisite corporate action on the part of the Company (including the Stockholders), This Agreement has been, and each of the Company Documents will be at or prior to the Closing, duly and validly executed and delivered by the Company and (assuming the due authorization, execution and delivery by Alarm) this Agreement constitutes, and each of the other Company Documents to which the Company is a party will constitute, the legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).

4.3 Conflicts; Consents of Third Parties.

(a) None of the execution, delivery or performance by the Company of the Company Documents, the consummation of the transactions contemplated thereby, or compliance by the Company with any of the provisions thereof will: (i) cause the Company to violate or breach any Law or Order; (ii) conflict with or result in a violation of the Organizational Documents of the Company; or (iii) except as set forth on Schedule 4.3(a), conflict with or result in a breach or termination of any of the terms, conditions or provisions of, or constitute a default under, accelerate any obligations arising under, trigger any payment under, require any Consent under or notice under, result in the creation of any Lien pursuant to, or otherwise adversely affect, any Material Contract to which the Company is a party or by which its assets may be bound.

(b) Except as set forth on Schedule 4.3(b), no waiver, Order, Permit or Consent of, any Person or Governmental Body is required on the part of the Company in connection with the execution and delivery of the Company Documents or the compliance by the Company with any of the provisions thereof, or the consummation of the transactions contemplated thereby, except for such consents, waivers, approvals, Orders, Permits, authorizations, declarations, filings, or notifications that are to be obtained prior to the Closing.

4.4 Capitalization.

(a) The authorized capital stock of the Company consists of 27,293,362 shares, consisting of (i) 2,966,257 shares of Series A Preferred Stock, all of which are issued and outstanding; (ii) 8,447,334 shares of Series B Preferred Stock, of which 8,265,710 are issued and outstanding; and (iii) 15,879,771 shares of Common Stock, of which 2,123,636 are issued and outstanding. All of the issued and outstanding capital stock of the Company is held by the

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Stockholders as set forth on Schedule 4.4(a). Schedule 4.4(a) also sets forth the names of the Company’s officers and directors or other governing persons. All of the issued and outstanding Shares were duly authorized for issuance and are validly issued, fully paid and non-assessable, and were issued in compliance with the applicable provisions of the Securities Act, any applicable state “blue sky” or securities law. Except for the Shares, there are no other equity securities of the Company outstanding. None of the Shares were issued in violation of any preemptive, preferential or similar rights of any Person.

(b) Except as set forth on Schedule 4.4(b), there are not any authorized or outstanding: (i) options, warrants, calls, rights of first refusal or other rights of any character to acquire equity or debt interests from the Company or any phantom stock, stock appreciation rights or any other rights intended to provide an economic return based on changes in the value of any debt or equity securities of the Company; (ii) authorized or outstanding equity or debt securities of the Company convertible into or exchangeable for equity or debt securities of the Company; or (iii) rights or options pursuant to which the Company is required to or has the right to redeem, purchase or otherwise reacquire any equity securities, or other instrument convertible or exercisable into equity securities, of the Company. The Company is not a party to any voting trust or other Contract with respect to the voting, redemption, sale, transfer or other disposition of the Shares.

4.5 Subsidiaries.

The Company does not own any equity or debt securities or other ownership interest, directly or indirectly, in any other Person, nor is it party to any Contract to acquire any such securities or other ownership interest.

4.6 Financial Statements; Books and Records; Accounts Receivable.

(a) The Company has delivered to Alarm copies of: (i) the audited balance sheets of the Company for the fiscal year ended December 31, 2011 and the related unaudited statements of income and of cash flows (ii) the unaudited balance sheets of the Company for the fiscal year ended December 31, 2012 and the related unaudited statements of income and of cash flows (the “Annual Financial Statements”); (iii) the unaudited balance sheet of the Company at March 31, 2013 and the related consolidated statements of income and cash flows of the Company for the three-month period then ended (the “Interim Financial Statements”, collectively with the Annual Financial Statements, the “Financial Statements”).

(b) Except in the case of unaudited financial statements, for the absence of notes and subject to normal year-end adjustments, the Financial Statements: (i) have been prepared in accordance with GAAP, consistently applied, and fairly present the financial position, results of operations and cash flows of the Company as at the dates and for the periods indicated therein, and (ii) are consistent with the books and records of the Company maintained in the ordinary course of business.

(c) The respective minute and corporate or company books of the Company, and the books of account and other business records of the Company, all of which have been previously delivered to Alarm and its representatives, are accurate and complete in all material respects.

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(d) All receivables reflected in the balance sheet in the Interim Financial Statements (the “Reference Balance Sheet”), or which have arisen from the conduct of the business of the Company since the date of the Reference Balance Sheet (the “Reference Balance Sheet Date”), are valid and have arisen only from bona fide, arms-length transactions entered into in the ordinary course of business consistent with past practices, are collectible in accordance with their terms and are not subject to defease, offset or any counterclaim. Except as set forth on Schedule 4.6(d), such receivables, net of reserves, are fairly presented in accordance with GAAP, consistently applied, in the Financial Statements. Except as set forth on Schedule 4.6(d), the Company has not accepted any prepayment or other payment for products to be delivered or services to be performed on or after the Closing Date. Except as set forth on Schedule 4.6(d), the Company does not have any issued and outstanding invoices for payments due in consideration for services not yet rendered or goods not yet delivered as of the Closing Date.

4.7 No Undisclosed Liabilities.

Except as set forth on Schedule 4.7 or to the extent reflected or provided for in the Reference Balance Sheet, the Company has no Liabilities other than: (i) accounts payable and accrued expenses incurred after the Reference Balance Sheet Date in the ordinary course of business consistent with past practices, (ii) executory obligations or liabilities under Contracts listed on Schedule 4.13(a) or that are not required to be listed thereon (but not including any Liabilities or obligations arising out of any breach of Contract), (iii) Liabilities incurred in connection with the transactions contemplated hereby or (iv) that are immaterial to the Company.

4.8 Absence of Certain Developments.

Since December 31, 2012: (1) the Company has conducted its business only in the ordinary course of business consistent with past practices; and (ii) there has not been any event, change, occurrence or circumstance that has had, or is reasonably likely to have, individually or in the aggregate, a Material Adverse Effect. Except as contemplated by this Agreement or as set forth on Schedule 4.8, since December 31, 2012, the Company has not:

(a) incurred any Debt, other than in the ordinary course of business consistent with past practices;

(b) changed any accounting principles, methods or practices, or the manner the Company keeps its books and records, or its practices with regard to the booking of sales, receivables, payables or accrued expenses or materially altered its payment or collection practices;

(c) (A) granted any severance, continuation or termination pay to any director, officer, shareholder or employee; (B) entered into any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any director, officer, shareholder or employee; (C) increased, amended, or changed compensation, bonus or other benefits payable or potentially payable to current or former directors, officers, shareholders

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or employees, other than that as may be required by Law; (D) adopted any new or changed the terms of any existing bonus, pension, insurance, health or other benefit plan; or (E) represented to any employee or former employee that the Company, Alarm or any other Person would continue to maintain or implement any benefit or would continue to employ such employee after the Closing Date;

(d) suffered any damage, destruction or loss (whether or not covered by insurance) to any of its material properties or assets or disposed of any assets other than inventory in the ordinary come of business consistent with past practices;

(e) except in the ordinary course of business consistent with past practices and levels, granted customers of the business any rebates, price concessions, discounts or allowances, materially altered its pricing or payment terms or agreed to any material reduction in discounts received from suppliers;

(f) made any declaration, setting aside or payment of any dividend or other distribution with respect to, or any repurchase, redemption or other acquisition of, any of its capital stock or other equity interests;

(g) purchased, leased or otherwise acquired (whether by merger, consolidation, or other business combination, purchase of securities, purchase of assets or otherwise) any material portion of the business or assets of any other Person;

(h) made, changed or revoked any material Tax election, elected or changed any material method of accounting for Tax purposes, settled any Legal Proceeding in respect of Taxes or entered into any Contract in respect of Taxes with any Governmental Body;

(i) cancelled, waived or compromised any Debt, right or claim having a value of more than $10,000 (individually) or an aggregate value in excess of $25,000;

(j) sold, assigned, transferred or granted any Intellectual Property, entered into any settlement regarding the breach or infringement of any Intellectual Property, or taken any action (or, to the Company’s Knowledge, failed to take any action) that has resulted in, or would reasonably be likely to result in, the loss, lapse, abandonment, invalidity or unenforceability of any of its Intellectual Property;

(k) made any capital expenditures or capital additions or betterments in excess of an aggregate of $25,000;

(l) made any purchase commitment outside the ordinary course of business consistent with past practice, or made any advances to any Person, other than to employees in the ordinary course of business consistent with past practice; or

(m) committed or agreed to do any of the foregoing.

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4.9 Taxes.

Except as set forth on Schedule 4.9:

(a) The Company has timely filed all Tax Returns required to be filed by it on or before the Closing Date, all of which were true, correct and complete in all material respects. The Company has provided Alarm with copies of such Tax Returns filed in each of the immediately preceding three (3) calendar years. All Taxes required to be paid by the Company have been timely reserved for or paid, whether or not shown on any such Tax Returns. There are no Liens as a result of any unpaid Taxes (other than for current Taxes not yet due and payable) upon any of the assets of the Company. The Company has set aside adequate reserves for any accrued but unpaid Taxes. The net operating losses and carryovers relating thereto reflected on those Tax Returns are not currently subject to any restrictions or limitations on their use by the Company under Sections 382, 383 or 384 of the Code, excluding any restrictions or limitations on their use attributable to the transactions contemplated pursuant to this Agreement.

(b) All Taxes required to be withheld or collected by the Company on or before the Closing Date have been withheld or collected and have been (or will be) duly and timely paid to the proper Taxing Authority. All Persons performing services on behalf of the Company have been properly classified by the Company for purposes of Tax reporting and Tax withholding as required by applicable Law. The Company has complied in all material respects with Tax recordkeeping requirements.

(c) No deficiencies for any Taxes have been proposed, asserted or assessed by any Taxing Authority against the Company that are still pending, and no Tax Return of the Company is under current examination by any Taxing Authority.

(d) No requests for waivers of the time to assess any Taxes have been made by the Company that are still pending.

(e) There is no pending claim by any Taxing Authority of a jurisdiction where the Company has not filed Tax Returns that the Company is subject to Taxation in that jurisdiction.

(f) The Company has not received a Tax ruling or entered into a closing or similar agreement with any Taxing Authority that will be binding on the Company after the Closing. The Company has not entered into any agreement with any Taxing Authority, including any Tax allocation, Tax abatement, Tax credit, or payment in lieu of Taxes agreements.

(g) The Company has not made any payments, and there is no Contract covering any Person that, individually or collectively, could give rise to the payment of any amount (individually or in the aggregate) that would not be deductible by Alarm or the Company by reason of Section 280G of the Code or would subject the recipient thereof to Section 4999 of the Code (or any corresponding provisions of state, local or foreign Tax Law), or that were or will not be deductible under Sections 162 or 404 of the Code (or any corresponding provisions of state, local or foreign Tax law).

(h) The Company has not participated in any “reportable transaction” as defined in Treasury Regulation Section 1.6011-4(b)(1) or any transaction that is substantially similar to such a “reportable transaction.”

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(i) The Company will not be required to include in income during a portion of a Straddle Period commencing after the Closing Date and/or a Post-Closing Period any income that economically accrued and was accounted for on or prior to the Closing Date by reason of the installment method of accounting, the completion method of accounting or otherwise.

(j) The Company is not, and has not been during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code, a real property holding corporation under Section 897(c)(2)of the Code.

(k) The Company has not been a member of a consolidated group that has filed (or was required to file) a consolidated, unitary or combined Tax Return or which may result in the Company incurring Liability for the Taxes of another Person by reason of Treasury Regulation Section 1.1502-6 or any similar provision of Tax Law.

(l) The Company has no Knowledge indicating that a Taxing Authority intends to assert a claim against the Company for delinquent Taxes or that there are any applicable facts that would reasonably support such a claim by a Taxing Authority.

(m) The Company, its Company Benefit Plans (as defined below), and its fiduciaries have not (individually nor collectively) participated in any nonexempt “prohibited transaction” within the meaning of Section 406 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) or Code Section 4975.

4.10 Real Property.

(a) Owned Real Property. The Company does not (i) own any real property (including ground leases); (ii) hold a freehold or other ownership interest (either directly or indirectly) in any real property; or (iii) hold any option or right of first refusal or first offer to acquire any real property.

(b) Leased Real Property. Schedule 4.10(b) contains an accurate and complete list of all real property leases, subleases, licenses or other occupancy agreements to which the Company (whether as lessor or lessee) is a party (such Contracts being referred to herein as the “Real Properly Lease”). Each Real Property Lease is valid and binding on the Company and is in full force and effect; all rents and additional rents and other sums, expenses and charges due thereunder to date on each such Real Property Lease have been timely paid; and the lessee has had quiet enjoyment thereof since the commencement of the original term of such Real Property Lease and no waiver of the lessee’s obligations thereunder has been granted by the lessor. There exists no material default or event of default by the Company or, to the Company’s Knowledge, by any other party to any Real Property Lease. The Company holds the leasehold estate on all the Real Property Leases free and clear of all Liens, except for any mortgagees’ liens on the real property in which such leasehold estate is located. The real property leased by the Company is in a state of good maintenance and repair (ordinary wear and tear excepted), adequate and suitable for the purposes for which they are presently being used, and there are no material repair or restoration works likely to be required in connection with any of the leased real property. The Company is in physical possession and actual and exclusive occupation of the

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whole of each of its leased properties. To the Company’s Knowledge, no environmental claim has been made against the Company with respect to any Real Property Lease. The Company does not owe any brokerage commission with respect to any of the Real Property Leases.

4.11 Title; Sufficiency.

Except as noted on Schedule 4.11: (i) all assets owned or leased by the Company are in the possession of the Company at one of the properties subject to a Real Property Lease; (ii) such assets are in good operating condition and repair (ordinary wear and tear excepted) and are suitable for the use to which they are put; and (iii) with respect to any assets leased by the Company, such assets are in such condition as to permit the surrender thereof on the date hereof without any cost or expense for repair or restoration if the related leases were terminated on the date hereof in the ordinary course of business. Except as set forth on Schedule 4.11, the Company owns all right, title and interest in and to all of its properties and assets reflected as owned in the Reference Balance Sheet or acquired since the Reference Balance Sheet Date, free and clear of any and all Liens, other than Permitted Exceptions. The properties and assets (tangible and intangible) owned or leased by the Company constitute all of the properties and assets necessary to conduct its business as heretofore conducted.

4.12 Intellectual Property.

(a) Schedule 4.12(a) sets forth a complete and correct list of all Intellectual Property owned by the Company that is subject to any issuance, registration, application or other filing by, to or with any Governmental Authority or authorized private registrar in any jurisdiction (collectively, “Intellectual Property Registrations”), including registered trademarks, domain names and copyrights, issued and reissued patents and pending applications for any of the foregoing. All required filings and fees related to the Intellectual Property Registrations have been timely filed with and paid to the relevant Governmental Authorities and authorized registrars, including without limitation all application and maintenance fees. All Intellectual Property Registrations are otherwise in good standing (including without limitation that all assignments have been executed and recorded, and that all deadlines for responses or other submissions to the relevant Government Authorities and registrars have been timely made). No intellectual property rights, or potential intellectual property rights embodied in the Company’s patent applications set forth on Schedule 4.12(a), have lapsed, and, except as set forth on Schedule 4.12(a), no action is required within thirty (30) days following the Closing to maintain the validity and enforceability of such Intellectual Property Registrations (including without limitation any actions with respect to pending applications for intellectual property rights or registrations set forth on Schedule 4.12(a)).

(b) The Company’s Intellectual Property includes the source code, system documentation, statements of principles of operation and schematics for the operation and maintenance of all Technology Assets, as well as any pertinent commentary or explanation, that is reasonably necessary to render such materials substantially understandable and usable by a trained computer programmer. The Documentation also includes any programs owned or licensed by the Company including software code compilers, software workbenches, development tools and proprietary development languages used for the development, maintenance and implementation of the Technology Assets other than shrink wrap software which has an initial or annual license or maintenance fee of less than $5,000.

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(c) Other than the rights of the Company’s customers to access the website located at www.energyhub.com (the “Website”) and the software, applications and services provided by the Company (the “Applications”) or as set forth on Schedule 4.12(c), the Company has not granted, transferred or assigned any right or interest in the Intellectual Property to any Person. Except as set forth in Schedule 4.12(c), there are no Contracts for consideration in excess of $10,000 per Contract or $100,000 in the aggregate in effect made by or on behalf of the Company with respect to the marketing, distribution, licensing or promotion of the Intellectual Property (including Contracts made by any salesperson, distributor, sublicensor or other remarketer or sales organization, but excluding shrink wrap and similar self-executing licenses). All such Contracts are valid, binding and enforceable between the Company and, to the Company’s Knowledge, the other parties thereto, and the Company and, to the Company’s Knowledge, such other parties are in compliance in all material respects with the terms and conditions of such agreements.

(d) Except as set forth in Schedule 4.12(d): (i) the Company owns and possesses all right, title and interest in and to all Intellectual Property purported to be owned by the Company, free and clear of all Liens; and (ii) the Company has a valid, enforceable and transferable license to use, all non-owned Intellectual Property.

(e) The Intellectual Property constitutes all proprietary rights reasonably necessary or desirable for the operation of the Company’s businesses as presently conducted. No claim by any third party contesting the validity, enforceability, use or ownership of any of the Intellectual Property has been made or is currently outstanding, and, to the Knowledge of the Company there exists no basis for such claim. The Company has not received any written notices of and has no Knowledge of any facts that are reasonably likely to result in any claim by a third party that there has been any infringement or misappropriation by, or conflict with, any Person with respect to the Intellectual Property, including any demand or request that the Company license rights from, or make royalty payments to, any Person. To the Company’s Knowledge, the Intellectual Property has not infringed, misappropriated or otherwise conflicted with any proprietary tights of any third parties and the Company has no Knowledge of any infringement, misappropriation or conflict that will occur as a result of the continued operation of the Company’s business consistent with the manner that the Company has heretofore operated its business. To the Company’s Knowledge, no third party is infringing, misappropriating or diluting any intellectual property rights of the Company.

(f) Except as provided in Schedule 4.12(f), the Company has taken all commercially reasonable actions, measures and precautions to maintain, safeguard and protect all of the Intellectual Property, the Company has taken all steps required by any applicable Law to protect and secure its trade secrets to the extent reasonably necessary pursuant to such Law and, to the Company’s Knowledge, there has been no unauthorized release, disclosure or dissemination of any such trade secrets. All personnel, including employees, agents, consultants and contractors, who have contributed to or participated in the conception and development of any Intellectual Property on behalf of the Company either: (i) have been party to a “work-for-hire” arrangement or agreement with the Company, in accordance with applicable Law, that has

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accorded the Company full, effective, exclusive and original ownership of all right, title and interest, including all intellectual property rights thereby arising; or (ii) have executed appropriate instruments of assignment in favor of the Company as assignee that are separately identified on Schedule 4.12(f) and that have conveyed to the Company full, effective and exclusive ownership of all right, title and interest, including all intellectual property rights thereby arising, the forms of which are substantially similar to the copies which have been previously provided to Alarm. The agreements with current and former employees and agreements with agents, consultants and contractors which are currently in effect include restrictive covenants with respect to non-competition and non-solicitation, the forms of which are substantially similar to the copies of which have been previously provided to Alarm.

(g) To the Company’s Knowledge, all software that is used by the Company is free from any material defect or programming or documentation error, including major bugs, logic errors or failures of such software to currently operate in all material respects as described in the related documentation, and substantially conforms to the specifications of such software. To the Company’s Knowledge, the software used by the Company does not contain any “back door,” “time bomb,” “Trojan horse,” “worm,” “drop dead device,” “virus” (as these terms are commonly used in the computer software industry), or other software routines or hardware components intentionally designed to permit unauthorized access, to disrupt, disable or erase software, hardware or data, or to perform any other similar type of unauthorized activities.

(h) All information or data of any kind possessed by the Company, including but not limited to, information that is individual and identifiable to any consumer and collected from consumers (“PII”), aggregate or anonymous information collected from consumers (“Non-PIP”) and employee data (together with the PII and Non-PII, “Data”), has been collected by the Company, or obtained from any other Person, in compliance with all applicable Laws. Further, all Data is being maintained, stored, processed and used by it in compliance with all Laws. Except as set forth on Schedule 4.12(h) the Company has at all times presented a privacy policy, as updated from time to time (“Privacy Policy”), to consumers at the time of its collection of any PH or Non-PII from consumers through its services offered as part of its businesses. The Company has operated its businesses consistent with the Privacy Policy and any other references to their respective Data collection and use practices contained in marketing materials and advertisements of the Company. All such references regarding its Data collection and use practices have accurately and, as applicable and required under the context, completely described the Company’s respective information collection practices and no such notices or disclosures have been inaccurate, misleading or deceptive under applicable Law. Except as set forth on Schedule 4.12(h), the Company has not received any written notices from any Governmental Authority that its collection, possession or use of PII or Non-PII is inconsistent with or a violation of its applicable Privacy Policy or otherwise constitutes a deceptive or misleading trade practice. The Company uses commercially reasonable technical measures consistent with relevant industry practice to store and maintain all Data to protect against unauthorized access to or use of the Data. Subject to applicable Law and as set forth on Schedule 4.12(h), the Company has the unrestricted right to use the Data, free and clear of all Liens.

(i) There has been no unauthorized use, access to or disclosure of any Data while in the possession of, or under the control of, the Company. The consummation of the transactions contemplated hereby will not result in any loss or impairment of the rights to own and use any Data, nor will such consummation require the consent of any third party in respect of any Data.

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(j) Schedule 4.12(j) sets forth a list of all third party intellectual property: (i) embodied in the Website, the Applications and the content and data embodied in, delivered through, or used to operate the Website and the Applications, including all data, databases, customer lists, healthcare provider information, forms, and textual, video, graphical and multimedia works (the “Content”); (ii) licensed for use by the Company; or (iii) used by the Company in the development, hosting or provision of the Website, Applications, or Content, other than shrink wrap software which has an initial or annual license or maintenance fee of less than $5,000. Except as set forth on Schedule 4.12(j), the Company’s Intellectual Property does not contain any software subject to a GNU General Public License, a GNU Library (Lesser) General Public License, or any license containing terms substantially similar to the terms contained in either of the foregoing licenses in any material respect, specifically including the reciprocity terms applicable to source code for derivative works (each, an “Open Source License”). Except as set forth on Schedule 4.12(j), neither the Website or the Applications, as a result of intermingling or integration of code owned by the Company with any “open source” software licensed under any Open Source License is, in whole or in part, subject to the provisions of any Open Source License.

(k) The Company is, and at all times has been, in compliance in all respects with that certain Confidential Patent License Agreement dated as of October 26, 2012 by and between SIPCO, LLC and the Company (the “SIPCO License Agreement”). No claims alleging a violation by the Company of the SIPCO License Agreement are pending, or to the Knowledge of the Company, threatened. Schedule 4.12(k) sets forth any payments currently due under the SIPCO License Agreement but which payments have not been made by the Company.

4.13 Contracts and Agreements.

(a) The applicable subpart of Schedule 4.13(a) sets forth all of the following Contracts currently in effect to which the Company is a party or by which it or any of its assets is bound (collectively, with the Contracts set forth on Schedule 4.15(a), the “Material Contracts”):

(i) Contracts entered into within the last three (3) years or otherwise having executory obligations on the part of the Company and relating to the acquisition or disposition by the Company of: (A) any business, real property or business segment (whether by merger, consolidation or other business combination, sale of assets or otherwise) or the capital stock of any Person, or (B) any of the assets of the Company (other than sales of inventory or the disposition of obsolete equipment, in each case in the ordinary course of business) for consideration in excess of $25,000;

(ii) Contracts relating to the incurrence, assumption or guarantee of any Debt;

(iii) any other Contracts (or groups of related Contracts) which involve the expenditure or receipt of more than $25,000 annually or more than $100,000 over the remaining term thereof (other than purchases of inventory in the ordinary course of business), or require performance by any party more than one year from the date hereof, that, in each case, are not terminable by the Company without penalty on notice of sixty (60) days or less;

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(iv) Contracts restricting the ability of the Company to operate any business;

(v) Contracts that require the Company to purchase minimum quantities (or pay any amount for failure to purchase any specific quantities) of goods or services, or to deal with any Person on an exclusive basis, or containing “most favored nations” or similar pricing arrangements;

(vi) Contracts that require the Company to indemnify or hold harmless any other Person;

(vii) Contracts that provide for any partnership, joint venture, strategic alliance, teaming or similar arrangement;

(viii) Contracts that provide for or relate to any employment or consulting relationship with any Person (other than at-will arrangements);

(ix) Contracts pursuant to which the Company grants or is granted a license of any Intellectual Property;

(x) Contracts granting a power of attorney;

(xi) Contracts relating to the sales or distributions of the Company’s products or services (excluding purchase and sales orders entered into in the ordinary course of business but including master sales contracts with the Company’s customers); and

(xii) Contracts that are otherwise material to the business, operations or financial condition of the Company and are outside the Company’s ordinary course of business.

(b) True, correct and complete copies of all Material Contracts as currently in effect have previously been delivered to Alarm. Except as set forth on Schedule 4.13(b), the Company is not in default under any Material Contract. To the Knowledge of the Company, no other party to a Material Contract has breached, violated or defaulted under any Material Contract and no circumstance exists that, with notice or lapse of time or both (including the transactions contemplated by this Agreement), would constitute such a default by any party thereto.

4.14 Employees; Compensation.

Schedule 4.14(a) lists the name of each employee (including leased employees) and independent contractors of the Company and the date of employment, position and the total current annual compensation payable to each such individual, including all wages, bonuses, commissions, allowances, and any other compensation forfeited or cancelled within the preceding 12 months. All wages, bonuses, commissions, and allowances with respect to any period prior to the Closing Date have been fully paid or accrued. All persons classified as non-employees and all individuals classified as exempt from overtime requirements were at all times properly classified as such. Seth Frader-Thompson is the only Stockholder who is also an employee of the Company.

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4.15 Employee Benefits Plans.

(a) Schedule 4.15(a) lists each “employee benefit plan” (as defined in ERISA) and any other plan, Contract or policy providing bonuses, profit sharing benefits, pension benefits, compensation, deferred compensation, stock options, phantom stock, stock appreciation rights, stock purchase rights, fringe benefits, severance payments, post-retirement benefits, scholarships, health and welfare benefits, disability benefits, sick leave pay, vacation pay, commissions, payroll practices, retention payments or other benefits (each such plan, Contract or policy is referred to herein as a “Company Benefit Plan”) that: (i) the Company sponsors or has or could have Liability with respect to, or has or could have any obligation to contribute to for the benefit of current or former employees, directors, or any other Person performing services for the Company. The Company has delivered to Alarm true, correct and complete copies of: (i) each Company Benefit Plan document, any amendments thereto, and all documents embodying and relating to such Company Benefit Plan, including third-party services agreements, investment management contracts, and any other administrative services agreement; (ii) annual reports including Forms 5500 (with schedules attached), 990 and 1041 for the preceding three (3) years for the plan and any related trust; (iii) the most recent summary plan description for each Company Benefit Plan for which such summary plan description is required; (iv) each trust agreement and insurance or group annuity contract relating to any Company Benefit Plan; (v) each communication within the preceding 12 months involving a plan or any related trust to or from the IRS, Department of Labor (“DOL”), Pension Benefit Guaranty Corporation (PBGC) or any other Governmental Body; and (vi) the most recent determination letter received from the IRS pertaining to any Company Benefit Plan that is a Company Pension Plan (as defined below).

(b) Schedule 4.15(b) lists each voluntary benefit plan available to employees which is considered to be exempt from ERISA under DOL Regulation Section 2510.3-1(j).

(c) Each Company Benefit Plan maintained, contributed to or required to be contributed to by the Company has been administered in all respects in accordance with its terms and with the applicable provisions of ERISA, the Code (including the rules and regulations thereunder) and all other applicable Laws.

(d) Schedule 4.15(d) lists each Company Benefit Plan that is an “employee pension benefit plan” (as defined in Section 3(2) of ERISA) that is intended to be tax qualified under Section 401(a) of the Code (each, a “Company Pension Plan”). All Company Pension Plans that are maintained, contributed to or required to be contributed to by the Company or any ERISA Affiliate are so qualified. No event has occurred since the date of the most recent determination letter or application therefor relating to any such Company Pension Plan that would adversely affect the qualification of such Company Pension Plan. No Legal Proceeding (other than routine benefit claims) has been asserted or instituted or to the Knowledge of the Company, threatened against any Company Benefit Plan, any trustee or fiduciaries thereof, the Company or any ERISA Affiliate, or any of the assets of any Company Benefit Plan or any related trust.

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(e) Schedule 4.15(e) lists each Company Benefit Plan that is a “nonqualified deferred compensation plan” (as defined in Code Section 409A(d)(1)). Each of the Company’s nonqualified deferred compensation plans has been, since January 1, 2005, in compliance with Code Section 409A, Internal Revenue Service Notice 2005-1, and all applicable notices, guidance, and regulations as may be in effect from time to time. No stock option granted under any Company Benefit Plan has an exercise price that has been or may be less than the fair market value of the underlying stock as of the date such option was granted or has any feature for the deferral of compensation other than the deferral of recognition of income until the later of exercise or disposition of such option.

(f) All contributions, deferrals, premiums and benefit payments under or in connection with the Company Benefit Plans that are required to have been made as of the Closing will have been (or will be) timely made or have been reflected on the Reference Balance Sheet. No Company Pension Plan has an “accumulated funding deficiency” (as such term is defined in Section 302 of ERISA or Section 412 of the Code), whether or not waived.

(g) Except as set forth on Schedule 4.15(g), the Company and its ERISA Affiliates do not currently maintain, contribute to or participate in, nor at any time have any of them had an obligation to maintain, contribute to, or otherwise participate in any employee benefit plans that are “multiemployer plans” (within the meaning of Section 3(37) of ERISA or Code Section 414(f)), “multiple employer plans” (within the meaning of Code Section 413(c)), plans that are subject to the provisions of Title IV of ERISA, or a welfare plan that is a “multiple employer welfare arrangement” (within the meaning of Section 3(40) of ERISA). Except as set forth on Schedule 4.15(g), neither the Company nor any of their ERISA Affiliates (i) has withdrawn or partially withdrawn from any multiemployer plan, or (ii) has any withdrawal liabilities with respect to any such plans.

(h) Each of the Company and its ERISA Affiliates, each Company Benefit Plan and each Company Benefit Plan “sponsor” or “administrator” (within the meaning of Section 3(16) of ERISA) has complied in all respects with the applicable requirements of Section 4980B of the Code and Section 601 et seq. of ERISA (such statutory provisions and predecessors thereof are referred to herein collectively as “COBRA”) and any comparable state Law. Schedule 4.15(h) lists the name of each Covered Employee who has experienced a “Qualifying Event” (as defined in COBRA) with respect to any Company Benefit Plan for purposes of “Continuation Coverage” (as defined in COBRA) and whose maximum period for Continuation Coverage required by COBRA or state Law has not expired. Schedule 4.15(h) also lists the name of each Covered Employee who is on leave of absence (paid or unpaid) and whether such person is eligible for Continuation Coverage.

(i) The Company and each Company Benefit Plan are in compliance with the applicable provisions of the Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”) and the Patient Protection and Affordable Care Act, as amended (“PPACA”), including, but not limited to, any applicable notice and/or disclosure requirements thereunder.

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(j) The Company has the requisite power to amend and/or terminate each Company Benefit Plan without prior notice or approval. The consummation of the transactions contemplated by this Agreement will not give rise to any Liability for any employee benefits payable by the Company. No Company Benefit Plan provides for post-employment benefits of any kind whatsoever (other than under COBRA, the Federal Social Security Act or any Company Benefit Plan qualified under Section 401(a) of the Code) to any former director or employee of, or other provider of services to, the Company or an ERISA Affiliate (or a beneficiary of any such Person), nor have any representations, agreements, covenants or commitments been made to provide such benefits.

4.16 Labor.

(a) No employee of the Company is represented by a labor union and there are no Contracts with any labor union or association representing any employees of the Company. To the Knowledge of the Company, no petition has been filed or other proceedings instituted by an employee or group of employees with any labor relations board seeking recognition of a bargaining representative; and to the Knowledge of the Company, there is no organizational effort currently being made or threatened by, or on behalf of, any labor union to organize any employees, and no demand for recognition of employees has been made by, or on behalf of; any labor union.

(b) The Company has previously delivered to Alarm true, correct and complete summaries of all: (i) workers’ compensation claims filed against the Company; and (ii) charges, grievances, complaints or notices of violation filed with, or otherwise made by, the Occupational Safety and Health Administration against the Company.

4.17 Litigation.

(a) Except as set forth on Schedule 4.17(a), there are no Legal Proceedings pending or, to the Knowledge of the Company, threatened against the Company, or to which the Company is otherwise a party, or to which any of their respective assets or businesses is subject.

(b) Except as described on Schedule 4.17(b), there are not outstanding Orders that are applicable to, or otherwise affect, the Company or any of its assets. Schedule 4.17(b) lists any settlement agreements to which the Company is a party or by which it is bound.

(c) Schedule 4.17(c) describes all claims for indemnification or breach asserted by or against the Company at any time in the past five (5) years arising out of the acquisition of any business or business segment from any other Person.

(d) There is no Legal Proceeding pending, or to the Knowledge of the Company, threatened, that in any manner challenges or seeks, or reasonably could be expected to prevent, enjoin, alter or delay any of the transactions contemplated by this Agreement.

4.18 Compliance with Laws; Permits.

(a) The Company is, and at all times in the preceding five (5) years has been, in compliance in all material respects with all Laws. No claims or investigations alleging any material violation by the Company of any Laws are pending or, to the Knowledge of the Company, threatened. Schedule 4.18(a) sets forth any claims or investigations resolved or otherwise concluded within the past five (5) years alleging any violation of any Laws.

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(b) The Company currently has all material Permits which are required for the operation of its respective businesses (all of which: (i) are listed on Schedule 4.18(b); (ii) have been previously delivered to Alarm; and (iii) are in full force and effect). The Company has complied at all times in the preceding five (5) years, and is presently in compliance, in all material respects, with the terms and conditions of all Permits. No loss, non-renewal, suspension, modification or expiration of, nor any noncompliance with, any material Permit is pending or, to the Knowledge of the Company, threatened.

4.19 Environmental Matters.

Seller has been, and has conducted the Business, in compliance with all Environmental Laws and has not received any notice of any noncompliance with any Environmental Law or any Liability or remedial or corrective obligation thereunder or any Proceeding relating thereto. No facts, events or circumstances with respect to the past or present operations by Seller or its Affiliates would prevent continued compliance in all material respects with, or give rise to any Liability (contingent or otherwise) under, any Environmental Law.

4.20 Insurance.

All insurance policies pertaining to the Company are listed on Schedule 4.20 and are in full force and effect on the date hereof. The Company has delivered to Alarm true, correct and complete copies of such insurance policies. Excluding insurance policies that have expired and been replaced in the ordinary course of business, no insurance policy has been cancelled or not renewed within the last two (2) years and, to the Knowledge of the Company, no threat has been made to cancel or not renew any insurance policy of the Company. Schedule 4.20 sets forth: (i) a complete insurance claims history during the three (3) years ending December 31, 2012 (including claims under former policies); and (ii) a list of all pending insurance claims (including such claims made under any former policies). None of the insurers under any such insurance policies has rejected the defense or coverage of any claim purported to be covered by such insurer or has reserved the right to reject the defense or coverage of any claim purported to be covered by such insurer. The Company has no Liability for retrospective premium adjustments under any insurance policies.

4.21 Significant Customers and Suppliers.

Schedule 4.21 sets forth a complete and accurate list of (a) the ten (10) largest customers of the Company (measured by aggregate billings) during the fiscal year ended December 31, 2012; and (b) the ten (10) largest suppliers of materials, products or services to the Company (measured by the aggregate amount purchased by the Company) during the fiscal year ended December 31, 2012. Since January 1, 2012, no such customer or supplier has canceled, terminated or otherwise materially altered its business relationship with the Company, or notified the Company of any intent to do so. To the Knowledge of the Company, there exists no condition or state of facts or circumstances that: (a) adversely impacts such customer or suppliers; or (b) otherwise involves customers or suppliers of or to the Company that could reasonably be expected to have a Material Adverse Effect.

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4.22 Certain Payments.

Neither the Company nor any of its directors, officers, shareholders, agents, employees or any other Person acting for or on behalf of the Company, has directly or indirectly: (a) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any Person, private or public, regardless of form, whether in money, property or services: (i) to obtain favorable treatment in securing business; (ii) to pay for favorable treatment for business secured; (iii) to obtain special concessions or for special concessions already obtained, for or in respect of the Company; or (iv) in violation of any Law; or (b) established or maintained any fund or asset that has not been recorded in the books and records of the Company.

4.23 Affiliate Transactions.

Except as disclosed on Schedule 4.23, (i) no Stockholder who is an employee of the Company, nor any Affiliate of such Stockholder, is an officer, director, employee, consultant, competitor, creditor, debtor, customer, distributor, supplier or vendor of, or is a party to any Contract or transaction with the Company; (ii) no current officer or director of the Company who is an employee of the Company (or any person that has served as an officer or director of the Company and has been an employee of the Company in the past three (3) years), or any Affiliate of the foregoing, is a party to any Contract or transaction with the Company other than related to the provision of services in the ordinary course of business; and (iii) no Affiliate of the Company has any right, title or interest in any property or asset used in or necessary for the conduct of the businesses of the Company in the ordinary course consistent with past practices.

4.24 Banking Facilities.

Schedule 4.24 sets forth a true, correct and complete list of each bank, savings and loan or similar financial institution with which the Company has an account or safety deposit box or other arrangement, and any numbers or other identifying codes of such accounts, safety deposit boxes or such other arrangements maintained by the Company thereat.

4.25 Products Liability.

Schedule 4.25 sets forth all pending claims for product liability, warranty, material back charge, material additional work, or other claims by any third party (whether based on contract or tort and whether relating to personal injury, including death, property damage or economic loss) arising from services rendered by the Company. All services rendered and products sold by the Company have been in conformity with all contractual commitments and all express and implied warranties, and the Company has no Liability in connection therewith in excess of any warranty reserve reflected on the Reference Balance Sheet. No services provided by the Company are subject to any guaranty, warranty, or other indemnity beyond the Company’s standard written terms and conditions of sale, true, correct and complete copies of which have been delivered to Alarm.

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4.26 Financial Advisors.

Except for Ackrell Capital, LLC (whose fees and expenses shall be fully satisfied by the Stockholders), no Person has acted, directly or indirectly, as a broker, finder or financial advisor for the Stockholders or the Company in connection with the transactions contemplated by this Agreement and no Person is entitled to any fee or commission or like payment from Alarm or the Company in respect thereof.

4.27 Voting Requirements.

The Board of Directors of the Company has by written consent (a) unanimously approved and declared advisable this Agreement and each of the other Company Documents to which the Company is a party, (b) resolved to recommend and has recommended the approval and adoption of this Agreement and the Merger to the stockholders of the Company and (c) directed that this Agreement and the Merger be submitted to the stockholders of the Company for their approval and adoption. The affirmative vote of (1) holders of a majority of all outstanding shares of capital stock of the Company, voting together as a single class and (2) 67% of the holders of outstanding shares of Series A Preferred Stock and Series B Preferred Stock, voting together as a separate class (the “Requisite Holders”) are the only votes or approvals of the stockholders of the Company or any other security of the Company necessary to approve, authorize and adopt this Agreement and the Merger.

4.28 Disclosure.

Neither this Agreement, nor any of the Schedules or Exhibits hereto, contains any untrue statement of a material fact or omits a material fact necessary to make the statements contained herein or therein, in light of the circumstances in which they were made, not misleading.

4.29 No Limitation.

No investigation or due diligence conducted by, or knowledge obtained by, Alarm shall limit, modify or negate any of the foregoing representations and warranties.

ARTICLE V

[INTENTIONALLY OMITTED]

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF ALARM AND THE MERGER SUB

Alarm and Merger Sub hereby represent and warrant to the Company, as of the date hereof and again as of the Closing, that:

6.1 Organization and Good Standing.

Each of Alarm and the Merger Sub is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to conduct its business as heretofore conducted.

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6.2 Authorization of Agreement.

Each of Alarm and the Merger Sub has all requisite corporate power and authority to execute and deliver this Agreement and each other agreement, document, instrument or certificate contemplated by this Agreement or to be executed by such party in connection with the consummation of the transactions contemplated hereby (together with this Agreement, the “Alarm Documents”), and to consummate the transactions and perform its obligations contemplated thereby. The execution, delivery and performance by each of Alarm and the Merger Sub of each Alarm Document, as applicable, and the consummation of the transactions contemplated thereby have been duly authorized by all requisite corporate action on behalf of Alarm and the Merger Sub, as applicable. This Agreement has been, and each other Alarm Document will be at or prior to the Closing, duly executed and delivered by Alarm and the Merger Sub, as applicable, and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) this Agreement constitutes, and each other Alarm Document when so executed and delivered will constitute, the legal, valid and binding obligation of Alarm and the Merger Sub, as applicable, enforceable against Alarm and the Merger Sub, as applicable, in accordance with its terms.

6.3 Conflicts; Consents of Third Parties.

(a) None of the execution, delivery or performance by Alarm or the Merger Sub of the Alarm Documents, the consummation of the transactions contemplated thereby, or compliance by Alarm or the Merger Sub with any of the provisions thereof will: (i) cause Alarm or the Merger Sub, as applicable, to violate or breach any Law or Order; (ii) conflict with or result in a violation of the Organizational Documents of Alarm or the Merger Sub, as applicable; or (iii) conflict with or result in a breach or termination of any of the terms, conditions or provisions of, or constitute a default under, accelerate any obligations arising under, trigger any payment under, require any Consent under or notice under, result in the creation of any Lien pursuant to, or otherwise adversely affect, any material Contract to which Alarm or the Merger Sub, as applicable, is a party or by which its assets may be bound.

(b) No waiver, Order, permit or Consent of, any Person or Governmental Body is required on the part of Alarm in connection with the execution and delivery of the Alarm Documents or the compliance by Alarm or the Merger Sub, as applicable, with any of the provisions thereof, or the consummation of the transactions contemplated thereby, except for such Consents, waivers, approvals, Orders, Permits, authorizations, declarations, filings or notifications that are to be obtained prior to the Closing.

6.4 Litigation.

There are no Legal Proceedings pending, or to the knowledge of Alarm threatened, that are reasonably likely to prohibit or restrain the ability of Alarm or the Merger Sub to enter into this Agreement or timely to consummate the transactions contemplated hereby.

6.5 Financial Advisors.

No Person has acted, directly or indirectly, as a broker, finder or financial advisor for Alarm or the Merger Sub in connection with the transactions contemplated by this Agreement and no Person is entitled to any fee or commission or like payment from Alarm or the Merger Sub in respect thereof.

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6.6 Sufficiency of Funds.

Alarm and/or the Merger Sub has sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Base Consideration, and consummate the transactions contemplated by this Agreement.

ARTICLE VII

COVENANTS

7.1 Access to Information.

Between the date of this Agreement and the Closing Date, the Company shall give to Alarm and the Merger Sub, its officers, agents, employees, counsel, accountants, engineers and other representatives, reasonable access to the properties, businesses and operations relating to the Company and such examination of the books and records of the Company as it requests upon reasonable advance notice and provided that it does not cause material interference to the business of the Company. The Company shall cause the officers, employees, consultants, agents, accountants, attorneys and other representatives of the Company to cooperate with Alarm and Alarm’s representatives in connection with such investigation and examination.

7.2 Conduct of the Business Pending the Closing.

(a) Prior to the Closing, except: (1) as required by applicable Law; or (2) as otherwise contemplated by this Agreement or (3) with the prior written consent of Alarm (which consent shall not be unreasonably withheld), the Company shall: (i) conduct its business only in the ordinary course of business consistent with past practices; (ii) use its commercially reasonable efforts to: (A) preserve the present business operations, organization and goodwill of the Company; (B) preserve the present relationships with customers and suppliers of the Company; and (C) keep available the services of the present officers, employees, agents and other personnel of the Company; and (iii) not take or omit to take any action that would be required to be disclosed on Schedule 4.8.

(b) Until the earlier of the Closing or the termination of this Agreement, neither the Company nor any of its respective agents, Affiliates or representatives, shall, directly or indirectly, solicit, initiate, encourage or enter into any discussions or negotiations with, or provide any assistance or information to, or enter into any agreement with, any Person or group of Persons (other than Alarm or the Merger Sub) concerning any acquisition, directly or indirectly, of the capital stock of the Company in, or any merger, consolidation, recapitalization, liquidation, dissolution or similar transaction involving, or any purchase of all or a substantial portion of the assets of, the Company. In furtherance of the foregoing, the Company shall, and shall cause its respective agents, Affiliates and representatives to, terminate any current discussions or negotiations with any Person or group of Persons (other than Alarm or the Merger Sub) concerning any acquisition, directly or indirectly, of the capital stock of the Company, or any merger, consolidation, recapitalization, liquidation, dissolution or similar transaction involving, or any purchase of all or a substantial portion of the assets of, the Company.

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7.3 Consents and Approvals.

Each of Alarm, the Merger Sub and the Company shall use its commercially reasonable efforts to: (1) take all actions necessary or appropriate to consummate the transactions contemplated by this Agreement; and (ii) cause the fulfillment at the earliest practicable date of all of the conditions to their respective obligations to consummate the transactions contemplated by this Agreement.

7.4 Further Assurances.

All deliveries, payments and other transactions and documents relating to the transactions contemplated herein shall be interdependent and none shall be effective unless and until all are effective (except to the extent that the party entitled to the benefit thereof has waived in writing satisfaction or performance thereof as a condition precedent to Closing). Each of Alarm, the Merger Sub and the Company shall use its commercially reasonable efforts to, from time to time (including after the Closing), execute and deliver such other documents, certificates, agreements and other writings, and take such other actions as may be reasonably necessary or requested by another party in order to consummate, evidence or implement expeditiously the transactions contemplated by any Company Document or Alarm Document, as applicable.

7.5 Publicity.

Neither the Company nor Alarm or the Merger Sub shall issue any press release or public announcement concerning this Agreement or the transactions contemplated hereby without obtaining the prior written approval of Alarm and the Company; provided however that the Company may, subject to consultation with Alarm, provide advance notice of the Closing to its customers and suppliers.

7.6 Tax Matters.

(a) The Company shall prepare or cause to be prepared at its own expense and shall file or cause to be filed all Tax Returns of the Company for all taxable periods ending on or prior to the Closing Date (“Pre-Closing Period”) that are filed after the Closing Date. Such Tax Returns shall be prepared in a manner consistent with past practice; provided, however, that in any event such Tax Returns shall be prepared in a manner that is consistent with applicable Law. The Company shall provide Alarm and the Stockholder Representative with a copy of the Tax Returns that it prepares under this Section 7.6(a) at least twenty (20) days prior to the filing of such Tax Returns, and the Company will incorporate any reasonable comments made by Alarm or the Stockholder Representative within such 20-day period; provided, that nothing herein shall require the Company to file any Tax Return that, in the opinion of its tax advisors, is not complete and accurate; provided, further, that the Company shall not take any position or apply any methodology in preparing any such Tax Return that is not consistent with the Tax practices and methodologies consistently applied in the ordinary course of business by the Company in the preparation of its Tax Returns relating to prior taxable periods (such as, for example and without limitation, practices with respect to the calculation of depreciation expense deductions), provided

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that such practices and methodologies comply with applicable Law. Alarm and the Stockholder Representative shall jointly instruct the Escrow Agent to remit to Alarm not less than five (5) days prior to the due date for filing such Tax Return, the portion of the Tax shown to be due on such Tax Return that is allocable to the Pre-Closing Period less any amounts reserved for payment of such taxes in the Final Net Working Capital calculation. Alarm and/or the Surviving Corporation shall have the right to handle, defend, conduct and control any claim for any Tax refund due the Company for the Pre-Closing Period and the portion of the Straddle Period (as defined below) ending on the Closing Date; provided, however, that Alarm shall keep the Stockholder Representative informed of the progress of all claims for such Tax refunds and shall provide copies of all written communications with any Taxing Authority related to claims for such Tax refunds.

(b) Alarm and/or the Surviving Corporation shall prepare (or cause to be prepared) and file (or cause to be filed) when due (taking into account all extensions properly obtained) all Tax Returns required to be filed by or with respect to the Company relating to: (i) all taxable periods beginning after the Closing Date (“Post-Closing Period”), and (ii) taxable periods that begin before and end after the Closing Date (“Straddle Period”). Alarm and/or the Surviving Corporation shall deliver to the Stockholder Representative copies of such Tax Return relating to the Straddle Period, along with a statement (a “Tax Statement”) showing the portion of any Tax Liability required to be paid with such Tax Return, relating to the portion of the Straddle Period ending on the Closing Date (computed in accordance with Section 7.6(c)), at least twenty (20) days prior to the due date for filing such Tax Return, and shall permit the Stockholder Representative to review and comment on such Tax Return and Tax Statement prior to filing. Alarm and the Stockholder Representative shall jointly instruct the Escrow Agent to remit to Alarm not less than five (5) days prior to the due date for filing such Tax Return relating to a Straddle Period, the portion of the Tax shown to be due on such Tax Return that is allocable to the portion of the Straddle Period ending on the Closing Date less any amounts reserved for payment of such taxes in the Final Net Working Capital calculation. The parties hereto agree that neither Alarm nor the Surviving Corporation shall take any position or apply any methodology in preparing any such Tax Return relating to a Straddle Period that is not consistent with the Tax practices and methodologies consistently applied in the ordinary course of business by the Company in the preparation of its Tax Returns relating to prior taxable periods (such as, for example and without limitation, practices with respect to the calculation of depreciation expense deductions), provided that such practices and methodologies comply with applicable Law.

(c) The parties hereto acknowledge that as a result of the transactions contemplated under this Agreement the Company will join in the filing of a consolidated return with Alarm for Federal income tax purposes pursuant to the requirements of Treasury Regulation Section 1.1502-76 and by applying the methodology set forth in Treasury Regulation Section 1.1502-76(b)(1)(ii)(A). The Company will need to file a separate Federal income Tax Return for the current tax year for the period that ends on the Closing Date prior to joining the consolidated group that includes Alarm. For purposes of allocating Taxes between the Pre-Closing Period, the Post-Closing Period, and the Straddle Period, the Company will, unless prohibited by applicable Law, close the taxable year of the Company as of the close of business on the Closing Date. If applicable Law does not permit the Company to close its taxable year on the Closing Date, the Taxes, if any, attributable to the Straddle Period shall be allocated: (i) to the Company for the

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period up to and including the close of business on the Closing Date; and (ii) to Alarm for the period subsequent to the Closing Date, pursuant to the following methodology; (x) Taxes, other than those referred to in clause (y) below, shall be allocated by means of a deemed closing of the books and records of the Company as of the close of the Closing Date; provided that exemptions, allowances or deductions that are calculated on an annual basis (including, but not limited to, depreciation and amortization deductions) shall be allocated between the period ending on the Closing Date and the period after the Closing Date in proportion to the number of days in each such period; and (y) property Taxes and ad valorem Taxes shall be allocated between the period ending on the Closing Date and the period after the Closing Date in proportion to the number of days in each such period.

(d) Notwithstanding any other provisions hereof, if an audit or other proceeding is commenced, and an adjustment is proposed or any other claim is made by any Taxing Authority with respect to a Tax liability of the Company relating to a Pre-Closing Period, or the portion of any Straddle Period ending on the Closing Date (a “Tax Claim”), Alarm and/or the Surviving Corporation shall promptly notify the Stockholder Representative of such audit or other proceeding, proposed adjustment or claim. Alarm shall have the right to handle, defend, conduct and control any such Tax Claim. Alarm shall not have the right to compromise or settle any such Tax Claim which would result in an increased Tax liability or a decreased refund to the Stockholders without the prior written consent of the Stockholder Representative, which consent shall not be unreasonably withheld or delayed, and Alarm shall keep the Stockholder Representative informed of the progress of all such Tax Claims and shall provide copies of all written communications with any Taxing Authority related to such Tax Claims. In the event of a conflict between the provisions of this Section 7.6(d), on the one hand, and the provisions of Section 9.4, on the other, the provisions of this Section 7.6(d) shall control.

(e) Any refunds (and any interest received thereon) of any Tax imposed on the Company for any Pre-Closing Period, or the portion of any Straddle Period ending on the Closing Date (determined in accordance with Section 7.6(c)) shall be payable to the Stockholders in accordance with their Applicable Percentage. Any other refunds of any Tax imposed on the Company (and any interest received thereon) shall be the property of the Company and shall inure to the benefit of Alarm and/or the Surviving Corporation.

(f) Following the Closing, Alarm, the Stockholder Representative and the Stockholders shall provide each other with such assistance as may reasonably be requested by any of them in connection with the preparation of any Tax Return, any audit or other examination by any Taxing Authority, or any judicial or administrative proceedings relating to Liability for Taxes of the Company. The party requesting assistance hereunder shall reimburse (in the case of the Stockholder Representative, solely on behalf of the Stockholders) the other for reasonable out-of-pocket expenses incurred in providing such assistance. Alarm and the Stockholders shall preserve and cause to be preserved all information, returns, books, records and documents relating to any Liabilities for Taxes of the Company with respect to a taxable period until the later of 60 days after the expiration of all applicable statutes of limitations and extensions thereof; or the conclusion of all litigation with respect to Taxes for such period.

(g) All Tax payments required under applicable Law to be made by the Company (including payment of withheld Taxes, estimated Taxes and prepaid Taxes) on or before the Closing Date shall be applied to the Pre-Closing Period or to the portion of the Straddle Period that ends on the Closing Date, as provided under applicable Law.

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(h) To the extent Section 6043A of the Code applies to the transactions contemplated under this Agreement, the parties shall cooperate with each other and provide each other with such information as is necessary for the parties to satisfy the reporting obligations under such section.

(i) Any good faith disputes as to the interpretation or implementation of the requirements of this Section 7.6 under applicable Law shall be resolved by the Accounting Referee.

7.7 Employee Stock Options.

Prior to the Closing Date, the Company, and its board of directors, to take all necessary action to effectuate the termination of all options to purchase the Company’s common stock (“Company Stock Options”) outstanding, whether or not exercisable and whether or not vested (including any portion that may become vested or exercisable as a result of the transaction contemplated hereunder), as of the Closing Date and the holders of such Company Stock Options shall no longer have any right with respect thereto, Prior to the Closing Date, the Company, and its board of directors, shall take all actions necessary to terminate the “EnergyHub, Inc. 2007 Stock Option and Grant Plan”, as amended (the “Company Stock Option Plan”), effective as of the Closing Date, and that on the Closing Date, the Company Stock Option Plan shall terminate, in full, and shall no longer have any force or effect.

7.8 Continued Employment of Employees.

The Company, Alarm and the Merger Sub agree and acknowledge that the consummation of the transactions contemplated by this Agreement shall not by the terms hereof alter or change the status of the Company’s employees and immediately after the Closing such employees will continue to be employed by the Company either on an at-will basis or subject to the terms of any written agreements between the Company and such employees. In addition, Alarm and the Merger Sub anticipate establishing management and key employee incentives for Company employees following the Closing.

7.9 Termination of Benefit Plans.

Alarm acknowledges and agrees that the Surviving Corporation shall maintain the Company Benefit Plans including, without limitation, the Company’s 401(k) Plan as of the Closing for a transition period to be determined solely in the discretion of Alarm.

7.10 Maintenance of Directors and Officers Liability Insurance.

On the Closing, Alarm agrees to cause the Company to purchase and maintain a tail Directors and Officers Liability Policy for the benefit of the officers and directors of the Company prior to the Closing for a period of five years following the Closing. The parties agree that, in the event that the amount set forth in Section 2.2(b)(vi) is insufficient to pay the applicable premiums in full, Physic Ventures, LLC and 406 Ventures, LLC agree, jointly and

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severally, to pay the Company the difference between the retained amount and the actual premiums incurred by the Company in the maintenance of such insurance policy. Additionally, to the extent that the retained amount exceeds the actual cost of the tail policy premium(s), the Company and/or Alarm shall pay such excess within five (5) Business Days of securing the tail policy to the Escrow Agent in accordance with the closing payment process set forth in Section 2.2.

