EGAIN Corp (Form: 10-K/A, Received: 10/24/2014 17:07:40)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(Amendment No. 1)

(Mark One)

£	Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended: June 30, 2014

£	Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number 001-35314

EGAIN CORPORATION

(Exact name of Registrant as specified in its charter)


Delaware	77-0466366
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

1252 Borregas Avenue, Sunnyvale, California	94089
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (408) 262-9003

Securities registered pursuant to Section 12(b) of the Act:
Common Stock, par value $0.001 per share

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

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

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No £

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

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 definition of “large accelerated filer”, "accelerated filer" and "smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer £ Accelerated filer x Non-accelerated filer £ Smaller reporting company £

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

The aggregate market value of the Registrant’s common stock held by non-affiliates (based on the closing price on the Nasdaq Capital Market) on December 31, 2013, was approximately $158.3 million. For purposes of the foregoing calculation only, the Registrant has included in the shares owned by affiliates the beneficial ownership of voting and non-voting common equity of officers and directors, and affiliated entities, of the Registrant and members of their families. Such inclusion shall not be construed as an admission that any such person is an affiliate for any other purpose.

There were 25,481,643 shares of the Registrant’s Common Stock $0.001 par value, outstanding on September 9, 2014.

DOCUMENTS INCORPORATED BY REFERENCE

Items 10 (as to directors), 11, 12, 13 and 14 of Part III incorporate by reference information from the registrant’s proxy statement to be filed with the Securities and Exchange Commission in connection with the solicitation of proxies for the registrant’s 2014 Annual Meeting of Stockholders.

EXPLANATORY NOTE

eGain Corporation is filing this Amendment No. 1 to Annual Report on Form 10-K/A (“Amendment No. 1”) to amend its Annual Report on Form 10-K for the fiscal year ended June 30, 2014, as filed with the Securities and Exchange Commission (“SEC”) on September 12, 2014 (the “Original Report”). The purpose of this Amendment No. 1 is to replace PART IV, Item 15 in its entirety, to replace the corresponding Exhibit Index in its entirety, and to file two exhibits. This Amendment No. 1 continues to speak as of the date of the Original Report and does not reflect events occurring after the filing of the Original Report or modify or update those disclosures that may be affected by subsequent events. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Report and the Registrant’s other filings with the SEC.

PART IV

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) 1. Financial Statements

See Index to Financial Statements in Item 8 of this report.

2. Financial Statement Schedule

Financial statement schedule, which is included at the end of this report: Schedule II—Valuation and Qualifying Accounts.

3. Exhibits

See Item 15(b) of this report.

All other schedules have been omitted since they are either not required, not applicable or the information has been included in the consolidated financial statements or notes thereto.

(b) Exhibits

The exhibits listed below are filed or incorporated by reference herein.

Exhibit No.		Description of Exhibit
2.1*		Share Purchase Agreement dated July 30, 2014 between the Registrant, Exony Limited, and Certain Shareholders of Exony Limited.
3(i).1		Amended and Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008.
3(i).2		Certificate of Amendment of Certificate of Incorporation, incorporated by reference to Exhibit 3(iii) to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012.
3(ii)		Amended and Restated Bylaws, incorporated by reference to Exhibit 3.4 to the Registrant’s Registration Statement on Form S-1, File No. 333-83439, originally filed with the Commission on July 22, 1999, as subsequently amended (the “Form S‑1”).
4.1		Form of Common Stock Certificate, incorporated by reference to Exhibit 4.1 to the Registrant’s Form S-1.
10.1#		Form of Indemnification Agreement, incorporated by reference to Exhibit 10.1 to the Registrant’s Form S-1.
10.2#		Amended and Restated 1998 Stock Plan and forms of stock option agreements thereunder, incorporated by reference to Exhibit 10.3 to the Registrant’s Form S-1.
10.3#		2000 Non-Management Stock Option Plan, incorporated by reference to Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2000.
10.4#		2005 Stock Incentive Plan, incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005.
10.5#		2005 Management Stock Option Plan, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 2, 2005.
10.6		Loan and Security Agreement dated as of June 27, 2011 between the Registrant and Comerica Bank, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8‑K filed on July 1, 2011.
10.7		Subordination Agreement dated as of June 27, 2011 between the Registrant and Comerica Bank, incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8‑K filed on July 1, 2011.
10.8		First Amendment to Loan and Security Agreement dated as of December 28, 2011 between the Registrant and Comerica Bank, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on December 28, 2011.
10.9		Second Amendment to Loan and Security Agreement dated as of June 28, 2012 between the Registrant and Comerica Bank, incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on July 3, 2012.
10.10		Third Amendment to Loan and Security Agreement dated as of December 28, 2012 between the Registrant and Comerica Bank, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on January 3, 2013.

Exhibit No.		Description of Exhibit
10.11		Prime Reference Rate Addendum to Loan and Security Agreement dated as of December 28, 2012 between the Registrant and Comerica Bank, incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8- K filed on January 3, 2013.
10.12		Modification to Loan Documents dated December 28, 2012 between the Registrant and Comerica Bank, incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed on January 3, 2013.
10.13		Fourth Amendment to Loan and Security Agreement dated as of April 30, 2014 between the Registrant and Comerica Bank, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 7, 2014.
10.14*		Standard Industrial/Commercial Multi-Tenant Lease Modified Net between the Registrant and DeGuigne Ventures, LLC dated May 9, 2011.
10.15		First Amendment to Standard Industrial/Commercial Multi-Tenant Lease Modified Net between the Registrant and D.R. Stephens Industrial Partners, LLC (Successor in Interest to DeGuigne Ventures, LLC) dated May 14, 2014, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 19, 2014.
21.1		Subsidiaries of eGain Corporation.
23.1		Consent of Burr Pilger Mayer, Inc., Independent Registered Public Accounting Firm (filed with the Securities and Exchange Commission on September 12, 2014 as Exhibit 23.1 to our Annual Report on Form 10-K for the fiscal year ended June 30, 2014 and incorporated herein by reference).
24.1		Power of Attorney.
31.1*		Rule 13a-14(a)/15(d)-15(e) Certification of Chief Executive Officer.
31.2*		Rule 13a-14(a) /15(d)-15(e) Certification of Chief Financial Officer.
32.1**		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 of Ashutosh Roy, Chief Executive Officer.
32.2**		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 of Eric Smit, Chief Financial Officer.
101##		The following materials from the Registrant's Annual Report on Form 10-K for the fiscal year ended June 30, 2014, formatted in Extensible Business Reporting Language (XBRL), include: (i) Consolidated Balance Sheets at June 30, 2014 and 2013, (ii) Consolidated Statements of Operations for the years ended June 30, 2014, 2013 and 2012, (iii) Consolidated Statements of Comprehensive Income/(Loss) for the years ended June 30, 2014, 2013 and 2012, (iv) Consolidated Statements of Stockholders' Equity for the years ended June 30, 2014, 2013 and 2012, (v) Consolidated Statements of Cash Flows for the years ended June 30, 2014, 2013, and 2012, and (vi) Notes to Consolidated Financial Statements.

*	Filed herewith.

#	Indicates management contract or compensation plan or arrangement.

* *

The certifications in this exhibit is not deemed “filed” with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933 (the “Securities Act”) or the Securities Exchange Act of 1934 (the “Exchange Act”), whether made before or after date hereof and irrespective of any general incorporation language contained in such filing.

##	In accordance with Rule 406T of Regulation S‑T, the information furnished in these exhibits will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such exhibits will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this Amendment No. 1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Sunnyvale, State of California, on the 24 ^th day of October, 2014.

eGAIN CORPORATION

/s/ Ashutosh Roy

Ashutosh Roy

Chief Executive Officer

EXHIBIT INDEX

Exhibit No.		Description of Exhibit
2.1*		Share Purchase Agreement dated July 30, 2014 between the Registrant, Exony Limited, and Certain Shareholders of Exony Limited.
3(i).1		Amended and Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008.
3(i).2		Certificate of Amendment of Certificate of Incorporation, incorporated by reference to Exhibit 3(iii) to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012.
3.(ii)		Amended and Restated Bylaws, incorporated by reference to Exhibit 3.4 to the Registrant’s Registration Statement on Form S-1, File No. 333-83439, originally filed with the Commission on July 22, 1999, as subsequently amended (the “Form S‑1”).
4.1		Form of Common Stock Certificate, incorporated by reference to Exhibit 4.1 to the Registrant’s Form S-1.
10.1#		Form of Indemnification Agreement, incorporated by reference to Exhibit 10.1 to the Registrant’s Form S-1.
10.2#		Amended and Restated 1998 Stock Plan and forms of stock option agreements thereunder, incorporated by reference to Exhibit 10.3 to the Registrant’s Form S-1.
10.3#		2000 Non-Management Stock Option Plan, incorporated by reference to Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2000.
10.4#		2005 Stock Incentive Plan, incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005.
10.5#		2005 Management Stock Option Plan, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on June 2, 2005.
10.6		Loan and Security Agreement dated as of June 27, 2011 between the Registrant and Comerica Bank, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8‑K filed on July 1, 2011.
10.7		Subordination Agreement dated as of June 27, 2011 between the Registrant and Comerica Bank, incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8‑K filed on July 1, 2011.
10.8		First Amendment to Loan and Security Agreement dated as of December 28, 2011 between the Registrant and Comerica Bank, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on December 28, 2011.
10.9		Second Amendment to Loan and Security Agreement dated as of June 28, 2012 between the Registrant and Comerica Bank, incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on July 3, 2012.
10.10		Third Amendment to Loan and Security Agreement dated as of December 28, 2012 between the Registrant and Comerica Bank, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on January 3, 2013.
10.11		Prime Reference Rate Addendum to Loan and Security Agreement dated as of December 28, 2012 between the Registrant and Comerica Bank, incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on January 3, 2013.
10.12		Modification to Loan Documents dated December 28, 2012 between the Registrant and Comerica Bank, incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed on January 3, 2013.
10.13		Fourth Amendment to Loan and Security Agreement dated as of April 30, 2014 between the Registrant and Comerica Bank, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 7, 2014.
10.14*		Standard Industrial/Commercial Multi-Tenant Lease Modified Net between the Registrant and DeGuigne Ventures, LLC dated May 9, 2011.
10.15		First Amendment to Standard Industrial/Commercial Multi-Tenant Lease Modified Net between the Registrant and D.R. Stephens Industrial Partners, LLC (Successor in Interest to DeGuigne Ventures, LLC) dated May 14, 2014, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 19, 2014.
21.1		Subsidiaries of eGain Corporation.

EXHIBIT INDEX

Exhibit No.		Description of Exhibit
23.1		Consent of Burr Pilger Mayer, Inc., Independent Registered Public Accounting Firm (filed with the Securities and Exchange Commission on September 12, 2014 as Exhibit 23.1 to our Annual Report on Form 10-K for the fiscal year ended June 30, 2014 and incorporated herein by reference).
24.1		Power of Attorney.
31.1*		Rule 13a-14(a)/15(d)-15(e) Certification of Chief Executive Officer.
31.2*		Rule 13a-14(a) /15(d)-15(e) Certification of Chief Financial Officer.
32.1**		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 of Ashutosh Roy, Chief Executive Officer.
32.2**		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 of Eric Smit, Chief Financial Officer.
101.INS##		XBRL Instance Document
101.SCH##		XBRL Taxonomy Extension Schema Document
101.CAL##		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF##		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB##		XBRL Taxonomy Extension Label Linkbase Document
101.PRE##		XBRL Taxonomy Extension Presentation Linkbase Document

*	Filed herewith.

#	Indicates management contract or compensation plan or arrangement.

* *

##	In accordance with Rule 406T of Regulation S‑T, the information furnished in these exhibits will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such exhibits will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

CONFORMED COPY

Exhibit 2.1

DATE July 30, 2014

(1) CERTAIN SHAREHOLDERS OF EXONY LIMITED

(2) EGAIN CORPORATION

(3) EXONY LIMITED

SHARE PURCHASE AGREEMENT

relating to the acquisition of

shares in the capital of

EXONY LIMITED

Pillsbury Winthrop Shaw Pittman LLP
Tower 42, Level 23
25 Old Broad Street
London EC2N 1HQ

CONFORMED COPY

TABLE OF CONTENTS

		Page
1.	Definitions and interpretation	1
2.	Conduct prior to completion	9
3.	Sale and purchase	9
4.	Consideration	10
5.	Completion	11
6.	Warranties	13
7.	Buyer’s Warranties and covenant	14
8.	Escrow Account	16
9.	Restrictions on the Covenantors	19
10.	Release by Sellers	21
11.	Termination of Shareholders’ Agreement	21
12.	Sellers’ Representatives	21
13.	Taxation	22
14.	Announcements and confidentiality	22
15.	Assignment	22
16.	General	23
17.	Notices	24
18.	Entire Agreement	25
19.	Governing law and jurisdiction	25
20.	Process agent	26

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Schedule
1.	The Sellers
2.	The Company
3.	The Subsidiary
4.	Completion obligations of the Sellers
5.	Warranties
6.	Limitations on Liability
7.	Properties
8.	Tax Covenant
9.	Working Capital Adjustment
10.	IP
Agreed Form Documents
A	Exercise Forms
B1 to B6	Letters of resignation
C1 to C2	Board minutes and unanimous board consent
D	Written resolutions (and Amended Articles)
E	Powers of attorney - voting
F	Escrow Agreement
G	Power of Attorney – execution and appointment of Sellers' Representatives
H	Investment Representation Letters
I	Short Form SPA
J	Optionholder Letters
K	ETV SPA

CONFORMED COPY

SHARE PURCHASE AGREEMENT


DATE: July 30,	2014

BETWEEN:

(1)	THE PERSONS whose names are set out in Part A of Schedule 1 (the “ Sellers ”)

(2)	EGAIN CORPORATION a corporation organised in the State of Delaware whose address of principal offices is 1252 Borregas Avenue, Sunnyvale, CA 94089, USA (the “ Buyer ”)

(3)	EXONY LIMITED a company whose registered in the United Kingdom with company number 03778354 and who registered office is at 5 New Street Square, London EC4A 3TW (the “ Company ”)

INTRODUCTION:

(A)	The Company is a private company limited by shares. Certain details of the Company are set out in Schedule 2.

(B)	The Sellers have agreed to sell and the Buyer has agreed to buy the Shares (as defined below) on the terms and subject to the conditions of this Agreement.

(C)	The Other Sellers (as defined below) have agreed to sell and the Buyer has agreed to buy the Other Shares (as defined below) on the terms and subject to the conditions of the Short Form SPA(s).

AGREEMENT:

1.	Definitions and interpretation

1.1	The Introduction and Schedules form part of this Agreement and have the same force and effect as if set out in the body of this Agreement. Any reference to this Agreement includes the Introduction and Schedules.

1.2	In this Agreement, the following words and expressions shall have the following meanings unless the context requires otherwise:

Accounts: the audited consolidated accounts of the Company and of the Subsidiary for the accounting reference period which ended on the Accounts Date (comprising a consolidated balance sheet and consolidated profit and loss account, notes and directors’ and auditors’ reports);

Accounts Date: 30 September 2013;

Actual Net Working Capital: the aggregate working capital of the Company and the Subsidiary calculated as at the Completion Date comprising the line items set out in the proforma Completion Net Working Capital Statement set out in Part 3 of Schedule 9, being the aggregate of Current Assets less the aggregate of Current Liabilities in each case as determined in accordance with the provisions of Parts 1 and 2 of Schedule 9;

Agreed Form: the form agreed between and signed or initialled by or on behalf of the Sellers and the Buyer;

Amended Articles : the articles of association of the Company as amended by the passing of the Resolutions;

Application Agreements: the agreements subsisting at the date hereof under which the Applications are or have been sold, supplied, licensed or supported and maintained by the Company or under which the Company has supplied any other services in association with the Applications or their use;

Application Unregistered IP: the copyright and database right in the Applications;

Application Registered IP: the patents and patent applications relating to the Applications and their use, which are listed as part of the Registered IP in Part 1 of Schedule 10;

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Applications: the software applications supplied and/or licensed by the Company to customers, a complete list of which is set out in Parts 2 and 3 of Schedule 10 (and Part 3 of Schedule 10 identifies those Applications which are Service Applications);

Application Unregistered Rights: rights in the Application Unregistered IP;

Application Registered Rights: rights in the Application Registered IP;

Business Day: any day (other than a Saturday or Sunday) on which banks generally are open in London for the transaction of normal business;

Buyer's Accountants: Burr Pilger Mayer, Inc., 60 South Market Street, Suite 800, San Jose, CA 95113;

Buyer Shares: has the meaning given to it in Clause 4.3;

Buyer’s Solicitors: Pillsbury Winthrop Shaw Pittman LLP of Tower 42, Level 23, 25, Old Broad Street, London EC2N 1HQ;

CAA 2001: Capital Allowances Act 2001;

Cash: cash in bank and in hand of the Company and the Subsidiary as at and reconciled to Completion;

Cash Shortfall: the amount by which the Cash falls short of the Target Cash;

Cash Consideration: the sum of (i) the Initial Cash Consideration and (ii) the Escrow Cash Amount, if any, after satisfaction of all Claims pursuant to this Agreement;

Cash Excess: the amount by which Cash exceeds the Target Cash;

Claim: has the meaning given to it in Schedule 6;

Companies Legislation: Companies Act 2006, Companies Act 1985, Companies Consolidation (Consequential Provisions) Act 1985, and Companies Act 1989;

Company Application Unregistered IP: that part of the Application Unregistered IP that is owned by the Company;

Company Application Unregistered Rights: rights of the Company in the Company Application Unregistered IP;

Completion: completion of the sale and purchase of the Shares in accordance with this Agreement;

Completion Date: the date on which Completion occurs;

Completion Net Working Capital Statement: the statement as at the Completion Date in the form set out in Part 3 of Schedule 9 which is to be prepared in accordance with the provisions of and on the bases set out in Part 1 of Schedule 9;

Confidential Information: all information not in the public domain, which a Seller shall have received or obtained at any time by reason of or in connection with his relationship with the Company or the Subsidiary including: trade secrets; customer/client lists, contact details of clients, customers and suppliers and individuals within those organisations; technical information, know-how, research and development; financial projections, target details and accounts; fee levels, pricing policies, commissions and commission charges; budgets, forecasts, reports, interpretations, records and corporate and business plans; planned products and services; marketing and advertising plans, requirements and materials, marketing surveys and research reports and market share and pricing statistics; and computer software and passwords;

Consideration: has the meaning given to it in Clause 4.1;

Covenantors: Martin Rex Dorricott and Douglas Webster;

CONFORMED COPY

CTA 2010: Corporation Tax Act 2010;

Current Assets: the current assets of the Company and the Subsidiary (including Cash and accounts receivable) determined in accordance with UK GAAP as used in preparing the Accounts;

Current Liabilities: the current liabilities of the Company and the Subsidiary (including trade creditors and known short term liabilities but excluding deferred revenue) determined in accordance with UK GAAP as used in preparing the Accounts;

Customer: a customer or client of the Company or the Subsidiary with whom the Company or the Subsidiary has dealt in connection with the Prohibited Business at any time during the 12 month period ending on the Completion Date;

Disclosure Letter: the letter dated the date of this Agreement from the Company to the Buyer making certain disclosures against the Warranties;

Disclosed: fairly disclosed to the Buyer with sufficient detail to allow the Buyer to identify the nature and scope of the matters, facts and circumstances disclosed;

EMI Options: certain options granted as qualifying enterprise management options as set out in Schedule 1;

Encumbrance: any interest or equity of any person (including any right to acquire, option or right of pre-emption) or any mortgage, charge, pledge, lien, assignment, hypothecation, security interest, title retention or any other security agreement or arrangement or other third party right, or any agreement, arrangement or obligation to create any of the same;

Escrow Account: the interest bearing account which is to be opened at Completion, and to be operated in accordance with the Escrow Agreement;

Escrow Agent : US Bank National Association as escrow agent;

Escrow Agreement: the escrow agreement in the Agreed Form marked “F”;

Escrow Amount: the Escrow Cash Amount and the Escrow Stock;

Escrow Cash: cash consisting of all or part of the Escrow Cash Amount;

Escrow Cash Amount: US$1,207,500;

Escrow Stock: 181,398 Buyer Shares;

ETV: the ETV Employee Warrant Trust and ETV Capital (Jersey) Limited;

ETV SPA : the sale and purchase agreement in the Agreed Form to be entered into on or about the date of this Agreement between ETV and the Buyer marked “K”;

Exchange Act: Securities Exchange Act of 1934 of the United States of America;

Executives: Martin Rex Dorricott, Douglas Webster, Jonathan McKay, Philip Sweetland, Michael Hickland, Simon Stearn and Simon Bunegar;

Exercise Form: the option exercise form in the Agreed Form marked “A” pursuant to which the Optionholders will exercise their Options (being Options which have not lapsed or otherwise been waived) and pursuant to which the Optionholders will, inter alia, instruct the Buyer to pay to the Company the amounts prescribed in Clause 5.1.4(a)(ii) or Clause 8.11.2(a) (as the case may be);

First Escrow Claim: a Claim under the Warranties or a claim under the Tax Covenant notified to the Sellers' Representatives and the Company on or before the First Expiry Date;

First Escrow Period: the period from Completion to the First Expiry Date;

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First Expiry Date: the later of (i) the first anniversary of the Completion Date, and (ii) completion of the first audit of the Company following Completion for the year to 30 June 2015 (not to exceed the date falling on the 15 month anniversary of the Completion Date);

First MIB Date : the first date for payment of the Management Incentive Bonus being the date falling 30 days following Completion;

Fundamental Warranties: the Warranties set out under paragraph 2 of Schedule 5;

Group Company: in relation to any company, any body corporate which is at that time a holding company of that company, a subsidiary of that company or a subsidiary of a holding company of that company;

Hardware: any and all computer, telecommunications and network equipment (other than any forming part of a public telecommunications network or service) owned by the Company, in the Company's possession or which the Company is otherwise permitted to use and which, in any such case, is used in the business of the Company (including PCs, mainframes, servers, screens, terminals, keyboards, disks, printers, cabling, associated and peripheral electronic equipment);

HMRC: Her Majesty’s Revenue & Customs and, in respect of any time before the establishment of Her Majesty’s Revenue & Customs, references to HMRC shall be construed, as the context may require, to include references to respectively the Inland Revenue and Customs & Excise;

Initial Buyer Shares: has the meaning given in Clause 4.3.1;

Initial Cash Consideration: US$6,842,500.00 being the sum of US$8,050,000 minus the Escrow Cash Amount;

Intellectual Property Rights: patents, registered designs, rights in design, copyright, database right, rights in databases, trade marks, service marks, trade or business names, domain names, logos, get-up or trade dress, inventions or secret processes, formulae, know-how and all rights or forms of protection of a similar nature or effect subsisting anywhere in the world, including applications or registrations for any such right;

IP Claim: any Claim under the Warranties in paragraph 17 of Schedule 5;

ITEPA 2003: Income Tax (Earnings and Pensions) Act 2003;

IT Contracts: all those contracts subsisting at Completion under which any third party provides or will provide any: (a) element of; (b) services relating to; or (c) any right for the Company to use; the IT System (including agreements for or relating to any relevant sale, supply, leasing, hire purchase, licensing, maintenance, website hosting, cloud computing, hosted environment, outsourcing, security, back-up, disaster recovery and services);

IT System: the Hardware and the Software;

Kennet: Kennet II L.P.;

Losses: in respect of any matter, event or circumstance includes all demands, claims, actions, proceedings, damages, payments, losses, costs (including reasonable legal and other professional costs), expenses or other liabilities plus any applicable value added or sales tax (including interest and penalties) arising or incurred in connection with such matter, event or circumstance;

Management Accounts: the unaudited accounts of the Company and of the Subsidiary for the period from the Accounts Date to 31 May 2014 (comprising in each case a balance sheet and profit and loss account);

Management Incentive Bonus: the bonus payable to Douglas Webster, Michael Hickland, Philip Sweetland, Martin Rex Dorricott, Simon Stearn and Simon Bunegar, details of which are set out in paragraph 3.3 of the Disclosure Letter;

Net Working Capital Adjustment: the adjustment by reference to the difference between the Actual Net Working Capital and the Target Net Working Capital, expressed as a positive or negative number and taking account of any Cash Excess or

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Cash Shortfall in accordance with Clauses 4.4.2(a) and 4.4.2(b) as set out in the Post-Completion Net Working Capital Statement;

Open Source Software: as defined at http://opensource.org/docs/osd;

Optionholders: those persons holding Options;

Optionholder Letters: the letter in the Agreed Form marked “K” from the Company to each Optionholder in relation to his or her Options and enclosing a Power of Attorney in the Agreed Form marked “J” and Exercise Form;

Optionholder Transfers: the transfers in the favour of the Buyer in respect of the Option Shares held by the Optionholders;

Options: the respective rights to acquire shares in the capital of the Company granted to each Optionholder being the EMI Options and the Unapproved Options;

Option Shares: shares in the capital of the Company to be issued on the exercise of Options;

Other Sellers: those owners of Other Shares and/or Option Shares who are not party to this Agreement and who are party to the Short Form SPA as set out in Part B of Schedule 1;

Other Shares: the issued shares in the capital of the Company (including without limitation certain Options Shares) other than the Shares or Option Shares to be sold by the Sellers, and which are to be sold to the Buyer under the Short Form SPA(s) as set out in Part B of Schedule 1;

Outstanding Holders: has the meaning attributed thereto in Clause 8.11 and as set out in Part C of Schedule 1;

Outstanding Sellers: those persons who are Outstanding Holders at the date hereof and sold their shares in the Company on Completion or pursuant to Clause 8.11;

Outstanding Shares: shares in the capital of the Company held by the Outstanding Holders and/or which would be issued by the Company on the exercise of the Options of the Outstanding Holders;

Parties: the parties to this Agreement, and each a “ Party ”;

Percentage Portion: the percentage of each Seller or Other Seller or Outstanding Holder as set forth against his/her name in column 7 of Parts A, B or C of Schedule 1;

Post-Completion Net Working Capital Statement: has the meaning given in Part 2 of Schedule 9;

Prohibited Business: the business of producing, developing and/or selling within the Restricted Territories software to analyse the management of traffic flows for call centres, as carried out by the Company and the Subsidiary at the date hereof;

Properties: the leasehold properties of the Company and the Subsidiary, certain details of which are given in Schedule 7;

Recommended Amount: has the meaning given in Clause 8.7.3;

Registered IP: all patents, trade marks, domain names, and registered designs and applications for the same owned by the Company, true and complete details of which are set out in Part 1 of Schedule 10;

Relevant Benefits: any pension, lump sum, gratuity or other like benefit provided or to be provided on retirement or on death, or by virtue of a pension sharing order or provision, or in anticipation of retirement, or, in connection with past service, after retirement or death or to be provided on or in anticipation of or in connection with any change in the nature of the service of any employee or officer;

Relevant Sellers: Martin Rex Dorricott and Douglas Webster;

Resolutions: the resolutions of the Company in the Agreed Form marked “D”;

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Restricted Territories:

(a)	the United Kingdom, the Channel Islands, the Isle of Man and the Republic of Ireland;

(b)	the United States of America; and

(c)	any other country in which the Company or the Subsidiary carries on business at Completion;

SEC: the United States Securities and Exchange Commission;

Section 431 Election : an election under Section 431 Income Tax (Earnings and Pensions) Act 2003;

Second Escrow Claim : an IP Claim, Share Capital Claim or a Tax Claim notified to the Sellers' Representatives and the Company on or before the Second Expiry Date;

Second Escrow Period: the period commencing on the day after the First Expiry Date and ending on the Second Expiry Date;

Second Expiry Date : the second anniversary of Completion;

Second MIB Date : the second date for payment of the Management Incentive Bonus being the date falling 30 days following that date that falls on the one year anniversary of Completion;

Securities Act: the Securities Act of 1933, as amended;

Sellers’ Accountants: Baker Tilly;

Sellers’ Representative: the person (or, if more than one, persons acting jointly) appointed in accordance with Clause 11;

Sellers’ Solicitors: Taylor Wessing LLP of 5 New Street Square, London EC4A 3TW;

Sellers’ Solicitor’s Account: the US dollar client account of Taylor Wessing LLP with National Westminster Bank Plc at 156 Fleet Street, PO Box 281, London EC4A 2DX, sort code: 60-80-08, account number 08498342;

Service Applications: those Applications or parts of Applications that have not been, or have not been intended by the Company to be, distributed by the Company but are instead used, or intended to be used, by the Company to provide a service to customers without the relevant Applications being distributed to the customers concerned (and Part 3 of Schedule 10 identifies those Applications which are Service Applications);

Shareholders' Agreement: the subscription and shareholders agreement dated 20 March 2003 between Kennet II L.P., Kennet SBS L.P., the Individual Investors, the Executives, the Transferees (each as defined therein) and the Company;

Shares: the aggregate of the shares in the capital of the Company shown against each Seller's name in columns 2A, 2B and 2C of Part A of Schedule 1;

Share Capital Claim: any claim under the Share Capital Warranties;

Share Capital Warranties: the warranties set out in paragraphs 4.1 and 4.3 of Schedule 5;

Short Form SPA: the sale and purchase agreement(s) in the Agreed Form to be entered into on or about the date of this Agreement between the Company, the Buyer and the Other Sellers, marked “I”;

Software: all of the software used by the Company in the course of its business, excluding the Applications and the Third Party Applications;

Source Code: the source code versions of the Applications;

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Stock Consideration: has the meaning given in Clause 4.3;

Stock Percentage: the percentage of each Seller or Outstanding Holder as set forth against his/her name in column 8 of Parts A or C of Schedule 1;

Stock Price: US$6.6567, (equivalent to £3.9286 as at the date hereof) being the average middle market closing price per Buyer Share in the 30 days during which such Buyer Shares have been traded, such 30 days ending three trading days prior to the date of this Agreement;

Subsidiary: the subsidiary of the Company, certain details of which are given in Schedule 3;

Supplier: a supplier to (other than utilities in respect of the supply of services in the ordinary and normal course of their business to their general body of customers) or sub-contractor of the Company or the Subsidiary in connection with the Prohibited Business with whom the Company or the Subsidiary has traded during the 12 months immediately ending on the Completion Date;

Target Cash: £500,000;

Target Net Working Capital: £1,900,000;

Taxation and Tax: have the meaning given to them in the Tax Covenant;

Taxation Authority: has the meaning given to it in the Tax Covenant;

Tax Covenant: the covenant contained in Schedule 8;

Tax Claim: a Claim under paragraph 21 of Schedule 5 or a claim under the Tax Covenant;

Tax Warranties: the Warranties set out under paragraph 21 of Schedule 5;

Taxes Act 1988: Income and Corporation Taxes Act 1988;

TCGA 1992: Taxation of Chargeable Gains Act 1992;

TMA 1970: Taxes Management Act 1970;

a third party: any person other than the Parties;

Third Party Applications: all software or other material, the Intellectual Property Rights to which software or other material are owned by a third party (including any open source software) which the Company, prior to Completion: (a) has included as part of the Applications; (b) has otherwise sold, supplied and/or licensed with or as part of the Applications;

Third Party Application Licences: all those agreements under which the Company is, prior to Completion, currently licensed to use the Third Party Applications (including any agreements applying to the use by the Company of any open source software);

UK GAAP: accounting principles, standards and practices generally accepted from time to time in the United Kingdom and approved by the United Kingdom Financial Reporting Council;

Unapproved Options: certain unapproved options over shares in the capital of the Company as set out in Schedule 1;

VATA 1994: Value Added Tax Act 1994;

Warranties: the warranties set out in Schedule 5; and

WC Initial Payments: the initial payments in relation to the Net Working Capital Adjustment to the Sellers and Other Sellers and Outstanding Sellers as set against their names in column (9) of Schedule 1.

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1.3	In this Agreement, unless otherwise specified:

1.3.1

any reference to any statute or statutory provision includes any subordinate legislation made under that statute or statutory provision, whether before or after the date of this Agreement;

1.3.2

any reference to any legislation (whether of the United Kingdom or elsewhere), including to any statute, statutory provision or subordinate legislation (“ Legislation ”):

(a)	includes a reference to that Legislation as from time to time amended or re-enacted, whether before or after the date of this Agreement;

(b)	in the Warranties and Tax Covenant only, includes a reference to any past Legislation (as from time to time amended or re-enacted) which that Legislation re-enacted,

except, in the case of each of Clauses 1.3.1 and 1.3.2, to the extent that any amendment or re-enactment coming into force, or Legislation made, on or after the date of this Agreement would create or increase the liability of any Party;

1.3.3

any reference to re-enactment includes consolidation and rewriting, in each case whether with or without modification.

1.4	In this Agreement (unless the context requires otherwise):

1.4.1

words and expressions which are defined in the Companies Legislation and which are not otherwise defined in this Agreement shall have the same meanings as are given to them in the Companies Legislation where used in this Agreement;

1.4.2

references to an “associate” or a “connected person” in relation to another person are references to a person who is an associate of or connected with another within the meaning of Taxes Act 1988 sections 417 and 839 as applicable;

1.4.3

words suggesting a gender shall include the other gender and the neuter;

1.4.4

words in the singular shall include the plural and vice versa;

1.4.5

any reference to a “company” shall be construed so as to include any company, corporation or other body corporate, wherever and however incorporated or established;

1.4.6

any reference to “holding company” or “subsidiary” means a “holding company” or “subsidiary” (as the case may be) as defined in the Companies Act 2006 section 1159 save that a company shall be treated, for the purposes only of the membership requirement contained in sections 1159(1)(b) and (c), as a member of another company even if its shares in that other company are registered in the name of (a) another person (or that person’s nominee), whether by way of security or in connection with the taking of security, or (b) its nominee;

1.4.7

any reference to a “person” includes a natural person, partnership, company, body corporate, association, organisation, government, state, foundation and trust (in each case whether or not having separate legal personality);

1.4.8

any reference to the Introduction, a Clause or Schedule is to the Introduction, a Clause or Schedule (as the case may be) of or to this Agreement;

1.4.9

any reference to this Agreement or to any other document is a reference to this Agreement or that other document as amended, varied, supplemented, or novated (in each case, other than in breach of the provisions of this Agreement) at any time;

1.4.10

“directly or indirectly” means either alone or jointly with any other person and whether on his own account or in partnership with another or others or as the holder of any interest in or as officer, employee or agent of or consultant to any other person;

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1.4.11

any phrase introduced by the terms “including”, “include”, “in particular” or a similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms;

1.4.12

any reference to something being “in writing” or “written” shall include a reference to that thing being produced by any legible and non-transitory substitute for writing (including in electronic form) or partly in one manner and partly in another;

1.4.13

where it is necessary to determine

(a)	whether a monetary limit or threshold set out in this Agreement has been reached or exceeded (as the case may be) and the value of the relevant claim or any of the relevant claims is expressed in a currency other than US dollars or pounds sterling (as applicable), or

(b)	the amount to be paid under Clause 4.4.2 in US dollars in respect of the Net Working Capital Adjustment,

the value of each such claim or payment shall be translated into US dollars or pounds sterling (as applicable) at the prevailing exchange rate applicable to that amount of that currency by reference to middle-market rates quoted by Barclays Bank immediately before close of business in London on the date of receipt by the relevant person(s) of written notification from the Buyer in accordance with this Agreement of the existence of such claim, or if such day is not a Business Day, on the Business Day immediately preceding such day;

1.4.14

in a case where a person's name appears in more than one Part of Schedule 1 then references to his Percentage Portion or Stock Percentage shall mean the aggregate of the Percentage Portions or Stock Percentages shown against his name in each Part of Schedule 1; and

1.4.15

any reference to any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than England, be deemed to include what most nearly approximates in that jurisdiction to the English legal term in question.

