Document:

Purchase Agreement dated as of February 19, 2004

 Exhibit 4.4 
  
 PURCHASE AGREEMENT 
  
 THIS PURCHASE AGREEMENT (“Agreement”) is made as of the 19th day of February, 2004 by and among Rainmaker Systems, Inc., a Delaware corporation
(the “Company”), and the Investors set forth on the signature pages affixed hereto (each an “Investor” and collectively the “Investors”). 
  
 Recitals 
  
 A. The Company and the Investors are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the
provisions of Regulation D (“Regulation D”), as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended; and 
  
 B. The Investors wish to purchase from the Company, and the Company wishes to
sell and issue to the Investors, upon the terms and conditions stated in this Agreement, (i) an aggregate of 4,666,700 shares of the Company’s Common Stock, par value $0.001 per share (the “Common Stock”), and (ii) warrants to
purchase an aggregate of 933,340 shares of Common Stock in the form attached hereto as Exhibit A (the “Warrants”); and 
  
 C. Contemporaneous with the sale of the Common Stock and Warrants, the parties hereto will execute and deliver a Registration Rights Agreement, in the
form attached hereto as Exhibit B (the “Registration Rights Agreement”), pursuant to which the Company will agree to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, and applicable state securities laws. 
  
 In consideration of the mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 
  
 1. Definitions. In addition to those terms defined above and elsewhere
in this Agreement, for the purposes of this Agreement, the following terms shall have the meanings set forth below: 
  
 “Affiliate” means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls,
is controlled by, or is under common control with, such Person. 
  
 “Business Day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business. 

 “Common Stock” means the common stock, par value $0.001 per share, of the Company, and
any securities into which the Common Stock may be reclassified. 
  
 “Company’s Knowledge” means the actual knowledge of the executive officers (as defined in Rule 405 under the 1933 Act) of the Company, after due inquiry. 
  
 “Confidential Information” means trade secrets, confidential information and know-how (including but not
limited to ideas, formulae, compositions, processes, procedures and techniques, research and development information, computer program code, performance specifications, support documentation, drawings, specifications, designs, business and marketing
plans, and customer and supplier lists and related information). 
  
 “Control” (including the terms “controlling”, “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 
  
 “Intellectual Property” means all of the following: (i) patents, patent applications, patent disclosures and inventions (whether or not
patentable and whether or not reduced to practice); (ii) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and Internet domain names, together with all goodwill associated with each of the foregoing; (iii)
copyrights and copyrightable works; (iv) registrations, applications and renewals for any of the foregoing; and (v) proprietary computer software (including but not limited to data, data bases and documentation). 
  
 “Material Adverse Effect” means a material adverse effect on
(i) the assets, liabilities, results of operations, financial condition or business of the Company and its Subsidiaries taken as a whole, or (ii) the ability of the Company to perform its obligations under the Transaction Documents. 
  
 “Nasdaq” means The Nasdaq Stock Market, Inc. 
  
 “Person” means an individual, corporation, partnership,
limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein. 
  
 “Purchase Price” means Seven Million Fifty One Dollars and
Fifty Cents ($7,000,051.50). 
  
 “Registration
Statement” has the meaning ascribed to such term in the Registration Rights Agreement. 
  
 “SEC Filings” has the meaning set forth in Section 4.6. 
  
 “Securities” means the Shares, the Warrants and the Warrant Shares. 
  
  

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 “Shares” means the shares of Common Stock being purchased by the Investors hereunder.

  
 “Subsidiary” has the meaning set forth in
Section 4.1. 
  
 “Transaction Documents” means
this Agreement, the Warrants and the Registration Rights Agreement. 
  
 “Warrant Shares” means the shares of Common Stock issuable upon the exercise of the Warrants. 
  
 “1933 Act” means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

  
 “1934 Act” means the Securities Exchange Act
of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder. 
  
 2. Purchase and Sale of the Shares and Warrants. Upon the terms and subject to the conditions of this Agreement, on the Closing Date, each of the
Investors shall severally, and not jointly, purchase, and the Company shall sell and issue to the Investors, the Shares and Warrants in the respective amounts set forth opposite the Investors’ names on the signature pages attached hereto in
exchange for the Purchase Price as specified in Section 3 below. 
  
 3. Closing. Upon confirmation that the other conditions to closing specified herein have been satisfied or duly waived by the Investors, the Company shall deliver to Lowenstein Sandler PC, in trust, a certificate or certificates,
registered in such name or names as the Investors may designate, representing the Shares and Warrants, with instructions that such certificates are to be held for release to the Investors only upon payment in full of the Purchase Price to the
Company by all the Investors. Upon such receipt by Lowenstein Sandler PC of the certificates, each Investor shall promptly, but no more than one Business Day thereafter, cause a wire transfer in same day funds to be sent to the account of the
Company as instructed in writing by the Company, in an amount representing such Investor’s pro rata portion of the Purchase Price as set forth on the signature pages to this Agreement. On the date (the “Closing Date”) the Company
receives the Purchase Price, the certificates evidencing the Shares and Warrants shall be released to the Investors (the “Closing”). The Closing of the purchase and sale of the Shares and Warrants shall take place at the offices of
Lowenstein Sandler PC, 1330 Avenue of the Americas, 21st Floor, New York, New York, or at such other location and on such other date as the Company and the Investors shall mutually agree. 
  
 4. Representations and Warranties of the Company. The Company hereby represents and warrants to the Investors that,
except as set forth in the schedules delivered herewith (collectively, the “Disclosure Schedules”): 
  
 4. 1 Organization, Good Standing and Qualification. Each of the Company and its Subsidiaries is a corporation duly organized,
validly existing and in good standing under 
  

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 the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to
carry on its business as now conducted and to own its properties. Each of the Company and its Subsidiaries is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property makes such qualification or leasing necessary unless the failure to so qualify has not and could not reasonably be expected to have a Material Adverse Effect. The Company’s subsidiaries are reflected on
Schedule 4.1 hereto (the “Subsidiaries”). 
  
 4.2 Authorization. The Company has full power and authority and has taken all requisite action on the part of the Company, its officers, directors and stockholders necessary for (i) the authorization, execution
and delivery of the Transaction Documents, (ii) authorization of the performance of all obligations of the Company hereunder or thereunder, and (iii) the authorization, issuance (or reservation for issuance) and delivery of the Securities. The
Transaction Documents constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability, relating to or affecting creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law). 
  
 4.3 Capitalization. Schedule 4.3 sets forth
(a) the authorized capital stock of the Company on the date hereof; (b) the number of shares of capital stock issued and outstanding; (c) the number of shares of capital stock issuable pursuant to the Company’s stock plans; and (d) the number
of shares of capital stock issuable and reserved for issuance pursuant to securities (other than the Shares and the Warrants) exercisable for, or convertible into or exchangeable for any shares of capital stock of the Company. All of the issued and
outstanding shares of the Company’s capital stock have been duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights and were issued in full compliance with applicable state and federal securities law
and any rights of third parties. Except as described on Schedule 4.3, all of the issued and outstanding shares of capital stock of each Subsidiary have been duly authorized and validly issued and are fully paid, nonassessable and free of
pre-emptive rights, were issued in full compliance with applicable state and federal securities law and any rights of third parties and are owned by the Company, beneficially and of record, subject to no lien, encumbrance or other adverse claim.
Except as described on Schedule 4.3, no Person is entitled to pre-emptive or similar statutory or contractual rights with respect to any securities of the Company. Except as described on Schedule 4.3, there are no outstanding warrants,
options, convertible securities or other rights, agreements or arrangements of any character under which the Company or any of its Subsidiaries is or may be obligated to issue any equity securities of any kind and except as contemplated by this
Agreement, neither the Company nor any of its Subsidiaries is currently in negotiations for the issuance of any equity securities of any kind. Except as described on Schedule 4.3 and except for the Registration Rights Agreement, there are no voting
agreements, buy-sell agreements, option or right of first purchase agreements or other agreements of any kind among the Company and any of the securityholders of the Company relating to the securities of the Company held by them. Except as described
on Schedule 4.3, no Person has the right to require the Company to register any securities of the Company under the 1933 Act, whether on a demand basis or in connection with the registration of securities of the Company for its own account or
for the account of any other Person. 
  

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 Except as described on Schedule 4.3, the issuance and sale of the Securities
hereunder will not obligate the Company to issue shares of Common Stock or other securities to any other Person (other than the Investors) and will not result in the adjustment of the exercise, conversion, exchange or reset price of any outstanding
security. 
  
 Except as described on Schedule
4.3, the Company does not have outstanding stockholder purchase rights or “poison pill” or any similar arrangement in effect giving any Person the right to purchase any equity interest in the Company upon the occurrence of certain
events. 
  
 4.4 Valid Issuance. The Shares
have been duly and validly authorized and, when issued and paid for pursuant to this Agreement, will be validly issued, fully paid and nonassessable, and shall be free and clear of all encumbrances and restrictions (other than those created by the
Investors), except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws. The Warrants have been duly and validly authorized. Upon the due exercise of the Warrants, the Warrant Shares will be
validly issued, fully paid and non-assessable free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws and except for those created by
the Investors. The Company has reserved a sufficient number of shares of Common Stock for issuance upon the exercise of the Warrants, free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the
Transaction Documents or imposed by applicable securities laws and except for those created by the Investors. 
  
 4.5 Consents. The execution, delivery and performance by the Company of the Transaction Documents and the offer, issuance and sale
of the Securities require no consent of, action by or in respect of, or filing with, any Person, governmental body, agency, or official other than actions or filings described in the Transaction Documents, filings that have been made pursuant to
applicable state securities laws and post-sale filings pursuant to applicable state and federal securities laws which the Company undertakes to file within the applicable time periods. Subject to the accuracy of the representations and warranties of
each Investor set forth in Section 5 hereof, the Company has taken all action necessary to exempt (i) the issuance and sale of the Securities, (ii) the issuance of the Warrant Shares upon due exercise of the Warrants, and (iii) the other
transactions contemplated by the Transaction Documents from the provisions of any shareholder rights plan or other “poison pill” arrangement, any anti-takeover, business combination or control share law or statute binding on the Company or
to which the Company or any of its assets and properties may be subject and any provision of the Company’s Certificate of Incorporation or By-laws that is or could reasonably be expected to become applicable to the Investors as a result of the
transactions contemplated hereby, including without limitation, the issuance of the Securities and the ownership, disposition or voting of the Securities by the Investors or the exercise of any right granted to the Investors pursuant to this
Agreement or the other Transaction Documents. 
  
 4.6 Delivery of SEC Filings; Business. The Company has made available to the Investors through the EDGAR system, true and complete copies of the Company’s most 
  

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 recent Annual Report on Form 10-K for the fiscal year ended December 31, 2002 (the “10-K”), and
all other reports filed by the Company pursuant to the 1934 Act since the filing of the 10-K and prior to the date hereof (collectively, the “SEC Filings”). The SEC Filings are the only filings required of the Company pursuant to the 1934
Act for such period. The Company and its Subsidiaries are engaged in all material respects only in the business described in the SEC Filings and the SEC Filings contain a complete and accurate description in all material respects of the business of
the Company and its Subsidiaries, taken as a whole. 
  
 4.7 Use of Proceeds. The net proceeds of the sale of the Shares and the Warrants hereunder shall be used by the Company for working capital and general corporate purposes, including, without limitation, investing in technology or
building or acquiring more low-cost capacity. 
  
 4.8 No Material Adverse Change. Since December 31, 2002, except as identified and described in the SEC Filings or as described on Schedule 4.8, there has not been: 
  
 (i) any change in the consolidated assets, liabilities, financial condition or operating results of the
Company from that reflected in the financial statements included in the 10-K, except for changes in the ordinary course of business which have not and could not reasonably be expected to have a Material Adverse Effect; 
  
 (ii) any declaration or payment of any dividend, or any
authorization or payment of any distribution, on any of the capital stock of the Company, or any redemption or repurchase of any securities of the Company; 
  
 (iii) any material damage, destruction or loss, whether or not covered by insurance to any assets or properties of the Company or its
Subsidiaries; 
  
 (iv) any waiver, not in the
ordinary course of business, by the Company or any Subsidiary of a material right or of a material debt owed to it; 
  
 (v) any satisfaction or discharge of any lien, claim or encumbrance or payment of any obligation by the Company or a Subsidiary, except in
the ordinary course of business and which is not material to the assets, properties, financial condition, operating results or business of the Company and its Subsidiaries taken as a whole (as such business is presently conducted and as it is
proposed to be conducted); 
  
 (vi) any change or
amendment to the Company’s Certificate of Incorporation or by-laws, or material change to any material contract or arrangement by which the Company or any Subsidiary is bound or to which any of their respective assets or properties is subject;

  
 (vii) any material labor difficulties or
labor union organizing activities with respect to employees of the Company or any Subsidiary; 
  

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 (viii) any material transaction entered into by the Company or a Subsidiary other than in
the ordinary course of business; 
  
 (ix) the
loss of the services of any key employee, or material change in the composition or duties of the senior management of the Company or any Subsidiary; 
  
 (x) the loss or, to the Company’s Knowledge, threatened loss of any customer which has had or could reasonably be expected to have a
Material Adverse Effect; or 
  
 (xi) to the
Company’s Knowledge, any other event or condition of any character that has had or could reasonably be expected to have a Material Adverse Effect. 
  