7.11 Stockholder Approval of the Merger.

On or prior to the Closing Date, the Company shall, in accordance with the Company’s Organizational Documents and the applicable requirements of the DGCL, use its best efforts to obtain and deliver to Alarm a Written Consent of its Stockholders, in substantially the form attached hereto as Exhibit H (the “Stockholder Consent”). In soliciting such written consent, the Company’s Board of Directors shall recommend that the stockholders approve this Agreement, the Merger and related matters in accordance with the DGCL and the Company’s Organizational Documents. At the time the Company solicits the Stockholder Consent, the Company shall distribute to each stockholder of the Company a notice pursuant to Section 262 of the DGCL of appraisal rights as required by the DGCL. The Company shall also prepare and deliver a written notice pursuant to Section 228(e) of the DGCL notifying any holder of capital stock who did not sign the Stockholder Consent of the actions taken by such Stockholder Consent.

ARTICLE VIII

CONDITIONS TO CLOSING

8.1 Conditions Precedent to Obligations of Alarm and the Merger Sub.

The obligation of Alarm and the Merger Sub to consummate the transactions contemplated by this Agreement is subject to the fulfillment, on or prior to the Closing Date, of each of the following conditions:

(a) the representations and warranties of the Company set forth in this Agreement shall be true, correct and complete in all material respects (except for those representations and warranties qualified by “materiality” or “Material Adverse Effect”, which shall be true, correct and complete in all respects) at and as of the Closing, and Alarm and the Merger Sub shall have received a certificate signed by an authorized officer of the Company, dated the Closing Date, to the foregoing effect;

(b) the Company shall have performed and complied in all respects with all obligations and agreements required by this Agreement to be performed or complied with by them on or prior to the Closing Date, and Alarm and the Merger Sub shall have received a certificate signed by an authorized officer of the Company, dated the Closing Date, to the foregoing effect;

(c) there shall not be in effect any Order by a Governmental Body of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby;

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(d) the Company shall have obtained all consents or waivers set forth on Schedules 4.3(a) and 4.3(b);

(e) Alarm and the Merger Sub shall have received good standing certificates, dated as of a recent date, reflecting the Company’s good standing in each jurisdiction in which it is required to be duly qualified;

(f) Alarm and the Merger Sub shall have received all deliveries pursuant to Section 3.4;

(g) Alarm and the Merger Sub shall have received a signed Restrictive Covenants Agreement from Seth Frader-Thompson in the form reasonably acceptable to Alarm; and

(h) there shall not have occurred any event, change or circumstance that has had or which could reasonably be expected to result in a Material Adverse Effect.

8.2 Conditions Precedent to Obligations of the Company.

The obligations of the Company to consummate the transactions contemplated by this Agreement are subject to the fulfillment, prior to or on the Closing Date, of each of the following conditions:

(a) the representations and warranties of Alarm and the Merger Sub set forth in this Agreement shall be true, correct and complete in all material respects (except for those representations and warranties qualified by “materiality” or “Material Adverse Effect”, which shall be true, correct and complete in all respects) at and as of the Closing (except to the extent such representations and warranties relate to an earlier date (in which case such representations and warranties shall be true, correct and complete on and as of such earlier date));

(b) Alarm and the Merger Sub shall have performed and complied in all respects with all obligations and covenants required by this Agreement to be performed or complied with by Alarm and/or the Merger Sub on or prior to the Closing Date; and

(c) there shall not be in effect any Order by a Governmental Body of competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated hereby.

8.3 Frustration of Closing Conditions.

None of the Company, Alarm or the Merger Sub may rely on the failure of any condition set forth in Sections 8.1 or 8.2, as the case may be, if such failure was caused by such party’s failure to comply with any provision of this Agreement.

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ARTICLE IX

INDEMNIFICATION

9.1 Survival of Representations and Warranties.

With the exception of the representations and warranties contained in: (a) Sections 4.2 (Authorization of Agreement), 4.4 (Capitalization), 4.11 (Title; Sufficiency), and 4.26 (Financial Advisors) which shall survive the Closing indefinitely; (b) Section 4.12(d) (Intellectual Property) which shall survive the Closing until the sixth anniversary of the Closing (each of the representations described in the foregoing clauses (a) and (b) being the “Fundamental Representations”); and (c) Sections 4.9 (Taxes), 4.15 (Employee Benefits Plans), and 4.19 (Environmental Matters), which shall survive the Closing until the 90th day following the expiration of the respective statutes of limitations for such representations, the representations and warranties of the parties to this Agreement shall survive Closing for a period of two (2) years, after which the indemnification obligation of a party contained herein shall terminate (unless a party has made a written claim for indemnification in respect of such claim prior to such expiration date (in which ease the relevant survival period shall be extended automatically to include any time period necessary until such claim shall have been finally settled, decided or adjudicated)). The covenants contained in this Agreement shall survive Closing according to their terms.

9.2 Indemnification of Alarm Indemnified Parties.

(a) The Stockholders agree to, severally but not jointly, indemnify and hold Alarm, the Merger Sub, the Company, each of their Affiliates, and each of their respective directors, officers, employees, Affiliates, stockholders, agents, representatives, successors and assigns (collectively, the “Alarm Indemnified Parties”) harmless from and against any and all Losses that any of Alarm Indemnified Parties may sustain (whether or not instituted by a third party), or to which any of Alarm Indemnified Parties may be subjected, arising out of or in connection with:

(i) any inaccuracy or misrepresentation in or breach of the representations or warranties made by the Company in any Company Document or such Stockholder in any Stockholder Document;

(ii) any breach of any covenant or agreement of the Company set forth in any Company Document or of such Stockholder in any Stockholder Document;

(iii) any pending or threatened Legal Proceedings disclosed or required to be disclosed on Schedule 4.17(a);

(iv) any and all Taxes (or the nonpayment thereof) of the Company properly allocable to the Pre-Closing Period or the portion of any Straddle Period ending on the Closing Date (as calculated in accordance with Section 7.6) to the extent not reserved against and taken into account in the calculation of Final Net Working Capital;

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(v) any and all fees, costs and expenses, including legal, accounting, financial advisory, investment banking, consulting and other advisory fees, costs and expenses of third parties, incurred or payable by the Company in connection with the proposed sale of the Company to the extent not included in the calculation of Final Net Working Capital or paid pursuant to Section 2.2;

(vi) any amounts in respect of any Debt of the Company incurred and existing as of immediately prior to the Effective Time; and

(vii) any amounts in respect of those matters set forth on Schedule 9.2(a).

(b) The right to indemnification, payment of Losses or other remedy based on such representations, warranties, covenants and obligations will not be affected by any investigation conducted or any knowledge acquired (or capable of being acquired) at any time, with respect to the accuracy or inaccuracy of any representation or warranty, or the compliance with any covenant or obligation. The waiver of any closing condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification, payment of Losses, or other remedy based on such representations, warranties, covenants and obligations.

9.3 Indemnification of Stockholders.

(a) Alarm hereby agrees to indemnify and hold the Stockholders and their respective Affiliates, agents, attorneys, representatives, successors and assigns (the “Seller Indemnified Parties”) harmless from and against any and all Losses that any of the Seller Indemnified Parties may sustain (whether or not instituted by a third party), or to which any of the Seller Indemnified Parties may be subjected, arising out of or in connection with:

(i) any inaccuracy or misrepresentation in or breach of any representation or warranty of Alarm or the Merger Sub in any Alarm Document;

(ii) any breach of any covenant or agreement of Alarm or the Merger Sub in any Alarm Document; and

(iii) any and all Taxes (or the nonpayment thereof) of the Company properly allocable to the Post-Closing Period or the portion of the Straddle Period beginning after the Closing Date (as calculated in accordance with Section 7.6 and as required under applicable Law).

(b) Following the Closing, the Company shall not have any Liability to any Stockholder or any other Person as a result of any inaccuracy or misrepresentation in or breach of the representations or warranties made by, or a breach of any covenant or agreement made by, the Company or any Stockholder. No Stockholder shall have any right of indemnification or contribution against the Company on account of any event or condition occurring or existing prior to or on the date of the Closing.

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9.4 Certain Limitations.

The party making a claim under this Section 9 is referred to as the “Indemnified Party”, and the party against whom such claims are asserted under this Section 9 is referred to as the “Indemnifying Party”. The indemnification provided for in this Section 9 and shall be subject to the following limitations:

(a) The Stockholders shall not be liable to the Alarm Indemnified Parties for indemnification under Section 9(a)(i) until the aggregate amount of all Losses exceeds $175,000 (the “Basket”), in which event the Stockholders shall be liable for the full amount of such Losses.

(b) Except for claims arising out of fraud, willful breach or breach of the Fundamental Representations, the aggregate amount of all Losses for which all Stockholders in the aggregate shall be liable pursuant to this Section 9 shall not exceed the Escrow Amount and the recourse of the Alarm Indemnified Parties shall be solely to the Escrow Amount. With respect to claims arising out of fraud, willful breach or breach of the Fundamental Representations, (i) the aggregate amount of all Losses for which all Stockholders shall be liable shall not exceed the aggregate amount of the Merger Consideration actually received by the Stockholders, (ii) the indemnification obligation of each Stockholder shall in no event exceed the amount of the Merger Consideration actually received by such Stockholder, and (iii) in no event shall any Stockholder be liable for any indemnification obligations of any other Stockholder. Further, notwithstanding anything to the contrary in this Agreement in the case of a breach of any representation or warranty made severally and not jointly by any Stockholder in such Stockholder’s Letter of Transmittal, the indemnification obligations of the Stockholders are several and no Stockholder shall be liable for any losses suffered by Alarm as a result of any breach of such representation by any other Stockholder. Further still, in no event shall any Common Holder who acquired his or her shares by virtue of exercise of stock options pursuant to the Company Stock Option Plan have any liability pursuant to the indemnification provisions of this Agreement or with respect to the Merger on account of such shares of common stock other than arising out of or with respect to his or her own representations, warranties and covenants expressly set forth in his or her Letter of Transmittal. To the extent a Common Holder also holds shares of Preferred Stock, such Common Holder also shall be subject to the indemnification provisions of this Agreement and other obligations of Holders of Preferred Stock set forth in this Agreement with respect to shares of Preferred Stock held by such Holder.

(c) Payments by an Indemnifying Party pursuant to this Section 9 in respect of any Loss shall be limited to the amount of any liability or damage that remains after deducting there from any insurance proceeds, and any indemnity, contribution or other similar payment received by the Indemnified Party (or the Company) in respect of any such claim.

(d) Except in the case of a breach of representation or warranty contained in the Letter of Transmittal of each applicable Stockholder for which the Indemnified Party may pursue the applicable Stockholder directly without first making a claim against the escrow, unless and until the assets remaining in the Escrow are insufficient to satisfy the outstanding indemnification claims, all claims for indemnification by the Alarm Indemnified Parties shall first be made against the Escrow Amount.

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(e) Notwithstanding anything herein to the contrary, no party shall be entitled to indemnification pursuant to this Article IX for any Losses to the extent such party has been indemnified or reimbursed for such Losses under any other provision of this Agreement including Section 2.3 hereof.

9.5 Indemnification Procedures.

(a) In the event an Indemnified Party seeks indemnification under Sections 9.2 or 9.3 (an “Indemnification Claim”), the Indemnified Party shall promptly provide written notice of such Indemnification Claim to the Indemnifying Party; provided, that no delay by the Indemnified Party will relieve the Indemnifying Party from any obligation hereunder, unless, and then solely to the extent that, the Indemnifying Party is actually and materially prejudiced thereby. The Indemnifying Party shall, with counsel of its choice (as long as such counsel is reasonably satisfactory to the Indemnified Party), defend against, negotiate, settle or otherwise deal with such Indemnification Claim, subject to the provisions hereof. If the Indemnifying Party elects to defend against, negotiate, settle or otherwise deal with any Indemnification Claim, it shall, within thirty (30) days (or sooner, if the nature of the Indemnification Claim so requires), notify the Indemnified Party of its intent to do so; provided, however, that the Indemnifying Party shall not be entitled to assume the control in any such defense (and the Indemnified Party shall control such defense at the expense of the Indemnifying Party) if: (i) the Indemnification Claim relates to or arises in connection with any criminal Legal Proceeding; (ii) the Indemnified Party reasonably believes that an adverse determination with respect to the Indemnification Claim would be materially detrimental to or materially injure the Indemnified Party’s reputation or business; (iii) the Indemnification Claim seeks an equitable relief; (iv) in the opinion of the Indemnified Party, a conflict or potential conflict exists between the Indemnified Party and the Indemnifying Party that would make such separate representation advisable; (v) the Indemnified Party has additional defenses to the Indemnification Claim not available to the Indemnifying Party; or (vi) the Indemnifying Party failed or is failing to actively prosecute or defend such Indemnification Claim. If the Indemnifying Party elects not to defend against, negotiate, settle or otherwise deal with any Indemnification Claim, the Indemnified Party may defend against, negotiate, settle or otherwise deal with such Indemnification Claim without prejudice to its rights to be indemnified hereunder. If the Indemnifying Party shall assume the defense of any Indemnification Claim, the Indemnified Party may participate, at its own expense, in the defense of such Indemnification Claim; provided, however, that the fees and expenses of the Indemnified Party’s counsel that are incurred prior to the Indemnifying Party’s effective assumption of any Indemnification Claim shall be the responsibility of the Indemnifying Party. The parties hereto agree to cooperate fully with each other in connection with the defense, negotiation or settlement of any such Indemnification Claim.

(b) Notwithstanding anything in Section 9.5(a) to the contrary, the Indemnifying Party shall not, without the written consent of the Indemnified Party, settle or compromise any Indemnification Claim or permit a default or consent to entry of any judgment unless: (1) the sole relief is monetary damages that will be solely satisfied by the Indemnifying Party; and (ii) the claimant provides the Indemnified Party an unqualified release from all Liability in respect of the Indemnification Claim. Notwithstanding the foregoing, if a settlement offer solely for money damages, which includes a complete release of the Indemnified Party from all other liability in respect of the Indemnification Claim, is made by the applicable third

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party claimant, and the Indemnifying Party notifies the Indemnified Party in writing of the Indemnifying Party’s willingness to accept the settlement offer and pay the amount called for by such offer (and offers evidence reasonably acceptable to the Indemnified Party of the Indemnifying Party’s ability to pay such amount), and the Indemnified Party declines to accept such offer, the Indemnified Party may continue to contest such Indemnification Claim, free of any participation by the Indemnifying Party, and the amount of any ultimate liability with respect to such Indemnification Claim that the Indemnifying Party has an obligation to pay hereunder shall be limited to the lesser of (A) the amount of the settlement offer that the Indemnified Party declined to accept plus any out-of-pocket expenses, including reasonable attorneys’ and other professional fees and disbursements which would not have been reimbursed by the settlement offer, of the Indemnified Party relating to such Indemnification Claim through the date of its rejection of the settlement offer; or (B) the aggregate actual Losses of the Indemnified Party with respect to such Indemnification Claim.

(c) In the event an Indemnified Party notifies the Indemnifying Party of any claim for indemnification hereunder that does not involve a third party claim, the Indemnifying Party shall, within thirty (30) days after the date of such notice, pay to the Indemnified Party the amount of all Losses payable pursuant to this Article IX and shall thereafter pay any other Losses payable pursuant to this Article IX arising out of the same matter on demand, unless the Indemnifying Party disputes in writing the Indemnifying Party’s liability for, or the amount of, any such Losses within such 30-day period, in which case such payment shall be made as provided above in respect of any matters not so disputed and any Losses in respect of the matters so disputed shall be paid within five (5) Business Days after any determination (by agreement of the Indemnified Party and Indemnifying Party or otherwise) that the Indemnifying Party is liable therefor, pursuant to this Article IX. The parties agree that prior to instituting any action pursuant and in accordance with Section 11.3 hereof with respect to any disputed claims under this Section 9.3(c), the parties will attempt in good faith to resolve such disputes by mutual agreement.

(d) Notwithstanding the foregoing, to the extent the provisions of this Section 9.5 conflict with the provisions of Section 7.6 with respect to the matters covered therein, the provisions of Section 7.6 shall govern.

9.6 Right of Setoff.

In the event that the assets remaining in the Escrow are insufficient to satisfy the outstanding indemnification claims, Alarm shall have the right to hold back from any Earnout Payment the amount of any indemnification claim made by an Alarm Indemnified Party. In the event Alarm holds back any claimed damages against any such payment due to the Stockholders, Alarm shall deliver a written notice to the Stockholder Representative specifying the Losses, to the extent then reasonably known or available, concurrent with such Earnout Payment. Upon final determination of such indemnification claim pursuant to Section 9.5, Alarm shall have the right to set off the amount of such Losses determined to be due hereunder against any Earnout Payment, and any remaining amounts previously withheld shall be immediately payable to the Stockholders. The foregoing right of setoff is subject to the limitations set forth in this Article IX, including, without limitation, Section 9.4(b).

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9.7 Tax Treatment of Indemnity Payments.

The parties agree to treat any indemnity payment made pursuant to this Article IX as an adjustment to the Merger Consideration for all Tax purposes.

9.8 Exclusive Remedy.

Except as set forth in Section 11.3(c), the sole and exclusive remedy and recourse of the parties hereto for any Losses arising out of or incurred in connection with this Agreement and the transactions contemplated hereby, except for claims based upon fraud or willful breach, shall be the indemnification provided for in Article IX and the parties waive all other rights and remedies provided at law or in equity, now or thereafter existing.

ARTICLE X

INTENTIONALLY OMITTED

ARTICLE XI

MISCELLANEOUS

11.1 Payment of Sales, Use, Transfer or Similar Taxes.

All sales, use, transfer, intangible, recordation, documentary stamp or similar Taxes or charges, of any nature whatsoever, applicable to, or resulting from, the transactions contemplated by this Agreement shall be borne by the Stockholders.

11.2 Expenses.

Except as otherwise provided in this Agreement, each of the Company, Alarm and the Merger Sub shall bear its own expenses (and the Stockholders shall bear the expenses of the Company) incurred in connection with the negotiation and execution of this Agreement and each other agreement, document and instrument contemplated by this Agreement and the consummation of the transactions contemplated hereby and thereby.

11.3 Submission to Jurisdiction; Consent to Service of Process; Waiver of Jury Trial.

(a) The parties hereto hereby irrevocably submit to the exclusive jurisdiction of any federal or state court located within the State of Delaware over any dispute arising out of or relating to this Agreement or any of the transactions contemplated hereby and each party hereby irrevocably agrees that all claims in respect of such dispute or any suit, action or proceeding related thereto shall be heard and determined solely in such courts. The parties hereby irrevocably waive, to the fullest extent permitted by applicable Law, any objection which they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of the parties hereto agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.

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(b) Each of the parties hereto hereby consents to process being served by any party to this Agreement in any suit, action or proceeding by delivery of a copy thereof in accordance with the provisions of Section 11.6.

(c) The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in addition to any other remedy to which they are entitled at law or in equity.

(d) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A ‘TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.3.

11.4 Entire Agreement; Amendments and Waivers.

This Agreement (including the schedules and exhibits hereto), the Company Documents, the Stockholder Documents and Alarm Documents represent the entire understanding and agreement between the parties hereto with respect to the subject matter hereof. This Agreement can be amended, supplemented or changed, and any provision hereof can be waived, only by written instrument making specific reference to this Agreement signed by the Company, the Stockholder Representative and Alarm. No action taken pursuant to this Agreement, including without limitation, any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representation, warranty, covenant or agreement contained herein. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy.

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11.5 Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts made and performed in such state without regard to choice of law and conflicts of law rules.

11.6 Notices.

All notices, requests, demands, claims and other communications hereunder shall be in writing. Any notice, request, demand, claim or other communication hereunder shall be deemed duly given: (a) if personally delivered, when so delivered; (b) if mailed, five (5) Business Days after having been sent by first class, registered or certified U.S. mail, return receipt requested, postage prepaid and addressed to the intended recipient as set forth below; (c) if given by facsimile, once such notice or other communication is transmitted to the facsimile number specified below, provided, that: (i) the sending facsimile generates a transmission report showing successful completion of such transaction; and (ii) if such facsimile is sent after 5:00 p.m. local time at the location of the receiving facsimile, or is sent on a day other than a Business Day, such notice or communication shall be deemed given as of 9:00 a.m. local time at such location on the next succeeding Business Day; or (d) if sent through a nationally-recognized overnight delivery service that guarantees next day delivery, the Business Day following its delivery to such service in time for next day delivery:

If to the Stockholder Representative:

Shareholder Representative Services LLC

1614 15^th Street, Suite 200

Denver, CO 80202

Email: deals@shareholderrep.com

Facsimile: (303) 623-0294

Telephone: (303) 648-4085

Attention: Managing Director

with a copy (which shall not constitute notice) to:

White and Williams LLP

One Penn Plaza, 250 West 34^th Street, Suite 4110

New York, NY 10119

Facsimile: (212) 631-4428

Attention: Lori Smith, Esq.

If to Alarm, to:

Alarm.com Incorporated

8150 Leesburg Pike

Vienna, VA 22182

Facsimile: (404) 342-4352

Attention: Daniel J. Ramos

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with a copy (which shall not constitute notice) to:

Nelson Mullins Riley & Scarborough LLP

201 17^th Street, Suite 1700

Atlanta, GA 30363

Facsimile: (404) 322-6500

Attention: J. Brennan Ryan

Any party entitled to notice hereunder may change the address or facsimile number to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving the other parties notice in the manner herein set forth.

11.7 Severability.

If any term or other provision of this Agreement is invalid, illegal, or incapable of being enforced by any Law or public policy, all other terms or provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.

11.8 Binding Effect; Assignment.

This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Except for rights to indemnity under Article IX, nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any Person not a party to this Agreement. No assignment of this Agreement or of any rights or obligations hereunder may be made by the Company, directly or indirectly (by operation of law or otherwise), without the prior written consent of Alarm. Upon any such permitted assignment, the references in this Agreement to the assignor shall also apply to any such assignee unless the context otherwise requires.

11.9 Counterparts.

This Agreement may be executed in one or more counterparts, including by way of electronic transmission, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

11.10 Intentionally Omitted.

11.11 Other Definitional and Interpretive Matters.

(a) Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:

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(i) Exhibits/Schedules. The Exhibits and Schedules to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein shall be defined as set forth in this Agreement. Any matter set forth on any of the Schedules hereto shall be deemed set forth in all other Schedules to the extent there is a specific cross-reference or to the extent the relevance of such matter to another Schedule is readily apparent from the face of the disclosure. The information contained in this Agreement, the Schedules and Exhibits is disclosed solely for purposes of this Agreement, and no information contained herein or therein shall be deemed to be an admission by any party hereto to any third party of any matter whatsoever (including any violation of applicable Law or breach of contract).

(ii) Gender and Number. Any reference in this Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa.

(iii) Headings. The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement. All references in this Agreement to any “Section” are to the corresponding Section of this Agreement unless otherwise specified.

(iv) Herein. The words such as “herein,” “hereinafter,” “hereof;” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.

(v) Including. The word “including” or any variation thereof means “including, without limitation” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.

(vi) Reflected On or Set Forth In. An item arising with respect to a specific representation, or warranty or other provision of this Agreement shall be deemed to be “reflected on” or “set forth in” a balance sheet or financial statements, to the extent any such phrase appears in such provision, if (a) there is a reserve, accrual or other similar item underlying a number on such referenced balance sheet or financial statements that related to the subject matter of such representation, (b) such item is otherwise specifically set forth on the referenced balance sheet or financial statements or (c) such item is reflected on the referenced balance sheet or financial statements and is specifically set forth in the notes thereto.

(b) The parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

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11.12 Intentionally Omitted.

11.13 Non-recourse. This Agreement may only be enforced against, and any claim, action, suit or other legal proceeding based upon, arising out of, or related to this Agreement, or the negotiation, execution or performance of this Agreement, may only be brought against the entities that are expressly named as parties hereto and then only with respect to the specific obligations set forth herein with respect to such party.

11.14 Stockholder Representative.

(a) Shareholder Representative Services LLC has been or will be appointed as the agent and attorney-in-fact for each Stockholder (such person, and any successor or replacement thereof as provided below, the “Stockholder Representative”) pursuant to the Letter of Transmittal. The Stockholder Representative shall be authorized, for and on behalf of all the Stockholders, to sign this Agreement, the Escrow Agreements and bind the Stockholders in respect of each provision hereof and thereof. The Stockholder Representative shall also be authorized, for and on behalf of all the Stockholders, to give and receive notices and communications, to authorize: (i) the payment of monies by the Stockholders, (ii) the distribution to Alarm of monies from the Escrow Agreement, in each case in satisfaction of claims for Losses by Alarm on behalf of the Alarm Indemnified Parties, and to object to such distributions, to agree to, negotiate, enter into settlements and compromises of, and demand arbitration or resolution by the Accounting Referee and comply with orders of courts and awards of arbitrators and/or the Accounting Referee with respect to the consideration adjustment pursuant to Section 2.3 and claims for Losses, as applicable, and to take all actions necessary or appropriate in the judgment of the Stockholder Representative to accomplish the foregoing. The Stockholder Representative may be changed by the holders of a majority of shares of Common Stock outstanding on an as converted basis immediately prior to the Closing (the “Majority Stockholders”) and from time to time upon not less than ten (10) days’ prior written notice to Alarm certifying that the Stockholder Representative has been removed by the requisite vote or consent of the Stockholders and specifying the substitute Stockholder Representative appointed by the Stockholders. The Stockholder Representative may resign at any time. Following the Closing, notices or communications to or from the Stockholder Representative shall constitute notice to or from each of the Stockholders.

(b) The Stockholder Representative shall not be liable for any act done or omitted hereunder or under the Escrow Agreement in its capacity as the Stockholder Representative while acting in good faith without gross negligence or willful misconduct or upon the advice of legal counsel. The Stockholders shall jointly and severally indemnify the Stockholder Representative and hold the Stockholder Representative harmless against any Losses incurred by the Stockholder Representative (including reasonable fees and expenses of any legal counsel retained by the Stockholder Representative) arising out of or in connection with the acceptance or administration of the Stockholder Representative’s duties hereunder or under the Escrow Agreement, in each case as such Loss is suffered or incurred; provided, that in the event that any such Loss is finally adjudicated to have been primarily caused by the gross negligence, willful misconduct or bad faith of the Stockholder Representative, the Stockholder Representative will reimburse the Stockholders the amount of such indemnified Loss attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Stockholder Representative by the Stockholders, any such Losses may be recovered by the Stockholder Representative from the Stockholder Representative Fund. To the extent the Stockholder Representative Fund has been exhausted, such Losses may be recoverable with the prior written consent of the Majority Stockholders from (i) the Escrow Amount at such time as remaining

53.

amounts would otherwise be distributable to the Stockholders, and (ii) any Earnout Payments at such time as any such amounts would otherwise be distributable to the Stockholders; provided, that while this section may allow the Stockholder Representative to be paid from the Stockholder Representative Fund, the Escrow Amount and the Earnout Payments, this does not relieve the Stockholders from their obligation to promptly pay such Losses as they are suffered or incurred, nor does it prevent the Stockholder Representative from seeking any remedies available to it at law or otherwise.

(c) Any decision, act, consent or instruction of the Stockholder Representative shall constitute a decision of all of the Stockholders and shall be final, binding and conclusive upon each of such Stockholders, and the Escrow Agent and Alarm may rely upon any such decision, act, consent or instruction of the Stockholder Representative as being the decision, act, consent or instruction of each and every Stockholder. The Escrow Agent and Alarm are hereby relieved from any Liability to any Person for any acts done by them accordance with such decision, act, consent or instruction of the Stockholder Representative.

(d) At Closing, Alarm shall cause the sum of $55,000 (the “Stockholder Representative Fund”) to be wired to the Stockholder Representative. The Stockholder Representative shall maintain the Stockholder Representative Fund on behalf of the Stockholders and, subject to the limitations set forth in the Engagement Letter by and among the Stockholder Representative and certain Stockholders dated as of the same date hereof (the “Engagement Letter”), shall be entitled to withdraw cash amounts from the Stockholder Representative Fund to pay directly or in reimbursement for out of pocket fees and expenses (including legal, accounting and other advisors’ fees and expenses, if applicable) incurred by the Stockholder Representative in performing its obligations under this Agreement or the Escrow Agreement. The Stockholders will not receive any interest or earnings on the Stockholder Representative Fund and irrevocably transfer and assign to the Stockholder Representative any ownership right that they may otherwise have had in any such interest or earnings. For tax purposes, all interest and other income from investment of the Stockholder Representative Fund shall be reported as having been earned by the Stockholder Representative, whether or not such income was disbursed. The Stockholder Representative will not be liable for any loss of principal of the Stockholder Representative Fund other than as a result of its gross negligence, willful misconduct or bad faith. Upon the later to occur of (i) the distribution of the final Earnout Payment in 2015 or (ii) the date on which any and all disputes in connection with any indemnification payments pursuant to Section 9 have been resolved in accordance with Section 9 and the Escrow Agreement, the remaining amount of the Stockholder Representative Fund, if any, shall be distributed to the Stockholders on a pro rata basis in accordance with the applicable relative percentages set forth on Schedule 2.6 by wire transfer of immediately available funds, except in the case of payments to employees or former employees of the Company for which employment tax withholding is required, which such amounts shall be delivered to Alarm or the Company and paid through Alarm’s or the Company’s payroll processing service or system. For tax purposes, the Stockholder Representative Fund shall be treated as having been received and voluntarily set aside by the Stockholders at the time of Closing. The parties agree that the Stockholder Representative is not acting as a withholding agent or in any similar capacity in connection with the Stockholder Representative Fund. If any tax reporting is required with respect to the ultimate distribution of any balance of the Stockholder Representative Fund, then the Stockholder Representative will provide to Alarm or its designated agent, upon request,

54.

information regarding the amounts distributed to each Stockholder, to be used by Alarm or its agent in completing any required tax reporting. For tax purposes, the Stockholder Representative Fund shall be treated as having been received and voluntarily set aside by the Stockholders at the time of Closing. In the event that the Stockholder Representative Fund is insufficient to reimburse the Stockholder Representative pursuant to this Section 11.14(d), the Stockholder Representative shall seek such amount directly from the Stockholders. For the avoidance of doubt, Alarm and the Company shall have no obligation to make any payments to the Stockholder Representative in its role as the Stockholder Representative except as specifically set forth in the first sentence of this Section 11.14(d) and in accordance with the terms of this Agreement and shall have no liability for any actions taken by the Stockholder Representative with respect to the Stockholder Representative Fund.

** REMAINDER OF PAGE INTENTIONALLY LEFT BLANK **

55.

IN WITNESS WHEREOF, the parties have executed and caused this Agreement to be executed and delivered on the date first written above.

ALARM:
ALARM.COM HOLDINGS, INC.
By:	/s/ Stephen Trundle
Name: Stephen Trundle
Title: President and CEO
MERGER SUB:
ENERGYHUB HOLDINGS, INC.
By:	/s/ Jennifer Moyer
Name: Jennifer Moyer
Title: Secretary
THE COMPANY:
ENERGYHUB, INC.
By:	/s/ Seth Frader-Thompson
Name: Seth Frader-Thompson
Title: CEO
STOCKHOLDER REPRESENTATIVE:
SHAREHOLDER REPRESENTATIVE SERVICES LLC, solely in its capacity as Stockholder Representative
By:	/s/ Mark B. Vogel
Name: Mark B. Vogel
Title: Managing Director

ANNEX A

DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings specified in this Annex A:

“2012 Convertible Notes” has the meaning set forth in the Recitals.

“2012 Convertible Note Holders” has the meaning set forth in the Recitals.

“2013 Convertible Notes” has the meaning set forth in the Recitals.

“2013 Convertible Note Holders” has the meaning set forth in the Recitals.

“2015 Earnout Payment” has the meaning set forth in Section 2.4(a).

“Accounting Referee” has the meaning set forth in Section 2.3(d).

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, and the term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract or otherwise. With respect to any natural person, “Affiliate” will include such person’s grandparents, any descendants of such person’s grandparents, such person’s spouse, the grandparents of such person’s spouse, and any descendants of the grandparents of such person’s spouse (in each case, whether by blood, adoption or marriage).

“Agreement” has the meaning set forth in the Recitals.

“Alarm” has the meaning set forth in the Recitals.

“Alarm Documents” has the meaning set forth in Section 6.2.

“Alarm Indemnified Parties” has the meaning set forth in Section 9.2(a).

“Annual Financial Statements” has the meaning set forth in Section 4.6(a).

“Applications” has the meaning set forth in Section 4.12(c).

“Base Consideration” has the meaning set forth in Section 2.1(a).

1.

“Business Day” means any day of the year on which national banking institutions in Virginia are open to the public for conducting business and are not required or authorized to close.

“Cash” means cash and cash equivalents.

“Cash Flow” has the meaning set forth in Section 2.4(e).

“Cause” means the occurrence of one or more of the following: (a) conviction of or being charged with any felony or any crime involving moral turpitude or dishonesty; (b) participation in a fraud or act of dishonesty against the Company, Alarm or any of their Affiliates; (c) threats or acts of violence in the workplace or in the course and scope of any business activity, unlawful harassment of any employee or independent contractor of the Company, Alarm or any Affiliate of Alarm, creation of any adversarial relationships with employees of the Company, Alarm or any of their Affiliates that Alarm determines to be detrimental to the Company, Alarm or any of their Affiliates, theft or unauthorized conversion or transfer of any opportunity of the Company, Alarm or any of their Affiliates to such individual or to any third party; (d) unlawful use of narcotics or other controlled substances, or use of alcohol or other drugs in a manner that the Company or Alarm reasonably determines to be adverse to the best interests of the Company, Alarm or any of their Affiliates; (e) gross negligence or intentional and willful refusal to follow the lawful directions of the Company or Alarm, that is not cured within fifteen (15) days following written notice from the Board of Directors stating, with reasonable specificity, the nature of such gross negligence or intentional and willful refusal, as applicable, and (if applicable) the acts to be taken to cure the same; (f) material nonperformance or breach of any contract between the Company, Alarm or any of their Affiliates and the applicable individual or any statutory duty owed by such individual to the Company, Alarm or any of their Affiliates, that is not cured within fifteen (15) days following written notice from the Board of Directors stating, with specificity, the nature of such material nonperformance or breach of contract, as applicable, and (if applicable) the acts to be taken to cure the same.

“Closing” has the meaning set forth in Section 3.1.

“Closing Date” has the meaning set forth in Section 3.1.

“Closing Net Working Capital” has the meaning set forth in Section 2.3(b).

“COBRA” has the meaning set forth in Section 4.15(h).

“Code” means the Internal Revenue Code of 1986, as amended.

2.

“Common Shares” has the meaning set forth in the Recitals.

“Common Stock” means the Company’s Common Stock, $0.001 par value per share.

“Common Stock Holder” has the meaning set forth in the Recitals.

“Company” has the meaning set forth in the Recitals.

“Company Benefit Plan” has the meaning set forth in Section 4.15(a).

“Company Documents” has the meaning set forth in Section 4.2.

“Company Pension Plan” has the meaning set forth in Section 4.15.

“Consent” means any approval, consent, ratification, waiver or other authorization of any Person.

“Content” has the meaning set forth in Section 4.12(j).

“Continuation Coverage” has the meaning set forth in Section 4.15(h).

“Contract” means any contract, indenture, note, bond, lease, commitment, plan, arrangement, instrument or other agreement, in each case whether written or oral.

“Credit Agreement” means that certain Loan and Security Agreement dated as of August 26, 2010 by and between the Company and Square 1 Bank, as may be amended from time to time, and the agreements and other documents issued in connection therewith.

“Data” has the meaning set forth in Section 4.12(h).

“Debt” means any indebtedness of a Person, in respect of borrowed money or evidenced by bonds, notes, debentures or other similar instruments or letters of credit (or reimbursement agreements in respect thereof) or banker’s acceptances or representing capitalized or synthetic lease obligations or the unpaid balance of the purchase price of any property or assets (including any earn out, whether or not contingent) or any outstanding checks or drafts, as well as the amount of all indebtedness of others secured by a Lien on any asset of such Person (whether or not such indebtedness is assumed by such Person) and, to the extent not otherwise included, the amount of any indebtedness of any other Person guaranteed by such Person, and interest expense accrued but unpaid, and all prepayment premiums, on or relating to any of such indebtedness, but the term “Debt” does not include ordinary course accounts payable that are not yet overdue.

3.

“Documentation” means all technical and descriptive materials relating to the acquisition, design, development, use or maintenance of computer code and program documentation and materials used by the Company.

“DOL” has the meaning set forth in Section 4.15(a).

“Earnout Payment” has the meaning set forth in Section 2.4.

“Earnout Period” has the meaning set forth in Section 2.5(b).

“EBITDA” has the meaning set forth in Section 2.4(e).

“Environmental Law” means any Law relating to the protection of human health, safety or the environment including (A) all requirements pertaining to reporting, licensing, permitting, controlling, investigating or remediating emissions, discharges, releases or threatened releases of Hazardous Materials, whether solid, liquid or gaseous in nature, into the air, surface water, groundwater or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, whether solid, liquid or gaseous in nature; and (B) all requirements pertaining to the protection of the health and safety of employees or the public from exposure to Hazardous Materials.

“ERISA” has the meaning set forth in Section 4.9(m).

“ERISA Affiliate” means any trade or business or Person, whether or not incorporated, that, together with Company would be deemed a “single employer” within the meaning of Section 4001(b) of ERISA or Sections 414(b), (c), (m) or (o) of the Code.

“Escrow Agent” means Capital One, N.A.

“Escrow Agreement” means the escrow agreement to be executed by the Stockholders, Alarm and the Escrow Agent, in the form of Exhibit F.

“Escrow Amount” means the Base Escrow Amount plus 10% of any Earnout Payments earned pursuant to Section 2.4 and in each case deposited and held in escrow pursuant to Article II hereof, together with all earnings, accretions or other income accruing thereon, net of Stockholders’ obligation to pay 50% of all fees, costs and expenses payable to the Escrow Agent from time to time.

4.

“Expiration Date” has the meaning set forth in Section 3.2(b).

“Final Earnout Payment” has the meaning set forth in Section 2.4(e).

“Final Net Working Capital” has the meaning set forth in Section 2.3(f).

“Financial Statements” has the meaning set forth in Section 4.6.

“GAAP” means generally accepted accounting principles in the United States as of the date hereof.

“Governmental Body” means any government or governmental or regulatory body hereof, or political subdivision thereof, whether federal, state, local or foreign, or any department, board, commission, agency, instrumentality or authority thereof; or any court or arbitrator (public or private).

“Hazardous Material” means any substance, material or waste: (i) that is regulated, classified, or otherwise characterized under or pursuant to any Environmental Law as “hazardous,” “toxic,” “pollutant,” “contaminant,” or “radioactive,” including, without limitation, petroleum and its by-products, including asbestos, gasoline or diesel fuel or other petroleum hydrocarbons or polychlorinated biphenyls (PCBs); (ii) the presence of which requires investigation or remediation under any Environmental Laws; or (iii) that is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic or mutagenic or otherwise hazardous and is regulated under Environmental Laws.

“Indemnified Party” has the meaning set forth in Section 9.4.

“Indemnifying Party” has the meaning set forth in Section 9.4.

“Indemnification Claim” has the meaning set forth in Section 9.5(a).

“Intellectual Property” means all of the following owned by or issued or licensed to or by, or otherwise used by, the Company: (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof; (b) all trademarks, service marks, trade dress, logos, trade

5.

names, URL domain names and corporate names, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith; (c) all software (including source code) and other copyrightable works, works of authorship and mask works, data, databases, data collections and related documentation, all copyrights, and all applications, registrations and renewals in connection therewith; (d) all customer and subscriber lists; (e) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, technical data, specifications, pricing and cost information, and business and marketing plans and proposals); (f) all Documentation; (g) all Technology Assets; and (h) all rights in and to any of the foregoing, including the right to sue, recover damages, costs, and attorneys’ fees for past and present infringement or misappropriation of any of the foregoing.

“Intellectual Property Registrations” has the meaning set forth in Section 4.12(a).

“Interim Financial Statements” has the meaning set forth in Section 4.6(a).

“IRS” means the Internal Revenue Service.

“Knowledge” means the knowledge of a specified Person after making such due inquiry of those officers, directors, key employees and professional advisors (including attorneys, accountants and consultants) of the Person who would reasonably be expected to have actual knowledge of the matters in question. The words “know,” “knowing” and “known” shall be construed accordingly. In the case of the Company, “knowledge” means the knowledge of Seth Frader-Thompson, Andrew Martin, Joshua Oberwetter and David Weiner.

“Law” means any foreign, federal, state, local law, statute, code, ordinance, rule or regulation.

“Legal Proceeding” means any judicial, administrative or arbitral actions, investigations, suits, inquiries, hearings or proceedings (public or private) by or before a Governmental Body.

“Letter of Transmittal” has the meaning set forth in Section 1.6.

“Liability” means any debt, liability or obligation (whether direct or indirect, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, known or unknown or due or to become due) and including all costs and expenses relating thereto.

6.

“Lien” means any lien, encumbrance, pledge, mortgage, deed of trust, security interest, claim, lease, charge, option, right of first refusal, easement, servitude or transfer restriction.

“Losses” means losses, liabilities, obligations and damages and any and all notices, actions, suits, proceedings, claims, demands, assessments, judgments, costs, penalties and expenses, including defense costs, amounts paid in settlement and reasonable attorneys’ and other professionals’ fees and disbursements incident to any and all Losses with respect to which indemnification is provided hereunder, including costs of enforcing the right to indemnification provided herein and shall specifically exclude all punitive, consequential, special or indirect damages.

“Material Adverse Effect” means any change or effect that, individually or in the aggregate (i) is materially adverse to the business, condition (financial or otherwise), results of operations, properties, assets or Liabilities of the Company (including, specifically, the termination or cancellation, or other materially adverse alteration of its business relationship with any customer or group of customers, representing revenues equal to or greater than 10% of the Company’s revenues (determined as of the 2012 fiscal year)), except for any change or effect that arises out of; results from or is attributable to: (A) any change in conditions in the global economy or regulatory or political conditions or changes, provided no such conditions or changes disproportionately affect the Company, (B) any change in the economic or business conditions affecting the industries in which the Company conducts its business (in each case that do not disproportionately affect the Company), (C) any change in applicable Law, (D) an act of god, act of war or terrorism or (E) any change resulting from any announcement of the transactions contemplated by this Agreement, or (ii) materially and adversely affects the ability of the Stockholders or the Company to consummate the transactions contemplated by this Agreement.

“Material Contracts” has the meaning set forth in Section 4.13(a).

“Merger Consideration” has the meaning set forth in Section 2.1.

“Net Working Capital” has the meaning set forth in Section 2.3(b).

“Order” means any order, injunction, judgment, decree, consent decree, ruling, writ, assessment or award of a Governmental Body.

7.

“Organizational Documents” means, as applicable, the certificate or articles of incorporation, certificate or articles of formation or organization, as applicable, and bylaws, shareholder agreements, operating agreements, partnership agreements and any similar governing or constitutive documents or agreements of any Person, each as currently in effect.

“Permits” means any approvals, authorizations, consents, licenses, permits or certificates of a Governmental Body necessary for the ownership or operation of the Company’s assets, or the conduct of its businesses as presently conducted.

“Permitted Exceptions” means (i) all defects, exceptions, restrictions, easements, rights of way and encumbrances disclosed in policies of title insurance which have been made available to Alarm or the Merger Sub by the Company, which currently affect title to such Company Property and which do not individually or in the aggregate interfere with or adversely affect the value, marketability or current use thereof in the business as conducted by the Company; (ii) statutory liens for current Taxes, assessments or other governmental charges not yet delinquent or the amount or validity of which is being contested in good faith by appropriate proceedings and for which appropriate reserves under GAAP have been established in the books of account of the Company; (iii) mechanics’, carriers’, workers’, repairers’ and similar Liens arising or incurred in the ordinary course of business for sums not yet delinquent; and (iv) title of a lessor under an operating lease with respect to leased property.

“Person” means any individual, corporation, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Body or other entity.

“PII” has the meaning set forth in Section 4.12(h).

“Post-Closing Period” has the meaning set forth in Section 7.6(b).

“Pre-Closing Period” has the meaning set forth in Section 7.6(a).

“Privacy Policy” has the meaning set forth in Section 4.12(h).

“Prohibited Territory” means the Unites States of America.

“Qualifying Event” has the meaning set forth in Section 4.15(h).

“Real Property Lease” has the meaning set forth in Section 4.10(b).

8.

“Reference Balance Sheet” has the meaning set forth in Section 4.6(d).

“Reference Balance Sheet Date” has the meaning set forth in Section 4.6(d).

“Series A Holder” has the meaning set forth in the Recitals.

“Series A Preferred Per Share Merger Consideration” means an amount equal to $0.19, subject to decrease, if the Closing occurs after May 6, 2013, ns a result of additional accrued interest on indebtedness through the date of repayment and expenses of the transaction, plus the Applicable Percentage of any Stockholder Earnout Payment per share or funds released pursuant to the Escrow Agreement to Series A Holders on a per share basis.

“Series A Preferred Stock” means the Company’s Series A Preferred Stock, $0.001 par value per share.

“Series A Shares” has the meaning set forth in the Recitals.

“Series B Documents” means the documents executed by the Company and the Series B Holders including but not limited to the Voting Agreement, Investor Rights Agreement and Right of First Refusal and Co-Sale Agreement.

“Series B Holder” has the meaning set forth in the Recitals.

“Series B Preferred Per Share Merger Consideration” means the applicable amount payable with respect to each share of Series B Preferred Stock in accordance with Schedule B, which amount shall range from $0.25 to $0.30 per share (such range representing the impact on allocation of proceeds of differing amounts of accrued dividends applicable to each such share based upon the respective dates of issuance of each such share), subject to decrease, if the Closing occurs after May 6, 2013, as a result of additional accrued interest on indebtedness through the date of repayment and expenses of the transaction, plus the Applicable Percentage of any Stockholder Earnout Payment per share or funds released pursuant to the Escrow Agreement to Series B Holders on a per share basis.

“Series B Preferred Stock” means the Company’s Series B Preferred Stock, $0.001 par value per share.

“Series B Shares” has the meaning set forth in the Recitals.

9.

“Shares” means Series A Shares, Series B Shares, and Common Shares.

“Software Revenue” has the meaning set forth in Section 2.4(e).

“Stockholder” has the meaning set forth in the Recitals.

“Stockholder Documents” means the Letter of Transmittal executed by each Stockholder of the Company in connection with this Agreement.

“Stockholder Earnout Payment” has the meaning set forth in Section 2.4(c).

“Stockholder Representative” has the meaning set forth in Section 11.14(a).

“Stockholder Representative Fund” has the meaning set forth in Section 11.14(d).

“Straddle Period” has the meaning set forth in Section 7.6.

“Target Net Working Capital” means $0.00.

“Taxes” means (i) all federal, state, local or foreign taxes, charges, fees, imposts, levies or other assessments, including, without limitation, all net income, alternative or add-on minimum tax, adjusted gross income or gross receipts, capital, sales, use, ad valorem, value added, transfer, franchise, profits or excess profits, inventory, capital stock, license, withholding, payroll, employment (including employee withholding or employer payroll tax, FICA or FUTA), social security, unemployment, excise, severance, stamp, healthcare or health insurance, occupation, real or personal property and estimated taxes, prohibited transactions, premiums, occupation, customs duties, fees, assessments and charges of any kind whatsoever, (ii) all interest, penalties, fines, additions to tax or additional amounts imposed by any Taxing Authority in connection with any item described in clause (i), and (iii) any Liability with respect to any items described in clauses (i) or (ii) payable by reason of Contract, assumption, transferee liability, operation of law, Treasury Regulation Section 1.1502-6 (or any predecessor· or successor thereof or any analogous or similar provision of Law) or otherwise.

“Taxing Authority” means the IRS and any other Governmental Body responsible for the administration of any Tax.

10.

“Tax Return” means any return, report or statement required to be filed with respect to any Tax (including any elections, declarations, schedules or attachments thereto and any amendment thereof), including any information return, claim for refund, amended return or declaration of estimated Tax, and including, where permitted or required, combined, consolidated or unitary returns for any group of entities that includes the Company or any of its Affiliates.

“Technology Assets” means: (a) all data and information, in any medium, including proprietary information, technical information, source code and object code; (b) all books, records, files, papers (including passcode sets for each of back-end provider and each customer of the Company); and (c) all delivery platforms, gateways, “on ramp” connections and access points relating to the Company.

“Total Revenue” has the meaning set forth in Section 2.4(e).

“WC Overpayment” has the meaning set forth in Section 2.3(f).

“WC Underpayment” has the meaning set forth in Section 2.3(f).

“Website” has the meaning set forth in Section 4.12(c).

11.

Below is a list of omitted schedules (or similar attachments) from the Agreement and Plan of Merger, by and among Alarm.com Holdings, Inc., EnergyHub Holdings, Inc., EnergyHub, Inc., and Shareholder Representative Services LLC, as stockholder representative, dated May 3, 2013. The registrant agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request.

Schedule B	Series B Per Share
Exhibit A	Series B Holders
Exhibit B	Series A Holders
Exhibit C	Common Holders
Exhibit D	Form of Certificate of Merger
Exhibit E	Form of Letter of Transmittal
Exhibit F	Form of Escrow Agreement
Exhibit G	Initial Six Month Rolling Forecast
Exhibit H	Form of Stockholder Consent
Schedule 2.2(b)	Payments on the Closing Date
Schedule 2.4(b)	Earn-Out Payments
Schedule 2.4(e)	Revenue Projections
Schedule 2.6	Escrow Allocations
Schedule 3.4(a)(iii)	Directors and Officers
Schedule 3.4(a)(iv)	Terminated Debt
Schedule 3.4(a)(x)	Terminated Agreements
Schedule 4.1	Organization and Good Standing
Schedule 4.3(a)	Conflicts
Schedule 4.3(b)	Consents of Third Parties
Schedule 4.4(a)	Capital Stock
Schedule 4.4(b)	Options and Warrants
Schedule 4.7	Undisclosed Liabilities
Schedule 4.8	Absence of Certain Developments
Schedule 4.9	Taxes
Schedule 4.10(b)	Leased Real Property
Schedule 4.11	Title; Sufficiency
Schedule 4.12(a)	Intellectual Property Registrations
Schedule 4.12(c)	Out-Bound Licenses
Schedule 4.12(d)	Liens
Schedule 4.12(f)	Intellectual Property Safeguards
Schedule 4.12(h)	Privacy
Schedule 4.12(j)	Third Party Intellectual Property

12.

Schedule 4.12(k)	Payments under SIPCO License Agreement
Schedule 4.13(a)	Material Contracts
Schedule 4.14(a)	Employees; Compensation
Schedule 4.15 (a)	Employee Benefit Plans under ERISA
Schedule 4.15 (b)	Employee Benefit Plans exempt from ERISA
Schedule 4.15(d)	Employee Pension Benefit Plans
Schedule 4.15(e)	Nonqualified Deferred Compensation Plans
Schedule 4.15(g)	Multiemployer Plans
Schedule 4.15(h)	Qualifying Events under COBRA
Schedule 4.17(a)	Legal Proceedings
Schedule 4.17(b)	Orders
Schedule 4.17(c)	Claims
Schedule 4.18(a)	Claims or Investigations
Schedule 4.18(b)	Permits
Schedule 4.20	Insurance
Schedule 4.21	Significant Customers and Suppliers
Schedule 4.23	Affiliate Transactions
Schedule 4.24	Banking Facilities
Schedule 4.25	Products Liability
Schedule 9.2(a)	Indemnification of Alarm Indemnified Parties

13.

EX-3

Exhibit 3.1

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

ALARM.COM HOLDINGS, INC.

Alarm.com Holdings, Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “DGCL”) (the “Corporation”),

DOES HEREBY CERTIFY:

1. The name of the Corporation is Alarm.com Holdings, Inc. The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on January 27, 2009.

2. The Corporation filed an Amended and Restated Certificate of Incorporation on March 3, 2009, which has not been amended prior to the date hereof.

3. The Amended and Restated Certificate of Incorporation in the form attached hereto as Exhibit A, which is incorporated herein by this reference, and which restates, integrates, supersedes and further amends the provisions of the Amended and Restated Certificate of Incorporation of this Corporation, has been duly adopted by the Corporation’s Board of Directors and a majority of the stockholders in accordance with Sections 242 and 245 of the DGCL, with the approval of the Corporation’s stockholders having been given by written consent without a meeting in accordance with Section 228 of the DGCL.

IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be signed by its duly authorized officer and the foregoing facts stated herein are true and correct.

Dated: July 11, 2012	Alarm.com Holdings, Inc.
	By:	/s/ Stephen Trundle
	Name:	Stephen Trundle
	Title:	Chief Executive Officer

EXHIBIT A

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

ALARM.COM HOLDINGS, INC.

Article 1 NAME

The name of this corporation is Alarm.com Holdings, Inc. (the “Corporation”).

Article 2 REGISTERED OFFICE AND AGENT

The registered office of the Corporation shall be located at The Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County of New Castle, Delaware 19801. The registered agent of the Corporation at such address shall be The Corporation Trust Company.

Article 3 PURPOSE AND POWERS

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the “DGCL”). The Corporation shall have all power necessary or convenient to the conduct, promotion or attainment of such acts and activities.

Article 4 CAPITAL STOCK

4.1. Authorized Shares

The total number of shares of all classes of stock which the Corporation shall have authority to issue is Sixteen Million Nine Hundred Ninety-One Thousand Ninety (16,991,090). Ten Million (10,000,000) shares shall be Common Stock, each having a par value of one cent ($0.01) (“Common Stock”) and Six Million Nine Hundred Ninety-One Thousand Ninety (6,991,090) shares shall be Preferred Stock, each having a par value of one-tenth of one cent ($0.001) (“Preferred Stock”), of which Three Million Five Hundred Eleven Thousand Seven Hundred and Twenty-Five (3,511,725) shares shall be designated “Series A Preferred Stock,” One Million Eight Hundred Nine Thousand Six Hundred and Eighty-Five (1,809,685) shares shall be designated “Series B Preferred Stock,” and One Million Six Hundred Sixty-Nine Thousand Six Hundred and Eighty (1,669,680) shares shall be designated “Series B-1 Preferred Stock.”

4.2. Designations and Powers

The following is a statement of the designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation.

A. COMMON STOCK

1. General. The voting, dividend and liquidation rights of the holders of the Common Stock (the “Common Holders”) are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Stock set forth herein and as may be designated by resolution of the Board of Directors with respect to any series of Preferred Stock as authorized herein.

2. Voting. The Common Holders are entitled to one vote for each share of Common Stock (“Common Share”) held at all meetings of stockholders (and written actions in lieu of meetings); provided, however, that, except as otherwise required by law, Common Holders, as such, shall not be entitled to vote on any amendment to this Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation or pursuant to the DGCL. There shall be no cumulative voting. The number of authorized Common Shares may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition to any vote of the holders of one or more series of Preferred Stock that may be required by the terms of this Certificate of Incorporation) the affirmative vote of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL.

B. PREFERRED STOCK

The Series A Preferred Stock, Series B Preferred Stock and Series B-1 Preferred Stock are entitled to the following rights, preferences, powers, privileges and restrictions, qualifications and limitations. Unless otherwise indicated, references to “Sections” in this Part B of Section 4.2 of this Article 4 refer to sections of Part B of Section 4.2 of this Article 4.

1. Dividends.

(a) Subject to Section 1(b), any dividends or distributions shall be distributed among all holders of Common Stock and Preferred Stock in proportion to the number of shares of Common Stock that would be held by each such holder if all shares of Preferred Stock were converted to Common Stock at the then effective conversion rate pursuant to Section 4 (collectively, “Dividends”); provided that any Dividends shall be when, as and if declared by the Board of Directors and the Board of Directors is under no obligation to declare Dividends. Payment of declared Dividends shall be made to the extent assets are legally available therefor and any amounts for which assets are not legally available shall be paid promptly as assets become legally available therefor.