1.5	The index and Clause headings in this Agreement are included for ease of reference only and do not affect the interpretation of this Agreement.

2.	Conduct prior to completion

2.1	Completion shall take place on 4 August 2014 (or on such other date as the Buyer and the Sellers’ Representatives agree) at the offices of the Sellers' Solicitors

2.2

The Company agrees and the Sellers undertake to procure that between the date hereof and Completion the Company shall not incur capital expenditure or financial commitments other than in the ordinary course of business in an aggregate amount of more than £50,000 without the prior written consent of the Buyer.

2.3

The Buyer agrees that in the event of any share split or share consolidation or other change to the share capital of the Buyer prior to Completion the number of Buyer Shares to be issued to the Sellers and Outstanding Sellers will be adjusted such that the Buyer Shares so issued are of equivalent economic value to the number of Buyer Shares to be so issued prior to any such change to the share capital of the Buyer.

3.	Sale and purchase

3.1

Subject to the terms and conditions hereof, each of the Sellers agrees that he or she shall sell the Shares set against his or her name in column 2A of Part A of Schedule 1 with full title guarantee free from all Encumbrances and the Buyer shall purchase the Shares, with effect from and including the Completion Date to the intent that as from that date all rights and advantages accruing to the Shares, including any dividends or distributions declared or paid on the Shares after that date, shall belong to the Buyer.

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3.2

Each of the Sellers waives all pre-emption and similar rights over the Shares and any other shares in the capital of the Company or any of them to which he or she may be entitled under the articles of association of the Company or otherwise in relation to the sale and purchase of the same under this Agreement or under the Short Form SPA or otherwise.

3.3

Each of the Sellers who are Optionholders shall execute and return Exercise Forms in respect of his Options and shall sell with full title guarantee and free from all Encumbrances the number of Shares set opposite his name in columns 2B and 2C of Part A of Schedule 1 to be issued by virtue of exercise of such Options and the Buyer shall buy such Shares on the terms and conditions of this Agreement.

3.4	The Buyer shall not be obliged to complete the purchase of any of the Shares unless the sale of all of the Shares and Other Shares are completed simultaneously.

3.5

In relation to the shares in the capital of the Company held by Outstanding Holders the Sellers are hereby deemed to have served a Selling Notice for the purpose of Article 7.5.1 on the Company and the Buyer agrees to procure that the Company serves Compulsory Sale Notice(s) (as defined in Article 7.5.1 of the Amended Articles) on the Outstanding Holders holding shares in the capital of the Company and otherwise take all steps necessary to drag the acquisition of the Outstanding Shares held by such Outstanding Holders (whether currently or upon the exercise of Options by such Outstanding Holders) in accordance with article 7.5 of the Amended Articles and so far as possible on the terms of the Short Form SPA(s).

3.6

Kennet Venture Partners Limited as manager of Kennett II L.P. and Kennet SBS L.P., being the Investor for the purposes of the Shareholders' Agreement, are hereby deemed to have given prior written consent as required by clauses 5 and 8.1 and schedule 4 of the Shareholders' Agreement to, and to all matters connected with or ancillary to, the sale and purchase of shares in the capital of the Company in accordance with this Agreement, the Short Form SPA(s) or any other associated document.

4.	CONSIDERATION

4.1

The aggregate consideration (the “ Consideration ”) for the Shares, the Other Shares and the Outstanding Shares shall be the sum of the Cash Consideration and the aggregate value of the Stock Consideration, based on the Company being debt-free on Completion, it being intended that (save as regards any payments under Clause 4.2.2) the Consideration paid to each Seller shall consist of one part Cash Consideration and one part Stock Consideration as detailed against their names in columns 3, 4, 5 and 6 of Part A of Schedule 1, and the Consideration paid to the Other Sellers and the Outstanding Sellers shall be wholly Cash Consideration or part Cash Consideration and part Stock Consideration as set out in columns 3, 4, 5 and 6 of Part B and Part C of Schedule 1. Each Seller, Other Seller and Outstanding Seller shall also receive as an addition to the Consideration his Percentage Portion of the Net Working Capital Adjustment.

4.2	Each Seller, Other Seller and Outstanding Holder (subject in relation to the Outstanding Holders to Clause 8.11) shall receive a cash payment equal to:

4.2.1

the amount of the Initial Cash Consideration shown against such Seller’s, Other Seller's or Outstanding Holder's name in column 3 of Parts A, B or C of Schedule 1; plus

4.2.2

such Seller’s, Other Seller's or Outstanding Holder's Percentage Portion of the Net Working Capital Adjustment, if positive; plus

4.2.3

such Seller’s, Other Seller's or Outstanding Holder's Percentage Portion of the lesser of

(a)	the Escrow Cash Amount; or

(b)	the amount of the Escrow Cash Amount released from the Escrow Account in accordance with the Escrow Agreement

(such Seller's or Other Seller's or Outstanding Holder's initial allocation of the Escrow Cash being set against his name in column 5 of Schedule 1).

4.3

The “ Stock Consideration ” shall mean an aggregate of 1,027,912 shares of Buyer’s common stock, US$0.001 par value per share (“ Buyer Shares ”), representing an aggregate value (at the Stock Price) of US$6,842,500.00. Each Seller and Outstanding Holder shall (subject in relation to the Outstanding Holders to Clause 8.11) receive Stock Consideration equal to:

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4.3.1

the number of Buyer Shares shown against such Seller’s or Outstanding Holder's name in column 4 of Part A or Part C of Schedule 1 (the “ Initial Buyer Shares ”); plus

4.3.2

such Seller’s or Outstanding Holder's Stock Percentage (rounded down the nearest Buyer Share) of the lesser of:

(a)	the Escrow Stock; and

(b)	the number of Buyer Shares released from Escrow Stock in accordance with the Escrow Agreement

(such Seller's or Outstanding Holder's initial allocation of the Escrow Stock being set against his name in column 6 of Schedule 1).

4.4	The Consideration shall be satisfied as follows:

4.4.1

on Completion, the Buyer shall make the cash payments and issue the Buyer Shares in accordance with Clause 5.1.4; and

4.4.2

on a date falling not more than five Business Days after the final determination of the Post-Completion Net Working Capital Statement in accordance with Part 2 of Schedule 9 (“ Due Date ”):

(a)

if the Actual Net Working Capital is less than the Target Net Working Capital (the “ WC Shortfall ”), the Buyer shall be entitled to make a Claim for the WC Shortfall (such Claim to be reduced by the Cash Excess), and shall deduct it from the Escrow Cash Amount and the Escrow Stock in the proportions in which Escrow Cash and Escrow Stock is then credited to the Escrow Account and the Buyer shall have no further recourse beyond the Escrow Account provided that any amount by which the Cash Excess exceeds the WC Shortfall shall be payable by the Buyer to the Sellers, Other Sellers and Outstanding Sellers in cash in their respective Percentage Portions (and if to the Other Sellers subject to and in accordance with Clause 8.11) after taking account of the WC Initial Payments; and

(b)

if the Actual Net Working Capital is equal to or more than the Target Net Working Capital, the Buyer shall pay to the Sellers, Other Sellers and Outstanding Sellers in cash in their respective Percentage Portions an amount equal to the difference between the Actual Net Working Capital and Target Net Working Capital less any Cash Shortfall or plus any Cash Excess (and if to the Other Sellers subject to and in accordance with Clause 8.11) after taking account of the WC Initial Payments,

such cash payments to be made by electronic transfer in immediately available funds to the single account notified by the Sellers' Representatives or the Buyer (whichever is the payee) to the other not less than one Business Day before the Due Date and any payment of Escrow Stock to be effected in accordance with the Escrow Agreement. Any payment of cash pursuant to the Net Working Capital Adjustment shall be an adjustment to the Cash Consideration and any payment of Escrow Stock shall be an adjustment to the Stock Consideration.

4.5

The Consideration shall be divided between the Sellers and the Other Sellers and the Outstanding Sellers (but subject to Clause 8.11) as shown against their names in Schedule 1 and/or the Short Form SPA(s), but the Buyer shall not be concerned with the division of the Cash Consideration once paid to the Sellers’ Solicitor’s Account.

4.6	The Consideration shall be deemed to be reduced by an amount equal to the aggregate amounts paid in respect of a breach of any of the Warranties or under the Tax Covenant.

4.7

All amounts due under this Agreement shall be paid in full without any deduction or withholding other than as required by law and no Party shall be entitled to assert any credit, set-off or counterclaim against another Party in order to justify withholding payment of any such amount in whole or in part.

5.	Completion

5.1	Completion shall take place on the Completion Date when:

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5.1.1

the Sellers shall deliver to the Buyer, or procure the delivery to the Buyer of, the documents and other items referred to in Schedule 4;

5.1.2

the Sellers shall repay or procure the repayment in full of all amounts owing (even if not due for repayment) to the Company or the Subsidiary by any of the Sellers or any connected persons or associates or directors of them or any of them and shall procure that all guarantees or indemnities given by or binding on the Company or the Subsidiary in respect of any liabilities (actual or contingent) of any of the Sellers or any of such connected persons or associates or directors are fully and effectively released without cost to the Company or the Subsidiary save that this Clause shall not apply to advances made to members of staff on account of expenses;

5.1.3

the Sellers shall procure:

(a)

that there shall be held a meeting of the board of directors of the Company and of the Subsidiary at which there shall be duly passed the resolutions set out and contained in the board minutes or unanimous board consents of the Company and of the Subsidiary in the Agreed Form marked “C1” to “C2” respectively; and

(b)	that there shall be duly passed the Resolutions as written resolutions; and

5.1.4

the Buyer shall:

(a)

pay:

(i)

the Initial Cash Consideration to the Sellers and the Other Sellers by way of transfer of funds to the Sellers’ Solicitor’s Account, receipt of which shall be an effective discharge of the Buyer’s obligation to pay the Initial Cash Consideration, after deduction in relation to any Optionholder of the amounts to be withheld from such Optionholder pursuant to Clause 5.1.4(a)(ii) below;

(ii)

to the Company on behalf of Optionholders (who are also Sellers) the aggregate amounts in satisfaction of (i) the aggregate exercise monies due, and (ii) amounts due in respect of Tax (including employee and employer’s National Insurance contributions and PAYE contributions) pursuant to the undertakings and authorisations provided by the Optionholders in the Exercise Forms and such Optionholders agree that the amount so payable in respect of any Optionholder shall be deducted from the cash amount otherwise payable to that Optionholder for his/her Option Shares and the Buyer agrees to procure that the Company shall pay to the relevant Taxation Authority such amounts due in respect of Tax;

(iii)

(or cause the Company to pay) to the Seller's Solicitors the sum of £1,458,130 in respect of the Management Incentive Bonus, constituted by the anticipated principal amount of £1,281,310 and £176,820 in respect of National Insurance contributions anticipated to be payable thereon, to be held subject to and in accordance with Clause 8.10;

(iv)	the Escrow Cash Amount into the Escrow Account;

(v)

(or cause the Company to pay) the WC Initial Payments to the Sellers and Other Sellers in the amounts set against their names in column 9 of Schedule 1 by way of transfer of funds to the Sellers’ Solicitor’s Account, receipt of which shall be an effective discharge of the Buyer’s obligation to pay the WC Initial Payments;

(b)	deliver the Escrow Agreement, duly executed by the Buyer;

(c)

issue such number of Initial Buyer Shares to each Seller and Other Seller as shown against his or her name in Parts A and B of column 4 of Schedule 1, with such legends as appropriate. It is Buyer’s current policy not to issue stock certificates representing shares of its capital stock, and all new issuances of capital stock are reflected on Buyer’s books and records in book entry only, with appropriate notations reflecting the applicable legends; and

(d)	issue the Escrow Stock to US Bank National Association as escrow agent.

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5.2

The performance by the Sellers of their respective obligations under Clause 5.1 shall be a condition precedent to the performance by the Buyer of its obligations under Clause 5.1 such that, if the Sellers or any of them shall fail or shall be unable to perform any of their obligations under Clause 5.1, the Buyer shall either:

5.2.1

defer Completion to a later date to be agreed;

5.2.2

elect to proceed to Completion; or

5.2.3

if failure to perform would materially adversely affect the value of the Shares, Other Shares and Outstanding Shares due to be acquired by the Buyer at its option (and without prejudice to any other remedies or rights which it may have against the Sellers or any of them in respect of such non-performance) cease to be liable to perform its obligations under Clause 5.1.

6.	WARRANTIES

6.1	The Company warrants to the Buyer that each of the Warranties (except for the Warranties set out under paragraph 2 of Schedule 5) is true and accurate in all respects and is not misleading at the date of this Agreement.

6.2	Each Seller severally warrants to the Buyer and in relation only to himself that each of the Fundamental Warranties is true and accurate in all respects and is not misleading at the date of this Agreement.

6.3	It is acknowledged and agreed that:

6.3.1

the aggregate liability of the Sellers, the Other Sellers, the Outstanding Sellers and the Company in respect of all and any Claims for breach of Warranty (other than a breach of a Fundamental Warranty) (and including, for the avoidance of doubt, any payment made by the Sellers, the Other Sellers and the Outstanding Sellers, pursuant to Clause 6.3.3) or of the Relevant Sellers under the Tax Covenant and for all costs shall be limited to and shall in no event exceed the Escrow Amount.

6.3.2

the Buyer agrees that its sole recourse in respect of any Claim (including a claim under the Tax Covenant and including all costs) shall be against the Escrow Stock and Escrow Cash in the Escrow Account. Accordingly, notwithstanding that the Warranties (other than the Fundamental Warranties) are given by the Company, the Sellers agree that the Buyer shall have recourse for Claims (including claims under the Tax Covenant but other than a breach of a Fundamental Warranty) against the Escrow Account in accordance with the terms of this Agreement. The Buyer agrees it shall not be entitled to recover any amount in respect of any breach of Warranty from the Company.

6.3.3

in the event of any Claim for a breach of any of the Warranties or any claim under the Tax Covenant, each of the Sellers (and each of the Other Sellers under the Short Form SPA) severally covenants in his respective Percentage Portion to pay to the Buyer an amount equal to what would, but for Clause 6.3.2 be the Company's liability, or to pay an amount equal to the Relevant Sellers' liability, in respect of that breach of Warranty or under the Tax Covenant (as appropriate), any such amount to be satisfied solely by way of a payment of Escrow Cash and/or transfer of Escrow Stock from the Escrow Account.

6.4	The Warranties shall not in any respect be extinguished or affected by Completion.

6.5	In the event of any breach of the Warranties (excluding the Tax Warranties and the Fundamental Warranties) (and without restricting the rights or ability of the Buyer to claim damages on any bases available to it) the Company shall pay on demand to the Buyer through the Escrow Account:

6.5.1

the amount by which the value of any asset or assets of the Company is or are less than or (as the case may be) the amount by which any Losses of the Buyer and/or the Company is or are greater than would have been the case if there had been no such breach of the Warranties (excluding the Tax Warranties); or

6.5.2

the amount by which the value of the Shares is less than would have been the case if there had been no such breach of the Warranties (excluding the Tax Warranties),

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together with an amount equal to any Losses of the Buyer and/or the Company that it would not have incurred or that would not have existed if there had been no such breach but, for these purposes, Losses shall only include direct losses and shall not include the amount of any benefit reasonably expected to be obtained by the Buyer or, as the case may be, the Company which, by reason of the breach or the matters giving rise to the breach, was not or will not be obtained in whole or in part.

6.6

The Sellers undertake to the Buyer that, in the event of any claim being made against them arising out of or relating to this Agreement, they will not make any claim against the Company or the Subsidiary or against any director, officer or employee of the Company or of the Subsidiary on which or on whom it may have relied before agreeing to any terms of this Agreement or authorising any statement in the Disclosure Letter save that nothing herein shall prevent a Seller bringing an action for a contribution for a breach of this Agreement or under the Tax Covenant against any other Seller (or Other Seller or Outstanding Seller) who may also be liable under this Agreement or the Tax Covenant in relation to the matters the subject of such Claim or Tax Covenant claim notwithstanding that such other Seller (or Other Seller or Outstanding Seller) may be a director, officer or employee of the Company or of the Subsidiary. The Company, the Subsidiary and any such director, officer or employee may enforce the terms of this Clause 6.6 in accordance with the Contracts (Rights of Third Parties) Act 1999, provided that, as a condition precedent thereto, any such third party shall:

6.6.1

obtain the prior written consent of the Buyer; and

6.6.2

not be entitled to assign its rights under this Clause 6.

6.7	The Warranties:

6.7.1

save for the Fundamental Warranties, are qualified by reference to those matters Disclosed in the Disclosure Letter;

6.7.2

are given separately and independently and, unless expressly provided to the contrary, are not limited or restricted by reference to, or inference from, the terms of any other Warranty or item of this Agreement;

6.7.3

where qualified by the knowledge, information, belief or awareness of the Company, unless expressly provided to the contrary, are deemed to include a statement that such knowledge, information, belief or awareness has been acquired after due and careful enquiries by the Company in respect of the relevant subject matter of such Warranties of the Executives; and

6.7.4

apply to the Subsidiary as well as to the Company as if (where relevant) references to “the Company” included a corresponding reference to the Subsidiary.

6.8

None of the Warranties nor any provision in the Tax Covenant shall be, or shall be deemed to be, qualified, modified or discharged by reason of any investigation or inquiry made by or on behalf of the Buyer save to the extent it has actual knowledge of the same and save as aforesaid no information relating to the Company or to the Subsidiary of which the Buyer, its agents or advisers have imputed or constructive knowledge, other than (in the case of the Warranties) by reason of its being Disclosed in the Disclosure Letter, shall prejudice any claim which the Buyer shall be entitled to bring or shall operate to reduce any amount recoverable by the Buyer under this Agreement. The Buyer shall not be able to claim any amount under this Agreement in respect of a matter, fact or circumstance actually known to it at Completion and the Buyer confirms to the Sellers that, it has no actual knowledge of any matter, fact or circumstance which it knows will or might lead to a Claim under the Warranties or a claim under the Tax Covenant.

6.9

The provisions of Schedule 6 shall (where relevant) apply to limit the liability of the Company and the Sellers, the Other Sellers and the Outstanding Sellers under the Warranties and, to the extent stated in Schedule 6, the Tax Covenant provided that the provisions of Schedule 6 shall not apply (unless expressly stated to apply) in respect of:

6.9.1

any claim under the Fundamental Warranties; or

6.9.2

any claim arising out (or to the extent it is increased) of any fraud or intentional misrepresentation or wilful breach of this Agreement on the part of the Company.

7.	BUYER’S WARRANTIES AND COVENANT

7.1	The Buyer warrants to the Sellers (for themselves and as trustees (but on terms that the Sellers' Representatives shall be entitled in their sole discretion to waive any entitlement hereunder (or otherwise make settlements with respect hereto) to

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such extent as they may think fit having regard to the Sellers' and Other Sellers' and Outstanding Holders' interests as a whole and any other interest he may determine) for each and every Other Seller and Outstanding Holder) that:

7.1.1

The Buyer is a company organised, validly existing and in good standing under the laws of its jurisdiction or incorporation and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted.

7.1.2

The Buyer has all requisite corporate power and authority to enter into this Agreement and to perform its obligations hereunder and consummate the transactions contemplated hereby. The execution and delivery of this Agreement, the performance by Buyer of its obligations hereunder and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of Buyer. This Agreement constitutes legally valid and binding obligations of the Buyer.

7.1.3

The execution, delivery and performance of this Agreement (a) will not result in any violation of, conflict with, constitute a breach, violation or default (with or without notice or lapse of time, or both) under the Buyer’s constitutional documents, or (b) to the actual knowledge of Buyer, will not, conflict with or result in any breach or violation of any statute, judgment, decree, order, rule or governmental regulation applicable to Buyer, except, in the case of clause (b), for any of the foregoing that would not, individually or in the aggregate, have a material adverse effect on Buyer and its subsidiaries taken as a whole, or that would not prevent, materially delay or materially burden the transactions contemplated by this Agreement.

7.1.4

No consent, approval, order or authorization of, or registration, declaration or filing with, any governmental authority is required by or with respect to Buyer in connection with the execution and delivery of this Agreement by Buyer or the consummation by Buyer of the transactions contemplated hereby, except for such consents, approvals, orders, authorizations, registrations, declarations, qualifications or filings as may be required under applicable securities laws in connection with the transactions set forth herein or which the failure to obtain would not have a material adverse effect on the consummation by Buyer of the transactions contemplated hereby.

7.1.5

Buyer has timely filed with the SEC all filings required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations promulgated thereunder since January 1, 2012. Such filings (i) complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations promulgated thereunder at the time they were filed (or if amended or superseded by a filing or other public disclosure prior to the date hereof, then on the date of such filing or other public disclosure) and (ii) did not as of the time they were filed (or if amended or superseded by a filing or other public disclosure prior to the date hereof, then on the date of such filing or other public disclosure) contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

7.1.6

Buyer will have at the Completion, access to sufficient resources to pay the amounts required to be paid by it under this Agreement, including payment in full of the Consideration, and to pay all of its associated fees, costs and expenses that are the obligations of the Buyer under this Agreement .

7.2

The Buyer Shares to be issued in connection with this Agreement are being issued in a transaction exempt from registration under the Securities Act of 1933, by reason of Section 4(a)(2) thereof and/or Regulation D promulgated thereunder (a “ Private Placement ”) and Regulation S, and therefore, may not be re-offered or resold other than in conformity with the registration and/or qualification requirements of the Securities Act and other applicable State blue sky securities laws and regulations or pursuant to an exemption therefrom. The Buyer Shares issued hereunder shall be legended to the effect described above and shall include such additional legends as necessary to comply with applicable U.S. federal securities laws, State blue sky securities laws and such other restrictions as shall be set forth in the Investment Representation Letter. Each Seller shall deliver an Investment Representation Letter in the Agreed Form at or prior to Completion. Buyer shall use commercially reasonable efforts to prepare and file a registration statement with the SEC covering the resale of Buyer Shares equal to the Stock Consideration. Buyer shall use commercially reasonable efforts to effect such filing prior to the later of (i) twenty (20) days after Completion and (ii) five (5) days after the completion of the financial statements required by Items 9.01(a) and (b) of Form 8-K (in each case assuming timely receipt of all information relating to the Sellers for inclusion in such registration statement, and all signatures, opinions and consents required for such registration statement and Form 8-K and that SEC activity is not delayed by pending government shut down). The Parties will exercise commercially reasonable efforts to complete such financial statements as soon as reasonably possible, which efforts shall include, without limitation, (i) the review by the Company’s independent auditors of any required interim financial statements, (ii) completion of any

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footnotes and schedules required to be included with such financial statements and (iii) the obtaining of any consents of Company’s auditors required for Buyer to use Company’s audited financials in Company’s public securities filings so as to enable Company to timely make the filings required on Form 8-K and the filing of such Form S-3.

8.	ESCROW ACCOUNT

8.1	Claims under the Warranties (other than the Fundamental Warranties) and claims under the Tax Covenant may be settled out of the Escrow Amount in accordance with the provisions of this Agreement, and of the Escrow Agreement but subject as follows:

8.1.1

any Claims under the Warranties (other than the Fundamental Warranties) or under the Tax Covenant for which it is finally decided that the Company or the Sellers (or Relevant Sellers or Other Sellers or Outstanding Sellers) are liable may be settled out of the Escrow Amount to the extent notified to the Sellers' Representatives and the Company on or before the First Expiry Date; but

8.1.2

such Claims may not be settled out of the Escrow Amount if notified after the First Expiry Date save only for Tax Claims, Share Capital Claims and IP Claims and only if any such Tax Claims, Share Capital Claims or IP Claims are so notified to the Sellers' Representatives and the Company before the Second Expiry Date.

8.2	On the Second Expiry Date then:

8.2.1

if there is no First Escrow Claim or Second Escrow Claim outstanding the Sellers' Representatives and the Buyer shall instruct the Escrow Agent to release the Escrow Amount plus any interest accrued due on the cash element and any other accrued cash or stock and less any fees, expenses or taxes deductible thereon in accordance with the terms of the Escrow Agreement to the Sellers, Other Sellers and to the Outstanding Sellers in their respective Percentage Portions;

8.2.2

if any First Escrow Claim or Second Escrow Claim remains outstanding there shall be retained in the Escrow Account Escrow Cash and Escrow Stock (in the proportions of cash and stock then standing to the credit of the Escrow Account) equal to the alleged amount of such Claim (or if less the Recommended Amount) (with Escrow Stock being valued in accordance with Clause 8.6) and the Sellers' Representatives and the Buyer shall instruct the Escrow Agent to release the balance of the Escrow Amount plus any interest accrued on the cash element thereof and any other accrued cash or stock and less any fees, expenses or taxes deductible thereon in accordance with the terms of the Escrow Agreement to the Sellers, the Other Sellers and the Outstanding Sellers in their respective Percentage Portions.

8.3

If it is finally decided, whether before, on or after the First or Second Expiry Date, that the Company or the Relevant Sellers are liable in whole or in part in respect of a Claim or claim under the Tax Covenant and which can be settled out of the relevant Escrow Cash and Escrow Stock then standing to the credit of the Escrow Account, the Sellers' Representatives and the Buyer shall instruct the Escrow Agent to release to the Buyer from the Escrow Account (in the proportions of cash and stock then standing to the credit of the Escrow Account) the amount due to the Buyer under such Claim or claim, less any fees, expenses or taxes deductible thereon in accordance with the terms of the Escrow Agreement, by way of full and final satisfaction of the liability of the Company and the Sellers (including the Relevant Sellers), the Other Sellers and the Outstanding Sellers under such Claim or claim.

8.4

The Sellers' Representatives and the Buyer shall instruct the Escrow Agent to release to the Buyer from the Escrow Account the amount (if any) due to the Buyer under any claim agreed by the Sellers' Representatives and the Buyer under Clause 4.4.2, and less any fees, expenses or taxes deductible thereon in accordance with the terms of the Escrow Agreement, by way of full and final satisfaction of the liability of the Sellers (including the Other Sellers and the Outstanding Sellers) under such claim.

8.5

If at any time after the Second Expiry Date it shall be finally decided that the Company or the Relevant Sellers are not liable in whole or in part in respect of a Claim or claim under the Tax Covenant for which a retention has been made under Clause 8.2.2 or if any such Claim or claims have been withdrawn, then to the extent that the Company or the Sellers (including the Relevant Sellers), the Other Sellers and the Outstanding Sellers are not so liable or that such Claim or claim has been withdrawn, the Sellers' Representatives and the Buyer shall instruct the Escrow Agent to release to the Sellers, the Other Sellers and the Outstanding Sellers any amount retained in the Escrow Account in respect of that Claim or claim, less any fees, expenses or taxes deductible thereon in accordance with the terms of the Escrow Agreement, in accordance with the Escrow Agreement.

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8.6	Where Escrow Stock is used to satisfy any amounts set-off against the Escrow Amount pursuant to this Clause 8, the Escrow Stock shall be valued at the Stock Price.

8.7	For the purposes of this Clause 8:

8.7.1

a Claim or claim under the Tax Covenant shall be deemed to have been withdrawn if legal proceedings in respect of it shall not have been commenced by being both issued and served on the Sellers' Representatives, on or before the expiry of nine months from the date on which the claim is notified to the Sellers' Representatives;

8.7.2

a Claim or claim under the Tax Covenant shall be deemed to be finally decided if either:

(a)	so determined by a court of competent jurisdiction from which there is no appeal or from whose judgment the Sellers or the Buyer (as the case may be) do or does not appeal within the shorter of the applicable deadline for appeal or two months; or

(b)	the Sellers' Representatives and the Buyer shall so agree in writing; and

8.7.3

a Claim or claim under the Tax Covenant shall be outstanding if it has not been withdrawn or finally decided but has been made and accompanied by a written opinion of a leading counsel to the effect that such Claim or claim will on the balance of probabilities succeed and the amount (the “ Recommended Amount ”) which is likely to be recovered pursuant to such Claim or claim under the Tax Covenant (excluding costs) and the amount to be retained in the Escrow Account shall not exceed the Recommended Amount. Such counsel shall have been called to the bar for a period of no less than 10 years and shall be selected by the Buyer and approved in writing by the Sellers' Representatives (such approval not to be unreasonably withheld or delayed) or in default of nomination by the Buyer within 7 days of the Second Expiry Date or approval by the Sellers' Representatives within 7 days of being nominated by the Buyer, then as selected by the Chairman of the Bar Council, and instructed jointly by the Buyer and the Sellers' Representatives.

8.8	Any payments under this Clause 8 are to be made by electronic transfer in immediately available funds to the single account notified by the payee to the payer not less than five Business Days before the Second Expiry Date.

8.9	Any amounts released from the Escrow Account to each of the Sellers and the Other Sellers and the Outstanding Sellers shall be paid to each such person in accordance with his Percentage Portion or in the case of Escrow Stock his Stock Percentage and:

8.9.1

all amounts paid to the Other Sellers and those Outstanding Sellers who are only entitled to cash shall be paid in cash out of the Escrow Cash; and

8.9.2

all amounts paid to the Sellers and those Outstanding Sellers entitled to part cash and part Buyer Shares shall be paid out of the Escrow Cash in the Percentage Portions and Escrow Stock in the Stock Percentage to each Seller, Other Seller and Outstanding Seller and in proportion to the amount of Escrow Cash and Escrow Stock set opposite their names in columns 5 and 6 of Schedule 1,

save to the extent that there is insufficient Escrow Cash, in which case the Sellers' Representatives shall determine the amount to be paid to each Seller, Other Seller and Outstanding Seller in cash out of the Escrow Cash and the amount to be paid in Escrow Stock and his determination shall be final, provided that no Other Seller (nor any Outstanding Seller entitled only to cash) will receive Escrow Stock but may receive the proceeds of sale of Escrow Stock should the Sellers' Representatives in their sole discretion determine to realise such Escrow Stock in order to enable the payment of cash to the Other Sellers or the Outstanding Sellers pursuant to this Agreement and/or the Short Form SPA(s) or otherwise. The Buyer and the Sellers' Representatives shall give directions to the Escrow Agent in accordance with the Escrow Agreement and to give effect to the provisions of Clauses 8.1 to this Clause 8.9.

8.10

The Sellers' Solicitors shall hold the aggregate sum of £1,458,130 paid to them pursuant to Clause 5.1.4(a)(iii) as an escrow amount and on or before the First MIB Date (as requested by the Company) and on or before the Second MIB Date (as requested by the Company) shall pay to the Company such amount of the Management Incentive Bonus as is due to be paid to those persons entitled to receive it, plus all sums that will be payable by the Company on account of PAYE and National Insurance contributions payable in respect of such part of the Management Incentive Bonus as is then to be paid out. If and to the extent that any part of the Management Incentive Bonus ceases to be due to one or more of the persons to whom it was

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originally allocated by reason of such person ceasing to qualify for all or part of the Management Incentive Bonus under the terms on which it was granted (as amended from time to time) (the “Excess”), such Excess shall be distributed by the Sellers' Solicitors to the Sellers, the Other Sellers and the Outstanding Sellers in their respective Percentage Portions.

8.11

In relation to those persons (the “ Outstanding Holders ”) identified in Part C of Schedule 1 being holders of shares in the capital of the Company and/or Optionholders who have not signed this Agreement and/or a Short Form SPA in respect of all their shares and/or Options (or such of them as do not do so on or before Completion) and do not sell all their shares (including those capable of acquisition on the exercise of Options) in the capital of the Company on or before Completion pursuant thereto:

8.11.1

When an Outstanding Holder being a shareholder as at Completion transfers his shares in the capital of the Company whether voluntarily on the terms of a Short Form SPA or pursuant to any mechanism to drag his shares (whether under article 7.5 of the Amended Articles or otherwise) or otherwise as agreed between the Buyer and such Outstanding Holder, the Buyer shall:

(a)

pay to such Outstanding Holder the Initial Cash Consideration as is set against his name in column 3 of Part C of Schedule 1, the WC Initial Payment as is set against his name in column 9 of Part 3 of Schedule 1 and transfer to the Outstanding Holder the Initial Buyer Shares as is set against his name in column 4 of Part C of Schedule 1; and

(b)	pay or transfer the amount set opposite such Outstanding Holder’s name as the Escrow Cash or Escrow Shares in columns 5 and 6 of Part C of Schedule 1 into the Escrow Account on and subject to the terms of Clauses 8.1 to 8.9.

8.11.2

When an Outstanding Holder being an Optionholder exercises his Options materially on the terms of the Exercise Form then the shares in the Company allotted on exercise of those Options shall be acquired by the Buyer pursuant to the mechanism to drag his shares under article 7.5 of the Amended Articles or in such other manner as the Buyer and the Outstanding Holder may agree, and:

(a)	the Buyer shall pay to the Company on behalf of the Optionholder the aggregate amounts in satisfaction of:

(i)	the aggregate exercise monies due; and

(ii)	amounts due in respect of Tax (including employee and employer's National Insurance contributions and PAYE contributions) pursuant to the undertakings and authorisations provided by the Optionholder in the Exercise Form,

and the Optionholder agrees that the amount so payable shall be deducted from the cash amount otherwise payable to him for his/her Option Shares and the Company shall pay to the relevant Taxation Authority such amounts due in respect of Tax;

(b)	the Buyer shall pay or transfer to the Outstanding Holder:

(i)	the Initial Cash Consideration set opposite such Outstanding Holder’s name in column 3 of Part C of Schedule 1 less the amounts due to be withheld from such Optionholder pursuant to Clause 8.11.2(a) and the WC Initial Payment as is set against his name in column 9 of Part 3 of Schedule 1; and

(ii)	the Initial Buyer Shares set opposite such Outstanding Holder’s name in column 4 of Part C of Schedule 1,

and in the event that the amount of the Initial Cash Consideration and the WC Initial Payment due to him is less than amounts due to be withheld from such Optionholder pursuant to Clause 8.11.2(a) then the Optionholder shall forthwith pay such additional amounts to the Company as are equal to such shortfall; and

(c)	the Buyer shall pay or transfer the amount of Escrow Cash or Escrow Shares set opposite such Outstanding Holder’s name in columns 5 and 6 of Part C of Schedule 1 into the Escrow Account on and subject to the

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terms of Clauses 8.1 to 8.9, but on the basis that an appropriate deduction is made therefrom for any amounts already paid out of the Escrow Account such that the relevant Outstanding Seller shall have borne his Percentage Portion of any such payment out.