 4.9 SEC Filings; S-3 Eligibility. 
  
 (a) At the time of filing thereof, the SEC Filings complied as to form in all material respects with the requirements of the 1934 Act and
did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. 
  
 (b) Each registration statement and any amendment thereto
filed by the Company since January 1, 2001 pursuant to the 1933 Act and the rules and regulations thereunder, as of the date such statement or amendment became effective, complied as to form in all material respects with the 1933 Act and did not
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein not misleading; and each prospectus filed pursuant to Rule 424(b) under the
1933 Act, as of its issue date and as of the closing of any sale of securities pursuant thereto did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which they were made, not misleading. 
  
 (c) The Company is eligible to use Form S-3 to register the Registrable Securities (as such term is defined in the Registration Rights
Agreement) for sale by the Investors as contemplated by the Registration Rights Agreement. 
  
 4.10 No Conflict, Breach, Violation or Default. The execution, delivery and performance of the Transaction Documents by the Company
and the issuance and sale of the Securities will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under (i) the Company’s Certificate of Incorporation or the Company’s
Bylaws, both as in effect on the date hereof (true and complete copies of which have been made available to the Investors through the EDGAR system), or (ii)(a) any statute, rule, regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Company, any Subsidiary or any of their respective assets or properties, or (b) any agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or a Subsidiary
is bound or to which any of their respective 
  

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 assets or properties is subject, except for any such conflicts, breaches, violations or defaults that do
not have or could not reasonably be expected to have a Material Adverse Effect. 
  
 4.11 Tax Matters. The Company and each Subsidiary has timely prepared and filed all material tax returns required to have been
filed by the Company or such Subsidiary with all appropriate governmental agencies and timely paid all taxes shown thereon or otherwise owed by it. The charges, accruals and reserves on the books of the Company in respect of taxes for all fiscal
periods are adequate in all material respects, and there are no material unpaid assessments against the Company or any Subsidiary nor, to the Company’s Knowledge, any basis for the assessment of any additional taxes, penalties or interest for
any fiscal period or audits by any federal, state or local taxing authority except for any assessment which is not material to the Company and its Subsidiaries, taken as a whole. All material taxes and other assessments and levies that the Company
or any Subsidiary is required to withhold or to collect for payment have been duly withheld and collected and paid to the proper governmental entity or third party when due. There are no tax liens or claims pending or, to the Company’s
Knowledge, threatened against the Company or any Subsidiary or any of their respective assets or property. Except as described on Schedule 4.11, there are no outstanding tax sharing agreements or other such arrangements between the Company
and any Subsidiary or other corporation or entity. 
  
 4.12 Title to Properties. Except as disclosed in the SEC Filings, the Company and each Subsidiary has good and marketable title to all real properties and all other properties and assets owned by it, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or materially interfere with the use made or currently planned to be made thereof by them; and except as disclosed in the SEC Filings, the Company and each Subsidiary holds any
leased real or personal property under valid and enforceable leases with no exceptions that would materially interfere with the use made or currently planned to be made thereof by them. 
  
 4.13 Certificates, Authorities and Permits. The Company and each Subsidiary possess adequate
certificates, authorities or permits issued by appropriate governmental agencies or bodies necessary to conduct the business now operated by it, and neither the Company nor any Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit that, if determined adversely to the Company or such Subsidiary, could reasonably be expected to have a Material Adverse Effect, individually or in the aggregate. 
  
 4.14 No Labor Disputes. No material labor dispute
with the employees of the Company or any Subsidiary exists or, to the Company’s Knowledge, is imminent. 
  
 4.15 Intellectual Property. 
  
 (a) All Intellectual Property of the Company and its Subsidiaries is currently in compliance in all material respects with all legal
requirements (including timely filings, proofs and payments of fees) and is valid and enforceable. To the Company’s Knowledge, no Intellectual Property of the Company or its Subsidiaries which is necessary for the conduct of Company’s and
each of its Subsidiaries’ respective businesses as currently 
  

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 conducted or as currently proposed to be conducted has been or is now involved in any cancellation,
dispute or litigation, and, to the Company’s Knowledge, no such action is threatened. To the Company’s Knowledge, no patent of the Company or its Subsidiaries has been or is now involved in any interference, reissue, re-examination or
opposition proceeding. 
  
 (b) All of the
licenses and sublicenses and consent, royalty or other agreements concerning Intellectual Property which are necessary for the conduct of the Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as
currently proposed to be conducted to which the Company or any Subsidiary is a party or by which any of their assets are bound (other than generally commercially available, non-custom, off-the-shelf software application programs having a retail
acquisition price of less than $10,000 per license) (collectively, “License Agreements”) are valid and binding obligations of the Company or its Subsidiaries that are parties thereto and, to the Company’s Knowledge, the other parties
thereto, enforceable in accordance with their terms, except to the extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law, and there exists no event or condition which will result in a material violation or
breach of or constitute (with or without due notice or lapse of time or both) a default by the Company or any of its Subsidiaries under any such License Agreement. 
  
 (c) To the Company’s Knowledge, the Company and its Subsidiaries own or have the valid right to use all
of the Intellectual Property that is necessary for the conduct of the Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted and for the ownership, maintenance and
operation of the Company’s and its Subsidiaries’ properties and assets, free and clear of all liens, encumbrances, adverse claims or obligations to license all such owned Intellectual Property and Confidential Information, other than
licenses entered into in the ordinary course of the Company’s and its Subsidiaries’ businesses. The Company and its Subsidiaries have a valid and enforceable right to use all third party Intellectual Property and Confidential Information
used or held for use in the respective businesses of the Company and its Subsidiaries. 
  
 (d) To the Company’s Knowledge, the conduct of the Company’s and its Subsidiaries’ businesses as currently conducted does
not infringe or otherwise impair or conflict with (collectively, “Infringe”) any Intellectual Property rights of any third party or any confidentiality obligation owed to a third party, and, to the Company’s Knowledge, the
Intellectual Property and Confidential Information of the Company and its Subsidiaries which are necessary for the conduct of Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to
be conducted are not being Infringed by any third party. There is no litigation or order pending or outstanding or, to the Company’s Knowledge, threatened or imminent against the Company or any of its Subsidiaries, that seeks to limit or
challenge or that concerns the ownership, use, validity or enforceability of any Intellectual Property or Confidential Information of the Company and its Subsidiaries and the Company’s and its Subsidiaries’ use of any Intellectual Property
or Confidential Information owned by a third party, and, to the Company’s Knowledge, there is no valid basis for the same. 
  

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 (e) The consummation of the transactions contemplated hereby and by the other Transaction
Documents will not result in the alteration, loss, impairment of or restriction on the Company’s or any of its Subsidiaries’ ownership or right to use any of the Intellectual Property or Confidential Information which is necessary for the
conduct of the Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted. 
  
 (f) All software owned by the Company or any of its Subsidiaries, and, to the Company’s Knowledge, all software licensed from third
parties by the Company or any of its Subsidiaries, (i) is free from any material defect, bug, virus, or programming, design or documentation error; (ii) operates and runs in a reasonable and efficient business manner; and (iii) conforms in all
material respects to the specifications and purposes thereof. 
  
 (g) The Company and its Subsidiaries have taken reasonable steps to protect the Company’s and its Subsidiaries’ rights in their Intellectual Property and Confidential Information. Each employee, consultant
and contractor who has had access to Confidential Information which is necessary for the conduct of Company’s and each of its Subsidiaries’ respective businesses as currently conducted or as currently proposed to be conducted has executed
an agreement to maintain the confidentiality of such Confidential Information and has executed appropriate agreements that are substantially consistent with the Company’s standard forms thereof. Except under confidentiality obligations, to the
Company’s Knowledge, there has been no material disclosure of any of the Company’s or its Subsidiaries’ Confidential Information to any third party. 
  
 4.16 Environmental Matters. Neither the Company nor any Subsidiary is in violation of any statute,
rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or
human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), owns or operates any real property contaminated with any substance that is subject to any Environmental Laws, is liable for any off-site disposal or
contamination pursuant to any Environmental Laws, and is subject to any claim relating to any Environmental Laws, which violation, contamination, liability or claim has had or could reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate; and there is no pending or, to the Company’s Knowledge, threatened investigation that could reasonably be expected to lead to such a claim. 
  
 4.17 Litigation. Except as described on Schedule 4.17, there are no pending actions, suits or
proceedings against or affecting the Company, its Subsidiaries or any of its or their properties; and to the Company’s Knowledge, no such actions, suits or proceedings are threatened or contemplated. 
  
 4.18 Financial Statements. The financial statements
included in each SEC Filing present fairly, in all material respects, the consolidated financial position of the Company as of the dates shown and its consolidated results of operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with United States generally accepted accounting principles applied on a consistent basis (except as may be 
  

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 disclosed therein or in the notes thereto, and, in the case of quarterly financial statements, as
permitted by Form 10-Q under the 1934 Act). Except as set forth in the financial statements of the Company included in the SEC Filings filed prior to the date hereof or as described on Schedule 4.18, neither the Company nor any of its
Subsidiaries has incurred any liabilities, contingent or otherwise, except those incurred in the ordinary course of business, consistent (as to amount and nature) with past practices since the date of such financial statements, none of which,
individually or in the aggregate, have had or could reasonably be expected to have a Material Adverse Effect. 
  
 4.19 Insurance Coverage. The Company and each Subsidiary maintains in full force and effect insurance coverage that is customary
for comparably situated companies for the business being conducted and properties owned or leased by the Company and each Subsidiary, and the Company reasonably believes such insurance coverage to be adequate against all liabilities, claims and
risks against which it is customary for comparably situated companies to insure. 
  
 4.20 Compliance with Nasdaq Continued Listing Requirements. The Company is in compliance with applicable Nasdaq continued listing
requirements. There are no proceedings pending or, to the Company’s Knowledge, threatened against the Company relating to the continued listing of the Company’s Common Stock on Nasdaq and the Company has not received any notice of, nor to
the Company’s Knowledge is there any basis for, the delisting of the Common Stock from Nasdaq. 
  
 4.21 Brokers and Finders. No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid
right, interest or claim against or upon the Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company, other than as
described in Schedule 4.21. 
  
 4.22 No
Directed Selling Efforts or General Solicitation. Neither the Company nor any Person acting on its behalf has conducted any general solicitation or general advertising (as those terms are used in Regulation D) in connection with the offer or
sale of any of the Securities. 
  
 4.23 No
Integrated Offering. Neither the Company nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any Company security or solicited any offers to buy any security, under
circumstances that would adversely affect reliance by the Company on Section 4(2) for the exemption from registration for the transactions contemplated hereby or would require registration of the Securities under the 1933 Act. 
  
 4.24 Private Placement. The offer and sale of the
Securities to the Investors as contemplated hereby is exempt from the registration requirements of the 1933 Act. 
  
 4.25 Questionable Payments. Neither the Company nor any of its Subsidiaries nor, to the Company’s Knowledge, any
of their respective current or former stockholders, 
  

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 directors, officers, employees, agents or other Persons acting on behalf of the Company or any
Subsidiary, has on behalf of the Company or any Subsidiary or in connection with their respective businesses: (a) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity;
(b) made any direct or indirect unlawful payments to any governmental officials or employees from corporate funds; (c) established or maintained any unlawful or unrecorded fund of corporate monies or other assets; (d) made any false or fictitious
entries on the books and records of the Company or any Subsidiary; or (e) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment of any nature. 
  
 4.26 Transactions with Affiliates. Except as disclosed in the SEC Filings or as disclosed on
Schedule 4.26, none of the officers or directors of the Company and, to the Company’s Knowledge, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than as holders of
stock options and/or warrants, and for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or
from, or otherwise requiring payments to or from any officer, director or such employee or, to the Company’s Knowledge, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director,
trustee or partner. 
  
 4.27 Internal
Controls. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has
established disclosure controls and procedures (as defined in 1934 Act Rules 13a-14 and 15d-14) for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company, including the
Subsidiaries, is made known to the certifying officers by others within those entities, particularly during the period in which the Company’s most recently filed period report under the 1934 Act, as the case may be, is being prepared. The
Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of a date within 90 days prior to the filing date of the most recently filed periodic report under the 1934 Act (such date, the
“Evaluation Date”). The Company presented in its most recently filed periodic report under the 1934 Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations
as of the Evaluation Date. Since the Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term is defined in Item 307(b) of Regulation S-K) or, to the Company’s Knowledge, in other factors
that could significantly affect the Company’s internal controls. The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with GAAP and the applicable requirements of the
1934 Act. 
  

 -12- 

 4.28 Disclosures. Neither the Company nor any Person acting on its behalf has
provided the Investors or their agents or counsel with any information that constitutes or might constitute material, non-public information. The written materials delivered to the Investors in connection with the transactions contemplated by the
Transaction Documents do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

  
 5. Representations and Warranties of the Investors.
Each of the Investors hereby severally, and not jointly, represents and warrants to the Company that: 
  
 5.1 Organization and Existence. The Investor is a validly existing corporation, limited partnership or limited liability company
and has all requisite corporate, partnership or limited liability company power and authority to invest in the Securities pursuant to this Agreement. 
  