(b) Subject to the following sentence, in the event that any Dividends are paid pursuant to Section 1(a), each holder of Series B Preferred Stock and each holder of Series B-1 Preferred Stock (collectively, the “Series B Holders”) will also be paid (on a pari passu basis with, and at the same time, in the same form and in the same manner as, such Dividends) additional dividends or distributions, as applicable, with respect to each share of Series B Preferred Stock or Series B-1 Preferred Stock, as the case may be, in an amount equal to the applicable Dividends paid to such Series B Holder on each such share of Series B Preferred Stock or Series B-1 Preferred Stock as applicable pursuant to Section 1(a) (the “Additional Series B Dividends”) such that each share of Series B Preferred Stock and Series B-1 Preferred Stock shall have received an amount equal to two times the applicable Dividend, The Additional Series B Dividends shall only be payable until such time as the Series B Holders have been paid Additional Series B Dividends pursuant to this Section 1(b) in an aggregate amount for each outstanding share of Series B Preferred Stock or Series B-1 Preferred Stock, as the case may be, equal to two-fifths (0.4) of the Original Issue Price for such share of Series B Preferred Stock or Series B-1 Preferred Stock, as applicable (such aggregate amount, the “Series B Dividend Preference”); provided that notwithstanding payment of the full Series B Dividend Preference, the Series B Holders shall continue to be entitled to receive Dividends in accordance with Section 1(a). “Original Issue Price” shall mean (i) in the case of the Series B Preferred Stock, $75.44 per share, (ii) in the case of the Series B-1 Preferred Stock, $75.44 per share, and (iii) in the case of the Series A Preferred Stock, ten dollars ($10.00) per share, each subject to appropriate adjustment in the event of any stock Dividend, stock split, combination or other similar recapitalization with respect to such series of Preferred Stock.

2. Liquidation, Dissolution or Winding Up; Certain Mergers, Consolidations and Asset Sales.

(a) Payments to Holders of Preferred Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or any Deemed Liquidation Event (any such event, a “Liquidation”), the Series B Holders shall, subject to the last two sentences of this Section 2(a), be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, before any payment shall be made to the holders of Series A Preferred Stock (“Series A Holders”) or Common Holders by reason of their ownership thereof, an amount per share equal to the Liquidation Preference (as hereinafter defined) for each share of Series B Preferred Stock or Series B-1 Preferred Stock held by them, as the case may be. Subject to and following payment in full of the amounts payable to Series B Holders above, the holders of shares of Series A Preferred Stock then outstanding shall be entitled, subject to the last two sentences of this Section 2(a), to be paid out of the assets of the Corporation available for distribution to its stockholders, before any payment shall be made to the Common Holders by reason of their ownership thereof, an amount per share equal to the Liquidation Preference for each share of Series A Preferred Stock held by them. “Liquidation Preference” shall mean, (1) in the case of a share of Series B Preferred Stock or Series B-1 Preferred Stock, a per share amount equal to (i) one and two-fifths (1.4) times the Original Issue Price for such share of Series B Preferred Stock or Series B-1 Preferred Stock, as the case may be, plus (ii) all declared and unpaid Dividends on each such share, less (iii) any portion of the Series B Dividend Preference previously paid (or any portion of the Series B Dividend Preference which constitutes part of any declared and unpaid Dividend at such time to the extent such Dividend is actually paid with respect to such share of Series B Preferred Stock or Series

B-1 Preferred Stock as part of the Liquidation) on such share, and (2) in the case of a share of Series A Preferred Stock, a per share amount equal to (i) the Original Issue Price, plus (ii) an amount for each outstanding share of Series A Preferred Stock (such amount, the “Series A Additional Preference”) equal to eight percent (8.00%) per annum of the Original Issue Price of the Series A Preferred Stock plus compounded Series A Additional Preference thereon, with such Series A Additional Preference accruing on a daily basis from and including the date of issuance of such share of the Series A Preferred Stock (each such date, whether before or after the date of this Certificate of Incorporation, a “Series A Issuance Date”) to and including the date on which the Liquidation Preference of each such share of Series A Preferred Stock is paid to the holder thereof in connection with a Liquidation, and with such Series A Additional Preference compounding on each quarterly anniversary of the applicable Series A Issuance Date, plus (iii) all declared but unpaid Dividends on each such share if upon any such Liquidation the remaining assets available for distribution to its stockholders shall be insufficient to pay the holders of shares of Preferred Stock the full amount to which they shall be entitled, then the entire assets of the Corporation legally available for distribution shall be distributed ratably among each series of Preferred Stock as follows: (i) first, to the Series B Holders with equal priority and pro rata among the Series B Holders at the time outstanding based upon the aggregate Liquidation Preference on Series B Preferred Stock and Series B-1 Preferred Stock then outstanding, until the full Liquidation Preference owed to all such holders has been paid, and (ii) second, to the extent funds remain available for distribution, to the Series A Holders with equal priority and pro rata among the Series A Holders at the time outstanding based upon the aggregate Liquidation Preference on Series A Preferred Stock then outstanding, until the full Liquidation Preference owed to all Series A Holders has been paid. Notwithstanding the above, for purposes of determining the amount each holder of shares of Preferred Stock is entitled to receive with respect to a Liquidation, each such holder of shares of a series of Preferred Stock shall be entitled to receive an amount equal to the amount that such holder would have received had such holder converted such holder’s shares of such series of Preferred Stock into Common Shares pursuant to Section 4(a) immediately prior to the Liquidation if, after giving effect to all such hypothetical conversions pursuant to this sentence, such holder would have received, in the aggregate, an amount greater than the amount that would be distributed to such holder pursuant to this Section 2(a) if such hypothetical conversion had not occurred. If, in accordance with the preceding sentence, any such holder of Preferred Stock shall become entitled to receive an amount equal to the amount that such holder would have received had such holder converted such holder’s shares of such series of Preferred Stock into Common Shares pursuant to Section 4(a) immediately prior to the Liquidation, then such holder shall not be entitled to receive any distribution that would otherwise be made to holders of Preferred Stock pursuant to the first two sentences of this Section 2(a).

(b) Payments to Common Holders. In the event of any Liquidation, after the payment of the full amounts required by subsection (a) of this Section 2, the remaining assets available for distribution to the Corporation’s stockholders shall be distributed among the Common Holders, pro rata based on the number of Common Shares held by each such holder.

(c) Deemed Liquidation Events.

(i) The following events (each, a “Deemed Liquidation Event”) shall be deemed to be a Liquidation of the Corporation for purposes of this Section 2:

(A) a merger or consolidation in which the Corporation is a constituent party or a subsidiary of the Corporation is a constituent party, in each case in which the stockholders of record of the Corporation as constituted immediately prior to such transaction will immediately after such transaction (by virtue of securities issued in such transaction) fail to hold at least 50% of the equity value or voting power of the resulting or surviving corporation or entity or ultimate parent of such resulting or surviving corporation or entity following such transaction in substantially the same proportions as immediately prior to such transaction;

(B) the sale, lease, transfer or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all of the assets of the Corporation and its subsidiaries taken as a whole, except where such sale, lease, transfer or other disposition is to a direct or indirect wholly owned subsidiary of the Corporation;

(C) the grant by the Corporation or any subsidiary of an exclusive license of all or substantially all of the intellectual property of the Corporation and its subsidiaries taken as a whole; or

(D) any other transaction or a series of related transactions in which more than fifty percent (50%) of the equity value or voting power of the Corporation or its subsidiary, Alarm.com Incorporated, is transferred or issued to a person or group of affiliated persons.

(ii) The Corporation shall not have the power to effect any transaction constituting a Deemed Liquidation Event pursuant to Section 2(c)(i)(A) above unless the agreement or plan of merger or consolidation or other applicable definitive document provides that the consideration payable to the stockholders of the Corporation shall be allocated among the holders of capital stock of the Corporation in accordance with this Section 2(c), Sections 2(a) and 2(b) above. The treatment of any particular transaction or series of related transactions as a Deemed Liquidation Event may be waived by the vote or written consent of both the holders of a majority of the then outstanding shares of Series B Preferred Stock (voting as a separate class) (the “Series B Majority Holders”) and the holders of a majority of the then outstanding shares of Series A Preferred Stock (voting as a separate class) (the “Series A Majority Holders”).

(iii) In the event of a Deemed Liquidation Event pursuant to Section 2(c)(i)(A), (B), (C) or (D) above, if the Corporation does not effect a dissolution of the Corporation under the DGCL within sixty (60) days after such Deemed Liquidation Event, then to the extent shares of Preferred Stock are then outstanding (A) the Corporation shall deliver a written notice to each holder of Preferred Stock no later than the sixtieth (60th) day after the Deemed Liquidation Event advising such holders of their right (and the requirements to be met to secure such right) pursuant to the terms of the following clause (B) to require the redemption of such shares of Preferred Stock, and (B) unless the Board of Directors determines otherwise and the (i) Series A Majority Holders and (ii) Series B Majority Holders, in each case, request otherwise in a written instrument delivered to the Corporation not later than seventy-five (75) days after such Deemed Liquidation Event, the Corporation shall use the consideration received

by the Corporation and its subsidiaries for such Deemed Liquidation Event (net of any retained liabilities associated with the assets sold or technology licensed, as determined in good faith by the Board of Directors), together with any other assets of the Corporation available for distribution to its stockholders (the “Available Proceeds”) to redeem, to the extent such Available Proceeds are legally available therefor, on the ninetieth (90th) day after such Deemed Liquidation Event (the “Liquidation Redemption Date”), all outstanding shares of Preferred Stock at a price per share determined pursuant to Section 2(a) above as if a dissolution of the Corporation had occurred. Notwithstanding the foregoing, in the event of a redemption pursuant to the preceding sentence, if the Available Proceeds are not sufficient to redeem all outstanding shares of Preferred Stock, or if the Corporation does not have sufficient lawfully available funds to effect such redemption, the Corporation shall redeem a pro rata portion of each holder’s shares of Series B Preferred Stock and Series B-1 Preferred Stock, on a pari passu basis in proportion to the number of Common Shares that would be held by each such holder if all shares of such Preferred Stock were converted into Common Stock at the then effective conversion rate on the applicable record date for such distribution, to the fullest extent of such Available Proceeds or such lawfully available funds, as the case may be, based on the respective amounts which would otherwise be payable in respect of the shares to be redeemed if the Available Proceeds were sufficient to redeem all such shares and, where such redemption is limited by the amount of lawfully available funds, the Corporation shall redeem the remaining shares of Series B Preferred Stock and Series B-1 Preferred Stock on such basis as soon as practicable after the Corporation has funds legally available therefor. Subject to and following payment in full of the amounts payable to Series B Holders above, the Corporation shall then redeem a pro rata portion of each holder’s shares of Series A Preferred Stock to the fullest extent of such remaining Available Proceeds or such lawfully available funds, as the case may be, based on the respective amounts which would otherwise be payable in respect of the shares to be redeemed if the remaining Available Proceeds were sufficient to redeem all such shares and, where such redemption is limited by the amount of lawfully available funds, the Corporation shall redeem the remaining shares of Series A Preferred Stock as soon as practicable after the Corporation has funds legally available therefor. Prior to the distribution or redemption provided for in this Section 2(c)(iii), the Corporation shall not expend or dissipate the consideration received for such Deemed Liquidation Event, except to discharge expenses incurred in the ordinary course of business.

(iv) The amount deemed paid or distributed to the holders of capital stock of the Corporation upon any Liquidation shall be the cash or the value of the property, rights or securities paid or distributed to such holders by the Corporation or the acquiring person, firm or other entity. The value of such property, rights or securities shall be its fair market value as reasonably determined in good faith by the Board of Directors; provided, however, that any securities shall be valued as follows:

(A) Securities not subject to investment letter or other similar restrictions on free marketability covered by (B) below:

(1) If traded on a securities exchange, including without limitation the Nasdaq Stock Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange or system over the twenty (20) trading-day period ending three (3) trading days prior to the closing of the Deemed Liquidation Event;

(2) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the twenty (20) trading-day period ending three (3) trading days prior to the closing of the Deemed Liquidation Event; and

(3) If there is no active public market, the value shall he the fair market value thereof, as reasonably determined in good faith by the Board of Directors (including without limitation at least one (1) Series B Director and one (1) Series A Director).

(B) The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder’s status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in (A) (1), (2) or (3) to reflect the approximate fair market value thereof, as reasonably determined in good faith by the Board of Directors (including without limitation at least one (I) Series B Director and one (1) Series A Director).

(v) In the event of a Deemed Liquidation Event pursuant to Section 2(e)(i), if any portion of the consideration payable to the stockholders of the Corporation is placed into escrow and/or is payable to the stockholders of the Corporation subject to contingencies, the agreement or agreements governing such transaction shall provide that (a) the portion of such consideration that is not placed in escrow and not subject to any contingencies (the “Initial Consideration”) shall be allocated among the holders of capital stock of the Corporation in accordance with Sections 2(a) and (b) as if the Initial Consideration were the only consideration payable in connection with such Deemed Liquidation Event and (b) any additional consideration which becomes payable to the stockholders of the Corporation upon release from escrow or satisfaction of contingencies shall be allocated among the holders of capital stock of the Corporation in accordance with Sections 2(a) and (b) after taking into account the previous payment of the Initial Consideration as part of the same transaction.

3. Voting.

(a) General Voting Rights. Except as otherwise provided in Section 3(b), on any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Preferred Stock shall be entitled to cast the number of votes equal to the number of whole Common Shares into which the shares of Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the other provisions of this Certificate of incorporation, holders of Preferred Stock shall vote together with the Common Holders as a single class.

(b) Special Voting Rights. In addition to the voting rights set forth in Section 3(a), the Corporation shall not, either directly or indirectly, take or permit any of its direct or indirect subsidiaries to take, including by amendment of this Certificate of Incorporation, merger, consolidation or otherwise, any of the following actions without the prior

consent of the Series A Majority Holders and the Series B Majority Holders, voting as separate classes: (i) amend, alter, modify, repeal, eliminate, nullify, waive or change, directly or indirectly, including, without limitation, pursuant to any amendment, waiver or other change (whether by merger, consolidation or otherwise), any rights, powers, preferences or privileges of the Series A Preferred Stock or Series B Preferred Stock or the Series A Holders or the Series B Holders under this Certificate of Incorporation, respectively; (ii) authorize, create or issue any class or series of capital stock or other equity security (including by reclassification of any existing security) that is senior to or on parity with the Series A Preferred Stock or Series B Preferred Stock, respectively, including in each case securities convertible into or exchangeable for equity securities and any equity securities issued in connection with debt securities; (iii) pay any dividend or other distribution on any equity securities or redeem, repurchase or otherwise acquire any equity securities of the Corporation; provided, however, that this restriction shall not apply to (1) the repurchase of Common Shares from employees, officers, directors, consultants or other persons performing services for the Corporation or any subsidiary pursuant to agreements under which the Corporation has the option to repurchase such shares at the lower of cost or fair market value upon the termination of employment or service, provided that such repurchase has been approved by the Board of Directors (including at least one (1) Series B Director and one (1) Series A Director) or (2) the repurchase of up to an aggregate of 1,537,942 Common Shares and shares of Series A Preferred Stock and Series B-1 Preferred Stock pursuant to a tender offer commenced by the Corporation as contemplated by that certain Series B Preferred Stock Purchase Agreement, dated as of June 30, 2012, among the Corporation and the investors party thereto; (iv) effect (1) any reclassification, reorganization or recapitalization of the outstanding capital stock of the Corporation, including, without limitation, any stock split or stock combination, or (2) other than a merger, consolidation or similar transaction that is a Deemed Liquidation Event, any merger, consolidation or similar transaction in which any shares of Series A Preferred Stock or Series B Preferred Stock, respectively, are exchanged or cancelled in return for cash, property or securities; (v) increase or decrease the authorized number of shares of capital stock of the Corporation, other than by redemption or conversion of Preferred Stock; (vi) change the number or method of election, nomination or appointment of members of the Board of Directors of the Corporation; (vii) incur or guarantee, without duplication, indebtedness for borrowed money or long term capital obligations at any time outstanding in excess, in the aggregate, of $10,000,000; or (viii) enter into any agreement, contract, lease, license, instrument or commitment (whether oral or written) with any of the Corporation’s officers or directors (other than any compensation or benefit arrangement) or holders of 5% of the outstanding shares of the Corporation, or any of their affiliates, members of their immediate families, spouses or children, or with an entity in which any such individual or entity has, directly or indirectly, any material interest.

4. Optional Conversion. The holders of the Preferred Stock shall have conversion rights as follows (the “Conversion Rights”):

(a) Right to Convert. Each share of Preferred Stock shall be convertible, at the option of the holder thereof (the “Electing Stockholder” and such option, the “Conversion Option”), at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and nonassessable Common Shares (i) at, in connection with, or following an IPO (as defined below), with respect to a share of Series B Preferred Stock or Series B-1 Preferred Stock, as the case may be, as is determined

by dividing the Original Issue Price of the Series B Preferred Stock or Series B-1 Preferred Stock, as applicable, by the IPO Conversion Price, determined as hereafter provided, in effect on the date the certificate is surrendered for conversion (such conversion rate is referred to herein as the “IPO Conversion Rate”) and (ii) with respect to a share of Series A Preferred Stock, or (to the extent that clause (i) is not applicable) with respect to a share of Series B Preferred Stock or Series B-1 Preferred Stock, as is determined by dividing the Original Issue Price by the Conversion Price (as hereinafter defined) in effect at the time of conversion. Such conversion shall be effective as of the close of business on the date of receipt by the Corporation of a conversion election notice (a “Conversion Notice”) from the Electing Stockholders (the “Voluntary Conversion Date”) (unless the Conversion Notice describes the occurrence of an event upon which the exercise of the Conversion Option is contingent, in which case, the Voluntary Conversion Date shall be the date of such event). The Common Shares issuable upon conversion of the Preferred Stock covered by the Conversion Notice shall be deemed to be outstanding of record as of the Voluntary Conversion Date. That number of shares of Preferred Stock elected to be converted by the Electing Stockholders shall be referred to as the “Conversion Number.” The “Conversion Price” shall initially mean (i) in the case of the Series B Preferred Stock, $75.44 per share, (ii) in the case of the Series B-1 Preferred Stock, $75.44 per share, and (iii) in the case of the Series A Preferred Stock, ten dollars ($10.00) per share. Such initial Conversion Price (or 1PO Conversion Price, if applicable), and the rate at which shares of Preferred Stock may be converted into Common Shares, shall be subject to adjustment as provided below.

(b) Fractional Shares. No fractional Common Shares shall be issued upon conversion of the Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the fair market value of a Common Share as reasonably determined in good faith by the Board of Directors (including without limitation at least one (1) Series B Director and one (1) Series A Director). Whether or not fractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Preferred Stock the holder is at the time converting into Common Stock and the aggregate number of Common Shares issuable upon such conversion.

(c) Mechanics of Conversion.

(i) Each Electing Stockholder shall surrender his, her or its certificate or certificates for the shares of Preferred Stock covered by the Conversion Notice (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation. On the Voluntary Conversion Date, all shares of Preferred Stock covered by the Conversion Notice shall be deemed to have been converted into Common Shares, which shall he deemed to be outstanding of record, and all rights with respect to the Preferred Stock so converted, including the rights, if any, to receive notices and vote (other than as a Common Holder), will terminate, except only the rights of the holders thereof, upon surrender of their certificate or certificates therefor, to receive certificates for the number of Common Shares into which such Preferred Stock has been converted. If so required by the Corporation, certificates surrendered for conversion shall be endorsed or

accompanied by written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or by his, her or its attorney duly authorized in writing. As soon as practicable after the Voluntary Conversion Date and the surrender of the certificate or certificates (or lost certificate affidavit and agreement) for Preferred Stock, the Corporation shall, as applicable, cause to be issued and delivered to such holder, (i) a certificate or certificates for the number of Common Shares issuable on such conversion in accordance with the provisions hereof, (ii) a certificate or certificates for the number of shares of Preferred Stock not otherwise converted but represented by the certificates surrendered to the Corporation, and (iii) cash in lieu of any fraction of a Common Share otherwise issuable upon such conversion.

(d) The Shares of Preferred Stock which are surrendered for conversion in accordance with the provisions hereof shall, from and after the Voluntary Conversion Date, be deemed to have been retired and cancelled and the shares of Preferred Stock shall be deemed converted into Common Stock for all purposes, notwithstanding the failure of the holder or holders thereof to surrender such certificates on or prior to such date. Such converted Preferred Stock may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the number of shares of Preferred Stock designated as Series A Preferred Stock, Series B Preferred Stock or Series B-1 Preferred Stock, accordingly.

(i) The Corporation shall at all times when the Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued stock, for the purpose of effecting the conversion of the Preferred Stock, such number of its duly authorized Common Shares as shall from time to time he sufficient to effect the conversion of all outstanding Preferred Stock; and if at any time the number of authorized but unissued Common Shares shall not be sufficient to effect the conversion of all then outstanding shares of the Preferred Stock, the Corporation shall take such corporate action as may be necessary to increase its authorized but unissued Common Shares to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to its Certificate of Incorporation. Before taking any action which would cause an adjustment reducing any Conversion Price (or IPO Conversion Price, if applicable) below the then par value of the Common Shares issuable upon conversion of Preferred Stock, the Corporation will take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and nonassessable Common Shares at such adjusted Conversion Price (or IPO Conversion Price, if applicable).

(ii) All shares of Preferred Stock which shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares, including the rights, if any, to receive notices and to vote, shall immediately cease and terminate as of the Voluntary Conversion Date, except only the right of the holders thereof to receive Common Shares in exchange therefor.

(iii) The Corporation shall pay any and all issue and other similar taxes that may be payable in respect of any issuance or delivery of Common Shares upon conversion of shares of Preferred Stock pursuant to this Section 4 or Section 5. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer

involved in the issuance and delivery of Common Shares in a name other than that in which the shares of Preferred Stock so converted were registered, and no such issuance or delivery shall be made unless and until the person or entity requesting such issuance has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid.

(e) Adjustments to Conversion Price for Diluting Issues.

(i) Special Definitions. For purposes of this Section 4, the following definitions shall apply:

(A) “Option” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.

(B) “Original Issue Date” shall mean the date on which the first share of Series B Preferred Stock was issued.

(C) “Convertible Securities” shall mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock, but excluding Options.

(D) “Additional Shares of Common Stock” shall mean all Common Shares issued (or, pursuant to Section 4(e)(iii) below, deemed to be issued) by the Corporation after the Original Issue Date, other than the following (“Exempted Securities”):

I. Common Shares, Options or Convertible Securities issued as a dividend or distribution on Preferred Stock;

II. Common Shares, Options or Convertible Securities issued by reason of a dividend, stock split, split-up or other distribution on Common Shares that is covered by Sections 4(f), (g), (h) and (i);

III. Common Shares or Options issued to employees or directors of, or consultants to, the Corporation or any of its subsidiaries pursuant to a plan, agreement or arrangement entered into in the ordinary course of the Corporation’s business and approved by the Board of Directors;

IV. Common Shares or Convertible Securities actually issued upon the exercise of Options or Common Shares actually issued upon the conversion or exchange of Convertible Securities, in each case provided such issuance is pursuant to the terms of such Option or Convertible Security; or

V. Common Shares, Options or Convertible Securities issued to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to a debt financing, equipment leasing or real property leasing transaction approved by the Board of Directors.

(ii) No Adjustment of Conversion Price. No adjustment in the Conversion Price (or IPO Conversion Price, if applicable) shall be made as the result of the issuance or deemed issuance of Additional Shares of Common Stock if: (a) the consideration per share (determined pursuant to Section 4(e)(v)) for such Additional Shares of Common Stock issued or deemed to be issued by the Corporation is equal to or greater than the Conversion Price (or IPO Conversion Price, if applicable) in effect immediately prior to the issuance or deemed issuance of such Additional Shares of Common Stock, or (b) prior to such issuance or deemed issuance, the Corporation receives written notice from the Series A Majority Holders, with respect to the Conversion Price for the Series A Preferred Stock, or the Series B Majority Holders, with respect to the Conversion Price (or IPO Conversion Price, if applicable) for the Series B Preferred Stock, in each case, agreeing that no such adjustment shall be made as the result of the issuance or deemed issuance of such Additional Shares of Common Stock.

(iii) Deemed Issue of Additional Shares of Common Stock.

(A) If the Corporation at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities (excluding Options or Convertible Securities which are themselves Exempted Securities) or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of Common Shares (as set forth in the instrument relating thereto, assuming the satisfaction of any conditions to exercisability, convertibility or exchangeability but without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date; provided that, in any such case in which there is deemed to be Additional Shares of Common Stock issued, no further adjustment in any Conversion Price (or IPO Conversion Price, if applicable) shall be made upon the subsequent issue of Convertible Securities or Common Shares upon the exercise of such Options or conversion or exchange of such Convertible Securities.

(B) If the terms of any Option or Convertible Security, the issuance of which resulted in an adjustment to any Conversion Price (or IPO Conversion Price, if applicable) pursuant to the terms of Section 4(e)(iv) below, are revised either automatically pursuant to the provisions contained therein or as a result of an amendment to such terms (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (1) any increase or decrease in the number of Common Shares issuable upon the exercise, conversion or exchange of any such Option or Convertible Security or (2) any increase or decrease in the consideration payable to the Corporation upon such exercise, conversion or exchange, then, effective upon such increase or decrease becoming effective, the Conversion Price (or IPO Conversion Price, if applicable) computed upon the original issue of such Option or Convertible Security (or upon the occurrence of a record date with respect thereto) shall be readjusted to such Conversion Price (or IPO Conversion Price, if applicable) as would have obtained had such revised terms been in effect upon the original date of issuance of such Option or Convertible Security. Notwithstanding the foregoing, no readjustment pursuant to this clause (B) shall have the effect

of increasing any Conversion Price (or IPO Conversion Price, if applicable) to an amount which exceeds the lower of (i) such Conversion Price (or IPO Conversion Price, if applicable) on the original adjustment date, or (ii) such Conversion Price (or IPO Conversion Price, if applicable) that would have resulted from any issuances of Additional Shares of Common Stock between the original adjustment date and such readjustment date.

(C) If the terms of any Option or Convertible Security (excluding Options or Convertible Securities which are themselves Exempted Securities), the issuance of which did not result in an adjustment to any Conversion Price (or IPO Conversion Price, if applicable) pursuant to the terms of Section 4(e)(iv) (either because the consideration per share (determined pursuant to Section 4(e)(iv)) of the Additional Shares of Common Stock subject thereto was equal to or greater than any Conversion Price (or IPO Conversion Price, if applicable) then in effect, or because such Option or Convertible Security was issued before the Original Issue Date), are revised after the Original Issue Date either automatically pursuant to the provisions contained therein or as a result of an amendment to such terms (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (1) any increase or decrease in the number of Common Shares issuable upon the exercise, conversion or exchange of any such Option or Convertible Security or (2) any increase or decrease in the consideration payable to the Corporation upon such exercise, conversion or exchange, then such Option or Convertible Security, as so amended or adjusted, and the Additional Shares of Common Stock subject thereto (determined in the manner provided in Section 4(e)(iii)(A)) shall be deemed to have been issued effective upon such increase or decrease becoming effective.

(D) Upon the expiration or termination of any unexercised Option or unconverted or unexchanged Convertible Security which resulted (either upon its original issuance or upon a revision of its terms) in an adjustment to any Conversion Price (or IPO Conversion Price, if applicable) pursuant to the terms of Section 4(e)(iv), such Conversion Price (or IPO Conversion Price, if applicable) shall be readjusted to such Conversion Price (or IPO Conversion Price, if applicable) as would have obtained had such Option or Convertible Security never been issued.

(E) If the number of Common Shares issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Corporation upon such exercise, conversion and/or exchange, is calculable at the time such Option or Convertible Security is issued or amended but is subject to adjustment based upon subsequent events, any adjustment to any Conversion Price (or IPO Conversion Price, if applicable) provided for in this Section 4(e)(iii) shall be effected at the time of such issuance or amendment based on such number of shares or amount of consideration without regard to any provisions for subsequent adjustments (and any subsequent adjustments shall be treated as provided in clauses (B) and (C) of this Section 4(e)(iii)). If the number of Common Shares issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Corporation upon such exercise, conversion and/or exchange, cannot be calculated at all at the time such Option or Convertible Security is issued or amended, any adjustment to any Conversion Price (or IPO Conversion Price, if applicable) that would result under the terms of this Section 4(e)(iii) at the time of such issuance or amendment shall instead be effected at the time such number of shares and/or amount of consideration is first calculable (even if subject to subsequent adjustments), assuming for purposes of calculating such adjustment to such Conversion Price (or IPO Conversion Price, if applicable) that such issuance or amendment took place at the time such calculation can first be made.

(iv) Adjustment of Conversion Price Upon Issuance of Additional Shares of Common Stock. In the event the Corporation shall at any time after the Original Issue Date issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Section 4(e)(iii)), without consideration or for a consideration per share less than any Conversion Price (or IPO Conversion Price, if applicable) in effect immediately prior to such issue, then such Conversion Price (or IPO Conversion Price, if applicable) shall be reduced, concurrently with such issue, to a price determined in accordance with the following formula:

CP2 = CP1 * (A + B) / (A + C)

For purposes of the foregoing formula, the following definitions shall apply:

CP2 shall mean the new Conversion Price (or IPO Conversion Price, if applicable) in effect immediately after such issue of Additional Shares of Common Stock;

CP1 shall mean the Conversion Price (or IPO Conversion Price, if applicable) in effect immediately prior to such issue of Additional Shares of Common Stock;

“A” shall mean the number of Common Shares outstanding immediately prior to such issue of Additional Shares of Common Stock;

“B” shall mean the number of Common Shares that would have been issued if such Additional Shares of Common Stock had been issued at a price per share equal to CPI (determined by dividing the aggregate consideration received by the Corporation in respect of such issue by CP1); and

“C” shall mean the number of such Additional Shares of Common Stock issued in such transaction.

(v) Determination of Consideration. For purposes of this Section 4(e), the consideration received by the Corporation for the issue of any Additional Shares of Common Stock shall be computed as follows:

(A) Cash and Property: Such consideration shall:

I. insofar as it consists of cash, be computed at the aggregate amount of cash received by the Corporation, excluding amounts paid or payable for accrued interest;

II. insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as reasonably determined in good faith by the Board of Directors (including without limitation at least one (1) Series B Director and one (1) Series A Director); provided that any such property consisting of securities shall be valued in accordance with Subsection 2(c)(iv); and

III. in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Corporation for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (I) and (II) above, as reasonably determined in good faith by the Board of Directors (including without limitation at least one (1) Series B Director and one (1) Series A Director).

(B) Options and Convertible Securities. The consideration per share received by the Corporation for Additional Shares of Common Stock deemed to have been issued pursuant to Subsection 4(e)(iii), relating to Options and Convertible Securities, shall be determined by dividing:

I. the total amount, if any, received or receivable by the Corporation as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by

II. the maximum number of Common Shares (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities.

(vi) Multiple Closing Dates. In the event the Corporation shall issue on more than one date Additional Shares of Common Stock that are a part of one transaction or a series of related transactions and that would result in an adjustment to any Conversion Price (or IPO Conversion Price, if applicable) pursuant to the terms of Section 4(e)(iv) above, then, upon the final such issuance, such Conversion Price (or IPO Conversion Price, if applicable) shall be readjusted to give effect to all such issuances as if they occurred on the date of the first such issuance (and without giving effect to any additional adjustments as a result of any subsequent issuances within such period).

(f) Adjustment for Stock Splits and Combinations. If the Corporation shall at any time or from time to time after the Original Issue Date effect a subdivision of the outstanding Common Stock any Conversion Price (or IPO Conversion Price, if applicable) in effect immediately before that subdivision shall be proportionately decreased so that the number of Common Shares issuable on conversion of the Preferred Stock shall be increased proportionately. If the Corporation shall at any time or from time to time after the Original Issue Date combine the outstanding Common Shares any Conversion Price (or IPO Conversion Price,

if applicable) in effect immediately before the combination shall be proportionately increased so that the number of Common Shares issuable on conversion of the Preferred Stock shall be decreased proportionately. Any adjustment under this subsection shall become effective at the close of business on the date the subdivision or combination becomes effective.

(g) Adjustment for Certain Dividends and Distributions. In the event the Corporation at any time or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of Common Holders entitled to receive, a dividend or other distribution payable on the Common Stock in additional Common Shares, then and in each such event any Conversion Price (or IPO Conversion Price, if applicable) in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying such Conversion Price (or IPO Conversion Price, if applicable) then in effect by a fraction:

(1) the numerator of which shall be the total number of Common Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and

(2) the denominator of which shall be the total number of Common Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of Common Shares issuable in payment of such dividend or distribution;

provided, however, that if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Conversion Price (or IPO Conversion Price, if applicable) shall be recomputed accordingly as of the close of business on such record date and thereafter the Conversion Price (or IPO Conversion Price, if applicable) shall be adjusted pursuant to this subsection as of the time of actual payment of such dividends or distributions; and provided, further, however, that no such adjustment shall be made if the holders of such series of Preferred Stock simultaneously receive (i) a dividend or other distribution of Common Shares in a number equal to the number of Common Shares as they would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of such event or (ii) a dividend or other distribution of shares of Preferred Stock which are convertible, as of the date of such event, into such number of Common Shares as is equal to the number of additional Common Shares being issued with respect to each Common Share in such dividend or distribution.

(h) Adjustments for Other Dividends and Distributions. In the event the Corporation at any time or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of Common Holders entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of Common Shares in respect of outstanding Common Shares) or in other property and the provisions of Section 1 do not apply to such dividend or distribution, then and in each such event the holders of each series of Preferred Stock shall receive, simultaneously with the distribution to the Common Holders, a dividend or other distribution of such securities or other property in an amount equal to the amount of such securities or other property, if any, as they would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of such event.

(i) Adjustment for Merger or Reorganization, etc. Subject to the provisions of Section 2(c), if there shall occur any reorganization, recapitalization, reclassification, consolidation or merger involving the Corporation in which the Common Stock (but not any outstanding series of Preferred Stock) is converted into or exchanged for securities, cash or other property (other than a transaction covered by Section 4(f), (g) or (h)), then, following any such reorganization, recapitalization, reclassification, consolidation or merger, each share of such series of Preferred Stock shall thereafter be convertible in lieu of the Common Stock into which it was convertible prior to such event into the kind and amount of securities, cash or other property which a holder of the number of Common Shares of the Corporation issuable upon conversion of one share of such series of Preferred Stock immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors) shall be made in the application of the provisions in this Section 4 with respect to the rights and interests thereafter of the holders of such series of Preferred Stock, to the end that the provisions set forth in this Section 4 (including provisions with respect to changes in and other adjustments of the applicable Conversion Price or IPO Conversion Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of such series of Preferred Stock.

(j) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of any Conversion Price (or IPO Conversion Price, if applicable) pursuant to this Section 4, the Corporation at its expense shall, as promptly as reasonably practicable but in any event not later than ten (10) days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Preferred Stock a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property into which each series of Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, as promptly as reasonably practicable after the written request at any time of any holder of Preferred Stock (but in any event not later than ten (10) days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (i) each Conversion Price (or IPO Conversion Price, if applicable) then in effect, and (ii) the number of Common Shares and the amount, if any, of other securities, cash or property which then would be received upon the conversion of each series of Preferred Stock.

(k) Notice of Record Date. In the event the Corporation shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon conversion of Preferred Stock) for the purpose of:

(i) entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other right; or

(ii) any capital reorganization of the Corporation, any reclassification of the Common Stock of the Corporation, or any Deemed Liquidation Event; or

(iii) any Liquidation,

then, and in each such case, the Corporation will send or cause to be sent to the holders of Preferred Stock a notice specifying, as the case may be, (i) the record date for such dividend, distribution or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, Liquidation or Deemed Liquidation Event is proposed to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon the conversion of Preferred Stock) shall be entitled to exchange their Common Shares (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, Liquidation or Deemed Liquidation Event, and the amount per share and character of such exchange applicable to the Preferred Stock and the Common Stock. Such notice shall be sent at least ten (10) days prior to the record date or effective date for the event specified in such notice. Any notice required by the provisions hereof to be given to a holder of shares of Preferred Stock shall be deemed sent to such holder if deposited in the United States mail, postage prepaid, and addressed to such holder at his, her or its address appearing on the books of the Corporation.

(l) IPO Conversion Price. The IPO Conversion Price applicable to the Series B Preferred Stock and Series B-1 Preferred Stock shall be established in the event the Corporation offers stock to the public in its initial underwritten public offering pursuant to the Securities Act (an “IPO”). If a proposed IPO is offered at a price (as reflected on the cover of the final prospectus filed with the Securities and Exchange Commission in connection with the IPO as the price being offered to the public) per Common Share (the “IPO Price”) that would result in (i) the product of (A) the IPO Price multiplied by (B) the number of Common Shares issuable upon conversion of one (1) share of Series B Preferred Stock or Series B-1 Preferred Stock, as the case may be, at the rate of conversion then in effect (and assuming no application of this Section 4(l)) (such product, the “Converted IPO Price”) being less than the Liquidation Preference for the Series B Preferred Stock or Series B-1 Preferred Stock, as applicable, then (ii) immediately prior to the consummation of the IPO (and in any event prior to any mandatory or voluntary conversion of Series B Preferred Stock or Series B-1 Preferred Stock in connection with such IPO pursuant to this Section 4 or Section 5), the “IPO Conversion Price” applicable to the Series B Preferred Stock or Series B-1 Preferred Stock, as the case may be, shall equal the product of (A) the Conversion Price then in effect with respect to a share of Series B Preferred Stock or Series B-1 Preferred Stock, as applicable, multiplied by (B) a fraction equal to the Converted IPO Price divided by the Liquidation Preference for the Series B Preferred Stock or Series B-1 Preferred Stock, as applicable, at such time. Notwithstanding the foregoing, in the event that the Converted IPO Price is equal to or greater than the Liquidation Preference for the Series B Preferred Stock or the Series B-1 Preferred Stock, as applicable, at such time, the IPO Conversion Price applicable to such series shall be established to equal the Conversion Price then in effect for such series. After the establishment of the IPO Conversion Price, the IPO Conversion Price shall be subject to additional adjustment pursuant to this Section 4. For avoidance of doubt, the Series A Preferred Stock is not entitled to any adjustment of its conversion rate in connection with an IPO pursuant to this Section 4(l).

(m) Waiver of Adjustment to Conversion Price. Notwithstanding anything herein to the contrary, any downward adjustment of the Conversion Price (or IPO Conversion Price, if applicable) of any series of Preferred Stock may be waived, either prospectively or retroactively and either generally or in a particular instance, by the vote or written consent of the holders of at least a majority of the then outstanding shares of such series of Preferred Stock (voting as a separate class). Any such waiver shall bind all future holders of shares of such series of Preferred Stock.

5. Mandatory Conversion.

(a) Subject to Section 5(b), upon the closing of the sale of Common Shares to the public in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of not less than seventy-five million dollars ($75,000,000) after deducting underwriter’s commissions and expenses (a “Qualified IPO”), (A) all outstanding shares of Preferred Stock shall automatically be converted into Common Shares, at the then effective conversion rate or IPO Conversion Rate (as determined pursuant to Section 4 above), as applicable, and (B) such shares may not be reissued by the Corporation as shares of such series; provided further, that upon the affirmative consent or vote of the (A) Series A Majority Holders or (B) Series B Majority Holders, as applicable then, in each such case, (1) all outstanding shares of such applicable series of Preferred Stock shall automatically be converted into Common Shares, at the then effective conversion rate or IPO Conversion Rate (as determined pursuant to Section 4 above) , as applicable, and (2) such shares may not be reissued by the Corporation as shares of such series (such date of conversion pursuant to this Section 5(a), a “Mandatory Conversion Date”).

(b) All holders of record of shares of Preferred Stock shall be given written notice of a Mandatory Conversion Date and the place designated for mandatory conversion of such shares of Preferred Stock pursuant to this Section 5, as applicable. Such notice need not be given in advance of the occurrence of a Mandatory Conversion Date. Such notice shall be sent by first class or registered mail, postage prepaid, to each record holder of Preferred Stock. Upon receipt of such notice, each holder of shares of Preferred Stock for which mandatory conversion had been triggered pursuant to this Section 5 shall surrender his, her or its certificate or certificates for all such shares (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation at the place designated in such notice, and shall thereafter receive certificates for the number of Common Shares to which such holder is entitled pursuant to this Section 5. On a Mandatory Conversion Date, all outstanding shares of Preferred Stock for which mandatory conversion had been triggered pursuant to this Section 5 shall be deemed to have been converted into Common Shares, which shall be deemed to be outstanding of record, and all rights with respect to such Preferred Stock so converted, including the rights, if any, to receive notices and vote (other than as a Common Holder), will terminate, except only the rights of the holders thereof, upon surrender of their certificate or certificates therefor, to receive certificates for the number of Common Shares into which such Preferred Stock has been converted. If so required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form satisfactory to the Corporation, duly

executed by the registered holder or by his, her or its attorney duly authorized in writing. As soon as practicable after a Mandatory Conversion Date and the surrender of the certificate or certificates (or lost certificate affidavit and agreement) for Preferred Stock, the Corporation shall cause to be issued and delivered to such holder, a certificate or certificates for the number of full Common Shares issuable on such conversion in accordance with the provisions hereof and cash as provided in Section 4(b) in lieu of any fraction of a Common Share otherwise issuable upon such conversion.

(c) All certificates evidencing shares of Preferred Stock which are required to be surrendered for conversion in accordance with the provisions hereof shall, from and after a Mandatory Conversion Date, be deemed to have been retired and cancelled and the shares of Preferred Stock represented thereby converted into Common Stock for all purposes, notwithstanding the failure of the holder or holders thereof to surrender such certificates on or prior to such date. Such converted Preferred Stock may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Preferred Stock, Series A Preferred Stock, Series B Preferred Stock or Series B-1 Preferred Stock accordingly.

6. Waiver. Any of the rights, powers or preferences of the Series A Holders set forth herein may be waived or defeased by the affirmative consent or vote of the Series A Majority Holders. Any of the rights, powers or preferences of the Series B Holders set forth herein may be waived or defeased by the affirmative consent or vote of the Series B Majority Holders.

Article 5 BOARD OF DIRECTORS

5.1. Number; Election

(a) The number of directors of the Corporation shall be such number as from time to time shall be fixed by, or in the manner provided in, the bylaws of the Corporation. Unless and except to the extent that the bylaws of the Corporation shall otherwise require, the election of directors of the Corporation need not be by written ballot. Except as otherwise provided in this Certificate of Incorporation, each director of the Corporation shall be entitled to one vote per director on all matters voted or acted upon by the Board of Directors.

(b) As long as any shares of Series B Preferred Stock remain outstanding, holders of Series B Preferred Stock, voting as a separate class, shall be entitled to elect two directors (the “Series B Directors”). As long as any shares of Series A Preferred Stock remain outstanding, Series A Holders, voting as a separate class, shall also be entitled to elect two directors (the “Series A Directors,” and together with the Series B Directors, the “Preferred Directors”). The Common Holders and the holders of Preferred Stock, voting together as a single class shall be entitled to elect all other directors of the Corporation. Notwithstanding the provisions of Section 223(a)(1) and 223(a)(2) of the DGCL, any vacancy, including newly created directorships resulting from any increase in the authorized number of directors or amendment of this Certificate of Incorporation, and vacancies created by removal or resignation of a director, may be filled by a majority of the directors then in office, though less than a

quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced; provided, however, that where such vacancy occurs among the directors elected by the holders of a class or series of stock, the holders of shares of such class or series may override the Board of Director’s action to fill such vacancy by (i) voting for their own designee to fill such vacancy at a meeting of this Corporation’s stockholders or (ii) written consent, if the consenting stockholders hold a sufficient number of shares to elect their designee at a meeting of the stockholders. Any director may be removed during his or her term of office, either with or without cause, by, and only by, the affirmative vote of the holders of the shares of the class or series of stock entitled to elect such director or directors, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders, and any vacancy thereby created may be filled by a majority vote of the holders of that class or series of stock represented at the meeting or pursuant to written consent.

5.2. Management of Business and Affairs of the Corporation; Location of Stockholders Meetings and Books and Records

The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws of the Corporation may provide.

The books of the Corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws of the Corporation.

5.3. Indemnification and Limitation of Liability

To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which DGCL permits the Corporation to provide indemnification) through bylaw provisions, agreements with such directors, officers, agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the DGCL, subject only to limits created by applicable DGCL (statutory or non-statutory), with respect to actions for breach of duty to the Corporation, its stockholders, and others.

No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director; provided that this provision shall not eliminate or limit the liability of a director (a) for any breach of the director’s duty of loyalty to the Corporation or its stockholders; (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (c) under Section 174 of the DGCL; or (d) for any transaction from which the director derived an improper personal benefit. Any amendment, repeal or modification of this Article 5.3 shall be prospective only and shall not adversely affect any right or protection of or any limitation of the liability of, or increase the liability of, a director, officer or agent of the Corporation existing at, or arising out of any acts or omissions of such director, officer or agent or other facts or incidents occurring prior to, the effective date of such amendment, repeal or modification.

Article 6 AMENDMENT OF BYLAWS

In furtherance and not in limitation of the powers conferred by the DGCL, the Board of Directors of the Corporation is expressly authorized and empowered to adopt, amend, alter, change and repeal the bylaws of the Corporation.

Article 7 RESERVATION OF RIGHT TO AMEND CERTIFICATE OF INCORPORATION

The Corporation reserves the right at any time, and from time to time, to amend, alter, change, or repeal any provision contained in this Certificate of Incorporation, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed by law; and all rights, preferences, and privileges of any nature conferred upon stockholders, directors, or any other persons by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the rights reserved in this Article 7.

Article 8 EXEMPTED PERSONS

To the fullest extent permitted by the DGCL, the Corporation acknowledges that: (i) each stockholder (subject to the proviso below) and each Preferred Director (each, an “Exempted Person”) shall have no duty (contractual or otherwise) not to, directly or indirectly, engage in the same or similar business activities or lines of business as the Corporation or any of its subsidiaries, including those deemed to be competing with the Corporation or any of its subsidiaries; and (ii) in the event that any Exempted Person acquires knowledge of a potential transaction or matter that may be a corporate opportunity for the Corporation, then such Exempted Person shall have no duty (contractual or otherwise) to communicate or present such corporate opportunity to the Corporation or any of its subsidiaries, as the case may be, and shall not be liable to the Corporation or its affiliates or stockholders for breach of any duty (contractual or otherwise) by reason of the fact that such Exempted Person, directly or indirectly, pursues or acquires such opportunity for itself, directs such opportunity to another person, or does not present such opportunity to the Corporation or any of its subsidiaries; provided, however, that this Article 8 shall not apply to Backbone Partners, LLC or stockholders who are also officers or employees of the Corporation or any subsidiary of the Corporation (other than officers affiliated with any Preferred Director) or who are permitted transferees of any such person.

CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION

OF

ALARM.COM HOLDINGS, INC.

Alarm.com Holdings, Inc. a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), does hereby certify as follows:

1. The name of the Corporation is Alarm.com Holdings, Inc. The date of filing of the Corporation’s original Certificate of Incorporation in the Office of the Secretary of State of the State of Delaware was January 27, 2009.

2. The Certificate of Incorporation of the Corporation is hereby amended by deleting Section 4.1 of Article 4 thereof in its entirety and by substituting in lieu of said Section the following new Section 4.1:

The total number of shares of all classes of stock which the Corporation shall have authority to issue is One Hundred Six Million Nine Hundred Ninety-One Thousand Ninety (106,991,090). One Hundred Million (100,000,000) shares shall be Common Stock, each having a par value of one cent ($0.01) (“Common Stock”) and Six Million Nine Hundred Ninety-One Thousand Ninety (6,991,090) shares shall be Preferred Stock, each having a par value of one-tenth of one cent ($0.001) (“Preferred Stock”), of which Three Million Five Hundred Eleven Thousand Seven Hundred and Twenty-Five (3,511,725) shares shall be designated “Series A Preferred Stock,” One Million Eight Hundred Nine Thousand Six Hundred and Eighty-Five (1,809,685) shares shall be designated “Series B Preferred Stock,” and One Million Six Hundred Sixty-Nine Thousand Six Hundred and Eighty (1,669,680) shares shall be designated “Series B-1 Preferred Stock.”

Upon the filing and effectiveness (the “Effective Time”) pursuant to the General Corporation Law of the State of Delaware of this Certificate of Amendment to the Certificate of Incorporation of the Corporation, each share of Common Stock issued and outstanding immediately prior to the Effective Time shall, automatically and without any action on the part of the respective holders thereof, be converted into nine (9) shares of Common Stock (the “Stock Split”). No fractional shares shall be issued in connection with the Stock Split. Each certificate that immediately prior to the Effective Time represented shares of Common Stock (“Old Certificates”), shall thereafter represent that number of shares of Common Stock into which the shares of Common Stock represented by the Old Certificate shall have been converted, subject to the elimination of fractional share interests as described above.”

3. The Certificate of Incorporation of the Corporation is hereby amended by deleting Section 4.2.4(a) of Article 4 thereof in its entirety and by substituting in lieu of said Section the following new Section 4.2.4(a):

(a) Right to Convert. Each share of Preferred Stock shall be convertible, at the option of the holder thereof (the “Electing Stockholder” and such option, the “Conversion Option”), at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and nonassessable Common Shares (i) at, in connection with, or following an IPO (as defined below), with respect to a share of Series B Preferred Stock or Series B-1 Preferred Stock, as the case may be, as is determined by dividing the Original Issue Price of the Series B Preferred Stock or Series B-1 Preferred Stock, as applicable, by the IPO Conversion Price, determined as hereafter provided, in effect on the date the certificate is surrendered for conversion (such conversion rate is referred to herein as the “IPO Conversion Rate”) and (ii) with respect to a share of Series A Preferred Stock, or (to the extent that clause (i) is not applicable) with respect to a share of Series B Preferred Stock or Series B-1 Preferred Stock, as is determined by dividing the Original Issue Price by the Conversion Price (as hereinafter defined) in effect at the time of conversion. Such conversion shall be effective as of the close of business on the date of receipt by the Corporation of a conversion election notice (a “Conversion Notice”) from the Electing Stockholders (the “Voluntary Conversion Date”) (unless the Conversion Notice describes the occurrence of an event upon which the exercise of the Conversion Option is contingent, in which case, the Voluntary Conversion Date shall be the date of such event). The Common Shares issuable upon conversion of the Preferred Stock covered by the Conversion Notice shall be deemed to be outstanding of record as of the Voluntary Conversion Date. That number of shares of Preferred Stock elected to be converted by the Electing Stockholders shall be referred to as the “Conversion Number.” The “Conversion Price” shall initially mean (i) in the case of the Series B Preferred Stock, $8.38222222 per share, (ii) in the case of the Series B-1 Preferred Stock, $8.38222222 per share, and (iii) in the case of the Series A Preferred Stock, $1.11111111 per share. Such initial Conversion Price (or IPO Conversion Price, if applicable), and the rate at which shares of Preferred Stock may be converted into Common Shares, shall be subject to adjustment as provided below. The Conversion Prices set forth above reflect, and include the effect of, the Stock Split,

4. This Certificate of Amendment of the Certificate of Incorporation of the Corporation has been duly adopted in accordance with the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware.

5. All other provisions of the Certificate of Incorporation shall remain in full force and effect

Signed on June 12, 2013

By:	/s/ Stephen Trundle
Name:	Stephen Trundle
Title:	Chief Executive Officer

EX-3

Exhibit 3.3

ALARM.COM HOLDINGS, INC.

AMENDED AND RESTATED BYLAWS

Adopted as of March 6, 2009

Amended and Restated as of July 11, 2012

TABLE OF CONTENTS

			Page
1.	OFFICES			1
	1.1	Registered Office		1
	1.2	Other Offices		1
2.	MEETINGS OF STOCKHOLDERS			1
	2.1	Place of Meetings		1
	2.2	Annual Meetings		1
	2.3	Special Meetings		1
	2.4	Notice of Meetings		1
	2.5	Waivers of Notice		2
	2.6	Business at Special Meetings		2
	2.7	List of Stockholders		2
	2.8	Quorum at Meetings		2
	2.9	Voting and Proxies		3
	2.10	Required Vote		3
	2.11	Action Without a Meeting		4
3.	DIRECTORS			4
	3.1	Powers		4
	3.2	Number and Election		5
	3.3	Nomination of Directors		5
	3.4	Vacancies		5
	3.5	Meetings		6
	3.6	Quorum and Vote at Meetings		7
	3.7	Committees of Directors		7
	3.8	Compensation of Directors		8
4.	CHAIRPERSON AND OFFICERS			8
	4.1	Positions		8
	4.2	Chairperson		8
	4.3	President		8
	4.4	Vice President		9
	4.5	Secretary		9

-i-

TABLE OF CONTENTS

(continued)

			Page
	4.6	Assistant Secretary		9
	4.7	Treasurer		9
	4.8	Assistant Treasurer		9
	4.9	Term of Office		10
	4.10	Compensation		10
	4.11	Fidelity Bonds		10
5.	CAPITAL STOCK			10
	5.1	Certificates of Stock; Uncertificated Shares		10
	5.2	Lost Certificates		10
	5.3	Record Date		11
	5.4	Stockholders of Record		12
6.	INDEMNIFICATION; INSURANCE			12
	6.1	Authorization of Indemnification		12
	6.2	Right of Claimant to Bring Action Against the Corporation		13
	6.3	Non-exclusivity		13
	6.4	Survival of Indemnification		13
	6.5	Insurance		13
7.	GENERAL PROVISIONS			14
	7.1	Inspection of Books and Records		14
	7.2	Dividends		14
	7.3	Reserves		14
	7.4	Execution of Instruments		14
	7.5	Fiscal Year		14
	7.6	Seal		14

-ii-

AMENDED AND RESTATED BYLAWS

OF

ALARM.COM HOLDINGS, INC.

1. OFFICES

1.1 Registered Office

The initial registered office of Alarm.com Holdings, Inc. (the “Corporation”) shall be in Wilmington, Delaware, and the initial registered agent in charge thereof shall be The Corporation Trust Company.

1.2 Other Offices

The Corporation may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine or as may be necessary or useful in connection with the business of the Corporation.

2. MEETINGS OF STOCKHOLDERS

2.1 Place of Meetings

All meetings of the stockholders shall be held at such place as may be fixed from time to time by the Board of Directors, the Chairperson or the President. Notwithstanding the foregoing, the Board of Directors may determine that the meeting shall not be held at any place, but may instead be held by means of remote communication.

2.2 Annual Meetings

The Corporation shall hold annual meetings of stockholders, commencing with the year 2009, on such date and at such time as shall be designated from time to time by the Board of Directors, the Chairperson or the President, at which stockholders shall elect a Board of Directors and transact such other business as may properly be brought before the meeting.

2.3 Special Meetings

Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the Board of Directors.

2.4 Notice of Meetings

Notice of any meeting of stockholders, stating the place, if any, date and hour of the meeting, the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, and the purpose or purposes for which the meeting is called, shall be given to each stockholder entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting (except to the extent that such notice is waived as provided in these Bylaws). Such notice shall be given in accordance with, and shall be deemed effective as set forth in, Sections 222 and 232 (or any successor section or sections) of the General Corporation Law of the State of Delaware (the “Delaware General Corporation Law”).

2.5 Waivers of Notice

Whenever the giving of any notice of a stockholders meeting is required by statute, the Certificate of Incorporation or these Bylaws, a written waiver thereof signed by the person or persons entitled to said notice, or a waiver thereof by electronic transmission by the person entitled to said notice, delivered to the Corporation, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance of a stockholder at a meeting shall constitute a waiver of notice (1) of such meeting, except when the stockholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting, and (2) (if it is a special meeting) of consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the stockholder objects to considering the matter at the meeting.

2.6 Business at Special Meetings

Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

2.7 List of Stockholders

After the record date for a meeting of stockholders has been fixed, at least ten days before such meeting, the officer who has charge of the stock ledger of the Corporation shall make a list of all stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of each stockholder (but not the electronic mail address or other electronic contact information, unless the Board of Directors so directs) and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting for a period of at least ten days prior to the meeting: (1) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (2) during ordinary business hours, at the principal place of business of the Corporation. If the meeting is to be held at a place, then such list shall also, for the duration of the meeting, be produced and kept open to the examination of any stockholder who is present at the time and place of the meeting. If the meeting is to be held solely by means of remote communication, then such list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.