8.11.3

If and to the extent that any Outstanding Holder being an Optionholder fails to exercise his Option on or before the date of expiry of his Option then the Buyer shall pay or transfer:

(a)

the Initial Cash Consideration set opposite such Outstanding Holder’s name in column 3 of Part C of Schedule 1 and the WC Initial Payment to which he would have been entitled in respect of those Option Shares, less the aggregate exercise monies that would have been paid by the Buyer to the Company on exercise of the said lapsed Option, to the Sellers’ Solicitors to be paid to the Sellers, Other Sellers and Outstanding Sellers as directed by the Sellers' Representatives;

(b)	the Initial Buyer Shares set opposite such Outstanding Holder’s name in column 4 of Part C of Schedule 1 to the Sellers and Outstanding Sellers as directed by the Sellers’ Representatives;

(c)

the amount of Escrow Cash or Escrow Shares set opposite such Outstanding Holder’s name in columns 5 and 6 of Part C of Schedule 1 into the Escrow Account on and subject to the terms of Clauses 8.1 to 8.9, but on the basis that an appropriate deduction is made therefrom for any amounts already paid out of the Escrow Account such that the relevant Outstanding Seller shall have borne his Percentage Portion of any such payment out, and the Percentage Portions and Stock Percentages of the Outstanding Sellers the Sellers and the Other Sellers shall be adjusted accordingly as the Sellers' Representatives see fit.

8.11.4

To the extent that any payments are to be made to the Sellers, the Other Sellers and the Outstanding Sellers by the Buyer pursuant to Clause 4.4.2(a) or 4.4.2(b), the Percentage Portions of such payments attributable to the Outstanding Holders shall also be paid by the Buyer to an Outstanding Holder who becomes an Outstanding Seller or to the Sellers’ Solicitors in accordance with Clauses 8.11.1, 8.11.2 or 8.11.3 (as applicable).

8.11.5

No amendment shall be made to the Amended Articles after Completion without the consent of the Sellers' Representatives and the Buyer until such time as all amounts have been paid out to the last of the Outstanding Sellers or to the Sellers’ Solicitors in accordance with Clauses 8.11.1, 8.11.2 and 8.11.3 and the acquisition of such shares (if any) has been completed.

9.	RESTRICTIONS ON THE COVENANTORS, KENNET AND MICHAEL HICKLAND

9.1

The provisions of this Clause 9 are made with the intention of assuring to the Buyer and its Group Companies the full benefit and value of the goodwill, confidential information and connections of the Company and the Subsidiary and as a constituent part of the agreement for the sale of the Shares. Accordingly each of the Covenantors and Kennet severally agrees that the restrictions contained in this Clause 9 agreed to by them are reasonable and necessary for the protection of the legitimate interests of the Buyer and that the restrictions do not work harshly on it.

9.2	Each of the Covenantors severally covenants with the Buyer and its Group Companies that for two years following the Completion Date, save with the prior written consent of the Buyer, he or she will not directly or indirectly on his own behalf or on behalf of any other person:

9.2.1

in competition with the Company or the Subsidiary deal with, seek employment or engagement with, or be employed or engaged by or be a director or consultant to, work on any account of, or be in any way interested in or connected with any business which competes with the Prohibited Business in the Restricted Territories in which that Covenantor has at any time during the period of 12 months ending on the Completion Date been involved for the purpose of providing services the same as or similar to those he provided to the Company or the Subsidiary, provided always that this Clause shall not prevent a Covenantor from:

(a)	being interested as a holder or beneficial owner solely for investment purposes of less than three per cent of any securities of any company whose securities are listed or quoted on any recognised investment exchange; or

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(b)	being (or seeking to be) engaged by a company whose activities include the Prohibited Business so long as he is not engaged in or otherwise responsible for the Prohibited Business;

9.2.2

deal with, seek employment or engagement with, be employed or engaged by, engage in business with or work on any account or business of any Customer for the purpose of providing that Customer with services within the Restricted Territories which are the same as or similar to any services which he was involved in providing to that Customer at any time in the 12 months preceding the Completion Date;

9.2.3

solicit business from any Customer for the purpose of providing to that Customer services within the Restricted Territories which are the same as or similar to those which he has been involved in providing to that Customer at any time in the 12 months preceding the Completion Date;

9.2.4

in connection with the Prohibited Business and within the Restricted Territories, interfere with or seek to interfere with contractual or other trade relations between the Company or the Subsidiary and any of its or their respective Customers;

9.2.5

in connection with the Prohibited Business and within the Restricted Territories, interfere or seek to interfere with contractual or other trade relations between the Company or the Subsidiary and any of its or their respective Suppliers;

9.2.6

in connection with the Prohibited Business and within the Restricted Territories solicit the services of, endeavour to entice away from the Company or the Subsidiary or knowingly assist in, or procure, the employment by any other person of any director or senior or managerial employee or consultant of the Company or the Subsidiary known personally to him (whether or not such person would commit any breach of his contract of employment or engagement by reason of leaving the service of such company);

9.2.7

save as required by applicable law or regulation, he will not communicate or divulge to any person or make use of any Confidential Information concerning the business, finances or affairs of the Company or the Subsidiary or of any of its respective Customers or Suppliers;

9.2.8

he will not, for so long as it is used or registered in the name of the Company or its Subsidiary, use or apply to register on any public register any trade, business or domain name or e-mail address used by the Company or its Subsidiary during the period of two years preceding the Completion Date (including the names (whether alone or in conjunction with other names)) or any name similar to those names or addresses or likely to be confused with them.

9.3

Michael Hickland covenants with the Buyer and its Group Companies that for the period of 1 year following the Completion Date, save with the prior written consent of the Buyer, he will not seek employment or engagement with, or be employed or engaged by or be a director or consultant to, work on any account of, or be in any way interested in or connected with Verint, Moxie, Salesforce or Oracle (the "Defined Companies") in a capacity which competes with the Prohibited Business in the Restricted Territories in which he has at any time during the period of 12 months ending on the Completion Date been involved for the purpose of providing services the same as or similar to those he provided to the Company or the Subsidiary, provided always that this Clause shall not prevent Michael Hickland from:

9.3.1

being interested as a holder or beneficial owner solely for investment purposes of less than three per cent of any securities of any Defined Company whose securities are listed or quoted on any recognised investment exchange; or

9.3.2

being (or seeking to be) engaged by a Defined Company notwithstanding that its activities include the Prohibited Business so long as he is not engaged in or otherwise responsible for the Prohibited Business.

9.4

Kennet covenants with the Buyer and its Group Companies that for the period of two years following the Completion Date, save with the prior written consent of the Buyer, it will not directly on its own or on behalf of another person, in competition with the Company or the Subsidiary be engaged by or be in any way invested in any business which competes with the Prohibited Business within the Restricted Territories, provided always that this Clause shall not prevent Kennet from being interested as a holder or beneficial owner solely for investment purposes of less than three per cent of any securities of any company whose security or listed or quoted on any recognised investment exchange.

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9.5	If any of the restrictions in Clause 9 is held to be void or ineffective for any reason but would be held to be valid and effective if part of its wording were deleted, that restriction shall apply with such deletions as may be necessary to make it valid and effective.

9.6	The restrictions contained in each sub-clause of Clause 9 shall be construed as separate and individual restrictions and shall each be capable of being severed without prejudice to the other restrictions or to the remaining provisions.

10.	RELEASE BY SELLERS

10.1

Each of the Sellers confirms that (other than for Options he holds, outstanding unreimbursed expenses, salary or other remuneration accrued for the current month and accrued untaken holiday) he or she has no claim (whether in respect of any breach of contract, compensation for loss of office or monies due to him or on any account whatsoever) outstanding against the Company or the Subsidiary or against any of the directors, officers or employees of the Company or the Subsidiary and that no agreement or arrangement (other than a contract of employment) is outstanding under which the Company or the Subsidiary or any of such persons has or could have any obligation of any kind to him or her.

10.2	To the extent that any such claim or obligation exists or may exist, each of the Sellers irrevocably and unconditionally waives such claim or obligation and releases the Company and the Subsidiary and any such other persons from any liability whatsoever in respect of such claim or obligation.

10.3

The Company, the Subsidiary and any shareholder, director, officer, employee or professional adviser of the Company or the Subsidiary may enforce the terms of Clauses 10.1 and 10.2 in accordance with the Contracts (Rights of Third Parties) Act 1999, provided always that, as a condition thereto, any such third party shall:

10.3.1

obtain the prior written consent of the Buyer; and

10.3.2

not be entitled to assign its rights under this Clause 10.

11.	TERMINATION OF SHAREHOLDERS' AGREEMENT

11.1

Those Parties to this Agreement which are also party to the Shareholders' Agreement agree that with effect from Completion the Shareholders' Agreement shall terminate and cease to have effect, save that clause 9 of the Shareholders' Agreement shall continue to have effect as between the Parties (the " Surviving Provision ").

11.2

Each party to the Shareholders' Agreement unconditionally and irrevocably confirms that no termination fee or any other payment or compensation is due or owing by any of them or any of their affiliates arising out of or in any way connected with or relating to the Shareholders' Agreement whether as a result of its termination or otherwise.

11.3

Each party to the Shareholders' Agreement hereby releases and waives any and all claims against each and any other party to the Shareholders' Agreement in respect of the Shareholders' Agreement and the termination of the Shareholders' Agreement and acknowledges that it or he shall have no rights (whether past, present or future and whether accrued or not) arising in connection with the termination of the Shareholders' Agreement, other than the obligations and liabilities arising under or in connection with the Surviving Provision.

11.4

Each of the parties to the Shareholders' Agreement unconditionally and irrevocably covenants that it will not bring (and will procure that its affiliates, as applicable, will not bring) any claims or commence any proceedings whatsoever in any jurisdiction against any other party to the Shareholders' Agreement and/or their affiliates arising out of the Shareholders' Agreement, save for any claims that may arise pursuant to the Surviving Provision.

12.	SELLERS’ REPRESENTATIVES

12.1

Each of the Sellers hereby appoints David Carratt and Rex Dorricott by way of the power of attorney in Agreed Form “G” as his or her representatives in respect of dealings with the Buyer in connection with or arising out of this Agreement including the determination of the Net Working Capital Adjustment, the bringing of any Claim and for the receipt of notices, and the Sellers’ Representatives may exercise any right or remedy to take any other action on behalf of each Seller other than in connection with his employment contract or otherwise in respect of his employment.

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12.2

In the event of the resignation, death or incapacity of a Sellers’ Representative, the Sellers shall (where such resignation, death or incapacity reduces the number of Sellers’ Representatives to zero) or may (where after such resignation, death or incapacity there remains at least one appointed Sellers’ Representative) within ten Business Days thereafter by written notice to the Buyer appoint a Seller as his or her successor who shall agree in writing to accept such appointment in the terms of this Agreement. There is no obligation on the Sellers to appoint more than one Sellers’ Representative.

13.

TAXATION

The provisions of Schedule 8 shall have effect.

14.	ANNOUNCEMENTS AND CONFIDENTIALITY

14.1

Subject to the provisions of Clause 14.2, no Party shall issue any press release or publish any circular to shareholders or any other public document or make any statement or disclosure to any person who is not a Party (including any document, statement or disclosure published, issued or made by the Sellers or any of them to any supplier to or customer of the Company or of the Subsidiary) in each case relating to this Agreement, its terms or the matters contained in it, without obtaining the prior written approval of the Sellers' Representative and the Buyer to its contents and the manner and extent of its presentation and publication or disclosure.

14.2	The provisions of Clause 14.1 do not apply to:

14.2.1

any announcement relating to or connected with or arising out of this Agreement required to be made by any Party:

(a)	by virtue of the regulations of the US Securities and Exchange Commission or applicable Nasdaq rules; or

(b)	by any court or governmental or administrative authority competent to require the same; or

(c)	by any applicable law or regulation; or

14.2.2

any disclosure made by a Party to its professional advisers, provided that such disclosure is made under obligations of confidentiality.

15.	ASSIGNMENT

15.1

Subject to this Clause 15, this Agreement shall be binding upon and enure for the benefit of the successors and assignees of the Parties including, in the case of individuals, their respective estates after their deaths and, subject to any succession or assignment permitted by this Agreement, any such successor or assignee of the Parties shall in its own right be able to enforce any term of this Agreement.

15.2	The Sellers, their successors and assignees shall not be entitled to assign their respective rights or obligations under this Agreement without the prior written consent of the Buyer.

15.3	Subject to Clause 15.4, the Buyer shall not be entitled to assign its rights or obligations under this Agreement without the prior written consent of the Sellers' Representatives.

15.4	The Buyer may assign to any Group Company the benefit of any right it may have under this Agreement provided that:

15.4.1

where any such Group Company ceases to be a Group Company of the Buyer (which shall be notified to the Sellers' Representatives without delay), such rights shall automatically re-transfer without Encumbrance to the Buyer (or another Group Company of the Buyer); and

15.4.2

no assignee shall be entitled to greater damages or other compensation than that to which the Buyer would have been entitled had it not assigned the benefit of such rights.

CONFORMED COPY

16.

GENERAL

16.1

Each Party undertakes, for no further consideration or payment but at the cost and expense of the requesting Party, to use all reasonable endeavours to sign all documents and to do all other acts as the requesting Party reasonably requires which may be necessary to give full effect to this Agreement.

16.2

The Buyer and, together, the Sellers, the Other Sellers and the Outstanding Sellers shall pay the costs and expenses (including the fees of any professional adviser) incurred by it/them in connection with the negotiation, preparation, execution and carrying into effect of this Agreement (“ Transaction Expenses ”) and each document referred to in it, save that the fees, costs and expenses of the Escrow Agent, if any, shall be shared equally among (1) the Buyer, and (2) the Sellers, Other Sellers and Outstanding Sellers. It is agreed that the Transaction Expenses of the Company, the Sellers, the Other Sellers and the Outstanding Sellers shall be borne by the Sellers, the Other Sellers and the Outstanding Sellers in their respective Percentage Portions.

16.3	This Agreement shall, as to any of its provisions remaining to be performed or capable of having or taking effect following Completion, remain in full force and effect notwithstanding Completion.

16.4	Unless expressly provided otherwise, all representations, warranties, undertakings, covenants, agreements and obligations made, given or entered into in this Agreement by more than one person are made, given or entered into severally.

16.5	The rights of each Party under this Agreement:

16.5.1

may be exercised as often as necessary;

16.5.2

are cumulative and not exclusive of rights or remedies provided by law; and

16.5.3

may be delayed, released or waived only in writing and specifically.

16.6	Delay in the exercise or non-exercise of any right or remedy provided by this Agreement or by law is not a waiver of that right or remedy.

16.7	A waiver of a breach of any of the terms of this Agreement or a default under this Agreement does not constitute a waiver of any other breach or default and shall not affect the other terms of this Agreement.

16.8	Any amendment of this Agreement shall not be binding on the Parties unless set out in writing, expressed to amend this Agreement and signed by the Buyer and the Sellers' Representatives.

16.9	The provisions contained in each Clause and paragraph of this Agreement shall be enforceable independently of each of the others and their validity or enforceability shall not be affected if any of the others is invalid or unenforceable by reason of any provision of applicable law.

16.10

If any provision is invalid or unenforceable but would be valid or enforceable if some part of the provision were deleted or modified, the provision in question shall apply with such modification as may be necessary to make it valid and enforceable.

16.11

This Agreement may be executed in any number of counterparts, and by the Parties on separate counterparts, each of which, when executed and delivered, shall constitute one and the same instrument.

16.12

The Parties agree that, subject always to and save as expressly provided in the provisions of this Clause 16.12, Clause 6.6 (third party exclusion from Warranty claims), Clause 7 (Buyer's Warranties and covenant), Clause 9 (restrictive covenants), Clause 10 (release by Sellers for the benefit of third parties) and Clause 15.1 (successors to, and assignees of, the Parties) and Clause 15.4 (Group Company transferees of the Shares post Completion):

16.12.1

no term of this Agreement shall be enforceable under the Contracts (Rights of Third Parties) Act 1999 by a third party other than an Outstanding Seller; and

CONFORMED COPY

16.12.2

notwithstanding that any term of this Agreement may be or become enforceable by a third party, the terms of this Agreement or any of them may be varied in any way or waived or this Agreement may be rescinded (in each case) without the consent of any such third party.

17.

NOTICES

17.1	Any notice or other communication to be given under this Agreement to a Party shall be in writing and shall be delivered personally or sent by post or email to the Party to be served at its address set out below:

17.1.1

to the Sellers’ Representatives at:

Rex Dorricott:

66A Homesteads Road

Basingstoke

Hampshire

RG22 5LJ

Email address: rex.dorricott@exony.com

David Carratt:

Glenridge Lodge

Callow Hill

Virginia Water

Surrey GU25 4LF

Email address: david.carratt@viecarratt.com

With copies (which shall not constitute notice) to each of:

(a)	ncooper@kennet.com ; and

(b)	Taylor Wessing LLP

5 New Street Square

London EC4A 3TW

Attn: Robert Fenner

17.1.2

to the Buyer at:

eGain Corporation

1252 Borregas Avenue

Sunnyvale, CA 94089

USA

Marked for the attention of: The Chief Financial Officer

With copies (which shall not constitute notice) to each of:

(a)	eGain Corporate Counsel (at the same address as above); and

(b)	Pillsbury Winthrop Shaw Pittman, LLP

CONFORMED COPY

2550 Hanover Street

Palo Alto, CA 94304

USA

Attn: Stanley Pierson

or at any other address or email address or to any other addressee as it may have notified to the other Party in accordance with this Clause 17.1. Any notice or other document sent by post shall be sent by prepaid first class recorded delivery post (if within the United Kingdom) or be prepaid/signed for airmail (if elsewhere).

17.2	Any such notice shall be deemed to have been received:

17.2.1

if delivered personally, at the time of delivery;

17.2.2

in the case of first class recorded delivery, 24 hours from the date of posting;

17.2.3

in the case of airmail, five days from the date of posting; and

17.2.4

in the case of email, at the time of delivery,

provided that if deemed receipt occurs before 9 am on a Business Day the notice shall be deemed to have been received at 9 am on that day, and if deemed receipt occurs after 5 pm on a Business Day, or on a day which is not a Business Day, the notice shall be deemed to have been received at 9 am on the next Business Day. For the purpose of this Clause, “Business Day” means any day which is not a Saturday, a Sunday or a public holiday in the place at or to which the notice is left or sent.

17.3	In proving service of a notice or document it shall be sufficient to prove that delivery was made and recorded or that an email was properly addressed and despatched and the sender did not receive notification of a failure to deliver, as the case may be.

18.	ENTIRE AGREEMENT

18.1

For the purposes of this Clause, “Pre-Contractual Statement” means any undertaking, promise, assurance, statement, representation, warranty or understanding (whether in writing or not) of any person (whether party to this Agreement or not) relating to the subject matter of this Agreement other than as expressly set out in this Agreement.

18.2	The Parties confirm that this Agreement represents the entire understanding, and constitutes the entire agreement of the Parties in relation to its subject matter and its terms and supersedes any previous agreement between the Parties relating to the subject matter or the terms of this Agreement.

18.3	Each of the Parties acknowledges and agrees that in entering into this Agreement it does not rely on any Pre-Contractual Statement.

18.4	Each of the Parties acknowledges and agrees that the only remedy available to it for breach of this Agreement shall be for breach of contract and it shall have no right of action against any other Party in respect of any Pre-Contractual Statement.

18.5	This Clause 18 shall exclude liability for misrepresentation save that nothing in this Clause 18 shall exclude any liability for (or remedy in respect of) fraudulent misrepresentation.

19.	GOVERNING LAW AND JURISDICTION

19.1	This Agreement and any non-contractual obligations arising out of or in connection with this Agreement (including its formation) are governed by and shall be construed in accordance with the law of England and Wales.

19.2

Each Party irrevocably agrees to submit to the exclusive jurisdiction of the courts of England over any claim, dispute or controversy (whether contractual or non-contractual) arising under or in connection with this Agreement or the legal relationships established by this Agreement (including its formation).

CONFORMED COPY

20.	PROCESS AGENT

20.1

The Buyer appoints Capita Trust Company of 4th Floor, 40 Dukes Place, London, EC3A 7NH as its agent to receive on its behalf in England service of any proceedings arising out of or in connection with this Agreement. Service of any proceedings on such agent shall be effective whether or not a copy is served on the Buyer.

20.2	The appointment under Clauses 20.1 may not be revoked by the Buyer unless it has previously appointed a substitute process agent to act in place of its agent for the purposes set out in Clauses 20.1 and has given written notice to the Sellers' Representatives of such appointment.

20.3	If either of the Sellers' Representatives notifies the Buyer that it has become aware that the process agent appointed under this Clause:

20.3.1

has ceased to be able to act as agent;

20.3.2

no longer has an address in England; or

20.3.3

has notified the Buyer that it declines or has ceased to act as agent,

the Buyer shall within five Business Days appoint a substitute reasonably acceptable to the Sellers' Representatives and deliver to the Sellers' Representatives details of the new agent's name and address.

20.4	If the Buyer fails to appoint a substitute agent in accordance with Clause 20.3, the Sellers' Representatives may, by written notice to the Buyer, appoint a replacement agent to act on the Buyer's behalf.

CONFORMED COPY

S CHEDULE 1

Part A

The Sellers


(1) Seller Name	(2A) Shares	(2B) EMI Options	(2C) Unapproved Options	(3) Initial Cash Consideration	(4) Buyer Share number	(5) Escrow Cash	(6) Escrow Stock Number	(7) Percentage Portion	(8) Stock Percentage	(9) WC First Payment	(10) Consideration

CONFORMED COPY

Part B

The Other Sellers


(1) Seller Name	(2A) Shares	(2B) EMI Options	(2C) Unapproved Options	(3) Initial Cash Consideration	(4) Buyer Share number	(5) Escrow Cash	(6) Escrow Stock Number	(7) Percentage Portion	(8) Stock Percentage	(9) WC First Payment	(10) Consideration

CONFORMED COPY

Part C

The Outstanding Holders


(1) Seller Name	(2A) Shares	(2B) EMI Options	(2C) Unapproved Options	(3) Initial Cash Consideration	(4) Buyer Share number	(5) Escrow Cash	(6) Escrow Stock Number	(7) Percentage Portion	(8) Stock Percentage	(9) WC First Payment	(10) Consideration

CONFORMED COPY

Schedule 2

The Company

Registered number:

03778354

Date of incorporation:

27/05/1999

Place of incorporation:

United Kingdom

Registered office address:

5 New Street Square, London EC4A 3TW

Directors:

David Jonathan Carratt

Martin Rex Dorricott

Michael Roger Hickland

Jonathan McKay

Philip James Sweetland

Douglas Craig Murray Webster

Secretary:

Michael Roger Hickland

Issued share capital:

(a)Amount:

£5,048.5888

(b)Number and class of shares:

3,177,936 deferred shares of £0.0001

4,090,268 ordinary shares of £0.001

6,405,272 preferred ordinary shares of £0.0001

Issued loan capital:

(a)Description:

None

(b)Amount:

None

Charges:

Date of charge:

Date of registration:

Property charged:

Chargee:

11/06/2010

29/06/2010

Fixed and floating charge over the undertaking and all property and assets present and future, including goodwill, book debts, uncalled capital, buildings, fixtures, fixed plant & machinery

Silicon Valley Bank

10.

Accounting Reference Date:

30/09

11.

Auditors:

Baker Tilly Audit Limited

Schedule 3

The Subsidiary

Exony, Inc.


1.	FEIN number:		20-3851904
2.	Delaware file number:		406704
3.	Date of incorporation:		28/11/2005
4.	Place of incorporation:		Delaware
5.	Registered office address:		Corporation Trust Centre 1209, Orange Street, Wilmington, Delaware
6.	Directors:		Martin Rex Dorricott Douglas Webster
7.	Secretary:		John T. Manaras
8.	Issued share capital:
	(a)Amount:		$1,000
	(b)Number and class of shares and by whom held:		1,000,000 shares of $0.001 each held by Exony Limited
9.	Issued loan capital:
	(a)Description:		N/A
	(b)Amount:		N/A
10.	Charges

	Date of charge:	Date of registration:	Property charged:	Chargee:
	11/06/2010	29/06/2010	Fixed and floating charge over the undertaking and all property and assets present and future, including goodwill, book debts, uncalled capital, buildings, fixtures, fixed plant & machinery	Silicon Valley Bank

11.	Accounting Reference Date:		30 September

12.	Accountants:		Diccio Gulman & Co. LLP (Boston, MA)

Schedule 4

Completion obligations of the Sellers

At Completion, the Sellers shall deliver or procure to be delivered to the Buyer:

1.	duly executed transfers in favour of the Buyer or its nominee(s) in respect of the Shares together with the certificates for the Shares;

2.	duly executed powers of attorney in the Agreed Form marked “E” granted by each Seller in favour of the Buyer in respect of the voting rights in the Shares held by such Seller;

a copy of any power of attorney in the Agreed Form marked “G” under which this Agreement, or any of the transfers or other documents referred to in this Schedule, is executed and evidence to the Buyer’s satisfaction of the authority of any person signing on behalf of any corporate entity and appointing the Sellers' Representatives;

4.	the common seal (if any), organisational documents and statutory books (including registers and minutes books) of the Company and its Subsidiary made up to the Completion Date;

5.	save to the extent that they are kept at the Properties (or any of them), all books of account, financial and accounting records, correspondence, documents, files, memoranda and other papers relating to the Company and the Subsidiary;

6.	certificates for all the issued shares of the Subsidiary registered in the name of the Company;

letters of resignation in the Agreed Form marked “B1” to “B6” from David Carratt, Martin Rex Dorricott, Michael Hickland, Jonathan McKay, Philip Sweetland and Douglas Webster as directors and company secretary (as applicable) in each case acknowledging that the writer has no claim against the Company or the Subsidiary for compensation for loss of office or otherwise;

8.	Investment Representation Letters in the Agreed Form marked “H” from those Sellers which are to receive Buyer Stock;

9.	all credit cards in the name, or for the account, of the Company or the Subsidiary in the possession of any officer or employee of the relevant company resigning at Completion;

10.	the security code and associated e-mail address for the Company to enable the Company to log in to the Companies House web filing system;

11.	the Escrow Agreement executed by the Sellers' Representatives and U.S. Bank National Association;

12.	the Completion Net Working Capital Statement;

13.	the Short Form SPA; and

14.	in respect of the Options:

(a)	copies of the Optionholder Letters as issued by the Company to the Optionholders;

(b)	a duly executed Exercise Form from each Optionholder who is a Seller or Other Seller except Ian Ashby and Jonathan McKay;

(c)	a duly executed Optionholder Transfer from each Optionholder who is a Seller or Other Seller except Ian Ashby and Jonathan McKay; and

(d)	signed Section 431 Elections for each Optionholder acquiring Stock Consideration under Clause 4.3.

Schedule 5

Warranties

1.	DISCLOSED INFORMATION

1.1	The facts set out in the Introduction and in Schedule 2 and Schedule 3 are true and accurate in all respects.

1.2	The Company has disclosed to the Buyer the existence and terms of any warranty and indemnity insurance cover or cover or indemnity providing protection of a similar nature relating to the subject matter of this Agreement.

2.	THE SELLERS

2.1	Each Seller has full power to enter into and perform this Agreement and all the documents in the Agreed Form to be executed by him and this Agreement constitutes, and each such Agreed Form document when executed will constitute, binding obligations of each such Seller in accordance with its terms.

2.2	The execution and delivery of this Agreement, and any of the Agreed Form documents to be executed, by each of the Sellers and the performance of and compliance with its terms and provisions by such Seller will not:

2.2.1

conflict with or result in a breach of, or constitute a default under, any agreement or instrument to which such Seller is a party or by which such Seller is bound or of the articles of association of the Company; or

2.2.2

conflict with or result in a breach of any law, regulation, order, writ, injunction or decree of any court or agency applicable to such Seller.

2.3

The Shares set against the name of each Seller in column 2A of Part A of Schedule 1 are, unless they are Option Shares, legally and beneficially owned by that Seller free from all Encumbrances and the Seller is not party to any agreement or arrangement pursuant to which any other person has the right (whether exercisable now or in the future and whether conditional or not) to call for the transfer of such Shares.

2.4

In relation to Option Shares, following exercise of the Options held by the Seller, he will be the sole legal and beneficial owner of the number of Shares set against his name in column 2B and column 2C of Part A of Schedule 1, all of which will have been validly allotted and with effect from Completion, fully paid

2.5

The number of Shares held by each Seller, and the number of Shares that such Seller is entitled to on exercise of any options, warrants or other instruments held by such Seller shown again such Sellers’ name in columns 2A, 2B and 2C of Part A of Schedule 1 represent all of the Shares and interests held by such Seller.

2.6	None of the Sellers is a party to any agreement or bound by any obligation the terms of which will prevent the Buyer from enjoying the full benefit of this Agreement.

2.7	No Seller nor, so far as the Seller is aware, any person connected with any Seller has any interest, direct or indirect, in any business other than that now carried on by the Company which is competitive with the Prohibited Business.

2.8

Save as regards any service, employment and/or consultancy agreements, there is not outstanding any agreement or arrangement to which the Company is a party and in which any Seller, any person beneficially interested in the Company’s share capital, any director of the Company or any person connected with any of them is or has been interested, whether directly or indirectly.

3.	CONSEQUENCES OF SALE OF THE SHARES

3.1	The Company is not a party to any agreement or bound by any obligation the terms of which will prevent the Buyer from enjoying the full benefit of this Agreement.

3.2

There are no agreements concerning the Company or its business which will or may be terminated or the terms of which will or may in any way be varied as a result of compliance with the terms of this Agreement or a change in the control of the Company or in the composition of the board of directors of the Company.

3.3	Neither the acquisition of the Shares by the Buyer nor compliance with the terms of this Agreement will entitle any person to receive from the Company or any Subsidiary any finder’s fee, royalty, brokerage or commission.

3.4	The execution and delivery of this Agreement and any of the Agreed Form documents and the performance and compliance with its terms will not:

3.4.1

conflict with or result in a breach or, or constitute a default under, any agreement or instrument to which the Company is a party or of the articles of association of the Company; or

3.4.2

conflict with or result in a breach of any law, regulation, order, writ, injunction or decree of any court or agency applicable to the Company; or

3.4.3

so far as the Company is aware cause the Company to lose the benefit of any right or privilege it presently enjoys or cause any person who normally does business with the Company not to continue to do so on the same basis or cause any officer or senior employee to leave and, so far as the Company is actually aware, the attitude or actions of customers, suppliers, employees and other persons with regard to the Company will not be prejudicially affected thereby.

4.	THE SHARES AND THE COMPANY

4.1

The Shares together with the Other Shares and the Outstanding Shares (in each case other than those the subject of the unexercised Options) comprise of the whole of the issued share capital of the Company and there are no shares in the capital of the Company allotted but not issued. All of the Shares are fully paid or credited as fully paid.

4.2	The Shares are legally and beneficially owned by the Sellers free from all Encumbrances.

4.3

Save only as provided in this Agreement and the Short Form SPA(s) and other than the Options there are no agreements or arrangements in force which call for the present or future creation, allotment, issue, redemption or repayment of, or grant to any person the right (whether exercisable now or in the future and whether conditional or not) to call for the creation, allotment, issue, redemption or repayment of, any share or loan capital of the Company (including by way of option or under any right of conversion or pre-emption).

4.4	The Company does not have, and never has had, any subsidiaries or subsidiary undertakings apart from the Subsidiary.

4.5	The Company is the beneficial owner of the entire issued share capital of the Subsidiary, free from all Encumbrances.

4.6	The Company has no associated companies as defined in FRS9.

4.7	Save as regards the Subsidiary, the Company has no branch, agency, place of business or permanent establishment outside the United Kingdom.

4.8	The latest copy of the articles of association of the Company filed with the Registrar of Companies and available for inspection on the date of this Agreement are true and complete.

4.9

The statutory books (including all registers and minute books) of the Company have been properly kept and contain a complete and accurate record of the matters which should be dealt with in them and no notice or allegation that any of them is incorrect or should be rectified has been received by the Company.

4.10	All returns, particulars, resolutions and other documents required under the Companies Legislation and all other legislation to be delivered on behalf of the Company to the Registrar of Companies or to any other authority whatsoever have been duly and properly made and delivered.

5.	INSOLVENCY

5.1

No order has been made and no resolution has been passed for the winding up of the Company or for a provisional liquidator or manager to be appointed in respect of the Company and no petition has been presented and, so far as the Company is aware, no meeting has been convened for the purpose of considering the winding up of the Company.

5.2	No administration order has been made and no petition for such an order has been presented in respect of the Company.

5.3

No receiver, administrator or manager (which expression shall include an administrative receiver) has been appointed in respect of all or any of the assets of the Company, nor has any power of sale or power to appoint a receiver or manager under the terms of any mortgage, charge or other security in respect of all or any assets of the Company become exercisable.

5.4	No voluntary arrangement under Insolvency Act 1986 section 1 or scheme of arrangement under Companies Act 2006 Part 26 or other compromise or arrangement in respect of the Company’s creditors generally, or any class of them, has been proposed or adopted.

5.5	No moratorium under Insolvency Act 1986 section 1A has been proposed or is in force in respect of the Company.

5.6

The Company is not and has not admitted itself to be unable to pay its debts as they fall due, nor has it failed to pay its debts when due (otherwise than by reason of a bona fide dispute as to their amount or enforceability), nor is the Company otherwise liable to be found unable to pay its debts within the meaning of Insolvency Act 1986 section 123.

5.7	No statutory demand has been served on the Company which has not been paid in full or been withdrawn.

5.8

The Company has not been a party to any transaction at an undervalue as defined in Insolvency Act 1986 section 238 nor has it given or received any preference as defined in Insolvency Act 1986 section 239, in either case within the period of two years ending on the date of this Agreement, nor has the Company at any time been party to any transaction defrauding creditors as defined in Insolvency Act 1986 section 423.

5.9	No loan capital, borrowings or interest is overdue for payment by the Company and no other material obligation or indebtedness of the Company is overdue for performance or payment.

5.10	No creditor of the Company has taken steps to enforce any debt or other sum owed by the Company, whether by legal proceedings, the exercise of a lien, power of distraint, sequestration, recovery of possession or otherwise (where such debt or sum remains unpaid).

5.11	No unsatisfied judgment is outstanding against the Company.

5.12	The Company has not suspended or ceased or threatened to suspend or cease to carry on all or a material part of its business.

5.13	No event analogous to any of the foregoing has occurred in or outside England.

6.	Compliance with laws and regulation

6.1

The Company has conducted its business in accordance with all applicable laws and regulations of the United Kingdom or any foreign country and there is no violation of, or default with respect to, any statute, regulation, order, decree or judgment of any Court or any governmental agency of the United Kingdom or any foreign country which may have a material adverse effect upon the assets or business of the Company.

6.2

All necessary licences, consents, permits and authorisations (public or private) have been obtained by the Company to enable the Company to carry on its business effectively in the places and in the manner in which such business is now carried on and all such licences, consents, permits and authorisations are valid and subsisting and the Company knows of no reason why any of them should be suspended, cancelled or revoked.

6.3	None of the activities, contracts or rights of the Company is ultra vires, unauthorised, invalid or unenforceable or in breach of any material contract or covenant.

6.4

Neither the Company, nor, so far as the Company is aware, any person for whose acts or defaults the Company may be vicariously liable, is subject to any outstanding order, decree or court stipulation or involved in any civil, criminal, administrative, regulatory or arbitration proceedings or any form of mediation or dispute resolution procedure.