 5.2 Authorization. The execution, delivery and performance by the Investor of the Transaction Documents to which such Investor is a
party have been duly authorized and will each constitute the valid and legally binding obligation of the Investor, enforceable against the Investor in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability, relating to or affecting creditors’ rights generally. 
  
 5.3 Purchase Entirely for Own Account. The Securities to be received by the Investor hereunder will be acquired for the
Investor’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the 1933 Act, and the Investor has no present intention of selling, granting any participation in, or
otherwise distributing the same in violation of the 1933 Act. The Investor is not a registered broker dealer or an entity engaged in the business of being a broker dealer. 
  
 5.4 Investment Experience. The Investor acknowledges that it can bear the economic risk and complete
loss of its investment in the Securities and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated hereby. 
  
 5.5 Disclosure of Information. The Investor has had
an opportunity to receive all additional information related to the Company requested by it and to ask questions of and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the
Securities. The Investor acknowledges receipt of copies of the SEC Filings. Neither such inquiries nor any other due diligence investigation conducted by the Investor shall modify, amend or affect the Investor’s right to rely on the
Company’s representations and warranties contained in this Agreement. 
  
 5.6 Restricted Securities. The Investor understands that the Securities are characterized as “restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and that 
  

 -13- 

 under such laws and applicable regulations such securities may be resold without registration under the 1933 Act only in
certain limited circumstances. 
  
 5.7
Legends. It is understood that, except as provided below, certificates evidencing the Securities may bear the following or any similar legend: 
  
 (a) “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“U.S. SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (A) TO THE COMPANY, (B) PURSUANT TO THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAW, (C) IN A
TRANSACTION THAT DOES NOT OTHERWISE REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW, PROVIDED THE HOLDER HAS FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING TO THAT EFFECT REASONABLY
SATISFACTORY TO THE COMPANY OR (D) PURSUANT TO A REGISTRATION STATEMENT PURSUANT TO THE U.S. SECURITIES ACT.” 
  
 (b) If required by the authorities of any state in connection with the issuance of sale of the Securities, the legend required by such
state authority. 
  
 Upon the earlier of (i) registration for
resale pursuant to the Registration Rights Agreement and receipt by the Company of the Investor’s written confirmation that such Securities will not be disposed of except in compliance with the prospectus delivery requirements of the 1933 Act
or (ii) Rule 144(k) becoming available the Company shall, upon an Investor’s written request, promptly cause certificates evidencing the Securities to be replaced with certificates which do not bear such restrictive legends, and Warrant Shares
subsequently issued upon due exercise of the Warrants shall not bear such restrictive legends provided the provisions of either clause (i) or clause (ii) above, as applicable, are satisfied with respect to such Warrant Shares. When the Company is
required to cause unlegended certificates to replace previously issued legended certificates, if unlegended certificates are not delivered to an Investor within three (3) Business Days of submission by that Investor of legended certificate(s) to the
Company’s transfer agent together with a representation letter in customary form, the Company shall be liable to the Investor for liquidated damages in an amount equal to 1% of the aggregate purchase price of the Securities evidenced by such
certificate(s) for each thirty (30) day period (or portion thereof) beyond such three (3) Business Day that the unlegended certificates have not been so delivered. 
  
 5.8 Accredited Investor. The Investor is an accredited investor as defined in Rule 501(a) of
Regulation D, as amended, under the 1933 Act. 
  

 -14- 

 5.9 No General Solicitation. The Investor did not learn of the investment in the
Securities as a result of any public advertising or general solicitation. 
  
 5.10 Brokers and Finders. No Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against or upon the Company, any Subsidiary or an
Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Investors. 
  

5.11 Prohibited Transactions. During the last thirty (30) days prior to the date hereof, no Investor has, directly or
indirectly, nor has any Person acting on behalf of or pursuant to any understanding with any Investor, effected or agreed to effect any short sale, whether or not against the box, established any “put equivalent position” (as defined in
Rule 16a-1(h) under the 1934 Act) with respect to the Common Stock, granted any other right (including, without limitation, any put or call option) with respect to the Common Stock or with respect to any security that includes, relates to or derived
any significant part of its value from the Common Stock or otherwise sought to hedge its position in the Securities (each, a “Prohibited Transaction”). Each Investor acknowledges that the representations and warranties contained in this
Section 5.11 are being made for the benefit of the Investors as well as the Company and that each of the other Investors shall have an independent the right to assert any claims against any Investor arising out of any breach or violation of the
provisions of this Section 5.11. 
  
 6. Conditions to
Closing. 
  
 6.1 Conditions to the
Investors’ Obligations. The obligation of the Investors to purchase the Shares and the Warrants at the Closing is subject to the fulfillment to the Investors’ satisfaction, on or prior to the Closing Date, of the following conditions,
any of which may be waived by the Investors agreeing hereunder to purchase a majority of the Shares and Warrants (the “Required Investors”): 
  
 (a) The representations and warranties made by the Company in Section 4 hereof qualified as to materiality shall be true and correct at
all times prior to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct as of such earlier date, and, the
representations and warranties made by the Company in Section 4 hereof not qualified as to materiality shall be true and correct in all material respects at all times prior to and on the Closing Date, except to the extent any such representation or
warranty expressly speaks as of an earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such earlier date. The Company shall have performed in all material respects all obligations and
conditions herein required to be performed or observed by it on or prior to the Closing Date. 
  
 (b) The Company shall have obtained in a timely fashion any and all consents, permits, approvals, registrations and waivers necessary or
appropriate for consummation of the purchase and sale of the Securities and the consummation of the other 
  

 -15- 

 transactions contemplated by the Transaction Documents, all of which shall be in full force and effect.

  
 (c) The Company shall have executed and
delivered the Registration Rights Agreement. 
  
 (d) The Company shall have received oral confirmation from the Nasdaq listing representative for the Common Stock to the effect that the issuance and sale of the Securities as contemplated hereby will not require shareholder approval
pursuant to the requirements of Nasdaq Marketplace Rule 4350(i). 
  
 (e) No judgment, writ, order, injunction, award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or by any governmental authority, shall have been
issued, and no action or proceeding shall have been instituted by any governmental authority, enjoining or preventing the consummation of the transactions contemplated hereby or in the other Transaction Documents. 
  
 (f) The Company shall have delivered a Certificate, executed
on behalf of the Company by its Chief Executive Officer or its Chief Financial Officer, dated as of the Closing Date, certifying to the fulfilment of the conditions specified in subsections (a), (b), (d), (e) and (i) of this Section 6.1. 

 
 (g) The Company shall have delivered a Certificate,
executed on behalf of the Company by its Secretary, dated as of the Closing Date, certifying the resolutions adopted by the Board of Directors of the Company approving the transactions contemplated by this Agreement and the other Transaction
Documents and the issuance of the Securities, certifying the current versions of the Certificate of Incorporation and Bylaws of the Company and certifying as to the signatures and authority of persons signing the Transaction Documents and related
documents on behalf of the Company. 
  
 (h) The
Investors shall have received an opinion from White & Case LLP, the Company’s counsel, dated as of the Closing Date, in form and substance reasonably acceptable to the Investors to substantially the effect set forth in Exhibit C.

  
 (i) No stop order or suspension of trading
shall have been imposed by Nasdaq, the SEC or any other governmental regulatory body with respect to public trading in the Common Stock. 
  
 6.2 Conditions to Obligations of the Company. The Company’s obligation to sell and issue the Shares and the Warrants at the
Closing is subject to the fulfillment to the satisfaction of the Company on or prior to the Closing Date of the following conditions, any of which may be waived by the Company: 
  
 (a) The representations and warranties made by the Investors in Section 5 hereof, other than the
representations and warranties contained in Sections 5.3, 5.4, 5.5, 5.6, 5.7, 5.8 and 5.9 (the “Investment Representations”), shall be true and correct in all 
  

 -16- 

 material respects when made, and shall be true and correct in all material respects on the Closing Date with the same
force and effect as if they had been made on and as of said date. The Investment Representations shall be true and correct in all respects when made, and shall be true and correct in all respects on the Closing Date with the same force and effect as
if they had been made on and as of said date. The Investors shall have performed in all material respects all obligations and conditions herein required to be performed or observed by them on or prior to the Closing Date. 
  
 (b) The Investors shall have executed and delivered the
Registration Rights Agreement. 
  
 (c) The
Investors shall have delivered the Purchase Price to the Company. 
  
 6.3 Termination of Obligations to Effect Closing; Effects. 
  
 (a) The obligations of the Company, on the one hand, and the Investors, on the other hand, to effect the Closing shall terminate as
follows: 
  
 (i) Upon the mutual written consent
of the Company and the Investors; 
  
 (ii) By
the Company if any of the conditions set forth in Section 6.2 shall have become incapable of fulfillment, and shall not have been waived by the Company; 
  
 (iii) By the Required Investors if any of the conditions set forth in Section 6.1 shall have become incapable of fulfillment, and shall
not have been waived by the Required Investors; or 
  
 (iv) By either the Company or the Required Investors if the Closing has not occurred on or prior to February 29, 2004; 
  
 provided, however, that, except in the case of clause (i) above, the party seeking to terminate its obligation to effect the Closing shall not then be in breach of any of
its representations, warranties, covenants or agreements contained in this Agreement or the other Transaction Documents if such breach has resulted in the circumstances giving rise to such party’s seeking to terminate its obligation to effect
the Closing. 
  
 (b) In the event of termination
by the Company or the Required Investors of their obligations to effect the Closing pursuant to this Section 6.3, written notice thereof shall forthwith be given to the other parties and the obligations of all parties to effect the Closing shall be
terminated without further action by any party. Nothing in this Section 6.3 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to
impair the right of any party to compel 
  

 -17- 

 specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.

  
 7. Covenants and Agreements of the Company and the
Investors. 
  
 7.1 Reservation of Common
Stock. The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of providing for the exercise of the Warrants, such number of shares of Common Stock as shall from
time to time equal the number of shares sufficient to permit the exercise of the Warrants issued pursuant to this Agreement in accordance with their respective terms. 
  
 7.2 Reports. The Company will furnish to such Investors and/or their assignees such information
relating to the Company and its Subsidiaries as from time to time may reasonably be requested by such Investors and/or their assignees; provided, however, that the Company shall not disclose material nonpublic information to the Investors, or to
advisors to or representatives of the Investors, unless prior to disclosure of such information the Company identifies such information as being material nonpublic information and provides the Investors, such advisors and representatives with the
opportunity to accept or refuse to accept such material nonpublic information for review and any Investor wishing to obtain such information enters into an appropriate confidentiality agreement with the Company with respect thereto. 
  
 7.3 No Conflicting Agreements. The Company will not
take any action, enter into any agreement or make any commitment that would conflict or interfere in any material respect with the Company’s obligations to the Investors under the Transaction Documents. 
  
 7.4 Insurance. The Company shall not materially
reduce the insurance coverages described in Section 4.19. 
  
 7.5 Compliance with Laws. The Company will comply in all material respects with all applicable laws, rules, regulations, orders and decrees of all governmental authorities. 
  
 7.6 Listing of Underlying Shares and Related Matters.
Promptly following the date hereof, the Company shall take all necessary action to cause the Shares and the Warrant Shares to be listed on the Nasdaq SmallCap Market no later than the Effectiveness Deadline (as such term is defined in the
Registration Rights Agreement). Further, if the Company applies to have its Common Stock or other securities traded on any other principal stock exchange or market, it shall include in such application the Shares and the Warrant Shares and will take
such other action as is necessary to cause such Common Stock to be so listed. The Company will use commercially reasonable efforts to continue the listing and trading of its Common Stock on the Nasdaq SmallCap Market and, in accordance, therewith,
will use commercially reasonable efforts to comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of such market or exchange, as applicable. 
  
 7.7 Termination of Covenants. The provisions of
Sections 7.2 through 7.5 shall terminate and be of no further force and effect upon the earlier of (i) the mutual consent of 
  

 -18- 

 the Company and the Required Investors or (ii) the date on which the Company’s obligations under the
Registration Rights Agreement to register or maintain the effectiveness of any registration covering the Registrable Securities (as such term is defined in the Registration Rights Agreement) shall terminate. 
  
 7.8 Prohibited Transactions. Prior to the earliest of
(i) the termination of this Agreement, (ii) the date on which the Registration Statement has been declared effective, and (iii) the Effectiveness Deadline, no Investor shall engage, directly or indirectly, nor shall any Person acting on behalf of or
pursuant to any understanding with any Investor engage, in a Prohibited Transaction. Each Investor acknowledges and agrees that in order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to any of the
Common Stock of each Investor or its transferee until such time as the Registration Statement has been declared effective. Each Investor acknowledges that the covenants contained in this Section 7.8 are being made for the benefit of the Investors as
well as the Company and that each of the other Investors shall have an independent the right to assert any claims against any Investor arising out of any breach or violation of the provisions of this Section 7.8. 
  
 8. Survival and Indemnification. 
  
 8.1 Survival. The representations, warranties,
covenants and agreements contained in this Agreement shall survive the Closing of the transactions contemplated by this Agreement. 
  