2.8 Quorum at Meetings

Stockholders may take action on a matter at a meeting only if a quorum exists with respect to that matter. Except as otherwise provided by statute or by the Certificate of Incorporation, the holders of a majority of the shares entitled to vote at the meeting, and who are present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. Where a separate vote by a class or series or classes

2.

or series is required, a majority of the outstanding shares of such class or series or classes or series, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter. Once a share is represented for any purpose at a meeting (other than (1) solely to object to holding the meeting or transacting business at the meeting, or (2) (if it is a special meeting) to object to the consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice), it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for the adjourned meeting. The holders of a majority of the voting shares represented at a meeting, whether or not a quorum is present, may adjourn such meeting from time to time.

2.9 Voting and Proxies

Unless otherwise provided in the Delaware General Corporation Law or in the Corporation’s Certificate of Incorporation, and subject to the other provisions of these Bylaws, each stockholder shall be entitled to one vote on each matter, in person or by proxy, for each share of the Corporation’s capital stock that has voting power and that is held by such stockholder. No proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed appointment of proxy shall be irrevocable if the appointment form states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. If authorized by the Board of Directors, and subject to such guidelines as the Board of Directors may adopt, stockholders and proxyholders not physically present at a meeting of stockholders may, by means of remote communication, participate in a meeting of stockholders and be deemed present in person and vote at such meeting whether such meeting is held at a designated place or solely by means of remote communication, provided that (1) the Corporation implements reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder, (2) the Corporation implements reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (3) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action is maintained by the Corporation.

2.10 Required Vote

When a quorum is present at any meeting of stockholders, all matters shall be determined, adopted and approved by the affirmative vote (which need not be by ballot) of the holders of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote with respect to the matter, unless the proposed action is one upon which, by express provision of statutes or of the Certificate of Incorporation, a different vote is specified and required, in which case such express provision shall govern and control with respect to that vote on that matter. If the Certificate of Incorporation provides for more or less than one vote for any share, on any matter, every reference in these Bylaws to a majority or other proportion of stock, voting stock or shares shall refer to a majority or other proportion of the votes of such stock, voting stock or shares. Where a separate vote by a class or classes or a series or series is required, the affirmative vote of the holders of a majority of the shares of such class or classes or a series or series present in person or represented by proxy at the meeting shall be the act of such

3.

class or series. Notwithstanding the foregoing, except as otherwise provided in the Certificate of Incorporation and that certain Stockholders’ Agreement of the Corporation dated as of July 11, 2012, as amended from time to time, among the Corporation and certain of its stockholders (the “Stockholders’ Agreement”), directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors.

2.11 Action Without a Meeting

Any action required or permitted to be taken at a stockholders’ meeting may be taken without a meeting, without prior notice and without a vote, if the action is taken by persons who would be entitled to vote at a meeting with respect to such action and who hold shares having voting power equal to not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all shares entitled to vote with respect to such action were present and voted. The action must be evidenced by one or more written consents describing the action taken, signed by the stockholders entitled to take action without a meeting, and delivered to the Corporation in the manner prescribed by the Delaware General Corporation Law for inclusion in the minute book. No consent shall be effective to take the corporate action specified unless the number of consents required to take such action are delivered to the Corporation within sixty days of the delivery of the earliest-dated consent. A telegram, cablegram or other electronic transmission consenting to such action and transmitted by a stockholder or proxyholder, or by a person or persons authorized to act for a stockholder or proxyholder, shall be deemed to be written, signed and dated for the purposes of this Section 2.11, provided that any such telegram, cablegram or other electronic transmission sets forth or is delivered with information from which the Corporation can determine (1) that the telegram, cablegram or other electronic transmission was transmitted by the stockholder or proxyholder or by a person or persons authorized to act for the stockholder or proxyholder and (2) the date on which such stockholder or proxyholder or authorized person or persons transmitted such telegram, cablegram or electronic transmission. The date on which such telegram, cablegram or electronic transmission is transmitted shall be deemed to be the date on which such consent was signed. No consent given by telegram, cablegram or other electronic transmission shall be deemed to have been delivered until such consent is delivered to the Corporation in accordance with Section 228(d)(1) of the Delaware General Corporation Law. Written notice of the action taken shall be given in accordance with the Delaware General Corporation Law to all stockholders who do not participate in taking the action who would have been entitled to notice if such action had been taken at a meeting having a record date on the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation.

3. DIRECTORS

3.1 Powers

The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things, subject to any limitation set forth in the Certificate of Incorporation or as otherwise may be provided in the Delaware General Corporation Law.

4.

3.2 Number and Election

The number of directors which shall constitute the whole board shall not be fewer than two members nor more than nine and shall be that number of members that the Board of Directors determines shall be serving on the Board of Directors from time to time. Until such time as the Board of Directors adopts resolutions changing the number of directors in accordance with the provisions of the Certificate of Incorporation and the Stockholders’ Agreement, the number of directors shall be seven (7).

3.3 Nomination of Directors

The Board of Directors shall nominate candidates to stand for election as directors as so provided in the Stockholders’ Agreement and other candidates also may be nominated by any Corporation stockholder, provided such other nomination(s) are submitted in writing to the Secretary of the Corporation no later than ninety days prior to the meeting of stockholders at which such directors are to be elected, together with the identity of the nominator and the number of shares of the Corporation’s stock owned, directly or indirectly, by the nominator, or by any such Corporation stockholder or stockholders pursuant to rights granted to such stockholder or stockholders in the Certificate of Incorporation or the Stockholders’ Agreement. The directors shall be elected at the annual meeting of the stockholders, except as provided in Section 3.4 hereof, and each director elected shall hold office until such director’s successor is elected and qualified or until the director’s earlier death, resignation or removal. Directors need not be stockholders.

3.4 Vacancies

Vacancies and newly created directorships resulting from any increase in the authorized number of directors may only be filled in accordance with the Certificate of Incorporation and the Stockholders’ Agreement. Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the Certificate of Incorporation or the Stockholders’ Agreement, vacancies and newly created directorships of such class or classes or series may only be filled by the requisite vote of such class or classes of stock or series thereof, in each case in accordance with the Certificate of Incorporation and the Stockholders’ Agreement. In the event that one or more directors resign from the Board of Directors, effective at a future date, the holders of any class or classes of stock or series thereof that are entitled to elect such resigning director or directors in accordance with the provisions of the Certificate of Incorporation or the Stockholders’ Agreement may elect a replacement for such director or directors in accordance with the provisions of the Certificate of Incorporation or the Stockholders’ Agreement, with such election or elections to take effect when such resignation or resignations shall become effective. Each director so chosen pursuant to this Section 3.4 shall hold office until the next election of directors of the class to which such director was appointed, and until such director’s successor is elected and qualified, or until the director’s earlier death, resignation or removal.

5.

3.5 Meetings

3.5.1 Regular Meetings

Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors; provided, however, that no action may be taken at any regular meeting of the Board of Directors unless (i) such action was included in an agenda of actions scheduled to be taken at the meeting, which shall be provided to each director not less than one day prior to such meeting, if delivered either personally or by telephone, express delivery service (so that the scheduled delivery date of the notice is at least one day in advance of the meeting), telegram, facsimile transmission, electronic mail (effective when directed to an electronic mail address of the director), or other electronic transmission, as defined in Section 232(c) (or any successor section) of the Delaware General Corporation Law (effective when received by the director), and five days prior to such meeting if by mail (effective upon deposit of such notice in the mail); or (ii) all of the members of the Board of Directors are present at such meeting at the time such action is taken and such action receives unanimous approval on behalf of all such members.

3.5.2 Special Meetings

Special meetings of the Board of Directors may be called by the Chairperson or President or at the request of at least one-third of the number of directors constituting the whole Board of Directors, including the Series A Director and Series B Director (as such terms are defined in the Stockholders’ Agreement), on one day’s notice to each director, either personally or by telephone, express delivery service (so that the scheduled delivery date of the notice is at least one day in advance of the meeting), telegram, facsimile transmission, electronic mail (effective when directed to an electronic mail address of the director), or other electronic transmission, as defined in Section 232(c) (or any successor section) of the Delaware General Corporation Law (effective when received by the director), and on five days’ notice by mail (effective upon deposit of such notice in the mail). However, 110 action may be taken at any special meeting of the Board of Directors unless (i) such action was included in an agenda of actions scheduled to be taken at the meeting, which shall be provided to each director with the notice of such meeting in accordance with this Section 3.5.2; or (ii) all of the members of the Board of Directors are present at such meeting at the time such action is taken and such action receives unanimous approval on behalf of all such members.

3.5.3 Telephone Meetings

Members of the Board of Directors may participate in a meeting of the board by any communication by means of which all participating directors can simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.

3.5.4 Action Without Meeting

Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if the action is taken by all members of the Board of Directors. The action must be evidenced by one or more consents in writing or by electronic transmission describing the action taken, signed by each director, and delivered to the Corporation for inclusion in the minute book.

6.

3.5.5 Waiver of Notice of Meeting

A director may waive any notice required by statute, the Certificate of Incorporation or these Bylaws before or after the date and time stated in the notice. Except as set forth below, the waiver must be in writing, signed by the director entitled to the notice, or made by electronic transmission by the director entitled to the notice, and delivered to the Corporation for inclusion in the minute book. Notwithstanding the foregoing, a director’s attendance at or participation in a meeting waives any required notice to the director of the meeting unless the director at the beginning of the meeting objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting; provided, however, that no action may be taken at any meeting of the Board of Directors unless (i) such action was included in an agenda of actions scheduled to be taken at the meeting, which shall be provided to each director in accordance with the terms of Sections 3.5.1 or 3.5.2, as applicable; or (ii) all of the members of the Board of Directors are present g such meeting at the time such action is taken and such action receives unanimous approval on behalf of all such members.

3.6 Quorum and Vote at Meetings

At all meetings of the board, a quorum of the Board of Directors consists of a majority of the total number of directors prescribed pursuant to Section 3.2 of these Bylaws. The vote of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the Certificate of Incorporation or by these Bylaws.

3.7 Committees of Directors

The Board of Directors may designate one or more committees, each committee to consist of one or more directors and to be comprised in accordance with any applicable terms of the Stockholders’ Agreement. Subject to the rights of any stockholder or stockholders under the Stockholders’ Agreement, the Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the Delaware General Corporation Law to be submitted to stockholders for approval or adopting, amending or repealing any bylaw of the Corporation; and unless the resolution designating the committee, these bylaws or the Certificate of Incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend, to authorize the issuance of stock, or to adopt a certificate of ownership and merger pursuant to Section 253 of the Delaware General Corporation Law. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. Each committee shall keep regular minutes of its meetings and report the

7.

same to the Board of Directors, when required. Unless otherwise specified in the Board of Directors resolution appointing the Committee, all provisions of the Delaware General Corporation Law and these Bylaws relating to meetings, action without meetings, notice (and waiver thereof), and quorum and voting requirements of the Board of Directors apply, as well, to such committees and their members. Unless otherwise provided in the Certificate of Incorporation, these Bylaws, or the resolution of the Board of Directors designating the committee, a committee may create one or more subcommittees, which shall be considered a committee of the Board for purposes of these Bylaws and the Stockholders’ Agreement, with each subcommittee to consist of members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.

3.8 Compensation of Directors

The Board of Directors shall have the authority to fix the compensation of directors. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

4. CHAIRPERSON AND OFFICERS

4.1 Positions

The officers of the Corporation shall be a President, a Secretary and a Treasurer, and such other officers as the Board of Directors (or an officer authorized by the Board of Directors) from time to time may appoint, including one or more Vice Chairmen, Executive Vice Presidents, Vice Presidents, Assistant Secretaries and Assistant Treasurers. Each such officer shall exercise such powers and perform such duties as shall be set forth below and such other powers and duties as from time to time may be specified by the Board of Directors or by any officer(s) authorized by the Board of Directors to prescribe the duties of such other officers. Any number of offices may be held by the same person. As set forth below, each of the President and/or any Vice President may execute bonds, mortgages and other contracts under the seal of the Corporation, if required, except where required or permitted by law to be otherwise executed and except where the execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation.

4.2 Chairperson

The Chairperson, if one is chosen, shall be chosen from among the members of the Board of Directors and shall (when present) preside over all meetings of the Board of Directors and stockholders. The Chairperson shall perform such additional duties and shall have such additional powers as may be assigned or granted to the Chairperson by the Board of Directors.

4.3 President

The President shall be the chief executive officer of the Corporation and shall have full responsibility and authority for management of the operations of the Corporation, subject to the authority of the Board of Directors. The President may execute bonds, mortgages and other contracts, under the seal of the Corporation, if required, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation.

8.

4.4 Vice President

In the absence of the President or in the event of the President’s inability or refusal to act, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated, or in the absence of any designation, then in the order of their election) shall perform the duties of the President, and when so acting shall have all the powers of, and be subject to all the restrictions upon, the President.

4.5 Secretary

The Secretary shall have responsibility for preparation of minutes of meetings of the Board of Directors and of the stockholders and for authenticating records of the Corporation. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors. The Secretary or an Assistant Secretary may also attest all instruments signed by any other officer of the Corporation.

4.6 Assistant Secretary

The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there shall have been no such determination, then in the order of their election), shall, in the absence of the Secretary or in the event of the Secretary’s inability or refusal to act, perform the duties and exercise the powers of the Secretary.

4.7 Treasurer

The Treasurer shall be the chief financial officer of the Corporation and shall have responsibility for the custody of the corporate funds and securities and shall see to it that full and accurate accounts of receipts and disbursements are kept in books belonging to the Corporation. The Treasurer shall render to the Chairperson, the President, and the Board of Directors, upon request, an account of all financial transactions and of the financial condition of the Corporation.

4.8 Assistant Treasurer

The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors (or if there shall have been no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of the Treasurer’s inability or refusal to act, perform the duties and exercise the powers of the Treasurer.

9.

4.9 Term of Office

The officers of the Corporation shall hold office until their successors are chosen and qualify or until their earlier resignation or removal. Any officer may resign at any time upon written notice to the Corporation. Any officer elected or appointed by the Board of Directors may be removed at any time, with or without cause, by the affirmative vote of a majority of the Board of Directors.

4.10 Compensation

The compensation of officers of the Corporation shall be fixed by the Board of Directors or by any officer(s) authorized by the Board of Directors to prescribe the compensation of such other officers.

4.11 Fidelity Bonds

The Corporation may secure the fidelity of any or all of its officers or agents by bond or otherwise.

5. CAPITAL STOCK

5.1 Certificates of Stock; Uncertificated Shares

The shares of the Corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution that some or all of any or all classes or series of the Corporation’s stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Every holder of stock represented by certificates shall be entitled to have a certificate (representing the number of shares registered in certificate form) signed in the name of the Corporation by the Chairperson, President or any Vice President, and by the Treasurer, Secretary or any Assistant Treasurer or Assistant Secretary of the Corporation. Any or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar whose signature or facsimile signature appears on a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

5.2 Lost Certificates

The Board of Directors, Chairperson, President or Secretary may direct a new certificate of stock to be issued in place of any certificate theretofore issued by the Corporation and alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming that the certificate of stock has been lost, stolen or destroyed. When authorizing such issuance of a new certificate, the board or any such officer may, as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or such owner’s legal representative, to advertise the same in such manner as the board or such officer shall require and/or to give the Corporation a bond or indemnity, in such sum or on such terms and conditions as the board or such officer may direct, as indemnity against any claim that may be made against the Corporation on account of the certificate alleged to have been lost, stolen or destroyed or on account of the issuance of such new certificate or uncertificated shares.

10.

5.3 Record Date

5.3.1 Actions by Stockholders

In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty days nor less than ten days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, unless the Board of Directors fixes a new record date for the adjourned meeting.

In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by the Delaware General Corporation Law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in the manner prescribed by Section 213(b) of the Delaware General Corporation Law. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by the Delaware General Corporation Law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

5.3.2 Payments

In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

11.

5.4 Stockholders of Record

The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, to receive notifications, to vote as such owner, and to exercise all the rights and powers of an owner. The Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise may be provided by the Delaware General Corporation Law.

6. INDEMNIFICATION; INSURANCE

6.1 Authorization of Indemnification

Each person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether by or in the right of the Corporation or otherwise (a “proceeding”), by mason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, partner (limited or general) or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other enterprise, including service with respect to an employee benefit plan, shall be (and shall be deemed to have a contractual right to be) indemnified and held harmless by the Corporation (and any successor to the Corporation by merger or otherwise) to the fullest extent authorized by, and subject to the conditions and (except as provided herein) procedures set forth in the Delaware General Corporation Law, as the same exists or may hereafter be amended (but any such amendment shall not be deemed to limit or prohibit the rights of indemnification hereunder for past acts or omissions of any such person insofar as such amendment limits or prohibits the indemnification rights that said law permitted the Corporation to provide prior to such amendment), against all expenses, liabilities and losses (including attorneys’ fees, judgments, fines, ERISA taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith; provided, however, that the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person (except for a suit or action pursuant to Section 6.2 hereof) only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. Persons who are not directors or officers of the Corporation and are not so serving at the request of the Corporation may be similarly indemnified in respect of such service to the extent authorized at any time by the Board of Directors of the Corporation. The indemnification conferred in this Section 6.1 also shall include the right to be paid by the Corporation (and such successor) the expenses (including attorneys’ fees) incurred in the defense of or other involvement in any such proceeding in advance of its final disposition; provided, however, that, if and to the extent the Delaware General Corporation Law requires, the payment of such expenses (including attorneys’ fees) incurred by a director or officer in advance of the final disposition of a proceeding shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such director or officer to repay all amounts so paid in advance if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Section 6.1 or otherwise; and provided further, that, such expenses incurred by other employees and agents may be so paid in advance upon such terms and conditions, if any, as the Board of Directors deems appropriate.

12.

6.2 Right of Claimant to Bring Action Against the Corporation

If a claim under Section 6.1 is not paid in full by the Corporation within sixty days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring an action against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such action. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in connection with any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the Delaware General Corporation Law for the Corporation to indemnify the claimant for the amount claimed or is otherwise not entitled to indemnification under Section 6.1, but the burden of proving such defense shall be on the Corporation. The failure of the Corporation (in the manner provided under the Delaware General Corporation Law) to have made a determination prior to or after the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Delaware General Corporation Law shall not be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Unless otherwise specified in an agreement with the claimant, an actual determination by the Corporation (in the manner provided under the Delaware General Corporation Law) after the commencement of such action that the claimant has not met such applicable standard of conduct shall not be a defense to the action, but shall create a presumption that the claimant has not met the applicable standard of conduct.

6.3 Non-exclusivity

The rights to indemnification and advance payment of expenses provided by Section 6.1 hereof shall not be deemed exclusive of any other rights to which those seeking indemnification and advance payment of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office.

6.4 Survival of Indemnification

The indemnification and advance payment of expenses and rights thereto provided by, or granted pursuant to, Section 6.1 hereof shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee, partner or agent and shall inure to the benefit of the personal representatives, heirs, executors and administrators of such person.

6.5 Insurance

The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, partner (limited or general) or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other enterprise, against any liability asserted against such person or incurred by such person in any such capacity, or arising out of such person’s status as such, and related expenses, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of the Delaware General Corporation Law.

13.

7. GENERAL PROVISIONS

7.1 Inspection of Books and Records

Any stockholder, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose, and to make copies or extracts from: (1) the Corporation’s stock ledger, a list of its stockholders, and its other books and records; and (2) other documents as required by law. A proper purpose shall mean a purpose reasonably related to such person’s interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the Corporation at its registered office or at its principal place of business.

7.2 Dividends

The Board of Directors may declare dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation and the laws of the State of Delaware.

7.3 Reserves

The directors of the Corporation may set apart, out of the funds of the Corporation available for dividends, a reserve or reserves for any proper purpose and may abolish any such reserve.

7.4 Execution of Instruments

All checks, drafts or other orders for the payment of money, and promissory notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

7.5 Fiscal Year

The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

7.6 Seal

The corporate seal shall be in such form as the Board of Directors shall approve. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.

14.

EX-4

Exhibit 4.2

AMENDED AND RESTATED

REGISTRATION RIGHTS AGREEMENT

OF

ALARM.COM HOLDINGS, INC.

DATED AS OF Jury 11, 2012

Table of Contents

			Page
1.	DEFINITIONS			2
2.	REGISTRATION RIGHTS			5
	2.1	Demand Registration		5
	2.2	Company Registration		8
	2.3	Obligations of the Company		8
	2.4	Furnish Information		11
	2.5	Expenses of Demand Registration		11
	2.6	Expenses of Company Registration		12
	2.7	Underwriting Requirements		12
	2.8	Delay of Registration		13
	2.9	Indemnification		13
	2.10	Reports Under Exchange Act		15
	2.11	Form S-3 Registration		15
	2.12	Assignment of Registration Rights		18
	2.13	Limitations on Subsequent Registration Rights		18
	2.14	“Market Stand Off” Agreement		19
	2.15	Termination of Registration Rights		19
3.	LEGEND ON SHARE CERTIFICATES			20
4.	MISCELLANEOUS			20
	4.1	Transfers, Successors and Assigns		20
	4.2	Governing Law		20
	4.3	Jurisdiction		20
	4.4	Counterparts: Facsimile		21
	4.5	Titles and Subtitles		21
	4.6	Notices		21
	4.7	Amendments and Waivers		21
	4.8	Severability		22
	4.9	Delays or Omissions		22
	4.10	Entire Agreement		22
	4.11	Aggregation of Stock		23
	4.12	Costs of Enforcement		23
	4.13	References		23
	4.14	WAIVER OF RIGHT TO JURY TRIAL		23
	4.15	Specific Enforcement		23

Schedule A Schedule of Stockholders

-i-

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

This Amended And Restated Registration Rights Agreement (this “Agreement”) is made as of July 11, 2012, by and among Alarm.com Holdings, Inc., a Delaware corporation (the “Company”), and the stockholders party hereto (the “Stockholders”).

WHEREAS, in connection with the acquisition by the Company of all of the equity interests of Alarm.com Incorporated, a Delaware corporation (“Alarm.com”), certain of the Stockholders purchased from the Company shares of its Series A Preferred Stock, par value one-tenth of one cent ($0.001) per share (the “Series A Preferred Stock”), and in connection therewith entered into a Registration Rights Agreement, dated as of March 6, 2009 (the “Prior Agreement”);

WHEREAS, the Company desires to sell to certain new Stockholders (collectively, the “Series B Stockholders”) shares of the Company’s Series B Preferred Stock, par value one-tenth of one cent ($0.001) per share (the “Series B Preferred Stock,” and together with the Series A Preferred Stock and the Series B-1 Preferred Stock, the “Preferred Stock”) on the terms and conditions set forth in that certain Series B Preferred Stock Purchase Agreement, dated as of June 30, 2012, by and among the Company and the Series B Stockholders (the “Stock Purchase Agreement”);

WHEREAS, in connection with and prior to the consummation of the transactions contemplated by the Stock Purchase Agreement, the Company has effectuated a recapitalization and entered into a Recapitalization Agreement with each of the holders of the Series A Preferred Stock and Common Stock pursuant to which such stockholders received, in exchange for all such shares, a mix, determined on an as-converted to Common Stock basis, of 56.90% shares of Series A Preferred Stock and 43.10% shares of the Company’s Series B-1 Preferred Stock, or a mix, determined on an as-converted to Common Stock basis, of 56.90% shares of Common Stock and 43.10% shares of Series B-1 Preferred Stock, respectively;

WHEREAS, pursuant to the Stock Purchase Agreement, the Company has initiated a self tender offer with respect to its outstanding shares of capital stock such that each stockholder of the Company was entitled to tender up to a number of shares equal to 43.10% of the shares of the Company’s outstanding capital stock owned of record by such holder plus shares of Common Stock underlying vested options held by such holder, at a repurchase price of $75.44 per share for an aggregate purchase price of up to approximately $116,000,000, from the purchase price received by the Company pursuant to the Stock Purchase Agreement;

WHEREAS, contemporaneous with the consummation of the transactions contemplated by the Stock Purchase Agreement, the Company will repurchase from certain existing holders of Series A Preferred Stock, Series B-1 Preferred Stock and Common Stock an aggregate of not less than 1,470,720 shares of Series B-1 Preferred Stock and 2,857 shares of Series A Preferred Stock and/or Common Stock at a purchase price of $75.44 per share, from the purchase price received by the Company pursuant to the Stock Purchase Agreement (the “Repurchase Transaction”);

1.

WHEREAS, as an inducement to the Series B Stockholders to execute the Stock Purchase Agreement and acquire the Series B Preferred Stock, and as an inducement to the Company to enter into and consummate the Repurchase Transaction, the undersigned Stockholders who are party to the Prior Agreement and the Company desire to enter into this Agreement to amend, restate, supersede and replace the rights and obligations described in the Prior Agreement with those set forth herein and to add the Series B Stockholders as Stockholders hereunder;

WHEREAS, Section 4.7 of the Prior Agreement provides that any term of the Prior Agreement may be amended and the observance of any term of the Prior Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company, the holders of more than fifty percent (50%) of the Series A Preferred Stock then outstanding and each Eligible Stockholder; and

WHEREAS, the Stockholders and the Company desire to establish rights of certain Stockholders to cause the Company to register shares of Common Stock issued or issuable to them.

Now, Therefore, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties hereto, intending legally to be bound hereby, amend, restate, supersede and replace the Prior Agreement in its entirety to read as follows:

1. Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms used in this Agreement shall be construed to have the meanings set forth or referenced below:

1.1 “ABS Capital Partners” means any or all of ABS Capital Partners V, L.P., ABS Capital Partners V-A, L.P., and ABS Capital Partners V Offshore, L.P.

1.2 “Affiliate” means with respect to any individual, corporation, partnership, association, trust, or any other entity (in each case, a “Person”), any other Person which, directly or indirectly, controls, is controlled by or is under common control with such Person, including any general partner, officer or director of such Person and any venture capital fund now or hereafter existing which is controlled by or under common control with one or more general partners or shares the same management company with such Person.

1.3 “Backbone” means Backbone Partners, LLC.

1.4 “Board of Directors” means the board of directors of the Company.

1.5 “Certificate of Incorporation” means the Second Amended and Restated Certificate of Incorporation of the Company, as amended from time to time.

1.6 “Common Stock” means the issued and outstanding common stock of the Company, par value one cent ($0.01) per share.

1.7 “Egis” means Egis Security Fund, LP.

1.8 “Eligible Stockholder” means any Person owning or having the right to acquire five percent (5%) or more of the Registrable Securities.

2.

1.9 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

1.10 “Form S-3” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

1.11 “Immediate Family Member” means in the case of a Stockholder that is a natural person, siblings, lineal antecedents or descendents, children, grandchildren, spouse or any other relatives (provided that such other relatives are approved by the Board of Directors), or any custodian or trustee for the account of a Stockholder or a Stockholder’s siblings, lineal antecedents or descendents, children, grandchildren, spouse or any other relatives (provided such other relatives are approved by the Board of Directors).

1.12 “Initiating Stockholders” means, collectively, any Stockholders who properly initiate a registration request under this Agreement.

1.13 “IPO” means the Company’s first firm commitment underwritten public offering of its Common Stock registered under the Securities Act.

1.14 “register,” “registered,” and “registration” means and refers to a registration effected by preparing and filing with the SEC a registration statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document.

1.15 “Registrable Securities” means (i) the Common Stock issuable or issued upon conversion of the Preferred Stock; (ii) any Common Stock held by a Stockholder party hereto; and (iii) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of the shares referenced in clause (i) or (ii) above or this clause (iii), excluding in all cases, however, any Registrable Securities sold by a Person in a transaction in which his, her or its rights under Section 2 are not assigned or any shares for which registration rights have terminated pursuant to Section 2.15.

1.16 “Registrable Securities then outstanding” means the number of shares determined by adding the number of shares of Common Stock outstanding which are, and the number of shares of Common Stock issuable pursuant to then exercisable or convertible securities which are, Registrable Securities.

1.17 “SEC” means the Securities and Exchange Commission.

1.18 “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.

1.19 “SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.

3.

1.20 “SEC Rule 405” means Rule 405 promulgated by the SEC under the Securities Act.

1.21 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

1.22 “Series B-1 Preferred Stock” means the issued and outstanding Series B-1 Preferred Stock of the Company, par value one-tenth of one cent ($0.001) per share.

1.23 “Sherwood” means David B. Sherwood, Jr.

1.24 “Stockholders Agreement” means that certain Amended and Restated Stockholders Agreement, by and among the Company and the stockholders party thereto, dated on or around the date hereof, as may be amended from time to time.

1.25 “TCV” means any or all of TCV VII, L.P., TCV VII (A), L.P., and TCV Member Fund, L.P.

1.26 “Violation” means losses, claims, damages, or liabilities (joint or several) to which a party hereto or any other Person who may be indemnified pursuant to Section 2.9 may become subject under the Securities Act, the Exchange Act, or any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement (including any preliminary prospectus, final prospectus or Free Writing Prospectus contained therein or any amendments or supplements thereto) or any issuer information (as defined in Rule 433 of the Securities Act) filed or required to be filed pursuant to Rule 433(d) under the Securities Act or any other document incident to such registration prepared by or on behalf of the Company or used or referred to by the Company, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by any other party hereto, of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law.

1.27 The following terms are defined in the Section of this Agreement opposite such terms:

Agreement	Preamble
Alarm.com	Recitals
Automatic Shelf Registration Statement	2.3.13
Company	Preamble
Deemed Liquidation Event	2.15
Free Writing Prospectus	2.3.3
Person	1.2
Preferred Stock	Recitals
Prior Agreement	Recitals
Repurchase Transaction	Recitals

4.

Series A Preferred. Stock	Recitals
Series B Preferred Stock	Recitals
Series B Stockholders	Recitals
Stock Purchase Agreement	Recitals
Stockholders	Preamble
TCV Majority	4.7
WKSI	2.3.13

2. Registration Rights. The Company covenants as follows:

2.1 Demand Registration.

2.1.1 If the Company shall receive at any time after one hundred eighty (180) days following the effective date of the first registration statement for a public offering of securities of the Company (other than a registration statement relating to the sale of securities to employees of the Company pursuant to a stock option, stock purchase or similar plan or a registration statement relating to a SEC Rule 145 transaction ) a written request from an Eligible Stockholder that the Company file a registration statement under the Securities Act covering the registration of at least five percent (5%) of the Registrable Securities then outstanding, or a lesser percent if the anticipated aggregate offering price, net of underwriting discounts and commissions, would exceed fifteen million dollars ($15,000,000), then the Company shall: (i) within ten (10) days of the receipt thereof, give written notice of such request to all Stockholders; (ii) as soon as practicable, and in any event within ninety (90) days of the receipt of such request, file a registration statement under the Securities Act covering all Registrable Securities which the Stockholders (including Stockholders other than the Initiating Stockholders) request to be registered within twenty (20) days of the mailing of such notice by the Company in accordance with Section 4.6; and (iii) use its reasonable best efforts to cause such registration statement to be declared effective by the SEC as soon as practicable but in no event later than one hundred twenty (120) days after such request.

2.1.2 If the Initiating Stockholders intend to sell the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Section 2.1.1 and the Company shall include such information in the written notice referred to in Section 2.1.1(i). The managing underwriter will be reasonably selected by the Board of Directors (which managing underwriter or underwriters shall be reasonably acceptable to a majority of the Registrable Securities to be registered by the Initiating Stockholders). In such event, the right of any Stockholder to include such Stockholder’s Registrable Securities in such registration shall be conditioned upon such Stockholder’s participation in such underwriting and the inclusion of such Stockholder’s Registrable Securities in the underwriting to the extent provided herein. All Stockholders proposing to distribute their securities through such underwriting shall (together with the Company as provided in Section 2.3.5) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting. Notwithstanding any other provision of this Section 2.1, if the managing underwriter advises Company in writing that marketing factors require a limitation of the number of shares to be underwritten, then Company shall so advise all Stockholders of Registrable Securities which would otherwise be underwritten pursuant hereto, and the number of shares of Registrable Securities that may be included in the

5.

underwriting shall be allocated among all Stockholders of Registrable Securities, including the Initiating Stockholders, in proportion (as nearly as practicable) to the number of Registrable Securities of the Company owned by each Stockholder; provided, however, that the number of shares of Registrable Securities held by the Stockholders to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration. To facilitate the allocation of shares in accordance with the provisions of this Section 2.1.2, the Company or the underwriters may round the number of shares allocated to any Stockholder to the nearest one hundred (100) shares.

2.1.3 The Company shall not be obligated to effect, or to take any action to effect, any registration:

2.1.3.1 pursuant to this Section 2.1:

2.1.3.1.1 In any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, unless the Company is already subject to service in such jurisdiction and except as may be required under the Securities Act;

2.1.3.1.2 In the case of a registration request by ABS Capital Partners, after the Company has effected three (3) registrations requested by ABS Capital Partners pursuant to this Section 2.1 and such registrations have been declared or ordered effective and remained effective until ABS Capital Partners or the Stockholders have completed the distribution related thereto;

2.1.3.1.3 In the case of a registration request by TCV, after the Company has effected three (3) registrations requested by TCV pursuant to this Section 2.1 and such registrations have been declared or ordered effective and remained effective until TCV or the Stockholders have completed the distribution related thereto;

2.1.3.1.4 In the case of a registration request by an Eligible Stockholder, other than ABS Capital Partners or TCV, after the Company has effected one (1) registration requested by such Eligible Stockholder pursuant to this Section 2.1 and such registration has been declared or ordered effective and remained effective until the Stockholder or Stockholders have completed the distribution related thereto;

2.1.3.1.5 In the case of Stockholders other than ABS Capital Partners, TCV and an Eligible Stockholder, the Company shall not be obligated to effect any registration pursuant to this Section 2.1;

2.1.3.1.6 If the Initiating Stockholders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.11;

2.1.3.1.7 If the Registrable Securities to be included in the registration statement could be sold without any volume or manner of sale restriction under SEC Rule 144 (it being understood that for purposes of determining eligibility for resale under this provision, no securities held by any Stockholder shall be considered salable without restriction under SEC Rule 144 to the extent such Stockholder reasonably determines that it is an Affiliate of the Company); or

6.

2.1.3.1.8 If, within thirty (30) days of receipt of a written request pursuant to Section 2.1.1, the Company gives notice to the Stockholders of the Company’s intention to make a public offering within ninety (90) days following receipt of such written request and the Company continues diligently to pursue such an offering, provided that such right shall be exercised by the Company not more than once in any twelve (12)-month period and provided, further, that the Company shall not register any securities for the account of itself (other than the securities to be registered in such offering) or any other stockholder during such ninety (90) day period (other than a registration statement relating either to the sale of securities to employees of the Company pursuant to a stock option, stock purchase or similar plan or a SEC Rule 145 transaction, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered); or

2.1.3.2 pursuant to any other provision of this Agreement (other than pursuant to Section 2.11):

2.1.3.2.1 In any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, unless the Company is already subject to service in such jurisdiction and except as may be required under the Securities Act; or

2.1.3.2.2 If the Registrable Securities to be included in the registration statement could be sold without any volume or manner of sale restriction under SEC Rule 144 (it being understood that for purposes of determining eligibility for resale under this provision, no securities held by any Stockholder shall be considered salable without restriction under SEC Rule 144 to the extent such Stockholder reasonably determines that it is an Affiliate of the Company).

2.1.4 Notwithstanding the foregoing, if the Company shall furnish to Stockholders requesting a registration statement pursuant to this Section 2.1 a certificate signed by the Chief Executive Officer of the Company stating that in the good faith reasonable judgment of the Board of Directors it would be materially detrimental to the Company and its stockholders for such registration statement to become effective or to remain effective as long as such registration statement would otherwise be required to remain effective because such action (x) would materially interfere with a significant acquisition, corporate reorganization or other similar transaction involving the Company, (y) would require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential or (z) would render the Company unable to comply with requirements under the Securities Act or Exchange Act, the Company shall have the right to defer taking action with respect to such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Stockholders; provided, however, that the Company may not utilize this right more than once in

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any twelve (12) month period; and, provided, further, that the Company shall not register any securities for the account of itself or any other stockholder during such ninety (90) day period other than a registration statement relating either to the sale of securities to employees of the Company pursuant to a stock option, stock purchase or similar plan or a SEC Rule 145 transaction, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered.

2.1.5 A registration shall not be counted as “effected” under Section 2.1.3 until such time as the applicable registration statement has been declared effective by the SEC (unless the Initiating Stockholders withdraw their request for such registration (except as a result of information concerning the business or financial condition of the Company which is made known to the Initiating Stockholders after the date on which such registration was requested) and elect not to pay the registration expenses therefor pursuant to Section 2.5). A registration shall not be counted as “effected” under Section 2.1.3 if, as a result of an exercise of the underwriter’s cut-back provisions, fewer than forty percent (40%) of the total number of Registrable Securities that Stockholders have requested to be included in such registration statement are actually included.

2.2 Company Registration. If the Company proposes to register (including for this purpose a registration effected by the Company for stockholders other than the Stockholders) any of its stock or other securities under the Securities Act in connection with the public offering of such securities (other than (i) a registration made pursuant to Section 2.1 or Section 2.11 or (ii) a registration statement relating either to the sale of securities to employees of the Company pursuant to a stock option, stock purchase or similar plan or a SEC Rule 145 transaction, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered), the Company shall, at such time, promptly give each Stockholder written notice of such registration. Upon the written request of each Stockholder given within twenty (20) days after mailing of such notice by the Company in accordance with Section 4.6, the Company shall, subject to the provisions of Section 2.7, cause to be registered under the Securities Act all of the Registrable Securities that each such Stockholder has requested to be registered. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 prior to the effectiveness of such registration whether or not any Stockholder has elected to include securities in such registration. The expenses of such withdrawn registration shall be borne by the Company in accordance with Section 2.6.

2.3 Obligations of the Company.

Whenever required under this Section 2, including Section 2.1 or Section 2.11, to effect the registration and sale of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

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2.3.1 prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its reasonable best efforts to cause such registration statement to become effective, and, upon the request of the Stockholders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the Registration Statement has been completed; provided, however, that (i) such 120-day period shall be extended for a period of time equal to the period any Stockholder refrains from selling any securities included in such registration at the request of an underwriter of Common Stock (or other securities) of the Company; and (ii) in the case of any registration of Registrable Securities on Form S-3 which are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, including any Automatic Shelf Registration Statement, the Company shall use its best efforts to cause such registration statement to be continuously effective and usable until all such Registrable Securities are sold;

2.3.2 prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement or as otherwise reasonably requested by the Stockholders covered by such registration statement;

2.3.3 furnish to the Stockholders such numbers of copies of a prospectus, including a preliminary prospectus and any free-writing prospectus, as defined in Rule 405 (a “Free Writing Prospectus”), in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them;

2.3.4 use its reasonable best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Stockholders; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

2.3.5 in the event of any underwritten public offering, including an offering pursuant to a registration statement on Form S-3, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering (each Stockholder participating in such underwriting shall also enter into and perform its obligations under such an agreement), and cause its appropriate officers to attend and participate in presentations to and meetings with prospective purchasers of the Registrable Securities, or a “roadshow”, as reasonably requested by the underwriters, if any, or the Initiating Stockholders;

2.3.6 notify each Stockholder holding Registrable Securities covered by such registration statement at any time when a prospectus or Free Writing Prospectus (to the extent prepared by or on behalf of the Company) relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus

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included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and, at the request of any such Stockholder, the Company will, as soon as reasonably practicable, file and furnish to all such Stockholders a supplement or amendment to such prospectus or Free Writing Prospectus (to the extent prepared by or on behalf of the Company) so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading in light of the circumstances under which they were made;

2.3.7 cause all such Registrable Securities registered pursuant to this Agreement to be listed on a national securities exchange or trading system and each securities exchange and trading system on which similar securities issued by the Company are then listed;

2.3.8 provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

2.3.9 take all reasonable actions to ensure that any prospectus or Free Writing Prospectus utilized in connection with any registration effected pursuant to this Agreement complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related prospectus, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

2.3.10 use all reasonable efforts to prevent the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any securities included in such registration statement for sale in any jurisdiction, and, in the event of such issuance, the Company shall immediately notify the Stockholders holding Registrable Securities covered by such registration statement of the receipt by the Company of such notification and shall use all reasonable efforts promptly to obtain the withdrawal of such order, and, in the event of the withdrawal of such order, the Company shall immediately notify such Stockholders thereof;

2.3.11 use its commercially reasonable efforts to obtain one or more “cold comfort” letters, dated the effective date of the related registration statement (and, if such registration includes an underwritten public offering, dated the date of the closing under the underwriting agreement), signed by the Company’s independent public accountants in customary form and covering such matters of the type customarily covered by “cold comfort” letters as the Stockholders holding a majority of the Registrable Securities being sold reasonably request;

2.3.12 use its commercially reasonable efforts to provide, at the request of any Stockholder participating in such registration, on the date such securities are delivered to the underwriters for sale pursuant to such registration or, if such securities are not being sold through underwriters, on the date the registration statement with respect to such securities becomes

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effective, a legal opinion of the Company’s outside counsel, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, dated the date of the closing under the underwriting agreement), with respect to the registration statement, each amendment and supplement thereto, the prospectus included therein (including the preliminary prospectus) and such other documents relating thereto in customary form and covering such matters of the type customarily covered by legal opinions of such nature;

2.3.13 to the extent the Company is a well-known seasoned issuer (as defined in Rule 405) (a “WKSI”) at the time any request for registration is submitted to the Company in accordance with Section 2.11, (i) if so requested, file an automatic shelf registration statement (as defined in Rule 405) (an “Automatic Shelf Registration Statement”) to effect such registration, and (ii) remain a WKSI (and not become an ineligible issuer (as defined in Rule 405)) during the period during which such Automatic Shelf Registration Statement is required to remain effective in accordance with this Agreement;

2.3.14 if at any time when the Company is required to re-evaluate its WKSI status for purposes of an Automatic Shelf Registration Statement used to effect a request for registration in accordance with Section 2.11 (i) the Company determines that it is not a WKSI, (ii) the registration statement is required to be kept effective in accordance with this Agreement and (iii) the registration rights of the applicable Stockholders have not terminated, promptly amend the registration statement onto a form the Company is then eligible to use or file a new registration statement on such form, and keep such registration statement effective in accordance with the requirements otherwise applicable under this Agreement; and

2.3.15 if (A) a registration made pursuant to a registration statement on Form S-3 is required to be kept effective in accordance with this Agreement after the third anniversary of the initial effective date of the shelf registration statement and (B) the registration rights of the applicable Stockholders have not terminated, file a new registration statement on Form S-3 with the SEC with respect to any unsold Registrable Securities subject to the original request for registration and cause such registration statement to become effective prior to the end of the three (3) year period after the initial effective date of the shelf registration statement, and keep such registration statement effective in accordance with the requirements otherwise applicable to the initial registration statement on Form S-3 under this Agreement.

2.4 Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of any selling Stockholder that such Stockholder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be reasonably required to effect the registration of such Stockholder’s Registrable Securities.

2.5 Expenses of Demand Registration. All expenses other than underwriting discounts and commissions incurred in connection with registrations, filings or qualifications pursuant to Section 2.1, including (without limitation) all registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company and the reasonable fees and disbursements actually incurred of one counsel for the selling Stockholders shall be borne by the Company; provided, however, that the Company shall not be required to

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pay for any expenses of any registration proceeding begun pursuant to Section 2.1 if the registration request is subsequently withdrawn at the request of the Initiating Stockholders (in which case all participating Stockholders who request such withdrawal shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless the Initiating Stockholders agree to forfeit their right to one demand registration pursuant to Section 2.1; provided, further, however, that if at the time of such withdrawal, the Initiating Stockholders have learned of a material adverse change in general market conditions, the condition, business or prospects of the Company from that known to the Initiating Stockholders at the time of their request and have withdrawn the request with reasonable promptness after learning of such information, then the Stockholders shall not be required to pay any of such expenses and shall retain their rights pursuant to Section 2.1).

2.6 Expenses of Company Registration. The Company shall bear and pay all expenses incurred in connection with any registration, filing or qualification of Registrable Securities with respect to the registrations pursuant to Section 2.2 for each Stockholder (which right may be assigned as provided in Section 2.12), including (without limitation) all registration, filing, and qualification fees, printers’ and accounting fees relating or apportionable thereto and the reasonable fees and disbursements actually incurred of one counsel for the selling Stockholders selected by them, but excluding underwriting discounts and commissions relating to Registrable Securities.

2.7 Underwriting Requirements. In connection with any offering involving an underwriting of shares of the Company’s capital stock pursuant to Section 2.2, the Company shall not be required to include any of the Stockholders’ securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total number of securities, including Registrable Securities, requested by Stockholders to be included in such offering exceeds the amount of securities to be sold other than by the Company that the underwriters determine in their reasonable discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company determine in their sole discretion will not jeopardize the success of the offering. Unless otherwise permitted pursuant to a consent granted in accordance with Section 2.13, in no event shall any Registrable Securities be excluded from such offering unless all other stockholders’ securities have been first excluded. In the event that the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be apportioned pro rata among the selling Stockholders based on the number of Registrable Securities held by all selling Stockholders or in such other proportions as shall mutually be agreed to by all such selling Stockholders. Notwithstanding the foregoing, in no event shall the amount of securities of the selling Stockholders, in the aggregate, included in the offering be reduced below thirty percent (30%) of the total amount of securities included in such offering, unless such offering is the Company’s IPO, in which case the selling Stockholders may be excluded beyond this amount if the underwriters make the determination described above and no other stockholder’s securities are included in such offering. For purposes of the preceding sentence in this Section 2.7 concerning apportionment, for any selling Stockholder which is a holder of Registrable Securities and which

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is an investment fund, partnership, limited liability company or corporation, the partners, members, retired partners, retired members, stockholders and Affiliates of such Stockholder, or the estates and family members of any such partners, retired partners, members and retired members and any trusts for the benefit of any of the foregoing Persons shall be deemed to be a single “selling Stockholder”, and any pro-rata reduction with respect to such “selling Stockholder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “selling Stockholder,” as defined in this sentence.

2.8 Delay of Registration.

No Stockholder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

2.9 Indemnification.

In the event any Registrable Securities are included in a registration statement under this Section 2:

2.9.1 To the extent permitted by law, the Company will indemnify and hold harmless each Stockholder, the partners, members, officers, directors and stockholders of each Stockholder, legal counsel and accountants for each Stockholder, any underwriter (as defined in the Securities Act) for such Stockholder and each Person, if any, who controls such Stockholder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Violation and the Company will pay to each such Stockholder, underwriter, controlling Person or other aforementioned Person, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.9.1 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Stockholder, underwriter, controlling Person or other aforementioned Person.

2.9.2 To the extent permitted by law, each selling Stockholder will severally and not jointly indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each Person, if any, who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter, any other Stockholder selling securities in such registration statement and any controlling Person of any such underwriter or other Stockholder, against any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Stockholder expressly for use in connection with such registration; and each such Stockholder will pay, any legal or other expenses reasonably incurred by any Person intended to be indemnified pursuant to

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this Section 2.9.2, in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this Section 2.9.2 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Stockholder, which consent shall not be unreasonably withheld; provided, further, that, in no event shall any indemnity under this Section 2.9.2 exceed the net proceeds from the offering received by such Stockholder.

2.9.3 Promptly after receipt by an indemnified party under this Section 2.9 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.9, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one (1) separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding (as determined by an independent special counsel selected by the Board of Directors). The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of liability to the indemnified party under this Section 2.9.3 to the extent of such prejudice, but the omission to so deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.9.3.

2.9.4 In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any Stockholder exercising rights under this Agreement, or any controlling Person of any such Stockholder, makes a claim for indemnification pursuant to this Section 2.9 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 2.9 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any such selling Stockholder or any such controlling Person in circumstances for which indemnification is provided under this Section 2.9, then, and in each such case, the Company and such Stockholder will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case, (x) no

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such Stockholder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Stockholder pursuant to such registration statement, and (y) no Person or entity guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person or entity who was not guilty of such fraudulent misrepresentation; provided, further, that in no event shall a Stockholder’s liability pursuant to this Section 2.9.4, when combined with the amounts paid or payable by such Stockholder pursuant to Section 2.9.2, exceed the proceeds from the offering (net of any underwriting discounts or commissions) received by such Stockholder.

2.9.5 Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company and Stockholders under this Section 2.9 shall survive the completion of any offering of Registrable Securities in a registration statement under this Section 2, and otherwise and shall survive the termination of this Agreement.

2.10 Reports Under Exchange Act.

With a view to making available to the Stockholders the benefits of SEC Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit a Stockholder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company shall:

2.10.1 make and keep public information available, as those terms are understood and defined in SEC Rule 144, at all times after the effective date of the first registration statement filed by the Company for the offering of its securities to the general public so long as the Company is subject to the periodic reporting requirements under Sections 13 or 15(d) of the Exchange Act;

2.10.2 file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and

2.10.3 furnish to any Stockholder, so long as the Stockholder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144, the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing any Stockholder of any rule or regulation of the SEC which permits the selling of any such securities without registration or pursuant to such form.

2.11 Form S-3 Registration.

2.11.1 In case the Company shall receive from an Eligible Stockholder a written request or requests that the Company effect a registration on Form S-3 and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Stockholder or Stockholders, the Company shall:

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(a) promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Stockholders; and

(b) as soon as practicable, effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Stockholder’s or Stockholders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Stockholder or Stockholders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this Section 2.11: (i) if Form S-3 is not then available for such offering by the Stockholders; (ii) if the Stockholders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public (net of any underwriters’ discounts or commissions) of less than fifteen million dollars ($15,000,000); (iii) if the Company shall furnish to the Stockholders a certificate signed by the Chief Executive Officer of the Company stating that in the good faith judgment of the Board of Directors, it would be materially detrimental to the Company and its stockholders for such Form S-3 Registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than sixty (60) days after receipt of the request of the Stockholder or Stockholders under this Section 2.11; provided, however, that the Company shall not utilize this right more than once in any twelve (12) month period; provided, further, that the Company shall not register any securities for the account of itself or any other stockholder during such sixty (60) day period (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Securities Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered); (iv) if the Company has, within the twelve (12) month period preceding the date of such request, already effected two (2) registrations on Form S-3 for the Stockholders pursuant to this Section 2.11; (v) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance; or (vi) during the period ending ninety (90) days after the effective date of a registration statement subject to Section 2.2.

2.11.2 Subject to the foregoing, the Company shall file a registration statement on Form S-3 covering the sale or distribution from time to time by the Initiating Stockholders and any other Stockholders participating in such registration, on a delayed or continuous basis pursuant to Rule 415 of the Securities Act, including without limitation, by way of underwritten offering, block sale or other distribution plan designated by the Initiating Holders, of the Registrable Securities so requested to be registered as soon as practicable after receipt of the request or requests of the Stockholders, and shall use its reasonable best efforts to cause such registration statement to be declared effective by the SEC as promptly as possible after the filing thereof, and cause such registration statement to be continuously effective and usable in accordance with Section 2.3.1(ii). If any registration statement on Form S-3 ceases to

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be effective under the Securities Act for any reason at any time until all Registrable Securities covered thereby have been sold, the Company shall use its commercially reasonable efforts to promptly cause such registration statement to again become effective under the Securities Act (including obtaining the prompt withdrawal of any order suspending the effectiveness of such registration statement), and in any event shall within 30 days of such cessation of effectiveness, amend such registration statement in a manner reasonably expected to obtain the withdrawal of any order suspending the effectiveness of such registration statement or, file an additional registration statement for an offering to be made on a delayed or continuous basis pursuant to Rule 415 of the Securities Act registering the resale from time to time by the applicable Stockholders thereof of all securities subject to such initial registration statement on Form S-3 as of the time of such filing. Any such subsequent registration statement shall also be on Form S-3 to the extent that the Company is eligible to use such form. All expenses incurred in connection with a registration requested pursuant to Section 2.11, including (without limitation) all registration, filing, qualification, printers’ and accounting fees and the reasonable fees and disbursements of one counsel for the selling Stockholder or Stockholders and counsel for the Company, but excluding any underwriters’ discounts or commissions associated with Registrable Securities, shall be borne by the Company. Registrations effected pursuant to this Section 2.11 shall not be counted as demands for registration or registrations effected pursuant to Section 2.1.

2.11.3 If a Person becomes a Stockholder of Registrable Securities registered pursuant to a registration statement filed pursuant to this Section 2.11 after such registration statement becomes effective, the Company shall, as promptly as is reasonably practicable following delivery of written notice to the Company of such Person becoming a Stockholder and requesting for its name to be included as a selling securityholder in the prospectus related to such registration statement, and in any event within 15 days after such date:

(a) if required and permitted by applicable law, file with the SEC a supplement to the related prospectus or a post-effective amendment to such registration statement and any necessary supplement or amendment to any document incorporated therein by reference and file any other required document with the SEC so that such Stockholder is named as a selling securityholder in such registration statement and the related prospectus in such a manner as to permit such Stockholder to deliver a prospectus to purchasers of Registrable Securities in accordance with applicable law; provided, however, that if a post-effective amendment is required by the rules and regulations of the SEC in order to permit resales by such Stockholder, the Company shall not be required to file more than one post-effective amendment or a supplement to the related prospectus for such purpose in any 45-day period;

(b) if, pursuant to Section 2.11.3(a), the Company shall have filed a post-effective amendment to such registration statement, use its reasonable best efforts to cause such post-effective amendment to become effective under the Securities Act as promptly as is reasonably practicable, but in any event by the date that is 60 days after the date such post-effective amendment is required to be filed; and

(c) notify such Stockholder as promptly as is reasonably practicable after the effectiveness under the Securities Act of any post-effective amendment filed pursuant to clause (a) above.

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2.11.4 If, following the effectiveness of a registration statement filed pursuant to this Section 2.11, the Initiating Stockholders intend to distribute Registrable Securities covered by a registration effected pursuant to this Section 2.11 by means of an underwriting, they shall so advise the Company and the provisions of Section 2.1.2 (other than the first sentence and with the substitution of Section 2.11 for references to Section 2.1) and Section 2.3 shall be applicable.

2.11.5 In the event any Stockholder requests to participate in a registration statement pursuant to this Section 2.11 in connection with a distribution of Registrable Securities to its partners or members, such registration statement shall in the event such distribution and subsequent resale is permitted by applicable law provide for resale by such partners or members, if requested by such Stockholder.

2.12 Assignment of Registration Rights.

The rights to cause the Company to register Registrable Securities pursuant to this Section 2 may be assigned (but only with all related obligations) by a Stockholder to a transferee or assignee of such securities that (i) is a subsidiary, Affiliate, parent, partner, member, limited partner, retired partner, retired member or stockholder of, or venture capital or private equity fund under common investment management with, such Stockholder, (ii) is such Stockholder’s Immediate Family Member or trust for the benefit of an individual Stockholder, or (iii) after such assignment or transfer, holds at least five percent (5%) of the shares of Registrable Securities then outstanding; provided: (a) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; (b) such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement, including without limitation the provisions of Section 2.14; and (c) such assignment shall be effective only if immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Securities Act.

2.13 Limitations on Subsequent Registration Rights.

Except as set forth below, from and after the date of this Agreement, the Company shall not, without the prior written consent of the Stockholders owning (i) more than fifty percent (50%) of the Registrable Securities that are issued or issuable as a result of conversion of the Series A Preferred Stock, and (ii) more than fifty percent (50%) of the Registrable Securities that are issued or issuable as a result of conversion of the Series B Preferred Stock, enter into any agreement with any holder or prospective holder of any securities of the Company which would allow such holder or prospective holder (a) to include such securities in any registration unless, under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of such securities will not reduce the amount of the Registrable Securities of the Stockholders that are included in such registration, or (b) to demand registration of any securities held by such holder or prospective holder.

18.

2.14 “Market Stand Off” Agreement.

No Stockholder shall, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the Company’s IPO and ending on the date specified by the Company and the managing underwriter (such period not to exceed, subject to the final sentence of this Section, one hundred eighty (180) days) (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock held immediately prior to the effectiveness of the Registration Statement for such offering, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise. The foregoing provisions of this Section 2.14 shall apply only to the Company’s IPO, shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement or shares purchased in the Company’s IPO or on the open market thereafter, and shall only be applicable to the Stockholders if all officers, directors and greater than one percent (1%) stockholders of the Company enter into similar agreements. The managing underwriters in connection with the Company’s IPO are intended third party beneficiaries of this Section 2.14 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. Each Stockholder shall execute such agreements as may be reasonably requested by the managing underwriters in the Company’s IPO that are consistent with this Section 2.14 or that are necessary to give further effect thereto. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the managing underwriters shall apply to all Stockholders subject to such agreements pro rata based on the number of shares subject to such agreements.