6.5

No such order, decree, stipulation, proceedings or procedure as is referred to in paragraph 6.4 are pending or threatened by or against the Company or, so far as the Company is aware, any such person and, so far as the Company is aware, there are no facts or circumstances which are likely to lead to any such order, decree, stipulation, proceedings or procedure and no person or authority has made any statement suggesting that he or it might initiate such order, decree, stipulation, proceedings or procedure.

7.	THE ACCOUNTS AND ACCOUNTING RECORDS

7.1	The Accounts:

7.1.1

comply with the requirements of the Companies Legislation;

7.1.2

have been prepared in accordance with accounting principles generally accepted in the United Kingdom and using bases, practices, methods and estimation techniques consistent with those used in preceding accounting periods; and

7.1.3

show a true and fair view of the state of affairs of the Company as at the Accounts Date and of its profit or loss for the financial year ended on that date.

7.2	The accounting records of the Company have at all times been properly and accurately kept and completed and contain due and accurate records of all matters required by law to be entered in them.

7.3	The Management Accounts have been prepared in a manner consistent with that adopted in the preparation of the Accounts.

7.4	Having regard to the purpose for which the Management Accounts have been prepared, they are not materially misleading.

8.	BUSINESS SINCE THE ACCOUNTS DATE

Since the Accounts Date:

8.1

the Company has carried on its business in the ordinary and usual course and without entering into any transaction, assuming any liability or making any payment not provided for in the Accounts which is not in the ordinary course of its business and without any interruption or alteration in the nature, scope or manner of its business;

8.2	the Company has not borrowed or raised any money;

8.3	the Company has paid its creditors within the times agreed with such creditors;

8.4	the Company has not entered into, or agreed to enter into, any capital commitment nor has it disposed of or realised any capital assets;

8.5	save in respect of those shares in the capital of the Company the subject of the Short Form SPA or the Option Shares no share or loan capital has been allotted or issued or agreed to be allotted or issued by the Company;

8.6

no distribution of capital or income has been declared, made or paid in respect of any share capital of the Company and (excluding fluctuations in overdrawn current accounts with bankers) no loan or loan capital or preference capital of the Company has been repaid in whole or part or has become liable to be repaid;

8.7	the Company has not offered or agreed to offer price reductions or discounts or allowances on sales of goods or services, nor provided them or agreed to provide them at less than cost, to an extent which may materially affect the profitability of the Company; and

8.8	there has been no material deterioration in the financial position or turnover of the Company.

DEBTS

9.1

The amount of all debts recorded in the Accounts or (in the case of an amount arising after the Accounts Date) the books of the Company as being due to the Company (less the amount of any specific provision or reserve for such debts made in the Accounts) are expected to be received in full in the ordinary course of business and in any event not later than three months after the Completion Date and, so far as the Company is aware, none of those debts is subject to any counter‑claim or set‑off.

9.2

No part of the amounts included in the Accounts or (in the case of an amount arising after the Accounts Date) in the books of the Company as due from debtors has been released on terms that any debtor pays less than the full book value of his debt or has been written off or has proved to any extent irrecoverable or is now regarded as irrecoverable.

10.	FINANCIAL ARRANGEMENTS

10.1

The Company has no borrowings, and has not agreed to create any borrowings, from its bankers or any other source and, in respect of borrowings disclosed in the Disclosure Letter, the Company has not exceeded any limitation on its borrowing contained in its articles of association or in any debenture or loan stock deed or other instrument.

10.2	There is no Encumbrance (other than a lien arising by operation of law in the ordinary course of business) over or affecting the whole or any part of the undertaking or assets of the Company.

10.3	No part of the borrowings or loan capital of the Company is dependent on the guarantee or indemnity of or security provided by any other person.

10.4	No person apart from the Company has given any guarantee of or security for any overdraft, loan or loan facility granted to the Company.

10.5	There are no debts owing by the Company, other than debts which have arisen in the ordinary course of business.

10.6

The Company is not, and has not been, engaged in any arrangements (including arrangements which would be required to be disclosed under Companies Act 2006 section 410A) which involve the raising or provision of finance and under which the Company is liable to repay borrowings or other liabilities in the nature of indebtedness, in any such case where such arrangements or liabilities are not properly shown or reflected in the Accounts.

10.7

The Company is not under any obligation to pay, purchase or provide funds (whether by the advance of money, the purchase of or subscription for shares or other securities, the purchase of assets or services, or otherwise) for the payment of, indemnity against the consequences of default in the payment of, or otherwise to be responsible for, any indebtedness of any other person.

10.8	During the period of six years ending on the date of this Agreement, the Company has not applied for or received any grant or allowance from any government or public authority or agency.

10.9

The Company has not made any political donation to any political party or to any other political organisation or to any independent election candidate, nor has it incurred any political expenditure, in any such case either since the Accounts Date or in the year preceding the Accounts Date and it is not under any commitment to do so.

11.	TRADING ARRANGEMENTS

11.1	During the period of one year ending on the date of this Agreement:

11.1.1

the Company has not lost any Major Customer for or Major Supplier of all or any of its products or requirements and a "Major Customer" is one who is responsible for in excess of 5% of the sales of the Company and a "Major Supplier" is one who is responsible for in excess of 5% of the supplies to the Company;

11.1.2

no Major Customer has significantly reduced its orders for all or any of the products of the Company;

11.1.3

so far as the Company is aware, there has been no substantial change (apart from normal price changes) in the basis or terms on which any Major Customer is prepared to enter into contracts or do business with the Company,

and no such loss, reduction or change has been threatened or is anticipated by the Company (without making enquiry) whether as a result of Completion or otherwise.

11.2

Neither in the financial period ending on the Accounts Date nor in the period since then has any person (together with other persons connected with him) purchased from, or sold to, the Company more than ten per cent of the aggregate amount of all sales or purchases made by the Company during such period and there is no person (together with other persons connected with him) on whom the Company is substantially dependent or the cessation of business with whom would substantially adversely affect the business of the Company.

11.3	There is in force no power of attorney or other authority (express, implied or ostensible) given by the Company to any person to enter into any contract or commitment on its behalf other than to its employees to enter into routine trading contracts in the usual course of their duties.

11.4	The Company has not appointed any agent or distributor or, other than under any of the Application Agreements, granted any licences carrying the right to grant sub-licences to third parties in respect of any of its products or services in any part of the world.

12.	LIABILITIES AND COMMITMENTS

12.1	The contracts listed in Schedule 11:

12.1.1

comprise all of the subsisting contracts to which the Company is a party (other than the Application Agreements) which are material to the Company; and

12.1.2

are valid, enforceable and binding on the Company in accordance with their respective terms.

12.2	The Company is not a party to or subject to any agreement, transaction, obligation or commitment (other than the Application Agreements) which:

12.2.1

is incapable of complete performance in accordance with its terms within 12 months after the date on which it was entered into or undertaken;

12.2.2

is likely to result in a loss to the Company on completion of performance;

12.2.3

cannot readily be fulfilled or performed by the Company on time without unusual expenditure of money and effort;

12.2.4

may be terminated or cease to be performed by any counterparty without notice or by giving three months’ notice or less;

12.2.5

is a contract for services (other than a contract entered into on arms' length terms in the ordinary course of business);

12.2.6

in any way restricts the Company’s freedom to carry on the whole or any part of its business in any part of the world in such manner as it thinks fit;

12.2.7

is an agreement or arrangement otherwise than by way of bargain at arm’s length; or

12.2.8

is in any way otherwise than in the ordinary and proper course of the Company’s business.

12.3

Neither the Company nor, so far as the Company is aware, any other party to any agreement with the Company is in default under any contract listed in Schedule 11 nor (so far as the Company is aware) are there any circumstances likely to give rise to such a default and the Company is not aware of the invalidity of or grounds for rescission, avoidance or repudiation of any of such agreements or any allegation of such a thing, and the Company has not received notice of any intention to terminate any of such agreements.

12.4	The Company is not a party to, nor have its profits or financial position since the Accounts Date been affected by, any agreement or arrangement which is not entirely of an arm’s length nature.

12.5	No offer, tender or the like is outstanding which is capable of being converted into an obligation of the Company by an acceptance or other act of some other person.

13.	INSURANCES

13.1	The Schedule of Insurances annexed to the Disclosure Letter contains all material details of the insurance policies of the Company or in which it has an interest.

13.2

Company has paid all premiums due and has not done or omitted to do anything the doing or omission of which would make any such policy of insurance void or voidable or which it knows would result in an increase in the rate of premiums payable under any such policy and the Company has neither received notice of any increase in premium or of change in the terms of cover under any of such policies nor of the withdrawal (in whole or in part) of cover in respect of any of such policies.

13.3	Where any of the Properties which are leasehold are insured by the landlord under the relevant lease, the interest of the Company is noted on the insurance policy.

13.4	No claim is outstanding under any of the policies referred to in paragraph 13.1 and so far as the Company is aware no fact or circumstance exists which is likely to give rise to a claim under any of those policies.

14.

ASSETS

14.1	All the assets included in the Accounts or acquired after the Accounts Date (other than the Applications, the Intellectual Property Rights in or relating to the Applications, any other Intellectual Property Rights used in the Company's business and the IT Systems):

14.1.1

are legally and beneficially owned by the Company free from any mortgage, charge, lien or other encumbrance;

14.1.2

are not held subject to any agreement for lease, hire, hire purchase or sale on conditional or deferred terms; and

14.1.3

are in the possession or under the control of the Company.

14.2	In respect of any of the items referred to in paragraph 14.1 which are held under any agreement for lease, hire, hire purchase or sale on conditional or deferred terms, there has been no default by the Company in the performance or observance of any of the provisions of such agreements.

15.	DATA PROTECTION

15.1	The Company has complied in all material respects with the Data Protection Act 1998 and the Privacy and Electronic Communications (EC Directive) Regulations 2003 as applicable as amended from time to time.

15.2	No notices have been served on the Company by the Information Commissioner and the Company is not aware of any circumstance which might give rise to any such notice.

16.	IT Systems

16.1

Except to the extent provided in the IT Contracts, the Company is the owner of the Hardware, free from Encumbrances. The Company has all necessary rights from relevant third parties to enable it post-Completion to make full use of the IT System for the purposes of the Company's business in the same manner and to the same extent as the IT System has been used by the Company prior to Completion.

16.2	So far as the Company is aware, the IT System:

16.2.1

is not defective in any material respect;

16.2.2

does not contain any virus and has not within the last 12 months been infected by any virus or accessed by any unauthorised person;

16.2.3

has sufficient capacity, scalability and performance to meet the requirements of the Company's business as they existed immediately prior to Completion; and

16.2.4

has been satisfactorily and regularly maintained.

16.3	Each of the IT Contracts is:

16.3.1

valid and binding on the Company and so far as the Company is aware, the other party thereto;

16.3.2

neither the subject of a notice of an intention to terminate it, nor is terminable by the counterparty to it without cause within 12 months of the date of this Agreement; and

16.3.3

not the subject of any breach or default and so far as the Company is aware there are neither: (a) any circumstances likely to give rise to such a breach or default; nor (b) any grounds (including the events contemplated by this Agreement) for termination, rescission, avoidance or repudiation of it or any allegation or threat of the same.

16.4	None of the IT Contracts is liable to be terminated or otherwise materially adversely affected by a change of control of the Company.

16.5

Disaster recovery plans are in place and are appropriate and adequate to ensure that the IT Systems and the data stored on them can be replaced or substituted without material disruption to the business of the Company in the event of a failure of the IT Systems (whether due to natural disaster, power failure or otherwise) and all steps reasonably necessary have been taken to ensure that, in the event of such a failure, the business of the Company can continue in the ordinary course and without loss. All data stored on the IT Systems has been regularly archived in properly stored, catalogued and secure form, to which the Company has unimpeded access.

16.6	The Company operates up-to-date industry-standard software and methodology to avoid virus infections which is appropriate to a business of its nature and size.

16.7	In the 12 months prior to Completion the Company has not suffered any failures or breakdowns of the IT System that have prevented the Company's business from operating for a period of 24 or more consecutive hours.

17.	INTELLECTUAL PROPERTY

17.1	In respect of the Registered IP:

17.1.1

the Registered IP is all of the registered intellectual property owned by the Company;

17.1.2

the Registered IP is owned absolutely in the name of the Company free of all liens, charges, encumbrances and licences, and the Company is not obliged to grant any liens, charges, encumbrances or licences in respect of it;

17.1.3

all documents necessary to establish the Company’s title to the Registered IP are in its possession and (where necessary) have been duly stamped;

17.1.4

the Sellers have no notice of any oppositions made or applications refused and have no grounds to believe any applications will be opposed or refused; and

17.1.5

all payments due and all registration and renewal formalities relating to the Registered IP are up-to-date, complete and correct.

17.1.6

all Registered IP material to the conduct of the business of the Company is valid and enforceable and is not subject to any outstanding injunction, judgment, order, decree, ruling or charge.

17.2	The Company either:

17.2.1

owns; or

17.2.2

is under the Third Party Application Licences duly licensed to use, and to allow others to use;

the Application Unregistered Rights, so as to permit the Company, without infringing any of the Application Unregistered Rights but subject to compliance with the Third Party Application Licences, to sell, supply, licence, maintain and/or support the Applications in the same manner and to the same extent that it has done so prior to Completion.

17.3	The Company Application Unregistered Rights are owned by the Company and they are free from any Encumbrances.

17.4	The Company has not supplied or licensed the use of the Applications to any third parties other than under the terms of an agreement in writing (which for these purposes includes an agreement in digital form) which:

17.4.1

places restrictions on the use of the relevant Applications (which restrictions are not the same in every licence but which are consistent with the nature and extent of the licence to use those Applications granted by the Company to the licensee concerned); and

17.4.2

does not allow the licensee to use the Applications to an unrestricted extent (save to the extent that the licensee is a distributor or reseller of the Applications and the relevant agreement places no limitation on the number of Applications that the licensee is permitted to distribute or resell).

17.5	There are no Application Agreements which contain terms which, when compared to the terms on the basis of which the Company normally contracts or has contracted in agreements of the same or substantially similar nature:

17.5.1

place unusually onerous obligations on the Company; or

17.5.2

are outside the normal course of the Company's business

17.6

The Company is not in breach of any of the Application Agreements and, so far as the Company is aware, no third party is in breach of any of the Application Agreements. The Application Agreements are valid and binding and the Company is not aware of any circumstances that mean that any of the Application Agreements are likely to be terminated for breach or other cause prior to any date on which they may otherwise be due to expire or on which any party may be entitled to terminate them for convenience.

17.7

The Company is not in breach of any of the Third Party Application Licences and, so far as the Company is aware, no third party is in breach of any of the Third Party Application Licences. The Third Party Application Licences are valid and binding and the Company is not aware of any circumstances that mean that any of the Third Party Application Licences are likely to be terminated for breach or other cause prior to any date on which they may otherwise be due to expire or on which any party may be entitled to terminate them for convenience.

17.8	In order to sell, supply, licence, maintain and support the Applications in the manner and to the extent carried on by the Company prior to Completion, the Company does not require any Intellectual Property Rights or any licences to use Intellectual Property Rights other than:

17.8.1

the Registered IP;

17.8.2

the Company Application Unregistered IP; and

17.8.3

the Third Party Application Licences.

17.9

Subject to compliance with, and the continued maintenance of, the Third Party Application Licences, the sale, supply, license, maintenance and support of the Applications by the Company in the manner and to the extent carried on by the Company prior to Completion does not infringe the Intellectual Property Rights of any third party.

17.10

To the best of the Company's knowledge and belief, all obligations of the Company to provide support and maintenance in relation to the Applications (including the provision of further releases of the Applications) can be performed with the existing resources of the Company for at least the period until the expiration of the subsisting support and maintenance contract terms entered into by the Company.

17.11

Part 2 of Schedule 10 sets out, in relation to the Applications, those parts of the Applications:

17.11.1

in relation to which the Company has possession or control of the Source Code; or

17.11.2

in relation to which the Company does not have possession or control of the Source Code.

To the extent that Part 2 of Schedule 10 states that the Company has possession or control of the Source Code, the Company has in its possession and control in the United Kingdom copies of all of those parts of the relevant Source Code.

17.12

Part 2 of Schedule 10 sets out, in relation to the Applications, those parts of the Applications which comprise or include any Open Source Software. Save as set out in part 2 of Schedule 10, there has not been included or used as part of the Applications any:

17.12.1

Open Source Software; or

17.12.2

any libraries or code licensed from time to time under the GNU General Public Licence (as set out at http://www.gnu.org/licenses/gpl.html) or any similar licence (that is: requiring the distribution of source code of the Application together with the Application);

so as, in either case, and other than in relation to the Service Applications to require the Applications (other than the Service Applications) or any part of them to be distributed with the Source Code relevant to those Applications or part of them, provided that were the Service Applications or any part of them to be distributed then this would not be the case and the Source Code relevant to the Service Applications would have to be distributed with the Service Applications.

18.	PROPERTIES

18.1	The Properties comprise the only property in any part of the world in which the Company has any estate, interest, right or liability or which are otherwise occupied or used by the Company.

18.2	The particulars of each of the Properties set out in Schedule 7 are true and accurate in all material respects.

18.3	The Company is in physical possession and actual occupation of the whole of each of the Properties on an exclusive basis for the purpose of the business of the Company.

18.4	The Company is solely entitled at law and in equity to the Properties and has a good and marketable title to them.

18.5	The Company is the registered proprietor at the Land Registry with title absolute in respect of the Properties referred to in Part 1 of Schedule 7.

18.6	The Properties are not subject to any agreement for sale, estate contract, option, right of pre-emption, right of occupation or enjoyment or other similar matter.

18.7

The Properties are not subject to or affected by any mortgage or charge (whether legal or equitable, fixed or floating), debenture, lien, pledge, security interest or other encumbrance including without limitation any which secure the payment of money or relate to any obligation or liability of any third party.

18.8	The Company has not in respect of the Properties received any notice of any dispute, claim, complaint or demand of any kind and, so far as the Company is aware, there are no circumstances which mean that the Company will receive any such notice.

18.9	So far as the Company is aware all covenants, restrictions, stipulations and other encumbrances affecting the Properties have been observed and performed in all material respects and no notice of any alleged breach has been received by the Company.

18.10

In relation to the Properties which are leasehold, the Company has paid all sums due and has in all material respects observed and performed the covenants and obligations on the part of the tenant and the conditions contained in the leases and the obligations contained in any licence or other document supplemental to or granted under any of the leases (details of which are disclosed in the Disclosure Letter).

19.	EMPLOYEES AND CONSULTANTS

19.1	The particulars of Directors shown in paragraph 5 of Schedule 2 and in paragraph 5 of Schedule 3 are true and complete and no person who is not named as a director in that paragraph is or is held out as a director of the Company or the Subsidiary.

19.2	Copies of all the terms of appointment or employment for each Director of the Company (including any amendments to them) are annexed to the Disclosure Letter.

19.3	The particulars shown in the Schedule of Employees annexed to the Disclosure Letter show all:

19.3.1

names, job titles, notice periods, dates of commencement of employment and the identity of the employer of; and

19.3.2

remuneration payable and other benefits provided or which the Company is obliged to provide to each officer, employee and consultant of the Company (and in the case of remuneration and benefits, any person connected

with any such person) and include true and complete particulars of all profit sharing, incentive, commission and bonus arrangements to which the Company is a party.

19.4	No person who is not named in the Schedule of Employees is an employee of the Company.

19.5	No present officer or employee of the Company has given or received notice terminating his appointment or employment.

19.6

So far as the Company is aware, no person employed by the Company who is subject to immigration control and has not been granted leave to enter or remain in the United Kingdom, or whose leave to enter or remain in the United Kingdom is invalid, has ceased to have effect (whether by reason of curtailment, revocation, cancellation, passage of time or otherwise), or is subject to a condition preventing them from accepting the employment.

19.7	In the last three years no civil penalty or criminal penalty has been imposed on the Company or any of its officers or employees in connection with a breach of immigration law.

19.8	The standard written terms of employment applicable to each grade or class of employee employed by the Company are annexed to the Disclosure Letter and all employees of the Company are employed on the standard written terms of employment annexed to the Disclosure Letter.

19.9	There is not now outstanding any contract of employment between the Company and any of its directors, officers or employees which is not terminable by the Company without compensation (other than statutory compensation) on three months' notice or less given at any time.

19.10

There is not in force at the date of this Agreement any agreement to which the Company is party which provides that a change of control of the Company (however such change of control may be defined therein) shall entitle any director, officer, employee or consultant of the Company to any payment or benefit whatsoever.

19.11

There is no outstanding claim against the Company by any person who is now or has been an officer or employee of the Company or any dispute between the Company and two or more of its employees or former employees and no payments or compensation are due from the Company as a result of a court or tribunal judgement.

19.12

No amounts due to or in respect of any of the officers or employees or former officers or employees of the Company are in arrears or unpaid save for salary and benefits accruing in the month in which this Agreement is entered into and those benefits that have accrued but are not due to have not yet been paid.

19.13

No employee of the Company is currently, or has been within the period of six months before the date of this Agreement, subject to any disciplinary process or engaged in any grievance procedure.

19.14

Full details of all employees who are absent from work for any reason other than paid annual holiday (including absence due to secondment, maternity, paternity adoption or parental leave and leave to care for dependants) and/or who are absent due to ill-health and have been for more than two weeks are disclosed in the Disclosure Letter.

19.15

In the 12 months preceding the date of this Agreement, the Company has not:

19.15.1

given notice of redundancies to the relevant Secretary of State or started consultations with a trade union under Chapter II of Part IV of the Trade Union and Labour Relations (Consolidation) Act 1992 or failed to comply with its obligations under Chapter II of Part IV of that Act; or

19.15.2

been a party to a relevant transfer (as defined in the Transfer of Undertakings (Protection of Employment) Regulations 2006) or failed to comply with an obligation imposed by those Regulations.

19.16

The Company does not operate any policy pursuant to which employees who are redundant (within the meaning of section 139 of the Employment Rights Act 1996 and/or section 195 of the Trade Union and Labour Relations (Consolidation) Act 1992) are entitled to payments which are in excess of those required to be paid under the Employment Rights Act 1996 section 135.

19.17

The Company does not use the services of consultants, agency workers or other self-employed persons and does not employ any part time or fixed term workers.

19.18

The Company has not entered into any secondment arrangement in respect of any employee or worker.

19.19

Since the Accounts Date, no payments have been made by the Company to any officer or employee or former officer or employee of the Company or to their dependants or relatives which are in excess of that person’s entitlements under their terms of employment or appointment, nor is the Company considering making, nor is it obliged to make any such payments save for the Management Incentive Bonus.

20.

PENSIONS

20.1	Save as Disclosed the Company:

20.1.1

has no obligation (whether legally binding or not) to:

(a)	pay any pension; or

(b)	make any other payment on or after retirement or death or during periods of sickness or disability (whether of a temporary or permanent nature); or

(c)	otherwise to provide Relevant Benefits,

to, or in respect of, any person who is now or has been an officer or employee of the Company or spouse or dependant of such officer or employee; and

20.1.2

does not participate in nor has it ever participated in any scheme or arrangement for the provision of Relevant Benefits and the Company is not otherwise paying, providing or contributing towards nor has it paid, provided or contributed towards or given any commitment (whether legally binding or not) to provide any Relevant Benefits for or in respect of any present or past employee or officer of a Group Company or of any predecessor in business of a Group Company (including for a spouse or dependant of any such person) or any other costs or expenses in respect of the provision of any Relevant Benefits.

20.2	The only benefits that the Company Pension Scheme is liable to provide are money purchase benefits as defined in the Pension Schemes Act 1993.

20.3	The Company does not or could not have any liability under Pensions Act 1995 sections 75 or 75A to make any payment to any scheme or arrangement for the provision of Relevant Benefits to which it contributed or in which it has participated prior to Completion.

20.4	The Company has complied with its obligations under Welfare Reform and Pensions Act 1999 section 3.

20.5

No Employee, and no former employee or officer of the Company, has any right to Relevant Benefits arising as a result of a transfer of their employment to a Group Company under either the Transfer of Undertakings (Protection of Employment) Regulations 1981 (as amended) or the Transfer of Undertakings (Protection of Employment) Regulations 2006.

20.6

There is no contribution notice, financial support direction or restoration order (as defined in sections 38 to 56 of the Pensions Act 2004) in force in which the Company is named, and nor has the Company been party to any act or omission and there is no other fact or circumstance likely to give rise to any such notice or direction.

20.7

Save in relation to the Company Pension Scheme and as required by law no undertaking or assurance has been given to any person who is now, or has been, an officer or employee of the Company, or spouse or dependant of such officer or employee, as to the introduction of any Relevant Benefits which the Company would be required to implement in accordance with good industrial relations practice, whether or not there is any legal obligation to do so.

21.

TAXATION

21.1

General

21.1.1

All notices, returns (including any land transaction returns), reports, accounts, computations, statements, assessments, claims, disclaimers, elections and registrations and any other necessary information required by

law to have been submitted by the Company to any Taxation Authority for the purposes of Taxation have been made on a proper basis, were submitted within applicable time limits and were accurate and complete in all material respects. None of the above is, or is so far as the Company is aware likely to be, the subject of any material dispute with any Taxation Authority.

21.1.2

All Taxation (whether of the UK or elsewhere), for which the Company has been liable or is liable to account, has been duly paid (insofar as such Taxation was required by law to have been paid) by the due dates and no penalties, fines, surcharges or interest in respect thereof have been incurred.

21.1.3

There are no liens for Taxes on any assets of the Company, other than liens for Taxes not yet due and payable.

21.1.4

The Company maintains records, invoices and other information in relation to Taxation that meet all legal requirements.

21.1.5

The Disclosure Letter discloses whether or not the Company is a large company within the meaning of regulation 3 of the Corporation Tax (Instalment Payment) Regulations 1998 and, if applicable, gives details of instalments of corporation tax paid in respect of any current or preceding accounting periods.

21.1.6

All Taxation (including where applicable National Insurance contributions) deductible under the PAYE system and/or any other Taxation Statute has, so far as is required by law, been deducted from all payments made (or treated for any Taxation purpose as made) by the Company. All amounts due to be paid to the relevant Taxation Authority on or before the date of this Agreement have been so paid.

21.1.7

The Disclosure Letter contains details of any payments or loans made to, any assets made available or transferred to, or any assets earmarked, however informally, for the benefit of, any employee or former employee (or any associate of such employee or former employee) of the Company by an employee benefit trust or another third party, falling within the provisions of Part 7A to ITEPA 2003 (introduced by Finance Act 2011 with effect from 6 April 2011) and details of any trust or arrangement capable of conferring such a benefit.

21.1.8

The Disclosure Letter contains details of all concessions, agreements and arrangements that the Company has entered into with a Tax Authority.

21.1.9

Neither the Company (nor any predecessor thereof) has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency, nor has any request been made in writing for any such extension or waiver.

21.1.10

The Company is not, nor so far as the Company is aware will become, liable to make to any person (including any Taxation Authority) any payment in respect of any liability to Taxation (other than VAT) which is primarily or directly chargeable against, or attributable to, any other person.

21.1.11

The Accounts make proper provision or reserve within generally accepted accounting principles for all Taxation for which the Company is accountable at Accounts Date. Proper provision has been made and shown in the Accounts for deferred taxation in accordance with generally accepted accounting principles.

21.2	Capital Losses

Details of all capital losses available for carry-forward by the Company are set out in the Disclosure Letter.

21.3	Capital Allowances

The Company has not claimed first-year tax credits within the meaning of Schedule A1 of CAA 2001, business renovation allowances under Part 3A of CAA 2001, flat conversion allowances under Part 4A of CAA 2001.

21.4	Distributions and Other Payments

21.4.1

No distribution or deemed distribution, within the meaning of section 1000 or sections 1022-1027 of CTA 2010, has within the period of seven years preceding Completion been made (or will be deemed to have been made)

by the Company, except dividends shown in their statutory accounts, and the Company is not bound to make any such distribution.

21.4.2

The Company has not, within the period of seven years preceding Completion, been engaged in, nor been a party to, any of the transactions set out in Chapter 5 of Part 23 of CTA 2010 (demergers).

21.5	Close Companies

Any loans or advances made, or agreed to be made, by the Company within sections 455, 459 and 460 of CTA 2010 have been disclosed in the Disclosure Letter. The Company has not released or written off, or agreed to release or write off, the whole or any part of any such loans or advances.

21.6	Group Relief

Except as provided in the Accounts, the Company is not, nor will be, obliged to make or be entitled to receive any payment for the surrender of group relief (within the meaning of Part 5 of CTA 2010) to or by the Company in respect of any period ending on or before Completion, or any payment for the surrender of the benefit of an amount of advance corporation tax or any repayment of such a payment.

21.7	Group of Companies

21.7.1

The Company has not entered into, or agreed to enter into, an election pursuant to sections 171A or 179A of TCGA 1992, paragraph 16 of Schedule 26 to the Finance Act 2008, or section 792 of CTA 2009 (or paragraph 66 of Schedule 29 to the Finance Act 2002).

21.7.2

Neither the execution nor completion of this Agreement, nor any other event since the Accounts Date, will result in any chargeable asset being deemed to have been disposed of and re-acquired by the Company or any Subsidiary for Taxation purposes or to the clawback of any relief previously given.

21.7.3

The Company has not ever been party to any arrangements pursuant to sections 59F-G of TMA 1970 (group payment arrangements).

21.8	Intangible Assets

The Company does not hold nor has held any right to which Part 8A of CTA 2010 applies or an exclusive licence in respect of such right within section 357BA of CTA 2010.

21.9	Company Residence and Overseas Interests

21.9.1

The Company has, throughout the past seven years, been resident in the UK for corporation tax purposes and has not, at any time in the past seven years, been treated as resident in any other jurisdiction for the purposes of any double taxation arrangements or for any other tax purposes.

21.9.2

Other than the Subsidiary, the Company does not hold, nor within the last seven years has held, shares in a company which is not resident in the UK, a material interest in an offshore fund, or a permanent establishment outside the UK.

21.10

Transfer Pricing

No transaction or arrangement involving the Company has taken place or is in existence which is such that any of the provisions of Part 4 Taxation (International and Other) Provisions Act 2010 or Chapter 13 Part 8 CTA 2009 has been or could be applied to it.

21.11

Anti-Avoidance

The Company has not been involved in any transaction or series of transactions the main purpose, or one of the main purposes of which was the avoidance of tax.

21.12

Inheritance Tax

No asset owned by the Company, nor the Shares, is subject to any Inland Revenue charge as mentioned in sections 237 and 238 of IHTA 1984 or is liable to be subject to any sale, mortgage or charge by virtue of section 212(1) of IHTA 1984.

21.13

Value Added Tax

21.13.1

The Company is a taxable person and is registered for the purposes of VAT with quarterly prescribed accounting periods.

21.13.2

The Company is not, nor has been in the period of six years ending with the date of Completion, a member of a group of companies for the purposes of section 43 VATA 1994.

21.13.3

All supplies made by the Company are taxable supplies. The Company has not been denied full credit for all input tax paid or incurred by it.

21.13.4

The Company does not own any assets which are capital items subject to the capital goods scheme under Part XV of the VAT Regulations 1995, nor has exercised any option to tax under Part 1 of Schedule 10 to the VATA 1994.

21.14

Stamp Duty, Stamp Duty Land Tax and Stamp Duty Reserve Tax

21.14.1

Any documents that are necessary in proving the title of the Company to any material asset which is owned by the Company at Completion are duly stamped for stamp duty purposes. No such documents which are outside the UK would attract stamp duty if they were brought into the UK.

21.14.2

Neither entering into this agreement nor Completion will result in the withdrawal of any stamp duty or stamp duty land tax relief granted on or before Completion which will affect the Company.

21.14.3

The Disclosure Letter sets out full and accurate details of any chargeable interest (as defined under section 48 of the Finance Act 2003) acquired or held by the Company before Completion in respect of which the Sellers are aware, or ought reasonably to be aware, that an additional land transaction return will be required to be filed with a Taxation Authority and/or a payment of stamp duty land tax made on or after Completion.

21.15

Certain United States Tax Matters

21.15.1

For the purposes of this Clause 21.15, the term “Company” does not include the Subsidiary.

21.15.2

The Subsidiary has not been a United States real property holding corporation within the meaning of Section 897(c)(2) of the United States Internal Revenue Code (“Code”) during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code, (ii) has not been a shareholder of a “controlled foreign corporation” as defined in Section 957 of the Code (or any similar provision of United States state or local law), (iii) has not been a “personal holding company” as defined in Section 542 of the Code (or any similar provision of United States state or local law), (iv) has not been a shareholder of a “passive foreign investment company” within the meaning of Section 1297 of the Code, and (v) has not had a permanent establishment (within the meaning of an applicable Tax treaty), or otherwise received any written notice that it is subject to Tax jurisdiction in a country other than the United States.

21.15.3

The Company (i) does not have and has not had any permanent establishment within the United States (within the meaning of an applicable Tax treaty), and has not received any written notice that it is subject to Tax in any state or local jurisdiction within the United States, (ii) is not and has never been, a “surrogate foreign corporation” within the meaning of Section 7874(a)(2)(B) of the Code or treated as a United States corporation under Section 7874(b) of the Code, and (iii) was not created or organized in the United States such that the Company would be taxable in the United States as a domestic entity pursuant to Procedure and Administration Regulations Section 301.7701-5(a).

21.15.4

Neither the Company, the Subsidiary nor any division, branch or body of the Company or the Subsidiary has ever filed a United States entity classification election IRS Form 8832 under Section 7701 of the Code.

SCHEDULE 6

Limitations on liability

Subject always to Clause 6.9, the Buyer agrees with the Company and the Sellers and the Other Sellers (and in this Schedule references to the Other Sellers shall be deemed to include the Outstanding Sellers) that any claim by the Buyer in respect of any breach of the Warranties or for the Net Working Capital Adjustment pursuant to this Agreement or (where expressly referred to) any claim under the Tax Covenant (a “Claim”) shall be governed by and shall be dealt with in accordance with the following provisions of this Schedule. Where it is necessary to determine whether a monetary limit or threshold set out in this Schedule 6 has been reached or exceeded (as the case may be), the value of the relevant Claim or any of the relevant Claims shall include any liability in respect of the costs and expenses incurred in association with that Claim or Claims.