 8.2 Indemnification. The Company agrees to indemnify and hold harmless each Investor and its Affiliates and their respective
directors, officers, employees and agents from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable attorney fees and disbursements and other expenses incurred in connection with
investigating, preparing or defending any action, claim or proceeding, pending or threatened and the costs of enforcement thereof) (collectively, “Losses”) to which such Person may become subject as a result of any breach of
representation, warranty, covenant or agreement made by or to be performed on the part of the Company under the Transaction Documents, and will reimburse any such Person for all such amounts as they are incurred by such Person. 
  
 8.3 Conduct of Indemnification
Proceedings. Promptly after receipt by any Person (the “Indemnified Person”) of notice of any demand, claim or circumstances which would or might give rise to a claim or the commencement of any action, proceeding
or investigation in respect of which indemnity may be sought pursuant to Section 8.2, such Indemnified Person shall promptly notify the Company in writing and the Company shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to such Indemnified Person, and shall assume the payment of all fees and expenses; provided, however, that the failure of any Indemnified Person so to notify the Company shall not relieve the Company of its
obligations hereunder except to the extent that the Company is materially prejudiced by such failure to notify. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person unless: (i) the Company and the Indemnified Person shall have mutually agreed to the retention of such counsel; or (ii) in the reasonable judgment of 
  

 -19- 

 counsel to such Indemnified Person representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. The Company shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, but if settled
with such consent, or if there be a final judgment for the plaintiff, the Company shall indemnify and hold harmless such Indemnified Person from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment.
Without the prior written consent of the Indemnified Person, which consent shall not be unreasonably withheld, the Company shall not effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Person from all liability arising out of such proceeding. 
  
 9. Miscellaneous. 
  
 9.1 Successors and Assigns. This Agreement may not be
assigned by a party hereto without the prior written consent of the Company or the Investors, as applicable, provided, however, that an Investor may assign its rights and delegate its duties hereunder in whole or in part to an Affiliate or to a
third party acquiring some or all of its Securities in a transaction complying with applicable securities laws without the prior written consent of the Company or the other Investors, after notice duly given by such Investor to the Company and the
other Investors, provided, that no such assignment or obligation shall affect the obligations of such Investor hereunder. The provisions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and
assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, except as expressly provided in this Agreement. 
  
 9.2 Counterparts; Faxes. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This
Agreement may also be executed via facsimile, which shall be deemed an original. 
  
 9.3 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement. 
  
 9.4 Notices. Unless otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given as hereinafter described (i) if given by personal
delivery, then such notice shall be deemed given upon such delivery, (ii) if given by telex or telecopier, then such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii) if given by mail, then such notice shall be
deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after such notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally recognized overnight air courier, then such
notice shall be deemed given one business day after delivery to such carrier. All notices shall be addressed to the party to be 
  

 -20- 

 notified at the address as follows, or at such other address as such party may designate by ten days’ advance
written notice to the other party: 
  
 If to the
Company: 
  
 Rainmaker Systems, Inc. 

1800 Green Hills Road 
 Scotts Valley, California 95066 
 Attention: Martin Hernandez 
 Fax: (831) 430-9705 
  
 With a copy to: 
  
 White & Case LLP 
 Three Embarcadero Center 
 22nd Floor 
 San Francisco, CA 94111 
 Attention: Kevin B. Fisher, Esq. 
 Fax: (415) 544-0202 
  
 If to the Investors: 
  
 to the addresses set forth on the signature pages hereto. 
  
 9.5 Expenses. The parties hereto shall pay their own
costs and expenses in connection herewith, except that the Company shall pay the reasonable fees and expenses of counsel to the Investors, not to exceed $20,000 in the aggregate. Such expenses shall be paid not later than the Closing. The Company
shall reimburse the Investors upon demand for all reasonable out-of-pocket expenses incurred by the Investors, including without limitation reimbursement of attorneys’ fees and disbursements, in connection with any amendment, modification or
waiver of this Agreement or the other Transaction Documents. In the event that legal proceedings are commenced by any party to this Agreement against another party to this Agreement in connection with this Agreement or the other Transaction
Documents, the party or parties which do not prevail in such proceedings shall severally, but not jointly, pay their pro rata share of the reasonable attorneys’ fees and other reasonable out-of-pocket costs and expenses incurred by the
prevailing party in such proceedings. 
  
 9.6
Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written
consent of the Company and the Required Investors. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any Securities purchased under this Agreement at the time outstanding, each future holder of
all such Securities, and the Company. 
  

 -21- 

 9.7 Publicity. No public release or announcement concerning the transactions
contemplated hereby shall be issued by the Company or the Investors without the prior consent of the Company (in the case of a release or announcement by the Investors) or Special Situations Fund III, L.P. (“SSF”) (in the case of a release
or announcement by the Company) (which consents shall not be unreasonably withheld), except as such release or announcement may be required by law or the applicable rules or regulations of any securities exchange or securities market, in which case
the Company or the Investors, as the case may be, shall allow SSF or the Company, as applicable, to the extent reasonably practicable in the circumstances, reasonable time to comment on such release or announcement in advance of such issuance.

  
 9.8 Severability. Any provision of
this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted
as if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
To the extent permitted by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect. 
  
 9.9 Entire Agreement. This Agreement, including the Exhibits and the Disclosure Schedules, and the
other Transaction Documents constitute the entire agreement among the parties hereof with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, both oral and written, between the parties with respect
to the subject matter hereof and thereof. 
  
 9.10 Further Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence
the fulfillment of the agreements herein contained. 
  
 9.11 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the choice of law principles
thereof. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the
world by the same methods as are specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in
such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

  
 [signature page follows] 
  

 -22- 

 IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to
execute this Agreement as of the date first above written. 
  

									
	 The Company:
	 	 	 	 RAINMAKER SYSTEMS, INC.

					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	 
	 	 	 	 	 	 	 Title:
	 	 

  

 -23- 

									
	 The Investors:
	 	 	 	 SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.

					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	Austin W. Marxe
	 	 	 	 	 	 	 Title:
	 	General Partner

  
 Aggregate Purchase Price: $2,500,050 
 Number of Shares: 1,666,700 
 Number of Warrants: 333,340 
  
 Address for Notice: 
  
 153 E. 53rd Street 
 55th Floor 
 New York, NY 10022 
  
 with a copy to: 
  
 Lowenstein Sandler PC 
 65 Livingston Avenue 
 Roseland, NJ 07068 
 Attn: John D. Hogoboom, Esq. 
 Telephone:    973.597.2500 
 Facsimile:     973.597.2400 
  

									
	 	 	 	 	 SPECIAL SITUATIONS TECHNOLOGY FUND, L.P.

					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	Austin W. Marxe
	 	 	 	 	 	 	 Title:
	 	General Partner

  
 Aggregate Purchase Price: $424,950 
 Number of Shares: 283,300 
 Number of Warrants: 56,660 
  
 Address for Notice: 
  
 153 E. 53rd Street 
 55th Floor 
 New York, NY 10022 
  

 -24- 

 with a copy to: 
  
 Lowenstein Sandler PC 
 65 Livingston Avenue 
 Roseland, NJ 07068 
 Attn: John D. Hogoboom, Esq. 
 Telephone:     973.597.2500 
 Facsimile:      973.597.2400 
  

									
	 	 	 	 	SPECIAL SITUATIONS TECHNOLOGY FUND II, L.P.
					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	Austin W. Marxe
	 	 	 	 	 	 	 Title:
	 	General Partner

  
 Aggregate Purchase Price: $2,075,100 
 Number of Shares: 1,383,400 
 Number of Warrants: 276,680 
  
 Address for Notice: 
  
 153 E. 53rd Street 
 55th Floor 
 New York, NY 10022 
  
 with a copy to: 
  
 Lowenstein Sandler PC 
 65 Livingston Avenue 
 Roseland, NJ 07068 
 Attn: John D. Hogoboom, Esq. 
 Telephone:  973.597.2500 
 Facsimile:   973.597.2400 
  

 -25- 

									
	 	 	 	 	 LAGUNITAS PARTNERS, LP
  
 By: Gruber & McBaine Capital Management, LLC,
 Its General Partner

					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	Jon D. Gruber
	 	 	 	 	 	 	 Title:
	 	Manager

  
 Aggregate Purchase Price: $1,000,000.50 
 Number of Shares: 666,667 
 Number of Warrants: 133,333 
  
 Address for Notice: 
  
 c/o Gruber & McBaine Capital Management, LLC 
 50 Osgood Place, Penthouse 
 San Francisco, CA 94133 
 Attn: Christine Arroyo 
 Telephone:   415.981.1039 
 Facsimile:    415.981.6434 
  

									
	 	 	 	 	 GRUBER & MCBAINE INTERNATIONAL
  
 By: Gruber & McBaine Capital Management, LLC,
 Attorney-in-Fact

					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	Jon D. Gruber
	 	 	 	 	 	 	 Title:
	 	Manager

  
 Aggregate Purchase Price: $250,000.50 
 Number of Shares: 166,667 
 Number of Warrants: 33,334 
  
 Address for Notice: 
  
 c/o Gruber & McBaine Capital Management, LLC 
 50 Osgood Place, Penthouse 
  

 -26- 

 San Francisco, CA 94133 
 Attn: Christine Arroyo 
 Telephone:   415.981.1039 
 Facsimile:    415.981.6434

  

	
	 
	

	Jon D. Gruber

  

	
	 
	

	Linda W. Gruber

  
 Aggregate Purchase Price: $250,000.50 
 Number of Shares: 166,666 
 Number of Warrants: 33,333 
  
 Address for Notice: 
  
 c/o Gruber & McBaine Capital Management, LLC 
 50 Osgood Place, Penthouse 
 San Francisco, CA 94133 
 Attn: Christine Arroyo 
 Telephone:   415.981.1039 
 Facsimile:    415.981.6434 
  

 -27- 

									
	 	 	 	 	 THE BALBOA FUND, L.P.

					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	Mark Meisenbach
	 	 	 	 	 	 	 Title:
	 	 

  
 Aggregate Purchase Price: $268,050 
 Number of Shares: 178,700 
 Number of Warrants: 35,740 
  
 Address for Notice: 
  
 12636 High Bluff Drive 
 San Diego, CA 92130 
 Attention: Jim O’Donnell 
 Telephone: 858.259.3923 
 Facsimile: 
  

									
	 	 	 	 	 THE BALBOA FUND, LTD.

					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	Mark Meisenbach
	 	 	 	 	 	 	 Title:
	 	 

  
 Aggregate Purchase Price: $231,900 
 Number of Shares: 154,600 
 Number of Warrants: 30,920 
  
 Address for Notice: 
  
 12636 High Bluff Drive 
 San Diego, CA 92130 
 Attention: Jim O’Donnell 
 Telephone: 858.259.3923 
 Facsimile: 
  
  

 -28- 

 Exhibit A to Purchase Agreement 
  
 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) PURSUANT TO THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAW, (C) IN A TRANSACTION THAT DOES NOT OTHERWISE REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW, PROVIDED THE HOLDER HAS FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING TO
THAT EFFECT REASONABLY SATISFACTORY TO THE COMPANY OR (D) PURSUANT TO A REGISTRATION STATEMENT PURSUANT TO THE U.S. SECURITIES ACT. 
  
 SUBJECT TO THE PROVISIONS OF SECTION 10 HEREOF, THIS WARRANT SHALL BE VOID AFTER 5:00 P.M. EASTERN TIME ON [FIFTH ANNIVERSARY OF THE CLOSING DATE] (the “EXPIRATION
DATE”). 
  
 No.
                     
  
 RAINMAKER SYSTEMS, INC. 
  
 WARRANT TO PURCHASE                  SHARES OF 
 COMMON STOCK, PAR VALUE $0.001 PER SHARE 
  
 For VALUE RECEIVED,
                                 (“Warrantholder”), is entitled to
purchase, subject to the provisions of this Warrant, from Rainmaker Systems, Inc., a Delaware corporation (“Company”), at any time not later than 5:00 P.M., Eastern time, on the Expiration Date (as defined above), at an exercise price per
share equal to $1.875 (the exercise price in effect being herein called the “Warrant Price”),                shares (“Warrant Shares”) of the
Company’s Common Stock, par value $0.001 per share (“Common Stock”). The number of Warrant Shares purchasable upon exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time as described herein.

  
 Section 1. Registration. The Company shall maintain
books for the transfer and registration of the Warrant. Upon the initial issuance of this Warrant, the Company shall issue and register the Warrant in the name of the Warrantholder. 
  
 Section 2. Transfers. As provided herein, this Warrant may be transferred only pursuant to a registration statement
filed under the Securities Act of 1933, as amended (the “Securities Act”), or an exemption from such registration. Subject to such restrictions, the 

 Company shall transfer this Warrant from time to time upon the books to be maintained by the Company for that purpose,
upon surrender thereof for transfer properly endorsed or accompanied by appropriate instructions for transfer and such other documents as may be reasonably required by the Company, including, if required by the Company, an opinion of its counsel to
the effect that such transfer is exempt from the registration requirements of the Securities Act, to establish that such transfer is being made in accordance with the terms hereof, and a new Warrant shall be issued to the transferee and the
surrendered Warrant shall be canceled by the Company. 
  