In order to enforce the foregoing covenant, the Company may impose stop transfer instructions with respect to the Registrable Securities of each Stockholder (and the shares or securities of every other Person subject to the foregoing restriction) until the end of such period. Notwithstanding the foregoing, if (x) during the last seventeen (17) days of the one hundred eighty (180)-day restricted period (or any shorter period, if applicable), the Company issues an earnings release or material news or a material event relating to the Company occurs; or (y) prior to the expiration of the one hundred eighty (180)-day restricted period (or any shorter period, if applicable), the Company announces that it will release earnings results during the sixteen (16)-day period beginning on the last day of the one hundred eighty (180)-day period (or any shorter period, if applicable), the restrictions imposed by this Section 2.14 shall continue to apply until the expiration of the eighteen (18)-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

2.15 Termination of Registration Rights.

The rights and obligations set forth in this Section 2 (other than Sections 2.5, 2.6 and 2.9 and the second sentence of Section 2.11.2, which shall survive until fully performed) shall terminate (i) upon a “Deemed Liquidation Event,” as such term is defined in the Certificate of Incorporation and (ii) as to any Stockholder, such earlier time after the IPO at which such Stockholder (together with any Affiliate of such Stockholder with whom such Stockholder must aggregate its sales under SEC Rule 144) holds one percent (1%) or less of the Company’s outstanding Common Stock and such shares can be sold in any three (3)-month period without registration and without volume or manner of sale restrictions in compliance with SEC Rule 144.

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3. Legend on Share Certificates.

Each certificate representing any Preferred Stock issued to the Stockholders and any Registrable Securities issued to the Stockholders shall be endorsed with the following legend (in addition to other legends required pursuant to the Stockholders Agreement):

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD IN THE EVENT OF THE COMPANY’S INITIAL PUBLIC OFFERING, WHICH ARE SET FORTH IN THE COMPANY’S AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (A COPY OF WHICH MAY BE OBTAINED UPON WRITTEN REQUEST FROM THE COMPANY).”

4. Miscellaneous.

4.1 Transfers, Successors and Assigns.

The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and, subject to Section 2.12, permitted assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. In the event that after the date of this Agreement, the Company issues shares of Capital Stock to Bain & Co., Inc. and its affiliates (collectively, “Bain”), Bain shall be entitled to become a party to this Agreement by execution of a signature page hereto, and Bain shall be deemed to be included in the definition of “TCV” for all purposes hereunder; provided, that Bain shall not have any demand registration rights separate and apart from TCV under Section 2.1 of this Agreement.

4.2 Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its principles of conflicts of laws that would result in the application of the law of any other jurisdiction.

4.3 Jurisdiction.

Each of the parties submits to the jurisdiction of all state and federal courts sitting in the Borough of Manhattan in the City of New York in the State of New York, and all actions and proceedings arising out of or relating to this Agreement shall be heard and determined in a state or federal court in the Borough of Manhattan in the City of New York in the State of New York, and any direct appellate courts therefrom.

20.

4.4 Counterparts; Facsimile.

This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may also be executed and delivered by facsimile signature.

4.5 Titles and Subtitles.

The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

4.6 Notices.

All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, and if not sent during such normal business hours, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address or facsimile number as set forth on the signature page or Schedule A hereto, or to such facsimile number or address as subsequently modified by written notice given in accordance with this Section 4.6. If notice is given to the Company, ABS Capital Partners, TCV, or Backbone a copy shall also be sent to each of (i) for the Company, J. Brennan Ryan, Nelson Mullins Riley & Scarborough LLP, 201 17th Street, Suite 1700, Atlanta, GA 30363, (ii) for ABS, David A. Gibbons, Hogan Lovells US LLP, 100 International Drive, Suite 2000, Baltimore, MD 21202, (iii) for TCV, Joshua M. Dubofsky, Latham & Watkins LLP, 140 Scott Drive, Menlo Park, CA 94025, and (iv) for Backbone, Gregory M. Giammittorio, Morrison & Foerster LLP, 1650 Tysons Blvd, Suite 400, McLean, VA 22102.

4.7 Amendments and Waivers.

This Agreement may be terminated, and any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of (i) the Company, (ii) Stockholders owning more than fifty percent (50%) of the Registrable Securities that are issued or issuable as a result of conversion of the Series A Preferred Stock, and (iii) Stockholders owning more than fifty percent (50%) of the Registrable Securities that are issued or issuable as a result of conversion of the Series B Preferred Stock. Any amendment, termination or waiver effected in accordance with this paragraph shall be binding upon each holder of any Registrable Securities then outstanding, each future holder of all such Registrable Securities, and the Company. Notwithstanding the foregoing, this Agreement may not be amended and the observance of any term hereunder may not be waived with respect to any Eligible Stockholder without the written consent of such Eligible Stockholder if such amendment or waiver would treat such Eligible Stockholder adversely and in a manner disproportionate with respect to such Eligible Stockholder as compared to either ABS Capital Partners or TCV as

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holders of Registrable Securities. The Company shall give prompt written notice of any amendment or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, termination or waiver. No waivers of or exceptions to any term, condition or provision of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision, unless they otherwise so expressly provide. Notwithstanding anything herein to the contrary, any actions to be taken with respect to notices, consents, approvals or waivers required or contemplated to be given by TCV hereunder shall be effective if given by Stockholders holding a majority of the outstanding shares of the Company’s capital stock then held by TCV on an as-converted to Common Stock basis (the “TCV Majority”), and any such action by such TCV Majority shall bind all of TCV.

4.8 Severability.

Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

4.9 Delays or Omissions.

No delay or omission to exercise any right, power or remedy accruing to any party hereto, upon any breach or default of any other party hereto, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party hereto of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must comply with the provisions of Section 4.7 hereof, and must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party hereto, shall be cumulative and not alternative.

4.10 Entire Agreement.

This Agreement (including the Schedule hereto), the Stock Purchase Agreement, the Repurchase Agreement (as defined in the Stock Purchase Agreement), the Indemnification Agreement (as defined in the Stock Purchase Agreement), the Stockholders Agreement, the Certificate of Incorporation and the other agreements referred to herein and therein constitute the full and entire understanding and agreement between the parties hereto with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing among the parties hereto is expressly canceled. Pursuant to Section 4.7 of the Prior Agreement, the undersigned parties who are parties to such Prior Agreement hereby amend and restate the Prior Agreement to read in its entirety as set forth in this Agreement, all with the intent and effect that the Prior Agreement shall hereby be terminated and entirely replaced and superseded by this Agreement.

22.

4.11 Aggregation of Stock.

All shares of Registrable Securities held or acquired by a Person or its Affiliates (including entities under common investment management and, in the case of TCV, Bain if Bain becomes a party to this Agreement) shall be aggregated together for the purpose of determining the availability to such Person of any rights under this Agreement.

4.12 Costs of Enforcement.

If any party hereto seeks to enforce his, her or its rights under this Agreement by legal proceedings, the substantially non-prevailing party shall pay all costs and expenses incurred by the substantially prevailing party, including all reasonable attorneys’ fees and all fees, costs, or disbursements incurred to collect fees, costs and disbursements.

4.13 References.

All references in this Agreement to Sections and Subsections are to Sections and Subsections contained in this Agreement unless a different document is expressly specified. For purposes of this Agreement, the word “including” shall be deemed to be followed by the words “without limitation.”

4.14 WAIVER OF RIGHT TO JURY TRIAL.

BY EXECUTING THIS AGREEMENT, THE PARTIES HERETO KNOWINGLY AND WILLINGLY WAIVE ANY RIGHT THEY HAVE UNDER APPLICABLE LAW TO A TRIAL BY JURY IN ANY DISPUTE ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE ISSUES RAISED BY THAT DISPUTE.

4.15 Specific Enforcement.

Subject to Section 2.8, it is agreed and understood that monetary damages may not adequately compensate an injured party for the breach of this Agreement by any other party, that this Agreement shall be specifically enforceable, and that any breach or threatened breach of this Agreement shall be the proper subject of a temporary or permanent injunction or restraining order. Further, each party hereto waives any claim or defense that there is an adequate remedy at law for such breach or threatened breach and waives any requirement of the posting of any bond in connection with any proceeding to enforce the terms of this Agreement.

[Signature page follows]

23.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

COMPANY:
ALARM.COM HOLDINGS, INC.
By:	/s/ Stephen Trundle
	Name: Stephen Trundle
	Title: Chief Executive Officer
	Address: 8150 Leesburg Pike
	Vienna, VA 22182
STOCKHOLDERS:
ABS CAPITAL PARTNERS, V, L.P.
By:	ABS Partners V, L.P., its General Partner
By:	ABS Partners V, L.L.C., its General Partner
By:	/s/ Ralph Terkowitz
	Name: Ralph Terkowitz
	Title: Managing Member
ABS CAPITAL PARTNERS, V-A, L.P.
By:	ABS Partners V, L.P., its General Partner
By:	ABS Partners V, L.L.C., its General Partner
By:	/s/ Ralph Terkowitz
	Name: Ralph Terkowitz
	Title: Managing Member
ABS CAPITAL PARTNERS, V OFFSHORE, L.P.
By:	ABS Partners V, L.P., its General Partner
By:	ABS Partners V, L.L.C., its General Partner
By:	/s/ Ralph Terkowitz
	Name: Ralph Terkowitz
	Title: Managing Member

SIGNATURE PAGE TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

TCV VII, L.P.
a Cayman Islands exempted limited partnership, acting by its general partner
Technology Crossover Management VII, L.P.a Cayman Islands exempted limited partnership, acting by its general partner
Technology Crossover Management VII, Ltd. a Cayman Islands exempted company
By:	/s/ Ric Fenton
Name:	Ric Fenton
Title:	Authorized Signatory
TCV VII (A), L.P.
a Cayman Islands exempted limited partnership, acting by its general partner
Technology Crossover Management VII, L.P.a Cayman Islands exempted limited partnership, acting by its general partner
Technology Crossover Management VII, Ltd. a Cayman Islands exempted company
By:	/s/ Ric Fenton
Name:	Ric Fenton
Title:	Authorized Signatory
TCV MEMBER FUND, L.P.
a Cayman Islands exempted limited partnership, acting by its general partner
Technology Crossover Management VII, Ltd. a Cayman Islands exempted company
By:	/s/ Ric Fenton
Name:	Ric Fenton
Title:	Authorized Signatory

SIGNATURE PAGE TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

EGIS SECURITY FUND, LP
By:	/s/ Robert Chefitz
	Name: Robert Chefitz
	Title: Managing Member
BACKBONE PARTNERS, LLC
By:	/s/ Stephen Trundle
	Name: Stephen Trundle
	Title: Member
DAVID B. SHERWOOD, JR.
/s/ David B. Sherwood, Jr.

SIGNATURE PAGE TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

/s/ Daniel Ramos

Daniel Ramos

/s/ Alison Slavin

Alison Slavin

/s/ Jean-Paul Martin

Jean-Paul Martin

/s/ David Hutz

David Hutz

SIGNATURE PAGE TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

SQUAM LAKE INVESTORS IX, L.P.
By: BGPI, Inc., its General Partner
By:	/s/ Bill Doherty
Name:	Bill Doherty
Title:	V.P. of the General Partner
BAIN & COMPANY, INC.
By:	/s/ James P. Spoto
Name:	James P. Spoto
Title:	Director of Accounting

SIGNATURE PAGE TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

EX-10

Exhibit 10.1

DEED OF LEASE

THIS DEED OF LEASE (this “Lease”) is made as of April 21, 2009, between 8150 LEESBURG PIKE, L.L.C., a Virginia limited liability company (“Landlord”), and ALARM.COM INCORPORATED, a Delaware corporation (“Tenant”).

ARTICLE I

DEFINITIONS

1.1 Building: a thirteen (13) story building containing approximately one hundred ninety-eight thousand two hundred fifty (198,250) square feet of rentable area and located on approximately 2.06 acres of land at 8150 Leesburg Pike, Vienna, Virginia.

1.2 Premises: approximately eleven thousand seventy-two (11,072) square feet of rentable area located on the fourteenth (14^th) floor of the Building and outlined on Exhibit A.

1.3 Lease Term: eighty-four (84) months.

1.4 Anticipated Occupancy Date: upon execution of this Lease by the last to execute of Landlord and Tenant.

1.5 Base Rent: two hundred eighty-seven thousand eight hundred seventy-two dollars and no cents ($287,872.00) for the first Lease Year (which amount is based on twenty-six dollars and no cents ($26.00) per square foot of rentable area), subject, however, to increase as provided in Section 4.1.

1.6 Base Rent Annual Escalation Percentage: two and one-half percent (2.5%).

1.7 Base Year: 2009.

1.8 Security Deposit: forty-seven thousand nine hundred seventy-eight dollars and sixty-seven cents ($47,978.67).

1.9 Broker(s): Atlantic Realty Associates, Inc. and Thomas and Company.

1.10 Tenant Address for Notices: Daniel Ramos, Alarm.com Incorporated, 1861 International Drive, McLean, VA 22102, until Tenant has commenced beneficial use of the Premises, and 8150 Leesburg Pike, Vienna, Virginia 22182 after Tenant has commenced beneficial use of the Premises.

1.11 Guarantor(s): None.

ARTICLE II

PREMISES

2.1 Tenant leases the Premises from Landlord upon the terms herein. Tenant shall have the right, together with all rights in common with other tenants of the Building, to use all sidewalks, paved areas and parking areas appurtenant thereto, and all elevators, hallways, restrooms and other common areas therein and thereon.

ARTICLE III

TERM

3.1 The term of this Lease (the “Lease Term”) shall commence on the Lease Commencement Date specified in Section 3.2 and continue through the Rent Commencement Date and then after the Rent Commencement Date for the period specified in Section 1.3 (plus if the Rent Commencement Date is not the first day of a month, the partial month in which the Rent Commencement Date occurs). The Lease Term shall also include any renewal or extension of the term of this Lease.

3.2 The Lease Commencement Date shall be the Anticipated Occupancy Date. The Rent Commencement Date means the later of (a) the date the Tenant’s Work described in Section 9.6 is deemed substantially complete as certified by Landlord’s construction manager, or (b) August 1, 2009, or (c) the date Tenant commences beneficial use of the Premises but in all events the Rent Commencement Date shall not be later than September 1, 2009. Tenant shall be deemed to have commenced beneficial use of the Premises when Tenant begins normal business operations in the Premises. If Tenant is in material breach of any obligation hereunder, then Tenant shall not have any right to commence beneficial use of the Premises.

3.3 Delivery of the Premises is anticipated on or about the Anticipated Occupancy Date. If the Premises are not delivered by such date, then Landlord shall not have any liability whatsoever, and this Lease shall not be rendered voidable, on account thereof.

3.4 Lease Year means a period of one year commencing on the first day of the month in which the Rent Commencement Date occurs and each successive one year period.

3.5 Tenant shall have the right to renew the term of this Lease for one period of five years (the “Renewal Term”) commencing immediately after expiration of the initial term of this Lease. Tenant may exercise such right only by written notice not later than nine (9) months prior to the expiration of the initial term of this Lease. If such notice is not received timely by Landlord, then Tenant’s rights pursuant to this Section shall be of no further force or effect. The parties shall have thirty days after Landlord’s receipt of such notice in which to agree on the base rent and additional rent which shall be payable during the Renewal Term. Among the factors to be considered by the parties during such negotiations are the general office rental market in Tysons Corner, Virginia and the rental rates being quoted by Landlord to comparable tenants for comparable space in the Building. In no event shall the Base Rent payable during the first year of the Renewal Term be less than one hundred three percent (103%) of the Base Rent payable during the last year of the initial term. If during such thirty day period the parties agree on such rent, then during such period they shall execute an amendment to this Lease stating the rent so agreed upon. If during such period the parties do not for any reason whatsoever agree in writing upon such rent, then the Renewal Term shall not commence and the Lease Term shall expire at the expiration of the initial term. If Tenant is in material default when the renewal notice is given or any time thereafter prior to the commencement of the Renewal Term, then at Landlord’s written election the Renewal Term shall not commence and the Lease Term shall expire at the expiration of the initial term. If Tenant subleases or assigns more than fifty percent (50%) of the Premises, then at Landlord’s written election Tenant’s rights under this Section shall be of no further force or effect.

2.

ARTICLE IV

BASE RENT

4.1 Tenant shall pay the Base Rent in equal installments in advance on the first day of each month during a Lease Year. On the first day of the second and subsequent Lease Years, the Base Rent in effect shall be increased by the product of (a) the Base Rent Annual Escalation Percentage, multiplied by (b) the Base Rent in effect. Anything to the contrary herein notwithstanding, the Base Rent for the first four (4) full calendar months following the Rent Commencement Date shall be abated. When Tenant executes this Lease, Tenant shall pay an amount equal to one (1) monthly installment of the Base Rent, which amount shall be credited toward the installment of the Base Rent payable for the fifth full calendar month following the Rent Commencement Date. If the Rent Commencement Date is not the first day of a month, then on the Rent Commencement Date Tenant shall pay the Base Rent for the month in which the Rent Commencement Date occurs, calculated at a daily rate of one-thirtieth (l/30th) of an installment of the Base Rent.

ARTICLE V

OPERATING CHARGES AND REAL ESTATE TAXES

5.1 (a) Tenant shall pay Tenant’s proportionate share of the amount by which Operating Charges (defined in Section 5.l(b)) during each calendar year falling entirely or partly within the Lease Term exceed a base amount (the “Operating Charges Base Amount”) equal to the Operating Charges incurred during the Base Year. For purposes of this Section, Tenant’s proportionate share shall be that percentage which is equal to a fraction, the numerator of which is the rentable area of the Premises, and the denominator of which is the rentable area of the Building.

(b) Operating Charges mean the following expenses incurred by Landlord in the ownership and operation of the Building and the land upon which the Building is located (the “Land”) to the extent such expenses do not relate solely to space leased by, property of, or the use and occupancy by another tenant of a portion of the Building: (1) water, sewer and other utility charges and electricity charges to the extent such are not billed separately and directly to other Tenants by the applicable utility; (2) insurance premiums; (3) reasonable and customary management fees; (4) costs of service and maintenance contracts; (5) maintenance, repair and replacement expenses (to the extent not previously reserved as provided in subsection (b)(8); (6) amortization (on a straight-line basis over the useful life (not to exceed ten years), with interest at two percentage points over the Wall Street Journal prime rate specified in the Money Rates Section of the Wall Street Journal at the time the expenditure was made) of capital expenditures made by Landlord to (A) reduce operating expenses if Landlord reasonably estimates that the annual reduction in operating expenses shall exceed such amortization, or (B) comply with laws or insurance requirements enacted or imposed after the date hereof; (7) charges for janitorial services; (8) reasonable reserves for replacements, repairs and contingencies; and (9) any other expense incurred by Landlord in owning, maintaining, repairing or operating the Building and

3.

the Land unless such expense was incurred due to the intentional misconduct or gross negligence of the Landlord or other tenants. Operating Charges do not include: principal or interest payments on any mortgage, deed of trust or ground lease; leasing commissions; depreciation of the Building except as specified above; and the costs of special services or utilities separately charged to particular tenants of the Building.

(c) If the average occupancy rate for the Building during any year is less than ninety-five percent (95%), or if any tenant is paying separately for electricity or janitorial services furnished to its premises, then Operating Charges for such year shall be deemed to include all additional expenses, as reasonably estimated by Landlord, which would have been incurred during such year if such average occupancy rate had been ninety-five percent (95%) and if Landlord paid for electricity and janitorial services furnished to such premises. For example, if the janitorial charges for a year were one dollar ($1.00) per square foot of occupied rentable area, then it would be reasonable for Landlord to estimate that if the Building had been ninety-five percent (95%) occupied during such year, then janitorial charges for such year would have been $188,337.50.

(d) At the beginning of calendar year 2010 and each calendar year thereafter, Landlord shall submit to Tenant a written statement indicating the amount by which Operating Charges that Landlord reasonably expects to be incurred during such year exceed the Operating Charges Base Amount and Tenant’s proportionate share of such excess. Tenant shall pay to Landlord on the first day of each month after receipt of such statement, until Tenant’s receipt of a succeeding statement, an amount equal to one-twelfth (1/12) of such share. Landlord reserves the right to submit a revised statement if Landlord reasonably expects such share to differ from the prior estimation. If a statement is submitted after the beginning of a year, then the first payment thereafter shall be adjusted to account for any underpayment or overpayment based on the prior statement and subsequent payments shall be based on the latest statement.

(e) Within approximately one hundred twenty (120) days after the end of calendar year 2010 and each calendar year thereafter, Landlord shall submit a statement indicating (1) Tenant’s proportionate share of the amount by which actual Operating Charges incurred during such year exceeded the Operating Charges Base Amount, and (2) the sum of Tenant’s estimated payments for such year. If such statement indicates that such sum exceeds Tenant’s actual obligation, then Tenant shall deduct the overpayment from its next payment(s) pursuant to this Article or if no further sums are due hereunder because the Lease Term has expired, then such excess shall be returned to Tenant. If such statement indicates that Tenant’s actual obligation exceeds such sum, then Tenant shall pay the excess. If Tenant does not notify Landlord in writing of any objection to such statement within ninety (90) days after receipt, then Tenant shall be deemed to have waived such objection.

(f) If the Lease Term expires on a day other than January 1 or December 31, then Tenant’s liability pursuant to this Section shall be proportionately reduced based on the number of days in the Lease Term falling within such year.

5.2 (a) Tenant shall pay Tenant’s proportionate share of the amount by which Real Estate Taxes (defined in Section 5.2 (b)) during each calendar year falling entirely or partly within the Lease Term exceed a base amount (the “Real Estate Taxes Base Amount”) equal to

4.

the Real Estate Taxes incurred during the Base Year. For purposes of this Section, Tenant’s proportionate share shall be that percentage which is equal to a fraction, the numerator of which is the rentable area of the Premises, and the denominator of which is the rentable area of the Building.

(b) Real Estate Taxes mean (1) real estate taxes (including special assessments) imposed upon Landlord or assessed against the Building or the Land, (2) future taxes or charges imposed upon Landlord or assessed against the Building or the Land which are in the nature of or in substitution for real estate taxes, including any tax levied on or measured by rents payable, and (3) reasonable expenses incurred by Landlord in reviewing or seeking a reduction of real estate taxes on the Building or the Land (only to the extent that the reduction in Real Estate Taxes exceed the amount of expenses incurred). Real Estate Taxes shall be deemed to include any taxes abated due to Landlord’s substantial renovation, rehabilitation or replacement of the Building.

(c) At the beginning of calendar year 2010 and each calendar year thereafter, Landlord shall submit to Tenant a written statement indicating the amount by which Real Estate Taxes that Landlord reasonably expects to be incurred during such year exceed the Real Estate Taxes Base Amount and Tenant’s proportionate share of such excess. Tenant shall pay to Landlord on the first day of each month after receipt of such statement, until Tenant’s receipt of a succeeding statement, an amount equal to one-twelfth (1/12) of such share. Landlord reserves the right to submit a revised statement if Landlord reasonably expects such share to differ from the prior estimation. If a statement is submitted after the beginning of a year, then the first payment thereafter shall be adjusted to account for any underpayment or overpayment based on the prior statement and subsequent payments shall be based on the latest statement.

(d) Within approximately one hundred twenty (120) days after the end of calendar year 2010 and each calendar year thereafter, Landlord shall submit a statement indicating (1) Tenant’s proportionate share of the amount by which actual Real Estate Taxes incurred during such year exceeded the Real Estate Taxes Base Amount, and (2) the sum of Tenant’s estimated payments for such year. If such statement indicates that such sum exceeds Tenant’s actual obligation, then Tenant shall deduct the overpayment from its next payment(s) pursuant to this Article or if no further payments are due hereunder because the Lease Term has expired, then such excess shall be returned to Tenant. If such statement indicates that Tenant’s actual obligation exceeds such sum, then Tenant shall pay the excess. If Tenant does not notify Landlord in writing of any objection to such statement with in ninety (90) days after receipt, then Tenant shall be deemed to have waived such objection.

(e) If the Lease Term expires on a day other than January 1 or December 31, then Tenant’s liability pursuant to this Section shall be proportionately reduced based on the number of days in the Lease Term falling within such year.

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ARTICLE VI

USE OF PREMISES

6.1 Tenant shall use the Premises solely for office and customer service, call center activities, technology development and services and related uses. Tenant shall not use the Premises for any unlawful purpose, or in any manner that in Landlord’s opinion will constitute waste, nuisance or unreasonable annoyance to Landlord or any tenant of the Building, or in any manner that will increase the number of parking spaces required for the Building or its full occupancy pursuant to present and future laws (including the Americans with Disabilities Act), ordinances, regulations and orders (collectively “Laws”). Tenant shall comply with all Laws concerning Tenant’s use, occupancy and condition of the Premises and all machinery, equipment and furnishings therein. If any Law requires an occupancy or use permit for Tenant’s use of the Premises, then Tenant shall obtain and keep current such permit at Tenant’s expense and promptly deliver a copy thereof to Landlord. Tenant shall not use the Premises in a manner that would (a) violate the terms of any occupancy or use permit, (b) impair or interfere with any base building system or facility, or (c) adversely affect the Building’s appearance, character or reputation.

6.2 Tenant shall pay timely any business, rent or other tax or fee that is now or hereafter assessed or imposed upon Tenant’s use or occupancy of the Premises, the conduct of Tenant’s business in the Premises or Tenant’s fixtures, furnishings, inventory or personal property. If any such tax or fee is imposed upon Landlord or Landlord is responsible for collection or payment thereof, then Tenant shall pay to Landlord the amount of such tax or fee.

6.3 Tenant shall not generate, use, release, store or dispose of any Hazardous Materials in or about the Building except in the ordinary course of its business and in compliance with all applicable Laws. Hazardous Materials mean (a) “hazardous wastes” as defined by the Resource Conservation and Recovery Act of 1976, (b) “hazardous substances” as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980, (c) “toxic substances” as defined by the Toxic Substances Control Act, (d) “hazardous materials” as defined by the Hazardous Materials Transportation Act (as any of such Acts may be amended from time to time), (e) petroleum products, (f) chlorofluorocarbons, and (g) substances whose presence could be detrimental or hazardous to health or the environment.

ARTICLE VII

ASSIGNMENT AND SUBLETTING

7.1 Tenant shall not sublet or permit occupancy of (collectively “sublease”) the Premises or part thereof, or assign or otherwise transfer (collectively “assign”) this Lease or any of Tenant’s rights or obligations, without Landlord’s prior written consent, which consent shall not be unreasonably withheld. No assignment of this Lease may be effected by operation of law without Landlord’s prior written consent. Any assignment or sublease, Landlord’s consent thereto or Landlord’s collection of rent from any assignee or subtenant shall not be construed as (a) a waiver or release of Tenant from liability hereunder, or (b) relieving Tenant, any assignee or subtenant from the obligation of obtaining Landlord’s prior written consent to any other assignment or sublease. Tenant assigns to Landlord any amount due from any assignee or subtenant as security for performance of Tenant’s obligations pursuant to this Lease. Tenant directs each such assignee or subtenant to pay such amount directly to Landlord if such assignee or subtenant receives written notice from Landlord specifying that Tenant is in default under this Lease and that such amount shall be paid directly to Landlord. Each assignee and subtenant shall pay as so directed. Landlord’s collection of such amount shall not be construed as an acceptance of such assignee or subtenant as a tenant or as a permitted assignee or subtenant. Tenant’s

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obligations pursuant to this Lease shall be deemed to extend to any subtenant or assignee. Tenant shall cause each subtenant or assignee to comply with such obligations. Any assignee shall be deemed to have assumed obligations as if such assignee had originally executed this Lease and at Landlord’s request shall execute promptly a document confirming such assumption. Each sublease is subject to the condition that if the Lease Term is terminated or Landlord succeeds to Tenant’s interest in the Premises by voluntary surrender or otherwise, at Landlord’s option the subtenant shall be bound to Landlord for the balance of the term of such sublease and shall attorn to and recognize Landlord as its landlord under the then executory terms of such sublease. Tenant shall not mortgage this Lease without Landlord’s prior written consent, which consent may be granted or withheld in Landlord’s sole and absolute discretion. Tenant shall pay the costs (including reasonable and customary attorneys’ fees) incurred by Landlord in connection with Tenant’s request for Landlord to consent to any assignment, sublease or mortgage.

7.2 If Tenant is a partnership, then any event(s) (whether or not voluntary, concurrent or related) which results in a dissolution of Tenant or a withdrawal or change of partners who, on the date of this Lease, own a controlling interest, shall be deemed a voluntary assignment of this Lease. Each general partner shall be deemed to own a controlling interest. If Tenant is a corporation, then any event(s) (whether or not voluntary, concurrent or related) which results in a dissolution, merger, consolidation or other reorganization of Tenant or sale, transfer or relinquishment of the interest of shareholders who, on the date of this Lease, own a controlling interest, shall be deemed a voluntary assignment of this Lease, provided however, such voluntary assignment shall require Landlord’s prior consent only if the event or events giving rise to the deemed voluntary assignment result in a change of at least fifty-one percent (51%) of the beneficial or controlling ownership interests in Tenant (a “Change in Control”). If there is such a Change in Control, then Landlord’s consent shall be required for such voluntary assignment, but Landlord agrees that it will not unreasonably withhold its consent to such voluntary assignment of this Lease resulting from such Change in Control so long as (i) no Event of Default exists under this Lease, (ii) the assignee will utilize the Premises for the use as set forth herein , (iii) the assignee has a net worth and liquidity at least equal to the net worth and liquidity of Tenant as of the date of this Lease, (iv) the assignee executes a written assumption of the obligations of Tenant under the Lease, a copy of which is delivered to Landlord at the time of such Change in Control. In the event of any deemed voluntary assignment, Landlord shall receive prior written notice from Tenant. The preceding sentence shall not apply to corporations whose stock is traded through a national or regional exchange or an over-the-counter market.

7.3 If Tenant wants to assign or sublet all or part of the Premises or this Lease, then Tenant shall give Landlord written notice (“Tenant’s Request Notice”) specifying the proposed assignee or subtenant and its business, the commencement date of the proposed assignment or sublease (the “Proposed Sublease Commencement Date”), the area proposed to be assigned or sublet (the “Proposed Sublet Space”), any premium or other consideration being paid for the proposed assignment or sublease and all other terms of the proposed assignment or sublease, and including the most recent financial statement and Dun and Bradstreet report of such assignee or subtenant and reasonably detailed information regarding such assignee or subtenant’s reputation and business experience.

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7.4 Landlord reserves the right to terminate the Lease Term with respect to the Proposed Sublet Space by sending Tenant written notice within thirty (30) days after Landlord’s receipt of Tenant’s Request Notice, provided, however if there is a voluntary assignment due to Change in Control which meets the requirements for Landlord’s consent set forth in Section 7.2 above, then Landlord shall not by reason of such voluntary assignment have a right to terminate the Lease Term. If Landlord exercises such right, then (a) Tenant shall tender the Proposed Sublet Space to Landlord on the Proposed Sublease Commencement Date as if the Proposed Sublease Commencement Date had been originally set forth in this Lease as the expiration date of the Lease Term with respect to the Proposed Sublet Space, (b) if the Proposed Sublet Space is not the entire Premises, then as to all portions of the Premises other than the Proposed Sublet Space, this Lease shall remain in full force and effect except that the rent shall be reduced proportionately, and (c) if the Proposed Sublet Space is the entire Premises, then the Lease Term shall terminate on the Proposed Sublease Commencement Date.

7.5 If pursuant to any agreement effecting or relating to any sublease or assignment the subtenant or assignee is to pay any amount in excess of the rent and other amounts due under this Lease, then, whether such excess is in the form of an increased rental, lump sum payment, payment for the sale or lease of fixtures or other leasehold improvements or any other form (and if the applicable space does not constitute the entire Premises, then such excess shall be determined on a pro rata basis), Tenant shall pay to Landlord fifty (50%) of any such excess after deducting all commercially reasonable fees, payments or expenses relating to said assignment or sublease. Landlord shall have the right to inspect Tenant’s books and records relating to any sublease or assignment.

ARTICLE VIII

MAINTENANCE AND REPAIRS

8.1 Tenant shall maintain the Premises and all fixtures and equipment located therein or exclusively serving the Premises (but excluding base building fixtures and equipment) in clean, safe and sanitary condition, take good care thereof, make all repairs and replacements thereto and suffer no waste or injury thereto. Tenant shall give Landlord prompt written notice of any defect in or damage to the Building or any part thereof. Except as otherwise provided in Article XVII, all damage to the Premises or to any other part of the Building or the Land caused by any act or omission of any invitee, agent, employee, subtenant, assignee, contractor, client, family member, licensee, customer or guest of Tenant (collectively “Invitees”) or Tenant, shall be repaired by and at Tenant’s expense, except that Landlord shall have the right to make any such repair at Tenant’s expense. Base building fixtures and equipment shall be deemed to exclude without limitation special tenant equipment such as air conditioning equipment serving only the Premises, telecommunications and computer equipment, and kitchen equipment. At the expiration or earlier termination of the Lease Term, Tenant shall surrender the Premises broom clean and in good order, condition and repair, except for ordinary wear and tear and as otherwise provided in Article XVII. Landlord shall provide and install replacement tubes for building standard fluorescent light fixtures (subject to reimbursement per Article V); all other bulbs and tubes for the Premises shall be provided and installed at Tenant’s expense. Landlord shall maintain all common areas in the Building and on the Land in good condition and repair, including, without limitation, keeping grass, shrubbery and trees properly cut and trimmed and keeping all sidewalks, driveways and parking lots reasonably free of ice and snow.

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In addition, Landlord shall, at its cost and expense (but subject to inclusion in Operating Charges), be responsible for the maintenance, repair and replacement of the entire roofing system (including repair of leaks), Building structural components, including, but not limited to, extension walls, load bearing columns, foundation and floor slab, and all walls and structures, interior or exterior, separating the Premises from the rest of the Building (other than the exterior surface of the Premises’ demising walls (not the structural elements thereof which shall be the responsibility of Landlord), which shall be Tenant’s responsibility), the common mechanical systems in the Building existing outside any leased premises, electrical service, and water, gas, sewer, plumbing and telephone lines, and the HVAC systems in the Building, and all latent defects in the Building. For the avoidance of doubt, this obligation of Landlord includes initial repairing and painting all HVAC units in the Premises, at Landlord’s expense prior to the Rent Commencement Date.

ARTICLE IX

ALTERATIONS

9.1 Landlord is under no obligation to make any alterations, decorations, additions, improvements or other changes (collectively “Alterations”) in or to the Premises except as otherwise expressly provided herein.

9.2 Tenant may make improvements, changes or alterations in or to the Premises (“Alterations”) without Landlord’s consent; provided, however, that Tenant shall not make any Material Alteration without Landlord’s prior written consent, such consent not to be unreasonably withheld, conditioned or delayed. Landlord shall have thirty (30) days following Tenant’s written request for such consent (such request to be provided in the same manner as notices hereunder) to consent or disapprove, provided that such thirty (30) day period shall not commence until and unless Landlord receives from Tenant a reasonably detailed description of such Material Alteration. At the time of Landlord’s consent to any Material Alteration, Landlord will specify if such Material Alteration must be removed by Tenant at the termination or expiration of the Lease; if Landlord specifies that such removal is required and Tenant makes such Material Alteration, Tenant agrees to restore the area of the Premises affected by such Material Alteration to its condition as existed prior to such Material Alteration at the time of the removal of the same. “Material Alteration” means an Alteration that (i) affects in a material respect the structural integrity of the Building or the structural components of the Building, (ii) affects in a material respect the building systems, (iii) requires a change to the Building’s certificate of occupancy, or (iv) materially affects the exterior of the Building. Notwithstanding the preceding, “Material Alteration” does not include any of Tenant’s Work.

9.3 Tenant shall have the right, at Tenant’s cost and expense, to install trade fixtures and equipment that it may deem necessary to the conduct of Tenant’s business. All such installations of trade fixtures and equipment shall be at the cost of Tenant, and Tenant hereby agrees to indemnify and save harmless Landlord from any and all costs or expenses, including attorneys’ fees, that Landlord may incur by reason of any claim for labor performed or material furnished that may arise by reason of the installation of any fixtures or equipment or the installation of partitions by Tenant as herein provided or any Tenant Alterations. Any and all trade fixtures and equipment installed by Tenant shall be removed by it at the termination of this Lease, provided that Tenant shall repair any and all damage caused to the Premises by the removal of any such trade fixtures and equipment.

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9.4 Any Alteration made by Tenant (including any initial tenant improvements to the Premises) shall be made: (a) in a good, workmanlike, first-class and prompt manner; (b) using new materials only; (c) by a contractor, on days and at times and under the supervision of an architect approved in writing by Landlord (Tenant’s contractors shall comply with the Landlord’s construction rules and regulations attached hereto as Exhibit C); (d) in accordance with plans and specifications prepared by an engineer or architect approved by Landlord and reviewed by Landlord; (e) in accordance with Laws, requirements of any firm insuring the Building and Building standards; (f) after obtaining a worker’s compensation insurance policy approved in writing by Landlord and any bonds or insurance as mutually agreed between Landlord and Tenant; and (g) with respect to electrical and mechanical work, by a contractor selected by Tenant and approved by Landlord. If a lien (or a petition to establish a lien) is filed in connection with any Alteration, then such lien (or petition) shall be discharged by Tenant at Tenant’s expense within thirty (30) days thereafter by the payment thereof or filing of a bond acceptable to Landlord. Landlord’s consent to an Alteration shall be deemed not to constitute Landlord’s consent to subjecting its interest in the Premises or the Building to liens which may be filed in connection therewith. Promptly after the completion of an Alteration, Tenant at its expense shall deliver to Landlord three (3) sets of accurate as-built drawings showing such Alteration.

9.5 If a Material Alteration is made without Landlord’s prior written consent, then Landlord shall have the right at Tenant’s expense to remove such Material Alteration and restore the Premises and the Building to their condition immediately prior thereto or to require Tenant to do the same. All Alterations to the Premises or the Building made by either party shall immediately become Landlord’s property and shall be surrendered with the Premises at the expiration or earlier termination of the Lease Term, except that (a) if Tenant is not in default under this Lease, then Tenant shall have the right to remove, prior to the expiration or earlier termination of the Lease Term, movable furniture, movable furnishings and movable trade fixtures installed in the Premises by Tenant solely at Tenant’s expense pursuant to Section 9.3, and (b) Tenant shall be required to remove all Material Alterations to the Premises or the Building only in accordance with Section 9.2. Movable furniture, furnishings and trade fixtures shall be deemed to exclude without limitation any item the removal of which might cause damage to the Premises or the Building or which would normally be removed from the Premises with the assistance of any tool or machinery other than a dolly. If any such item is not removed prior to the expiration or earlier termination of the Lease Term, then such item shall become Landlord’s property and shall be surrendered with the Premises as a part thereof; provided, however, that Landlord shall have the right to remove such item from the Premises at Tenant’s expense.

9.6 Landlord shall provide Tenant an allowance (the “Improvements Allowance”) of twenty-five dollars ($25.00) per rentable square foot of the Premises. The Improvements Allowance is provided in order to help Tenant finance the cost of tenant improvements to the Premises including, without limitation, renovation of the restrooms located in the common area of the 14^th floor of the Building (“Tenant’s Work”). Landlord shall have no duty to advance any portion of the Improvements Allowance until Landlord has approved final working drawings for

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such tenant improvements, which approval shall not be unreasonably withheld, conditioned or delayed. The Improvements Allowance may be used for any portion of Tenant’s Work, including, but not limited to, build-out, design, drawings, and CD’s and a reasonable and customary construction management fee of one percent (1%) of total construction costs payable to Landlord, and up to $5.00 per rentable square foot of the Improvements Allowance may be used to pay the costs of furniture, telecommunications equipment, cabling and wiring. Within thirty (30) days after the written request of Tenant, provided that at the time of Tenant’s written request the Tenant’s Work is fifty percent (50%) complete, as certified by Tenant’s architect and verified by Landlord’s construction manager, Landlord shall reimburse Tenant for reasonable expenses incurred by Tenant to date in constructing such tenant improvements to the extent of fifty percent (50%) of the Improvements Allowance, provided: (i) such request is accompanied by a copy of the invoice for such expenses; (ii) copies of all contracts, bills, vouchers, change orders and other information relating to the expenses for which reimbursement is being sought as may be reasonably requested by Landlord shall be made available to Landlord by Tenant; (iii) the work and materials for which payment is requested are substantially in accordance with the final working drawings approved by Landlord; (iv) the work and materials for which payment is requested have been physically incorporated in to the Premises, free of any security interest, lien or encumbrance; and (vi ) Tenant has delivered to Landlord written, unconditional partial waivers of mechanics’ and materialmen’s liens against the Premises and the Building from all con tractors, subcontractors, laborers and material suppliers. Upon full completion of the Tenant’s Work, as certified by Tenant’s architect and verified by Landlord’s construction manager, provided Tenant shall deliver a written request to Landlord for reimbursement, Landlord shall reimburse Tenant, within thirty (30) days after Landlord receives Tenant’s written request, for the reasonable expenses incurred by Tenant in completing the tenant improvements to the extent of the remaining fifty percent (50%) of the Improvements Allowance, provided: (i) such request is accompanied by a copy of the invoice for such expenses; (ii) copies of all contracts, bills, vouchers, change orders and other information relating to the expenses for which reimbursement is being sought as may be reasonably requested by Landlord shall be made available to Landlord by Tenant; (iii) the work and materials for which payment is requested are substantially in accordance with the final working drawings approved by Landlord; (iv) the work and materials for which payment is requested have been physically incorporated into the Premises, free of any security interest, lien or encumbrance; and (vi) Tenant has delivered to Landlord written, unconditional final waivers of mechanics’ and material men’s liens against the Premises and the Building from all contractors, subcontractors, laborers and material suppliers. Notwithstanding anything above to the contrary, Landlord shall not be required to reimburse Tenant for any invoice received later than six months following the Rent Commencement Date. Any Improvements Allowance not spent or used by Tenant as provided herein for tenant improvements shall be applied to Base Rent, beginning on the Rent Commencement Date, and each month thereafter until used in full except that no amount of the increase in the Improvements Allowance described below may be applied to Base Rent. Any increase in the Improvements Allowance must be used for work and materials physically incorporated into the Premises. Tenant shall have the right to request, in a writing to Landlord delivered prior to the Rent Commencement Date, an increase in the Improvements Allowance up to $5.00 per rentable square foot and Landlord shall provide the same, and any amount so requested by Tenant shall be repaid to Landlord, together with interest at ten (10) percent per annum, in equal monthly installments over the initial Lease Term as Additional Rent.

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9.7 Throughout the Lease Term, at no additional cost to Landlord, Tenant shall have the right to install and maintain in a designated location on the roof of the Building a satellite dish and other telecommunications equipment integral to Tenant’s primary business in the Premises, subject to the rights of other tenants in the Building. The foregoing notwithstanding, Tenant shall not have the right to use more than its prorata share of the area of the Building’s roof made available for use by tenants. All aspects of such items and their installation shall be subject to Landlord’s prior written approval such approval shall not be unreasonably withheld, conditioned or delayed. Not later than the expiration or earlier termination of the Lease Term, Tenant shall remove such items and repair all damage associated therewith all at Tenant’s sole cost and risk.

9.8 Subject to Landlord’s approval and the rights of other tenants in the Building, Landlord shall grant access to the Building to telecommunications companies (approved in advance by Landlord) providing services to Tenant for the purpose of installing and operating telecommunications lines for Tenant’s operations in the Premises, including, without limitation communications cables and conduit (“Communications Installations”) in locations to be determined by Landlord in its sole discretion. All such Communications Installations shall be installed at Tenant’s sole cost and risk and Tenant shall be responsible at the termination or expiration of the Lease for removal of all such Communications Installations from the Building and the restoration of the Building to the condition it was in prior to the installation of such Communications Installations. In the event that Tenant’s Communications Installations interfere with the communications lines and/or equipment of Landlord or any other tenant of the Building, Tenant shall immediately take all actions reasonably required to stop such interference and shall reconfigure or remove any Communications Installations installed by or on behalf of Tenant in the Building which create or are related to such interference.

ARTICLE X

SIGNS

10.1 Landlord will list Tenant’s name in the Building directory. Tenant shall not paint, affix or otherwise display on any part of the exterior or interior of the Building any sign, advertisement or notice except as provided herein. Tenant may install, at Tenant’s sole cost and risk, a Tenant identification sign of no more than fifty (50) square feet on the fourth (4^th) floor exterior wall of the Building on the side of the Building facing Route 7. All aspects of such signage, including without limitation the exact physical location of the sign on the exterior and the lettering thereof, shall be subject to Landlord’s prior review and approval which shall not be unreasonably withheld, conditioned or delayed and any such sign must comply in all aspects with all applicable governmental laws, rules, ordinances and regulations. Tenant shall install such sign, if at all, not later than six months following the Rent Commencement Date. Tenant shall remove such exterior sign at Tenant’s cost and risk if required by Landlord during any maintenance or remodeling of the Building. Tenant shall insure, maintain in good condition and repair (and replace as reasonably determined by Landlord) such sign. Upon the expiration or earlier termination of the Lease Term, Tenant shall remove such exterior sign and repair any damage attributable to such sign or its removal, all at Tenant’s cost. Tenant shall illuminate such exterior sign 24 hours a day, 7 days per week.

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ARTICLE XI

SECURITY DEPOSIT

11.1 Tenant shall deliver the Security Deposit when Tenant executes this Lease. Landlord shall not be required to pay interest on the Security Deposit or to maintain the Security Deposit in a separate account. Within three (3) days after notice of Landlord’s use of the Security Deposit to pay any delinquent amounts payable by Tenant hereunder, Tenant shall restore the Security Deposit to its prior amount. Within forty-five (45) days after the expiration or earlier termination of the Lease Term, Landlord shall return the Security Deposit less such portion thereof as Landlord may have used to satisfy Tenant’s obligations. If Landlord transfers the Security Deposit to a transferee of the Building or Landlord’s interest therein, then such transferee (and not Landlord) shall be liable for its return.

ARTICLE XII

HOLDING OVER

12.1 Tenant acknowledges that it is extremely important that Landlord have substantial advance notice of the date Tenant will vacate the Premises because Landlord will (a) require an extensive period to secure a replacement tenant, and (b) plan its entire leasing and renovation program for the Building in reliance on its lease expiration dates. If the Premises are not surrendered at the expiration or earlier termination of Tenant’s right of possession, then it will be conclusively presumed that the value of possession, and the resulting loss that will be suffered by Landlord, far exceed the Base Rent and additional rent that would have been payable had the Lease Term continued during such holdover period. Therefore if upon the expiration or earlier termination of Tenant’s right of possession Tenant (or anyone claiming through Tenant) does not surrender immediately the Premises (or portion thereof), then the rent shall be increased to 125% of the Base Rent, additional rent and other sums that would have been payable pursuant to the provisions of this Lease (assuming the Lease Term for the entire Premises had continued during such holdover period) for the first month of such holdover period, 150% of the Base Rent, additional rent and other sums that would have been payable pursuant to the provisions of this Lease (assuming the Lease Term for the entire Premises had continued during such holdover period) for each of the second and third months of such holdover period, and 200% of the Base Rent, additional rent and other sums that would have been payable pursuant to the provisions of this Lease (assuming the Lease Term for the entire Premises had continued during such holdover period) for each month thereafter. Such rent shall be computed on a monthly basis and shall be payable on the first day of such holdover period and the first day of each calendar month thereafter during such holdover period until the Premises have been vacated.

ARTICLE XIII

INSURANCE

13.1 Tenant shall not conduct any activity or place any item in or about the Building which may violate the requirements or increase the rate of any insurance covering the Building. If any increase in such rate is due to any such activity or item, then (whether or not Landlord has consented to such activity or item) Tenant shall pay such increase. The statement of any insurance company or insurance rating or similar organization that such an increase is due to any such activity or item shall be conclusive evidence thereof.

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13.2 Tenant shall maintain throughout the Lease Term with a company licensed to do business in the jurisdiction in which the Building is located, approved in writing by Landlord and having a rating equal to or exceeding A:Xl in Best’s Insurance Guide (a) broad form commercial general liability insurance (written on an occurrence basis and including contractual liability coverage insuring Tenant’s obligations pursuant to Section 15.2, premises and operations, broad form property damage and independent contractors coverages, and an endorsement for personal injury), and (b) special form property insurance. Such liability insurance shall be in minimum amounts typically carried by prudent tenants engaged in similar operations, but in no event shall be in an amount less than two million dollars ($2,000,000) combined single limit per occurrence. Such property insurance shall be in an amount not less than that required to replace all Alterations and all other contents of the Premises. All such insurance (except for coverage of Tenant’s personal property contents in the Premises) shall name Landlord (and, at Landlord’s option, its partners, members, employees and building manager) and the holder of any Mortgage as additional insureds, contain an endorsement that such insurance shall remain in full force and effect notwithstanding that the insured may have waived its claims against any person prior to the occurrence of a loss, provide that the insurer waives all right of recovery by way of subrogation against Landlord, its partners, agents and employees, be primary and noncontributory, and contain a provision prohibiting cancellation, failure to renew, reduction in amount or a material change of coverage (1) as to the interests of Landlord or the holder of any Mortgage by reason of any act or omission of Tenant, and (2) without the insurer’s giving Landlord thirty (30) days’ prior written notice of such action. Tenant shall deliver a certificate of such insurance and receipts evidencing payment of the premium for such insurance (and, upon request, copies of all required insurance policies, including endorsements and declarations) to Landlord on or before the Lease Commencement Date and at least annually thereafter. Landlord reserves the right to reasonably increase from time to time the minimum amounts of insurance Tenant is required to maintain, provided, however, that any such increase shall conform to then existing generally-accepted market practices for leases of the type, size, term and location of this Lease.

13.3 Landlord shall procure and maintain throughout the Lease Term (a) “all risk” insurance for the Building, including the Premises, which insurance shall be written on a replacement cost basis, if obtainable and practical; otherwise, in an amount equal to the full reasonable insurable value of the Building, including the Premises (but excluding coverage for Tenant’s business personal property and excluding general liability insurance coverage for the Premises, each of which coverages shall be maintained by Tenant), which insurance shall be adjusted annually to reflect any increases in such insurable value; (b) rent or use and occupancy insurance against loss of rents to Landlord or damage resulting from a casualty in an amount equal to six (6) months’ requirement of the rent; and (c) general public liability insurance against claims for personal injury, death or property damage occurring upon, in or about the Building and all common areas, with limits of not less than Two Million Dollars ($2,000,000) in respect to injury or death of a single person, Two Million Dollars ($2,000,000) in respect of any one occurrence, and One Hundred Thousand Dollars ($100,000) in respect of property damage. The cost of premiums for the insurance coverage required under this subsection shall be included in Operating Charges under Article V of this Lease.

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ARTICLE XIV

SERVICES AND UTILITIES

14.1 Landlord will furnish to the Premises air-conditioning and heating during the seasons they are required in Landlord’s reasonable judgment. Landlord will provide: janitorial service on Monday through Friday (excluding holidays); electricity; water; elevator service; and exterior window-cleaning service. The Building’s normal operating hours are 8:00a.m. to 6:00p.m. on Monday through Friday (excluding holidays) and 9:00a.m. to noon on Saturday (excluding holidays) and such other hours as Landlord determines. Except as otherwise specified herein, Landlord shall not be required to furnish services and utilities beyond such hours. If Tenant requires air-conditioning or heating beyond such hours, then Landlord will furnish the same, provided Tenant gives sufficient advance notice of such requirement (not less than 24 hours advance notice) and pays for same in accordance with Landlord’s then current schedule. Upon execution of this Lease, the current schedule is $50.00 per hour for the first hour and $35.00 per hour for each additional hour.

14.2 Any piece of equipment existing or installed in the Premises having a name plate rating in excess of two kilowatts shall be deemed as requiring excess electric current. Landlord shall have the right to either install submeters or check meters to record the electrical consumption by such piece of equipment, or cause an independent engineer to survey and determine such consumption. Tenant shall pay the cost of any such survey and metering and installation, maintenance and repair thereof. Tenant shall pay Landlord (or the utility company, if direct service is provided by such company) for such consumption as shown by such metering (or a flat monthly charge determined by the survey) based on the rates charged for such service by such company. This Section shall not apply to normal office equipment such as personal computers, copiers, televisions, refrigerators, microwaves, VAV boxes with reheat coils and similar items but shall apply to supplemental air conditioning units.

ARTICLE XV

LIABILITY OF LANDLORD

15.1 Landlord, its employees and agents shall not be liable to Tenant, Invitees or any other person or entity for any damage (including indirect and consequential damage), injury, loss or claim (including claims for the interruption of or loss to business) based on or arising out of any cause whatsoever (except to the extent caused by the gross negligence or willful misconduct of Landlord, its employees and agents) for damages, including without limitation: repair to any portion of the Premises or the Building; interruption in the use of the Premises or any equipment therein; accident or damage resulting from any use or operation (by Landlord, Tenant or any other person or entity) of elevators or heating, cooling, electrical, sewerage or plumbing equipment; termination of this Lease by reason of damage to or condemnation of the Premises or the Building; fire, robbery, theft, vandalism, mysterious disappearance or any other casualty; actions of any other tenant of the Building or other person or entity; failure or inability to furnish or interruption in any utility or service specified in this Lease; and leakage in any part of the Premises or the Building. If a condition exists which may be the basis of a claim of constructive eviction, then Tenant shall give Landlord written notice thereof and a reasonable opportunity to correct such condition, and in the interim Tenant shall not claim that it has been constructively evicted but Tenant shall be entitled to a rent abatement in proportion to the portion of the

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Premises rendered unusable thereby. Any property placed by Tenant or Invitees in or about the Premises or the Building shall be at the sole risk of Tenant, and (except to the extent caused by the gross negligence or willful misconduct of Landlord, its employees and agents) Landlord shall not in any manner be responsible therefor. Any person receiving an article delivered for Tenant shall be acting as Tenant’s (not Landlord’s) agent. For purposes of this Article, the term “Building” shall be deemed to include the Land.

15.2 Tenant shall reimburse Landlord, its employees and agents for, and shall indemnify, defend upon request and hold them harmless from and against, all costs, damages, claims, liabilities, expenses (including attorneys’ fees), losses and court costs suffered by or claimed against them, directly or indirectly, based on or arising out of, in whole or in part, (a) use and occupancy by Tenant of the Premises or the business conducted by Tenant therein, (b) any act or omission of Tenant or any Invitee, (c) any material breach of Tenant’s obligations or warranties under this Lease, including failure to surrender the Premises upon the expiration or earlier termination of the Lease Term or (c) entry by Tenant or Invitees upon the Land prior to the Lease Commencement Date.

15.3 Neither Landlord nor any successors or assigns of Landlord shall be liable for any obligation or liability based on or arising out of any event or condition occurring during any period Landlord or such successor/assign was not the owner of the Building. If Landlord or such successor/assign transfers its interest in the Building, then Tenant shall attorn to the transferee and execute, acknowledge and deliver within ten (10) business days after request any reasonable document submitted to Tenant to confirm the attornment.

15.4 Tenant shall not have the right to offset, deduct or assert a counterclaim for any amount owed or allegedly owed to it, against any payment to Landlord. Tenant’s sole remedy for recovery of such amount is to institute an independent action.

15.5 If Tenant is awarded a money judgment against Landlord or with respect to any breach of Landlord’s obligations, then recourse for satisfaction of such judgment shall be limited to execution against Landlord’s estate and interest in the Building. No other asset of Landlord, any officer, director, partner or member of Landlord (collectively “Officer”) or any other person or entity shall be available to satisfy or subject to such judgment, nor shall any Officer or other person or entity have personal liability for satisfaction of any claim or judgment against Landlord or any Officer.

ARTICLE XVI

RULES

16.1 Tenant shall observe: the rules specified in Exhibit B; and any other reasonable and customary rule that Landlord may promulgate for the Building, provided notice thereof is given and such rule is not inconsistent with this Lease. Landlord shall have no duty to enforce any provision of any other lease against any other tenant. Landlord shall not enforce the rules in a manner that unreasonably discriminates against Tenant.

