Exhibit 10.17

 

LEASE AGREEMENT

 

THIS LEASE (this “Lease”) is made as of 3/28, 2005 by and between Genesis
Partners, LLC of Bozeman, Montana, herein referred to as “Landlord”, and Right
Now Technologies, Inc., a Montana corporation, of Bozeman, Montana, hereinafter
referred to as “Tenant”.

 

WITNESSETH:

 

1. Leased Property. Landlord hereby leases to Tenant the office building located
on the real property in Gallatin County, Montana whose address is 77 Discovery
Drive, Bozeman, Montana, consisting of approximately 9184 square feet as
depicted on the attached Exhibit A, together with (i) the non-exclusive right of
ingress and egress for Tenant and its employees, agents, invitees and
contractors between the building and the nearest public streets, and (ii) the
exclusive right to use the parking lot surrounding the building for its
employees, agents, invitees and contractors (the “premises”). Landlord
represents and agrees that the parking lot will provide, at all times during the
term of this Lease, a parking ratio of not less than five spaces per 1000 square
feet of rentable square footage in buildings whose tenants are or will be using
the parking lot.

 

2. Terms of Lease. The primary term of this Lease shall be for sixty (60) months
commencing on the 1st day of April, 2005, and ending on the 31st day of March,
2010, both dates inclusive, unless sooner terminated as herein provided.

 

3. Option to Extend. Upon expiration of the primary term of this Lease, Tenant
is granted an option to extend the term of this Lease for two (2) additional
sixty (60) month periods, each (each an “extension term”) upon the same terms
and conditions as are included in this Lease, subject, however, to renegotiation
of the rent provided in paragraph 4 of this Lease. The primary term and the
extension terms will be collectively referred to in this Lease as the “term.”
Tenant shall notify Landlord within not less than one hundred twenty (120) days
prior to the expiration of the primary term of this Lease or prior to the
expiration of each extension term of Tenant’s exercise of its option to extend
this Lease, provided that in the circumstances described in paragraph 13, the
options to extend the term may be exercised earlier as provided in paragraph 13,
and if the option to extend is exercised earlier as provided in paragraph 13,
nevertheless, the rental payable as provided in

 

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paragraph 4 shall be determined at the time and in the manner provided in
paragraph 4 and this paragraph 3. During the following sixty (60) day period,
Tenant and Landlord shall negotiate and arrive at an agreement or disagreement
of the amount of rent to be paid during the applicable extension term. If
Landlord and Tenant agree upon the rent to be paid during the applicable
extension term, Landlord and Tenant shall at the end of the sixty (60) day
period enter into a new written lease or an amendment agreement setting forth
the amount of rental Tenant shall be required to pay pursuant paragraph 4 for
the applicable extension term and any other additional terms to which Landlord
and Tenant have agreed. If Tenant and Landlord fail to agree upon the rent to be
paid during the applicable extension term during the sixty (60) day period of
negotiations, a fair market appraisal comparison of comparable properties will
be completed by an independent party upon which the Landlord and Tenant may use
to negotiate the amount of rent to be paid during the applicable extension term.
If Tenant and Landlord fail to agree upon the rent to be paid during the
applicable extension term during the sixty (60) day period of negotiations,
either Landlord or Tenant may, by written notice to the other party given within
the ensuing thirty (30) day period, elect to invoke the arbitration provisions
of this Lease to determine the rent Tenant shall be required to pay pursuant to
paragraph 4 for the applicable extension term.

 

4. Rent. Tenant shall pay as rental for the premises for the first year of the
primary term of the Lease the sum of $133,260 computed at the rate of $14.51 per
square foot on 9184 square feet of office space, payable monthly, in advance on
the first day of each month, in installments of $11,105 per month. On each
anniversary date of this Lease, beginning on April 1st, 2007, the annual rent
shall be increased by 2%. Rent shall be paid without notice or demand by
Landlord to Landlord at 895 Technology Blvd, Suite 101, Bozeman, Montana 59718
or at such other place as Landlord may direct in writing.

 

5. Covenants. Tenant hereby acknowledges and agrees:

 

A. Tenant is familiar with the premises. Tenant’s taking of possession of the
premises shall be conclusive evidence that the premises were in good, clean and
sanitary condition, are in all respects satisfactory and acceptable to Tenant,
and are in the condition in which Landlord represented the premises to be.