 Section
3. Exercise of Warrant. Subject to the provisions hereof, the Warrantholder may exercise this Warrant in whole or in part at any time prior to its expiration upon surrender of the Warrant, together with delivery of the duly executed Warrant
exercise form attached hereto as Appendix A (the “Exercise Agreement”) and payment by cash, certified check or wire transfer of funds for the aggregate Warrant Price for that number of Warrant Shares then being purchased, to the Company
during normal business hours on any business day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the Warrantholder). The Warrant Shares so purchased shall be deemed to
be issued to the Warrantholder or the Warrantholder’s designee, as the record owner of such shares, as of the close of business on the date on which this Warrant shall have been surrendered (or evidence of loss, theft or destruction thereof and
security or indemnity satisfactory to the Company), the Warrant Price shall have been paid and the completed Exercise Agreement shall have been delivered. Certificates for the Warrant Shares so purchased, representing the aggregate number of shares
specified in the Exercise Agreement, shall be delivered to the Warrantholder within a reasonable time, not exceeding three (3) business days, after this Warrant shall have been so exercised. The certificates so delivered shall be in such
denominations as may be requested by the Warrantholder and shall be registered in the name of the Warrantholder or such other name as shall be designated by the Warrantholder. If this Warrant shall have been exercised only in part, then, unless this
Warrant has expired, the Company shall, at its expense, at the time of delivery of such certificates, deliver to the Warrantholder a new Warrant representing the number of shares with respect to which this Warrant shall not then have been exercised.
As used herein, “business day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business. Each exercise hereof shall constitute the re-affirmation by the Warrantholder
that the representations and warranties contained in Section 5 of the Purchase Agreement among the Company and the initial holders of the Company Warrants (as defined below) (the “Purchase Agreement”) are true and correct in all material
respects with respect to the Warrantholder as of the time of such exercise. 
  
 Section 4. Compliance with the Securities Act of 1933. Except as provided in the Purchase Agreement, the Company may cause the legend set forth on the first page of this Warrant to be set forth on each Warrant
or similar legend on any security issued or issuable upon exercise of this Warrant, unless counsel for the Company is of the opinion as to any such security that such legend is unnecessary. 
  
 Section 5. Payment of Taxes. The Company will pay any documentary
stamp taxes attributable to the initial issuance of Warrant Shares issuable upon the exercise of the Warrant; provided, however, that the Company shall not be required to pay any tax or taxes which may be 
  

 -30- 

 payable in respect of any transfer involved in the issuance or delivery of any certificates for Warrant Shares in a name
other than that of the Warrantholder in respect of which such shares are issued, and in such case, the Company shall not be required to issue or deliver any certificate for Warrant Shares or any Warrant until the person requesting the same has paid
to the Company the amount of such tax or has established to the Company’s reasonable satisfaction that such tax has been paid. The Warrantholder shall be responsible for income taxes due under federal, state or other law, if any such tax is
due. 
  
 Section 6. Mutilated or Missing Warrants. In case
this Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and substitution of and upon cancellation of the mutilated Warrant, or in lieu of and substitution for the Warrant lost, stolen or destroyed, a new
Warrant of like tenor and for the purchase of a like number of Warrant Shares, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction of the Warrant, and with respect to a lost, stolen or
destroyed Warrant, reasonable indemnity or bond with respect thereto, if requested by the Company. 
  
 Section 7. Reservation of Common Stock. The Company hereby represents and warrants that there have been reserved, and the Company shall at all
applicable times keep reserved until issued (if necessary) as contemplated by this Section 7, out of the authorized and unissued shares of Common Stock, sufficient shares to provide for the exercise of the rights of purchase represented by this
Warrant. The Company agrees that all Warrant Shares issued upon due exercise of the Warrant shall be, at the time of delivery of the certificates for such Warrant Shares, duly authorized, validly issued, fully paid and non-assessable shares of
Common Stock of the Company. 
  
 Section 8. Adjustments.
Subject and pursuant to the provisions of this Section 8, the Warrant Price and number of Warrant Shares subject to this Warrant shall be subject to adjustment from time to time as set forth hereinafter. 
  
 (a) If the Company shall, at any time or from time to time
while this Warrant is outstanding, pay a dividend or make a distribution on its Common Stock in shares of Common Stock, subdivide its outstanding shares of Common Stock into a greater number of shares or combine its outstanding shares of Common
Stock into a smaller number of shares or issue by reclassification of its outstanding shares of Common Stock any shares of its capital stock (including any such reclassification in connection with a consolidation or merger in which the Company is
the continuing corporation), then the number of Warrant Shares purchasable upon exercise of the Warrant and the Warrant Price in effect immediately prior to the date upon which such change shall become effective, shall be adjusted by the Company so
that the Warrantholder thereafter exercising the Warrant shall be entitled to receive the number of shares of Common Stock or other capital stock which the Warrantholder would have received if the Warrant had been exercised immediately prior to such
event upon payment of a Warrant Price that has been adjusted to reflect a fair allocation of the economics of such event to the Warrantholder. Such adjustments shall be made successively whenever any event listed above shall occur. 
  
 (b) If any capital reorganization, reclassification of the
capital stock of the Company, consolidation or merger of the Company with another corporation in which the 
  

 -31- 

 Company is not the survivor, or sale, transfer or other disposition of all or substantially all of the
Company’s assets to another corporation shall be effected, then, as a condition of such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition, lawful and adequate provision shall be made whereby each
Warrantholder shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the Warrant Shares immediately theretofore issuable upon exercise of the Warrant, such shares of
stock, securities or assets as would have been issuable or payable with respect to or in exchange for a number of Warrant Shares equal to the number of Warrant Shares immediately theretofore issuable upon exercise of the Warrant, had such
reorganization, reclassification, consolidation, merger, sale, transfer or other disposition not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests of each Warrantholder to the end that the
provisions hereof (including, without limitation, provision for adjustment of the Warrant Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise hereof. The Company shall not effect any such consolidation, merger, sale, transfer or other disposition unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the
Company) resulting from such consolidation or merger, or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or entity shall assume the obligation to deliver to the Warrantholder, at the last address of the
Warrantholder appearing on the books of the Company, such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Warrantholder may be entitled to purchase, and the other obligations under this Warrant. The
provisions of this paragraph (b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, transfers or other dispositions. 
  
 (c) In case the Company shall fix a payment date for the making of a distribution to all holders of Common
Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of
consolidated earnings or earned surplus or dividends or distributions referred to in Section 8(a)), or subscription rights or warrants, the Warrant Price to be in effect after such payment date shall be determined by multiplying the Warrant Price in
effect immediately prior to such payment date by a fraction, the numerator of which shall be the total number of shares of Common Stock outstanding multiplied by the Market Price (as defined below) per share of Common Stock immediately prior to such
payment date, less the fair market value (as determined by the Company’s Board of Directors in good faith) of said assets or evidences of indebtedness so distributed, or of such subscription rights or warrants, and the denominator of which
shall be the total number of shares of Common Stock outstanding multiplied by such Market Price per share of Common Stock immediately prior to such payment date. “Market Price” as of a particular date (the “Valuation Date”) shall
mean the following: (a) if the Common Stock is then listed on a national stock exchange, the closing sale price of one share of Common Stock on such exchange on the last trading day prior to the Valuation Date; (b) if the Common Stock is then quoted
on The Nasdaq Stock Market, Inc. (“Nasdaq”), the closing sale price of one share of Common Stock on Nasdaq on the last trading day prior to the Valuation Date or, if no such closing sale price is available, the average of the high bid and
the low asked price quoted on Nasdaq on the last trading day prior to the Valuation Date; or (c) if the Common Stock is not then listed on a 
  

 -32- 

 
national stock exchange or quoted on Nasdaq, the fair market value of one share of Common Stock as of the Valuation Date, shall be determined in good faith
by the Board of Directors of the Company and the Warrantholder. If the Common Stock is not then listed on a national securities exchange or quoted on Nasdaq, the Board of Directors of the Company shall respond promptly, in writing, to an inquiry by
the Warrantholder prior to the exercise hereunder as to the fair market value of a share of Common Stock as determined by the Board of Directors of the Company. In the event that the Board of Directors of the Company and the Warrantholder are unable
to agree upon the fair market value in respect of subpart (c) hereof, the Company and the Warrantholder shall jointly select an appraiser, who is experienced in such matters. The decision of such appraiser shall be final and conclusive, and the cost
of such appraiser shall be borne equally by the Company and the Warrantholder. Such adjustment shall be made successively whenever such a payment date is fixed. 
  
 (d) An adjustment to the Warrant Price shall become effective immediately after the payment date in the case
of each dividend or distribution and immediately after the effective date of each other event which requires an adjustment. 
  
 (e) In the event that, as a result of an adjustment made pursuant to this Section 8, the Warrantholder shall become entitled to receive
any shares of capital stock of the Company other than shares of Common Stock, the number of such other shares so receivable upon exercise of this Warrant shall be subject thereafter to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Warrant Shares contained in this Warrant. 
  
 Section 9. Fractional Interest. The Company shall not be required to issue fractions of Warrant Shares upon the exercise of this Warrant. If any
fractional share of Common Stock would, except for the provisions of the first sentence of this Section 9, be deliverable upon such exercise, the Company, in lieu of delivering such fractional share, shall pay to the exercising Warrantholder an
amount in cash equal to the Market Price of such fractional share of Common Stock on the date of exercise. 
  
 Section 10. Extension of Expiration Date. If the Company fails to cause any Registration Statement covering Registrable Securities (unless
otherwise defined herein, capitalized terms are as defined in the Registration Rights Agreement relating to the Warrant Shares (the “Registration Rights Agreement”)) to be declared effective prior to the applicable dates set forth therein,
or if any of the events specified in Section 2(c)(ii) of the Registration Rights Agreement occurs, and the Blackout Period (whether alone, or in combination with any other Blackout Period) continues for more than 60 days in any 12 month period, or
for more than a total of 90 days, then the Expiration Date of this Warrant shall be extended one day for each day beyond the 60-day or 90-day limits, as the case may be, that the Blackout Period continues; provided, however, that in no event shall
the Expiration Date be later than [8 years and 120 days from the Closing Date]. 
  
 Section 11. Benefits. Nothing in this Warrant shall be construed to give any person, firm or corporation (other than the Company and the Warrantholder) any legal or equitable right, 

  

 -33- 

 
remedy or claim, it being agreed that this Warrant shall be for the sole and exclusive benefit of the Company and the Warrantholder. 
  
 Section 12. Notices to Warrantholder. Upon the happening of any event
requiring an adjustment of the Warrant Price, the Company shall promptly give written notice thereof to the Warrantholder at the address appearing in the records of the Company, stating the adjusted Warrant Price and the adjusted number of Warrant
Shares resulting from such event and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Failure to give such notice to the Warrantholder or any defect therein shall not affect the
legality or validity of the subject adjustment. 
  
 Section 13.
Identity of Transfer Agent. The Transfer Agent for the Common Stock is U.S. Stock Transfer. Upon the appointment of any subsequent transfer agent for the Common Stock or other shares of the Company’s capital stock issuable upon the
exercise of the rights of purchase represented by the Warrant, the Company will mail to the Warrantholder a statement setting forth the name and address of such transfer agent. 
  
 Section 14. Notices. Unless otherwise provided, any notice required or permitted under this Warrant shall be given in
writing and shall be deemed effectively given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if given by telex or facsimile, then such notice shall be deemed given upon
receipt of confirmation of complete transmittal, (iii) if given by mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after such notice is deposited in first class mail,
postage prepaid, and (iv) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one business day after delivery to such carrier. All notices shall be addressed as follows: if to the Warrantholder, at
its address as set forth in the Company’s books and records and, if to the Company, at the address as follows, or at such other address as the Warrantholder or the Company may designate by ten days’ advance written notice to the other:

  
 If to the Company: 
  
 Rainmaker Systems, Inc. 
 1800 Green Hills Road 
 Scotts Valley, California 95066 
 Attention: Martin Hernandez 
 Fax: (831) 430-9705 
  
 With a copy to: 
  
 White & Case LLP 
 Three Embarcadero Center 
 22nd Floor 
 San Francisco, CA 94111 
 Attention: Kevin B. Fisher, Esq. 
 Fax: (415) 544-0202 
  

 -34- 

 Section 15. Registration Rights. The initial Warrantholder is entitled to the benefit of certain
registration rights with respect to the shares of Common Stock issuable upon the exercise of this Warrant as provided in the Registration Rights Agreement, and any subsequent Warrantholder may be entitled to such rights. 
  
 Section 16. Successors. All the covenants and provisions hereof by or
for the benefit of the Warrantholder shall bind and inure to the benefit of its respective successors and assigns hereunder. 
  
 Section 17. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Warrant shall be governed by, and construed in accordance with, the
internal laws of the State of New York, without reference to the choice of law provisions thereof. The Company and, by accepting this Warrant, the Warrantholder, each irrevocably submits to the exclusive jurisdiction of the courts of the State of
New York located in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Warrant and the transactions contemplated
hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Warrant. The Company and, by
accepting this Warrant, the Warrantholder, each irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. The Company and, by accepting this Warrant, the
Warrantholder, each irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. EACH OF THE COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER. 
  