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ARTICLE XVII

DESTRUCTION

17.1 If the Premises are rendered totally or partially inaccessible or unusable by fire or other casualty, then Landlord shall, at its sole expense, diligently restore the Premises and the Building to substantially the same condition they were in prior to such casualty, except that if in Landlord’s reasonable judgment such restoration cannot be completed within one hundred eighty (180) days after the occurrence of such casualty (taking into account the time needed for effecting a settlement with any insurance company, removal of debris, preparation of plans and issuance of all required governmental permits), then either Landlord or Tenant shall have the right to terminate the Lease Term upon sixty (60) days prior written notice provided: (i) by Landlord, within forty-five (45) days after the occurrence of such casualty, or (ii) by Tenant, within thirty (30) days following Tenant’s receipt of written notice from Landlord that the restoration cannot be completed with one hundred eighty (180) days (which notice shall be provided by Landlord within thirty (30) days following the date of such casualty). If this Lease is not terminated pursuant to this Article, then until such restoration of the Premises are substantially complete Tenant shall be required to pay the Base Rent for only the portion of the Premises that in Landlord’s reasonable judgment is usable for Tenant’s purposes while such restoration is being made, except that if such casualty was caused by the act or omission of Tenant or an Invitee, then Tenant shall not be entitled to any rent reduction. After receipt of the insurance proceeds (including proceeds of any insurance maintained by Tenant), Landlord shall restore the Premises and the Building, except that (a) if such casualty was caused by the act or omission of Tenant or an Invitee, then Tenant shall pay the amount by which such expenses exceed any property insurance proceeds actually received by Landlord on account of such casualty, and (b) Landlord shall not be required to repair or restore any Alteration previously made by Tenant or any of Tenant’s trade fixtures, furnishings, equipment or personal property. Anything to the contrary notwithstanding, Landlord shall have the right to terminate this Lease if (l) insurance proceeds are insufficient to pay the full cost of such restoration, (2) any Mortgage holder does not make such proceeds available for such restoration, (3) zoning or other Laws do not permit such restoration, or (4) restoration costs exceed twenty-five percent (25%) of the Building’s replacement value.

ARTICLE XVIII

CONDEMNATION

18.1 If one-third or more of the Premises or occupancy thereof is condemned or sold under threat of condemnation (collectively “condemned”), then this Lease shall terminate on the day prior to the date title vests in the condemnor (the “Vesting Date”). If less than such one-third is condemned, then this Lease shall continue in full force and effect as to the part of the Premises not condemned, except that as of the Vesting Date rent shall be reduced proportionately.

18.2 All awards, damages and compensation paid on account of such condemnation shall belong to Landlord. Tenant assigns to Landlord all rights thereto. Tenant shall not make any claim against Landlord or the condemnor for any portion thereof attributable to damage to the Premises, value of the unexpired portion of the Lease Term, leasehold improvements or severance damages. The foregoing shall not prevent Tenant from pursuing a separate claim

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against the condemnor for the value of movable furnishings and movable trade fixtures installed in the Premises solely at Tenant’s expense, relocation expenses and loss of tenant ‘s goodwill, provided that such claim in no way diminishes any award, damages or compensation payable to Landlord.

ARTICLE XIX

DEFAULT

19.1 An Event of Default is (a) Tenant’s failure to make when due any payment of the Base Rent, additional rent or other amount, which failure continues for ten (10) days after written notice from Landlord, (b) Tenant’s breach of any other covenant or warranty, which breach continues for thirty (30) days after written notice from Landlord or such longer period as may be reasonably necessary to cure the same if the breach is not capable of cure within thirty (30) days, provided that such longer period shall not exceed a total of sixty (60) days following Landlord’s written notice, (c) an Event of Bankruptcy as specified in Article XX, or (d) Tenant’s dissolution or liquidation.

19.2 This Lease is on the express condition that if an Event of Default occurs (even if prior to the Lease Commencement Date), then this Section shall apply. Except as otherwise provided in this Section, Landlord’s obligations pursuant to this Lease shall cease and failure to perform such obligations shall not relieve Tenant from any obligation. If an Event of Default occurs, Landlord shall have the right to terminate this Lease. In addition, to the extent permitted by applicable law, with or without terminating this Lease, Landlord may re-enter, terminate Tenant’s right of possession and take possession of the Premises. The provisions of this Article shall operate as a notice to quit. Tenant waives any other notice to quit or of Landlord’s intention to re-enter the Premises or terminate this Lease. If necessary, Landlord may proceed to recover possession of the Premises under applicable law, or by such proceedings, including re-entry and possession, as may be applicable and permitted by applicable law. Anything to the contrary in the foregoing notwithstanding, Landlord shall not exercise its remedies set forth herein following an Event of Default until the matter of Tenant’s default has been Finally Determined by judicial proceeding. As used in this Section 19.2, a matter has been “Finally Determined” when a judgment has been rendered by a court having jurisdiction that Tenant was in default of its obligations under this Lease and the time for appeal thereof has passed without an appeal having been taken. Landlord may relet the Premises or any part thereof, alone or together with other space, for such term(s) (which may extend beyond the date on which the Lease Term would have expired but for any termination thereof) and on such terms and conditions (which may include concessions) as Landlord, in its sole discretion, may determine, but Landlord shall not be liable for, nor shall Tenant’s obligations be diminished by reason of, Landlord’s failure to relet all or any portion of the Premises or collect any rent due upon such reletting so long as Landlord’s failure to relet or collect rents is reasonable under the circumstances. Whether or not this Lease is terminated or any suit is instituted, Tenant shall be liable for: (a) the Base Rent, additional rent, damages or other sums which may be due or sustained prior to such default, and for all costs, fees and expenses (including without limitation reasonable attorneys’ fees, brokerage fees, advertising expenses, expenses incurred in placing the Premises in first-class rentable condition and reasonable concessions (based on then existing market conditions for leases with similar terms as those herein) granted by Landlord) incurred by Landlord in pursuit of its remedies and in renting the Premises to others from time to time; and

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(b) additional damages which at Landlord’s election shall be either: (1) an amount equal to the Base Rent and additional rent which would have become due from the date of Tenant’s default through the expiration (or what but for any termination thereof would have been such expiration), less the amount of rental, if any, which Landlord receives during such period from others to whom the Premises may be rented (other than any additional rent received as a result of any failure of such other person to perform any of its obligations), which amount shall be computed and payable in monthly installments, in advance, on the first day of each calendar month following Tenant’s default and continuing until the expiration of the Lease Term (or what but for any termination thereof would have been such expiration); provided, however, that if at the time of any reletting of the Premises there exists other space in the Building available for leasing, then the Premises shall be deemed the last space rented, even though the Premises may be relet prior to the date such other space is leased. Separate suits may be brought from time to time to collect any such damages for any month(s) (and any such suit shall not in any manner prejudice Landlord’s right to collect any such damages for any subsequent month(s)) or Landlord may defer initiating any such suit until after the expiration of the Lease Term (in which event such deferral shall not be construed as a waiver of Landlord’s rights as set forth herein and Landlord’s cause of action shall be deemed not to have accrued until the expiration of the Lease Term); or (2) an amount equal to the present value (as of the date of Tenant’s default) of the Base Rent and additional rent due or which would have become due from time to time through the expiration of the Lease Term (or what but for any termination thereof would have been such expiration), which liquidated and agreed final damages shall be payable to Landlord in a lump sum on demand. For purpose of this Section, present value shall be computed by discounting at a rate equal to one (1) whole percentage point above the discount rate in effect (as of the date of payment) at the Federal Reserve Bank located in Richmond , Virginia. Landlord may bring suit to collect any such damages at any time after an Event of Default. Tenant waives any right of redemption, re-entry or restoration of the operation of this Lease under any present or future law, including any such right which Tenant would otherwise have if Landlord obtains possession of the Premises after an Event of Default. Whether or not the Lease Term and/or Tenant’s right of possession is terminated, Landlord shall have the right to terminate any renewal or expansion right and to withhold any consent or approval in its sole and absolute discretion. If Landlord is entitled, or Tenant is required, pursuant to any provision hereof to take any action upon the termination of the Lease Term, then Landlord shall be entitled, and Tenant shall be required, to take such action also upon the termination of Tenant’s right of possession.

19.3 The various rights and remedies reserved to Landlord, including those not specifically described herein, shall, to the extent that the exercise of such right and/or remedy does not result in a duplicative recovery, be cumulative and shall be in addition to every other right or remedy provided for in this Lease or (except to the extent contrary to an express term hereof) now or hereafter existing at law or in equity, and the exercise of the rights or remedies provided for in this Lease or now or hereafter existing at law or in equity shall not preclude the simultaneous or later exercise by Landlord of any or all other rights and remedies. Landlord’s delay or failure to exercise or enforce any of Landlord’s rights or remedies or Tenant’s obligations shall not constitute a waiver of any such rights, remedies or obligations. Landlord’s acceptance of any payment with knowledge of a breach shall not constitute a waiver of such breach. Landlord shall be deemed not to have granted any waiver unless such waiver is set forth expressly in an instrument signed by Landlord. Any such waiver shall not be construed as a waiver of any matter except as specified therein. Neither Tenant’s payment of an amount less

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than a sum due nor Tenant’s endorsement or statement on any check or letter accompanying such payment shall be deemed an accord and satisfaction. Notwithstanding any request or designation by Tenant, Landlord may apply any payment received from Tenant to any payment then due. Landlord’s acceptance of any payment (including any payment pursuant to Section 12.1) shall be deemed not to constitute a waiver of any breach or prejudice Landlord’s rights and remedies. Re-entry and acceptance of keys shall not be considered an acceptance of a surrender of this Lease.

19.4 If more than one natural person and/or entity shall constitute Tenant, then the liability of each such person or entity shall be joint and several. If Tenant is a general partnership or other entity the partners or members of which are subject to personal liability, then the liability of each such partner or member shall be joint and several.

19.5 If Tenant fails to make any payment to any third party or to do any act required hereby to be made or done by Tenant, then Landlord may, but shall not be required to, make such payment or do such act after reasonable prior notice to Tenant. Landlord’s taking such action shall not be considered a cure of such failure by Tenant or prevent Landlord from pursuing any remedy it is otherwise entitled to in connection with such failure. If Landlord elects to take such action, then Tenant shall reimburse Landlord for such amounts together with interest at the Default Rate immediately upon demand.

19.6 If Tenant fails to pay the Base Rent, additional rent or any other payment due Landlord by the date such payment is due (without regard to any grace period specified in this Lease), then (without limiting Landlord’s rights and remedies) Tenant shall pay a late fee of five percent (5%) of the amount of such payment. Such payment shall bear interest at the Default Rate from the date such payment was due to the date of payment. The Default Rate shall equal the rate per annum which is the greater of eighteen percent (18%) or five (5) whole percentage points above the prime rate published from time to time in the Money Rates section of the Wall Street Journal or substitute prime rate reasonably designated by Landlord.

19.7 Intentionally Deleted.

19.8 If Landlord shall be in default hereunder, and if such default materially impairs Tenant’s use of or operations in the Premises, Tenant shall so notify Landlord in writing and Landlord shall have a period of thirty (30) days following the date of receipt of such written notice to cure the default, or if such default is of a nature that it cannot be cured in thirty (30) days, then Landlord shall have a reasonable period of time beyond such thirty day period to cure the default provided that Landlord is diligently pursuing such cure. In the event that Landlord does not cure the default within the applicable cure period, Tenant shall notify Landlord in writing that Tenant intends to cure such default and Tenant shall have the right, but not the obligation, to cure such default for the account of Landlord, and any reasonable amount paid by Tenant in so doing shall be deemed paid for the account of Landlord, Landlord agreeing to reimburse Tenant therefrom. If Landlord shall fail to reimburse Tenant within thirty (30) days of written demand for any amount paid for the account of Landlord hereunder, such amount may be deducted by Tenant from the next or any succeeding payments of Base Rent provided, however, that Tenant shall not deduct any amount until the matter of Landlord’s default has been Finally Determined by judicial proceeding. As used in this Lease, a matter has been “Finally

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Determined” when a judgment has been rendered by a court having jurisdiction that Landlord was in default of those obligations of Landlord under this Lease for which Tenant claims reimbursement and the time for appeal thereof has passed without an appeal having been taken.

ARTICLE XX

BANKRUPTCY

20.1 An Event of Bankruptcy is the occurrence with respect to Tenant, Guarantor or any other person liable for Tenant’s obligations hereunder, including without limitation any general partner of Tenant (“General Partner”) if Tenant is now or hereafter a partnership, of any of the following: (a) such person’s becoming insolvent, as that term is defined in Title II of the United States Code (the “Bankruptcy Code”), or under the insolvency laws of any state (the “Insolvency Laws”); (b) appointment of a receiver or custodian for any property of such person, or the institution of a foreclosure or attachment action upon any property of any such person which is not discharged within sixty (60) days; (c) filing by such person of a voluntary petition under the provisions of the Bankruptcy Code or Insolvency Laws; (d) filing of an involuntary petition against such person as the subject debtor under the Bankruptcy Code or Insolvency Laws, which either (1) is not dismissed within sixty (60) days after filing, or (2) results in the issuance of an order for relief against the debtor; (e) such person’s making or consenting to an assignment for the benefit of creditors or a composition of creditors; (f) such person’s submitting (either before or after execution hereof) to Landlord any financial statement containing any intentional material inaccuracy or omission; or (g) decrease by fifty percent (50%) or more of such person’s net worth below the net worth of such person as of the date hereof.

20.2 After the commencement of a case (the “Case”) in which Tenant is the subject debtor under the Bankruptcy Code, (a) Tenant or its trustee in bankruptcy (collectively “Trustee”) shall perform all of Tenant’s post-petition obligations under this Lease, and (b) if Landlord is entitled to damages (including without limitation unpaid rent), then all such damages shall be entitled to administrative expense priority pursuant to Section 507(a)(l) of the Bankruptcy Code. If the Lease is assigned pursuant to the Bankruptcy Code, then the assignee shall be deemed without further act to have assumed all of Tenant’s obligations under this Lease arising from and after such assignment and at Landlord’s request shall execute an instrument confirming such assumption. Trustee shall not have the right to assume or assume and assign this Lease unless Trustee promptly (a) cures all defaults under this Lease, (b) compensates Landlord for damages incurred as a result of such defaults, (c) provides adequate assurance of future performance on the part of Trustee as debtor in possession or Trustee’s assignee, and (d) complies with all other requirements of the Bankruptcy Code. If Trustee fails to assume or assign this Lease in accordance with the requirements of the Bankruptcy Code within sixty (60) days after the initiation of the Case (or, if shorter, the shortest period of time in which Trustee may be required to so act), then Trustee shall be deemed to have rejected this Lease. If this Lease is rejected or deemed rejected, then Landlord may exercise all rights and remedies available pursuant to Article XIX. Adequate assurance of future performance shall require (among other things) that the following minimum criteria be met: (1) Tenant’s gross receipts in the ordinary course of business during the thirty (30) days preceding the Case must be greater than ten (10) times the next monthly installment of the Base Rent and additional rent; (2) Both the average and median of Tenant’s monthly gross receipts in the ordinary course of business during the seven (7) months preceding the Case must be greater than ten (10) times the next

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monthly installment of the Base Rent and additional rent; (3) Trustee must pay its estimated pro rata share of the cost of all services performed or provided by Landlord (whether directly or through agents or contractors and whether or not previously included as part of the Base Rent) in advance of the performance or provision of such services; (4) Trustee must agree that Tenant’s business shall be conducted in a first-class manner, and that no liquidating sale, auction or other non-first-class business operation shall be conducted in the Premises; (5) Trustee must agree that the use of the Premises as stated in this Lease shall remain unchanged and that no prohibited use shall be permitted; (6) Trustee must agree that the assumption or assumption or assignment of this Lease shall not violate or affect the rights of other tenants in the Building; (7) Trustee must pay at the time the next monthly installment of the Base Rent is due, in addition to such installment, an amount equal to the monthly installments of the Base Rent and additional rent due for the next six (6) months thereafter, such amount to be held as a security deposit; (8) Trustee must agree to pay immediately after Landlord draws on such security deposit the amount drawn; (9) Trustee must comply with all of Tenant’s obligations under this Lease; and (10) All assurances of future performance specified in the Bankruptcy Code must be provided.

ARTICLE XXI

SUBORDINATION

21.1 This Lease is subject and subordinate to the lien, provisions, operation and effect of all mortgages, deeds of trust, ground leases or other security instruments which may now or hereafter encumber the Building or the Land (collectively “Mortgages”), to all funds and indebtedness intended to be secured thereby, and to all renewals, extensions, modifications, recastings or refinancings thereof, provided that Landlord shall use commercially reasonable efforts to obtain from the Mortgagee under such Mortgage(s) a subordination, non-disturbance and attornment agreement (“SNDA”) on such Mortgagee’s standard form. The holder of a Mortgage to which this Lease is subordinate shall have the right (subject to any required approval of the holder of any other Mortgage) at any time to declare this Lease to be superior to the lien, provisions, operation and effect of such Mortgage.

21.2 At Landlord’s request Tenant shall execute promptly any requisite or appropriate document confirming such subordination. Tenant waives the provisions of any statute or rule of law now or hereafter in effect which may give Tenant any right to terminate or otherwise adversely affect this Lease or Tenant’s obligations in the event any such foreclosure proceeding is prosecuted or completed or in the event the Land, the Building or Landlord’s interest therein is transferred by foreclosure sale or by deed in lieu of foreclosure. If this Lease is not extinguished upon such transfer or by the transferee following such transfer, then, at the request of such transferee, Tenant shall attorn to such transferee and shall recognize such transferee as landlord under this Lease. Upon such attornment such transferee shall not be (a) bound by any payment of the Base Rent or additional rent more than one (1) month in advance, (b) bound by any amendment of this Lease made without the consent of the holder of each Mortgage existing as of the date of such amendment, (c) liable for any breach, act or omission of any prior landlord, (d) subject to any offsets or defenses which Tenant might have against any prior landlord, or (c) liable for return of the Security Deposit unless such transferee actually receives the Security Deposit. Within ten (10) days after receipt, Tenant shall execute, acknowledge and deliver any requisite or appropriate document submitted to Tenant confirming such attornment.

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21.3 If a (prospective or current) holder of a Mortgage requires that modifications to this Lease be obtained, and provided that such modifications (a) are reasonable, (b) do not adversely affect Tenant’s use of the Premises as herein permitted, and (c) do not increase the rent and other sums to be paid by Tenant after the Term hereof, or impose any additional monetary obligations upon Tenant or eliminate any rights or lease extension or expansion options of Tenant hereunder, then Landlord may submit to Tenant an amendment to this Lease incorporating such modifications. Tenant shall execute, acknowledge and return such amendment within ten (10) days after receipt.

ARTICLE XXII

QUIET ENJOYMENT

22.1 If Tenant shall perform timely all of its obligations, then, subject to the provisions of this Lease, Tenant shall during the Lease Term peaceably and quietly occupy and enjoy possession of the Premises without hindrance by Landlord, any successor in interest to Landlord, or anyone claiming through Landlord.

22.2 Landlord reserves the right, subject to Tenant’s rights hereunder, to: (a) change the street address and name of the Building; (b) change the arrangement and location of entrances, passageways, doors, doorways, corridors, elevators, stairs, restrooms or other public parts of the Building; (c) erect, use and maintain pipes, conduits and other equipment in and through the Premises; (d) grant to anyone the exclusive right to conduct any particular business in the Building not inconsistent with the permitted use of the Premises; (e) use or lease exclusively the roof, sidewalks and other exterior areas so long as such use or lease does not materially interfere with Tenant’s rights to use the roof; (f) resubdivide the Land or to combine the Land with other lands; (g) construct improvements on the Land and in the public and common areas of the Building; (h) relocate any parking area designated for Tenant’s use and charge for permits to park in the underground garage (except to the extent Tenant is entitled to free parking permits as set forth herein); (i) display signs, advertisements and notices on any part of the exterior or interior of the Building; and (ii) make alterations to the Premises after Tenant vacates the Premises or portion thereof and without relieving Tenant of its obligation to pay rent through the expiration of the Lease Term. Exercise of any such right shall not be considered a constructive eviction or a disturbance of Tenant’s business or occupancy. In exercising such rights, Landlord shall make commercially reasonable efforts to minimize the disturbance of Tenant’s use and enjoyment of the Premises.

ARTICLE XXIII

PARKING

23.1 At Tenant’s request Landlord shall make available to Tenant and its employees, at no additional cost or expense, monthly parking permits at a ratio of three permits for each 1,000 square feet of rentable area in the Premises for the parking of a standard-sized automobiles on the P1 and P2 levels of the garage in the Building (the “Garage”). In addition, Tenant will be entitled to use three reserved spaces on the third floor exterior parking deck at no cost to Tenant during the initial Lease Term except that Tenant will pay the cost of reserved signage for such spaces. Tenant shall be permitted to purchase additional parking permits to the extent parking space is available in the Building. The charge for such additional permits shall be the prevailing

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rate charged from time to time by Landlord or the Garage operator (currently $55.00 per permit on the P1 and P2 levels, $45.00 per permit on the deck level, and $75.00 per permit on the lobby level). Monthly permits for the parking of automobiles in reserved or unreserved spaces in the Garage or third floor parking deck may be purchased on a monthly basis based on availability. The foregoing notwithstanding, Landlord does not guarantee the availability of any permits to Tenant during the second or any subsequent month of the Lease Term if and to the extent that Tenant docs not purchase such monthly permits during the first month and each subsequent month of the Lease Term.

ARTICLE XXIV

GENERAL PROVISIONS

24.1 Tenant acknowledges that neither Landlord nor any broker, agent or employee of Landlord has made any representation or promise with respect to the Premises or the Building except as expressly set forth herein, and no right is being acquired by Tenant except as expressly set forth herein. This Lease contains the entire agreement of the parties and supersedes all prior agreements, negotiations, letters of intent, proposals, representations, warranties and discussions between the parties. This Lease may be changed in any manner only by an instrument signed by both parties.

24.2 Nothing contained herein shall be construed as creating a relationship between the parties other than that of landlord and tenant.

24.3 Each party warrants that in connection with this Lease it has not employed or dealt with any broker, agent or finder other than the Broker(s) whose commissions shall be paid by Landlord pursuant to a separate agreement.

24.4 From time to time but not more than two (2) times per year upon ten (10) business days’ prior written notice, Tenant and each subtenant and assignee of Tenant shall execute, acknowledge and deliver to Landlord and its designees a written statement certifying: (a) that this Lease is unmodified and in full force and effect (or that this Lease is in full force and effect as modified and stating the modifications); (b) the dates to which rent and any other charges have been paid; (c) that, to Tenant’s knowledge, Landlord is not in default in the performance of any obligation (or specifying the nature of any default); (d) the address to which notices are to be sent; (e) that this Lease is subordinate to all Mortgages of which Tenant has knowledge; (f) that Tenant has accepted the Premises and all work therefor has been completed (or specifying the incomplete work); and (g) such other matters as Landlord may reasonably request. Any such statement may be relied upon by any owner of the Building or the Land, any prospective purchaser of the Building or the Land, any holder or prospective holder of a Mortgage or any other person or entity. Time is of the essence to the delivery of such statements. Tenant’s failure to deliver timely such statements may cause substantial damages resulting from, for example, delays in obtaining financing secured by the Building. If any such statement is not delivered timely by Tenant, then all matters contained in such statement shall be deemed true.

24.5 LANDLORD, TENANT, GUARANTORS AND GENERAL PARTNERS WAIVE TRIAL BY JURY IN ANY ACTION, CLAIM OR COUNTERCLAIM BROUGHT IN CONNECTION WITH ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED

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WITH THIS LEASE, THE LANDLORD-TENANT RELATIONSHIP, TENANT’S USE OR OCCUPANCY OF THE PREMISES OR ANY CLAIM OF INJURY OR DAMAGE. Tenant, Guarantors and General Partners consent to service of process relating to any such action at the Premises; provided, however, that nothing herein shall be construed as requiring such service at the Premises. Landlord, Tenant, all Guarantors and all General Partners waive any objection to the venue of any action filed in any court situated in the jurisdiction in which the Building is located and waive any right under the doctrine of forum non conveniens or otherwise to transfer any such action to any other court.

24.6 Any notice or other required communication shall be in writing and deemed duly given when delivered in person (with receipt therefor) or sent (postage prepaid, return receipt requested) by Federal Express, other overnight courier, or certified mail, to the following addresses: (a) if to Landlord, 8150 Leesburg Pike, Suite 1100, Vienna, Virginia 22182; or (b) if to Tenant, at the Tenant Address for Notices. A party may change its address by notice given in accordance with this Section. If Landlord or the holder of any Mortgage notifies Tenant that a copy of each notice to Landlord shall be sent to such holder at a specified address, then Tenant shall give (in the manner specified in this Section and at the same time such notice is given to Landlord) a copy of each such notice to such holder, and no such notice shall be considered duly given unless such copy is so given to such holder. If Tenant claims that Landlord has breached any obligation, then Tenant shall give such holder notice specifying the breach and permit such holder a reasonable opportunity (not less than sixty (60) days) to cure the breach. Such holder’s curing of Landlord’s default shall be deemed performance by Landlord.

24.7 Each provision shall be valid and enforceable to the fullest extent permitted by law. If any provision or its application to any person or circumstance shall be in valid or unenforceable to any extent (e.g., an interest rate is usurious), then such provision shall be deemed to be replaced by the valid and enforceable provision most substantively similar thereto (e.g., the highest non-usurious interest rate) and the remainder of this Lease and the application of such provision to other persons or circumstances shall not be affected.

24.8 Headings are used for convenience and shall not be considered in construing this Lease. Gender appropriate pronouns and plural or singular forms shall be substituted as the context may require. This Lease may be executed in multiple counterparts, each of which is deemed an original and all of which constitute one and the same document.

24.9 This Lease shall be binding upon and inure to the benefit of each party and its successors and assigns, subject to the provisions restricting assignment or subletting.

24.10 Tenant shall permit Landlord and its designees to enter the Premises upon reasonable prior notice (except in case of an emergency), without rent abatement, to inspect and exhibit the Premises and make such alterations and repairs as Landlord deems necessary.

24.11 This Lease shall be governed by the laws of the Commonwealth of Virginia.

24.12 The submission to Tenant of correspondence or an unsigned copy of this document shall not constitute an offer or option to lease. This Lease shall become effective only upon execution and delivery by both parties.

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24.13 Time is of the essence with respect to each obligation of Tenant.

24.14 Landlord reserves the right to make changes to the Building’s plans and specifications, provided such changes do not alter the Building’s character or materially, adversely affect Tenant’s rights hereunder and quiet enjoyment of the Premises.

24.15 All amounts payable by Tenant shall be paid to Landlord by check (subject to collection) and delivered to the address to which notices to Landlord are to be given or to such other party or such other address as Landlord may designate in writing. Except as otherwise specified, any amount owed by Tenant to Landlord, and any cost, expense, damage or liability incurred by Landlord for which Tenant is liable, shall be considered additional rent payable pursuant to this Lease and paid by Tenant within ten (10) days after the date Landlord notifies Tenant of the amount thereof.

24.16 Tenant’s liabilities existing as of the expiration or earlier termination of the Lease Term shall survive such expiration or termination.

24.17 [Intentionally Deleted]

24.18 If either party hereto is delayed or prevented from performing any obligation due to fire, act of God, governmental act or failure to act, labor dispute, inability to procure materials or any cause beyond such party’s reasonable control (whether similar or dissimilar to the foregoing), then the time for performance shall be excused for the period of such delay or prevention and extended for a period equal to the period of such delay or prevention. The foregoing notwithstanding, this Section shall not excuse any late payment or extend the Lease Term.

24.19 Landlord’s review, approval and consent powers (including the right to review plans and specifications) are for its benefit only. Such review, approval or consent (or conditions imposed in connection therewith) shall be deemed not to constitute a representation concerning legality, safety or any other matter. Tenant waives any right to damages based upon Landlord’s actually or allegedly wrongfully withholding or delaying any approval or consent. Tenant’s sole remedy therefor shall be a proceeding for specific performance, injunction or declaratory judgment.

24.20 From time to time but not more than two (2) times per year upon ten (10) business days’ prior written notice, Tenant shall submit such information regarding the financial condition of Tenant, each Guarantor and each General Partner as Landlord may reasonably request. Tenant warrants that all such information heretofore or hereafter submitted is and shall be correct and complete.

24.21 Deletion of any printed, typed or other portion of this Lease shall not evidence an intention to contradict such deleted portion. Such deleted portion shall be deemed not to have been inserted in this Lease. Interpretation of this Lease shall not be affected by any claim that this Lease has been prepared by either party.

24.22 The person executing on Tenant’s behalf warrants due authorization to so act.

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24.23 Tenant shall receive sixty (60) access cards for entry to the Building and parking garage at no cost. Replacement access cards or additional access cards may be provided by Landlord upon Tenant’s request and at Landlord’s standard charge.

24.24 Upon the expiration of the lease by and between Landlord and Mary Ann Choby, DMD, MS (“Existing Tenant”), dated October 27, 1999, for Suite 1401 (the “Suite 1401 Lease”) which is anticipated to occur on December 31, 2009 and subject to the vacation of such space by Existing Tenant, Tenant shall lease such space, consisting of approximately 1,071 square feet of rentable area (“Suite 1401”) and such space shall become a part of the Premises subject to all of the terms and conditions of the Lease as modified by this Section 24.24. The following terms and conditions shall apply to the leasing of Suite 1401:

1. Base Rent per square foot of Suite 1401 for the period from the Suite 1401 Rent Commencement Date through the end of the then current Lease Year for the Premises shall be the per square foot Base Rent then payable by Tenant for the Premises. Thereafter Base Rent for Suite 1401 shall be increased on the same day, in the same manner and using the same percentage for increases in Base Rent as applicable to the Premises.

2. Payment of Base Rent for Suite 1401 shall commence on a date which is the later of: (a) February 1, 2010, (b) the date the tenant improvements to Suite 1401 are substantially complete as certified by Landlord’s construction manager, and (c) the date Tenant commences beneficial use of Suite 140, but in no event shall the payment of Base Rent for Suite 1401 commence later than sixty (60) days following the date Landlord notifies Tenant that the Existing Tenant has vacated Suite 1401 (the “Suite 1401 Rent Commencement Date”) and shall terminate on the date the Lease Term otherwise terminates or expires by normal business operations therefrom. If the Suite 1401 Rent Commencement Date is not the first day of a month, then on the Suite 1401 Rent Commencement Date, Tenant shall pay the Base Rent for the month in which the Suite 1401 Rent Commencement Date occurs, calculated at a daily rate of one-thirtieth (l/30^th) of an installment of the monthly Base Rent for such space. Anything to the contrary in the foregoing notwithstanding, Base Rent for the first four full calendar months following the Suite 1401 Rent Commencement Date shall be abated.

3. Tenant shall construct such improvements to Suite 1401 as Tenant may require, including without limitation, the installation of bathrooms and showers in Suite 1401 (“Suite 1401 Tenant Work”) at Tenant’s sole cost and expense, subject to the provisions of Article IX hereof.

4. The improvements allowance for Suite 1401 (“Suite 1401 Allowance”) shall be equal to $26,775.00 (the product of the square footage of rentable area of Suite 1401 times $25.00). If Tenant notifies Landlord not later than the Suite 1401 Rent Commencement Date that Tenant wishes to increase the Suite 1401 Allowance, then Landlord shall increase the Suite 1401 Allowance by $5.00 per rentable square foot of Suite 1401 provided that the Base Rent for Suite 1401 shall be increased by an amount equal to the product of $5.00 times the rentable square foot of Suite 1401 amortized at 10% over the remaining initial Lease Term. The Suite 1401 Allowance shall be used for construction of improvements to Suite 1401, including, without limitation, design fees, construction management fees and permitting fees and a construction management fee paid to Landlord. Up to $5.00 per rentable square foot of the Suite

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1401 Allowance may be used for cabling, telephone, furniture and fixtures. Any Suite 1401 Allowance not spent or used by Tenant for the Suite 1401 Tenant Work by a date six months after the Suite 1401 Rent Commencement Date shall be applied to the payments of Base Rent next coming due under the Lease until used in full except that no portion of the increase in the Suite 1401 Allowance may be applied to Base Rent. If Tenant requests the increase as provided above, the entire increased amount of the Improvements Allowance must be used for work and materials physically incorporated into the Premises.

5. Upon the termination or expiration of the Lease Term, Tenant shall restore Suite 1401 to building shell condition, including without limitation, the removal of all showers and bathrooms installed by or on behalf of Tenant in Suite 1401, and the restoration of such areas to shell condition.

24.25 If Suite 1402 on the fourteenth (14th) floor of the Building and contiguous to the Premises (“Expansion Space”) becomes available for lease, then Tenant shall have a first right to lease such space on the following terms and conditions. At such time as Landlord has received a letter of intent for the Expansion Space satisfactory to Landlord and the potential tenant named therein which is executed by Landlord and such potential tenant (the “LOI”), Landlord shall notify Tenant in writing of such LOI and shall provide a copy of the LOI to Tenant (“Landlord’s Notice of LOI”). Tenant shall have a period of five (5) days after receipt of Landlord’s Notice of LOI to give Landlord written notice that Tenant will lease such Expansion Space. If Landlord provides the Landlord’s Notice of LOI and Tenant properly and timely gives Landlord notice that Tenant will lease such space during the initial eighteen (18) months of the Lease Term, then the terms and conditions upon which Tenant shall lease such Expansion Space shall be the terms and conditions of this Lease modified as follows: (i) Base Rent per rentable square foot of the Expansion Space for the period from the Expansion Space Rent Commencement Date through the end of the then current Lease Year for the Premises shall be the then current Base Rent per rentable square foot of the Premises being paid by Tenant (thereafter Base Rent for the Expansion Space shall be increased on the same day, in the same manner and using the same percentage for increases in Base Rent as applicable to the Premises), (ii) Tenant will receive an improvements allowance of $25.00 per rentable square foot of the Expansion Space, and (iii) the first four (4) months of Base Rent due for the Expansion Space only shall be abated. If following the last day of the eighteenth (18^th) month of the initial Lease Term but prior to the first day of the thirty-sixth (36^th) month of the initial Lease Term Landlord provides the Landlord’s Notice of LOI and Tenant properly and timely gives Landlord notice that Tenant will lease such Expansion Space, then the terms and conditions upon which Tenant shall lease such Expansion Space shall be the terms and conditions of this Lease modified as follows: (i) Base Rent per rentable square foot of the Expansion Space for the period from the Expansion Space Rent Commencement Date through the end of the then current Lease Year for the Premises shall be the then current Base Rent per rentable square foot of the Premises being paid by Tenant (thereafter Base Rent for the Expansion Space shall be increased on the same day, in the same manner and using the same percentage for increases in Base Rent as applicable to the Premises (ii) Tenant shall receive an improvements allowance of twenty dollars ($20.00) per rentable square foot of the Expansion Space, and (iii) only the first two (2) months of Base Rent due for the Expansion Space shall be abated. With respect to the Improvements Allowance payable under (ii) above, Tenant may request an additional $5.00 per square foot of Improvements Allowance, and Landlord shall provide the same provided, however, that the Base Rent

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otherwise payable for the Expansion Space shall increase by an amount equal to the product of (a) $5.00 times (b) the total rentable square footage of the Expansion Space amortized at 10% over the remaining initial Lease Term. No portion of an increase in the Improvements Allowance requested by Tenant under this Section 24.25 may be applied to Base Rent. All of the increase in the Improvements Allowance shall be used for work and materials physically to the first day of the sixtieth (60^th) month of the initial Lease Term, Landlord provides the Landlord’s Notice of LOI and Tenant properly and timely gives Landlord notice that Tenant will lease the Expansion Space, then the terms and conditions upon which Tenant shall lease such Expansion Space shall be the terms and conditions of this Lease modified as follows: the Base Rent per rentable square foot of the Expansion Space for the period from the Expansion Space Rent Commencement Date through the end of the then current Lease Year for the Premises shall be the Base Rent per rentable square foot that is then payable for the Premises (thereafter Base Rent for the Expansion Space shall be increased on the same day, in the same manner and using the same percentage for increases in Base Rent as applicable to the Premises), there will be no improvement allowance paid to Tenant and there will be no abatement of Base Rent. If Landlord provides the Landlord’s Notice of LOI and Tenant does not properly or timely give Landlord notice that Tenant will lease such Expansion Space or Tenant gives Landlord notice that Tenant will not lease such Expansion Space, then Tenant shall have no further right hereunder to lease the Expansion Space, provided, however, that if Landlord and the prospective tenant (or an affiliate thereof) under the LOI do not execute a lease for the Expansion Space on the terms set forth in such LOI or the economic equivalent of such terms within ninety (90) days following the date of Landlord’s Notice of LOI, then Tenant shall have one additional opportunity to exercise Tenant’s right to lease the Expansion Space on the terms and conditions set forth herein. The Expansion Space is hereby agreed to be approximately 2,841 rentable square feet. The commencement of the Lease Term as to the Expansion Space (“Expansion Space Commencement Date”) shall be the date Landlord receives Tenant’s written notice that Tenant elects to lease the Expansion Space and upon such date the Expansion Space shall become a part of the Premises. The Rent Commencement Date for the Expansion Space shall be the earlier of (a) ninety (90) days after the Expansion Space Commencement Date and (b) the date Tenant commences beneficial use of the Expansion Space. If the Rent Commencement Date for the Expansion Space is not the first day of a month, then on the Rent Commencement Date for the Expansion Space, Tenant shall pay the Base Rent for the month in which such Rent Commencement Date occurs, calculated at a daily rate of one-thirtieth (l/30^th) of an installment of the monthly Base Rent for such Expansion Space. Within ten (10) days after Tenant’s notice to Landlord that Tenant is leasing the Expansion Space, Landlord and Tenant shall execute an appropriate amendment to this Lease setting forth the terms and conditions of the lease of the Expansion Space. If an uncured Event of Default (i.e., a breach which has not been cured within the applicable grace period specified in Section 19.1) exists on the date written notice is given to Tenant by Landlord that Tenant is leasing the Expansion Space or at any time thereafter prior to the date the Expansion Space is occupied by Tenant, then, at Landlord’s written election, Tenant’s rights pursuant to this Section shall be of no further force or effect. Tenant shall receive an additional fifteen (15) access cards for entry to the Building and Parking Garage at no cost on the Expansion Space Commencement Date. Replacement access cards or additional access cards shall be provided by Landlord upon Tenant’s request and at Landlord’s standard charge. If at any time thirty percent (30%) or more of the square feet of rentable area of the Premises has been subleased or assigned, then at Landlord’s written election Tenant’s rights

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pursuant to this Section shall be of no further force or effect. In the event Tenant leases the Expansion Space then Landlord agrees that Tenant will be permitted to eliminate all demising walls on the 14^th floor so that all space leased by Tenant is contiguous, and further in such event Tenant shall be permitted to renovate the rest rooms located on the 14^th floor, in each case subject to Landlord’s approval of the design for such renovations, such approval not to be unreasonably conditioned, withheld or delayed.

24.26 No Consequential or Indirect Damages. No party shall be liable hereunder for any consequential, indirect or punitive damages and any claim therefor is hereby waived.

* * * *

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IN WITNESS WHEREOF, the parties have executed this Lease as of the date first above written.

WITNESS:	LANDLORD:
	8150 LEESBURG PIKE, L.L.C.
	By:	8150 Leesburg Pike Manager, Inc.,
	Its:	Manager
/s/	By:	/s/ David A. Ross
	Title:	President
	Date:	4/23/2009
WITNESS:	TENANT:
	ALARM.COM INCORPORATED
/s/ Daniel Ramos	By:	/s/ Stephen Trundle
	Title:	President & CEO
	Date:	4/21/2009

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EXHIBIT A

FLOOR PLAN

EXHIBIT B

RULES

This Exhibit is a part of that certain Deed of Lease dated as of April 21, 2009 (the “Lease”), between 8150 LEESBURG PIKE, L.L.C. (“Landlord”) and ALARM.COM INCORPORATED (“Tenant”).

1. Tenant shall not obstruct or use for any purpose other than ingress and egress to and from the Premises any sidewalk, entrance, passage, court, elevator, vestibule, stairway, corridor, hall or other part of the Building not exclusively occupied by Tenant. Landlord shall have the right to control and operate the public portions of the Building and the facilities furnished for common use of the tenants, in such manner as Landlord deems best for the benefit of the tenants generally. Tenant shall not permit the visit to the Premises of persons in such numbers or under such conditions as to interfere with the use and enjoyment of the entrances, corridors, elevators and other public portions or facilities of the Building by other tenants. Tenant shall coordinate in advance with Landlord’s property management department all move-ins, move-outs and deliveries to the Building so that arrangements can be made to minimize such interference. Tenant and its employees shall not use any of the parking spaces designated for use by visitors only or the roof.

2. Tenant shall not place any showcase, mat or other article in any common or public area of the Building.

3. Tenant shall not use any water and wash closet or other plumbing fixture for any purpose other than that for which it was constructed. Tenant shall not place any debris, rubbish, rag or other substance therein.

4. Tenant shall not use any loudspeaker or sound system which may be heard outside the Premises.

5. Tenant shall not bring any bicycle, vehicle, animal, bird or pet of any kind in to the Building. Tenant shall not do or perm it any cooking on the Premises, except for microwave cooking, hot dog and /or popcorn machine and use of coffee and/or soft drink machines by Tenant’s employees for their own consumption. Tenant shall not install any microwave oven or coffee machine in the Premises without Landlord’s prior written approval of such equipment and its location within the Premises. Tenant shall not cause or permit any unusual or objectionable odor to be produced upon or permeate from the Premises.

6. Tenant shall not use any space in the Building for the sale of goods to the public at large or for the sale at auction of goods or property of any kind.

7. Tenant shall not place on a floor a load exceeding the load which such floor was designed to carry. Landlord shall have the right to prescribe the weight, position and manner of installation of safes and other heavy items. Landlord shall have the right to repair at Tenant’s expense any damage caused by Tenant’s moving property into or out of the Premises or due to the same being in or upon the Premises or to require Tenant to do the same. Tenant shall not receive into the Building or carry in the elevators any furniture, equipment or bulky item except

as approved by Landlord, and any such furniture, equipment and bulky item shall be delivered only through the designated delivery entrance of the Building and the designated freight elevator. Tenant shall remove promptly from sidewalks adjacent to the Building items delivered for Tenant.

8. Tenant shall not place additional locks or bolts of any kind on any door or window or make any change in any lock or locking mechanism without Landlord’s prior written approval. Tenant shall keep doors leading to common area closed (except for ingress or egress). Upon the termination of its tenancy, Tenant shall deliver to Landlord all keys furnished to or procured by Tenant, and if any key so furnished is not delivered, then Tenant shall pay the replacement cost thereof. Tenant’s key system shall be separate from that for the rest of the Building.

9. Tenant shall not install or operate in the Premises any equipment that operates on greater than 2 kilowatt power without obtaining Landlord’s prior written consent which approval will not be unreasonably withheld. Landlord may condition such consent upon Tenant’s payment of additional rent in compensation for the excess consumption of electricity or other utilities and for the cost of any additional wiring or apparatus that may be occasioned by such equipment in accordance with Section 14.1 of the Lease. Tenant shall not install any equipment of any type or nature that will or may necessitate any changes, replacements or additions to, or changes in the use of, the water system, heating system, plumbing system, air-conditioning system or electrical system of the Premises or the Building, without obtaining Landlord’s prior written consent, which consent may be granted or withheld in Landlord’s sole and absolute discretion. If any equipment of Tenant causes noise or vibration that may be transmitted to such a degree as to be objectionable to Landlord or any tenant in the Building, then Landlord shall have the right to install at Tenant’s expense vibration eliminators or other devices sufficient to reduce such noise and vibration to a level satisfactory to Landlord or to require Tenant to do the same.

10. Landlord may exclude from the Building any person who does not properly identify himself to the Building manager on duty. Landlord may require any person admitted to or leaving the Building to register.

11. Tenant shall not use the Premises for lodging.

12. Before closing and leaving the Premises at any time, Tenant shall turn off all lights.

13. Tenant shall not request any employee of the building manager or Landlord to do anything outside of such employee’s regular duties without Landlord’s prior written consent. Tenant’s special requirements will be attended to only upon application to Landlord. Tenant shall pay for any such special requirements in accordance with the schedule of charges maintained by Landlord from time to time. Tenant shall not employ any employee of the building manager or Landlord for any purpose whatsoever without Landlord’s prior written consent.

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14. Canvassing, soliciting, peddling and loitering in or about the Building are prohibited. Tenant shall cooperate to prevent the same.

15. Only hand trucks equipped with rubber tires and side guards may be used in the Building. Tenant shall be responsible for loss or damage resulting from any delivery made by or for Tenant.

16. Tenant shall comply with standards prescribed by Landlord for curtains, drapes, blinds, shades, screens, lights and ceilings, including standards designed to give the Building a uniform, attractive appearance.

17. Drapes (whether installed by Landlord or Tenant) which are visible from the exterior of the Building shall be cleaned by Tenant at least once a year at Tenant’s expense.

18. Landlord may, upon request of Tenant, waive Tenant’s compliance with any of the rules. A waiver shall not (a) be effective unless signed by Landlord and delivered to Tenant, (b) relieve Tenant from the obligation to comply with such rule in the future unless otherwise agreed in writing by Landlord, or (c) relieve Tenant from any liability for any loss or damage resulting from Tenant’s failure to comply with any rule.

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EXHIBIT C

CONSTRUCTION RULES AND REGULATIONS

8150 Leesburg Pike

Vienna, VA 22182

1) General Notes—Tenants must submit the following to 8150 Leesburg Pike, LLC c/o ARC Management LLC, 8150 Leesburg Pike, Suite 1100, Vienna, VA 22182:

Prior to submission for building permit

Tenant must submit a full set of construction drawings including Architectural, Mechanical, Electrical, & Plumbing sheets to ARC Management for review and approval. Modifications to any base building architectural, electrical, mechanical, or plumbing systems will not be permitted unless approved by ARC Management in writing prior to the commencement of any work.

Prior to start of construction activity

General contractor’s contact information including name of project superintendent

Copy of the general contractor’s Virginia state license and bonding capacity.

Subcontractor list including licensing information

Certificate of Insurance issued by the general contractor’s insurer, naming 8150 Leesburg Pike, LLC, Inc. and ARC Management, LLC as additional “insured” with regards to the referenced job.

Copy of Building Permit and approved plans issued Fairfax County and all subsequent trade permits, Mechanical, Electrical, Plumbing, and Sprinkler.

2) A pre-construction meeting between ARC Management, the Tenant and the general contractor will be required prior to construction. Please call ARC Management to schedule. ARC Management contacts are:

Building Engineer/ Dispatch—Felipe 703-761-9000

Construction Project Manager—Lita Miller 703-760-9500 x151

Property Manager—Randi Halavazis 703-761-9000 x125

3) Tenant is responsible for activities conducted in and around the building on the Tenant’s behalf by contractors, laborers, third party vendors or others. Such activities shall include but not be limited to access to the building, parking, storage, deliveries, trash removal, protection of common areas, loitering and securing the unit and common area doors and windows.

Tenant is responsible for the adherence to these rules, regulations, and procedures by all personnel performing work on its behalf and any violations of these policies shall be enforced by the ARC Management at the sole cost and expense of the Tenant.

Violation of any of the following policies, by any Tenant or his representative, will be a violation and will result in the removal of the offending parties or companies from the premises.

4) Operating Hours

Normal business hours for the building are from 8:00AM to 5:00PM, Monday through Friday and 8:00AM to 1:00 PM, Saturday. No loud or disruptive construction activity will be allowed in the building during these hours. Core drilling must be scheduled before 7:00AM or after 6:00PM and in advance with ARC Management.

5) Elevator Use

Elevator use for construction purposes, i.e. transporting personnel, tools and materials, shall be limited to non-business hours and only with prior written approval of ARC Management. It will be the Tenant’s responsibility to ensure that adequate protection for the elevator is installed including floor, wall and ceiling protection to preserve interior finishes, doors, lighting and calls stations. Any damage to the elevator will be repaired at the Tenant’s sole cost and expense.

6) Protection of Existing Installations

Tenant is responsible for providing and maintaining adequate protection for all building common area including the parking lot, sidewalks, interior and exterior walls, stairwells, floors, carpets, furniture, fixtures, etc. Protection must be in place prior to start of construction and subject to acceptance by the ARC Management.

7) Roof Penetration & HVAC installation, maintenance and repairs

No roof work or access to the roof to install, maintain or repair HVAC equipment shall be performed without the prior written approval of ARC Management. All work involving roof penetrations shall be performed by the base building roofing subcontractor. Please coordinate with ARC Management. Roof penetrations performed without the approval of ARC Management may result in voiding of the base building warranty. If the roof warranty is voided due to negligence of the tenant the tenant shall be responsible for the sole cost and expense to reinstate or obtain a new warranty. Roof work, including the use of a crane to lift equipment and/or materials to the roof shall be limited to non-business hours or as authorized by ARC Management.

8) Housekeeping

Tenant is responsible for the removal of trash and debris generated by the interior construction of their premises. A haul off dumpster may be used only with the prior written approval of ARC Management for such use and onsite placement.

The Tenant is responsible for maintaining both O.S.H.A. standards for the job site and the cleanliness of the building.

2.

No debris will be left in the building or in areas surrounding it. All miscellaneous waste items such as sandwich wrappers, waste foods, milk and soft drink containers, etc. are to be removed from the project immediately.

Under no circumstance is the building’s housekeeping dumpster to be used for construction debris.

ARC Management reserves the right to charge the Tenant for day porter and trash removal expenses as a result of Tenant’s failure to follow these housekeeping rules.

9) Facilities

Tenant is responsible for providing lavatory facilities for all personnel involved in the construction of their interiors.

10) Interruption of Building Services

Tenant will provide a minimum of two (2) days prior notice to ARC Management of any work requiring either the temporary or permanent outage of any of the buildings utilities, such as water, gas, electric, telephone, etc.

Tenant or their representatives will advise ARC Management of any testing or inspections of building systems such as fire alarm and sprinkler systems in their unit.

ARC Management reserves the right to require re-scheduling of such work (including off hour performance) if it presents an undue burden on either the building or its occupants. Additionally, Tenant is responsible for the notification and coordination of any Public Utility entities necessary to secure such an outage.

11) Safety

It is the Tenant’s responsibility to assure that the entire job site and all personnel working there maintain strict compliance with all O.S.H.A., Federal, State, and local regulations concerning worker safety. The Tenant or their representative is responsible for the notification of the proper authorities and supervising organizations for the shut-down of the building’s fire alarm, sprinkler, or other “life safety” service. In no case will such “life safety” systems be left out-of-service over night without the prior written approval of ARC

Management and any shut-down is subject to the requirements outlined in item 8 above.

The storage or staging of equipment, tools or materials in common areas is strictly prohibited.

12) Supervision

Tenant is responsible for providing an on-site general supervisor. This person will be in attendance at all times when work is being performed. The supervisor will be able to answer questions pertaining to the project and be responsible for the compliance with the regulations outlined in this document. Contact information for the Tenant’s established supervisor (including after-hours) will be furnished to ARC Management at the pre-construction meeting (item 2).

3.

13) Security

Tenant is responsible for controlling access to the building and the behavior of all personnel operating on their behalf. The Tenant will be responsible for providing access to and securing the building and unit. Access to the electric room, telephone closet, sprinkler room or another unit will be allowed only with prior written approval of ARC Management and subject to accompaniment by an ARC representative.

Tenant is responsible for the security and protection of all materials stored on the job site. ARC Management and its representative are not responsible for loss of equipment and material from the jobsite.

14) Conduct

Tenant is responsible for the conduct of all individuals associated with the construction of their unit. Workmen are not to congregate in any occupied or common area of the property for any reason other than the performance of work related to the construction of the unit.

15) Parking & Deliveries

Tenant is responsible for minimizing the number of vehicles parked onsite by its general contractor and subcontractors. On-site parking will be allowed with prior written approval and only in areas designated by Landlord. Overnight parking is strictly prohibited. Deliveries will be made to the rear lobby entrances or rear suite entry, if applicable. Deliveries are limited to drop off and pick up only. Idling, extended blocking or obstruction of the building’s entrances and drive aisles is strictly prohibited. Delivery of construction materials such as drywall, metal studs, metal ductwork to upper floor units shall be made through a window opening. The use of cranes and scissor lifts are allowed with the prior written approval of Landlord. All materials shall be delivered to the unit. Storage or staging of materials in common areas or outside the building is strictly prohibited.

16) Tie-Ins

Access for utility & life safety systems connection including sanitary, water, fire alarm, venting or fresh air tie in is allowed with prior written approval by ARC Management and work shall take place during non-business hours or as mutually agreed to by the adjacent tenants affected by the work. Tie-ins to the base building fire alarm system must be contracted with Alarm Tech and coordinated with ARC Management.

4.

FIRST AMENDMENT TO DEED OR LEASE

THIS FIRST AMENDMENT TO DEED OF LEASE (this “First Amendment”) is made as of July 21, 2010, between 8150 LEESBURG PIKE, L.L.C. (“Landlord”) and ALARM.COM INCORPORATED (“Tenant”).

WHEREAS, by Deed of Lease dated as of April 21, 2009 (the “Lease”), Tenant leased from Landlord certain space in the building located at 8150 Leesburg Pike, Vienna, Virginia (the “Building”), as more particularly described in the Lease.

NOW THEREFORE, the parties agree as follows:

1. All capitalized terms used in this First Amendment that are not defined herein shall have the meanings assigned to such terms in the Lease.

2. Expansion Space.

(a) Pursuant to and in accordance with Section 24.25 of the Lease, Tenant has previously exercised its right to lease the Expansion Space (i.e., Suite 1402 consisting of approximately 2,841 rentable square feet).

(b) The term “Expansion Space Commencement Date” is the date of this First Amendment, and effective as of the Expansion Space Commencement Date: (i) Landlord hereby leases to Tenant and Tenant hereby lenses from Landlord the Expansion Space; and (ii) the term “Premises” shall include the Expansion Space, and Tenant’s lease of the Expansion Space shall be subject to all the terms and conditions of the Lease, as modified hereby.

(c) The Lease Term for the Expansion Space shall commence on the Expansion Space Commencement Date and shall expire as and when the Lease Term for the initial Premises expires.

(d) The Rent Commencement Date for the Expansion Space shall be the earlier of (a) ninety (90) days after the Expansion Space Commencement Date, and (b) the date Tenant commences beneficial use of the Expansion Space. Tenant shall be deemed to have commenced beneficial use of the Expansion Space when Tenant begins normal business operations in the Expansion Space. If Tenant is in material breach of any obligation under the Lease or this Amendment, then at Landlord’s written election, Tenant shall not have any right to commence beneficial use of the Expansion Space and Tenant’s rights pursuant to this Paragraph 2 (and Section 24.25 of the Lease) shall be of no further force or effect. If the Rent Commencement Date for the Expansion Space is not the first day of a month, then on the Rent Commencement Date for the Expansion Space, Tenant shall pay the Base Rent for the month in which such Rent Commencement Date occurs, calculated at a daily rate of one-thirtieth (1/30th) of an installment of the monthly Base Rent for such Expansion Space.

(e) Base Rent per rentable square foot of the Expansion Space for the period from the Rent Commencement Date for the Expansion Space through the end of the then current Lease Year for the Premises shall be the then current Base Rent per rentable square foot of the

Premises being paid by Tenant (thereafter Base Rent for the Expansion Space shall be increased on the same day, in the same manner and using the same percentage for increases in Base Rent as applicable to the Premises), except that the first four (4) full calendar months of Base Rent due for the Expansion Space only shall be abated.

(f) Landlord shall deliver and Tenant shall accept the Expansion Space in its “as is” condition as of the Expansion Space Commencement Date, and Landlord is under no obligation to make any Alterations in or to the Expansion Space except as otherwise expressly provided in the Lease.