 

B. Tenant will keep the premises in a clean and sanitary condition during the
term of this Lease. Landlord shall have no obligation to make any alterations or
improvements of any kind in or

 

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about the premises other than as set forth in this Lease. Tenant shall repair or
replace promptly all damages to the premises due to acts of Tenant, its agents,
employees, invitees, or subtenants, reasonable wear and tear excepted. Tenant
also shall not cause any waste to be committed in or about the premises; Tenant
will keep the premises free and clear of any and all refuse and debris; and
Tenant agrees to observe all rules and regulations of the County of Gallatin and
State of Montana in any way relating to maintenance, use and occupancy of the
premises.

 

C. Tenant will not use or permit anything to be used upon the premises which is
likely to deface or damage the premises, or do anything that will increase the
rate of insurance thereof (unless Tenant first agrees to pay any increased
premiums), or permit anything to be done upon the premises or in the areas,
sidewalk or streets adjacent to the premises, which will amount to or create a
nuisance.

 

D. Tenant shall make no alterations in or additions to the premises without
first obtaining Landlord’s written consent, which consent will not be
unreasonably withheld, delayed or conditioned. Tenant shall not erect or permit
to be erected upon the premises any signs without written consent of Landlord,
which consent will not be unreasonable withheld, delayed or conditioned.

 

E. Tenant agrees, with respect to all alterations or improvements to the
premises or any part thereof, which Tenant undertakes with written consent of
Landlord, that Tenant shall in all instances save Landlord and the premises
forever harmless and free from all damages, loss and liability of every kind and
character which may be claimed, asserted or charged, including liability to
adjacent owners or tenants, based upon the acts or negligence of Tenant or its
agents, contractors or employees, for any negligence, or for the failure of any
of them to observe and comply with the requirements of the law, including the
regulations and the authorities in the City of Bozeman, and Tenant will preserve
and hold Landlord and the premises free and clear from all liens or encumbrances
for labor and materials furnished. Any and all alterations, additions, and
improvements made by Tenant to or upon the premises (with the exception of
furnishings, equipment, and removable trade fixtures installed by Tenant) shall,
upon installation, be deemed attached and part of the premises, provided
however, that if prior to termination of this Lease, or within fifteen (15) days
thereafter, Landlord so directs by written notice to Tenant, promptly following
said termination of this Lease, Tenant shall remove such of the said additions,

 

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improvements, fixtures, and installations placed upon the demised premises by
Tenant as shall by designated in said notice from Landlord, and Tenant shall
repair any damages occasioned by such removal. Further, in this regard, Tenant
hereby agrees that it will, during the continuance of this Lease, keep the
premises and interior of the premises in good condition and repair, reasonable
wear and tear excepted.

 

F. Tenant may use and occupy the premises for the purpose of a business office
and all activities incidental thereto, including the manufacture of software,
and not otherwise. Tenant shall not use or knowingly permit any part of the
premises to by used for any unlawful purposes and shall comply with all
applicable laws and regulations of the County of Gallatin, State of Montana, and
the United States of America.

 

G. Tenant agrees that Landlord shall not be liable for any damage or injury to
persons or property or for the loss of property sustained by Tenant or by any
other person or persons on the premises due to any act of negligence of Tenant.

 

H. Tenant agrees that it will not assign this Lease or sublease any portion of
the premises or permit this Lease to transferred by operation of law or
otherwise without the written consent of Landlord, which consent shall not be
unreasonably withheld, delayed or conditioned; provided, however, that any
merger and reorganization of Tenant for the purpose of incorporating under
another state law shall not be deemed to be an assignment for purposes of this
paragraph and shall not require Landlord’s consent, or that any merger or change
in control of the Tenant shall not be deemed to be an assignment for the
purposes of this paragraph and shall not require Landlord’s consent. Tenant
shall remain responsible under this Lease for any portion of the premises sublet
by Tenant (even if Landlord approved the subletting), unless Landlord shall
agree otherwise. Any subtenant to whom any portion of the property is sublet
shall agree to abide by the provisions of this Lease which are applicable to the
sublet portion of the premises, before Landlord will be required to consent to
the proposed subleasing of any portion of the premises.

 

I. Tenant will permit Landlord, at all reasonable times and after reasonable
notice to Tenant at Landlord’s sole risk and expense and in a manner that causes
the least practical disruption to Tenant, to enter upon the premises (i) to
inspect their condition and to make reasonable and necessary repairs for the
protection and preservation of the premises, (ii) to ascertain whether Tenant
has performed its covenants under this Lease, and (iii) to show the premises to
persons who

 

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may wish to rent the premises after the expiration of the term of this Lease or
to purchase the premises, provided that any showing of the premises to persons
who may wish to rent the premises shall be only during the last year of the term
of the Lease.