 Section 18.
Call Provision. Notwithstanding any other provision contained herein to the contrary, in the event that the closing bid price of a share of Common Stock as traded on the Nasdaq (or such other exchange or stock market on which the Common Stock
may then be listed or quoted) equals or exceeds $3.75 (appropriately adjusted for any stock split, reverse stock split, stock dividend or other reclassification or combination of the Common Stock occurring after the date hereof) for any twenty (20)
consecutive trading days commencing after the Registration Statement (as defined in the Registration Rights Agreement) has been declared effective, the Company, upon thirty (30) days prior written notice (the “Notice Period”) given
to the Warrantholder within one business day immediately following the end of any such twenty (20) trading day period, may call this Warrant, in whole but not in part, at a redemption price equal to $0.01 per share of Common Stock then purchasable
pursuant to this Warrant; provided that (i) the Company simultaneously calls all Company Warrants (as defined below) on the same terms and (ii) all of the shares of Common Stock issuable hereunder either (A) are registered pursuant to an effective
Registration Statement (as defined in the Registration Rights Agreement) which has not been suspended and for which no stop order is in effect, and pursuant to which the 

  

 -35- 

 
Warrantholder is able to sell such shares of Common Stock at all times during the Notice Period or (B) no longer constitute Registrable Securities (as
defined in the Registration Rights Agreement). Notwithstanding any such notice by the Company, the Warrantholder shall have the right to exercise this Warrant prior to the end of the Notice Period. 
  
 Section 19. No Rights as Stockholder. Prior to the exercise of this
Warrant, the Warrantholder shall not have or exercise any rights as a stockholder of the Company by virtue of its ownership of this Warrant. 
  
 Section 20. Amendment; Waiver. This Warrant is one of a series of Warrants of like tenor issued by the Company pursuant to the Purchase Agreement
and initially covering an aggregate of 933,340 shares of Common Stock (collectively, the “Company Warrants”). Any term of this Warrant may be amended or waived (including the adjustment provisions included in Section 8 of this
Warrant) upon the written consent of the Company and the holders of Company Warrants representing at least 50% of the number of shares of Common Stock then subject to all outstanding Company Warrants (the “Majority Holders”);
provided, that (x) any such amendment or waiver must apply to all Company Warrants; and (y) the number of Warrant Shares subject to this Warrant, the Warrant Price and the Expiration Date may not be amended, and the right to exercise this
Warrant may not be altered or waived, without the written consent of the Warrantholder. 
  
 Section 21. Section Headings. The section headings in this Warrant are for the convenience of the Company and the Warrantholder and in no way alter, modify, amend, limit or restrict the provisions hereof.

  

 -36- 

 IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, as of the
     day of                         , 200_. 
  

			
	RAINMAKER SYSTEMS, INC.
		
	By:	 	 
	 	 	

	Name:	 	 
	Title:	 	 

  

 -37- 

 APPENDIX A 
 RAINMAKER SYSTEMS, INC. 
 WARRANT EXERCISE FORM 
  
 To Rainmaker Systems, Inc.: 
  
 The undersigned hereby irrevocably elects to exercise the right of purchase represented by the within Warrant
(“Warrant”) for, and to purchase thereunder by the payment of the Warrant Price and surrender of the Warrant,                     
shares of Common Stock (“Warrant Shares”) provided for therein, and requests that certificates for the Warrant Shares be issued as follows: 
  

					
	 	 	  
                                       
                                        
   
 Name
	 	 
	 	 	  
                                       
                                        
   
 Address
	 	 
	 	 	  
                                       
                                        
   
	 	 
	 	 	  
                                       
                                        
   
 Federal Tax ID or Social Security No.
	 	 

  
 and delivered by
(certified mail to the above address, or (electronically (provide DWAC
Instructions:                            ), or (other (specify):
                                        
                        ). 
  
 and, if the number of Warrant Shares shall not be all the Warrant Shares purchasable upon exercise of the Warrant, that a new Warrant for the balance of the Warrant
Shares purchasable upon exercise of this Warrant be registered in the name of the undersigned Warrantholder or the undersigned’s Assignee as below indicated and delivered to the address stated below. 
  

					
	 Dated:                                     
         ,                 
  
	 	 
	 Note:The signature must correspond with
 Signature:                                     
                   
 the name of the Warrantholder as
written
 on the first page of the Warrant in every
 particular,
without alteration or enlargement
 or any change whatever, unless the Warrant
 has been assigned.
	 	  
  
  
  
                                       
                                        
     
 Name (please print)
  
                                       
                                        
     
  
                                       
                                        
     
 Federal Identification or Social Security No.

  

					
	 	 	 	 	  
 Assignee:
  

  

  

  

 -39- 

 Exhibit B to Purchase Agreement 
  
 REGISTRATION RIGHTS AGREEMENT 
  
 This Registration Rights Agreement (the “Agreement”) is made and
entered into as of this          day of February, 2004 by and among Rainmaker Systems, Inc., a Delaware corporation (the “Company”), and the “Investors” named in that certain
Purchase Agreement by and among the Company and the Investors (the “Purchase Agreement”). 
  
 The parties hereby agree as follows: 
  
 1. Certain Definitions. 
  
 As used in this Agreement, the following terms shall have the following meanings: 
  
 “Affiliate” means, with respect to any person, any other person which directly or indirectly controls, is
controlled by, or is under common control with, such person. 
  
 “Business Day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business. 
  
 “Common Stock” shall mean the Company’s common stock, par value $0.001 per share, and any securities
into which such shares may hereinafter be reclassified. 
  
 “Investors” shall mean the Investors identified in the Purchase Agreement and any Affiliate or permitted transferee of any Investor who is a subsequent holder of any Warrants or Registrable Securities. 
  
 “Prospectus” shall mean the prospectus included in any
Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus. 
  
 “Register,” “registered” and “registration” refer to a registration made by preparing and filing a
Registration Statement or similar document in compliance with the 1933 Act (as defined below), and the declaration or ordering of effectiveness of such Registration Statement or document. 
  
 “Registrable Securities” shall mean the Shares and the shares of Common Stock issuable (i) upon the
exercise of the Warrants, if any, and (ii) any other securities issued or issuable with respect to or in exchange for Registrable Securities; provided, that, a security shall cease to be a Registrable Security upon (A) sale pursuant to a
Registration Statement or Rule 144 under the 1933 Act, or (B) such security becoming eligible for sale by the Investors pursuant to Rule 144(k). 
  
 “Registration Statement” shall mean any registration statement of the Company filed under the 1933 Act that covers the resale of any of
the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration
Statement. 
  

 “Required Investors” means the Investors holding a majority of the Registrable
Securities. 
  
 “SEC” means the U.S. Securities
and Exchange Commission. 
  
 “Shares” means the
shares of Common Stock issued pursuant to the Purchase Agreement. 
  
 “1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 
  
 “1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 
  
 “Warrants” means, the warrants to purchase shares of Common
Stock issued to the Investors pursuant to the Purchase Agreement, the form of which is attached to the Purchase Agreement as Exhibit A. 
  
 “Warrant Shares” means the shares of Common Stock issuable upon the exercise of the Warrants. 
  
 2. Registration. 
  
 (a) Registration Statement. Promptly following the
closing of the purchase and sale of the securities contemplated by the Purchase Agreement (the “Closing Date”) but no later than thirty (30) days after the Closing Date (the “Filing Deadline”), the Company shall prepare and file
with the SEC one Registration Statement on Form S-3 (or, if Form S-3 is not then available to the Company, on such form of registration statement as is then available to effect a registration for resale of the Registrable Securities, subject to the
Required Investors’ consent), covering the resale of the Registrable Securities in an amount at least equal to the number of Shares plus the number of shares of Common Stock necessary to permit the exercise in full of the Warrants. Such
Registration Statement shall include, to the extent permitted, the plan of distribution attached hereto as Exhibit A. Such Registration Statement also shall cover, to the extent allowable under the 1933 Act and the rules promulgated
thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Registrable Securities. The Company shall use its reasonable
best efforts to obtain from each person who now has piggyback registration rights a waiver of those rights with respect to the Registration Statement. The Registration Statement (and each amendment or supplement thereto, and each request for
acceleration of effectiveness thereof) shall be provided in accordance with Section 3(c) to the Investors and their counsel prior to its filing or other submission. If a Registration Statement covering the Registrable Securities is not filed with
the SEC on or prior to the Filing Deadline, the Company will make pro rata payments to each Investor, as liquidated damages and not as a penalty, in an amount equal to 1.0% of the aggregate amount invested by such Investor (the “Investment
Amount”) for each 30-day period or pro rata for any portion thereof following the date by which such Registration Statement should have been filed for which no Registration Statement is filed with respect to the Registrable Securities;
provided, however, that in no event shall the aggregate amount of liquidated damages payable by the Company pursuant to this Agreement exceed 36% of the Investment Amount. Such payments shall be in full compensation to the Investors, and shall
constitute the Investors’ exclusive remedy for such events; provided, however, that the Investors 
  

 -41- 

 shall retain the right to pursue all available equitable remedies. Such payments shall be made to each
Investor in cash. 
  
 (b) Expenses. The
Company will pay all expenses associated with the registration of the Registrable Securities, including filing and printing fees, the Company’s counsel and accounting fees and expenses, costs associated with clearing the Registrable Securities
for sale under applicable state securities laws, listing fees, fees and expenses of one counsel to the Investors and the Investors’ reasonable expenses in connection with the registration, but excluding discounts, commissions, fees of
underwriters, selling brokers, dealer managers or similar securities industry professionals with respect to the Registrable Securities being sold. 
  
 (c) Effectiveness. 
  
 (i) The Company shall use commercially reasonable efforts to have the Registration Statement declared effective as soon as practicable.
The Company shall notify the Investors by facsimile or e-mail as promptly as practicable, and in any event, within twenty-four (24) hours, after any Registration Statement is declared effective and shall simultaneously provide the Investors with
copies of any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby. If (A) a Registration Statement covering the Registrable Securities is not declared effective by the SEC within ninety
(90) days after the Closing Date (120 days if the Registration Statement is subject to SEC review) (the “Effectivness Deadline”), or (B) after a Registration Statement has been declared effective by the SEC, sales cannot be made pursuant
to such Registration Statement for any reason (including without limitation by reason of a stop order, or the Company’s failure to update the Registration Statement), but excluding the inability of any Investor to sell the Registrable
Securities covered thereby due to market conditions and except as excused pursuant to subparagraph (ii) below, then the Company will make pro rata payments to each Investor, as liquidated damages and not as a penalty, in an amount equal to 1.0% of
the aggregate amount invested by such Investor for each 30- day period or pro rata for any portion thereof following the date by which such Registration Statement should have been effective (the “Blackout Period”); provided, however, that
in no event shall the aggregate amount of liquidated damages payable by the Company pursuant to this Agreement exceed 36% of the Investment Amount. Such payments shall be in full compensation to the Investors, and shall constitute the
Investors’ exclusive remedy for such events; provided, however, that the Investors shall retain the right to pursue all available equitable remedies. The amounts payable as liquidated damages pursuant to this paragraph shall be paid monthly
within three (3) Business Days of the last day of each month following the commencement of the Blackout Period until the termination of the Blackout Period. Such payments shall be made to each Investor in cash. 
  
 (ii) For not more than twenty (20) consecutive days or for a
total of not more than forty-five (45) days in any twelve (12) month period, the Company may delay the disclosure of material non-public information concerning the Company, by suspending the use of any Prospectus included in any registration
contemplated by this Section containing such information, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company (an “Allowed Delay”); provided, that the Company shall
promptly (a) notify the Investors in writing of the existence of (but in no event, without the prior 
  

 -42- 

 written consent of an Investor, shall the Company disclose to such Investor any of the facts or
circumstances regarding) material non-public information giving rise to an Allowed Delay, (b) advise the Investors in writing to cease all sales under the Registration Statement until the end of the Allowed Delay and (c) use commercially reasonable
efforts to terminate an Allowed Delay as promptly as practicable. 
  
 (d) Underwritten Offering. If any offering pursuant to a Registration Statement pursuant to Section 2(a) hereof involves an underwritten offering, the Company shall have the right to select an investment banker
and manager to administer the offering, which investment banker or manager shall be reasonably satisfactory to the Required Investors. 
  