(g) Landlord shall provide Tenant an allowance (the “Expansion Space Allowance”) of twenty-five dollars ($25.00) per rentable square foot of the Expansion Space. The Expansion Space Allowance is provided in order to help Tenant finance the cost of tenant improvements to the Expansion Space (“Expansion Space Work”). As part of the Expansion Space Work, Tenant shall be permitted: (i) to eliminate all demising walls on the 14th floor of the Building so that all space leased by Tenant on the 14th floor of the Building is contiguous; and (ii) to renovate the restrooms located on the 14th floor of the Building; in each case subject to Landlord’s approval of the design for such renovations, such approval not to be unreasonably conditioned, withheld or delayed. Landlord shall have no duty to advance any portion of the Expansion Space Allowance until Landlord has approved final working drawings for such Expansion Space Work, which approval shall not be unreasonably withheld, conditioned or delayed. The Expansion Space Allowance may be used for any portion of the Expansion Space Work, including, but not limited to, build-out, design, drawings, and CD’s and a reasonable and customary construction management fee of one percent (1%) of total construction costs payable to Landlord, and up to $5.00 per rentable square foot of the Expansion Space Allowance may be used to pay the costs of furniture, telecommunications equipment, cabling and wiring. Within thirty (30) days after the written request of Tenant, provided that at the time of Tenant’s written request the Expansion Space Work is substantially complete, as certified by Tenant’s architect and verified by Landlord’s construction manager, Landlord shall reimburse Tenant for reasonable expenses incurred by Tenant to date in constructing such Expansion Space Work to the extent of the Expansion Space Allowance, provided: (i) such request is accompanied by a copy of the invoice for such expenses; (ii) copies of all contracts, bills, vouchers, change orders and other information relating to the expenses for which reimbursement is being sought as may be reasonably requested by Landlord shall be made available to Landlord by Tenant; (iii) the work and materials for which payment is requested are substantially in accordance with the final working drawings approved by Landlord; (iv) the work and materials for which payment is requested have been physically incorporated into the Expansion Space, free of any security interest, lien or encumbrance; and (v) Tenant has delivered to Landlord written, unconditional final waivers of mechanics’ and materialmen’s liens against the Expansion Space, the Premises and the Building from all contractors, subcontractors, laborers and material suppliers. Notwithstanding anything above to the contrary, Landlord shall not be required to reimburse Tenant for any invoice received later than six (6) months following the Rent Commencement Date for the Expansion Space, and any Expansion Space Allowance not spent for the Expansion Space Work or for which payment is not requested by such date by Tenant as aforesaid shall remain the property of Landlord. The Expansion Space Allowance must be used for work and materials physically incorporated into the Expansion Space.

2.

(h) Tenant shall receive an additional fifteen (15) access cards for entry to the Building and Garage at no cost within ten (10) days of the Expansion Space Commencement Date. Replacement access cards or additional access cards may be provided by Landlord upon Tenant’s request and at Landlord’s standard charge.

3. Section 24.25 of the Lease is hereby deleted and shall be of no further force or effect.

4. Each party represents and warrants that in connection with this Amendment it has not employed, hired, or dealt with any broker, agent or finder other than Atlantic Realty Associates, Inc. and THOMAS & CO. REALTY ADVISORS LLC d/b/a Thomas & Co.

5. Except as otherwise provided herein, the Lease shall remain in full force and effect.

6. This Amendment may be executed in multiple counterparts, each of which shall constitute an original, and all of which, together, shall constitute one and the same document. Faxed or emailed signatures will have the same binding effect as original signatures.

[Signatures appear on the following page.]

3.

IN WITNESS WHEREOF, the parties have caused this First Amendment to Deed of Lease to be executed as of the date first written above.

8150 LEESBURG PIKE, L.L.C.
By:	8150 Leesburg Pike Manager, Inc.,
Manager
By:	/s/ Stanley M. Barg
Name:	Stanley M. Barg
Title:	Chief Operating Officer
ALARM.COM INCORPORATED
By:	/s/ Daniel Ramos
Name:	Daniel Ramos
Title:	Senior Vice President

4.

SECOND AMENDMENT TO DEED OF LEASE

THIS SECOND AMENDMENT TO DEED OF LEASE (this “Second Amendment”) is made as of April 28, 2011, between 8150 LEESBURG PIKE, L.L.C. (“Landlord”) and ALARM.COM INCORPORATED (“Tenant”).

WHEREAS, by Deed of Lease dated as of April 21, 2009, as amended by First Amendment to Deed of Lease dated as of July 21, 2010 (collectively, the “Lease”), Tenant leased from Landlord certain space in the building located at 8150 Leesburg Pike, Vienna, Virginia (the “Building”), as more particularly described in the Lease.

NOW THEREFORE, the parties agree as follows:

1. All capitalized terms used in this Second Amendment that are not defined herein shall have the meanings assigned to such terms in the Lease.

2. Expansion Space.

(a) Suite 1000 is that certain suite of approximately five thousand five hundred forty-four (5,544) square feet of rentable area shown on Exhibit 1. Suite 1020 is that certain suite of approximately one thousand nine hundred thirty-seven (1,937) square feet of rentable area shown on Exhibit 1.

(b) The term “Suites 1000/1020 Commencement Date” is the date of this Second Amendment, and effective as of the Suite 1000/1020 Commencement Date: (i) Landlord hereby leases to Tenant and Tenant hereby leases from Landlord Suites 1000 and 1020; and (ii) the term “Premises” shall include Suites 1000 and 1020, and Tenant’s lease of Suites 1000 and 1020 shall be subject to all the terms and conditions of the Lease, as modified hereby.

(c) The Lease Term for Suites 1000 and 1020 shall commence on the Suites 1000/1020 Commencement Date and shall expire as and when the Lease Term for the initial Premises expires.

(d) The Rent Commencement Date for Suites 1000 and 1020 shall be the earlier of (a) ninety (90) days after the Suites 1000/1020 Commencement Date, and (b) the date Tenant commences beneficial use of Suites 1000 and 1020. Tenant shall be deemed to have commenced beneficial use of Suites 1000 and 1020 when Tenant begins normal business operations in Suites 1000 and 1020. If Tenant is in material breach of any obligation under the Lease or this Amendment, then at Landlord’s written election, Tenant shall not have any right to commence beneficial use of Suites 1000 and 1020 and Tenant’s rights pursuant to this Paragraph 2 shall be of no further force or effect. If the Rent Commencement Date for Suites 1000 and 1020 is not the first day of a month, then on the Rent Commencement Date for Suites 1000 and 1020, Tenant shall pay the Base Rent for the month in which such Rent Commencement Date occurs, calculated at a daily rate of one-thirtieth (1/30th) of an installment of the monthly Base Rent for Suites 1000 and 1020.

(e) Base Rent per rentable square foot of Suites 1000 and 1020 for the period from the Rent Commencement Date for Suites 1000 and 1020 through the end of the then current Lease Year for the Premises shall be the then current Base Rent per rentable square foot of the Premises being paid by Tenant (thereafter Base Rent for Suites 1000 and 1020 shall be increased on the same day, in the same manner and using the same percentage for increases in Base Rent as applicable to the Premises), except that the first four (4) full calendar months of Base Rent due for Suites 1000 and 1020 only shall be abated.

(f) Landlord shall deliver and Tenant shall accept Suites 1000 and 1020 in its “as is” condition as of Suites 1000/1020 Commencement Date, and Landlord is under no obligation to make any Alterations in or to Suites 1000 and 1020 except as otherwise expressly provided in the Lease.

(g) Landlord shall provide Tenant an allowance (the “Suites 1000/1020 Allowance”) of twenty-five dollars ($25.00) per rentable square foot of Suites 1000 and 1020. The Suites 1000/1020 Allowance is provided in order to help Tenant finance the cost of tenant improvements to Suites 1000 and 1020 (“Suites 1000/1020 Work”). As part of the Suites 1000/1020 Work, Tenant shall be permitted to eliminate all demising walls in Suites 1000/1020 so that all space leased by Tenant in Suites 1000/1020 is contiguous; in each case subject to Landlord’s approval of the design for such renovations, such approval not to be unreasonably conditioned, withheld or delayed. Landlord shall have no duty to advance any portion of the Suites 1000/1020 Allowance until Landlord has approved final working drawings for such Suites 1000/1020 Work, which approval shall not be unreasonably withheld, conditioned or delayed. The Suites 1000/1020 Allowance may be used for any portion of the Suites 1000/1020 Work, including, but not limited to, build-out, design, drawings, and CD’s and a reasonable and customary construction management fee of one percent (1%) of total construction costs payable to Landlord, and up to $5.00 per rentable square foot of the Suites 1000/1020 Allowance may be used to pay the costs of furniture, telecommunications equipment, ca bling and wiring. Within thirty (30) days after the written request of Tenant, provided that at the time of Tenant’s written request the Suites 1000/1020 Work is substantially complete, as certified by Tenant’s architect and verified by Landlord’s construction manager, Landlord shall reimburse Tenant for reasonable expenses incurred by Tenant to date in constructing such Suites 1000/1020 Work to the extent of the Suites 1000/1020 Allowance, provided: (i) such request is accompanied by a copy of the invoice for such expenses; (ii) copies of all contracts, bills, vouchers, change orders and other information relating to the expenses for which reimbursement is being sought as may be reasonably requested by Landlord shall be made available to Landlord by Tenant; (iii) the work and materials for which payment is requested are substantially in accordance with the final working drawings approved by Landlord; (iv) the work and materials for which payment is requested have been physically incorporated into Suites 1000 and 1020, free of any security interest, lien or encumbrance; and (v) Tenant has delivered to Landlord written, unconditional final waivers of mechanics’ and materialmen’s liens against Suites 1000 and 1020, the Premises and the Building from all contractors, subcontractors, laborers and material suppliers. Notwithstanding anything above to the contrary, Landlord shall not be required to reimburse Tenant for any invoice received later than six (6) months following the Rent Commencement Date for Suites 1000 and 1020, and any Suites 1000/1020 Allowance not spent for the Suites 1000/1020 Work or for which payment is not requested by such date by Tenant as aforesaid shall remain the property of Landlord. The Suites 1000/1020 Allowance must be used for work and materials physically incorporated into Suites 1000 and 1020.

2.

(h) Tenant shall receive an additional thirty (30) access cards for entry to the Building and Garage at no cost within ten (10) days of the Suites 1000/1020 Commencement Date. Replacement access cards or additional access cards may be provided by Landlord upon Tenant’s request and at Landlord’s standard charge.

3. Expansion Space.

(a) Suite 1040 is that certain suite of approximately two thousand eight hundred twenty-seven (2,827) square feet of rentable area shown on Exhibit 1. Suite 1050 is that certain suite of approximately one thousand seven hundred forty (1,740) square feet of rentable area shown on Exhibit 1. Suite 1070 is that certain suite of approximately two thousand nine hundred twenty-nine (2,929) square feet of rentable area shown on Exhibit 1.

(b) Each of Suites 1040, 1050 and 1070 shall be leased to Tenant on the same terms and conditions applicable to Suites 1000/1020 except that (1) delivery of such Suites shall not be prior to February 1, 2012, (2) the Rent Commencement Date for each such Suite shall be seventy-five (75) days after the delivery of such Suite (or earlier if Tenant commences beneficial use earlier), (3) the abatement with respect to such Suites shall be two months, (4) the per square foot allowance with respect to such Suites shall be twenty dollars ($20.00), (5) the total access cards for entry to the Building and Garage for such Suites shall be thirty (30), and (6) as part of the improvements to be performed by Tenant, Tenant shall also be allowed to renovate the rest rooms located on the 10^th floor of the building (subject to Landlord’s reasonable approval).

4. Each party represents and warrants that in connection with this Amendment it has not employed, hired, or dealt with any broker, agent or finder other than Atlantic Realty Associates, Inc. and UGL Equis.

5. Except as otherwise provided herein, the Lease shall remain in full force and effect.

6. This Amendment may be executed in multiple counterparts, each of which shall constitute an original, and all of which, together, shall constitute one and the same document. Faxed or emailed signatures will have the same binding effect as original signatures.

[Signatures appear on the following page.]

3.

IN WITNESS WHEREOF, the parties have caused this Second Amendment to Deed of Lease to be executed as of the date first written above.

8150 LEESBURG PIKE, L.L.C.
By:	8150 Leesburg Pike Manager, Inc.,
Manager
By:	/s/ Stanley M. Barg
Name:	Stanley M. Barg
Title:	Chief Operating Officer
ALARM.COM INCORPORATED
By:	/s/ Daniel Ramos
Name:	Daniel Ramos
Title:	Senior Vice President

4.

THIRD AMENDMENT TO DEED OF LEASE

THIS THIRD AMENDMENT TO DEED OF LEASE (this “Third Amendment”) is made as of January 10, 2012, between 8150 LEESBURG PIKE, L.L.C. (“Landlord”) and ALARM.COM INCORPORATED (“Tenant”).

WHEREAS, by Deed of Lease dated as of April 21, 2009, as amended by First Amendment to Deed of Lease dated as of July 21, 2010, and as amended by Second Amendment to Deed of Lease dated as of April 28, 2011 (collectively, the “Lease”), Tenant leases from Landlord certain space in the building located at 8150 Leesburg Pike, Vienna, Virginia (the “Building”), as more particularly described in the Lease.

NOW THEREFORE, the patties agree as follows:

1. All capitalized terms used in this Third Amendment that are not defined herein shall have the meanings assigned to such terms in the Lease.

2. Tenant shall be permitted, at Tenant’s cost, to remove the existing carpet in the elevator lobby area located on the 14^th floor of the Building and install floor tile or carpet containing the Tenant’s name and logo, substantially in accordance with Exhibit 1 attached to this Amendment. If Tenant has not performed such removal and installation within six (6) months after the date of this Amendment, then at Landlord’s option, Tenant’s right to perform such removal and installation shall be void and of no further force and effect. The provisions of Sections 8.1 and 9.4 of the Lease (including without limitation Tenant’s obligations to: maintain, repair and replace; perform in a good, work manlike manner; use new materials; discharge liens; etc.) shall be applicable to such removal and installation. Prior to the earlier of: (a) the expiration or earlier termination of the Lease Term, or (b) the date Tenant fails to lease or occupy the entire 14^th floor of the Building: Tenant shall at Tenant’s expense restore the elevator lobby area to a condition similar to the other elevator lobby areas located within the Building as of the date of such restoration, as reasonably determined by Landlord (or, at Landlord’s option, Landlord may perform such restoration at Tenant’s expense). Tenant’s aforesaid duty to restore shall survive the expiration or earlier termination of the Lease Term.

3. Each party represents and warrants that in connection with this Third Amendment it has not employed, hired, or dealt with any broker, agent or finder.

4. Except as otherwise provided herein, the Lease shall remain in full force and effect.

5. This Third Amendment may be executed in multiple counterparts, each of which shall constitute an original, and all of which, together, shall constitute one and the same document. Faxed or emailed signatures will have the same binding effect as original signatures.

IN WITNESS WHEREOF, the parties have caused this Third Amendment to Deed of Lease to be executed as of the date first written above.

8150 LEESBURG PIKE, L.L.C.
By:	8150 Leesburg Pike Manager, Inc.,
Manager
By:	/s/ Stanley M. Barg
Name:	Stanley M. Barg
Title:	Chief Operating Officer
ALARM.COM INCORPORATED
By:	/s/ Daniel Ramos
Name:	Daniel Ramos
Title:	Senior Vice President

2.

EXHIBIT 1

Plans for Renovations

FOURTH AMENDMENT TO DEED OF LEASE

THIS FOURTH AMENDMENT TO DEED OF LEASE (this “Fourth Amendment”) is made as of June 5, 2012, between 8150 LEESBURG PIKE, L.L.C. (“Landlord”) and ALARM.COM INCORPORATED (“Tenant”).

WHEREAS, by Deed of Lease dated as of April 21, 2009, as amended by First Amendment to Deed of Lease dated as of July 21, 2010, and as amended by Second Amendment to Deed of Lease dated as of April 28, 2011, and as amended by Third Amendment to Deed of Lease dated as of January 10, 2012 (the “Third Amendment,” and all of the foregoing, collectively, the “Lease”), Tenant leases from Landlord certain space in the building located at 8150 Leesburg Pike, Vienna, Virginia (the “Building”), as more particularly described in the Lease.

NOW THEREFORE, the parties agree as follows:

1. All capitalized terms used in this Fourth Amendment that are not defined herein shall have the meanings assigned to such terms in the Lease.

2. (a) For purposes of Paragraph 3.b(1) of the Third Amendment, delivery of each of Suites 1040, 1050 and 1070 shall be deemed to have occurred on February 1, 2012.

(b) For purposes of Paragraph 3.b(2) of the Third Amendment, the Rent Commencement Date for each of Suites 1040, 1050 and 1070 shall be deemed to have occurred on April 16, 2012.

3. Each party represents and warrants that in connection with this Fourth Amendment it has not employed, hired, or dealt with any broker, agent or finder other than UGL Services – Equis Operations.

4. Except as otherwise provided herein, the Lease shall remain in full force and effect.

5. This Fourth Amendment may be executed in multiple counterparts, each of which shall constitute an original, and all of which, together, shall constitute one and the same document. Faxed or emailed signatures will have the same binding effect as original signatures.

IN WITNESS WHEREOF, the parties have caused this Fourth Amendment to Deed of Lease to be executed as of the date first written above.

8150 LEESBURG PIKE, L.L.C.
By:	8150 Leesburg Pike Manager, Inc.,
Manager
By:	/s/ Stanley M. Barg
Name:	Stanley M. Barg
Title:	Chief Operating Officer
ALARM.COM INCORPORATED
By:	/s/ Daniel Ramos
Name:	Daniel Ramos
Title:	Senior Vice President

2.

FIFTH AMENDMENT TO DEE D OF LEASE

THIS FIFTH AMENDMENT TO DEED OF LEASE (this “Fifth Amendment”) is made as of December 7, 2012, between 8150 LEESBURG PIKE, L.L.C. (“Landlord”) and ALARM.COM INCORPORATED (“Tenant”).

WHEREAS, by Deed of Lease dated as of April 21, 2009, as amended by First Amendment to Deed of Lease dated as of July 21, 2010, and as amended by Second Amendment to Deed of Lease dated as of April 28, 2011, and as amended by Third Amendment to Deed of Lease dated as of January 10, 2012, and as amended by Fourth Amendment to Deed of Lease dated as of June 5, 2012 (the “Fourth Amendment,” and all of the foregoing, collectively, the “Lease”), Tenant leased from Landlord certain space in the building located at 8150 Leesburg Pike, Vienna, Virginia (the “Building”), as more particularly described in the Lease.

NOW THEREFORE, the parties agree as follows:

1. All capitalized terms used in this Fifth Amendment that are not defined herein shall have the meanings assigned to such terms in the Lease.

2. Expansion Space.

(a) Commencing on the Suite 1210 Commencement Date (defined below), Landlord shall lease to Tenant and Tenant shall lease from Landlord additional space on the twelfth (12^th) floor of the Building containing approximately two thousand seven hundred twenty-three (2,723) square feet of rentable area shown on Exhibit 1 (“Suite 1210”). From and after the Suite 1210 Commencement Date, the term “Premises” shall include Suite 1210 (and shall contain a total of thirty-two thousand six hundred eighty-four [32,684] square feet of rentable area), and Suite 1210 shall be subject to all terms and conditions of the Lease, as modified hereby. The Lease Term for Suite 1210 shall expire as and when the current Lease Term for the remainder of the Premises expires (i.e., August 31, 2016).

(b) The “Suite 1210 Commencement Date” means the earlier of (i) the date the Landlord’s Suite 1210 Work (defined below) is deemed substantially complete as reasonably determined by Landlord or Landlord’s architect, or (ii) the date Tenant commences beneficial use of Suite 1210. Tenant shall be deemed to have commenced beneficial use of Suite 1210 when Tenant begins normal business operations in Suite 1210. If Tenant is in material breach of any obligation under the Lease or this Fifth Amendment, then at Landlord’s written election until such breach has been cured, Tenant shall not have any right to commence beneficial use of Suite 1210 and Tenant’s rights pursuant to this Paragraph 2 shall be of no further force or effect. Anything to the contrary contained in this Lease notwithstanding: (A) the substantial completion of Landlord’s Suite 1210 Work and the delivery of Suite 1210 to Tenant is anticipated to occur on or about December 31 , 2012; provided, however, if Suite 1210 is not delivered by such date, then Landlord shall not have any liability whatsoever, and this Fifth Amendment shall not be rendered voidable, on account thereof; (B) Tenant acknowledges that a portion of Suite 1210 (for the egress corridor referenced in Paragraph 2(c) below) is presently leased or otherwise occupied by a tenant/occupant whose term has not expired or who has not yet vacated Suite 1210 (as may be applicable); (C) the delivery of Suite 1210 and the Suite 1210 Commencement Date are

expressly subject to and contingent upon such tenant/occupant in fact vacating such portion of Suite 1210 and Landlord regaining lawful possession of the entirety of Suite 1210; and (D) if any Law requires an occupancy or use permit for Suite 1210, then Landlord shall initially obtain such permit at Landlord’s cost and deliver a copy thereof to Tenant, and thereafter Tenant shall keep current such permit at Tenant’s cost. The foregoing in this Section notwithstanding, if Suite 1210 is not delivered to Tenant in the condition required by this Amendment on or before April 30, 2013, then any time thereafter, Tenant and Landlord shall each have the right to terminate this Lease upon thirty (30) days’ prior written notice to the non-terminating party (“Termination Notice”), and such right to terminate shall be Tenant’s sole and exclusive remedy; provided, however, if Landlord delivers possession of the Premises to Tenant prior to the expiration of the aforesaid thirty (30) day period, then any such Termination Notice (whether delivered by Landlord or Tenant) shall be deemed withdrawn, and this Lease shall continue in full force and effect.

(c) Suite 1210 shall be delivered by Landlord and accepted by Tenant in “as is” condition, and Landlord is under no obligation to make any Alterations in or to Suite 1210; except that prior to the Suite 1210 Commencement Date, Landlord shall, at Landlord’s expense (all of the following in this sentence, collectively, “Landlord’s Suite 1210 Work”), construct a slab-to-slab egress corridor within Suite 1210 for improved access to the common areas of the twelfth (12^th) floor of the Building, and make any lighting relocation, HVAC redistribution including smoke/fire dampers and any other Building system adjustment that may be required by applicable Laws as a result of building the new corridor. The foregoing Landlord’s Suite 1210 Work shall be accomplished using Building standard methods, materials and finishes. Within two (2) business days after Landlord’s request from time to time, Tenant shall provide any additional information and decisions pertaining to Landlord’s Suite 1210 Work requested by Landlord, and if Tenant fails to respond within the time required, then Landlord may make such decisions pertaining to Landlord’s Suite 1210 Work on behalf of Tenant. Tenant’s taking possession of Suite 1210 shall constitute acknowledgment that Suite 1210 is in good condition and that all Landlord’s Suite 1210 Work is satisfactory, except as to any defective or incomplete item that is described in a written notice given by Tenant to Landlord not later than five (5) days after the day Tenant takes possession. Tenant shall have no right to make any Alteration in Suite 1210 until Tenant submits such notice. Within thirty (30) days after receiving Tenant’s notice (to the extent reasonably practical in light of the defective or incomplete item), Landlord will correct and complete any defective or incomplete item described in such notice which Landlord’s architect or engineer confirms is in fact defective or incomplete.

(d) From and after the Suite 1210 Commencement Date, Tenant shall pay to Landlord Base Rent for Suite 1210 based on the then current Base Rent rate per square foot applicable to the remainder of the Premises (which, as of the date of this Fifth Amendment, is twenty-eight dollars [$28.00] per square foot of rentable area), and thereafter Base Rent for Suite 1210 shall be increased as and when Base Rent for the remainder of the Premises is increased. If the Suite 1210 Commencement Date occurs on a day other than the first day of a month, then the first installment of Base Rent for Suite 1210 shall be prorated at a daily rate, using as the numerator the number of days in the month containing the Suite 1210 Commencement Date from and after (i.e., including) the Suite 1210 Commencement Date, and using as the denominator thirty (30) days. The foregoing notwithstanding, the Base Rent for Suite 1210 for the first two (2) full calendar months after the Suite 1210 Commencement Date only shall be abated.

2.

(e) On the Suite 1210 Commencement Date, Tenant’s proportionate share (and all charges based upon the rentable square footage of the Premises) shall be adjusted upward as provided for in the Lease (including, without limitation, as provided for in Sections 5.1(a) and 5.2(a) of the Lease). The foregoing notwithstanding, Tenant’s obligation to pay Tenant’s proportionate share of Operating Charges and Real Estate Taxes with respect to Suite 1210 shall not commence until January 1, 2014 (and such obligation from the date of this Amendment through December 31, 2013 shall be abated, but only with respect to Suite 1210).

(f) Tenant shall receive an additional twenty (20) access cards for entry to the Building and Garage at no cost within ten (10) days of the Suite 1210 Commencement Date. Replacement access cards or additional access cards may be provided by Landlord upon Tenant’s request and at Landlord’s standard charge. The foregoing and anything to the contrary contained in the Lease or this Fifth Amendment notwithstanding: (i) Tenant acknowledges that Tenant has received from Landlord access cards in excess of the three (3) per one thousand (1,000) ratio set forth in the first sentence of Section 23.1 of the Lease (“Ratio”); and (ii) Landlord reserves the right, upon no less than thirty (30) days’ prior written notice to Tenant, and only if required to provide adequate parking at the same Ratio to other tenants and occupants of the Building, to recapture access cards from Tenant that are in excess of the Ratio, and Tenant shall return such excess cards to Landlord within ten (10) business days after receipt of such notice from Landlord.

3. Each party represents and warrants that in connection with this Amendment it has not employed, hired, or dealt with any broker, agent or finder other than Atlantic Realty Associates, Inc. (representing Landlord) and DTZ (representing Tenant) (collectively, the “Amendment Brokers”). Landlord agrees to pay the Amendment Brokers their respective commissions and/or fees in connection with this Amendment pursuant to one or more separate agreement(s) by and between Landlord and the Amendment Brokers.

4. Except as otherwise provided herein, the Lease shall remain in full force and effect.

5. This Amendment may be executed in multiple counterparts, each of which shall constitute an original, and all of which, together, shall constitute one and the same document. Faxed or emailed signatures will have the same binding effect as original signatures.

[Signatures appear on the following page.]

3.

IN WITNESS WHEREOF, the parties have caused this Fifth Amendment to Deed of Lease to be executed as of the date first written above.

8150 LEESBURG PIKE, L.L.C.
By:	8150 Leesburg Pike Manager, Inc.,
Its:	Manager
By:	/s/ Stanley M. Barg
Name:	Stanley M. Barg
Title:	Chief Operating Officer
ALARM.COM INCORPORATED
By:	/s/ Daniel Ramos
Name:	Daniel Ramos
Title:	Senior Vice President

4.

EXHIBIT 1

Suite 1210

SIXTH AMENDMENT TO DEED OF LEASE

THIS SIXTH AMENDMENT TO DEED OF LEASE (this “Sixth Amendment”) is made as of March 12, 2013, between 8150 LEESBURG PIKE, L.L.C. (“Landlord”) and ALARM.COM INCORPORATED (“Tenant”).

WHEREAS, by Deed of Lease dated as of April 21, 2009, as amended by First Amendment to Deed of Lease dated as of July 21, 2010, and as amended by Second Amendment to Deed of Lease dated as of April 28, 2011, and as amended by Third Amendment to Deed of Lease dated as of January 10, 2012, and as amended by Fourth Amendment to Deed of Lease dated as of June 5, 2012, and as amended by Fifth Amendment to Deed of Lease dated as of December 7, 2012 (collectively, the “Lease”), Tenant leases from Landlord certain space in the building located at 8150 Leesburg Pike, Vienna, Virginia (the “Building”), as more particularly described in the Lease.

NOW THEREFORE, the parties agree as follows:

1. All capitalized terms used in this Sixth Amendment that are not defined herein shall have the meanings assigned to such terms in the Lease.

2. Tenant shall be permitted, at Tenant’s cost, to remove the existing carpet in the elevator lobby area located on the 10^th floor of the Building and install floor tile or carpet containing the Tenant’s name and logo, substantially in accordance with Exhibit 1 attached to this Sixth Amendment. If Tenant has not performed such removal and installation within six (6) months after the date of this Sixth Amendment, then at Landlord’s option, Tenant’s right to perform such removal and installation shall be void and of no further force and effect. The provisions of Sections 8.1 and 9.4 of the Lease (including without limitation Tenant’s obligations to: maintain, repair and replace; perform in a good, workmanlike manner; use new materials; discharge liens; etc.) shall be applicable to such removal and installation. Prior to the earlier of: (a) the expiration or earlier termination of the Lease Term, or (b) the date Tenant fails to lease or occupy the entire 10^th floor of the Building; Tenant shall at Tenant’s expense restore the elevator lobby area to a condition similar to the other elevator lobby areas located within the Building as of the date of such restoration, as reasonably determined by Landlord (or, at Landlord’s option, Landlord may perform such restoration at Tenant’s expense). Tenant’s aforesaid duty to restore shall survive the expiration or earlier termination of the Lease Term.

3. Each party represents and warrants that in connection with this Sixth Amendment it has not employed, hired, or dealt with any broker, agent or finder.

4. Except as otherwise provided herein, the Lease shall remain in full force and effect.

5. This Sixth Amendment may be executed in multiple counterparts, each of which shall constitute an original, and all of which, together, shall constitute one and the same document. Faxed or emailed signatures will have the same binding effect as original signatures.

IN WITNESS WHEREOF, the parties have caused this Sixth Amendment to Deed of Lease to be executed as of the date first written above.

8150 LEESBURG PIKE, L.L.C.
By:	8150 Leesburg Pike Manager, Inc.,
Manager
By:	/s/ Stanley M. Barg
Name:	Stanley M. Barg
Title:	Chief Operating Officer
ALARM.COM INCORPORATED
By:	/s/ Daniel Ramos
Name:	Daniel Ramos
Title:	Senior Vice President

2.

EXHIBIT 1

Plans for Renovations

SEVENTH AMENDMENT TO DEED OF LEASE

THIS SEVENTH AMENDMENT TO DEED OF LEASE (this “Amendment”) is made as of May 29, 2013, between 8150 LEESBURG PIKE, L.L.C. (“Landlord”) and ALARM.COM INCORPORATED (“Tenant”).

WHEREAS, by Deed of Lease dated as of April 21, 2009, as amended by First Amendment to Deed of Lease dated as of July 21, 2010, and as amended by Second Amendment to Deed of Lease dated as of April 28, 2011, and as amended by Third Amendment to Deed of Lease dated as of January 10, 2012, and as amended by Fourth Amendment to Deed of Lease dated as of June 5, 2012, and as amended by Fifth Amendment to Deed of Lease dated as of December 7, 2012 (the “Fifth Amendment”), and as amended by Sixth Amendment to Deed of Lease dated as of March 12, 2013 (all of the foregoing, collectively, the “Lease”), Tenant leases from Landlord certain space in the building located at 8150 Leesburg Pike, Vienna, Virginia (the “Building”), as more particularly described in the Lease.

NOW THEREFORE, the parties agree as follows:

1. All capitalized terms used in this Amendment that are not defined herein shall have the meanings assigned to such terms in the Lease.

2. The Fifth Amendment is hereby deleted in its entirety and shall be of no further force and effect.

3. Expansion Space.

(a) Commencing on the Suite 1210/1230 Commencement Date (defined below), Landlord shall lease to Tenant and Tenant shall lease from Landlord additional space on the twelfth (12^th) floor of the Building containing approximately: (i) three thousand six hundred sixty-six (3,666) square feet of rentable area shown on Exhibit 1 (“Suite 1230”); and (ii ) two thousand seven hundred twenty-three (2,723) square feet of rentable area shown on Exhibit 1 (“Suite 1210,” and together with Suite 1230, collectively, “Suite 1210/1230”). From and after the Suite 1210/1230 Commencement Date, the term “Premises” shall include Suite 1210/1230 (and shall contain a total of thirty-six thousand three hundred fifty [36,350] square feet of rentable area), and Suite 1210/1230 shall be subject to all terms and conditions of the Lease, as modified hereby. The Lease Term for Suite 1210/1230 shall expire as and when the current Lease Term for the remainder of the Premises expires (i.e., August 31, 2016).

(b) The “Suite 1210/1230 Commencement Date” means the earlier of (i) the date possession of Suite 1210/1230 is delivered to (or refused by) Tenant, or (ii) the date Tenant commences beneficial use of Suite 1210/1230. Tenant shall be deemed to have commenced beneficial use of Suite 1210/1230 when Tenant begins normal business operations in Suite 1210/1230. If Tenant is in material breach of any obligation under the Lease or this Amendment, then at Landlord’s written election until such breach has been cured, Tenants hall not have any right to commence beneficial use of Suite 1210/1230 and Tenant’s rights pursuant to this Paragraph 3 shall be of no further force or effect. Anything to the contrary contained in this Lease notwithstanding, if any Law requires an occupancy or use permit for Suite 1210/1230, then Tenant shall initially obtain such permit at Tenant’s cost and deliver a copy thereof to Landlord, and thereafter Tenant shall keep current such permit at Tenant’s cost.

(c) Suite 1210/1230 shall be delivered by Landlord and accepted by Tenant in “as is” condition, and Landlord is under no obligation to make or pay for any Alterations in or to Suite 1210/1230; except that prior to the Suite 1210/1230 Commencement Date, Landlord shall remove from Suite 1210/1230 all of the prior occupant’s moveable personal property (e.g., tables, chairs and other furnishings). At the end of the Lease Term, Tenant shall not be obligated to remove any Alterations from Suite 1210/1230 that exist at the time Landlord initially delivers possession of Suite 1210/1230 to Tenant.

(d) From and after the Suite 1210/1230 Commencement Date, Tenant shall pay to Landlord Base Rent for Suite 1210/1230 based on the then current Base Rent rate per square foot applicable to the remainder of the Premises (which, as of the date of this Amendment, is twenty-eight dollars [$28.00] per square foot of rentable area), and thereafter Base Rent for Suite 1210/1230 shall be increased as and when Base Rent for the remainder of the Premises is increased. If the Suite 1210/1230 Commencement Date occurs on a day other than the first day of a month, then the first installment of Base Rent for Suite 1210/1230 shall be prorated at a daily rate, using as the numerator the number of days in the month containing the Suite 1210/1230 Commencement Date from and after (i.e., including) the Suite 1210/1230 Commencement Date, and using as the denominator thirty (30) days. The foregoing notwithstanding, the Base Rent for Suite 1210/1230 for the first two (2) full calendar months after the Suite 1210/1230 Commencement Date only shall be abated.

(e) On the Suite 1210/1230 Commencement Date, Tenant’s proportionate share (and all charges based upon the rentable square footage of the Premises) shall be adjusted upward as provided for in the Lease (including, without limitation, as provided for in Sections 5.1(a) and 5.2(a) of the Lease). The foregoing notwithstanding, Tenant’s obligation to pay Tenant’s proportionate share of Operating Charges and Real Estate Taxes with respect to Suite 1210/1230 shall not commence until January 1, 2014 (and such obligation from the date of this Amendment through December 31, 2013 shall be abated, but only with respect to Suite 1210/1230).

(f) Tenant shall receive an additional forty (40) access cards for entry to the Building and Garage at no cost within ten (10) days of the Suite 1210/1230 Commencement Date. Replacement access cards or additional access cards may be provided by Landlord upon Tenant’s request and at Landlord’s standard charge. The foregoing and anything to the contrary contained in the Lease or this Amendment notwithstanding: (i) Tenant acknowledges that Tenant has received from Landlord access cards in excess of the three (3) per one thousand (1,000) ratio set forth in the first sentence of Section 23.1 of the Lease (“Ratio”); and (ii) Landlord reserves the right, upon no less than thirty (30) days’ prior written notice to Tenant, and only if required to provide adequate parking at the same Ratio to other tenants and occupants of the Building, to recapture access cards from Tenant that are in excess of the Ratio, and Tenant shall return such excess cards to Landlord within ten (10) business days after receipt of such notice from Landlord.

2.

4. Each party represents and warrants that in connection with this Amendment it has not employed, hired, or dealt with any broker, agent or finder other than Atlantic Realty Associates, Inc. (representing Landlord) and DTZ (representing Tenant) (collectively, the “Amendment Brokers”). Landlord agrees to pay the Amendment Brokers their respective commissions and/or fees in connection with this Amendment pursuant to one or more separate agreement(s) by and between Landlord and the Amendment Brokers.

5. Except as otherwise provided herein, the Lease shall remain in full force and effect.

6. This Amendment may be executed in multiple counterparts, each of which shall constitute an original, and all of which, together, shall constitute one and the same document. Faxed or emailed signatures will have the same binding effect as original signatures.

[Signatures appear on the following page.]

3.

IN WITNESS WHEREOF, the parties have caused this Seventh Amendment to Deed of Lease to be executed as of the date first written above.

8150 LEESBURG PIKE, L.L.C.
By:	8150 Leesburg Pike Manager, Inc.,
Its:	Manager
By:	/s/ Stanley M. Barg
Name:	Stanley M. Barg
Title:	Chief Operating Officer
ALARM.COM INCORPORATED
By:	/s/ Daniel Ramos
Name:	Daniel Ramos
Title:	Senior Vice President

4.

EXHIBIT 1

Suite 1230

EX-10

Exhibit 10.2

ALARM.COM HOLDINGS, INC.

AMENDED AND RESTATED

2009 STOCK INCENTIVE PLAN

Adopted January 30, 2014

TABLE OF CONTENTS

			Page
1.	PURPOSE			1
2.	DEFINITIONS			1
3.	ADMINISTRATION OF THE PLAN			4
	3.1	Board		4
	3.2	Committee		5
	3.3	Terms of Awards		5
	3.4	No Liability		6
	3.5	Share Issuance/Book Entry		6
4.	STOCK SUBJECT TO THE PLAN			6
	4.1	Number of Shares Available for Awards		6
	4.2	Adjustments in Authorized Shares		6
	4.3	Share Usage		6
5.	EFFECTIVE DATE, DURATION AND AMENDMENTS			7
	5.1	Effective Date		7
	5.2	Term		7
	5.3	Amendment and Termination of the Plan		7
6.	AWARD ELIGIBILITY			7
	6.1	Employees and Other Service Providers		7
	6.2	Limitations on Incentive Stock Options		7
7.	AWARD AGREEMENT			8
8.	TERMS AND CONDITIONS OF OPTIONS			8
	8.1	Option Price		8
	8.2	Vesting		8
	8.3	Term		9
	8.4	Exercise of Options on Termination of Service		9
	8.5	Limitations on Exercise of Option		9
	8.6	Exercise Procedure		9
	8.7	Right of Holders of Options		9
	8.8	Delivery of Stock Certificates		9
	8.9	Transferability of Options		10
	8.10	Family Transfers		10
	8.11	Notice of Disqualifying Disposition		10
9.	RESTRICTED STOCK			10
	9.1	Award of Restricted Stock		10
	9.2	Restrictions		11
	9.3	Restricted Stock Certificates		11
	9.4	Rights of Holders of Restricted Stock		11
	9.5	Termination of Service		11
	9.6	Purchase and Delivery of Stock		12
10.	FORM OF PAYMENT			12

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11.	WITHHOLDING TAXES		12
12.	RESTRICTIONS ON TRANSFER OF SHARES OF STOCK		13
	12.1	Right of First Refusal	13
	12.2	Repurchase and Other Rights	13
	12.3	Installment Payments	14
		12.3.1 General Rule	14
		12.3.2 Exception in the Case of Stock Repurchase Right	14
	12.4	Publicly Traded Stock	14
	12.5	Legend	14
13.	PARACHUTE LIMITATIONS		14
14.	REQUIREMENTS OF LAW		15
	14.1	General	15
	14.2	Rule 16b-3	16
	14.3	Financial Reports	16
15.	EFFECT OF CHANGES IN CAPITALIZATION		16
	15.1	Changes in Stock	16
	15.2	Reorganization in Which the Company Is the Surviving Entity and in Which No Change of Control Occurs	17
	15.3	Change of Control	17
	15.4	Adjustments	18
	15.5	No Limitations on Company	18
16.	GENERAL PROVISIONS		18
	16.1	Disclaimer of Rights	18
	16.2	Nonexclusivity of the Plan	18
	16.3	Captions	19
	16.4	Other Award Agreement Provisions	19
	16.5	Number and Gender	19
	16.6	Severability	19
	16.7	Governing Law	19
	16.8	Code Section 409A	19
17.	EXECUTION		20

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ALARM.COM HOLDINGS, INC.

AMENDED AND RESTATED

2009 STOCK INCENTIVE PLAN

Alarm.com Holdings, Inc., a Delaware corporation (the “Company”), sets forth herein the terms of its Amended and Restated 2009 Stock Incentive Plan (the “Plan”) as follows:

1. PURPOSE

The Plan is intended to enhance the Company’s and its Subsidiaries’ (as defined herein) ability to attract and retain highly qualified officers, directors, key employees, and other persons, and to motivate such persons to serve the Company and its Subsidiaries and to expend maximum effort to improve the business results and earnings of the Company, by providing to such persons an opportunity to acquire or increase a direct proprietary interest in the operations and future success of the Company. To this end, the Plan provides for the grant of stock options and restricted stock in accordance with the terms hereof. Stock options granted under the Plan may be nonqualified stock options or incentive stock options, as provided herein.

2. DEFINITIONS

For purposes of interpreting the Plan and related documents (including Award Agreements), the following definitions shall apply:

2.1 “Affiliate” means, with respect to the Company, any company or other trade or business that controls, is controlled by or is under common control with the Company within the meaning of Rule 405 of Regulation C under the Securities Act, including, without limitation, any Subsidiary, provided that an entity may not be considered an Affiliate if it results in noncompliance with Code Section 409A.

2.2 “Award” means a grant of an Option or Restricted Stock under the Plan.

2.2 “Award Agreement” means the written agreement between the Company and a Grantee that evidences and sets out the terms and conditions of an Award.

2.3 “Benefit Arrangement” shall have the meaning set forth in Section 13 hereof.

2.4 “Board” means the Board of Directors of the Company.

2.5 “Cause” means, as determined by the Board and unless otherwise provided in an applicable agreement with the Company or a Subsidiary, (i) material dereliction of duty, (ii) insubordination, gross negligence or willful misconduct in connection with the performance of duties; (iii) conviction of a criminal offense (other than minor traffic offenses); (iv) material breach of any term of any employment, consulting or other services, confidentiality, intellectual property or non-competition agreements, if any, between the Service Provider and the Company or an Affiliate; or (v) the material breach of any material provision of an established policy or work rule of the Company or its Subsidiary, as determined in good faith by the Board of Directors of the Company.

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2.6 “Change of Control” means (i) the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, (ii) a merger or consolidation of the Company with or into another entity in which the Company is not the surviving entity, (iii) a sale of all or substantially all of the assets of the Company to another person or entity, or (iv) any transaction (including without limitation a merger or reorganization in which the Company is the surviving entity) which results in any person or entity (other than stockholders of the Company as of the Effective Date) owning more than 50% of the combined voting power of all classes of stock of the Company.

2.7 “Code” means the Internal Revenue Code of 1986, as now in effect or as hereafter amended.

2.8 “Committee” means the Compensation Committee of the Board or such other Committee as may be designated by the Board to administer the Plan.

2.9 “Company” shall have the meaning set forth in the preamble hereof.

2.10 “Disability” means the Grantee is unable to perform each of the essential duties of such Grantee’s position by reason of a medically determinable physical or mental impairment which is potentially permanent in character or which can be expected to last for a continuous period of not less than 12 months; provided, however, that, with respect to rules regarding expiration of an Incentive Stock Option following termination of the Grantee’s Service, Disability shall mean the Grantee is unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

2.11 “Effective Date” means July 1, 2009, the date the Board approved the Plan.

2.12 “Exchange Act” means the Securities Exchange Act of 1934, as now in effect or as hereafter amended.

2.13 “Fair Market Value” means the value of a share of Stock, determined as follows: if on the Grant Date or other determination date the Stock is listed on an established national or regional stock exchange, or is publicly traded on an established securities market, the Fair Market Value of a share of Stock shall be the closing price of the Stock on such exchange or in such market (if there is more than one such exchange or market the Board shall determine the appropriate exchange or market) on the Grant Date or such other determination date (or if there is no such reported closing price, the Fair Market Value shall be the mean between the highest bid and lowest asked prices or between the high and low sale prices on such trading day) or, if no sale of Stock is reported for such trading day, on the next preceding day on which any sale shall have been reported. If the Stock is not listed on such an exchange, quoted on such system or traded on such a market, Fair Market Value shall be the value of the Stock as determined by the Board in good faith in a manner consistent with Code Section 409A. For these purposes, Fair Market Value shall be determined without regard to any restriction other than a restriction which, by its terms, will never lapse.

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2.14 “Family Member” means a person who is a spouse, former spouse, child, stepchild, grandchild, parent, stepparent, grandparent, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law, including adoptive relationships, of the Grantee, any person sharing the Grantee’s household (other than a tenant or employee), a trust in which any one or more of these persons have more than fifty percent of the beneficial interest, a foundation in which any one or more of these persons (or the Grantee) control the management of assets, and any other entity in which one or more these persons (or the Grantee) own more than fifty percent of the voting interests.

2.15 “Grant Date” means, as determined by the Committee or Board, the latest to occur of (i) the date as of which the Committee or Board approves an Award, (ii) the date on which the recipient of an Award first becomes eligible to receive an Award under Section 6 hereof, or (iii) such other date as may be specified by the Committee or Board.

2.16 “Grant Shares” shall have the meaning set forth in Section 15.3 hereof.

2.17 “Grantee” means a person who receives or holds an Award under the Plan.

2.18 “Incentive Stock Option” means an “incentive stock option” within the meaning of Section 422 of the Code, or the corresponding provision of any subsequently enacted tax statute, as amended from time to time.

2.19 “Nonqualified Stock Option” means an Option that is not an Incentive Stock Option.

2.20 “Option” means an option to purchase one or more shares of Stock pursuant to the Plan.

2.21 “Option Price” means the purchase price for each share of Stock subject to an Option.

2.22 “Other Agreement” shall have the meaning set forth in Section 13 hereof.

2.23 “Parachute Payment” shall have the meaning set forth in Section 13 hereof.

2.24 “Parent” means a “parent corporation” of the Company within the meaning of Section 424(e) of the Code.

2.25 “Plan” shall have the meaning set forth in the preamble hereof.

2.26 “Purchase Price” means the purchase price for each share of Stock pursuant to an Award of Restricted Stock.

2.27 “Reporting Person” means a person who is required to file reports under Section 16(a) of the Exchange Act.

-3-

2.28 “Restricted Stock” means shares of Stock, awarded to a Grantee pursuant to Section 9 hereof, that are subject to restrictions and to a risk of forfeiture.

2.29 “Securities Act” means the Securities Act of 1933, as now in effect or as hereafter amended.

2.30 “Service” means the “performance of substantial services” (within the meaning of Section 409A(d) of the Code) as an employee, officer, director or other Service Provider of the Company or an Affiliate. Unless otherwise stated in the applicable Award Agreement, a Grantee’s change in position or duties shall not result in interrupted or terminated Service, so long as such Grantee continues to be an employee, officer, director or other Service Provider of the Company or an Affiliate. Subject to the preceding sentence, whether a termination of Service shall have occurred for purposes of the Plan shall be determined by the Board, which determination shall be final, binding and conclusive.

2.31 “Service Provider” means an employee, officer or director of the Company or an Affiliate, or a consultant or adviser currently providing services to the Company or an Affiliate.

2.32 “Stock” means the Common Stock, $.01 par value per share, of the Company.

2.33 “Stockholders’ Agreement” means the Company’s Stockholders’ Agreement dated as of March 6, 2009, as may be amended from time to time.

2.34 “Subsidiary” means any “subsidiary corporation” of the Company within the meaning of Section 424(f) of the Code.

2.35 “Ten-Percent Stockholder” means an individual who owns more than ten percent (10%) of the total combined voting power of all classes of outstanding stock of the Company, its parent or any of its Subsidiaries. In determining stock ownership, the attribution rules of Section 424(d) of the Code shall be applied.

3. ADMINISTRATION OF THE PLAN

3.1 Board.

The Board shall have such powers and authorities related to the administration of the Plan as are consistent with the Company’s certificate of incorporation and by-laws and applicable law. The Board shall have full power and authority to take all actions and to make all determinations required or provided for under the Plan, any Award or any Award Agreement, and shall have full power and authority to take all such other actions and make all such other determinations not inconsistent with the specific terms and provisions of the Plan that the Board deems to be necessary or appropriate to the administration of the Plan, any Award or any Award Agreement. All such actions and determinations shall be by the affirmative vote of a majority of the members of the Board present at a meeting or by consent of the Board executed in writing in accordance with the Company’s certificate of incorporation and by-laws and applicable law. The interpretation and construction by the Board of any provision of the Plan, any Award or any Award Agreement shall be final, binding and conclusive.

-4-

3.2 Committee.

The Board from time to time may delegate to one or more Committees such powers and authorities related to the administration and implementation of the Plan, as set forth in Section 3.1 above and in other applicable provisions, as the Board shall determine, consistent with the certificate of incorporation and by-laws of the Company and applicable law. In the event that the Plan, any Award or any Award Agreement entered into hereunder provides for any action to be taken by or determination to be made by the Board, such action may be taken by or such determination may be made by the applicable Committee if the power and authority to do so has been delegated to the Committee by the Board as provided for in this Section 3.2 and all references herein to the Board shall be deemed to be the Committee. Unless otherwise expressly determined by the Board, any such action or determination by the Committee shall be final, binding and conclusive.

3.3 Terms of Awards.

Subject to the other terms and conditions of the Plan, the Board or Committee shall have full and final authority to:

(i) designate Grantees,

(ii) determine the type or types of Awards to be made to a Grantee,

(iii) determine the number of shares of Stock to be subject to an Award,

(iv) establish the terms and conditions of each Award (including, but not limited to, the Option Price of any Option, the nature and duration of any restriction or condition (or provision for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of an Award or the shares of Stock subject thereto, and any terms or conditions that may be necessary to qualify Options as Incentive Stock Options),

(v) prescribe the form of each Award Agreement evidencing an Award, and

(vi) amend, modify, or supplement the terms of any outstanding Award. Notwithstanding the foregoing, no amendment, modification or supplement of any Award shall, without the consent of the Grantee, impair the Grantee’s rights under such Award.

Such authority specifically includes the authority, in order to effectuate the purposes of the Plan but without amending the Plan, to modify Awards to eligible individuals who are foreign nationals or are individuals who are employed outside the United States to recognize differences in local law, tax policy, or custom. Notwithstanding the foregoing, no amendment, modification or supplement of any Award shall, without the consent of the Grantee, impair the Grantee’s rights under such Award.

-5-

The Company may retain the right in an Award Agreement to cause a forfeiture of the gain realized by a Grantee on account of actions taken by the Grantee in violation or breach of or in conflict with any employment agreement, non-competition agreement, any agreement prohibiting solicitation of employees or clients of the Company or any Affiliate thereof or any confidentiality obligation with respect to the Company or any Affiliate thereof or otherwise in competition with the Company or any Affiliate thereof, to the extent specified in such Award Agreement applicable to the Grantee. In addition, the Company may annul an Award if the Grantee is an employee of the Company or an Affiliate thereof and is terminated for Cause as defined in the applicable Award Agreement or the Plan, as applicable.

3.4 No Liability.

No member of the Board or of the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Award or Award Agreement.

3.5 Share Issuance/Book Entry.

Notwithstanding any provision of this Plan to the contrary, the issuance of the Stock under the Plan may be evidenced in such a manner as the Board, in its discretion, deems appropriate, including, without limitation, book-entry registration or issuance of one or more Stock certificates.

4. STOCK SUBJECT TO THE PLAN

4.1 Number of Shares Available for Awards

Subject to adjustment as provided in Section 15 hereof, the number of shares of Stock available for issuance under the Plan shall be 7,203,024. All shares of Stock issuable under the Plan may be issued as Incentive Stock Options. Stock issued or to be issued under the Plan shall be authorized but unissued shares or, to the extent permitted by applicable law, issued shares that have been reacquired by the Company.

4.2 Adjustments in Authorized Shares

The Board shall have the right to substitute or assume Awards in connection with mergers, reorganizations, separations, or other transactions to which Section 424(a) of the Code applies. The number of shares of Stock reserved pursuant to Section 4 shall be increased by the corresponding number of Awards assumed and, in the case of a substitution, by the net increase in the number of shares of Stock subject to Awards before and after the substitution.

4.3 Share Usage

Shares covered by an Award shall be counted as used as of the Grant Date. If any shares covered by an Award are not purchased or are forfeited or expire, or if an Award otherwise terminates without delivery of any Stock subject thereto or is settled in cash in lieu of shares, then the number of shares of Stock counted against the aggregate number of shares available under the Plan with respect to such Award shall, to the extent of any such forfeiture, termination, or expiration again be available for making Awards under the Plan. If the exercise price of any Option granted under the Plan is satisfied by tendering shares of Stock to the Company (by either actual delivery or by attestation), only the number of shares of Stock issued net of the shares of Stock tendered shall be deemed delivered for purposes of determining the maximum number of shares of Stock available for delivery under the Plan.

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5. EFFECTIVE DATE, DURATION AND AMENDMENTS

5.1 Effective Date.

The Plan shall be effective as of the Effective Date, subject to approval of the Plan by the Company’s stockholders within one year of the Effective Date. Upon approval of the Plan by the stockholders of the Company as set forth above, all Awards made under the Plan on or after the Effective Date shall be fully effective as if the stockholders of the Company had approved the Plan on the Effective Date. If the stockholders fail to approve the Plan within one year of the Effective Date, any Awards made hereunder shall be null and void and of no effect.

5.2 Term.

The Plan shall terminate automatically ten (10) years after the Effective Date and may be terminated on any earlier date as provided in Section 5.3. Notwithstanding the foregoing, Awards granted prior to the expiration date shall continue in accordance with their terms.

5.3 Amendment and Termination of the Plan

The Board may, at any time and from time to time, amend, suspend, or terminate the Plan as to any shares of Stock as to which Awards have not been made. An amendment to the Plan shall be contingent on approval of the Company’s stockholders only to the extent required by applicable law, regulations or rules. No Awards shall be made after the termination of the Plan. No amendment, suspension, or termination of the Plan shall, without the consent of the Grantee, impair rights or obligations under any Award theretofore awarded under the Plan.

6. AWARD ELIGIBILITY

6.1 Employees and Other Service Providers.

Awards (including Awards of Incentive Stock Options, subject to Section 6.2) may be made under the Plan to any employee, officer or director of, or other Service Provider providing services to, the Company or any Affiliate. To the extent required by applicable state law, Awards within certain states may be limited to employees and officers or employees, officers and directors. An eligible person may receive more than one Award, subject to such restrictions as are provided herein.

6.2 Limitations on Incentive Stock Options.

An Option shall constitute an Incentive Stock Option only (i) if the Grantee of such Option is an employee of the Company or any Parent or Subsidiary of the Company; (ii) if it is specifically designated as such in the related Award Agreement; (iii) to the extent that the aggregate Fair Market Value (determined at the time the Option is granted) of the shares of Stock with respect to which all Incentive Stock Options held by such Grantee become exercisable for the first time during any calendar year (under the Plan and all other plans of the Grantee’s

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employer and its Parent and Subsidiaries) does not exceed $100,000, which limitation shall be applied by taking Options into account in the order in which they were granted; (iv) if it is granted within ten (10) years from the date the Plan was adopted, or the date the Plan is approved by the stockholders of the Company, whichever is earlier; and (v) if the requirements under Section 422 of the Code applicable to “incentive stock options” have been fully satisfied with respect to such Option.

7. AWARD AGREEMENT

Each Award pursuant to the Plan shall be evidenced by an Award Agreement, in such form or forms as the Board shall from time to time determine, which specifies the number of shares subject to the Award (subject to adjustment in accordance with Section 15). Award Agreements granted from time to time or at the same time need not contain similar provisions but shall be consistent with the terms of the Plan. Each Award Agreement evidencing an Award of Options shall specify whether such Options are intended to be Nonqualified Stock Options or Incentive Stock Options, and in the absence of such specification such options shall be deemed Nonqualified Stock Options.

8. TERMS AND CONDITIONS OF OPTIONS

8.1 Option Price.

The Option Price of each Option shall be fixed by the Board and stated in the Award Agreement evidencing such Option. The Option Price shall not be less than the Fair Market Value on the Grant Date of a share of Stock; provided, however, that in the event that a Grantee is a Ten-Percent Stockholder, the Option Price of an Incentive Stock Option granted to such Grantee shall be not less than 110 percent of the Fair Market Value of a share of Stock on the Grant Date. Only to the extent required by applicable law, in the case of a Nonqualified Stock Option, the Option Price shall be not less than 110 percent of the Fair Market Value of a share of Stock on the Grant Date. In no case shall the Option Price of any Option be less than the par value of a share of Stock.