 

J. Tenant, upon leaving the premises, shall at its own expense, remove all dirt,
rubbish, and refuse and upon failure to do so, Landlord may immediately, without
further notice, do so at Tenant’s expense. Tenant shall immediately pay
Landlord’s expenses upon receipt of a bill for the same from Landlord.

 

6. Default and Landlord’s Rights. If the premises shall be deserted or vacated,
or if a trustee or receiver of a substantial portion of Tenant’s property is
appointed, or if an order is enetered against Tenant for relief under Title 11
of the United States Code, or there shall be a default in payment of any rent
for more than five (5) days after written notice of such default from Landlord,
or there shall be a default in the performance or any other covenant, agreement,
condition, rule or regulation herein contained, or hereafter established with
Tenant’s consent, which shall continue for more than thirty (30) days (or, if
the default is not curable within thirty (30) days and if Tenant begins to cure
the default within such thirty (30) day period and diligently pursues curing the
same, then for such for additional period as shall be reasonably necessary to
cure the default) after Tenant’s receipt of written notice of such default from
Landlord, Tenant’s rights in this Lease (if Landlord so elects, and such
election is reserved) shall thereupon terminate and end without the necessity
for any further notice, and Landlord shall have the right to re-enter and
repossess the premises in the manner permitted by law and dispossess or remove
there from Tenant or other occupants thereof and their effects without being
liable to any prosecution or action therefore. Landlord may likewise, at
Landlord’s option, and in addition to any other remedies which Landlord may have
upon default, let and relet the premises in whole or in part, altering, changing
or subdividing the same as in its reasonable judgment may accomplish the best
rental results, and upon such terms and for such length of time, whether lesser
or greater than the unexpired portion of the term of this Lease, as Landlord may
reasonably see fit, and Tenant shall be liable to Landlord for any deficiency
between the remaining unpaid rental and the rental so procured by Landlord for
the period of said letting or reletting which is during the remaining term of
this Lease and shall further be liable for the reasonable costs of reletting and
alterations or changes required to enable Landlord to let and relet the
premises, the deficiency and costs not to exceed, however, the balance of the

 

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unpaid rental due from tenant for the remaining term of the Lease. Landlord any
institute action for the whole of any such deficiency immediately upon effecting
a letting or reletting and shall not thereafter be precluded from further like
action in the event such letting or relettng shall not cover the entire
unexpired portion of the term hereof, or Landlord may monthly, or at such
greater intervals as it may see fit, require Tenant to pay said deficiency then
existing, and Tenant agrees to pay said deficiency to Landlord from time to time
when called upon by Landlord to do so. Should this Lease not be terminated,
Landlord may, notwithstanding such letting or reletting, at any time thereafter
elect to terminate it. Tenant, upon termination as herein provided, will yield
quiet and peaceful possession to Landlord, subject to any letting or reletting
Landlord has effected of the premises. If Landlord shall give the notice of
termination as herein provided, then, at the expiration of such period, this
Lease shall terminate as completely as if that were the date herein fixed for
the expiration of the term of this Lease, and Tenant shall then surrender the
premises to Landlord.

 

7. No Waiver of Breach. Tenant agrees that no consent, expressed or implied, by
Landlord to any breach of Tenant’s covenants or agreements shall be deemed a
waiver of any succeeding breach.

 

8. Notice. It is agreed that all notices herein required to be given shall be
effective upon mailing, postage prepaid, addressed to Landlord at 895 Technology
Blvd, Suite 101 Bozeman, Montana 59718 or addressed to Tenant at 45 Discovery
Drive, Bozeman, Montana or such other place as either may designate in writing
to the other. In addition, any notice from Landlord to Tenant relating to this
Lease or the premises shall be deemed duly served if personally delivered to an
officer of Tenant at the premises.

 

9. Surrender Upon Termination. Tenant shall, upon termination of the term,
peacefully and quietly surrender the premises to Landlord in as good condition
as it was at the beginning, reasonable use and wear and damage by the elements
excepted. Tenant shall remove all of its personal property and trade fixtures
(repairing any damage to the premises such removal causes) so that Landlord can
repossess and enjoy the premises not later than noon on the day upon which the
term ends, whether upon notice or by holdover or otherwise. Landlord shall have
the right to enforce this covenant by ejectment, for damages, or for breach of
any other condition or covenant of this Lease.