2.	The liability of the Company, the Sellers and the Other Sellers in respect of any breach of the Warranties and covenants under the Agreement and under the Tax Covenant shall be limited as follows:

2.1

the Buyer shall not be entitled to recover any amount in respect of a beach of the Warranties (other than the Fundamental Warranties) where the liability resulting from the breach is less than £10,000 and any such liability of less than £10,000 shall be disregarded in computing the figure of £50,000 referred to in paragraph 2.2 below save that two or more Claims arising out of the same breach of Warranty or Warranties which relate to the same subject matter may be aggregated and treated as one Claim for the purpose of this £10,000 de minimis;

2.2

the Buyer shall not be entitled to recover any amount in respect of a breach of the Warranties (other than the Fundamental Warranties) or under the Tax Covenant unless the amount recoverable, when aggregated with all other amounts recoverable for breach of the Warranties or under the Tax Covenant, exceeds £50,000, in which event this limitation shall cease to apply and the whole of such amounts shall be recoverable and not merely the excess over £50,000;

2.3

the aggregate liability of the Company, the Sellers and the Other Sellers in respect of all and any Claims for breach of any of the Warranties (other than the Fundamental Warranties) and claims under the Tax Covenant shall be limited to and shall in no event exceed the amount standing to the credit of the Escrow Account from time to time; and

2.4

the aggregate liability of the Sellers and the Other Sellers in respect of all and any Claims for breach of the Fundamental Warranties shall be limited to and shall in no event exceed the Consideration (as adjusted by the Net Working Capital Adjustment) and the individual liability of each Seller and each Other Seller for all Claims (including for breach of the Fundamental Warranties) shall be limited to the amount of the Consideration set against his name in column 10 of Schedule 1 as adjusted by reference to his Percentage Portion of the Net Working Capital Adjustment. For the avoidance of doubt, each Seller and Other Seller shall be responsible for settling any such Claims for breach of the Fundamental Warranties and shall not have recourse to the Escrow Amount.

3.	The liability of the Company, the Sellers and the Other Sellers in respect of any breach of the Warranties and covenants under the Agreement and for claims under the Tax Covenant shall be limited as follows:

3.1	the Sellers and the Other Sellers shall cease to have any liability:

3.1.1

for breach of any of the Warranties (apart from the Fundamental Warranties, for a Tax Claim, Share Capital Claim and for an IP Claim), on the expiry of the First Escrow Period; and

3.1.2

for an IP Claim, Share Capital Claim or a Tax Claim, on the second anniversary of Completion; and

3.1.3

for breach of the Fundamental Warranties, on the sixth anniversary of Completion,

except in respect of a Claim of which the Buyer gives notice to the Company and the Sellers' Representatives (or in the case of a breach of the Fundamental Warranties, to the relevant Seller or Other Seller) before the relevant date. Without prejudice to the foregoing, when giving such notice, the Buyer shall specify, in such detail as is reasonably available to it at that time, the nature of the potential liability and, so far as is practicable, the amount likely to be claimed in respect of it.

3.2

The liability of the Company, the Sellers and the Other Sellers for any Claim notified under this paragraph 3 shall (if it has not been previously satisfied, settled or withdrawn), cease 12 months after the date on which the Claim was notified unless court proceedings have been started in respect of it and the proceedings have not been withdrawn or terminated.

3.3

The time limits in this paragraph 3 shall not limit any Claim in respect of a contingent liability where notice in writing of the Claim is given to the Sellers' Representatives in accordance with paragraph 3.1 and before the end of the periods specified therein, but the Company, the Sellers and the Other Sellers shall not be liable in respect of any such Claim based on a liability which is contingent until it becomes an actual liability.

The liability of the Company, the Sellers or the Other Sellers for a Claim shall be reduced to the extent that the Buyer and/or the Company and/or the Subsidiary receives any recoveries from any third party (including a Taxation Authority or insurer) in respect of the matter or circumstance giving rise to the Claim.

If the Buyer and/or the Company or the Subsidiary makes any recovery from a third party (including a Taxation Authority or insurer) in respect of the matter or circumstance giving rise to a Claim for breach and such recovery is made following payment by the Company or the Sellers (whether out of the Escrow Account or otherwise) of the Claim, then the recipient of such recovery shall repay to the Sellers and the Other Sellers an amount of such recovery not exceeding the amount paid in respect of the Claim.

6.	The Sellers and the Other Sellers shall have no liability in respect of any claims by the Buyer in respect of any breach of the Warranties to the extent that:

6.1	the claim in question arises, or is increased, as a result of any increase in rates of Taxation or any change in the law or published practice of a Taxation Authority made after the date of this Agreement with retrospective effect;

6.2

the Company or the Subsidiary (i) is insured against any loss or damage suffered by the Company or the Subsidiary forming the basis of the claim in question under the terms of any insurance policy of the Company or the Subsidiary for the time being in force and (ii) actually recovers under such insurance policy. If and to the extent, in respect of any matter that is or may be the subject of a claim, the Company or the Subsidiary or the Buyer has or may have a claim against a third party (including an insurer), the Buyer and the Company shall take and the Buyer shall procure that the Company and the Subsidiary take all reasonable steps to pursue recovery against such third party provided that the Buyer has a reasonable likelihood of success and the bringing of such a claim shall not in the Buyer’s reasonable opinion be materially prejudicial to the goodwill attaching to, or the business of, the Company, the Buyer or any Group Company of the Buyer. The Buyer shall procure that each of the Company and the Subsidiary maintains in force up to the Second Expiry Date professional indemnity insurance and other insurance to at least an equivalent level and so far as possible on at least equivalent terms to that maintained by the Company and the Subsidiary at Completion.

6.3

the subject matter of the claim in question is the subject matter of a specific and express provision or allowance in the Post-Completion Net Working Capital Statement, the Accounts or any Management Accounts (the " Relevant Accounts ") unless (and then only to the extent that) such provision or allowance is insufficient; or

6.4

the claim in question arises or is increased as a result of any changes after Completion in the accounting bases, policies, practice or methods applied in preparing any accounts or valuing any assets or liabilities of the Company and/or the Subsidiary from those used in preparing the Relevant Accounts save where the Relevant Accounts were not prepared in accordance with applicable law and regulation.

7.	If any matter comes to the notice of the Buyer or the Company which may give rise to a liability under the Warranties, the Buyer shall (or shall procure that the Company shall):

7.1	as soon as reasonably practicable give notice of that matter to the Sellers' Representatives, specifying in such detail as is reasonably available to it at that time the nature of the potential liability and, so far as is practicable, the amount likely to be claimed in respect of it;

7.2	consult with, and take reasonable notice of the representations of, the Sellers' Representatives before making any admission of liability, agreement or compromise with any person, body or authority in relation to that matter;

7.3	in respect of any third party claim which may give rise to a liability under the Warranties (but not otherwise):

(a)

give the Sellers' Representatives and the Sellers' professional advisers reasonable access at any reasonable times to any relevant documents and records within the power or control of the Buyer and/or the Company or the Subsidiary so as to enable the Sellers' Representatives and the Sellers' professional advisers to examine such documents and records and to take copies at their own expense, save where to do so would or might reasonably breach or endanger the Buyer’s or any Group Company of the Buyer’s legal privilege in any such documents or records or any obligations of confidentiality owed to a third party;

(b)

take such action as the Sellers' Representatives may reasonably request to avoid, dispute, resist, compromise or defend any claim arising out of the matter in question, save where the Buyer reasonably considers that any such action would materially prejudice the goodwill attaching to the Company and be materially prejudicial to the business of the Company, the Subsidiary or their respective businesses (and for the avoidance of doubt, the breach of any Warranties by the Company shall not be deemed to prejudice such goodwill) and subject to the Sellers (or any of them) indemnifying the Buyer and/or the Company to the Buyer’s satisfaction against any liability, costs, damages or expenses which may be thereby incurred.

8.	For the avoidance of doubt:

8.1	nothing in this Schedule shall limit the Buyer’s obligation to mitigate its loss in respect of a claim by the Buyer in respect of any breach of the Warranties;

8.2

neither the Buyer nor the Company or the Subsidiary shall be entitled to recover damages in respect of any claim by the Buyer in respect of any breach of the Warranties or the Tax Covenant if, and to the extent that, the Buyer or the Company or the Subsidiary has already recovered damages in respect of the same fact or subject matter; and

8.3	the limitations in this Clause shall apply to any Claim against the Sellers and Other Sellers under Clause 6.3 as they apply to any Claim for breach of the Warranties and/or any claim under the Tax Covenant.

SCHEDULE 7

Properties

1	Registered titles

Leasehold

Brief description

Registered proprietor

Title number

Date of lease and original parties

Unexpired term

Current rent

Present use

St Catherine's House, Oxford Square, 9-21 Oxford Street, Newbury, Berkshire

Exony Limited (company number 3778354)

BK459625

Lease dated 24 January 2014 between Bendinat (London) Limited (1) and Exony Limited (2)

Term – 10 years from 24 January 2014 expiring on 23 January 2024

Rent free period until 23 May 2015. Rent at £156,525 per annum commencing on 24 May 2015, subject to review on 24 January 2019

Offices or any other use within Class B1 of the 1987 Use Classes Order to with prior written consent of landlord (not to be unreasonably withheld or delayed)

2	Unregistered titles

None

3	Other property worldwide

None

SCHEDULE 8

Tax Covenant

1.	INTERPRETATION

1.1	The following definitions and rules of interpretation apply in this Tax Covenant.

Accounts Relief:

(a)	any Relief (including the right to a repayment of Tax) that has been shown as an asset in the Completion Net Working Capital Statement; and

(b)	any Relief that has been taken into account in computing (and so reducing or eliminating) any provision for deferred Tax in the Completion Net Working Capital Statement.

Buyer's Relief:

(a)	any Accounts Relief; and

(b)	any Relief, whenever arising, of the Buyer or any member of the Buyer's Tax Group other than the Company and the Subsidiary;

Buyer's Tax Group: the Buyer and any other company or companies which are from time to time treated as members of the same group as, or otherwise connected or associated in any way with, the Buyer for any Tax purpose;

Dispute: any dispute, appeal, negotiations or other proceedings in connection with a Tax Claim;

Event: includes (without limitation), the expiry of a period of time, the Company becoming or ceasing to be associated with any other person for any Tax purpose or ceasing to be or becoming resident in any country for any Tax purpose, the death or the winding up or dissolution of any person, the earning, receipt or accrual for any Tax purpose of any income, profit or gains, the incurring of any loss or expenditure, and any transaction (including the execution and completion of all provisions of this agreement), event, act or omission whatsoever, and any reference to an Event occurring on or before a particular date shall include Events that, for Tax purposes, are deemed to have, or are treated or regarded as having, occurred on or before that date;

Liability for Taxation:

(a)

any liability of the Company to make an actual payment of Tax whether or not the same is primarily payable by the Company and whether or not the Company has or may have any right of reimbursement against any other person, in which case the amount of the Liability for Taxation shall be the amount of the actual payment;

(b)

the Loss of any Accounts Relief in which case the amount of the Liability for Taxation will be the amount of Tax which would (on the basis of Tax rates current at the date of such Loss) have been saved but for such Loss assuming for this purpose that the Company had sufficient profits or was otherwise in a position to use the Relief; or where the Relief is the right to repayment of Tax or to a payment in respect of Tax, the amount of the repayment or payment; and

(c)

the use or setting off against gross receipts, income, profits or gains or against a Tax Liability of any Buyer's Relief in circumstances where, but for such use or set off, the Company would have had a liability to make a payment of or in respect of Tax for which the Buyer would have been able to make a successful claim against the Company under this Tax Covenant, in which case, the amount of the Liability for Taxation shall be the amount of Tax for which the Company would have been liable but for such use or set off;

Loss: includes absence, non-existence, non-availability, reduction, modification, loss, counteraction, nullification, disallowance, withdrawal or claw-back;

Overprovision: the amount by which any provision for Tax (other than deferred tax) in the Post Completion Net Working Capital Statement is overstated, except where such overstatement arises as a result of:

(a)	a change in law;

(b)	a change in the accounting bases on which the Company or the Subsidiary values its assets; or

(c)	a voluntary act or omission of the Buyer,

which, in each case, occurs after Completion;

Relief: includes any loss, relief, allowance, credit, exemption or set off in respect of Tax or any deduction in computing income, profits or gains for the purposes of Tax and any right to a repayment of Tax or to a payment in respect of Tax;

Saving: the reduction or elimination of any liability of the Company to make an actual payment of corporation tax in respect of which the Company would not have been liable under paragraph 2 of this Tax Covenant, by the use of any Relief (which for these purposes shall be deemed not to be a Buyer's Relief) arising wholly as a result of a Liability for Taxation in respect of which the Company has made a payment under paragraph 2 of this Tax Covenant;

Tax or Taxation: all forms of taxation and statutory, governmental, state, federal, provincial, local, government or municipal charges, duties, imposts, contributions, levies, withholdings or liabilities wherever chargeable and whether of the UK or any other jurisdiction (including, for the avoidance of doubt, National Insurance contributions in the UK and corresponding obligations elsewhere) and any penalty, fine, surcharge, interest, charges or costs relating thereto (including interest and penalties arising from the failure of the Company to make adequate instalment payments under the Corporation Tax (Instalments Payments) Regulations 1998 ( SI 1998/3175 ) in any period ending on or before Completion);

Tax Claim: any assessment, notice, demand, letter or other document issued or action taken by or on behalf of any Taxation Authority, self-assessment or other occurrence from which it appears that the Company or the Buyer is or may be subject to a Liability for Taxation or other liability in respect of which the Company is or may be liable under this Tax Covenant;

Tax Refund: a right to repayment of Tax or an actual repayment of Tax to which the Company or a Subsidiary becomes entitled or receives in respect of a period (or part period) prior to Completion or as a result of an Event occurring prior to Completion;

Taxation Authority: any government, state or municipality or any local, state, federal or other fiscal, revenue, customs or excise authority, body or official competent to impose, administer, levy, assess or collect Tax in the UK or elsewhere; and

Taxation Statute: any directive, statute, enactment, law or regulation wherever enacted or issued, coming into force or entered into providing for or imposing any Tax and shall include orders, regulations, instruments, by-laws or other subordinate legislation made under the relevant statute or statutory provision and any directive, statute, enactment, law, order, regulation or provision which amends, extends, consolidates or replaces the same or which has been amended, extended, consolidated or replaced by the same.

1.2	References to gross receipts, income, profits or gains earned, accrued or received shall include any gross receipts, income, profits or gains deemed under the relevant Taxation Statute to have been or treated or regarded as earned, accrued or received.

1.3	References to a repayment of Tax shall include any repayment supplement or interest in respect of it.

1.4	Any reference to something occurring in the ordinary course of business shall not include:

(a)	anything that involves, or leads directly or indirectly to, any liability of the Company to Tax that is the primary liability of, or properly attributable to, or due from another person (other than a member of the Buyer's Tax Group);

(b)	anything that relates to or involves the acquisition or disposal of an asset or the supply of services (including the lending of money, or the hiring or licensing of tangible or intangible property) in a transaction which is not entered into on arm's length terms;

(c)

anything that relates to or involves the making of a distribution for Tax purposes, the creation, cancellation or reorganisation of share or loan capital, the creation, cancellation or repayment of any intra-group debt or the Company becoming or ceasing to be or being treated as ceasing to be a member of a group of companies or becoming or ceasing to be associated or connected with any other company for any Tax purposes;

(d)	anything that relates to any scheme, transaction or arrangement designed partly or wholly or containing steps or stages designed partly or wholly for the purpose of avoiding or reducing or deferring a Liability to Taxation;

(e)

anything that gives rise to a Liability for Taxation on deemed (as opposed to actual) profits or to the extent that it gives rise to a Liability for Taxation on an amount of profits greater than the difference between the sale proceeds of an asset and the amount attributable to that asset in the Accounts or, in the case of an asset acquired since the Accounts Date, the cost of that asset; or

(f)	anything that involves, or leads directly or indirectly to, a change of residence of the Company for Tax purposes.

1.5	Unless the contrary intention appears, words and expressions defined in this agreement have the same meaning in this Tax Covenant and any provisions in this agreement concerning matters of construction or interpretation also apply in this Tax Covenant.

1.6

Any stamp duty which is charged on any document, or in the case of a document which is outside the UK, any stamp duty which would be charged on the document if it were brought into the UK, which is necessary to establish the title of the Company to any asset, and any interest fine or penalty relating to such stamp duty, shall be deemed to be a liability of the Company to make an actual payment of Taxation in consequence of an Event arising on the last day on which it would have been necessary to pay such stamp duty in order to avoid any liability to interest or penalties arising on it.

COVENANT

The Relevant Sellers covenant with the Buyer that, subject to the provisions of this Tax Covenant, the Relevant Sellers shall pay to the Buyer an amount equal to any:

(a)	Liability for Taxation resulting from or by reference to any Event occurring on or before Completion or in respect of any gross receipts, income, profits or gains earned, accrued or received by the Company on or before Completion;

(b)	Liability for Taxation which is primarily the liability of another person (the " Primary Person ") for which the Company is liable in consequence of:

(i)	the Primary Person failing to discharge such Tax Liability; and

(ii)	the Company at any time before Completion:

(A)	being a member of the same group of companies as the Primary Person; or

(B)	having control of, being controlled by, or being otherwise connected with, the Primary Person or being controlled by the same person as the Primary Person,

for any Tax purpose;

(c)

Liability for Taxation that arises at any time under Part 7A of ITEPA 2003 including any liability arising as a consequence of any payments or loans made to, any assets made available or transferred to, or any assets earmarked, however informally, for the benefit of, any employee or former employee of the Company or for the benefit of any relevant person, by an employee benefit trust or another third party where the arrangement giving rise to the charge was entered into at a time when the third party was acting on the instructions of, or for the benefit of, the Company or an associate of a Company;

(d)	Liability for Taxation being a liability for inheritance tax which:

(i)	is a liability of the Company and arises as a result of a transfer of value occurring or being deemed to occur on or before Completion (whether or not in conjunction with the death of any person whenever occurring);

(ii)	has given rise at Completion to a charge on any of the Shares or assets of the Company; or

(iii)

gives rise after Completion to a charge on any of the Shares in or assets of the Company as a result of the death of any person within seven years of a transfer of value that occurred before Completion; and

(e)	reasonable costs and expenses properly incurred by the Buyer or the Company in taking any successful action under this Schedule.

3.	PAYMENT DATE

3.1	Payment by the Relevant Sellers in respect of any liability under this Schedule must be made from the Escrow Amount on the following days:

(a)	in the case of a Liability for Taxation that involves an actual payment of or in respect of Tax, the later of five Business Days before the due date for payment and five Business Days after the date on which the Buyer serves notice on the Sellers' Representatives requesting payment;

(b)	in the case of the loss of a right to repayment of Tax or a liability under paragraph 2.1(g) five Business Days following the date on which the Buyer serves notice on the Sellers' Representatives requesting payment;

(c)	in a case that involves the loss of a Relief (other than a right to repayment of Tax), the last date on which the Tax is or would have been required to be paid to the relevant Taxation Authority in respect of the period in which the Loss of the Relief gives rise to an actual liability to pay Tax;

(d)	in a case that falls within paragraph 1.1(c) of the definition of Liability for Taxation, the date on which the Tax saved by the Company is or would have been required to be paid to the relevant Taxation Authority.

3.2	If the Liability for Taxation is a liability to corporation tax payable by instalments in accordance with the Corporation Tax (Instalment Payments) Regulations 1998 ( SI 1998/3175 ):

(a)	the notice served by the Buyer on the Sellers' Representatives under paragraph 3.1 shall specify the amount of the liability that is due for payment on each instalment date for the accounting period in which the Liability to Taxation arises; and

(b)	the due dates for payment of the Tax in paragraph 3.1(a) to paragraph 3.1(d) shall be the due dates for payment of each of the instalments.

3.3

Any dispute as to the amount specified in any notice served on the Sellers' Representatives under paragraph 3.1 (a) to paragraph 3.1 (d) shall be determined by the auditors of the Company for the time being, acting as experts and not as arbitrators (the costs of that determination being shared equally by the Company and the Buyer).

4.	EXCLUSIONS

4.1

The covenant contained in paragraph 2 above shall not cover any Liability for Taxation (and the Company shall not be liable for any breach of the Tax Warranties where such breach is caused by a Liability for Taxation, or where damages are calculated by reference to a Liability for Taxation) to the extent that:

(a)	specific provision or reserve (other than a provision for deferred tax) in respect of the liability is made or reflected in the Completion Net Working Capital Statement;

(b)	such Liability for Taxation was discharged on or before Completion and the discharge of such Liability for Taxation was reflected in the Completion Net Working Capital Statement;

(c)

it arises or is increased as a result only of any change in law (other than a change targeted specifically at countering a tax avoidance scheme) announced and coming into force after Completion (whether relating to rates of Tax or otherwise) or the withdrawal of any extra-statutory concession previously made by a Taxation Authority (whether or not the change purports to be effective retrospectively in whole or in part);

(d)	it would not have arisen but for a change after Completion in the accounting bases on which the Company values its assets (other than a change made to comply with UK GAAP as applied by the Company at Completion);

(e)	the Buyer is compensated for any such matter under any other provision of this agreement;

(f)	it arises or is increased in consequence of:

(i)	any failure by the Buyer or the Company to comply with, or a failure to procure the compliance of a Group Company with, any of their respective obligations under this Tax Covenant; or

(ii)	the Liability for Taxation arises or is increased as a result of any delay or default by the Buyer or the Company in paying over to any Taxation Authority any amount received from the Company under this Tax Covenant or for breach of the Tax Warranties;

(g)

there is available to the Company a Relief which is not a Buyer's Relief, or such a Relief would have been available but for the use or setting off of that Relief against gross receipts, income, profits or gains or Tax, in either case, in respect of which the Company would not have been liable to make a payment under this Tax Covenant; or

(h)

it is interest arising under the Corporation Tax (Instalment Payments) Regulations 1998 as a result of the instalment payments made before Completion being insufficient as a result of gross receipts, income, profits or gains earned, accrued or received after Completion or an Event arising after Completion; or

(i)	the gross receipts, income, profits or gains in respect of which it arises were actually earned, accrued or received by the Company prior to Completion but were not reflected in the Completion Net Working Capital Statement; or

(j)

it would not have arisen but for a voluntary act, transaction or omission of the Company after Completion or the Buyer, which was outside the ordinary course of business of the Company and which the Buyer was aware or ought reasonably to have been aware would give rise to the Liability for Taxation or other liability in question.

4.2

For the purposes of paragraph 4.1(j) an act will not be regarded as voluntary if undertaken pursuant to a legally binding obligation entered into by the Company on or before Completion or imposed on the Company by any legislation whether coming into force before, on or after Completion, or if carried out at the written request of the Sellers.

5.	LIMITATIONS

5.1	The provisions of Schedule 6 (Limitations on liability) shall (where indicated) apply to claims under this Tax Covenant in respect of any Liability for Taxation.

5.2	The liability of the Relevant Sellers under this Tax Covenant will terminate on the Second Expiry Date.

6.	OVERPROVISIONS

6.1	If any provision for Tax in the Accounts (other than a provision for deferred tax) has proved to be an Overprovision, then:

(a)	the amount of any Overprovision shall first be set off against any payment then due from the Relevant Sellers under this Tax Covenant or for breach of a Tax Warranty (including, for the avoidance of doubt, where the Sellers have made a payment in respect of such breach pursuant to clause 6.3.3);

(b)

to the extent that there is an excess, a refund shall be made to the Relevant Sellers of any previous payment or payments made by the Relevant Sellers under this Tax Covenant or by the Company or out of the Escrow Amount for breach of a Tax Warranty (including, for the avoidance of doubt, where the Sellers have made a payment in respect of such breach pursuant to clause 6.3.3) (and not previously refunded) up to the amount of such excess; and

(c)

to the extent that the excess referred to in paragraph 6.1(b) is not exhausted, the remainder of that excess will be carried forward and set off against any future payment or payments which become due from the Relevant Sellers under this Tax Covenant or by the Company or out of the Escrow Amount for breach of a Tax Warranty (including, for the avoidance of doubt, where the Sellers have made a payment in respect of such breach pursuant to clause 6.3.3).

6.2	The Sellers' Representatives may (at the Sellers' expense) on or before the Second Expiry Date instruct the auditors for the time being of the Company or any Subsidiary to certify the existence of, and amount of, an Overprovision.

6.3

After the Company's auditors have produced any certificate under this paragraph 6, the Sellers' Representatives or the Buyer may, at any time before the Second Expiry Date, request the auditors for the time being of the Company to review (at the expense of the person requesting the review) that certificate in the light of all relevant circumstances, including any facts of which it was not aware, and which were not taken into account, at the time when such certificate was produced, and to certify whether in their opinion the certificate remains correct or whether, in light of those circumstances, it should be amended.

6.4

If the auditors make an amendment to the earlier certificate and the amount of the Overprovision is revised, that revised amount shall be substituted for the previous amount and any adjusting payment that is required shall be made by or to the Relevant Sellers as soon as is reasonably practicable. Any payments to the Relevant Sellers shall be made to the single account notified by the Sellers' Representatives to the Buyer for the purpose.

7.	SAVINGS AND TAX REFUNDS

7.1	If the Company obtains a Saving or a Tax Refund, the Buyer shall as soon as reasonably practicable thereafter repay to the Relevant Sellers, after deduction of any amounts then due by the Relevant Sellers:

(a)	In the case of a Saving, the lesser of:

(i)	In the case the amount of the Saving (as determined by the auditors) less any costs incurred by the Buyer or the Company; and

(ii)	the amount paid by the Relevant Sellers under this Tax Covenant in respect of the Liability for Taxation which gave rise to the Saving less any part of that amount previously repaid to the Sellers under any provision of this Tax Covenant or otherwise; and

(b)	in the case of a Tax Refund, the amount of that Tax Refund.

7.2	The Sellers' Representatives may (at the Relevant Sellers' expense) on or before the Second Expiry Date instruct the auditors for the time being of the Company or any Subsidiary to certify the existence of, and amount of, a Saving or Tax Refund.

8.	RECOVERY FROM THIRD PARTIES

8.1

Where the Relevant Sellers have paid an amount in full discharge of a liability under paragraph 2 in respect of any Liability for Taxation and the Buyer or the Company is or becomes entitled to recover from some other person not being the Buyer, the Company or any other company within the Buyer's Tax Group, any amount in respect of such Liability for Taxation, the Buyer shall or shall procure that the Company shall:

(a)	notify the Sellers' Representatives of its entitlement as soon as reasonably practicable; and

(b)

if required by the Sellers' Representatives and, subject to the Buyer and the Company being indemnified by the Sellers' Representatives against any Tax that may be suffered on receipt of that amount and any reasonable costs and expenses properly incurred in recovering that amount, take or procure that the Company takes all reasonable steps to enforce that recovery against the person in question (keeping the Sellers' Representatives fully informed of the progress of any action taken).

8.2	If the Buyers or the Company recovers any amount referred to in paragraph 8.1, the Buyer shall account to the Relevant Sellers for the lesser of:

(a)

any amount recovered (including any related interest or related repayment supplement) less any Tax suffered in respect of that amount and any costs and expenses incurred in recovering that amount (except to the extent that amount has already been made good by the Relevant Sellers under paragraph 8.1(b)); and

(b)	the amount paid by the Relevant Sellers under this Tax Covenant in respect of the Liability for Taxation in question.

9.	CORPORATION TAX RETURNS

9.1

The Relevant Sellers or their duly authorised agent shall at the Company's cost and expense prepare the corporation tax returns and computations of the Company for all accounting periods ended on or before Completion, to the extent that the same have not been prepared before Completion, and submit them to the Buyer.

9.2

The Buyer shall procure that the returns and computations referred to in paragraph 9.1 shall be authorised, signed and submitted to the relevant Taxation Authority without amendment or with such amendments as the Buyer reasonably considers to be necessary and shall give the Relevant Sellers or their agent all such assistance as may reasonably be required (at the Sellers’ cost and expense) to agree those returns and computations with the relevant Taxation Authority provided that the Buyer shall not be obliged to take any such action as is mentioned in this paragraph 9.2 in relation to any return that is not full, true and accurate in all material respects.

9.3

The Relevant Sellers or their duly authorised agent shall at the Company’s cost and expense prepare all documentation and shall have conduct of all matters (including correspondence) relating to the corporation tax returns and computations of the Company for all accounting periods ended on or before Completion provided that the Relevant Sellers shall not without the prior written consent of the Buyer (not to be unreasonably withheld or delayed) transmit any communication (written or otherwise) to the relevant Taxation Authority or agree any matter with the relevant Taxation Authority.

9.4

The Buyer shall procure that the Company, at the Company’s cost and expense, afford such access to their books, accounts and records as is necessary and reasonable to enable the Relevant Sellers or their duly authorised agent to prepare the corporation tax returns and computations of the Company for all accounting periods ended on or before the Accounts Date and conduct matters relating to them in accordance with this paragraph 9.

9.5	The Relevant Sellers shall take all reasonable steps to ensure that the corporation tax returns and computations of the Company for all accounting periods ended on or before the Accounts Date are prepared and agreed with the relevant Taxation Authority as soon as possible.

9.6	For the avoidance of doubt:

(a)	where any matter relating to Tax gives rise to a Tax Claim, the provisions of paragraph 10 shall take precedence over the provisions of this paragraph 9; and

(b)	the provisions of this paragraph 9 shall not prejudice the rights of the Buyer to make a claim under this Tax Covenant in respect of any Liability for Taxation.

10.	CONDUCT OF TAX CLAIMS

10.1

Subject to paragraph 10.2, if the Buyers or the Company becomes aware of a Tax Claim, the Buyer shall give or procure that notice in writing is given to the Sellers' Representatives as soon as reasonably practicable (and in any event no later than ten Business Days before the expiry of any deadline for disputing or appealing against such Tax Claim), provided that the giving of such notice shall not be a condition precedent to the liability of the Relevant Sellers under this Tax Covenant.

10.2

If the Relevant Sellers become aware of a Tax Claim, they shall notify the Buyer in writing as soon as reasonably practicable, and, on receipt of such notice, the Buyer shall be deemed to have given the Sellers' Representatives notice of the Tax Claim in accordance with the provisions of paragraph 10.1.

10.3

Subject to paragraph 10.4, if the Relevant Sellers indemnify the Buyer and the Company to the Buyer's reasonable satisfaction against all liabilities, costs, damages or expenses which may be incurred thereby, including any additional Liability for Taxation, the Buyer shall take and procure that the Company shall take such action as the Relevant Sellers (acting by the Sellers' Representatives) may reasonably request by notice in writing given to the Buyer to avoid, dispute, defend, resist, appeal, request an internal HMRC review or compromise any Tax Claim.

10.4

Neither the Buyer or the Company shall be obliged to appeal or procure an appeal against any assessment to Tax if the Buyer, having given the Sellers' Representatives written notice of such assessment, does not receive written instructions from the Relevant Sellers (acting by the Sellers' Representatives) within ten Business Days to do so.

10.5

If:

(a)

the Relevant Sellers (acting by the Sellers' Representatives) do not request the Buyer to take any action under paragraph 10.3 or fails to indemnify the Buyer or the Company to the Buyer's reasonable satisfaction within a period of 14 days following receipt of the notice referred to in paragraph 10.1;

(b)	the Relevant Sellers (or the Company before Completion) have been involved in a case involving fraudulent conduct or deliberate default in respect of the Liability for Taxation which is the subject matter of the Dispute; or

(c)	the Dispute involves an appeal against a determination by the Tax Chamber of the First-tier Tribunal or higher tribunal, unless the Relevant Sellers have obtained the opinion of tax counsel of at least five years' standing that there is a reasonable prospect that the appeal will succeed,

the Buyer or the Company shall have the conduct of the Dispute absolutely (without prejudice to its rights under this Tax Covenant) and shall be free to pay or settle the Tax Claim on such terms as they may (acting reasonably) consider fit.

10.6

Subject to paragraph 10.8, by agreement in writing between the Buyer and the Sellers' Representatives, the conduct of a Dispute may be delegated to the Relevant Sellers on such terms as may be agreed from time to time between the Buyer and the Sellers' Representatives, provided that, unless the Buyer and the Sellers' Representatives specifically agree otherwise in writing, the following terms shall be deemed to be incorporated into any such agreement:

(a)

the Buyer shall promptly be kept fully informed of all matters pertaining to a Dispute and shall be entitled to see and keep copies of all correspondence and notes or other written records of telephone conversations or meetings and, in the event that there is no written record, shall be given an immediate report of all telephone conversations with any Taxation Authority to the extent that it relates to a Dispute;

(b)	the appointment of solicitors or other professional advisers shall be subject to the approval of the Buyer, such approval not to be unreasonably withheld or delayed;

(c)

all material written communications pertaining to the Dispute which are to be transmitted to the relevant Taxation Authority shall first be submitted to the Buyer or the Company for approval and shall only be finally transmitted if such approval is given, which approval is not to be unreasonably withheld or delayed; and

(d)

the Relevant Sellers shall make no settlement or compromise of the Dispute or agree any matter in the conduct of the Dispute which is likely to affect the amount thereof or the future liability to Tax of the Buyer or the Company without the prior approval of the Buyer or the Company (as may be appropriate), such approval not to be unreasonably withheld or delayed.

10.7

The Buyer shall provide and shall procure that the Company provides to the Relevant Sellers and the Seller's professional advisors reasonable access to premises and personnel and to any relevant assets, documents and records within their power, possession or control for the purpose of investigating the matter and enabling the Relevant Sellers or the Sellers' Representatives to take such action as is referred to in this paragraph 10.

10.8	Neither the Buyer nor the Company shall be subject to any claim by or liability to the Relevant Sellers for non-compliance with any of the provisions of this paragraph 10 if the Buyer or the Company has acted in good faith in accordance with the instructions of the Sellers' Representatives.

11. BUYER'S COVENANT IN RESPECT OF SECONDARY LIABILITIES

The Buyer covenants to pay to the Sellers, within five Business days of Demand, an amount equal to any Tax assessed on the Sellers to the extent that such Tax:

(a)	is primarily a liability of the Company or a Subsidiary and could not be recovered by the Buyer under paragraph 2;

(b)	arises as a result of the failure of the Buyer or the Company or Subsidiary to apply an amount provided for in the Accounts or an amount paid by Company to the Buyer under this deed to discharge a liability for Tax to which that amount relates; or

(c)	relates to any liability for Tax which arises in respect of any period after Completion; and

together with any costs and expenses reasonably and properly incurred by the Sellers in investigating, assessing or contesting any such liability or increased liability for Tax.

SCHEDULE 9

Working Capital Adjustment

PART 1

BASIS OF PREPARATION AND REVIEW

The Completion Net Working Capital Statement will be prepared in the format set out in the proforma statement of net working capital attached as Part 3 of this Schedule and will include all elements of the Actual Net Working Capital definition and of any Cash Excess or any Cash Shortfall and of any amounts for which a Claim can be made or is otherwise payable pursuant to Clause 4.4.2.

2.	The Completion Net Working Capital Statement will be prepared on the basis that it relates to each of the Company and the Subsidiary as a going concern and exclude any effects of the change of control or ownership of any of them contemplated by this Agreement.

3.	In determining:

i)	"Cash" for the purpose of the Completion Net Working Capital Statement there shall be deemed to be included all Cash that would be credited to the account of the Company upon exercise of all Options.

ii)	Any provision for debtors, such provision shall be a specific provision.

PART 2

MANNER OF REVIEW

1.	The Buyer will, as soon as reasonably practicable after the Completion Date, review the Completion Net Working Capital Statement on the basis of preparation set out in Part 1 of this Schedule.