8.2 Vesting.

Subject to Sections 8.3 and 15.3 hereof, each Option granted under the Plan shall become exercisable at such times and under such conditions as shall be determined by the Board and stated in the Award Agreement. For purposes of this Section 8.2, fractional numbers of shares of Stock subject to an Option shall be rounded down to the next nearest whole number. The Board shall have the authority to prescribe in any Award Agreement that the Option may be exercised only in accordance with a vesting schedule during the term of the Option. The Board may provide, for example, in the Award Agreement for (i) accelerated exercisability of the Option subject to the Company’s right to repurchase upon termination of Service, (ii) expiration of the Option prior to its term in the event of the termination of the Grantee’s Service, (iii) immediate forfeiture of the Option in the event the Grantee’s Service is terminated for Cause or (iv) unvested Options to be exercised subject to the Company’s right of repurchase upon termination of Service with respect to unvested shares of Stock.

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8.3 Term.

Each Option granted under the Plan shall terminate, and all rights to purchase shares of Stock thereunder shall cease, upon the expiration of ten years from the Grant Date, or under such circumstances and on such date prior thereto as is set forth in the Plan or as may be fixed by the Board and stated in the Award Agreement relating to such Option; provided, however, that in the event that the Grantee is a Ten-Percent Stockholder, an Option granted to such Grantee that is intended to be an Incentive Stock Option shall not be exercisable after the expiration of five years from its Grant Date.

8.4 Exercise of Options on Termination of Service.

Each Award Agreement shall set forth the extent to which the Grantee shall have the right to exercise the Option following termination of the Grantee’s Service. Such provisions shall be determined in the sole discretion of the Board, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service.

8.5 Limitations on Exercise of Option.

Notwithstanding any other provision of the Plan, in no event may any Option be exercised, in whole or in part, prior to the date the Plan is approved by the stockholders of the Company, or after ten years following the Grant Date, or after the occurrence of an event referred to in Section 15 hereof which results in termination of the Option.

8.6 Exercise Procedure.

An Option that is exercisable may be exercised by the Grantee’s delivery to the Company of written notice of exercise on any business day, at the Company’s principal office, on the form specified by the Company. Such notice shall specify the number of shares of Stock with respect to which the Option is being exercised and shall be accompanied by payment in full of the Option Price of the shares for which the Option is being exercised. The Option Price shall be payable in a form described in Section 10.

8.7 Right of Holders of Options.

Unless otherwise stated in the applicable Award Agreement, an individual holding or exercising an Option shall have none of the rights of a stockholder (for example, the right to cash or dividend payments or distributions attributable to the subject shares of Stock or to direct the voting of shares of Stock) until the shares of Stock covered thereby are fully paid and issued to such individual.

8.8 Delivery of Stock Certificates.

Promptly after the exercise of an Option by a Grantee and the payment in full of the Option Price, such Grantee shall be entitled to the issuance of a stock certificate or certificates evidencing such Grantee’s ownership of the shares of Stock purchased upon such exercise of the Option. Notwithstanding any other provision of this Plan to the contrary, the Company may elect to satisfy any requirement under this Plan for the delivery of stock certificates through the use of book-entry.

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8.9 Transferability of Options.

Except as provided in Section 8.10, during the lifetime of a Grantee, only the Grantee (or, in the event of legal incapacity or incompetency, the Grantee’s guardian or legal representative) may exercise an Option. Except as provided in Section 8.10, no Option shall be assignable or transferable by the Grantee to whom it is granted, other than by will or the laws of descent and distribution.

8.10 Family Transfers.

If authorized in the applicable Award Agreement, a Grantee may transfer, not for value, all or part of an Option that is not an Incentive Stock Option to any Family Member. For the purpose of this Section 8.10, a “not for value” transfer is a transfer which is (i) a gift, (ii) a transfer under a domestic relations order in settlement of marital property rights; or (iii) unless applicable law does not permit such transfers, a transfer to an entity in which more than fifty percent of the voting interests are owned by Family Members (or the Grantee) in exchange for an interest in that entity. Following a transfer under this Section 8.10, any such Option shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, and shares of Stock acquired pursuant to the Option shall be subject to the same restrictions on transfer of shares as would have applied to the Grantee. Subsequent transfers of transferred Options are prohibited except to Family Members of the original Grantee in accordance with this Section 8.10 or by will or the laws of descent and distribution. The events of termination of Service under an Option shall continue to be applied with respect to the original Grantee, following which the Option shall be exercisable by the transferee only to the extent, and for the periods specified in the applicable Award Agreement, and the shares may be subject to repurchase by the Company or its assignee.

8.11 Notice of Disqualifying Disposition

If any Grantee shall make any disposition of shares of Stock issued pursuant to the exercise of an Incentive Stock Option under the circumstances described in Code Section 421(b) (relating to certain disqualifying dispositions), such Grantee shall notify the Company of such disposition within ten (10) days thereof.

9. RESTRICTED STOCK

9.1 Award of Restricted Stock.

The Board may from time to time grant Restricted Stock to persons eligible to receive Awards under Section 6 hereof, subject to such restrictions, conditions and other terms as the Board may determine.

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9.2 Restrictions.

At the time an Award of Restricted Stock is made, the Board shall establish a restriction period applicable to such Restricted Stock. Each Award of Restricted Stock may be subject to a different restriction period. The Board may, in its sole discretion, at the time an Award of Restricted Stock is made, prescribe conditions that must be satisfied prior to the expiration of the restriction period, including the satisfaction of corporate or individual performance objectives or continued Service, in order that all or any portion of the Restricted Stock shall vest. To the extent required by applicable law, the vesting restrictions applicable to an Award of Restricted Stock shall lapse no less rapidly than the rate of twenty percent (20%) per year for each of the first five (5) years from the Grant Date, based on continued Service.

The Board also may, in its sole discretion, shorten or terminate the restriction period or waive any of the conditions applicable to all or a portion of the Restricted Stock. The Restricted Stock may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the restriction period or prior to the satisfaction of any other conditions prescribed by the Board with respect to such Restricted Stock.

9.3 Restricted Stock Certificates.

The Company shall issue, in the name of each Grantee to whom Restricted Stock has been granted, stock certificates representing the total number of shares of Restricted Stock granted to the Grantee, as soon as reasonably practicable after the Grant Date. The Board may provide in an Award Agreement that either (i) the Secretary of the Company shall hold such certificates for the Grantee’s benefit until such time as the Restricted Stock is forfeited to the Company, or the restrictions lapse, or (ii) such certificates shall be delivered to the Grantee, provided, however, that such certificates shall bear a legend or legends that complies with the applicable securities laws and regulations and makes appropriate reference to the restrictions imposed under the Plan and the Award Agreement.

9.4 Rights of Holders of Restricted Stock.

Unless the Board otherwise provides in an Award Agreement, holders of Restricted Stock shall have the right to vote such Stock and the right to receive any dividends declared or paid with respect to such Stock; provided that an such Award Agreement shall assign such voting rights to the Board with respect to unvested shares of Restricted Stock. The Board may provide that any dividends paid on Restricted Stock must be reinvested in shares of Stock, which may or may not be subject to the same vesting conditions and restrictions applicable to such Restricted Stock. All distributions, if any, received by a Grantee with respect to Restricted Stock as a result of any stock split, stock dividend, combination of shares, or other similar transaction shall be subject to the restrictions applicable to the original Grant.

9.5 Termination of Service.

Unless otherwise provided by the Board in the applicable Award Agreement, upon the termination of a Grantee’s Service with the Company or an Affiliate, any shares of Restricted Stock held by such Grantee that have not vested, or with respect to which all applicable restrictions and conditions have not lapsed, shall immediately be deemed forfeited. Upon forfeiture of Restricted Stock, the Grantee shall have no further rights with respect to such Grant, including but not limited to any right to vote Restricted Stock or any right to receive dividends with respect to shares of Restricted Stock.

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9.6 Purchase and Delivery of Stock.

To the extent required in an Award Agreement, the Grantee may be required to purchase the Restricted Stock from the Company at a Purchase Price equal to the greater of (i) the aggregate par value of the shares of Stock represented by such Restricted Stock or (ii) the Purchase Price, if any, specified in the Award Agreement relating to such Restricted Stock. The Purchase Price shall be payable in a form described in Section 10 or, in the discretion of the Board, in consideration for past Services rendered to the Company or an Affiliate. Only to the extent required by applicable law, the Purchase Price of a share of Restricted Stock shall be not less than 85 percent of the Fair Market Value on the Grant Date of a share of Stock; provided, however, that, only to the extent required by applicable law, in the event that the Grantee is a Ten-Percent Stockholder, the Purchase Price shall be not less than 100 percent of the Fair Market Value on the Grant Date of a share of Stock.

Upon the expiration or termination of the restriction period and the satisfaction of any other conditions prescribed by the Board, the restrictions applicable to shares of Restricted Stock shall lapse, and, unless otherwise provided in the Award Agreement, a stock certificate for such shares shall be delivered, free of all such restrictions, to the Grantee or the Grantee’s beneficiary or estate, as the case may be.

10. FORM OF PAYMENT

Payment of the Option Price for the shares purchased pursuant to the exercise of an Option shall be made in cash or in cash equivalents acceptable to the Company. In addition, to the extent the Award Agreement so provides, payment of the Option Price for shares purchased pursuant to exercise of an Option may be made in any other form that is consistent with applicable laws, regulations and rules.

11. WITHHOLDING TAXES

The Company or an Affiliate, as the case may be, shall have the right to deduct from payments of any kind otherwise due to a Grantee any federal, state, or local taxes of any kind required by law to be withheld with respect to the vesting of or other lapse of restrictions applicable to an Award or upon the issuance of any shares of Stock or payment of any kind upon the exercise of an Option. At the time of such vesting, lapse, or exercise, the Grantee shall pay to the Company or the Affiliate, as the case may be, any amount that the Company or the Affiliate may reasonably determine to be necessary to satisfy such withholding obligation. Subject to the prior approval of the Board, which may be withheld by the Board, as the case may be, in its sole discretion, the Grantee may elect to satisfy such obligations, in whole or in part, (i) by causing the Company to withhold shares of Stock otherwise issuable to the Grantee or (ii) by delivering to the Company shares of Stock already owned by the Grantee. The shares of Stock so delivered or withheld shall have an aggregate Fair Market Value equal to such withholding obligations. The Fair Market Value of the shares of Stock used to satisfy such withholding obligation shall be determined by the Company or the Affiliate as of the date that the amount of tax to be withheld is

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to be determined. A Grantee who has made an election pursuant to this Section 11 may satisfy his or her withholding obligation only with shares of Stock that are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements. The maximum number of shares of Stock that may be withheld from any Award to satisfy any federal, state or local tax withholding requirements upon the exercise, vesting, lapse of restrictions applicable to such Award or payment of shares pursuant to such Award, as applicable, cannot exceed such number of shares having a Fair Market Value equal to the minimum statutory amount required by the Company to be withheld and paid to any such federal, state or local taxing authority with respect to such exercise, vesting, lapse of restrictions or payment of shares.

12. RESTRICTIONS ON TRANSFER OF SHARES OF STOCK

12.1 Right of First Refusal.

Subject to Section 12.4 below, a Grantee (or such other individual who is entitled to exercise an Option or otherwise acquires shares pursuant to an Award under the terms of this Plan) shall not sell, pledge, assign, gift, transfer, or otherwise dispose of any shares of Stock acquired pursuant to an Award to any person or entity without first offering such shares to the Company for purchase on the same terms and conditions as those offered the proposed transferee. The Company may assign its right of first refusal under this Section 12.1 in whole or in part, to (1) any holder of stock or other securities of the Company, (2) any Affiliate or (3) any other person or entity that the Board determines has a sufficient relationship with or interest in the Company. The Company shall give reasonable written notice to the Grantee of any such assignment of its rights. The Company or the assignee of such rights, as the case may be, shall be required to exercise such right within ninety (90) days after receiving notice from the Grantee. If neither the Company nor its assignee elects to exercise its right of first refusal, the Grantee may transfer such shares of Stock to such third party. The restrictions of this Section 12.1 apply to any person to whom Stock that was originally acquired pursuant to an Award is sold, pledged, assigned, bequeathed, gifted, transferred or otherwise disposed of, without regard to the number of such subsequent transferees or the manner in which they acquire the Stock, but the restrictions of this Section 12.1 do not apply to a transfer of Stock that occurs as a result of the death of the Grantee or of any subsequent transferee (but shall apply to the executor, the administrator or personal representative, the estate, and the legatees, beneficiaries and assigns thereof).

12.2 Repurchase and Other Rights.

Stock issued upon exercise of an Option or pursuant to an Award of Restricted Stock may be subject to such right of repurchase upon termination of Service or other transfer restrictions as the Board may determine, consistent with applicable law and prior to delivery of any such stock the Board may require the Grantee to become party to the Stockholders’ Agreement. Any additional restrictions shall be set forth in the Award Agreement; provided that no such restrictions shall be inconsistent with the terms of the Plan.

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12.3 Installment Payments.

12.3.1 General Rule.

In the case of any purchase of Stock under this Section 12, the Company or its permitted assignee may pay the Grantee, transferee of the Option or other registered owner of the Stock the purchase price in three or fewer annual installments. Interest shall be credited on the installments at the applicable federal rate (as determined for purposes of Section 1274 of the Code) in effect on the date on which the purchase is made. The Company or its permitted assignee shall pay at least one-third of the total purchase price each year, plus interest on the unpaid balance, with the first payment being made on or before the 60th day after the purchase.

12.3.2 Exception in the Case of Stock Repurchase Right.

If an Award Agreement authorizes, upon the Grantee’s termination of Service, the repurchase of shares of Stock acquired by the Grantee pursuant to the exercise of an Option or under an Award of Restricted Stock, to the extent required by applicable law, payment shall be made in cash or by cancellation of indebtedness within the later of 90 days from the date of termination of Service or 90 days from the date of exercise or purchase, as the case may be.

12.4 Publicly Traded Stock.

If the Stock is listed on an established national or regional stock exchange or is admitted to quotation on The NASDAQ Stock Market, Inc., or is publicly traded on an established securities market, the foregoing transfer restrictions of Sections 12.1 and 12.2 shall terminate as of the first date that the Stock is so listed, quoted or publicly traded.

12.5 Legend.

In order to enforce the restrictions imposed upon shares of Stock under this Plan or as provided in an Award Agreement, the Board may cause a legend or legends to be placed on any certificate representing shares issued pursuant to this Plan that complies with the applicable securities laws and regulations and makes appropriate reference to the restrictions imposed under it, including any obligations imposed under the Stockholders’ Agreement.

13. PARACHUTE LIMITATIONS

Notwithstanding any other provision of this Plan or of any other agreement, contract, or understanding heretofore or hereafter entered into by a Grantee with the Company or any Affiliate, except an agreement, contract, or understanding that expressly addresses Section 280G or Section 4999 of the Code (an “Other Agreement”), and notwithstanding any formal or informal plan or other arrangement for the direct or indirect provision of compensation to the Grantee (including groups or classes of participants or beneficiaries of which the Grantee is a member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit to or for the Grantee (a “Benefit Arrangement”), if the Grantee is a “disqualified individual,” as defined in Section 280G(c) of the Code, any Awards held by that Grantee and any right to receive any payment or other benefit under this Plan shall not become exercisable or vested (i) to the extent that such right to exercise, vesting, payment, or benefit, taking into account all other rights, payments, or benefits to or for the Grantee under this Plan, all Other Agreements, and all Benefit Arrangements, would cause any payment or benefit to the Grantee under this Plan to be considered a “parachute payment” within the meaning of Section 280G(b)(2) of the Code as then

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in effect (a “Parachute Payment”) and (ii) if, as a result of receiving a Parachute Payment, the aggregate after-tax amounts received by the Grantee from the Company under this Plan, all Other Agreements, and all Benefit Arrangements would be less than the maximum after-tax amount that could be received by the Grantee without causing any such payment or benefit to be considered a Parachute Payment provided, however, that prior to any such payment or benefit not becoming exercisable or vested, the Company shall, during any period when the Company does not have stock that is readily tradable on an established securities market, have used its reasonable best efforts to obtain shareholder approval of the Parachute Payments in the manner described in Q&A/7 of the regulations issued under Section 280G of the Code. In the event that the receipt of any such right to exercise, vesting, payment, or benefit under this Plan, in conjunction with all other rights, payments, or benefits to or for the Grantee under any Other Agreement or any Benefit Arrangement would cause the Grantee to be considered to have received a Parachute Payment under this Plan that would have the effect of decreasing the after-tax amount received by the Grantee as described in clause (ii) of the preceding sentence, then the Grantee shall have the right, in the Grantee’s sole discretion, to designate those rights, payments, or benefits under this Plan, any Other Agreements, and any Benefit Arrangements that should be reduced or eliminated so as to avoid having the payment or benefit to the Grantee under this Plan be deemed to be a Parachute Payment.

14. REQUIREMENTS OF LAW

14.1 General.

The Company shall not be required to sell or issue any shares of Stock under any Award if the sale or issuance of such shares would constitute a violation by the Grantee, any other individual exercising a right emanating from such Award, or the Company of any provision of any law or regulation of any governmental authority, including without limitation any federal or state securities laws or regulations. If at any time the Company shall determine, in its discretion, that the listing, registration or qualification of any shares subject to an Award upon any securities exchange or under any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the issuance or purchase of shares hereunder, no shares of Stock may be issued or sold to the Grantee or any other individual exercising an Option pursuant to such Award unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Company, and any delay caused thereby shall in no way affect the date of termination of the Award. Without limiting the generality of the foregoing, in connection with the Securities Act, upon the exercise of any right emanating from such Award or the delivery of any shares of Restrictive Stock, unless a registration statement under the Securities Act is in effect with respect to the shares of Stock covered by such Award, the Company shall not be required to sell or issue such shares unless the Board has received evidence satisfactory to it that the Grantee or any other individual exercising an Option may acquire such shares pursuant to an exemption from registration under the Securities Act. Any determination in this connection by the Board shall be final, binding, and conclusive. The Company may, but shall in no event be obligated to, register any securities covered hereby pursuant to the Securities Act. As to any jurisdiction that expressly imposes the requirement that an Option shall not be exercisable until the shares of Stock covered by such Option are registered or are exempt from registration, the exercise of such Option (under circumstances in which the laws of such jurisdiction apply) shall be deemed conditioned upon the effectiveness of such registration or the availability of such an exemption.

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14.2 Rule 16b-3.

During any time when the Company has a class of equity security registered under Section 12 of the Exchange Act, it is the intent of the Company that Awards pursuant to the Plan and the exercise of Options granted hereunder will qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To the extent that any provision of the Plan or action by the Board does not comply with the requirements of Rule 16b-3, it shall be deemed inoperative to the extent permitted by law and deemed advisable by the Board, and shall not affect the validity of the Plan. In the event that Rule 16b-3 is revised or replaced, the Board may exercise its discretion to modify this Plan in any respect necessary to satisfy the requirements of, or to take advantage of any features of, the revised exemption or its replacement.

14.3 Financial Reports.

To the extent required by applicable law, not less often than annually, the Company shall furnish to Grantees summary financial information including a balance sheet regarding the Company’s financial condition and results of operations, unless such Grantees have duties with the Company that assure them access to equivalent information. Such financial statements need not be audited.

15. EFFECT OF CHANGES IN CAPITALIZATION

15.1 Changes in Stock.

If the number of outstanding shares of Stock is increased or decreased or the shares of Stock are changed into or exchanged for a different number or kind of shares or other securities of the Company on account of any recapitalization, reclassification, stock split, reverse split, combination of shares, exchange of shares, stock dividend or other distribution payable in capital stock, or other increase or decrease in such shares effected without receipt of consideration by the Company occurring after the Effective Date, the number and kinds of shares for which grants of Options may be made under the Plan shall be adjusted proportionately and accordingly by the Board. In addition, the number and kind of shares for which Awards are outstanding shall be adjusted proportionately and accordingly so that the proportionate interest of the Grantee immediately following such event shall, to the extent practicable, be the same as immediately before such event, as determined by the Board in its sole discretion. Any such adjustment in outstanding Options shall be performed by the Board in a manner that complies with the requirements set forth in Section 409A of the Code and the rules governing Incentive Stock Options, to the extent applicable. The conversion of any convertible securities of the Company shall not be treated as an increase in shares effected without receipt of consideration. Notwithstanding the foregoing, in the event of any distribution to the Company’s stockholders of securities of any other entity or other assets (including an extraordinary dividend but excluding a non-extraordinary dividend of the Company) without receipt of consideration by the Company, the Company shall, in such manner as the Company deems appropriate, adjust (i) the number and kind of shares subject to outstanding Awards and/or (ii) the exercise price of outstanding Options to reflect such distribution.

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15.2 Reorganization in Which the Company Is the Surviving Entity and in Which No Change of Control Occurs.

Subject to the exception set forth in the last sentence of Section 15.4, if the Company shall be the surviving entity in any reorganization, merger, or consolidation of the Company with one or more other entities and in which no Change of Control occurs, any Award theretofore made pursuant to the Plan shall pertain to and apply solely to the common stock shares to which a holder of the number of shares of Stock subject to such Award would have been entitled immediately following such reorganization, merger, or consolidation, and with a corresponding proportionate adjustment of the Option Price per share, all such adjustments to be done by the Board in a manner that complies with the requirements set forth in Section 409A of the Code and the rules governing Incentive Stock Options, to the extent applicable.

15.3 Change of Control.

Subject to the exceptions set forth in the last sentence of this Section 15.3 and the last sentence of Section 15.4 upon the occurrence of a Change of Control either of the following two actions shall be taken, as determined by the Board, in its sole discretion:

(i) fifteen days prior to the scheduled consummation of a Change of Control, all Options outstanding hereunder shall become immediately exercisable and shall remain exercisable for a period of fifteen days, or

(B) the Board may elect, in its sole discretion, to cancel any outstanding Awards and pay or deliver, or cause to be paid or delivered, to the holder thereof an amount in cash or securities having a value (as determined by the Board acting in good faith) equal to the product of the number of shares of Stock subject to the Award (the “Grant Shares”) multiplied by the amount, if any, by which (I) the formula or fixed price per share paid to holders of shares of Stock pursuant to such transaction exceeds (II) the Option Price applicable to such Grant Shares.

With respect to the Company’s establishment of an exercise window, (i) any exercise of an Option during such period shall be conditioned upon the consummation of the event and shall be effective only immediately before the consummation of the event, and (ii) upon consummation of any Change of Control, the Plan and all outstanding but unexercised Options shall terminate. The Board shall send written notice of an event that will result in such a termination to all individuals who hold Options not later than the time at which the Company gives notice thereof to its stockholders.

This Section 15.3 shall not apply to any Change of Control to the extent that provision is made in writing in connection with such Change of Control for the assumption or continuation of the Options theretofore granted, or for the substitution for such Awards for new common stock options relating to the stock of a successor entity, or a parent or subsidiary thereof, with appropriate adjustments as to the number of shares, in each case on substantially the same terms as the Options existing as of the Change of Control, and option prices, in which event the Awards theretofore granted shall continue in the manner and under the terms so provided.

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15.4 Adjustments.

Adjustments under Section 15 related to shares of Stock or securities of the Company shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. No fractional shares or other securities shall be issued pursuant to any such adjustment, and any fractions resulting from any such adjustment shall be eliminated in each case by rounding downward to the nearest whole share. The Board may provide in the Award Agreements at the time of grant, or any time thereafter with the consent of the Grantee, for different provisions to apply to an Award in place of those described in Sections 15.1, 15.2 and 15.3.

15.5 No Limitations on Company.

The making of Awards pursuant to the Plan shall not affect or limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure or to merge, consolidate, dissolve, or liquidate, or to sell or transfer all or any part of its business or assets.

16. GENERAL PROVISIONS

16.1 Disclaimer of Rights

No provision in the Plan or in any Award or Award Agreement shall be construed to confer upon any individual the right to remain in the employ or service of the Company or any Affiliate, or to interfere in any way with any contractual or other right or authority of the Company either to increase or decrease the compensation or other payments to any individual at any time, or to terminate any employment or other relationship between any individual and the Company or any Affiliate. The obligation of the Company to pay any benefits pursuant to this Plan shall be interpreted as a contractual obligation to pay only those amounts described herein, in the manner and under the conditions prescribed herein. The Plan shall in no way be interpreted to require the Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for payment to any participant or beneficiary under the terms of the Plan.

16.2 Nonexclusivity of the Plan

Neither the adoption of the Plan nor the submission of the Plan to the stockholders of the Company for approval shall be construed as creating any limitations upon the right and authority of the Board to adopt such other incentive compensation arrangements (which arrangements may be applicable either generally to a class or classes of individuals or specifically to a particular individual or particular individuals) as the Board in its discretion determines desirable, including, without limitation, the granting of stock options otherwise than under the Plan.

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16.3 Captions

The use of captions in this Plan or any Award Agreement is for the convenience of reference only and shall not affect the meaning of any provision of the Plan or such Award Agreement.

16.4 Other Award Agreement Provisions

Each Award under the Plan may contain such other terms and conditions not inconsistent with the Plan as may be determined by the Board, in its sole discretion.

16.5 Number and Gender

With respect to words used in this Plan, the singular form shall include the plural form, the masculine gender shall include the feminine gender, etc., as the context requires.

16.6 Severability

If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction.

16.7 Governing Law

The validity and construction of this Plan and the instruments evidencing the Awards awarded hereunder shall be governed by the laws of the State of Delaware other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Plan and the instruments evidencing the Awards awarded hereunder to the substantive laws of any other jurisdiction.

16.8 Code Section 409A

The Board intends to comply with Section 409A of the Code, or an exemption to Section 409A of the Code, with regard to Awards hereunder that constitute nonqualified deferred compensation within the meaning of Section 409A of the Code. To the extent that the Board determines that a Grantee would be subject to the additional 20% tax imposed on certain nonqualified deferred compensation plans pursuant to Section 409A of the Code as a result of any provision of any Award granted under this Plan, such provision shall be deemed amended to the minimum extent necessary to avoid application of such additional tax. The nature of any such amendment shall be determined by the Board and shall not materially alter the benefits associated with any outstanding Award. Neither the Company nor any of its respective affiliates or subsidiaries, or any of the agents, employees, officers, directors or other representatives of one or more of the foregoing represents, warrants or guarantees any particular or favorable tax or other result in connection with this Agreement, the Plan, Shares or otherwise. The Grantee shall be solely and exclusively responsible for any and all such results.

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17. EXECUTION

To record adoption of the Plan by the Board as of January 30, 2014, and approval of the Plan by the stockholders of the Company on January 30, 2014, the Company has caused its authorized officer to execute the Plan.

ALARM.COM HOLDINGS, INC.
By:	/s/ Stephen Trundle
Name: Stephen Trundle
Title:	Chief Executive Officer

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2009 STOCK INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

Alarm.com Holdings, Inc., a Delaware corporation (the “Company”), hereby grants an option to purchase shares of its Common Stock, $.01 par value, (the “Stock”) to the optionee named below. The terms and conditions of the option are set forth in this cover sheet, in the attachment and in the Company’s 2009 Stock Incentive Plan (the “Plan”).

Grant Date:

Name of Optionee:                                                                                 

Optionee’s Employee Identification Number:     -                    -                     

Number of Shares Covered by Option:                                

Option Price per Share: $     .             

Vesting Start Date:                         ,                 

By signing this cover sheet, you agree to all of the terms and conditions described in the attached Agreement and in the Plan, a copy of which has been made available to you. You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent.

Optionee:                                         

(Signature)

Company:                                         

(Signature)

Title:                                         

Attachment

This is not a stock certificate or a negotiable instrument

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2009 STOCK INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

Non-Qualified Stock Option	This option is not intended to be an incentive stock option under Section 422 of the Internal Revenue Code and will be interpreted accordingly.
Vesting	This option is only exercisable before it expires and then only with respect to the vested portion of the option. Subject to the preceding sentence, you may exercise this option, in whole or in part, to purchase a whole number of vested shares (not less than 100 shares unless the number of shares purchased is the total number available for purchase under the option), by following the procedures set forth in the Plan and below in this Agreement. Your right to purchase shares of Stock under this option vests as to one fifth (1/5) of the total number of shares covered by this option, as shown on the cover sheet (the “Option Shares”), on the one-year anniversary of the Vesting Start Date (“Anniversary Date”), provided you then continue in Service. Thereafter, for each such vesting date that you remain in Service, the number of shares of Stock which you may purchase under this option shall vest at the rate of one-sixtieth (1/60) of the Option Shares per month as of the first day of each month following the month of the Anniversary Date. The resulting aggregate number of vested shares will be rounded to the nearest whole number, and you cannot vest in more than the number of shares covered by this option. Except as provided below, no additional shares of Stock will vest after your Service has terminated for any reason.
Term	Your option will expire in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Grant Date, as shown on the cover sheet. Your option will expire earlier (but never later) if your Service terminates, as described below.
Regular Termination	If your Service terminates for any reason, other than death, Disability or Cause, then your option will expire at the close of business at Company headquarters on the date ninety (90) days after Service terminates.

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Termination for Cause	If your Service is terminated for Cause, then you shall immediately forfeit all rights to your option and the option shall immediately expire.
Death	If your Service terminates because of your death, then your option will be vested and exercisable in accordance with the schedule set forth above through the date of your death (and the unvested portion of your option shall immediately terminate), and your option will expire at the close of business at Company headquarters on the date twelve (12) months after the date of death. During the option period, your estate or heirs may exercise the vested portion of your option.
Disability	If your Service terminates because of your Disability, then your option will be vested and exercisable in accordance with the schedule set forth above through the date of your termination of Service due to the Disability (and the unvested portion of your option shall immediately terminate), and your option will expire at the close of business at Company headquarters on the date twelve (12) months following termination of Service.
Leaves of Absence	For purposes of this option, your Service does not terminate when you go on a bona fide employee leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by applicable law. However, your Service will be treated as terminating as of the date you went on employee leave, unless your right to return to active work is guaranteed by law or by a contract. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work. The Company determines, in its sole discretion, which leaves count for this purpose, and when your Service terminates for all purposes under the Plan.
Notice of Exercise	When you wish to exercise this option, you must notify the Company by filing the proper “Notice of Exercise” form at the address given on the form. Your notice must specify how many shares you wish to purchase (in a parcel of at least 100 shares generally). Your notice must also specify how your shares of Stock should be registered (in your name only or in your and your spouse’s names as joint tenants with right of survivorship). The notice will be effective when it is received by the Company. If someone else wants to exercise this option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.

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Form of Payment	When you submit your notice of exercise, you must include, together with a joinder to the Company’s Stockholders’ Agreement, payment of the option price for the shares you are purchasing. Payment may be made in one (or a combination) of the following forms:
	•     Cash, your personal check, a cashier’s check, a money order or another cash equivalent acceptable to the Company. •     Shares of Stock withheld by the Company from the shares of Stock otherwise to be received, with such withheld shares having an aggregate Fair Market Value on the date of exercise equal to the aggregate option price. •     Shares of Stock which have already been owned by you and which are surrendered to the Company. The Fair Market Value of the shares, determined as of the effective date of the option exercise, will be applied to the option price. •     To the extent a public market for the Stock exists as determined by the Company, by delivery (on a form prescribed by the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell shares of Stock and to deliver all or part of the sale proceeds to the Company in payment of the aggregate option price.
Withholding Taxes	You will not be allowed to exercise this option unless you make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the option exercise or sale of shares of Stock acquired under this option. Any of the methods described under “Form of Payment” will be considered acceptable arrangements for paying such taxes.
Transfer of Option	Except as set forth in the paragraph below, during your lifetime, only you (or, in the event of your legal incapacity or incompetency, your guardian or legal representative) may exercise the option, and you cannot transfer or assign this option. For instance, you may not sell this option or use it as security for a loan. If you attempt to do any of these things, this option will immediately become invalid. You may, however, dispose of this option in your will or it may be transferred upon your death by the laws of descent and distribution. Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your spouse, nor is the Company obligated to recognize your spouse’s interest in your option in any other way. Subject to the prior written approval of the Company, which approval shall not be unreasonably withheld, you shall be permitted to voluntarily transfer the option to a Permitted Transferee in connection with your bona fide estate planning purposes. For these purposes, “Permitted Transferee” means (a) solely as a joint owner, your spouse, ancestor or lineal descendant

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	(including any child of yours or your descendant who was adopted prior to the age or majority) who is a natural person; (b) a trust for the exclusive benefit of you or any persons enumerated in clause (a) above, the trustee of which is you, or an institutional trustee; (c) an entity that is effectively controlled by you; and (d) if you are deceased, your estate, but only if, by operation of law or the terms of your will, all of your options are distributable to one or more Permitted Transferees enumerated above.
Market Stand-off Agreement	In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the Company’s initial public offering, you agree not to sell, make any short sale of, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose or transfer for value or agree to engage in any of the foregoing transactions with respect to any shares of Stock without the prior written consent of the Company or its underwriters, for such period of time after the effective date of such registration statement as may be requested by the Company or the underwriters (not to exceed 180 days in length unless requested by the lead underwriter).
Investment Representation	If the sale of Stock under the Plan is not registered under the Securities Act, but an exemption is available which requires an investment or other representation, you shall represent and agree at the time of exercise that the Stock being acquired upon exercise of this option is being acquired for investment, and not with a view to the sale or distribution thereof, and shall make such other representations as are deemed necessary or appropriate by the Company and its counsel.
The Company’s Right of First Refusal	In accordance with Section 12.1 of the Plan, in the event that you propose to sell, pledge or otherwise transfer to a third party any Stock acquired under this Agreement, or any interest in such Stock, the Company shall have the “Right of First Refusal” with respect to all (and not less than all) of such shares of Stock. If you desire to transfer Stock acquired under this Agreement, you must give a written “Transfer Notice” to the Company describing fully the proposed transfer, including the number of shares proposed to be transferred, the proposed transfer price and the name and address of the proposed transferee.
	The Transfer Notice shall be signed both by you and by the proposed new transferee and must constitute a binding commitment of both parties to the transfer of the shares. The Company shall have the right to purchase all, and not less than all, of the shares of Stock on the terms of the proposal described in the Transfer Notice (subject, however, to any change in such terms permitted in the next paragraph) by delivery of a notice of exercise of the Right of First Refusal within ninety (90) days after the date when the Transfer Notice was received by the Company.

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If the Company fails to exercise its Right of First Refusal within ninety (90) days after the date when it received the Transfer Notice, you may, not later than one hundred fifty (150) days following receipt of the Transfer Notice by the Company, conclude a transfer of the Stock subject to the Transfer Notice on the terms and conditions described in the Transfer Notice. Any proposed transfer on terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed transfer by you, shall again be subject to the Right of First Refusal and shall require compliance with the procedure described in the paragraph above. If the Company exercises its Right of First Refusal, the parties shall consummate the sale of the Stock on the terms set forth in the Transfer Notice within sixty (60) days after the date when the Company delivered its notice of exercise to you (or within such longer period as may have been specified in the Transfer Notice); provided, however, that in the event the Transfer Notice provided that payment for the Stock was to be made in a form other than lawful money paid at the time of transfer, the Company shall have the option of paying for the Stock with lawful money equal to the present value of the consideration described in the Transfer Notice.

In the case of any purchase of Stock under this Right of First Refusal, at the option of the Company, the Company may pay you the purchase price in three or fewer annual installments. Interest shall be credited on the installments at the applicable federal rate (as determined for purposes of Section 1274 of the Code) in effect on the date on which the purchase is made. The Company shall pay at least one-third of the total purchase price each year, plus interest on the unpaid balance, with the first payment being made on or before the 60th day after the purchase.

The Company’s rights under this subsection shall be freely assignable, in whole or in part, shall inure to the benefit of its successors and assigns and shall be binding upon any transferee of the shares of Stock.

The Company’s Right of First Refusal shall terminate in the event that the Stock is listed on an established national or regional stock exchange, is admitted for quotation on The Nasdaq Stock Market, Inc., or is publicly traded on an established securities market.

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Right to Repurchase	Following termination of your Service for any reason, the Company shall have the right to purchase all of those shares of Stock that you have or will acquire under this option. If the Company exercises its right to purchase the shares, the Company will notify you of its intention to purchase such shares, and will consummate the purchase within one year (or 90 days to the extent required by applicable law) of your termination of Service or, in the case of Stock acquired after your termination of Service, within one year (or 90 days to the extent required by applicable law) of the date of exercise. The purchase price shall be the Fair Market Value of the shares on the date of your termination of Service if the Company exercises its right to purchase such shares within 90 days of your termination of Service or exercises its right within 90 days of the date of your exercise of the option following termination of Service; otherwise the purchase price shall be the Fair Market Value of the shares on the date the Company gives you notice of its intent to exercise its right to purchase the shares. The Company’s rights of repurchase shall terminate in the event that the Stock is listed on an established national or regional stock exchange, is admitted for quotation on The Nasdaq Stock Market, Inc., or is publicly traded on an established securities market.
Retention Rights	Neither your option nor this Agreement give you the right to be retained by the Company (or any Parent, Subsidiaries or Affiliates) in any capacity. The Company (and any Parent, Subsidiaries or Affiliates) reserve the right to terminate your Service at any time and for any reason.
Stockholder Rights	You, or your estate or heirs, have no rights as a stockholder of the Company until a certificate for your option’s shares of Stock has been issued (or an appropriate book entry has been made). No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued (or an appropriate book entry has been made), except as described in the Plan.
Forfeiture of Rights	If you should take actions in competition with the Company, the Company shall have the right to cause a forfeiture of your rights, including, but not limited to, the right to cause: (i) a forfeiture of any outstanding option, and (ii) with respect to the period commencing twelve (12) months prior to your termination of Service with the Company and ending twelve (12) months following such termination of Service (A) a forfeiture of any gain recognized by you upon the exercise of an option or (B) a forfeiture of any Stock acquired by you upon the exercise of an option (but the Company will pay you the option price without interest).

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	Unless otherwise specified in an employment or other agreement between the Company and you, you take actions in competition with the Company if you directly or indirectly, own, manage, operate, join or control, or participate in the ownership, management, operation or control of, or are a proprietor, director, officer, stockholder, member, partner or an employee or agent of, or a consultant to any business, firm, corporation, partnership or other entity which competes with any business in which the Company or any of its Affiliates is engaged during your employment or other independent contractor relationship with the Company or its Affiliates or at the time of your termination of Service.
Adjustments	In the event of a stock split, a stock dividend or a similar change in the Stock, the number of shares covered by this option and the option price per share shall be adjusted (and rounded down to the nearest whole number) if required pursuant to the Plan. Your option shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity in accordance with the terms of the Plan.
Legends	All certificates representing the Stock issued upon exercise of this option shall, where applicable, have endorsed thereon the following legends: “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OPTIONS TO PURCHASE SUCH SHARES SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE.” “THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION OR QUALIFICATION THEREOF UNDER SUCH ACT AND SUCH APPLICABLE STATE OR OTHER JURISDICTION’S SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT REQUIRED.”

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Applicable Law	This Agreement will be interpreted and enforced under the laws of the State of Delaware, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
The Plan	The text of the Plan is incorporated in this Agreement by reference. Certain capitalized terms used in this Agreement are defined in the Plan, and have the meanings set forth in the Plan. This Agreement and the Plan constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded.
Stockholders’ Agreement	You agree, as a condition of this grant, that, upon request by the Company for any reason, you will promptly execute such document(s) as necessary to become a party to the Stockholders’ Agreement.
Data Privacy	In order to administer the Plan, the Company may process personal data about you. Such data includes but is not limited to the information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you such as home address and business addresses and other contact information, payroll information and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan. By accepting this grant, you give explicit consent to the Company to process any such personal data. You also give explicit consent to the Company to transfer any such personal data outside the country in which you work or are employed, including, with respect to non-U.S. resident Grantees, to the United States, to transferees who shall include the Company and other persons who are designated by the Company to administer the Plan.
Consent to Electronic Delivery	The Company may choose to deliver certain statutory materials relating to the Plan in electronic form. By accepting this grant you agree that the Company may deliver the Plan prospectus and the Company’s annual report (to the extent required) to you in an electronic format. If at any time you would prefer to receive paper copies of these documents, as you are entitled to, the Company would be pleased to provide copies. Please contact the Secretary of the Company to request paper copies of these documents.

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Certain Dispositions If you sell or otherwise dispose of Stock acquired pursuant to the exercise of this option following termination of the Company’s Right of First Refusal and sooner than the one year anniversary of the date you acquired the Stock, then you agree to notify the Company in writing of the date of sale or disposition, the number of shares of Stock sold or disposed of and the sale price per share within 30 days of such sale or disposition.

BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE.

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ALARM.COM HOLDINGS, INC.

AMENDED AND RESTATED

2009 STOCK INCENTIVE PLAN

EARLY EXERCISE NOTICE AND

RESTRICTED STOCK PURCHASE AGREEMENT

This Agreement (“Agreement”) is made as of             , by and between ALARM.COM HOLDINGS, INC., a Delaware corporation (the “Company”), and              (“Purchaser”). To the extent any capitalized terms used in this Agreement are not defined, they shall have the meaning ascribed to them in the Company’s Amended and Restated 2009 Stock Incentive Plan, as currently in effect and as may be hereinafter amended from to time (the “Plan”).

1. Exercise of Option. Subject to the terms and conditions hereof, Purchaser hereby elects to exercise Purchaser’s option to purchase              shares of the Common Stock (the “Shares”) of the Company under and pursuant to the Plan and the Non-Qualified Stock Option Agreement dated              (the “Option Agreement”). Of these Shares, Purchaser has elected to purchase              of those Shares which have become vested as of the date hereof under the Vesting Schedule set forth in the Option Agreement (the “Vested Shares”) and              Shares which are unvested as of the date hereof under the Vesting Schedule set forth in the Option Agreement (the “Unvested Shares”). The Shares shall be subject to the Right to Repurchase under the Option Agreement and the Plan; provided, further that the Unvested Shares shall also be subject to the Repurchase Option set forth in Section 3(b) below.

The purchase price for the Shares shall be $             per Share for a total purchase price of $            . The term “Shares” refers to the purchased Shares and all securities received in replacement of the Shares or as stock dividends or splits, all securities received in replacement of the Shares in a recapitalization, merger, reorganization, exchange or the like, and all new, substituted or additional securities or other properties to which Purchaser is entitled by reason of Purchaser’s ownership of the Shares.

2. Time and Place of Exercise. The purchase and sale of the Shares under this Agreement shall occur at the principal office of the Company simultaneously with the execution and delivery of this Agreement in accordance with the provisions of the Option Agreement; provided, however, that payment shall be provided in the form provided herein. Following such date, the Company will issue to Purchaser the Shares to be purchased by Purchaser (which shall be issued in Purchaser’s name) against payment of the purchase price therefor by Purchaser by cash, personal check, cashier’s check, money order or another cash equivalent acceptable to the Company, or (b) to the extent a public market for the stock of the Company exists as determined by the Company, by delivery (on a form prescribed by the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell shares of stock of the Company and to deliver all or part of the sale proceeds to the Company in payment of the aggregate option price.

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3. Limitations on Transfer.

(a) Transfer Restrictions. In addition to any other limitation on transfer created by applicable securities laws or any stockholders’ agreement to which Purchaser is a party, Purchaser shall not assign, encumber or dispose of any interest in the Shares while the Shares are subject to the Company’s Repurchase Option (as defined below), except as provided below. After any Shares have been released from such Repurchase Option, Purchaser shall not assign, encumber or dispose of any interest in such Shares except in compliance with the provisions below and applicable securities laws.

(b) Repurchase Option.

(i) In the event of the voluntary or involuntary termination of Purchaser’s Service for any or no reason, the Company shall upon the date of such termination (the “Termination Date”) have an irrevocable, exclusive option (the “Repurchase Option”) for a period of one year (or 90 days to the extent required by applicable law) from the later of such date or the date upon which the Shares are purchased to repurchase all or any portion of the Unvested Shares held by Purchaser as of the Termination Date which have not yet been released from the Company’s Repurchase Option at the original purchase price per Share specified in Section 1 (adjusted for any stock splits, stock dividends and the like).

(ii) The Repurchase Option shall be exercised by the Company by written notice to Purchaser or Purchaser’s executor and, at the Company’s option, (A) by delivery to Purchaser or Purchaser’s executor with such notice of a check in the amount of the purchase price for the Shares being purchased, or (B) in the event Purchaser is indebted to the Company, by cancellation by the Company of an amount of such indebtedness equal to the purchase price for the Shares being repurchased, or (C) by a combination of (A) and (B) so that the combined payment and cancellation of indebtedness equals such purchase price. Upon delivery of such notice and payment of the purchase price in any of the ways described above, the Company shall become the legal and beneficial owner of the Shares being repurchased and all rights and interest therein or related thereto, and the Company shall have the right to transfer to its own name the number of Shares being repurchased by the Company, without further action by Purchaser.

(iii) One hundred percent (100%) of the Unvested Shares shall initially be subject to the Repurchase Option. The Unvested Shares shall be released from the Repurchase Option in accordance with the Vesting Schedule set forth in the Option Agreement, including any provisions regarding acceleration of vesting, as if such Unvested Shares were still subject to the Option Agreement. For avoidance of doubt, once the Unvested Shares are released from the Repurchase Option, all Shares shall continue to be subject to the Right to Repurchase set forth in the Option Agreement. Fractional shares shall be rounded to the nearest whole share.

(iv) In the event of a Change of Control, the Board, in its sole discretion, may elect to waive (in part or in whole) its Repurchase Option, which waiver will be effective as of the date of the Change of Control (or as of some other date prior to the Change of Control, but contingent upon the consummation of the Change of Control).

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4. Escrow of Unvested Shares. For purposes of facilitating the enforcement of the provisions of Section 3 above, Purchaser agrees, immediately upon receipt of the certificate(s), if certificated, for the Shares subject to the Company’s Repurchase Option described in Section 3(b), to deliver such certificate(s), together with an Assignment Separate from Certificate in the form attached to this Agreement as Attachment A-1 executed by Purchaser and by Purchaser’s spouse (if required for transfer), in blank, to the Secretary of the Company, or the Secretary’s designee, to hold such certificate(s) and Assignment Separate from Certificate in escrow and to take all such actions and to effectuate all such transfers and/or releases as are in accordance with the terms of this Agreement. Purchaser hereby acknowledges that the Secretary of the Company, or the Secretary’s designee, is so appointed as the escrow holder with the foregoing authorities as a material inducement to make this Agreement and that said appointment is coupled with an interest and is accordingly irrevocable. Purchaser agrees that said escrow holder shall not be liable to any party hereof (or to any other party). The escrow holder may rely upon any letter, notice or other document executed by any signature purported to be genuine and may resign at any time. Purchaser agrees that if the Secretary of the Company, or the Secretary’s designee, resigns as escrow holder for any or no reason, the Board of Directors of the Company shall have the power to appoint a successor to serve as escrow holder pursuant to the terms of this Agreement.

5. Investment and Taxation Representations. In connection with the purchase of the Shares, Purchaser represents to the Company the following:

(a) Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the securities. Purchaser is purchasing these securities for investment for his or her own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act.

(b) Purchaser understands that the securities have not been registered under the Securities Act by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Purchaser’s investment intent as expressed herein.

(c) Purchaser understands that the Shares are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, Purchaser must hold the Shares indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. Purchaser acknowledges that the Company has no obligation to register or qualify the Shares for resale. Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Shares, and requirements relating to the Company which are outside of the Purchaser’s control, and which the Company is under no obligation and may not be able to satisfy.

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(d) Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser acknowledges and agrees that neither the Company nor any of its respective affiliates or subsidiaries, or any of the agents, employees, officers, directors or other representatives of one or more of the foregoing represents, warrants or guarantees any particular or favorable tax or other result in connection with this Agreement, the Plan, Shares or otherwise. Purchaser shall be solely and exclusively responsible for any and all such results. Purchaser represents that Purchaser has consulted any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

6. Restrictive Legends and Stop-Transfer Orders.

(a) Legends. The certificate or certificates representing the Shares shall bear the following legends (as well as any legends required by applicable state and federal corporate and securities laws):

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE, DISTRIBUTION OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

(b) Stop-Transfer Notices. Purchaser agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

(c) Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

7. No Employment Rights. Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company, or a Parent or Subsidiary of the Company, to terminate Purchaser’s employment or consulting relationship, for any reason, with or without cause.

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8. Section 83(b) Election. Purchaser understands that Section 83(a) of the Internal Revenue Code of 1986, as amended (the “Code”), taxes as ordinary income for a Nonstatutory Stock Option and as alternative minimum taxable income for an Incentive Stock Option the difference between the amount paid for the Shares and the Fair Market Value of the Shares as of the date any restrictions on the Shares lapse. In this context, “restriction” means the right of the Company to buy back the Shares pursuant to the Repurchase Option set forth in Section 3(b) of this Agreement. Purchaser understands that Purchaser may elect to be taxed at the time the Shares are purchased, rather than when and as the Repurchase Option expires, by filing an election under Section 83(b) (an “83(b) Election”) of the Code with the Internal Revenue Service within 30 days from the date of purchase. Even if the Fair Market Value of the Shares at the time of the execution of this Agreement equals the amount paid for the Shares, the election must be made to avoid income and alternative minimum tax treatment under Section 83(a) in the future. Purchaser understands that failure to file such an election in a timely manner may result in adverse tax consequences for Purchaser. Purchaser further understands that an additional copy of such election form should be filed with his or her federal income tax return for the calendar year in which the date of this Agreement falls. Purchaser acknowledges that the foregoing is only a summary of the effect of United States federal income taxation with respect to purchase of the Shares hereunder, and does not purport to be complete. Purchaser further acknowledges that the Company has directed Purchaser to seek independent advice regarding the applicable provisions of the Code, the income tax laws of any municipality, state or foreign country in which Purchaser may reside, and the tax consequences of Purchaser’s death.

Purchaser agrees that he or she will execute and deliver to the Company with this executed Agreement a copy of the Acknowledgment and Statement of Decision Regarding Section 83(b) Election (the “Acknowledgment”) attached hereto as Attachment A-2. Purchaser further agrees that he or she will execute and submit with the Acknowledgment a copy of the 83(b) Election attached hereto as Attachment A-3 (for income tax purposes in connection with the early exercise of a Nonstatutory Stock Option) if Purchaser has indicated in the Acknowledgment his or her decision to make such an election.

9. Market Stand-off Agreement. In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the Company’s initial public offering, Purchaser agrees not to sell, make any short sale of, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose or transfer for value or agree to engage in any of the foregoing transactions with respect to any Shares without the prior written consent of the Company or its underwriters, for such period of time after the effective date of such registration statement as may be requested by the Company or the underwriters (not to exceed 180 days in length unless requested by the lead underwriter).

10. Miscellaneous.

(a) Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law.

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(b) Entire Agreement; Enforcement of Rights. This Agreement, its attachments and the related Option Agreement and Plan set forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior discussions between them. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.

(c) Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

(d) Construction. This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.

(e) Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by telegram or fax or 48 hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address as set forth below or as subsequently modified by written notice.

(f) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(g) Successors and Assigns. The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations of Purchaser under this Agreement may only be assigned with the prior written consent of the Company.

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The parties have executed this Agreement as of the date first set forth above.

COMPANY:

ALARM.COM HOLDINGS, INC.

By:                                                                                                  

Name (print):                                                                               

Title:                                                                                              

PURCHASER:

(Signature)

(Print Name)

Address:                                                                                        

I,                                                                                                                   , spouse of Purchaser, have read and hereby approve the foregoing Agreement. In consideration of the Company’s granting my spouse the right to purchase the Shares as set forth in the Agreement, I hereby agree to be bound irrevocably by the Agreement and further agree that any community property or similar interest that I may have in the Shares shall hereby be similarly bound by the Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any amendment or exercise of any rights under the Agreement.

Spouse of Purchaser (if applicable)

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ATTACHMENT A-1

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED and pursuant to that certain Early Exercised Notice and Restricted Stock Purchase Agreement between the undersigned (“Purchaser”) and ALARM.COM HOLDINGS, INC. (the “Company”) dated             ,             (the “Agreement”), Purchaser hereby sells, assigns and transfers unto the Company              (            ) shares of the Common Stock of the Company, standing in Purchaser’s name on the books of the Company and represented by Certificate No.             , and does hereby irrevocably constitute and appoint              to transfer said stock on the books of the Company with full power of substitution in the premises.

THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE ATTACHMENTS THERETO.

Dated:                                                                                            

(Signature)

(Print Name)

Spouse of Purchaser (if applicable)

Instruction: Please do not fill in any blanks other than the signature line. The purpose of this assignment is to enable the Company to exercise its Repurchase Option set forth in the Agreement without requiring additional signatures on the part of Purchaser.

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ATTACHMENT A-2

ACKNOWLEDGMENT AND STATEMENT OF DECISION

REGARDING SECTION 83(b) ELECTION

The undersigned (which term includes the undersigned’s spouse), a purchaser of                  shares of Common Stock of ALARM.COM HOLDINGS, INC., a Delaware corporation (the “Company”) by exercise of an option (the “Option”) granted pursuant to the Company’s Amended and Restated 2009 Stock Incentive Plan (the “Plan”), hereby states as follows:

1. The undersigned acknowledges receipt of a copy of the Plan relating to the offering of such shares. The undersigned has carefully reviewed the Plan and the option agreement pursuant to which the Option was granted.

2. The undersigned either [check and complete as applicable]:

(a)             has consulted, and has been fully advised by, the undersigned’s own tax advisor regarding the federal, state and local tax consequences of purchasing shares under the Plan, and particularly regarding the advisability of making elections pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”) and pursuant to the corresponding provisions, if any, of applicable state law; or

(b)             has knowingly chosen not to consult such a tax advisor.

3. The undersigned hereby states that the undersigned has decided [check as applicable]:

(a)             to make an election pursuant to Section 83(b) of the Code, and is submitting to the Company, together with the undersigned’s executed Early Exercise Notice and Restricted Stock Purchase Agreement, an executed form entitled “Election Under Section 83(b) of the Internal Revenue Code of 1986”; or

(b)             not to make an election pursuant to Section 83(b) of the Code.

4. Neither the Company nor any subsidiary or representative of the Company has made any warranty or representation to the undersigned with respect to the tax consequences of the undersigned’s purchase of shares under the Plan or of the making or failure to make an election pursuant to Section 83(b) of the Code or the corresponding provisions, if any, of applicable state law.

Dated:                                                                                            

(Signature)

(Print Name)

Spouse of Purchaser (if applicable)

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ATTACHMENT A-3

ELECTION UNDER SECTION 83(b)

OF THE INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code, to include in taxpayer’s gross income for the current taxable year, the amount of any compensation taxable to taxpayer in connection with taxpayer’s receipt of the property described below:

1. The name, address, taxpayer identification number and taxable year of the undersigned are as follows:

NAME OF TAXPAYER:                                                 

NAME OF SPOUSE:                                                        

ADDRESS:                                                                           

IDENTIFICATION NO. OF TAXPAYER:               

IDENTIFICATION NO. OF SPOUSE:                      

TAXABLE YEAR:                                                            

2. The property with respect to which the election is made is described as follows:

             shares of the Common Stock $0.01 par value, of ALARM.COM HOLDINGS, INC., a Delaware corporation (the “Company”).

3. The date on which the property was transferred is:                                         

4. The property is subject to the following restrictions:

Repurchase option at cost in favor of the Company upon termination of taxpayer’s employment or consulting relationship.

5. The fair market value at the time of transfer, determined without regard to any restriction other than a restriction which by its terms will never lapse, of such property is: $                                

6. The amount (if any) paid for such property: $                                

7. The amount to include in gross income is $                                

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The undersigned has submitted a copy of this statement to the person for whom the services were performed in connection with the undersigned’s receipt of the above-described property. The transferee of such property is the person performing the services in connection with the transfer of said property. Additionally, the undersigned will include a copy of the election with the undersigned’s income tax return for the taxable year in which the property is transferred.

The undersigned understands that the foregoing election may not be revoked except with the consent of the Commissioner.

Dated:
	Taxpayer
Dated:	Spouse of Taxpayer

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EX-21

Exhibit 21.1

Subsidiaries of Alarm.com Holdings, Inc.

Name	Jurisdiction of Incorporation
Alarm.com Incorporated	Delaware
EnergyHub, Inc.	Delaware
WH Interactive, LLC	Delaware
PointCentral, LLC	Delaware
Onabridge Technologies, LLC	Delaware
Alarm.com Poland sp. z o.o.	Poland
Argus Systems Holdings, LLC	Delaware
Building 36 Technologies, LLC	Delaware
JTT Investment Partners, LLC	Georgia
Alarm.com International Holdings, LLC	Delaware
Five Interactive, LLC	Delaware
Qolsys, Inc.	Delaware
TFN Investments, LLC	Utah
Tech Force National, LLC	Utah