 

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10. Peaceful Possession. Landlord covenants and agrees, at its sole expense,
that the exterior, structure, the roof and the heating, ventilating, air
conditioning, electrical, plumbing and all utility systems on or in the premises
shall be maintained in good repair and tenantable condition, excepting damage
resulting from neglect or intentional acts of Tenant, its agents, employees,
contractors and invitees. So long as Tenant pays the rent and performs the
covenants and agreements herein contained, Tenant shall peacefully and quietly
hold the premises for the primary term and any extensions thereof.

 

11. Time of Essence. Time is of the essence of this Lease with respect to the
performance by Tenant and Landlord of their obligations hereunder.

 

12. Attorney’s Fees. In the event any action to enforce any of the terms of this
Lease is brought, the prevailing party shall be entitled to its reasonable
attorney’s fees as provided in paragraph 25.

 

13. Liability - Premises. Landlord shall not be responsible or liable (i) for
any personal injury to Tenant or any other person on the premises, or for injury
or damage to personal property or improvements of Tenant or of any third party
on the premises unless such injury or damage is caused by the neglect or
omissions of Landlord, its agents or employees; (ii) for injury or damage caused
by the neglect or omissions of Tenant or its agents, contractors, invitees or
employees; or (ii) on account of any inconvenience or annoyance or damage caused
by fire, explosion, earthquake, flood or other causes beyond the control of
Landlord. Tenant will obtain general liability insurance in an amount of not
less than $1,000,000 on which Landlord shall be named as an additional insured.
If Tenant shall sublet any portion of the premises, the subtenant shall also
furnish the general liability insurance required of Tenant or be covered under
Tenant’s policy.

 

In addition, Tenant will at all times hold Landlord harmless from any claim or
damages by reason of any personal injury, property damage, or otherwise, arising
from its operation or use of the premises or any of Tenant’s equipment used in
connection therewith, provided the claim or damage is not caused by negligence
or omission of Landlord, its agents, contractors or employees.

 

Landlord shall carry, at its sole expense, all risk casualty insurance, covering
the premises, in the amount equal to the full replacement cost of the premises.
The policy shall be endorsed so that it may be terminated or amended only upon
not less than thirty (30) days prior written notice to Tenant. The policy shall
contain no co-insurance clause, a deductible amount not exceeding $5,000,

 

 

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and the insurance company’s consent to the waivers of subrogation set forth in
the next sentence. Landlord waives any claims it may have against Tenant and any
rights to grant subrogation rights to others for any loss, damage or claim which
is covered by Landlord’s insurance. In the event that the premises shall be
rendered wholly or partially untenantable by fire, explosion, earthquake, Act of
God, or any other cause beyond the control of Landlord (collectively, the
“casualties”), Landlord (i) shall rebuild and restore the premises as soon as
reasonably practicable to the premises’ former condition and use but only (A) to
the extent of the insurance proceeds Landlord receives, and (B) if the
casualties do not occur during the last two (2) years of the term (and for this
purpose the term shall include all extension terms Tenant notifies Landlord it
will exercise on or before thirty (30) days after the occurrence of any of the
casualties), or (ii) in circumstances not described in clause (ii) may, at its
option, either terminate this Lease by written notice given to Tenant within
sixty (60) days after the casualty or commence to repair the premises within
sixty (60) days after the casualty. If Landlord shall elect or be required to
repair the premises, the rental hereunder shall be abated in proportion to the
part of the premises that are untenantable, and no rental shall be payable
hereunder for the period that said premises shall be wholly untenantable,
provided that in the event any of the casualties is caused by carelessness,
negligence or improper conduct of Tenant, or of Tenant’s agents, employees,
contractors or invitees, the rental shall not be so abated.

 

All fixtures or improvements placed on the premises by Tenant, which shall be
damaged or destroyed, shall be repaired and replaced by Tenant at its own
expense and not at the expense of Landlord.

 

If any of the glass or plate glass in the premised shall be damaged or become
broken from the inside, Tenant shall replace, at Tenant’s own cost and expense,
all such glass or plate glass broken. If the glass is damaged or broken from the
outside, Landlord shall replace the same at its own cost and expense.

 

14. Repairs and Maintenance. Landlord shall bear the entire expense of all
repairs, maintenance, alterations, or improvements to the basic structure
(exterior walls, roof, heating, ventilating, air conditioning, electrical,
plumbing and other systems on the premises). Landlord shall, in addition, bear
the entire expense for the repair and maintenance of the parking area, including
landscaping and keeping the parking area free of rubbish, ice and snow. Tenant
shall pay

 

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at its own expense, all repairs, maintenance, and alterations of Tenant
installed fixtures or improvements and utilities.