The Buyer and the Buyer’s Accountants on the one hand, and the Seller and the Sellers’ Accountants on the other, will be entitled to review the books, records and papers of the other of them as they relate to each member of the Company and the Subsidiary and which are relevant for the purposes of preparing or, as the case may be, evaluating the Completion Net Working Capital Statement. The Buyer will, and will procure that each of the Company, the Subsidiary and the Buyer’s Accountants (if appropriate), on the one hand, and the Seller will, and will procure that the Sellers’ Accountants (if appropriate), on the other hand will, provide to the other of them all reasonable assistance to prepare or, as the case may be evaluate, the Completion Net Working Capital Statement, including the provision of access to all working papers and relevant personnel of each of their respective entities referred to in this paragraph 2.

In the event the Buyer disagrees with any of the Completion Net Working Capital Statement, the Buyer shall procure that a draft statement of the Net Working Capital Adjustment is delivered to the Sellers' Representatives within 60 days after the Completion Date reflecting the disputed amounts (“ Post-Completion Net Working Capital Statement ”).

The Sellers’ Representatives will notify the Buyer within 20 days after receipt of the draft Post-Completion Net Working Capital Statement whether the Sellers agree with the draft Post-Completion Net Working Capital Statement. If the Sellers do not so agree, such notification by the Sellers' Representatives must give reasonable details of any disagreement (including the basis for such disagreement) and the adjustments (including the quantification of the item) which, in the opinion of the Sellers, should be made (the “ Disputed Details ”). Any matter or item in relation to the draft Post-Completion Net Working Capital Statement not included by the Sellers within the Disputed Details will be deemed to be agreed by the Sellers for the purposes of the final determination of the Post-Completion Net Working Capital Statement in accordance with this Schedule.

If:

(A)	the Buyer does not procure delivery to the Sellers' Representatives of a draft Post-Completion Net Working Capital Statement then the Completion Net Working Capital Statement shall constitute the Post-Completion Net Working Capital Statement for the purposes of this Agreement;

(B)	the Sellers' Representatives does not notify the Buyer of any Disputed Details within the 20 day period, the draft Post-Completion Net Working Capital Statement will constitute the Post-Completion Net Working Capital Statement for the purposes of this Agreement; or

(C)

the Buyer does not notify the Sellers' Representatives that it disagrees with the Disputed Details within five days of receipt, the draft Post-Completion Net Working Capital Statement, as amended by the Disputed Details, will constitute the Post-Completion Net Working Capital Statement for the purposes of this Agreement.

In the case of disagreement, the Sellers' Representatives and the Buyer will meet and discuss the Disputed Details in order to seek to reach agreement upon such adjustments (if any) to the draft Post-Completion Net Working Capital Statement as are acceptable to the Buyer and the Sellers' Representatives in order to put such draft document in final form.

If the Buyer and the Sellers' Representatives are unable to resolve all matters in dispute within ten days after the notification by the Sellers' Representatives in accordance with paragraph 4 above of the Disputed Details, the unresolved Disputed Details (but no other matters) will be referred on the application of either the Sellers' Representatives or the Buyer to an independent firm of internationally recognised chartered accountants to be nominated (in default of nomination by agreement between the Buyer and the Sellers' Representatives within a further two days) by the President for the time being of the Institute of Chartered Accountants in England and Wales for resolution. Such firm will be appointed by the Company on such expert’s standard terms. In giving its decision, the firm so appointed will state what adjustments (if any) are necessary to the draft Post-Completion Net Working Capital Statement in order for them to have been prepared in accordance with this Agreement. Such draft Post-Completion Net Working Capital Statement will, subject to and following any such adjustments, constitute the Post-Completion Net Working Capital Statement for the purposes of this Agreement.

8.	If there is a referral to an independent firm of accountants, the following provisions will apply:

(A)	the Sellers’ Representatives and/or the Buyer shall be entitled to make submissions in writing to the independent accountants, together with any relevant documents required by the appointed firm for the purposes of making its decision in accordance with this Schedule;

(B)

except to the extent that the Buyer and the Sellers' Representatives agree otherwise or as otherwise set out in this Part 2, the independent accountants will determine their own procedure and will determine only whether any of the adjustments proposed by the Sellers' Representatives in the Disputed Details and which remain in dispute are correct in whole or in part, and, if applicable, what alterations should be made to the draft Post-Completion Net Working Capital Statement in order to correct the relevant inaccuracies in them;

(C)	the Sellers' Representatives and the Buyer will use all reasonable endeavours to procure that the independent accountants are given all such assistance and access to documents and other information as they may reasonably require in order to make their decision;

(D)	the independent accountants will be requested to give their decision on matters arising out of the Disputed Details, with reasons therefor, as soon as reasonably practicable having allowed the Buyer or the Sellers' Representatives to make their submissions; and

(E)	save in the case of fraud or manifest error, the decision by the independent accountants will be final and binding on all concerned and will be given by the independent accountants acting as an expert and not as an arbitrator.

8.	The costs of the independent accountants (including their expenses and the costs of any advisers to the independent accountants) will be borne by the Sellers and the Buyer in such proportions as the independent accountants may determine by reference to the outcome of the determination.

PART 3

PRO FORMA NET WORKING CAPITAL STATEMENT

Schedule 10

Part 1

Registered IP

Exhibit 10.14

STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE MODIFIED NET

1. Basic Provisions (“Basic Provision”).

1.1 Parties: This Lease (“ Lease” ), dated, May 9, 2011, is made by and between DeGuigne Ventures, LLC( “Landlord” ) and eGain Communications corporation ( “Tenant” ), (collectively the “ Parties ,” or individually a “ Party ”).

1.2(a) Premises: A portion of that certain building containing approximately 20,640 square feet, including all improvements therein or to be provided by Landlord under the terms of this Lease, commonly known by the street address of 1250 Borregas Ave, located in the City of Sunnyvale, County of Santa Clara, State of California , with zip code 94089 as outlined on Exhibit A attached hereto (“ Premises ”). The “ Building ” is that certain building containing the Premises and generally described as (describe briefly the nature of the Building): a multi-tenant R&D building.

In addition to Tenant’s rights to use and occupy the Premises as hereinafter specified, Tenant shall have non-exclusive rights to the Common Areas (as defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any rights to the roof, exterior walls or utility raceways of the Building or to any other buildings in the Industrial Center. The Premises, the Building, the Common Areas, the land upon which they are located, along with all other buildings and improvements thereon, are herein collectively referred to as the “ Industrial Center .” (Also see Paragraph 2.)

1.2(b) Parking: 80 unreserved vehicle parking spaces (“ Unreserved Parking Spaces ”); and no reserved vehicle parking spaces (“ Reserved Parking Spaces ”). (Also, see Paragraph 2.6)

1.3 Term : Five (5) years (“ Original Term ”) commencing the later of: (i) July 1, 2011, or (ii) upon the completion of the Tenant Improvements) (“ Commencement Date ”) and ending five years thereafter (“ Expiration Date ”). (Also Paragraph 3.)

1.4 Early Possession : Upon completion of the Tenant Improvements. (“ Early Possession Date ”). (Also Paragraphs 3.2 and 3.3.)

1.5 Base rent : $26,832.00 per month (“ Base Rent ”), payable on the first day of each month commencing on the third (3 ^rd ) full month of the Original Term. (Also see Paragraph 4. ) Base Rent to be adjusted as follows:

Months 13-24	$27,864.00	per month
Months 25-36	$ 28,896.00	per month
Months 37-48	$ 29,928.00	per month
Months 49-60	$ 30,960.00	per month

1.6(a) Base Rent Paid Upon Execution : $26,832.00 as Base Rent for the third (3 ^rd ) full month of the Original Term, and the estimated of Tenant’s Share of Common Area Operating Expenses (including the management fee) in the amount of $5,794.00 per month commencing on the Commencement Date.

1.6(b) Tenant’s Share of Common Area Operating Expenses: 48.52 % (“ Tenant’s Share ”) as determined by prorata square footage of the Premises as compared to the total square footage of the Building.

1.7 Security Deposit : $30,960.00 (“ Security Deposit ”). (Also see Paragraph 5)

1.8 Permitted Use : General office and legal related uses. (“ Permitted Use ”) (Also see Paragraph 5.)

1.9 Insuring Party . Landlord is the “ Insuring Party .” (Also see Paragraph 8)

1.10(a) Real Estate Brokers . The following real estate broker(s) (collectively, the “ Brokers ”) and brokerage relationships exist in this transaction and are consented to by the Parties (check applicable boxes):

0 represents Landlord exclusively (“ Landlord’s Broker ”);

0 represents Tenant exclusively (“ Tenant’s Broker ”); or

S BT Commercial represents both Landlord and Tenant (“ Dual Agency ”). (Also see Par. 15.)

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1.10(b) Payment to Brokers . Upon the execution of this Lease by both Parties, Landlord shall pay to said Broker(s)according to separate written agreement between Landlord and said Broker(s).

1.11 Guarantor . The obligations of the Tenant under this Lease are to be guaranteed by NONE (“ Guarantor ”). (Also see Paragraph 37.)

1.12 Addenda and Exhibits . Attached hereto is Exhibit A, all of which constitute a part of this Lease.

2. Premises, Parking and Common Areas.

2.1 Letting . Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set forth in this Lease. The leaseable area is measured to the outside edge of the outside walls and drip lines to the centerline of any demising walls, including a pro rata share of the electrical room and other common spaces. Unless otherwise provided herein, any statement of square footage set forth in this Lease, or that may have been used in calculating rental and/or Common Area Operating Expenses, is an approximation which Landlord and Tenant agree is reasonable and the rental and Tenant’s Share (as defined in Paragraph 1.6(b) based thereon is not subject to revision whether or not the actual square footage is more or less.

2.2 Condition . Landlord shall deliver the Premises to Tenant clean and free of debris on the Commencement Date and warrants to Tenant that the roof, roof membrane, existing plumbing, electrical systems, fire sprinkler system, lighting, air conditioning and heating systems and loading doors, if any, in the Premises, other than those constructed by Tenant, shall be in good operating condition on the Commencement Date. If a non-compliance with said warranty exists as of the Commencement Date, Landlord shall, except as otherwise provided in this Lease, promptly after receipt of written notice from Tenant setting forth with specificity the nature and extent of such non-compliance, rectify same at Landlord’s expense without the inclusion of such expense in Common Area Operating Expenses (as defined below). If Tenant does not give Landlord written notice of a non-compliance with this warranty within ninety (90) days after the Commencement Date (except for roof, roof membrane and HVAC, such period shall be six (6) months), correction of that non-compliance shall be as set forth in Paragraph 7 below.

2.3 Warranties . Tenant acknowledges that neither landlord nor any of its agents made any representations or warranties respecting the project, the buildings, or the Premises, upon which tenant relied in entering into this lease, which are not expressly set forth in this lease. Tenant further acknowledges that neither Landlord nor any of its agents made any representations as to (i) whether the Premises may be used for tenant’s intended use under existing law or; (ii) the suitability of the Premises for the conduct of tenant’s business or; (iii) the exact square footage of the Premises; that tenant relied solely upon its own investigations respecting said premises (including but not limited to the electrical and fire sprinkler systems, security, environmental aspects, seismic and earthquake requirements, and compliance with the American with Disabilities Act and applicable zoning, municipal, county, state and federal laws, ordinances and regulations and any covenants or restrictions of record (collectively, “ Applicable Laws ”) and that upon its execution of this lease, accepts the leaseable area as specified herein. Tenant expressly waives any and all claims for damage by reason of any statement, representation, warranty, promise or other agreement of landlord or landlord’s agent(s), if any, not contained in this lease or in any addenda hereto.

2.4 [Intentionally omitted.]

2.5 Vehicle Parking . Tenant shall be entitled to use the number of Unreserved Parking Spaces and Reserved Parking Spaces specified in Paragraph 1.2(b) on those portions of the Common Areas designated from time to time by Landlord for parking. Tenant shall not use more parking spaces than said number. Said parking spaces shall be used for parking by vehicles no larger than full-size passenger automobiles or pick-up trucks, herein called “ Permitted Size Vehicles .” Vehicles other than Permitted Size Vehicles shall be parked and loaded or unloaded as reasonably directed by Landlord in the Rules and Regulations (as defined in Paragraph 40) issued by Landlord. (Also see Paragraph 2.9.)

(a) Tenant shall not permit or allow any vehicles that belong to or are controlled by Tenant or Tenant’s employees, suppliers, shippers, customers, contractors or invitees to be loaded, unloaded, or parked in areas other than those reasonably designated by Landlord for such activities.

(b) If Tenant permits or allows any of the prohibited activities described in this Paragraph 2.6, then Landlord shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove or tow away the vehicle involved and charge the cost to Tenant, which cost shall be immediately payable upon demand by Landlord.

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2.6 Common Areas—Definition . The term “ Common Areas ” is defined as all areas and facilities outside the Premises and within the exterior boundary line of the Industrial Center and Interior utility raceways within the Premises that are provided and designated by the Landlord from time to time for the general non-exclusive use of Landlord, Tenant and other tenants of the Industrial Center and their respective employees, suppliers, shippers, customers, contractors and invitees, including parking areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways, parkways, driveways and landscaped areas.

2.7 Common Areas—Tenant’s Rights . Landlord hereby grants to Tenant, for the benefit of Tenant and its employees, suppliers, shippers, contractors, customers and invitees, during the term of this Lease, the non-exclusive right to use, in common with others entitled to such use, the Common Areas as they exist from time to time, subject to any rights, powers, and privileges reserved by Landlord under the terms hereof or under the terms of any rules and regulations or restrictions governing the use of the Industrial Center. Under no circumstances shall the right herein granted to use the Common Areas be deemed to include the right to store any property, temporarily or permanently, in the Common Areas. Any such storage shall be permitted only by the prior written consent of Landlord or Landlord’s designated agent, which consent may be revoked at any time. In the event that any unauthorized storage shall occur then Landlord shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove the property and charge the cost to Tenant, which cost shall be immediately payable upon demand by Landlord.

2.8 Common Areas—Rules and Regulations . Landlord or such other person(s) as Landlord may appoint shall have the exclusive control and management of the Common Areas and shall have the right, from time to time, to reasonably establish, modify, amend and enforce reasonable Rules and Regulations with respect thereto in accordance with Paragraph 40. Tenant agrees to abide by and conform to all such Rules and Regulations and to cause its employees, suppliers, shippers, customers, contractors and invitees to so abide and conform. Landlord shall not be responsible to Tenant for the non-compliance with said rules and regulations by other tenants of the Industrial Center.

2.9 Common Areas—Changes . Provided that the foregoing rights do not materially increase Tenant’s obligations, diminish Tenant’s rights or interfere with Tenant’s use of or access to the Premises, Landlord shall have the right, in Landlord’s sole discretion, from time to time:

(a) To make changes to the Common Areas, including, without limitation, changes in the location, size, shape and number of driveways, entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress, direction of traffic, landscaped areas, walkways and utility raceways;

(b) To close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Premises remains available;

(d) To add additional buildings and improvements to the Common Areas;

(e) To use the Common Areas while engaged in making additional improvements, repairs or alterations to the Industrial Center, or any portion thereof; and

(f) To do and perform such other acts and make such other changes in, to or with respect to the Common Areas and Industrial Center as Landlord may, in the exercise of sound business judgment, deem to be appropriate.

3. Term.

3.1 Term. The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3.

3.2 Early Possession. If an Early Possession Date is specified in Paragraph 1.4 and if Tenant totally or partially occupies the Premises after the Early Possession Date but prior to the Commencement Date, the obligation to pay Base Rent shall be abated for the period of such early occupancy. All other terms of this Lease, however, (including but not limited to the obligations to pay Tenant’s Share of Common Area Operating Expenses and to carry the insurance required by Paragraph 8) shall be in effect during such period. Any such early possession shall not affect nor advance the Expiration Date of the Original Term.

3.3 Delay in Possession. If for any reason Landlord cannot deliver possession of the Premises to Tenant by the Early Possession Date, if one is specified in Paragraph 1.4, or if no Early Possession Date is specified, by the Commencement Date, Landlord shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease, or the obligations of

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Tenant hereunder, or extend the term hereof, but in such case, Tenant shall not, except as otherwise provided herein, be obligated to pay rent or perform any other obligation of Tenant under the terms of this Lease until the later of (i) Landlord delivers possession of the Premises to Tenant or (2) the Commencement Date. If possession of the Premises is not delivered to Tenant within sixty (60) days after the Early Possession Date, Tenant may, at its option, by notice in writing to Landlord within ten (10) days after the end of sixty (60) day period, cancel this Lease, in which event the parties shall be discharged from all obligations hereunder; provided further, however, that if such written notice of Tenant is not received by Landlord within said ten (10) day period, Tenant’s right to cancel this Lease hereunder shall terminate and be of no further force or effect.

3.4 Early Access . Tenant shall have the right to access the Premises anytime following the full execution of this Lease for the sole purpose of installing Tenant’s furniture, fixtures, equipment and cabling and otherwise to prepare the Premises for Tenant’s occupancy. Such early access shall not be deemed occupancy or possession of the Premises. Tenant’s early access to the Premises shall not interfere with the tenant improvement work set forth in Paragraph 49 below.

4. Rent

4.1 Base Rent. Commencing on the third (3 ^rd ) full month of the Term, Tenant shall pay Base Rent and other rent or charges, as the same may be adjusted from time to time, to Landlord in lawful money of the United States, without offset or deduction, on or before the 1 ^st day of each month. Base Rent and all other rent and charges for any period during the term hereof which is for less than one full month shall be prorated based upon the actual number of days of the month involved. Payment of Base Rent and other charges shall be made to Landlord at its address stated herein or to such other persons or at such other addresses as Landlord may from time to time designate in writing to Tenant.

4.2 Common Area Operating Expenses. Tenant shall pay to Landlord during the term hereof, in addition to the Base Rent, Tenant’s Share (as specified in Paragraph 1.6(b)) of all Common Area Operating Expenses, as hereinafter defined, during each calendar year of the term of this Lease, in accordance with the following provisions:

(a) “ Common Area Operating Expenses ” are defined, for purposes of this Lease, as all costs incurred by Landlord relating to the ownership and operation of the Industrial Center, including, but not limited to, the following:

(i) The operation, repair and maintenance, in neat, clean, good order and condition, of the following:

(aa) The Common Areas, including parking areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways, parkways, driveways, landscaped areas, striping, bumpers, irrigation systems, Common Area lighting facilities, fences and gates, elevators and roof.

(bb) [Intentionally omitted.]

(cc) Fire detection and sprinkler systems.

(ii) The cost of water, gas, electricity and telephone to service the Common Areas.

(iii) Trash disposal, property management fees of 4% of the gross monthly rental and security services.

(iv) [Intentionally omitted.]

(v) Real Property Taxes (as defined in Paragraph 10.2) to be paid by Landlord for the Building and the Common Areas under Paragraph 10 hereof.

(vi) The cost of the premiums for the insurance policies maintained by Landlord under Paragraph 8 hereof.

(vii) Any deductible portion of an insured loss concerning the building or the Common Areas. provided, however, Tenant’s Share of such deductible portion shall not exceed $30,000 per casualty event.

(vii) [Intentionally omitted.]

(viii) Any other services to be provided by Landlord that are stated elsewhere in this Lease to be a Common Area Operating Expense.

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(b) Any Common Area Operating Expenses and Real Property Taxes that are specifically attributable to the Building or to any other building in the industrial Center or to the operation, repair and maintenance thereof, shall be reasonably allocated entirely to the Building or to such other building. However, any Common Area Operating Expenses and Real Property Taxes that are not specifically attributable to the Building or to any other building or to the operation, repair and maintenance thereof, shall be equitably and reasonably allocated by Landlord to all buildings in the Industrial Center. In addition, if any tenants of the Building or Industrial Center are using a disproportionate amount of utilities, trash disposal or other services which costs are including in Common Area Operating Expenses, Landlord shall equitably and reasonable adjust the amount Tenant shall be responsible for such cost in an equitable manner such that Tenant is not paying more that its proportionate share based upon the use of such utilities, trash disposal or other services.

(c) The inclusion of the improvements, facilities and services set forth in subparagraph 4.2(a) shall not be deemed to impose an obligation upon Landlord to either have said improvements or facilities or to provide those services unless the Industrial Center already has the same, Landlord already provides the services, or Landlord has agreed elsewhere in this Lease to provide the same or some of them.

(d) Tenant’s Share of Common Area Operating Expenses shall be payable by Tenant within thirty (30) days after a reasonably detailed statement of actual expenses is presented to Tenant by Landlord. At Landlord’s option, however, an amount may be estimated by Landlord from time to time of Tenant’s Share of annual Common Area Operating Expenses and the same shall be payable monthly or quarterly, as Landlord shall designate, during each 12-month period of the Lease term, on the same day as the Base Rent is due hereunder. Landlord shall deliver to Tenant within sixty (60) days after the expiration of each calendar year a reasonably detailed statement showing Tenant’s Share of the actual Common Area Operating Expenses incurred during the preceding year. If Tenant’s payments under this Paragraph 4.2(d) during said preceding year exceed Tenant’s Share as indicated on said statement, Landlord shall be credited the amount of such over-payment against Tenant’s Share of Common Area Operating Expenses next becoming due (or if no further Common Area Operating Expenses shall become due, then Landlord shall pay such amount to Tenant concurrently with such statement. The foregoing sentence shall survive the expiration or earlier termination of this Lease. If Tenant’s payments under this Paragraph 4.2(d) during said preceding year were less than Tenant’s Share as indicated on said statement, Tenant shall pay to Landlord the amount of the deficiency within thirty (30) days after delivery by Landlord to Tenant of said statement.

(e) Notwithstanding anything to the contrary, Common Area Operating Expenses shall not include any of the following: (i) rent paid to any ground lessor, (ii) the cost of constructing tenant improvements or signage for any other tenant of the Industrial Center; (iii) the cost of special services, goods, or materials provided to any other tenant of the Industrial Center; (iv) repairs covered by proceeds of insurance or from funds provided by Tenant or any other tenant of the Industrial Center (or where any other tenant of the Industrial Center is obligated to make such repairs or pay the cost of same); (v) legal fees, advertising costs, or other related expenses incurred by Landlord in connection with the leasing of space to individual tenants of the Industrial Center; (vi) repairs, alterations, additions, improvements, or replacements needed to rectify or correct any defects in the original design, materials, or workmanship of Industrial Center or common areas; (vii) self insurance retentions; (viii) any reserved; (ix) damage and repairs necessitated by the negligence or willful misconduct of Landlord, Landlord’s employees, contractors, or agents; (x) executive salaries or salaries of service personnel to the extent that such personnel perform services not in connection with the management, operation, repair, or maintenance of the Industrial Center; (xi) Landlord’s general overhead expenses not related to the Industrial Center above the management fee; (xii) legal fees, accountants’ fees, and other expenses incurred in connection with disputes of tenants or other occupants of the Industrial Center or associated with the enforcement of the terms of any leases with tenants or the defense of Landlord’s title to or interest in the Industrial Center or any part thereof; (xiii) costs incurred due to a violation by Landlord or any other tenant of the Industrial Center of the terms and conditions of a lease; (xiv) costs incurred for other building or improvements which are added to the Industrial Center after the date of the lease to rectify or correct a condition which existed prior to their addition; (xv) cost incurred as set forth in Paragraph 2 above; (xvi) costs of any service provided to Tenant or other occupants of the Industrial Center for which Landlord is reimbursed; and (xvii) costs and expenses which would be capitalized under generally accepted accounting principles (“GAAP”), except for such costs which are (a) required by Applicable Laws which were not applicable to the Industrial Center as of the Commencement Date, (b) intended to and actually reduce other Common Area Operating Expenses, and (c) like-for-like or similar replacements of existing capital improvements which are necessary to operate the Industrial Center in the same condition as of the Commencement Date, and in all cases such capital expenses shall be amortized over the useful life of the improvement as determined in accordance with GAAP.

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5. Security Deposit . Tenant shall deposit with Landlord upon Tenant’s execution hereof the Security Deposit set forth in Paragraph 1.7 as security for Tenant’s faithful performance of Tenant’s obligations under this Lease. If Tenant fails to pay Base Rent or other rent or charges due hereunder, or otherwise Defaults under this Lease (as defined in Paragraph 13.1), Landlord may use, apply or retain all or any portion of said Security Deposit, Tenant shall within ten (10) days after written request therefore deposit monies with Landlord sufficient to restore said Security Deposit to the full amount required by this Lease. Landlord shall not be required to keep all or any part of the Security Deposit separate from its general accounts. Landlord shall, at the expiration or earlier termination of the term hereof and after Tenant has vacated the Premises, return to Tenant (or, at Landlord’s option, to the last assignee, if any, of Tenant’s interest herein), that portion of the Security Deposit not used or applied by Landlord. Unless otherwise expressly agreed in writing by Landlord, no part of the Security Deposit shall be considered to be held in trust, to bear interest or other increment for its use, or to be prepayment for any monies to be paid by Tenant under this Lease.

6. Use.

6.1 Permitted Use.

(a) Tenant shall use and occupy the Premises only for the Permitted Use set forth in Paragraph 1.8, or any other legal use which is reasonably comparable thereto, and for no other purpose. Tenant shall not use or permit the use of the Premises in a manner that is unlawful, creates waste or a nuisance, or that disturbs owners and/or occupants of, or causes damage to the Premises or neighboring premises or properties.

(b) Landlord hereby agrees to not unreasonably withhold or delay its consent to any written request by Tenant, Tenant’s assignees or subtenants, and by prospective assignees and subtenants of Tenant, its assignees and subtenants, for a modification of said Permitted Use, so long as the same will not impair the structural integrity of the improvements on the Premises or in the Building or the mechanical or electrical systems therein, does not conflict with uses by other Tenants, is not significantly more burdensome to the Premises or the Building and the improvements thereon, and is otherwise permissible pursuant to this Paragraph 6. If Landlord elects to withhold such consent, Landlord shall within five (5) business days after such request give a written notification of same, which notice shall include an explanation of Landlord’s reasonable objections to the change in use.

6.2 Hazardous Substances.

(a) Reportable Uses Require Consent. The term “Hazardous Substance” as used in this Lease shall mean any product, substance, chemical, material or waste whose presence, nature, quantity and/or intensity of existence, use, manufacture, disposal, transportation, spill, release or effect, either by itself or in combination with other materials expected to be on the Premises, is either: (i) potentially injurious to the public health, safety or welfare, the environment, or the Premises; (ii) regulated or monitored by any governmental authority; or (iii) a basis for potential liability of Landlord to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substance shall include, but not be limited to, hydrocarbons, petroleum, gasoline, crude oil or any products or by-products thereof. Tenant shall not engage in any activity in or about the Premises which constitutes a Reportable Use (as hereinafter defined) of Hazardous Substances without the express prior written consent of Landlord and compliance in a timely manner (at Tenant’s sole cost and expense) with all Applicable Requirements (as defined in Paragraph 6.3). “ Reportable Use ” shall mean (i) the installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority, and (iii) the presence in, on or about the Premises of a Hazardous Substance with respect to which any Applicable Laws require that a notice be given to persons entering or occupying the Premises or neighboring properties. Notwithstanding the foregoing, Tenant may, without Landlord’s prior consent, but in compliance with all Applicable requirements, use any ordinary and customary materials reasonably required to be used by Tenant in the normal course of the Permitted Use, so long as such use is not a Reportable Use and does not expose the Premises or neighboring properties to any meaningful risk of contamination or damage or expose Landlord to any liability therefor. In addition, Landlord may (but without any obligation to do so) condition its consent to any Reportable Use of any Hazardous Substance by Tenant upon Tenant’s giving Landlord such additional assurances as Landlord, in its reasonable discretion, deems necessary to protect itself, the public, the Premises and the environment against damage, contamination or injury and/or liability therefor, including but not limited to the installation (and, at Landlord’s option, removal on or before Lease expiration or earlier termination) of reasonably necessary protective modifications to the Premises (such as concrete encasements) and/or the deposit of an additional Security Deposit under Paragraph 5 hereof.

(b) Duty to Inform Landlord . If Tenant knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Premises or the Building, other than as previously consented to by Landlord, Tenant shall immediately give Landlord written notice thereof, together with a copy of any statement, report, notice, registration, application,

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permit, business plan, license, claim, action, or proceeding given to, or received from, any governmental authority or private party concerning the presence, spill, release, discharge of, or exposure to, such Hazardous Substance including but not limited to all such documents as may be involved in any Reportable Use involving the Premises. Tenant shall not cause any Hazardous Substance to be spilled or released in, on, under or about the Premises (including, without limitation, through the prompting or sanitary sewer system).

(c) Indemnification . Tenant shall indemnify, protect, defend and hold Landlord, its agents, employees, lenders and ground lessor, if any, and the Premises, harmless from and against any and all damages, liabilities, judgments, costs, claims, liens, expenses, penalties, loss of permits and attorneys’ and consultants’ fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Tenant or by anyone under Tenant’s control. Tenant’s obligations under this paragraph 6.2(c) shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Tenant, and the cost of investigation (including consultants’ and attorneys’ fees and testing), removal, remediation, restoration and/or abatement thereof, or of any contamination therein involved, and shall survive the expiration or earlier termination of this Lease. No termination, cancellation or release agreement entered into by Landlord and Tenant shall release Tenant from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Landlord in writing at the time of such agreement.

6.3 Tenant’s Compliance with Requirements. Tenant shall, at Tenant’s sole cost and expense, fully, diligently and in a timely manner, comply with all “ Applicable Requirements ,” which term is used in this Lease to mean all laws, rules, regulations, ordinances, directives, covenants, easements and restrictions of record, permits, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Landlord’s engineers and/or consultants, relating to Tenant’s use of Hazardous Substances (including but not limited to matters pertaining to (i) industrial hygiene, (ii) environmental conditions on, in, under or about the Premises, including soil and ground water conditions, and (iii) the use, generation, manufacture, production, installation, maintenance, removal, transportation, storage, spill, or release of any Hazardous Substance), now in effect or which may hereafter come into effect. Tenant shall, within five (5) days after receipt of Landlord’s written request, provide Landlord with copies of all documents and information, including but not limited to permits, registrations, manifests, applications, reports and certificates, evidencing Tenant’s compliance with any applicable Requirements specified by Landlord, and shall immediately upon receipt, notify Landlord in writing (with copies of any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or involving failure by Tenant or the Premises to comply with any Applicable Requirements.

6.4 Inspection; Compliance with Law . Landlord, Landlord’s agents, employees, contractors and designated representatives, and the holders of any mortgages, deeds of trust or ground leases on the Premises (“ Lenders ”) shall have the right to enter the Premises at any time in the case of an emergency, and otherwise at reasonable times, for the purpose of inspecting the condition of the Premises and for verifying compliance by Tenant with this Lease and all Applicable Requirements (as defined in Paragraph 6.3), and Landlord shall be entitled to employ experts and/or consultants in connection therewith to advise Landlord with respect to Tenant’s activities, including but not limited to Tenant’s installation, operation, use, monitoring, maintenance, or removal of any Hazardous Substance on or from the Premises. The costs and expenses of any such inspections shall be paid by the party requesting same, unless a Breach of this Paragraph 6 by Tenant or a violation of Applicable Requirements relating to Hazardous Substances used by Tenant or a contamination, caused or materially contributed to by Tenant, is found to exist or to be imminent, or unless the inspection is requested or ordered by a governmental authority as the result of any such existing or imminent violation or contamination. In such case, Tenant shall upon request reimburse Landlord or Landlord’s Lender, as the case may be, for the costs and expenses of such inspections.

6.5 Landlord’s Indemnification . Landlord and its successors and assigns shall indemnify, defend, reimburse and hold Tenant, its employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation, which suffered as a direct result of Hazardous Substances on the Premises prior to Tenant taking possession or which are caused by the negligence or willful misconduct of Landlord, its agents or employees. Landlord’s obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease.

7. Maintenance, Repairs, Utility Installations, Trade Fixtures and Alterations .

7.1 Tenant’s Obligations .

(a) Subject to the provision of Paragraphs 2.2 (Condition), 7.2 (Landlord’s Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Tenant shall, at Tenant’s sole cost and expense and at all times, keep the Premises and every part thereof in good order, condition and repair (whether or not such portion of the Premises requiring repair, or the means of repairing the same, are reasonably or readily accessible to Tenant, and whether or not the need for such repairs occurs as a result of Tenant’s use, any prior use, the elements or the age of such portion of the Premises), including, without limiting the generality of the foregoing, all equipment or facilities specifically serving the Premises, such as plumbing, heating, air conditioning, ventilating, electrical, lighting facilities,

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boilers, fired or unfired pressure vessels, fire hose connections if within the Premises, fixtures, interior walls, interior surfaces of exterior walls, ceilings (including its components such as tiles, t-bar grid), floors, floor coverings, windows, doors, plate glass, and skylights, but excluding any items which are the responsibility of Landlord pursuant to Paragraph 7.2 below. Tenant, in keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices. Tenant’s obligations shall not include restorations, replacements or renewals unless due to Tenant’s failure to perform good maintenance practices.

(b) Tenant shall, at Tenant’s sole cost and expense, procure and maintain a contract, with copies to Landlord, in customary form and substance for and with a contractor specializing and experienced in the inspection, maintenance and service of the heating, air conditioning and ventilation system for the Premises. However, Landlord reserves the right, upon notice to Tenant, to procure and maintain the contract for the heating, air conditioning and ventilating systems, and if Landlord so elects, Tenant shall reimburse Landlord, upon demand, for the cost thereof.

(c) If Tenant fails to perform Tenant’s obligations under this Paragraph 7.1, Landlord may enter upon the Premises after ten (10) days’ prior written notice to Tenant (except in the case of an emergency, in which case no notice shall be required), perform such obligations on Tenant’s behalf, and put the Premises in good order, condition and repair, in accordance with Paragraph 13.2 below.

7.2 Landlord’s Obligations . Subject to the provisions of Paragraphs 2.2 (Condition), 4.2 (Common Area Operating Expenses ), 7 (Use), 7.1 (Tenant’s Obligations), 9 (Damage or Destruction) and 14 (Condemnation), Landlord, subject to reimbursement pursuant to Paragraph 4.2, shall keep in good order, condition and repair the foundations, exterior walls, structural condition of interior bearing walls, exterior roof, roof membrane, fire sprinkler and/or standpipe and hose (if located in the Common Areas) or other automatic fire extinguishing system including fire alarm and/or smoke detection systems and equipment, fire hydrants, parking lots, walkways, parkways, driveways, landscaping, fences, signs, Utility Installations (as defined below) and utility systems serving the Common Areas and all parts thereof, and any capital repairs to the Premises or Utility Installations as well as providing the services for which there is a Common Area Operating Expense pursuant to Paragraph 4.2. Landlord shall not be obligated to paint the exterior or interior surfaces of exterior walls nor shall Landlord be obligated to maintain, repair or replace windows, doors or plate glass of the Premises. Tenant expressly waives the benefit of any statute now or hereafter in effect which would otherwise afford Tenant the right to make repairs at Landlord’s expense or terminate this Lease because of Landlord’s failure to keep the Building, Industrial Center or Common Areas in good order, condition and repair.