 3. Company Obligations. The Company will use commercially reasonable efforts to effect the registration of the Registrable Securities in accordance
with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible: 
  
 (a) use commercially reasonable efforts to cause such Registration Statement to become effective and to remain continuously effective for
a period that will terminate upon the earlier of (i) the date on which all Registrable Securities covered by such Registration Statement as amended from time to time, have been sold, and (ii) the date on which all Registrable Securities covered by
such Registration Statement may be sold pursuant to Rule 144(k) (the “Effectiveness Period”) and advise the Investors in writing when the Effectiveness Period has expired; 
  
 (b) prepare and file with the SEC such amendments and post-effective amendments to the Registration
Statement and the Prospectus as may be necessary to keep the Registration Statement effective for the period specified in Section 3(a) and to comply with the provisions of the 1933 Act and the 1934 Act with respect to the distribution of all of the
Registrable Securities covered thereby; 
  
 (c)
provide copies to and permit counsel designated by the Investors to review each Registration Statement and all amendments and supplements thereto no fewer than three (3) business days prior to their filing with the SEC and consider in good faith any
reasonable comments made by such counsel; 
  
 (d)
furnish to the Investors and their legal counsel (which may be by email or pdf file) (i) promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company (but not later than two (2) Business Days after the
filing date, receipt date or sending date, as the case may be) one (1) copy of any Registration Statement and any amendment thereto, each preliminary prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or
on behalf of the Company to the SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any portion of any thereof which contains information
for which the Company has sought confidential treatment), and (ii) such number of copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as each Investor may reasonably request
in order to facilitate the disposition of the Registrable Securities owned by such Investor that are covered by the related Registration Statement; 
  

 -43- 

 (e) in the event the Company selects an underwriter for the offering, the Company shall
enter into and perform its reasonable obligations under an underwriting agreement, in usual and customary form, including, without limitation, customary indemnification and contribution obligations, with the underwriter of such offering; 

 
 (f) if required by the underwriter, or if any Investor is
described in the Registration Statement as an underwriter, the Company shall furnish, on the effective date of the Registration Statement (except with respect to clause (i) below) and on the date that Registrable Securities are delivered to an
underwriter, if any, for sale in connection with the Registration Statement (including any Investor deemed to be an underwriter), (i) (A) in the case of an underwritten offering, an opinion, dated as of the closing date of the sale of Registrable
Securities to the underwriters, from independent legal counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the
underwriters and the Investors participating in such underwritten offering or (B) in the case of an “at the market” offering, an opinion, dated as of or promptly after the effective date of the Registration Statement to the Investors, from
independent legal counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in a public offering, addressed to the Investors, and (ii) a letter, dated as of the effective date
of such Registration Statement and confirmed as of the applicable dates described above, from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters (including any Investor deemed to be an underwriter); 
  
 (g) use commercially reasonable efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness and, (ii) if
such order is issued, obtain the withdrawal of any such order at the earliest possible moment; 
  
 (h) prior to any public offering of Registrable Securities, use commercially reasonable efforts to register or qualify or cooperate with
the Investors and their counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or blue sky laws of such jurisdictions requested by the Investors and do any and all other
commercially reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to (i) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(h), (ii) subject itself to general taxation in any jurisdiction where it
would not otherwise be so subject but for this Section 3(h), or (iii) file a general consent to service of process in any such jurisdiction; 
  
 (i) use commercially reasonable efforts to cause all Registrable Securities covered by a Registration Statement to be listed on each
securities exchange, interdealer quotation system or other market on which similar securities issued by the Company are then listed; 
  
 (j) immediately notify the Investors, at any time when a Prospectus relating to Registrable Securities is required to be delivered under
the 1933 Act, upon discovery 
  

 -44- 

 that, or upon the happening of any event as a result of which, the Prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing,
and at the request of any such holder, promptly prepare and furnish to such holder a reasonable number of copies of a supplement to or an amendment of such Prospectus as may be necessary so that, as thereafter delivered to the purchasers of such
Registrable Securities, such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances
then existing; and 
  
 (k) otherwise use
commercially reasonable efforts to comply with all applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable
Securities hereunder. 
  
 (l) With a view to
making available to the Investors the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may at any time permit the Investors to sell shares of Common Stock to the public without registration, the Company
covenants and agrees to: (i) make and keep public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) six months after such date as all of the Registrable Securities may be resold pursuant to Rule
144(k) or any other rule of similar effect or (B) such date as all of the Registrable Securities shall have been resold; (ii) file with the SEC in a timely manner all reports and other documents required of the Company under the 1934 Act; and (iii)
furnish to each Investor upon request, as long as such Investor owns any Registrable Securities, (A) a written statement by the Company that it has complied with the reporting requirements of the 1934 Act, (B) a copy of the Company’s most
recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information as may be reasonably requested in order to avail such Investor of any rule or regulation of the SEC that permits the selling of any such Registrable
Securities without registration. 
  
 4. Due Diligence Review;
Information. The Company shall make available, upon receipt of written notice reasonably in advance, during normal business hours and no more than once in every six-month period, for inspection and review by the Investors, advisors to and
representatives of the Investors (who may or may not be affiliated with the Investors and who are reasonably acceptable to the Company), any underwriter participating in any disposition of shares of Common Stock on behalf of the Investors pursuant
to a Registration Statement or amendments or supplements thereto or any blue sky, NASD or other filing, all financial and other records, all SEC Filings (as defined in the Purchase Agreement) and other filings with the SEC, and all other corporate
documents and properties of the Company as may be reasonably necessary for the purpose of such review, and cause the Company’s officers, directors and employees, within a reasonable time period, to supply all such information reasonably
requested by the Investors or any such representative, advisor or underwriter in connection with such Registration Statement (including, without limitation, in response to all questions and other inquiries reasonably made or submitted by any of
them), prior to and from time to time after the filing and effectiveness of the Registration Statement for the sole purpose of enabling the Investors and such representatives, advisors and underwriters and their respective accountants 
  

 -45- 

 
and attorneys to conduct initial and ongoing due diligence with respect to the Company and the accuracy of such Registration Statement. 
  
 The Company shall not disclose material nonpublic information to the Investors, or to
advisors to or representatives of the Investors, unless prior to disclosure of such information the Company identifies such information as being material nonpublic information and provides the Investors, such advisors and representatives with the
opportunity to accept or refuse to accept such material nonpublic information for review and any Investor wishing to obtain such information enters into an appropriate confidentiality agreement with the Company with respect thereto. 
  
 5. Obligations of the Investors. 
  
 (a) Each Investor shall furnish in writing to the Company
such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect the registration of such Registrable Securities and
shall execute such documents in connection with such registration as the Company may reasonably request. At least five (5) Business Days prior to the first anticipated filing date of any Registration Statement, the Company shall notify each Investor
of the information the Company requires from such Investor if such Investor elects to have any of the Registrable Securities included in the Registration Statement. An Investor shall provide such information to the Company at least two (2) Business
Days prior to the first anticipated filing date of such Registration Statement if such Investor elects to have any of the Registrable Securities included in the Registration Statement. 
  
 (b) Each Investor, by its acceptance of the Registrable Securities agrees to cooperate with the Company as
reasonably requested by the Company in connection with the preparation and filing of a Registration Statement hereunder, unless such Investor has notified the Company in writing of its election to exclude all of its Registrable Securities from such
Registration Statement. 
  
 (c) In the event the
Company, at the request of the Investors, determines to engage the services of an underwriter, such Investor agrees to enter into and perform its obligations under an underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the managing underwriter of such offering and take such other actions as are reasonably required in order to expedite or facilitate the dispositions of the Registrable
Securities. 
  
 (d) Each Investor agrees that,
upon receipt of any notice from the Company of either (i) the commencement of an Allowed Delay pursuant to Section 2(c)(ii) or (ii) the happening of an event pursuant to Section 3(j) hereof, such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such Registrable Securities, until the Investor’s receipt of the copies of the supplemented or amended prospectus filed with the SEC and until any related post-effective
amendment is declared effective and, if so directed by the Company, the Investor shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of destruction) all copies in the Investor’s
possession of the Prospectus covering the Registrable Securities current at the time of receipt of such notice. 
  

 -46- 

 (e) No Investor may participate in any third party underwritten registration hereunder
unless it (i) agrees to sell the Registrable Securities on the basis provided in any underwriting arrangements in usual and customary form entered into by the Company, (ii) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements, and (iii) agrees to pay its pro rata share of all underwriting discounts and commissions. Notwithstanding the foregoing, no Investor
shall be required to make any representations to such underwriter, other than those with respect to itself and the Registrable Securities owned by it, including its right to sell the Registrable Securities, and any indemnification in favor of the
underwriter by the Investors shall be several and not joint and limited in the case of any Investor, to the proceeds received by such Investor from the sale of its Registrable Securities. The scope of any such indemnification in favor of an
underwriter shall be limited to the same extent as the indemnity provided in Section 6(b) hereof. 
  
 6. Indemnification. 
  
 (a) Indemnification by the Company. The Company will indemnify and hold harmless each Investor and its officers, directors,
members, employees and agents, successors and assigns, and each other person, if any, who controls such Investor within the meaning of the 1933 Act, against any losses, claims, damages or liabilities, joint or several, to which they may become
subject under the 1933 Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof; (ii) any blue sky application or other document executed by the Company specifically for that purpose or based upon
written information furnished by the Company filed in any state or other jurisdiction in order to qualify any or all of the Registrable Securities under the securities laws thereof (any such application, document or information herein called a
“Blue Sky Application”); (iii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; (iv) any violation by the Company or
its agents of any rule or regulation promulgated under the 1933 Act applicable to the Company or its agents and relating to action or inaction required of the Company in connection with such registration; or (v) any failure to register or qualify
the Registrable Securities included in any such Registration in any state where the Company or its agents has affirmatively undertaken or agreed in writing that the Company will undertake such registration or qualification on an Investor’s
behalf (the undertaking of any underwriter chosen by the Company being attributed to the Company) and will reimburse such Investor, and each such officer, director or member and each such controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case if and to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Investor or any such controlling person in writing
specifically for use in such Registration Statement or Prospectus. 
  
 (b) Indemnification by the Investors. In connection with any registration pursuant to the terms of this Agreement, each Investor will furnish to the Company 

  

 -47- 

 
in writing such information as the Company reasonably requests concerning the holders of Registrable Securities or the proposed manner of distribution for
use in connection with any Registration Statement or Prospectus and agrees, severally but not jointly, to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors, officers, employees, stockholders and each
person who controls the Company (within the meaning of the 1933 Act) against any losses, claims, damages, liabilities and expense (including reasonable attorney fees) resulting from any untrue statement of a material fact or any omission of a
material fact required to be stated in the Registration Statement or Prospectus or preliminary prospectus or amendment or supplement thereto or necessary to make the statements therein not misleading, to the extent, but only to the extent that such
untrue statement or omission is contained in any information furnished in writing by such Investor to the Company specifically for inclusion in such Registration Statement or Prospectus or amendment or supplement thereto. In no event shall the
liability of an Investor be greater in amount than the dollar amount of the proceeds (net of all expense paid by such Investor in connection with any claim relating to this Section 6 and the amount of any damages such Investor has otherwise been
required to pay by reason of such untrue statement or omission) received by such Investor upon the sale of the Registrable Securities included in the Registration Statement giving rise to such indemnification obligation. 
  
 (c) Conduct of Indemnification Proceedings. Any
person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party; provided that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of
such counsel shall be at the expense of such person unless (a) the indemnifying party has agreed to pay such fees or expenses, or (b) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of any such person, based upon written advice of its counsel, a conflict of interest exists between such person and the indemnifying party with respect to such claims (in which case, if
the person notifies the indemnifying party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such
person); and provided, further, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice
shall materially adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or
expenses of more than one separate firm of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified party, consent to entry of any judgment or enter into any settlement that does
not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation. 
  
 (d) Contribution. If for any reason the indemnification provided for in the preceding paragraphs (a)
and (b) is unavailable to an indemnified party or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such
loss, claim, 

  

 -48- 

 
damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any
other relevant equitable considerations. No person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any person not guilty of such fraudulent misrepresentation. In no
event shall the contribution obligation of a holder of Registrable Securities be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such holder in connection with any claim relating to this Section 6 and the amount
of any damages such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution
obligation. 
  
 7. Miscellaneous. 
  
 (a) Amendments and Waivers. This Agreement may be
amended only by a writing signed by the Company and the Required Investors. The Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written
consent to such amendment, action or omission to act, of the Required Investors. 
  
 (b) Notices. All notices and other communications provided for or permitted hereunder shall be made as set forth in Section 9.4 of
the Purchase Agreement. 
  
 (c) Assignments
and Transfers by Investors. The provisions of this Agreement shall be binding upon and inure to the benefit of the Investors and their respective successors and assigns. An Investor may transfer or assign, in whole or from time to time in part,
to one or more persons its rights hereunder in connection with the transfer of Registrable Securities by such Investor to such person, provided that such Investor complies with all laws applicable thereto and provides written notice of assignment to
the Company promptly after such assignment is effected. 
  
 (d) Assignments and Transfers by the Company. This Agreement may not be assigned by the Company (whether by operation of law or otherwise) without the prior written consent of the Required Investors, provided,
however, that the Company may assign its rights and delegate its duties hereunder to any surviving or successor corporation in connection with a merger or consolidation of the Company with another corporation, or a sale, transfer or other
disposition of all or substantially all of the Company’s assets to another corporation, without the prior written consent of the Required Investors, after notice duly given by the Company to each Investor. 
  
 (e) Benefits of the Agreement. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 
  

 -49- 

 (f) Counterparts; Faxes. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may also be executed via facsimile, which shall be deemed an original. 
  
 (g) Titles and Subtitles. The titles and subtitles
used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 
  
 (h) Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as if it were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereby waive any provision
of law which renders any provisions hereof prohibited or unenforceable in any respect. 
  
 (i) Further Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other
actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained. 
  
 (j) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such
subject matter. 
  
 (k) Governing Law; Consent
to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to the choice of law principles thereof. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or
judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as
are specified for the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto
irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER. 
  

 -50- 

 IN WITNESS WHEREOF, the parties have executed this Agreement or caused their duly authorized officers to
execute this Agreement as of the date first above written. 
  

									
	 The Company:
	 	 	 	 RAINMAKER SYSTEMS, INC.

					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	 
	 	 	 	 	 	 	 Title:
	 	 

  

 -51- 

									
	 The Investors:
	 	 	 	 SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.