 

15. Utilities. Taxes Etc. Tenant shall pay for all telephone, water/sewer,
electricity, natural gas, fire system monitoring, security systems, and
janitorial services used in the operation of the premises. Tenant agrees to pay
for replacement of light bulbs. Landlord shall pay for all real property taxes
and assessments levied and assessed against the premises and for snow removal
and lawn maintenance.

 

16. No Smoking Policy. There will be no smoking allowed anywhere in the premises
by anyone. It will be Tenant’s responsibility to convey to and enforce this
policy by its employees, agents and all other invitees.

 

17. Paragraph Headings. The paragraph headings in this instrument are for
convenience only and do not limit or construe the contents or any paragraphs.

 

18. Severability. It is the intent of the parties that if a part of this Lease
is invalid, all valid parts that are severable from the invalid part shall
remain in effect. If a part of this Lease is invalid in one or more of it
applications, that part remains in effect in all valid applications that are
severable from the invalid applications.

 

19. Landlord’s Liability. The term “Landlord” as used herein shall mean only the
owner or owners at the time in question of the premises. In the event of any
transfer of such title or interest, Landlord herein named (and in case of any
subsequent transfers the then grantor) shall be relieved from and after the date
of such transfer of all liabilities as respects Landlord’s obligations
thereafter to be performed, provided that any funds in the hands of Landlord or
the then grantor at time of such transfer in which Tenant has an interest shall
be delivered to the grantee, who shall assume the obligations of Landlord or the
then grantor to Tenant with respect to those funds. The obligations contained in
this Lease to be performed by Landlord shall, subject to the foregoing
provisions of this paragraph 19, be binding on Landlord’s successors and
assigns.

 

20. Supersedes. This Lease supersedes all prior agreements between the parties.

 

21. Exercise of Rights. The omission of Landlord or Tenant to exercise any right
provided for on the default of the other at any time shall not preclude Landlord
or Tenant from the exercise of such right at any subsequent default of the other
or be deemed a waiver thereof or the right to do so.

 

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22. Binding Effect. This Lease shall be binding upon and inure to the benefit of
the heirs, successors, administrators, and permitted assigns of the parties
hereto.

 

23. Security Deposit. The parties acknowledge that at the execution of this
Lease, Landlord holds the sum of $10,000 as a security deposit in connection
with a prior lease of the premises. Landlord shall continue to hold and use the
security deposit as security for Tenant’s performance of its obligations under
this Lease. At the termination of this Lease and if at that time Tenant has
fully complied with all of its obligations under this Lease, Landlord shall
return the security deposit, without interest (or the part of the security
deposit which Landlord has not applied to satisfy Tenant’s obligations under
this Lease), to Tenant

 

24. Governing Law. This Agreement and all matters relating thereto shall be
governed by the laws of Montana..

 

25. Arbitration. Any dispute under this Lease shall be decided by binding
arbitration initiated and conducted in accordance with the commercial
arbitration rules of the American Arbitration Association (“AAA”). The parties
shall decide upon the arbitrator. If the parties are unable to decide upon the
arbitrator within ten (10) days after a notice from one party to the other that
a dispute exists under this Lease, the AAA shall select the arbitrator. The
decision of the arbitrator shall be binding. All costs of arbitration shall be
borne by the party the arbitrator determines to be the non-prevailing party.
Such costs shall include the costs and reasonable attorneys’ fees of the
prevailing party.

 

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IN WITNESS WHEREOF, the parties have hereunto set their hands as of the date and
year first written above.

 

 

GENESIS PARTNERS, LLC – Landlord

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

/s/ Steve Daines

 

3/24/05

 

Steve Daines, member – Landlord

 

date

 

 

 

 

 

 

 

 

 

/s/ Clair Daines

 

3/28/05

 

Clair Daines, member – Landlord

 

date

 

 

 

 

 

 

 

 

 

/s/ Greg Gianforte

 

3/28/05

 

Greg Gianforte, member – Landlord

 

date

 

 

 

 

 

 

 

 

 

Right Now Technologies, Inc. – Tenant

 

 

 

 

 

 

 

 

 

 

 

By

/s/ Alan Rassaby

 

3/17/05

 

 

Alan Rassaby

 

date

 

 

Company Secretary

 

 

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