7.3 Utility Installations, Trade Fixtures, Alterations.

(a) Definitions; Consent Required . The term “ Utility Installations ” is used in this Lease to refer to all air lines, power panels, electrical distribution, security, fire protections systems, communications systems, lighting fixtures, heating, ventilating and air conditioning equipment, plumbing, and fencing in, on or about the Premises. The term “ Trade Fixtures ” shall mean Tenant’s machinery and equipment which can be removed without doing material damage to the Premises. The term “ Alterations ” shall mean any modification of the improvements on the Premises which are provided by Landlord under the terms of this Lease, other than Utility Installations or Trade Fixtures. “ Tenant-Owned Alterations and/or Utility Installations ” are defined as Alterations and/or Utility Installations made by Tenant that are not yet owned by Landlord pursuant to Paragraph 7.4(a). Tenant shall not make nor cause to be made any Alterations or Utility Installations in, on, under or about the Premises without Landlord’s prior written consent. Tenant may, however, make non-structural Utility Installations to the interior of the Premises (excluding the roof) without Landlord’s consent but upon notice to Landlord, so long as they are not visible from the outside of the Premises, do not involve puncturing, relocating or removing the roof or any existing walls, or changing or interfering with the fire sprinkler or fire detection systems and the cumulative cost thereof does not exceed $ 50,000.00.

(b) Consent . Any Alterations or Utility Installations that Tenant shall desire to make and which require the consent of the Landlord shall be presented to Landlord in written form with detailed plans. All consents given by Landlord, whether by virtue of Paragraph 7.3(a) or by subsequent specific consent, shall be deemed conditioned upon: (i) Tenant’s acquiring all applicable permits required by governmental authorities; (ii) the furnishing of copies of such permits together with a copy of the plans and specifications for the Alteration or Utility Installation to Landlord prior to commencement of the work thereon; and (iii) the compliance by Tenant with all conditions of said permits in a prompt and expeditious manner. Any Alterations of Utility Installations by Tenant during the term of this Lease shall be done in a good and workmanlike manner, with good and sufficient materials, and be in compliance with all Applicable Requirements. Tenant shall promptly upon completion thereof furnish Landlord with as-built plans and specifications therefor. Landlord may (but without obligation to do so) condition its consent to any requested Alteration or Utility Installation that costs $50,000.00 or more upon Tenant’s providing Landlord with a lien and completion bond in an amount equal to one and one-half times the estimated cost of such Alteration or Utility Installation.

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(c) Lien Protection . Tenant shall pay when due all claims for labor or materials furnished or alleged to have been furnished to or for Tenant at or for use on the Premises, which claims are or may be secured by any mechanic’s or materialmen’s lien against the Premises or any interest therein. Tenant shall give Landlord not less than ten (10) days’ notice prior to the commencement of any work in, on, or about the Premises, and Landlord shall have the right to post notices of non-responsibility in or on the Premises as provided by law. If Tenant shall, in good faith, contest the validity of any such lien, claim or demand, then Tenant shall, at its sole expense, defend and protect itself, Landlord and the Premises against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof against the Landlord or the Premises. If Landlord shall require, Tenant shall furnish to Landlord a surety bond satisfactory to Landlord in an amount equal to one and one-half times the amount of such contested lien claim or demand, indemnifying Landlord against liability for the same, as required by law for the holding of the Premises free from the effect of such lien or claim. In addition, Landlord may require Tenant to pay Landlord’s attorneys’ fees and costs in participating in such action if Landlord shall decide it is to its best interest to do so.

7.4 Ownership, Removal, Surrender, and Restoration.

(a) Ownership . Subject to Landlord’s right to require their removal and to cause Tenant to become the owner thereof as hereinafter provided in this Paragraph 7.4, all Alterations and Utility Installations made to the Premises by Tenant shall be the property of and owned by Tenant, but considered a part of the Premises. Landlord may, at any time and at its option, elect in writing to Tenant to be the owner of all or any specified part of the Tenant-Owned Alterations and Utility Installations. Unless otherwise instructed per Subparagraph 7.4(b) hereof, all Tenant-Owned Alterations and Utility Installations shall, at the expiration or earlier termination of this Lease, become the property of Landlord and remain upon the Premises and be surrendered with the Premises by Tenant.

(b) Removal . Unless otherwise agreed in writing, Landlord may require at the time of its consent to such Tenant-Owned Alteration or Utility Installation (or if no consent was obtained, then no later than 180 days prior to the expiration of this Lease) that any or all of such Tenant-Owned Alterations or Utility Installations be removed by the expiration or earlier termination of this Lease, notwithstanding that their installation may have been consented to by Landlord. Landlord may require the removal at any time of all or any part of any Alterations or Utility Installations made without the required consent of Landlord.

(c) Surrender/Restoration . The voluntary or other surrender of this lease by Tenant, or a mutual cancellation thereof, shall not work a merger, and shall, at the option of Landlord, terminate all or any existing subleases or subtenancies, or may, at the option of Landlord, operate as an assignment to Landlord of any or all such subleases or subtenancies. Immediately prior to the expiration or sooner termination of this Lease, Tenant shall remove all of Tenant’s signs from the exterior of the Building and shall remove all of Tenant’s equipment, trade fixtures, furniture, supplies, wall decorations and other personal property from the Premises, and shall vacate and surrender the Premises to Landlord in the same condition, broom clean, as existed at the Lease Commencement Date, normal wear and tear and casualty damage excepted. Tenant shall repair all damage to the Premises caused by Tenant or by Tenant’s removal of Tenant’s property and all damage to the exterior of the Building caused by Tenant’s removal of Tenant’s signs. Tenant shall patch and refinish, to Landlord’s reasonable satisfaction, all penetrations made by Tenant or its employees to the floor, walls or ceiling of the Premises, whether such penetrations were made with Landlord’s approval or not. Tenant shall replace all stained or damaged ceiling tiles and shall repair or replace, as necessary, all wall coverings and clean or replace, as may be required, floor coverings to the reasonable satisfaction of Landlord. Tenant shall replace all burned out light bulbs and damaged or stained light lenses. Tenant shall repair all damage caused by Tenant to the exterior surface of the Building and the paved surfaces of the outside areas adjoining the Premises and, where necessary, replace or resurface same. Additionally, Tenant shall, prior to the expiration or sooner termination of this Lease, remove any improvements, constructed or installed by Tenant which Landlord requests be so removed by Tenant and repair all damage caused by such removal. If the Premises are not surrendered to Landlord in the condition required by this Article at the expiration or sooner termination of this Lease, Landlord may, at Tenant’s expense, so remove Tenant’s signs, property and/or improvements not so removed and make such repairs and replacements not so made or hire, at Tenant’s expenses, independent contractors to perform such work. Tenant shall be liable to Landlord for all costs incurred by Landlord in returning the Premises to the required condition.

8. Insurance; Indemnity.

8.1 Payment of Premiums. The cost of the premiums for the insurance policies maintained by Landlord under this Paragraph 8 and which Landlord maintains as of the date of this Lease and continues to maintain thereafter , shall be a Common Area Operating Expense pursuant to Paragraph 4.2 hereof. Premiums for policy periods commencing prior to, or extending beyond, the term of this Lease shall be prorated to coincide with the corresponding Commencement Date or Expiration Date.

8.2 Liability Insurance .

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(a) Carried by Tenant . Tenant shall obtain and keep in force during the term of this Lease a Commercial General Liability policy of insurance protecting Tenant, Landlord and any Lender(s) whose names have been provided to Tenant in writing (as additional insureds) against claims for bodily injury, personal injury and property damage based upon, involving or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $1,000,000 per occurrence with an “Additional Insured-Managers or Landlords of Premises. The policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an “ insured contract ” for the performance of Tenant’s indemnity obligations under this Lease. The limits of said insurance required by this Lease or as carried by Tenant shall not, however, limit the liability of Tenant nor relieve Tenant of any obligation hereunder. All insurance to be required by this Lease or as carried by Tenant shall not, however, limit the liability of Tenant nor relieve Tenant of any obligation hereunder. All insurance to be carried by Tenant shall be primary to and not contributory with any similar insurance carried by Landlord, whose insurance shall be considered excess insurance only.

(b) Carried by Landlord . Landlord shall also maintain liability insurance described in Paragraph 8.2(a) above, in addition to and not in lieu of, the insurance required to be maintained by Tenant except coverage for pollution liability, premises pollution, on site and off site, including release of any pollutants, toxins, or contaminants, whether such release is sudden or prolonged or willful or accidental, shall only be carried solely by Tenant. Tenant shall not be named as an additional insured therein.

8.3 Property Insurance-Building, Improvements and Rental Value.

(a) Building and Improvements. Landlord shall obtain and keep in force during the term of this Lease a policy or policies in the name of Landlord, with loss payable to Landlord and to any Lender(s), insuring against loss or damage to the Premises and Building. Such insurance shall be for full replacement cost, as the same shall exist from time to time, or the amount required by any Lender(s), but in no event more than the commercially reasonable and available insurable value thereof if, by reason of the unique nature or age of the improvements involved, such latter amount is less than full replacement cost. Tenant-Owned Alterations and Utility Installations, Trade Fixtures and Tenant’s personal property shall be insured by Tenant pursuant to Paragraph 8.4. If the coverage is available and commercially appropriate, Landlord’s policy or policies shall insure against all risks of direct physical loss or damage (and at Landlord’s option the perils of flood and/or earthquake), including coverage for any additional costs resulting from debris removal and reasonable amounts of coverage for the enforcement of any ordinance or law regulating the reconstruction or replacement of any undamaged sections of the Building required to be demolished or removed by reason of the enforcement of any building, zoning, safety or land use laws as the result of a covered loss, but not including plate glass insurance. Said policy or policies shall also contain an agreed valuation provision in lieu of any co-insurance clause, waiver of subrogation, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located.

(b) Rental Value . Landlord shall also obtain and keep in force during the term of this Lease a policy or policies in the name of Landlord, with loss payable to Landlord and any Lender(s), insuring the loss of the full rental and other charges payable by all tenants of the Building to Landlord for at least one year (including all Real Property Taxes, insurance costs, all Common Area Operating Expenses and any scheduled rental increases). Said insurance may provide that in the event the Lease is terminated by reason of an insured loss, the period of indemnity for such coverage shall be extended beyond the date of the completion of repairs or replacement of the Premises, to provide for one full year’s loss of rental revenues from the date of any such loss. Said insurance shall contain an agreed valuation provision in lieu of any co-insurance clause, and the amount of coverage shall be adjusted annually to reflect the projected rental income, Real Property Taxes, insurance premium costs and other expenses, if any, otherwise payable, for the next 12-month period. Subject to Section 4.2.(a)(vii) above, Common Area Operating Expenses shall include any deductible amount in the event of such loss.

(c) Adjacent Premises . Tenant shall pay for any increase in the premiums for the property insurance of the Building and for the Common Areas or other buildings in the Industrial Center if said increase is directly caused by Tenant’s acts, omissions, use or occupancy of the Premises.

(d) Tenant’s Improvements . Since Landlord is the Insuring Party, Landlord shall not be required to insure Tenant-Owned Alterations and Utility Installations unless the item in question has become the property of Landlord under the terms of this Lease.

8.4 Tenant’s Property Insurance . Subject to the requirements of Paragraph 8.5, Tenant at its cost shall maintain insurance coverage on all of Tenant’s personal property, Trade Fixtures and Tenant-Owned Alterations and Utility Installations in, on, or about the Premises on a “special” causes of loss (“all risk”) policy. Such insurance shall be full replacement cost coverage with a deductible not to exceed $1,000 per occurrence. The proceeds from any such insurance shall be used by Tenant for the replacement of personal

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property and the restoration of Trade Fixtures and Tenant-Owned Alterations and Utility Installations. Upon request from Landlord, Tenant shall provide Landlord with written evidence that such insurance is in force.

8.5 Insurance Policies . Insurance required hereunder shall be in companies duly licensed to transact business in the state where the Premises are located, and maintaining during the policy term a “General Policyholders Rating” of at least A-VII, or such other rating as may be required by a Lender, as set forth in the most current issue of “Best’s Insurance Guide.” Tenant shall not do or permit to be done anything which shall invalidate the insurance policies referred to in this Paragraph 8. Tenant shall cause to be delivered to Landlord, within seven (7) days after the earlier of the Early Possession Date or the Commencement Date, certified copies of, or certificates evidencing the existence and amounts of, the insurance required under Paragraph 8.2(a) and 8.4. Tenant shall notify Landlord at least thirty (30) days prior to any cancelation or material reduction of Tenant’s insurance policy. Tenant shall at least five (5) days prior to the expiration of such policies, furnish Landlord with evidence of renewals or “insurance binders” evidencing renewal thereof, or Landlord may order such insurance and charge the cost thereof to Tenant, which amount shall be payable by Tenant to Landlord upon demand.

8.6 Waiver of Subrogation . Without affecting any other rights or remedies, Tenant and Landlord each hereby release and relieve the other, and waive their entire right to recover damages (whether in contract or in tort) against the other, for loss or damage to their property arising out of or incident to the perils required to be insured against under Paragraph 8. The effect of such releases and waivers of the right to recover damages shall not be limited by the amount of insurance carried or required, or by any deductibles applicable thereto. Landlord and Tenant agree to have their respective insurance companies issuing property damage insurance waive any right to subrogation that such companies may have against Landlord or Tenant, as the case may be, so long as the insurance is not invalidated thereby.

8.7 Indemnity . Subject to Paragraph 8.6 above, Tenant, shall, during the term of this lease, indemnify and save harmless Landlord and any agents of Landlord from any and all loss, damage, claims of damage, obligations, cause or causes of action, or liabilities of any kind or nature (including reasonable costs of attorney’s fees if Landlord is made a party to any action which Tenant’s indemnity runs hereunder) by reason of injury or death of any person or persons or damage to any property of any kind and to whomsoever belonging, including injury or death to the person or damage to the property of Tenant, Tenant’s officers, directors, employees, agents, guests, subtenants and assignees, concessionaires and licensees, and any other person, firm or corporation selling or manufacturing merchandise or services upon or from the Premises, or any part thereof, from any cause or cause whatsoever which result from Tenant’s use or from any other activity done, permitted or suffered by Tenant. As a material part of the consideration to Landlord, Tenant hereby assumes all risk of damage to property or injury to persons in or about the Premises from any cause whatsoever (except that which is cause by the sole active negligence or willful misconduct by Landlord or its Agents or by the failure of Landlord to observe any of the terms and conditions of this lease, if such failure has persisted for an unreasonable period after written notice of such failure). . Tenant’s obligations under this paragraph shall survive the termination of this lease.

8.8 Exemption of Landlord from Liability. Landlord shall not be liable for injury or damage which may be sustained by Tenant or to the person or goods, wares, merchandise or other property of Tenant, Tenant’s employees, contractors, invitees, customers, or any other person in or about the Premises, whether such damage or injury is caused by or results from fire, earthquake, steam, electricity, gas, water or rain, which may leak or from or into any part of the premises or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether said injury or damage results from conditions arising upon the Premises or upon other portions of the Building of which the Premises are a part, from other sources or places, and regardless of whether the cause of such damage or injury or the means of preparing the same is accessible or not. Landlord shall not be liable for any damages arising from any act or neglect of any other tenant of Landlord nor from the failure by Landlord to enforce the provisions of any other lease in the Industrial Center. Notwithstanding Landlord’s negligence or breach of this Lease, Landlord shall under no circumstances be liable for injury to Tenant’s business or for any loss of income or profit therefrom.

9. Damage or Destruction .

9.1 Definitions .

(a) “ Premises Partial Damage ” shall mean damage or destruction to the Premises, other than Tenant-Owned Alterations and Utility Installations, the repair cost of which damage or destruction is less than fifty percent (50%) of the then Replacement Cost (as defined in Paragraph 9.1(d) of the Premises (excluding the Tenant-Owned Alterations and Utility Installations and Trade Fixtures) immediately prior to such damage or destruction.

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(b) “ Premises Total Destruction ” shall mean damage or destruction to the Premises, other than Tenant-Owned Alterations and Utility Installations, the repair cost of which damage or destruction is fifty percent (50%) or more of the then Replacement Cost of the Premises (excluding Tenant-Owned Alterations and Utility Installations and Trade Fixtures) immediately prior to such damage or destruction. In addition, damage or destruction to the Building, other than Tenant-Owned Alterations and Utility Installations and Trade Fixtures of any tenants of the Building, the cost of which damage or destruction is fifty percent (50%) or more of the then Replacement Cost (excluding Tenant-Owned Alterations and Utility Installations and Trade Fixtures of any Tenants of the Building) of the Building shall, at the option of Landlord, be deemed to be Premises total Destruction.

(c) “ Industrial Center Total Destruction ” shall mean damage or destruction to the Industrial Center or the Building in which the premises are located, regardless of the damage to the premises. The cost of which damage or destruction is fifty percent (50%) or more of the then Replacement Cost of the Industrial Center or the Building (excluding Tenant-Owned Alterations and Utility Installations and Trade Fixtures) immediately prior to such damage or destruction.

(c) “ Insured Loss ” shall mean damage or destruction to the Premises, other than Tenant-Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a) irrespective of any deductible amounts or coverage limits involved.

(d) “ Replacement Cost ” shall mean the cost to repair or rebuild the improvements owned by Landlord at the time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of applicable building codes, ordinances or laws, and without deduction for depreciation.

(e) “ Hazardous Substance Condition ” shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by, a Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the Premises.

9.2 Premises Partial Damage—Insured or Uninsured Loss . If Premises Partial Damage that is an Insured or Uninsured Loss occurs, unless solely caused by a negligent or willful act of Tenant (in which event Tenant shall be responsible for any cost of the repairs not covered by insurance proceeds and this Lease shall continue in full force and effect), then Landlord shall, at Landlord’s expense, repair such damage (but not Tenant’s Trade Fixtures or Tenant-Owned Alterations and Utility Installations) as soon as reasonably possible, but only to the extent of the available insurance proceeds, if any, and the deductibles and this Lease shall continue in full force and effect.

9.3 Premises Total Destruction. If the Premises Total Destruction that is an Insured or Uninsured Loss occurs, unless solely caused by a negligent or willful act of Tenant (in which event Tenant shall be responsible for any cost of the repairs not covered by insurance proceeds and this Lease shall continue in full force and effect), either Landlord or Tenant may, upon written notice within thirty (30) days following receipt by Tenant of Landlord’s reasonable determine of the Replacement Cost. If the Lease is not terminated by either party, then Landlord shall, at Landlord’s expense, repair such damage (but not Tenant’s Trade Fixtures or Tenant-Owned Alterations and Utility Installations) as soon as reasonably possible, but only to the extent of the available insurance proceeds, if any, and the deductibles and this Lease shall continue in full force and effect.

9.4 Industrial Center Destruction . Notwithstanding any other provision hereof, if the Industrial Center in which the Premises are located suffers Total Destruction (including any destruction required by any authorized public authority), this Lease at either party’s option shall terminate sixty (60) days following the date of such Total Destruction, whether or not the damage or destruction affected the premises. In the event, however, that the damage or destruction was solely caused by Tenant, Landlord shall have the right to recover Landlord’s damages from Tenant except as released and waived in Paragraph 9.7.

9.5 Damage Near End of Term . If at any time during the last twelve (12) months of the term of this Lease there is damage for which the cost to repair exceeds one month’s Base Rent, whether or not an Insured Loss, either party may, at their option, terminate this Lease effective sixty (60) days following the date of occurrence of such damage by giving written notice to the other party of their election to do so within thirty (30) days after the date of occurrence of such damage. Provided, however, if Tenant at that time has an exercisable option to extend this Lease, then Tenant may preserve this Lease by (a) exercising such option, and (b) providing Landlord with any shortage in insurance proceeds (or adequate assurance thereof) needed to make the repairs on or before the earlier of (i) the date which is ten (10) days after Tenant’s receipt of Landlord’s written notice purporting to terminate this Lease, or (ii) the day prior to the date upon which such option expires. If Tenant duly exercises such option during such period and provides Landlord with funds (or adequate assurance thereof) to cover any shortage in insurance proceeds, Landlord shall, at Landlord’s expense repair such damage as soon as reasonably possible and this Lease shall continue in full force and effect. If Tenant fails to exercise such option and provide such funds or assurance during such period, then this Lease shall terminate as of the date set forth in the first sentence of this Paragraph 9.5.

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9.6 Abatement of Rent; Tenant’s Remedies .

(a) In the event of (i) an casualty or (ii) Hazardous Substance Condition for which Tenant is not responsible under the terms of this Lease, the Base Rent, Common Area Operating Expenses and other charges, if any, payable by Tenant hereunder for the period during which such damage or condition, its repair, remediation or restoration continues, shall be abated in proportion to the degree to which Tenant’s use of or access to the Premises is impaired. Except for abatement of Base Rent, Common Area Operating Expenses and other charges, if any, as aforesaid, all other obligations of Tenant hereunder shall be performed by Tenant, and Tenant shall have no claim against Landlord for any damage suffered by reason of any such damage, destruction, repair, remediation or restoration.

(b) If Landlord shall be obligated to repair or restore the Premises under the provisions of this Paragraph 9 and shall not commence, in a substantial and meaningful way, the repair or restoration of the Premises within ninety (90) days after such obligation shall accrue, Tenant may, at any time prior to the commencement of such repair or restoration, give written notice to Landlord and to any Lenders of which Tenant has actual notice of Tenant’s election to terminate this Lease on a date not less than sixty (60) days following the giving of such notice. If Tenant gives such notice to Landlord and such Lenders and such repair or restoration is not commenced within thirty (30) days after receipt of such notice, this Lease shall terminate as of the date specified in said notice. If Landlord or a Lender commences the repair or restoration of the Premises within thirty (30) days after the receipt of such notice, this Lease shall continue in full force and effect. “ Commence ” as used in this Paragraph 9.6 shall mean either the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever occurs first.

9.7 Hazardous Substance Conditions . If a Hazardous Substance Condition occurs, unless Tenant is responsible therefor pursuant to the terms of this Lease (in which case Tenant shall make the investigation and remediation thereof required by Applicable Requirements and this Lease shall continue in full force and effect, but subject to Landlord’s rights under Paragraph 6.2(c) and Paragraph 13), Landlord may at Landlord’s option either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Landlord’s expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to investigate and remediate such condition exceeds twelve (12) times the then monthly Base Rent or $50,000, whichever is greater, give written notice to Tenant within thirty (30) days after receipt by Landlord of knowledge of the occurrence of such Hazardous Substance Condition of Landlord’s desire to terminate this Lease as of the date sixty (60) days following the date of such notice. In the event Landlord elects to give such notice of Landlord’s intention to terminate this Lease, Tenant shall have the right within ten (10) days after receipt of such notice to give written notice to Landlord of Tenant’s commitment to pay for the excess costs of (a) investigation and remediation of such Hazardous Substance Condition to the extent required by Applicable Requirements, over (B) an amount equal to twelve (12) times the then monthly Base Rent or $50,000 whichever is greater. Tenant shall provide Landlord with the funds required of Tenant or satisfactory assurance thereof within thirty (30) days following said commitment by Tenant. In such event this Lease shall continue in full force and effect, and Landlord shall proceed to make such investigation and remediation as soon as reasonably possible after the required funds are available. If Tenant does not give such notice and provide the required funds or assurance thereof within the time period specified above, this Lease shall terminate as of the date specified in Landlord’s notice of termination.

9.8 Termination—Advance Payments . Upon termination of this Lease pursuant to this Paragraph 9, Landlord shall return to Tenant any advance payment made by Tenant to Landlord and so much of Tenant’s Security Deposit as has not been, or is not then required to be, used by Landlord under the terms of this Lease.

9.9 Waiver of Statutes . Landlord and Tenant agree that the terms of this Lease shall govern the effect of any damage to or destruction of the Premises and the Building with respect to the termination of this Lease and hereby waive the provisions of any present or future statute to the extent it is inconsistent herewith.

10. Real Property Taxes .

10.1 Payment of Taxes . Landlord shall pay the Real Property Taxes, as defined in Paragraph 10.2, applicable to the Industrial Center, and except as otherwise provided in Paragraph 10.3, any such amounts shall be included in the calculation of Common Area Operating Expenses in accordance with the provisions of Paragraph 4.2.

10.2 Real Property Tax Definition . As used herein, the term “ Real Property Taxes ” shall include any form of real estate tax or assessment, general, special, ordinary or extraordinary, and any license fee, commercial rental tax, improvement bond or bonds, levy or tax (other than inheritance, personal income or estate taxes) imposed upon the Industrial Center by any authority having the direct or indirect power to tax, including any city, state or federal government, or any school, agricultural, sanitary, fire, street, drainage, or other improvement district thereof, levied against any legal or equitable interest of Landlord in the Industrial Center or

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any portion thereof, Landlord’s right to rent or other income therefrom, and/or Landlord’s business of leasing the Premises. The term “ Real Property Taxes ” shall also include any tax, fee, levy, assessment or charge, or any increase therein, imposed by reason of events occurring, or changes in Applicable Law taking effect, during the term of this Lease, including but not limited to a change in the ownership of the Industrial Center or in the improvements thereon, the execution of this Lease, or any modification, amendment or transfer thereof, and whether or not contemplated by the Parties. In calculating Real Property Taxes for any calendar year, the Real Property Taxes for any real estate tax year shall be included in the calculation of Real Property Taxes for such calendar year based upon the number of days which such calendar year and tax year have in common.

10.3 Additional Improvements . Tenant shall pay to Landlord the Common Area Operating Expenses as payable under Paragraph 4.2, the entirety of any increase in Real Property Taxes if assessed solely by reason of Alterations, Trade Fixtures or Utility Installations placed upon the Premises by Tenant or at Tenant’s request.

10.4 Joint Assessment . If the Building is not separately assessed, Real Property Taxes allocated to the Building shall be an equitable proportion of the Real Property Taxes for all of the land and improvements included within the tax parcel assessed or the industrial center, such proportion to be determined by Landlord from the respective valuations assigned in the assessor’s work sheets or such other information as may be reasonably available. Landlord’s reasonable determination thereof, in good faith, shall be conclusive.

10.5 Tenant’s Property Taxes . Tenant shall pay prior to delinquency all taxes assessed against and levied upon Tenant-Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Tenant contained in the Premises or stored within the Industrial Center. When possible, Tenant shall cause its Tenant-Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Landlord. If any of Tenant’s said property shall be assessed with Landlord’s real property, Tenant shall pay Landlord the taxes attributable to Tenant’s property within ten (10) days after receipt of a written statement setting forth the taxes applicable to Tenant’s property.

11. Utilities . Tenant shall pay directly for all utilities and services supplied to the Premises, including but not limited to electricity, water, telephone, security, gas, sewer, trash removal and cleaning of the Premises, together with any taxes thereon. If any such utilities or services are not separately metered to the Premises or separately billed to the Premises, Tenant shall pay to Landlord a reasonable proportion to be determined by Landlord of all such charges jointly metered or billed with other premises in the Building, in the manner and within the time periods set forth in Paragraph 4.2(d). Landlord shall not be liable to Tenant for injury, damage, loss of Tenant’s business or profits, from any failure, interruption, rationing or other curtailment in the supply of electric, gas, water or other utilities from whatever cause. Tenant shall not consume water in excess of that usually furnished or supplied for reasonable and normal drinking and lavatory use in connection with an office environment (as determined by Landlord), without first procuring the written consent of Landlord, which Landlord may refuse, and in the event of consent, Landlord may have installed a water meter in the Premises to measure the amount of water consumed. The cost of any such meter and of its installation, maintenance and repair shall be paid for by the Tenant, and Tenant agrees to pay to Landlord promptly upon demand for all such water consumed as shown by said meters, at the rates charged for such services by the local public utility plus any additional expense incurred in keeping account of the water so consumed. If a separate meter is not installed, the excess cost for such water shall be established by an estimate made by a utility company or electrical engineer hired by Landlord at Tenant’s expense.

12 Assignment and Subletting .

12.1 Landlord’s Consent Required .

(a) Tenant shall not assign this lease, nor any right hereunder, nor sublet the premises, nor any part thereof, without the prior written consent of Landlord. In exercising its reasonable discretion Landlord may consider all commercially relevant factors involved in the leasing of the premises including but not limited to the a) the creditworthiness and financial stability of the prospective assignee or subtenant; b) references of prior landlords; c) the past history of such subtenant, with respect to involvement in litigation and bankruptcy proceedings; d) the impact of said subtenant or assignee and proposed use of the premises on pedestrian and vehicular traffic, other tenants, and parking; e) the use, generation or disposal of hazardous materials. The presence of one negative factor enumerated above shall be deemed reasonable justification for Landlord’s withholding consent.

(b) A change in the control of Tenant shall constitute an assignment requiring Landlord’s consent. The transfer, on a cumulative basis, of fifty percent (50%) or more of the voting control of Tenant shall constitute a change in control for this purpose. For purposes of this paragraph, neither the private placement offering or public offering of tenant’s securities, nor the assignment of this lease to an Affiliate of Tenant, shall constitute a change of control requiring landlord’s consent.

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(c) The involvement of Tenant or its assets in any transaction, or series of transactions (by way of merger, sale, acquisition, financing, refinancing, transfer, leveraged buy-out or otherwise), whether or not a formal assignment or hypothecation of this Lease or Tenant’s assets occurs, which results or will result in a reduction of the Net Worth of Tenant, as hereinafter defined, by an amount equal to or greater than twenty-five percent (25%) of such Net Worth of Tenant as it was represented to Landlord at the time of full execution and delivery of this Lease or at the time of the most recent assignment to which Landlord has consented, or as it exists immediately prior to said transaction or transactions constituting such reduction, at whichever time said Net Worth of Tenant was or is greater, shall be considered an assignment of this Lease by Tenant to which Landlord may reasonably withhold its consent. “ Net Worth of Tenant ” for purposes of this Lease shall be the net worth of Tenant (excluding any Guarantors) established under generally accepted accounting principles consistently applied.

(d) An assignment or subletting of Tenant’s interest in this Lease without Landlord’s specific prior written consent shall, at Landlord’s option, be a Default curable after notice per Paragraph 13.1, or a non-curable Breach without the necessity of any notice and grace period. If Landlord elects to treat such unconsented to assignment or subletting as a non-curable Breach, Landlord shall have the right to terminate this Lease.

(e) Tenant’s remedy for any breach of this Paragraph 12.1 by Landlord shall be limited to compensatory damages and/or injunctive relief.

12.2 Terms and Conditions Applicable to Assignment and Subletting .

(a) Regardless of Landlord’s consent, any assignment or subletting shall not (i) be effective without the express written assumption by such assignee of the obligations of Tenant under this Lease, (ii) release Tenant of any obligations hereunder, nor (iii)alter the primary liability of Tenant for the payment of Base Rent and other sums due Landlord hereunder or for the performance of any other obligations to be performed by Tenant under this Lease.

(b) Landlord may accept any rent or performance of Tenant’s obligations from any person other than Tenant pending approval or disapproval of an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of any rent for performance shall constitute a waiver or estoppel of Landlord’s right to exercise its remedies for the Default or Breach by Tenant of any of the terms, covenants or conditions of this Lease.

(c) The consent of Landlord to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting by Tenant or to any subsequent or successive assignment or subletting by the assignee or subtenant. However, Landlord may consent to subsequent or successive assignment or subletting by the assignee or subtenant. However, Landlord may consent to subsequent sublettings and assignments of the sublease or any amendments or modifications thereto without notifying Tenant or anyone else liable under this Lease or the sublease and without obtaining their consent, and such action shall not relieve such persons from liability under this Lease or the sublease.

(d) In the event of any Default or Breach of Tenant’s obligation under this Lease, Landlord may proceed directly against Tenant, any guarantors or anyone else responsible for the performance of the Tenant’s obligations under this Lease, including any subtenant, without first exhausting Landlord’s remedies against any other person or entity responsible therefor to Landlord, or any security held by Landlord.

(e) Each request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Landlord’s determination as to the financial and operational responsibility and appropriateness of the proposed assignee or subtenant, including but not limited to the intended use and/or required modification of the Premises, if any. Tenant agrees to provide Landlord with such other or additional information and/or documentation as may be reasonably requested by Landlord.

(f) Any assignee of, or subtenant under, this Lease shall, by reason of accepting such assignment or entering into such sublease, be deemed, for the benefit of Landlord, to have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Tenant during the term of said assignment or sublease, other than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Landlord has specifically consented in writing.

(g) If Tenant desires to assign this Lease or sublease the Premises for a term equal to substantially the remainder of the term of this lease and obtains an acceptable subtenant or assignee, then the Landlord shall have the option prior to the execution of the sublease or assignment agreement to cancel this lease with respect to that portion of the Premises so assigned or sublet. Landlord, in Landlord’s sole discretion, may then enter into a new lease with any prospective subtenant as the substitute Tenant. If Landlord

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exercises this option, then this present lease shall be terminated with respect to the assigned or sublet space by mutual agreement as of that time.

12.3 Additional Terms and Conditions Applicable to Assignment and Subletting . The following terms and conditions shall apply to any subletting or assignment by Tenant of all or any part of the Premises and shall be deemed included in all subleases and assignments under this Lease whether or not expressly incorporated therein:

(a) Tenant hereby assigns and transfers to Landlord all of Tenant’s interest in all rentals, income or other consideration arising from any sublease or assignment of all or a portion of the Premises heretofore or hereafter made by Tenant, and Landlord may collect such sums and apply same toward Tenant’s obligations under this Lease. Landlord shall not, by reason of the foregoing provision or any other assignment of such sublease to Landlord, nor by reason of the collection of the rents from a subtenant, be deemed liable to the subtenant for any failure of Tenant to perform and comply with any of Tenant’s obligations to such subtenant under such Sublease. Tenant hereby irrevocably authorizes and directs any such subtenant, upon receipt of a written notice from Landlord stating that a Breach exists in the performance of Tenant’s obligations under this Lease, to pay to Landlord the rents and other charges due and to become due under the sublease. Subtenant shall rely upon any such statement and request from Landlord and shall pay such rents and other charges to Landlord without any obligation or right to inquire as to whether such Breach exists and notwithstanding any notice from or claim from Tenant to the contrary. Tenant shall have no right or claim against such subtenant, or, until the Breach has been cured, against Landlord, for any such rents and other charges so paid by said subtenant to Landlord.

(b) In the event of a Breach by Tenant in the performance of its obligations under this Lease, Landlord, at its option and without any obligation to do so, may require any subtenant to attorn to Landlord, in which event Landlord shall undertake the obligations of the sub landlord under such sublease from the time of the exercise of said option to the expiration of such sublease; provided, however, Landlord shall not be liable for any prepaid rents or security deposit paid by such subtenant to such sub landlord or for any other prior defaults or breaches of such sub landlord under such sublease.

(c) Any matter or thing requiring the consent of the sublandlord under a sublease shall also require the consent of Landlord herein.

(d) No subtenant under a sublease approved by Landlord shall further assign or sublet all or any part of the Premises without Landlord’s prior written consent pursuant to the terms of this Paragraph 12.

(e) Landlord shall deliver a copy of any notice of Default or Breach by Tenant to the subtenant, who shall have the right to cure the Default of Tenant within the grace period, if any, specified in such notice. The subtenant shall have a right of reimbursement and offset from and against Tenant for any such Defaults cured by the subtenant.