					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	Austin W. Marxe
	 	 	 	 	 	 	 Title:
	 	General Partner
				
	 	 	 	 	 	 	 SPECIAL SITUATIONS TECHNOLOGY FUND, L.P.

					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	Austin W. Marxe
	 	 	 	 	 	 	 Title:
	 	General Partner
				
	 	 	 	 	 	 	 SPECIAL SITUATIONS TECHNOLOGY FUND II, L.P.

					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	 
	 	 	 	 	 	 	 Title:
	 	 
					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	Austin W. Marxe
	 	 	 	 	 	 	 Title:
	 	General Partner

  

 -52- 

									
	 The Investors:
	 	 	 	 LAGUNITAS PARTNERS, L.P.

				
	 	 	 	 	 	 	 By:  Gruber & McBaine Capital Management, LLC,

	 	 	 	 	 	 	 Its General Partner

					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	Jon D. Gruber
	 	 	 	 	 	 	 Title:
	 	Manager
				
	 	 	 	 	 	 	 GRUBER & MCBAINE INTERNATIONAL

				
	 	 	 	 	 	 	 By:  Gruber & McBaine Capital Management, LLC,

	 	 	 	 	 	 	 Attorney-in-Fact

					
	 	 	 	 	 	 	By:	 	  

	 	 	 	 	 	 	 Name:
	 	Jon D. Gruber
	 	 	 	 	 	 	 Title:
	 	Manager
				
	 	 	 	 	 	 	  

 Jon D.
Gruber

				
	 	 	 	 	 	 	  

 Linda W.
Gruber

  

 -53- 

									
	 	 	 	 	 THE BALBOA FUND., L.P.

					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	Mark Meisenbach
	 	 	 	 	 	 	 Title:
	 	 
				
	 	 	 	 	 	 	 THE BALBOA FUND, LTD.

					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	Mark Meisenbach
	 	 	 	 	 	 	 Title:
	 	 

  
  

 -54- 

 Exhibit A 
  

Plan of Distribution 
  
 The selling stockholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling shares of common stock or
interests in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of
their shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These dispositions may be at fixed prices, at prevailing market prices
at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices. 
  
 The selling stockholders may use any one or more of the following methods when disposing of shares or interests therein: 
  
 - ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers; 
  
 - block trades in which the broker-dealer
will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction; 
  
 - purchases by a broker-dealer as principal and resale by the broker-dealer for its account; 
  
 - an exchange distribution in accordance with the rules of the applicable exchange; 
  
 - privately negotiated transactions; 
  
 - short sales; 
  
 - through the writing or settlement of options or other hedging transactions, whether through an options exchange or
otherwise; 
  
 - broker-dealers may agree with the selling
stockholders to sell a specified number of such shares at a stipulated price per share; 
  
 - a combination of any such methods of sale; and 
  
 - any other method permitted pursuant to applicable law. 
  
 The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of common stock, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the

 list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders
under this prospectus. The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this
prospectus. 
  
 In connection with the sale of our common stock or
interests therein, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The
selling stockholders may also sell shares of our common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of
shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). 
  
 The aggregate proceeds to the selling stockholders from the sale of the
common stock offered by them will be the purchase price of the common stock less discounts or commissions, if any. Each of the selling stockholders reserves the right to accept and, together with their agents from time to time, to reject, in whole
or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of the proceeds from this offering. Upon any exercise of the warrants by payment of cash, however, we will receive the exercise price of
the warrants. 
  
 The selling stockholders also may resell all or
a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act of 1933, provided that they meet the criteria and conform to the requirements of that rule. 
  
 The selling stockholders and any underwriters, broker-dealers or agents that
participate in the sale of the common stock or interests therein may be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the shares may
be underwriting discounts and commissions under the Securities Act. Selling stockholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the
Securities Act. 
  
 To the extent required, the shares of our
common stock to be sold, the names of the selling stockholders, the respective purchase prices and public offering prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer
will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement that includes this prospectus. 
  
 In order to comply with the securities laws of some states, if applicable, the common stock may be sold in these
jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the common stock may not be sold unless it has been registered or 
  

 -56- 

 qualified for sale or an exemption from registration or qualification requirements is available and is complied with.

  
 We have advised the selling stockholders that the
anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the selling stockholders and their affiliates. In addition, we will make copies of this prospectus (as it may be
supplemented or amended from time to time) available to the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act. 
  
 We have agreed to indemnify the selling stockholders against liabilities, including liabilities under the Securities Act and state securities laws,
relating to the registration of the shares offered by this prospectus. 
  
 We have agreed with the selling stockholders to keep the registration statement of which this prospectus constitutes a part effective until the earlier of (1) such time as all of the shares covered by this prospectus have been disposed of
pursuant to and in accordance with the registration statement or (2) the date on which the shares may be sold pursuant to Rule 144(k) of the Securities Act. 
  

 -57-Exhibit 4.2

 Exhibit 4.2 
  

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), 55 WATER
STREET, NEW YORK, NEW YORK, TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
  
 THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING SET FORTH IN THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF DTC OR A NOMINEE OF DTC. THIS NOTE IS EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF
A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ITS NOMINEE TO A SUCCESSOR DEPOSITORY
OR ITS NOMINEE. 
  
 Registered No.     

  
 $225,000,000 
  
 CUSIP No. 144418 AN 0 
  
 CARRAMERICA REALTY CORPORATION 
  
 3.625% SENIOR NOTE DUE 2009 
  
 CARRAMERICA REALTY CORPORATION, a corporation duly organized and existing under the laws of the State of Maryland (herein referred to as the
“Company” which term shall include any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co. or registered assigns, upon presentation, the principal sum of Two
Hundred Twenty-Five Million Dollars on April 1, 2009 and to pay interest on the outstanding principal amount thereon from March 23, 2004 or from the immediately preceding Interest Payment Date to which interest has been paid or duly provided for,
semi-annually in arrears on April 1 and October 1 in each year, commencing October 1, 2004 at the rate of 3.625% per annum, until the entire principal hereof is paid or made available for payment. The interest so payable and punctually paid or duly
provided for on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note is registered at the close of business on the Regular Record Date for such interest which shall be the March 15 or September
15 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for shall forthwith cease to be 

 payable to the Holder on such Regular Record Date, and may either be paid to the Person in whose name this Note is
registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of the Notes not more than 15 days and not less than 10 days prior to such
Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. Payment of the principal of and interest on this Note will be made at the office or agency maintained for that purpose in the City of New York, New York, or elsewhere as provided in the Indenture, in such coin or
currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payments of principal and interest on the Notes (other than payments of
principal and interest due at Maturity) may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. 
  
 Notes of this series are one of a duly authorized issue of securities of the Company (herein called the “Notes”),
issued and to be issued in one or more series under an Indenture, dated as of January 11, 2002 (the “Indenture”), among the Company, CarrAmerica Realty, L.P., as guarantor (herein called the “Guarantor”), and U.S. Bank National
Association, as trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantor, the Trustee and the Holders of the Notes and of the terms upon which the Notes are authenticated and delivered. This Note is one of the series designated
therein. 
  
 Notes of this series may be redeemed at any time at
the option of the Company, in whole or in part, in accordance with the terms of Article Eleven of the Indenture, at a redemption price equal to the sum of (i) the principal amount of the Notes being redeemed plus accrued interest thereon to the
Redemption Date and (ii) the Make-Whole Amount, if any, with respect to such Notes. 
  
 As used herein, 
  
 “Make-Whole Amount” means, in connection with any optional redemption, the excess, if any, of (i) the aggregate present value as of the date of the redemption of each dollar of principal being redeemed and the amount of interest
(exclusive of interest accrued to the date of redemption) that would have been payable in respect of the dollar if the redemption had not been made, determined by discounting, on a semi-annual basis, the principal and interest at the Reinvestment
Rate (determined on the third Business Day preceding the date the notice of redemption is given) from the respective dates on which the principal and interest would have been payable if the redemption had not been made, over (ii) the aggregate
principal amount of the Notes being redeemed or paid. 
  

 2 

 “Reinvestment Rate” means 0.15% plus the arithmetic mean of the yields under the headings
“Week Ending” published in the most recent Statistical Release under the caption “Treasury Constant Maturities” for the maturity (rounded to the nearest month) corresponding to the remaining life to maturity of the Notes, as of
the payment date of the principal being redeemed. If no maturity exactly corresponds to the maturity, yields for the two published maturities most closely corresponding to the maturity shall be calculated pursuant to the immediately preceding
sentence and the Reinvestment Rate shall be interpolated or extrapolated from those yields on a straight-line basis, rounding each of the relevant periods to the nearest month. For purposes of calculating the Reinvestment Rate, the most recent
Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used. 
  
 “Statistical Release” means the statistical release designated “H.15(519)” or any successor publication which is published weekly by
the Federal Reserve System and which establishes yields on actively traded United states government securities adjusted to constant maturities or, if the statistical release is not published at the time of any determination of the Make-Whole Amount,
then such other reasonably comparable index which shall be designated by the Company. 
  
 The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of the Company on this Note and (b) certain restrictive covenants and the related defaults and Events of Default applicable
to the Company, in each case, upon compliance by the Company with certain conditions set forth in the Indenture, which provisions apply to this Note. 
  
 If an Event of Default with respect to the Notes shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner
and with the effect provided in the Indenture. 
  
 As provided in
and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless
such Holder shall have previously given written notice to the Trustee of a continuing Event of Default with respect to the Notes, the Holders of not less than 25% in principal amount of the Notes of this series at the time Outstanding shall have
made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity and the Trustee shall not have received from the Holders of a majority in principal amount of
Notes of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply
to any suit instituted by the Holder of this Note for the enforcement of any payment of principal hereof or any interest on or after the respective due dates expressed herein. 
  

 3 

 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the rights of the Holders of the Notes of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a
majority in principal amount of the Outstanding Notes of each series of Notes then Outstanding affected thereby. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes of each series
at the time Outstanding, on behalf of the Holders of all Notes of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note. 
  
 No
reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair (i) the obligation of the Company, which is absolute and unconditional, to pay the principal of (and Make-Whole Amount, if any) and interest on
this Note at the times, place and rate, and in the coin or currency, herein prescribed, or (ii) the obligations of the Guarantor, which are unconditional, in respect of the Guaranteed Obligations. 
  
 As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any Place of Payment where the principal of (and Make-Whole Amount, if any)
and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by the Holder hereof or his or her attorney duly authorized in
writing, and thereupon one or more new Notes of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 
  
 The Notes of this series are issuable only in registered form in
denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of a
different authorized denomination, as requested by the Holder surrendering the same. 
  

 4 

 No service charge shall be made for any such registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 
  
 Prior to due presentment of this Note for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. 
  
 No recourse under or upon any obligation, covenant or agreement contained in
the Indenture or in this Note, or because of any indebtedness evidenced hereby or thereby, shall be had against any promoter, as such, or against any past, present or future stockholder, officer or director, as such, of the Company or of any
successor, either directly or through the Company or any successor, under any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of this Note by the Holder thereof and as part of the consideration for the issue of the Notes of this series. 
  

All capitalized terms used but not otherwise defined in this Note which are defined in the Indenture shall have the meanings assigned to them in the
Indenture. 
  
 THE INDENTURE AND THE NOTES, INCLUDING THIS NOTE,
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 
  
 Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused a “CUSIP” number to be printed on the Notes of this series as a convenience to
the Holders of such Notes. No representation is made as to the correctness or accuracy of such CUSIP number as printed on the Notes, and reliance may be placed only on the other identification numbers printed hereon. 
  
 Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 
  

 5 

 IN WITNESS WHEREOF, CARRAMERICA REALTY CORPORATION has caused this instrument to be duly executed under
its corporate seal. 
  
 Dated: March     , 2004

  

			
	 CARRAMERICA REALTY CORPORATION

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

	
	 [Corporate Seal]

	
	 Attest:

	
	  

	 
	 

  

					
	 CARRAMERICA REALTY, L.P., as Guarantor

		
	 By:
	 	 CARRAMERICA REALTY GP HOLDINGS,
INC., as General Partner

			
	 	 	 By
	 	  

	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

	
	 [Corporate Seal]

	
	 Attest:

	
	  

	 
	 

  

 6 

 TRUSTEE’S CERTIFICATE OF AUTHENTICATION: 
  
 This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture. 
  

			
	 U.S. BANK NATIONAL ASSOCIATION, as Trustee

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

 7 

  

	
	  

	
	ASSIGNMENT FORM
	
	FOR VALUE RECEIVED, the undersigned hereby
	sells, assigns and transfers unto

  

	
	 PLEASE INSERT SOCIAL

	 SECURITY OR OTHER IDENTIFYING

	 NUMBER OF ASSIGNEE

	 _____________________________________

  
 _____________________________________

 (Please Print or Typewrite Name and Address including 
                   Zip Code of Assignee) 
  
 _____________________________________ 
 the
within Note of CarrAmerica Realty Corporation and hereby does irrevocably constitute and appoint 
  
                                       
                               Attorney to transfer said Note on the books of the within-named
Company with full power of substitution in the premises. 
  
 Dated:
                                       
                  
  
                             _______________ 
  
 NOTICE: The signature to this assignment must correspond with the name as it appears on the
first page of the within Note in every particular, without alteration or enlargement or any change whatever. 
  

  

 8

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