12.4 Permitted Transfer . Notwithstanding anything to the contrary in this Lease, Tenant may, without Landlord’s prior written consent and without the right of recapture or any participation by Landlord in assignment and subletting proceeds, sublet the Premises or assign the lease to: (i) a parent, subsidiary, affiliate, division or corporation controlling, controlled by or under common control with Tenant; (ii) an acquirer or purchaser of all or substantially all of Tenant’s assets in the geographic market area; (iii) any entity resulting from a merger, consolidation, or other reorganization of Tenant; and/or (iv) any entity or person by sale or other transfer of a percentage of capital stock or equity of Tenant which results in a change of controlling persons. Any of the above are referenced hereafter as “Permitted Transfer” and the transferee is referenced as “Permitted Transferee”. For the purpose of this Lease, sale of Tenant’s capital stock through any public exchange, the issuances for purposes of raising financing or the distribution of Tenant’s assets resulting from the dissolution of Tenant shall not be deemed an assignment, subletting, or any other transfer of the Lease or the Premises. However in all events. Tenant shall remain liable for the lease obligations.

13. Default; Breach; Remedies .

13.1 Default; Breach . Landlord and Tenant agree that if any attorney is consulted by Landlord in connection with a Tenant Default or Breach (as hereinafter defined), $350.00 is a reasonable minimum sum per such occurrence for legal services and costs in the preparation and service of a notice of Default, and that Landlord may include the cost of such services and costs in said notice as rent due and payable to cure said default. a “ Default ” by Tenant is defined as a failure by Tenant to observe, comply with or perform any of the terms, covenants, conditions or rules applicable to Tenant under this Lease. A “ Breach ” by Tenant is defined as the occurrence of any one or more of the following Defaults, and, where a grace period for cure after notice is specified herein, the failure by Tenant to cure such Default prior to the expiration of the applicable grace period, and shall entitle Landlord to pursue the remedies set forth in Paragraphs 13.2 and/or 13.3.

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(a) The abandonment of the Premises.

(b) Except as expressly otherwise provided in this Lease, the failure by Tenant to make any payment of Base Rent, Tenant’s Share of Common Area Operating Expenses, or any other monetary payment required to be made by Tenant hereunder as and when due, the failure by Tenant to provide Landlord with reasonable evidence of insurance or surety bond required under this Lease, or the failure of Tenant to fulfill any obligation under this Lease which endangers or threatens life or property, where such failure continues for a period of three (3) business days following written notice thereof by or on behalf of Landlord to Tenant.

(c) Except as expressly otherwise provided in this Lease, the failure by Tenant to provide Landlord with reasonable written evidence (in duly executed original form, if applicable) of (i) compliance with Applicable Requirements per Paragraph 6.3, (ii) the inspection, maintenance and service contracts required under Paragraph 7.1(b), (iii) the rescission of an unauthorized assignment or subletting per Paragraph 12.1, (iv) a Tenancy Statement per Paragraphs 16 or 37, (v) the subordination or non-subordination of this Lease per Paragraph 30, (vi) the guaranty of the performance of Tenant’s obligations under this Lease if required under Paragraphs 1.11 and 37, (vii) the execution of any document requested under Paragraph 42 (easements), or (viii) any other documentation or information which Landlord may reasonably require of Tenant under the terms of this lease, where any such failure continues for a period of five (5) days following written notice by or on behalf of Landlord to Tenant.

(d) A Default by Tenant as to the terms covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof that are to be observed, complied with or performed by Tenant, other than those described in Subparagraphs 13.1(a), (b), or (c), above, where such Default continues for a period of thirty (30) days after written notice thereof by or on behalf of Landlord to Tenant; provided however, that if the nature of Tenant’s Default is such that more than thirty (30) days are reasonably required for its cure, then it shall not be deemed to be a Breach of this Lease by Tenant if Tenant commences such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion.

(e) The occurrence of any of the following events: (i) the making by Tenant of any general arrangement or assignment for the benefit of creditors; (ii) Tenant’s becoming a “debtor” as defined in 11 U.S. Code Section 101 or any successor statute thereto (unless, in the case of a petition filed against Tenant, the same is dismissed within sixty (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease, where possession is not restored to Tenant within thirty (30) days; or (iv) the attachment, execution or other judicial seizure of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease, where such seizure is not discharged within thirty (30) days; provided, however, in the event that any provision of this Subparagraph 13.1(e) is contrary to any applicable law, such provision shall be of no force or effect, and shall not affect the validity of the remaining provisions.

(f) The discovery by Landlord that any financial statement of Tenant or of any Guarantor, given to Landlord by Tenant or any Guarantor, was materially false.

(g) If the performance of Tenant’s obligations under this Lease is guaranteed: (i) the death of a Guarantor, (ii) the termination of a Guarantor’s liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantor’s becoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor’s refusal to honor the guaranty, or (v) a Guarantor’s breach of its guaranty obligation on an anticipatory breach basis, and Tenant’s failure, within sixty (60) days following written notice by or on behalf of Landlord to Tenant of any such event, to provide Landlord with written alternative assurances of security, which, when coupled with the then existing resources of Tenant, equals or exceeds the combined financial resources of Tenant and the Guarantors that existed at the time of the execution of this Lease.

13.2 Remedies . If Tenant fails to perform any affirmative duty or obligation of Tenant under this Lease, within ten (10) days after written notice to Tenant (or in case of an emergency, without notice), Landlord may at its option (but without obligation to do so), perform such duty or obligation on Tenant’s behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or approvals. The costs and expenses of any such performance by Landlord shall be due and payable by Tenant to Landlord upon invoice therefor. If any check given to Landlord by Tenant shall not be honored by the bank upon which it is drawn, Landlord, at its own option, may require all future payments to be made under this Lease by Tenant to be made only by cashier’s check. In the event of a Breach of this Lease by Tenant (as defined in Paragraph 13.1), with or without further notice or demand, and without limiting Landlord in the exercise of any right or remedy which Landlord may have by reason of such Breach, Landlord may:

(a) Terminate Tenant’s right to possession of the Premises by any lawful means, in which case this Lease and the term hereof shall terminate and Tenant shall immediately surrender possession of the Premises to Landlord. In such event Landlord shall be entitled to recover from Tenant: (i) the worth at the time of the award of the unpaid rent which had been earned at the time of

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termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that the Tenant proves could have been reasonably avoided; (iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the Tenant proves could be reasonably avoided; and (iv) any other amount necessary to compensate Landlord for all the detriment proximately caused by the Tenant’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including but not limited to the cost of recovering possession of the Premises, expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorneys’ fees, and that portion of any leasing commission paid by Landlord in connection with this Lease applicable to the unexpired term of this Lease. The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco or the Federal Reserve Bank District in which the Premises are located at the time of award plus one percent (1%). Efforts by Landlord to mitigate damages caused by Tenant’s Default or Breach of this Lease shall not waive Landlord’s right to recover damages under this Paragraph 13.2. If termination of this Lease is obtained through the provisional remedy of unlawful detainer, Landlord shall have the right to recover in such proceeding the unpaid rent and damages as are recoverable therein, or Landlord may reserve the right to recover all or any part thereof in a separate suit for such rent and/or damages. If a notice and grace period required under Subparagraph 13.1 (b), (c) or (d) was not previously given, a notice to pay rent or quit, or to perform or quit, as the case may be, given to Tenant under any statute authorizing the forfeiture of leases for unlawful detainer shall also constitute the applicable notice for grace period purposes required by Subparagraph 13.1 (b), (c) or (d). In such case, the applicable grace period under the unlawful detainer statue shall run concurrently after the one such statutory notice, and the failure of Tenant to cure the Default within the greater of the two (2) such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Landlord to the remedies provided for in this Lease and/or by said statute.

(b) Continue the Lease and Tenant’s right to possession in effect (in California under California Civil Code Section 1951.4) after Tenant’s Breach and recover the rent as it becomes due, provided Tenant has the right to sublet or assign, subject only to reasonably limitations. Landlord and Tenant agree that the limitations on assignment and subletting in this Lease are reasonable. Acts of maintenance or preservation, efforts to relet the Premises, or the appointment of a receiver to protect the Landlord’s interest under this Lease, shall not constitute a termination of the Tenant’s right to possession.

(c) Pursue any other remedy now or hereafter available to Landlord under the laws or judicial decisions of the state wherein the Premises are located.

(d) The expiration or termination of this Lease and/or the termination of Tenant’s right to possession shall not relieve Tenant from liability under any indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Tenant’s occupancy of the Premises.

13.3 [Intentionally omitted.]

13.4 Late Charges . Tenant hereby acknowledges that late payment by Tenant to Landlord of rent and other sums due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Landlord by the terms of any ground lease, mortgage or deed of trust covering the Premises. Accordingly, if any installment of rent or other sum due from Tenant shall not be received by Landlord or Landlord’s designee within five (5) days after such amount shall be due, then, without any requirement for notice to Tenant, Tenant shall pay to Landlord a late charge equal to ten percent (10%) of such overdue amount. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of late payment by Tenant. Notwithstanding the foregoing, Landlord will not assess a late charge until Landlord has given written notice of such late payment for the first late payment in any twelve (12) month period and after Tenant has not cured such late payment within three (3) days from receipt of such notice. No other notices will be required during the following twelve (12) months for a late charge to be incurred. Acceptance of such late charge be Landlord shall in no event constitute a waiver of Tenant’s Default or Breach with respect to such overdue amount, nor prevent Landlord from exercising any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for three (3) consecutive installments of Base Rent, then notwithstanding Paragraph 4.1 or any other provision of this Lease to the contrary, Base Rent shall, at Landlord’s option, become due and payable quarterly in advance.

13.5 Breach by Landlord . Landlord shall not be deemed in breach of this Lease unless Landlord fails within a reasonable time to perform an obligation required to be performed by Landlord. For purposes of this Paragraph 13.5, a reasonable time shall in no event be less than thirty (30) days after receipt by Landlord, and by any Lender(s) whose name and address shall have been furnished to Tenant in writing for such purpose, of written notice specifying wherein such obligation of Landlord has not been performed; provided, however, that if the nature of Landlord’s obligation is such that more than thirty (30) days after such notice are reasonably

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required for its performance, then Landlord shall not be in breach of this Lease if performance is commenced within such thirty (30) day period and thereafter diligently pursued to completion.

14. Condemnation . If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (all of which are herein called “condemnation”), this Lease shall terminate as to the part so taken as of the date the condemning authority takes title or possession, whichever first occurs. If more than twenty five percent (25%) of the floor area of the Premises, or more than twenty-five percent (25%) of the portion of the Common Areas designated for Tenant’s parking, is taken by condemnation, Tenant may, at Tenant’s option, to be exercised in writing within ten (10) days after Landlord shall have given Tenant written notice of such taking (or in the absence of such notice, within ten (10) days after the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Tenant does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Base Rent shall be reduced in the same proportion as the rentable floor area of the Premises taken bears to the total rentable floor area of the Premises. No reduction of the Base Rent shall occur if the condemnation does not apply to any portion of the Premises. Any award for the taking of all or any part of the Premises under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of Landlord, whether such award shall be made as compensation for diminution of value of the leasehold or for the taking of the fee, or as severance damages; provided, however, that Tenant shall be entitled to any compensation, separately awarded to Tenant for Tenant’s relocation expenses and/or loss of Tenant’s Trade Fixtures. In the event that this Lease is not terminated by reason of such condemnation, Landlord shall to the extent of its net severance damages received, over and above Tenant’s Share of the legal and other expenses incurred by Landlord in the condemnation matter, repair any damage to the Premises caused by such condemnation authority. Tenant shall be responsible for the payment of any amount in excess of such net severance damages required to complete such repair.

15. Broker’s Fees .

15.1 Procuring Cause . The Broker(s) named in Paragraph 1.10 is/are the procuring cause of this Lease.

15.2 [Intentionally omitted.]

15.3 Assumption of Obligations . Any buyer or transferee of Landlord’s interest in this Lease, whether such transfer is by agreement or by operation of law, shall be deemed to have assumed Landlord’s obligation under this Paragraph 15.

15.4 Representations and Warranties . Tenant and Landlord each represent and warrant to the other that it has had no dealings with any person, firm, broker or finder other than as named in Paragraph 1.10(a) in connection with the negotiation of this Lease and/or the consummation of the transaction contemplated hereby, and that no broker or other person, firm or entity other than said named Broker(s) is entitled to any commission or finder’s fee in connection with said transaction. Tenant and Landlord do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, and/or attorneys’ fees reasonably incurred with respect thereto.

16. Tenancy and Financial Statements .

16.1 Tenancy Statement . Each Party (as “ Responding Party ”) shall within ten (10) business days after written notice from the other Party (the “ Requesting Party ”) execute, acknowledge and deliver to the Requesting Party a statement in writing in a form similar to the then most current “ Tenancy Statement ” form published by the American Industrial Real Estate Association, plus such additional information, confirmation and/or statements as may be reasonably requested by the Requesting Party.

16.2 Financial Statement . If Landlord desires to finance, refinance, or sell the Premises or the Building, or any part thereof, Tenant and all the Guarantors shall deliver to any potential lender or purchaser designated by Landlord such financial statements of Tenant and such Guarantors as may be reasonably required by such lender or purchaser, including but not limited to Tenant’s financial statements for the past three (3) years. All such financial statements shall be received by Landlord and such lender or purchaser in confidence and shall be used only for the purposes herein set forth.

17. Landlord’s Liability . The term “ Landlord ” as used herein shall mean the owner or owners at the time in question of the fee title to the Premises. In the event of a transfer of Landlord’s title or interest in the Premises or in this Lease, Landlord shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Landlord at the time of such transfer or assignment. Except as provided in Paragraph 15.3, upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Landlord shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be

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performed by Landlord. Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Landlord shall be binding only upon the Landlord as herein above defined. Notwithstanding any other terms or provisions of this lease, Tenant agrees that in the event of any default or breach by Landlord with respect to any of the terms of the Lease to be observed and performed by Landlord (a) Tenant shall look solely to the estate and property (which is the subject of this lease) of Landlord or any successor in interest in the property and the Industrial Center and all proceeds therefrom, for the satisfaction of Tenant’s remedies for the collection of a judgment (or other judicial process) requiring the payment of money by Landlord; (b) no other property or assets of Landlord, its partners, members, shareholders, officers or any successor in interest shall be subject to levy, execution or other enforcement procedure for the satisfaction if Tenant’s remedies;(c) no personal liability shall at any time be asserted or enforceable against Landlord, it’s partner’s, members or successors in interest (except to the extent permitted in (a) above), and no judgment will be taken against any partner, member, shareholder, officer or director of Landlord. The provisions of this section shall apply only to the Landlord and the parties herein described, and shall not be for the benefit of any insurer nor any other third party.

18. Severability . The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof.

19. Interest on Past-Due Obligations . Any monetary payment due Landlord hereunder, other than late charges, not received by Landlord within thirty (30) days following the date on which it was due, shall bear interest from the date due at the prime rate charged by the largest state chartered bank in the state in which the Premises are located plus four percent (4%) per annum, but not exceeding the maximum rate allowed by law, in addition to the potential late charge provided for in Paragraph 13.4.

20. Time of Essence . Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under this Lease.

21. Rent Defined . All monetary obligations of Tenant to Landlord under the terms of this Lease are deemed to be rent.

22. No Prior or other Agreements . This Lease contains all agreements between the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective.

23. Notices .

23.1 Notice Requirements . All notices required or permitted by this Lease shall be in writing and may be delivered in person (by hand or by messenger or courier service) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid during normal business hours, and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23. The addresses noted adjacent to a Party’s signature on this Lease shall be that Party’s address for delivery or mailing of notice purposes. Either Party may by written notice to the other specify a different address for notice purposes, except that upon Tenant’s taking possession of the Premises, the Premises shall constitute Tenant’s address for the purpose of mailing or delivering notices to Tenant. A copy of all notices required or permitted to be given to Landlord hereunder shall be concurrently transmitted to such party or parties at such addresses as Landlord may from time to time hereafter designate by written notice to Tenant.

23.2 Date of Notice . Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail, the notice shall be deemed given forty-eight (48) hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantees next day delivery shall be deemed given twenty-four (24) hours after delivery of the same to the United States Postal Service or courier. If notice is received on a Saturday or a Sunday or a legal holiday, it shall be deemed received on the next business day.

24. Waivers . No waiver by either Party of the default or breach of any term covenant or condition hereof by the other Party, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent default or breach of the same or any other term, covenant or condition hereof. Landlord’s consent to, or approval of, any such act shall not be deemed to render unnecessary the obtaining of Landlord’s consent to, or approval of, any subsequent or similar act by Tenant, or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. Regardless of Landlord’s knowledge of a Default or Breach at the time of accepting rent, the acceptance of rent by Landlord shall not be a waiver of any Default or Breach by Tenant of any provision hereof. Any payment given Landlord by Tenant may be accepted by Landlord on account of moneys or damages due Landlord, notwithstanding any qualifying statements or conditions made by Tenant in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Landlord at or before the time of deposit of such payment.

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25. Recording . Either Landlord or Tenant shall, upon request of the other, execute, acknowledge and deliver to the other a short form memorandum of this Lease for recording purposes. The Party requesting recordation shall be responsible for payment of any fees or taxes applicable thereto.

26. No Right To Holdover . Tenant has no right to retain possession of the Premises or any part thereof beyond the expiration or earlier termination of this Lease. In the event that Tenant holds over in violation of this Paragraph 26 then the Base Rent payable from and after the time of the expiration or earlier termination of this Lease shall be increased to one hundred fifty percent (150%) of the Base Rent applicable during the month immediately preceding such expiration or earlier termination. Nothing contained herein shall be construed as a consent by Landlord to any holding over by Tenant.

27. Cumulative Remedies . No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

28. Covenants and Conditions . Al provisions of this Lease to be observed or performed by Tenant are both covenants and conditions.

29. Binding Effect; Choice of Law . This Lease shall be binding upon the Parties, successors and assigns and be governed by the laws of the State in which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall be initiated in the county in which the Premises are located.

30. Subordination; Attornment; Non-Disturbance .

30.1 Subordination . This Lease and any Option granted hereby shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively, “ Security Device ”), now or hereafter placed by Landlord upon the real property of which the Premises are a part, to any and all advances made on the security thereof, and to all renewals, modifications, consolidations, replacements and extensions thereof. Tenant agrees that the Lenders holding any such Security Device shall have no duty, liability or obligation to perform any of the obligations of Landlord under this Lease, but that in the event of Landlord’s default with respect to any such obligation, Tenant will give any Lender whose name and address have been furnished Tenant in writing for such purpose notice of Landlord’s default pursuant to Paragraph 13.5. If any Lender shall elect to have this Lease and/or any Option granted hereby superior to the lien of its Security Device and shall give written notice thereof to Tenant, this Lease and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordation thereof.

30.2 Attornment . Subject to the non-disturbance provisions of Paragraph 30.3, Tenant agrees to attorn to a Lender or any other party who acquires ownership of the Premises by reason of a foreclosure of a Security Device, and that in the event of such foreclosure, such new owner shall not: (i) be liable for any act or omission of any prior Landlord or with respect to events occurring prior to acquisition of ownership, (ii) be subject to any offsets or defenses which Tenant might have against any prior Landlord, or (iii) be bound by prepayment of more than one month’s rent.

30.3 Non-Disturbance . With respect to Security Devices entered into by Landlord after the execution of this lease, Tenant’s subordination of this Lease shall be subject to receiving assurance (a “non-disturbance agreement”) from the Lender that Tenant’s possession and this Lease, including any options to extend the term hereof, will not be disturbed so long as Tenant is not in Breach hereof and attorns to the record owner of the Premises.

30.4 Self-Executing . The agreements contained in this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that upon written request from Landlord or a Lender in connection with a sale, financing or refinancing of Premises, Tenant and Landlord shall execute such further writings as may be reasonably required to separately document any such subordination or non-subordination, attornment and/or non-disturbance agreement as is provided for herein.

31. Attorneys’ Fees . If any Party brings an action or proceeding to enforce the terms hereof or declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys’ fees, costs and expenses. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term “ Prevailing Party ” shall include, without limitation, a Party who substantially obtains or defeats the relief sought, as the case may be whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys’ fee award shall not be computed in accordance with any court fee schedule, but shall be such as to full reimburse all attorneys fees, cost and expenses reasonably incurred. Landlord shall

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be entitled to attorneys’ fees, costs and expenses incurred in preparation and service of notices of Default and consultations in connection therewith, whether or not a legal action is subsequently commenced in connection with such Default or resulting Breach.

32. Landlord’s Access; Showing Premises; Repairs . Landlord and Landlord’s agents shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times for the purpose of showing the same to prospective purchasers, lenders, or tenants, and make such alterations, repairs, improvements or additions to the Premises or to the Building, as Landlord may reasonably deem necessary. Landlord may at any time place on or about the Premises or Building any ordinary “For Sale” signs and Landlord may at any time during the last one hundred eighty (180) days of the term hereof place on or about the Premises any ordinary “For Lease” signs. All such activities of Landlord shall be without abatement of rent or liability to Tenant.

33. Auctions . Tenant shall not conduct, nor permit to be conducted, either voluntarily or involuntarily, any auction upon the Premises without first having obtained Landlord’s prior written consent. Notwithstanding anything to the contrary in this Lease, Landlord shall not be obligated to exercise any standard of reasonableness in determining whether to grant such consent.

34. Signs . Tenant shall not place any sign upon the exterior of the Premises or the Building, except that Tenant may, with Landlord’s prior written consent, install (but not on the roof) such signs as are reasonably required to advertise Tenant’s own business so long as such signs are in a location designated by Landlord and comply with Applicable Requirements and the signage criteria established for the Industrial Center by Landlord. The installation of any sign on the Premises by or for Tenant shall be subject to the provisions of Paragraph 7 (Maintenance, Repairs, Utility Installations, Trade Fixtures and Alterations). Unless otherwise expressly agreed herein, Landlord reserves all rights to the use of the roof of the Building and the right to install advertising signs on the Building, including the roof, which do not unreasonably interfere with the conduct of Tenant’s business; Landlord shall be entitled to all revenues from such advertising signs.

35. Termination; Merger . Unless specifically stated otherwise in writing by Landlord, the voluntary or other surrender of this Lease by Tenant, the mutual termination or cancellation hereof, or a termination hereof by Landlord for Breach by Tenant, shall automatically terminate any sublease or lesser estate in the Premises; provided, however, Landlord shall, in the event of any such surrender, termination or cancellation, have the option to continue any one or all of any existing subtenancies. Landlord’s failure within ten (10) days of following any such event to make a written election to the contrary by written notice to the holder of any such lesser interest, shall constitute Landlord’s election to have such event constitute the termination of such interest.

36. Consents .

(a) Except for Paragraph 33 (Auctions) or as otherwise expressly provided herein, wherever in this Lease the consent of a Party is required to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. Landlord’s actual reasonable costs and expenses (including but not limited to architects’. attorneys’, engineers’ and other consultants’ fees) incurred in the consideration of, or response to, a request by Tenant for any Landlord consent pertaining to this Lease or the Premises, including but not limited to consents to an assignment a subletting or the presence or use of a Hazardous Substance, shall be paid by Tenant to Landlord upon receipt of an invoice and supporting documentation therefor. In addition to the deposit described in Paragraph 12.2(e), Landlord may, as condition to considering any such request by Tenant, require that Tenant deposit with Landlord an amount of money (in addition to the Security Deposit held under Paragraph 5) reasonably calculated by Landlord to represent the cost Landlord will incur in considering and responding to Tenant’s request. Any unused portion of said deposit shall be refunded to Tenant without interest. Landlord’s consent to any act, assignment of this Lease or subletting of the Premises by Tenant shall not constitute an acknowledgment that no Default or Breach by Tenant of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically stated in writing by Landlord at the time of such consent.

(b) All conditions to Landlord’s consent authorized by this Lease are acknowledged by Tenant as being reasonable. The failure to specify herein any particular condition to Landlord’s consent shall not preclude the impositions by Landlord at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is being given.

37. [Intentionally omitted.]

38. Quiet Possession . Upon payment by Tenant of the rent for the Premises and the performance of all of the covenants, conditions and provisions on Tenant’s part to be observed and performed under this Lease, Tenant shall have quiet possession of the Premises for the entire term hereof subject to all of the provisions of this Lease.

39. Options.

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39.1 Definition . As used in this Lease, the word “Option” has the following meaning: (a) the right to extend the term of this Lease or to renew this Lease or to extend or renew any lease that Tenant has on other property of Landlord.

39.2 Options Personal to Original Tenant . Each Option granted to Tenant in this Lease is personal to the original Tenant named in Paragraph 1.1 hereof, and cannot be voluntarily or involuntarily assigned or exercised by any person or entity other than said original Tenant while the original Tenant is in full and actual possession of the Premises and without the intention of thereafter assigning or subletting. The Options, if any, herein granted to Tenant are not assignable, either as a part of an assignment of this Lease or separately or apart therefrom, and no Option may be separated from this Lease in any manner, by reservation or otherwise. Notwithstanding the foregoing, for the purposes of this Paragraph 39, a Permitted Transferee shall be deemed an original Tenant.

39.3 Multiple Options . In the event that Tenant has any multiple Options to extend or renew this Lease, a later option cannot be exercised unless the prior Options to extend or renew this Lease have been validly exercised.

39.4 Effect of Default on Options .

(a) Tenant shall have no right to exercise an Option, notwithstanding any provision in the grant of Option to the contrary: (i) during the period commencing with the giving of any notice of Default under Paragraph 13.1 and continuing until the noticed Default is cured, or (ii) during the period of time any monetary obligation due Landlord from Tenant is unpaid (without regard to whether notice thereof is given Tenant), or (iii) during the time Tenant is in Breach of this Lease, or (iv) in the event that Landlord has given to Tenant three (3) or more notices of separate Defaults under Paragraph 13.1 during the twelve (12) month period immediately preceding the exercise of the Option, whether or not the Defaults are cured.

(b) The period of time within which an Option may be exercised shall not be extended or enlarged by reason of Tenant’s inability to exercise an Option because of the provisions of Paragraph 39.4(a)

(c) All rights of Tenant under the provisions of an Option shall terminate and be of no further force or effect, notwithstanding Tenant’s due and timely exercise of the Option, if, after such exercise and during the term of this Lease, (i) Tenant fails to pay to Landlord a monetary obligation of Tenant for a period of thirty (30) days after such obligation becomes due (without any necessity of Landlord to give notice thereof to Tenant), or (ii) Landlord gives to Tenant three (3) or more notices of separate Defaults under Paragraph 13.1 during any twelve (12) month period, whether or not the Defaults are cured, or (iii) if Tenant commits a Breach of this Lease.

40. Rules and Regulations . Tenant agrees that it will abide by, and keep and observe all reasonable rules and regulations (“Rules and Regulations”) which Landlord may reasonably make from time to time for the management, safety, care, and cleanliness of the grounds, the parking and unloading of vehicles and the preservation of good order, as well as for the convenience of other occupants or tenants of the Building and the Industrial Center and their invitees.

41. Security Measures . Tenant hereby acknowledges that the rental payable to Landlord hereunder does not include the cost of guard service or other security measures, and that Landlord shall have no obligation whatsoever to provide same. Tenant assumes all responsibility for the protection of the Premises, Tenant, its agents and invitees and their property from the acts of third parties.

42. Reservations . Landlord reserves the right, from time to time, to grant, without the consent or joinder of Tenant, such easements, rights of way, utility raceways, and dedications that Landlord deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights of way, utility raceways, dedications, maps and restrictions do not reasonably interfere with the use of the Premises by Tenant. Tenant agrees to sign any documents reasonably requested by Landlord to effectuate any such easement rights, dedication, map or restrictions.

43. Performance Under Protest . If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment “under protest” and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay under the provisions of this Lease.

44. Authority . If either Party hereto is a corporation, trust, limited liability company, or general or limited partnership, each individual executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on it’s behalf and that such entity is duly authorized and existing and qualified to do business in California and that Tenant has the full right and legal authority to enter into this lease.

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45. Conflict . Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions.

46 . Offer . Preparation of this Lease by either Landlord or Tenant or Landlord’s agent or Tenant’s agent and submission of same to Tenant or Landlord shall not be deemed an offer to lease. This Lease is not intended to be binding until executed and delivered by all Parties hereto.

47. Amendments . This Lease may be modified only in writing, signed by the parties in interest at the time of the modification. The Parties shall amend this Lease from time to time to reflect any adjustments that are made to the Base Rent or other rent payable under this Lease. As long as they do not materially change Tenant’s obligations hereunder, Tenant agrees to make such reasonable non-monetary modification to this Lease as may be reasonably required by an institutional insurance company or pension plan Lender in connection with the obtaining of normal financing or refinancing of the property of which the Premises are a part.

48. Multiple Parties . Except as otherwise expressly provided herein, if more than one person or entity is named herein as either Landlord or Tenant, the obligations of such multiple parties shall be the joint and several responsibility of all persons or entities named herein as such Landlord or Tenant.

49. Tenant Improvements . Landlord at Landlord’s sole cost and expense (without inclusion within Common Area Operating Expenses), shall plan, permit and construct the Tenant Improvements pursuant to the space plan attached hereto as Exhibit A. Such work includes:

The build out in this space is existing and includes lights and flooring and consists of a dropped ceiling which is 10 ft. high with 2x4 T-bar ceiling grid with 2x4 second look white Armstrong tiles. Any new improvements will be created using these same building standards.

The break room will be created where shown and will consist of an 8’ ft. counter with sink and vct floor. A new ceiling and glass wall will be added. Dishwasher, refrigerator and cabinets will be installed. Landlord will also construct an outdoor seating area attached to the break room by replacing the two existing parking stalls.

All new office doors to be 9’ prefinished birch. All new offices to have 3’ sidelights.

All new walls will be drywall on metal stud and will be straight and painted Swiss Coffee.

Landlord will provide 130 6x6 cubes as shown (“Cubicles”) in a configuration agreeable by Tenant.

The truck door will be replaced with glass.

Any upgrades to these specs or to a normal office or warehouse environment requested by Tenant to be paid for by Tenant (this includes any additional HVAC loads above 1 ton per 400 except for the server room as shown above), any increased fire ratings, any hard ceilings, any soffits, any special lighting or a/v equipment, any signs, any security equipment, any phones or network wiring or communications equipment, any dark rooms and their affiliated walls, any non drywall walls, any item that is not straight in nature such as curved walls or cornices, any appliances, any electrical hookups for equipment, any electrical drops, any piping for air or gases, any increased power loads, any power strips, any electric over a standard office environment, any soundproofing, any office furniture outside of the cubicles.

All window coverings by Tenant, approved by landlord.

Server room shall have a dedicated 5 ton hvac unit.

Costs for all architect’s fees and permits are included.

All construction shall be done in a good and workmanlike manner and in compliance with all applicable laws and codes. Architectural drawings will be provided for timely review and approval by Tenant.

Provided such modifications do not increase the cost of the tenant improvements or result in delays in the substantial completion of the construction, Tenant shall be entitled to make reasonable modifications to the tenant improvements described herein upon Landlord’s reasonable approval.

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When the Landlord believes that the Tenant Improvements are substantially completed, Tenant and Landlord will conduct a punchlist inspection of the Premises and, if any incomplete or defective construction is noted or the punchlist will materially interfere with the conduct of Tenant’s business in the Premises, the Tenant Improvements shall not be deemed “substantially completed” until all such material items are corrected. All other punchlist times shall be corrected as soon as reasonably possible.

Tenant shall have the right to use the Cubicles at all times during the Term at no additional cost.

LANDLORD AND TENANT HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE PREMISES.

THIS LEASE PREPARED FOR YOUR ATTORNEY’S REVIEW AND APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED TO THE PRESENCE OF ASBESTOS, UNDERGROUND STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE BROKERS OR THEIR CONTRACTORS, AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES; THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. IF THE SUBJECT PROPERTY IS IN A STATE OTHER THAN CALIFORNIA, AN ATTORNEY FROM THE STATE WHERE THE PROPERTY IS LOCATED SHOULD BE CONSULTED.

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The parties hereto have executed this Lease at the place and on the dates specified above their respective signatures..

Executed at:		Executed at:

on:		on:


By Landlord:		By Tenant:
DeGuigne Ventures, LLC		eGain Communications corporation

By: David Dollinger Living Trust
Its: Sole Member

By:		By:
David Dollinger, Trustee
		Name Printed:

		Title:
		Address:
		Telephone: ( )
		Facsimile: ( )

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Exhibit A

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Exhibit 21.1

Subsidiaries of eGain

1. eGain Communications Ltd. (UK)

2. eGain Communications Pvt. Ltd. (India)

3. eGain Communications SrL (Italy)

4. eGain Communications B.V. (Netherlands)

5. eGain Communications Ltd. (Ireland)

6. eGain France S.A.R.L.(France)

7. eGain Deutschland GmbH (Germany)

8. Exony Ltd (UK)

9. Exony, Inc. (USA)

Exhibit 24.1

Pursuant to the requirements of the Securities Exchange Act of 1934, this Amendment No. 1 to Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Name	Title	Date

/s/ Ashutosh Roy	Chief Executive Officer and Director (Principal Executive Officer)	October 24, 2014
Ashutosh Roy

/s/ Eric N. Smit	Chief Financial Officer (Duly Authorized Officer and Principal Financial and Accounting Officer)	October 24, 2014
Eric N. Smit

/s/ David Scott *	Director	October 24, 2014
David Scott

/s/ Gunjan Sinha*	Director	October 24, 2014
Gunjan Sinha

/s/ Phiroz P. Darukhanavala *	Director	October 24, 2014
Phiroz P. Darukhanavala


/s/ Eric N. Smit
By: Eric N. Smit Attorney-in-Fact

Exhibit 31.1

CERTIFICATIONS

I, Ashutosh Roy, certify that:

1.	I have reviewed this annual report on Form 10-K of eGain Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ A SHUTOSH R OY
	Ashutosh Roy
	Chief Executive Officer

Date: October 24, 2014

Exhibit 31.2

I, Eric Smit, certify that:

1.	I have reviewed this annual report on Form 10-K of eGain Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ E RIC N. S MIT
	Eric N. Smit
	Chief Financial Officer

Date: October 24, 2014

Exhibit 32.1

STATEMENT OF CHIEF EXECUTIVE OFFICER UNDER 18 U.S.C. § 1350

I, Ashutosh Roy, the chief executive officer of eGain Corporation (the “Company”), certify for the purposes of section 1350 of chapter 63 of title 18 of the United States Code that, to my knowledge,

(i) the Annual Report of the Company on Form 10-K for the period ending June 30, 2014 the (“Report”), fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934, and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ ASHUTOSH ROY

Ashutosh Roy

October 24, 2014

A signed original of this written statement required by 18 U.S.C. § 1350 has been provided to eGain Corporation and will be retained by eGain Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

STATEMENT OF CHIEF FINANCIAL OFFICER UNDER 18 U.S.C. § 1350

I, Eric Smit, the chief financial officer of eGain Corporation (the “Company”), certify for the purposes of section 1350 of chapter 63 of title 18 of the United States Code that, to my knowledge,

(i) the Annual Report of the Company on Form 10-K for the period ending June 30, 2014 (the “Report”), fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934, and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ E RIC N. S MIT

E RIC N. S MIT

October 24, 2014