Document:

Exhibit 10.13

 

OFFICE LEASE AGREEMENT

 

Between

 

	
   

  	
  Landlord:

  	
   

  	
  PPF OFF 150
  CALIFORNIA STREET, LP,

  	
   

  
	
   

  	
   

  	
   

  	
  a Delaware limited
  partnership

  	
   

  

 

and

 

	
   

  	
  Tenant:

  	
   

  	
  AD INFUSE INC.,

  	
   

  
	
   

  	
   

  	
   

  	
  a Delaware corporation

  	
   

  

 

150 CALIFORNIA STREET

SAN FRANCISCO, CALIFORNIA

 

 

TABLE OF CONTENTS

 

LEASE AGREEMENT

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  PREMISES AND COMMON
  AREAS; EXISTING LEASE

  	
  1

  
	
  2.

  	
  TERM

  	
  2

  
	
  3.

  	
  LANDLORD’S FAILURE TO
  GIVE POSSESSION

  	
  3

  
	
  4.

  	
  QUIET ENJOYMENT

  	
  3

  
	
  5.

  	
  BASE RENT

  	
  3

  
	
  6.

  	
  RENT PAYMENT

  	
  3

  
	
  7.

  	
  OPERATING EXPENSES AND
  TAXES

  	
  4

  
	
  8.

  	
  LATE CHARGE

  	
  9

  
	
  9.

  	
  PARTIAL PAYMENT

  	
  10

  
	
  10.

  	
  SECURITY DEPOSIT

  	
  10

  
	
  11.

  	
  USE OF PREMISES

  	
  11

  
	
  12.

  	
  COMPLIANCE WITH LAWS

  	
  12

  
	
  13.

  	
  WASTE DISPOSAL

  	
  12

  
	
  14.

  	
  RULES AND REGULATIONS

  	
  12

  
	
  15.

  	
  SERVICES

  	
  12

  
	
  16.

  	
  TELEPHONE AND DATA
  EQUIPMENT

  	
  14

  
	
  17.

  	
  SIGNS

  	
  15

  
	
  18.

  	
  FORCE MAJEURE

  	
  15

  
	
  19.

  	
  REPAIRS AND MAINTENANCE
  BY LANDLORD

  	
  15

  
	
  20.

  	
  REPAIRS BY TENANT

  	
  15

  
	
  21.

  	
  ALTERATIONS AND
  IMPROVEMENTS/LIENS

  	
  16

  
	
  22.

  	
  DESTRUCTION OR DAMAGE

  	
  17

  
	
  23.

  	
  EMINENT DOMAIN

  	
  18

  
	
  24.

  	
  DAMAGE OR THEFT OF
  PERSONAL PROPERTY

  	
  19

  
	
  25.

  	
  INSURANCE; WAIVERS

  	
  19

  
	
  26.

  	
  INDEMNITIES

  	
  21

  
	
  27.

  	
  ACCEPTANCE AND WAIVER

  	
  21

  
	
  28.

  	
  ESTOPPEL

  	
  22

  
	
  29.

  	
  NOTICES

  	
  22

  
	
  30.

  	
  DEFAULT

  	
  22

  
	
  31.

  	
  REMEDIES

  	
  23

  
	
  32.

  	
  SERVICE OF NOTICE

  	
  26

  
	
  33.

  	
  ADVERTISING

  	
  26

  
	
  34.

  	
  SURRENDER OF PREMISES

  	
  26

  
	
  35.

  	
  REMOVAL OF FIXTURES

  	
  27

  
	
  36.

  	
  HOLDING OVER

  	
  27

  
	
  37.

  	
  ATTORNEY’S FEES

  	
  27

  
	
  38.

  	
  MORTGAGEE’S RIGHTS

  	
  27

  
	
  39.

  	
  ENTERING PREMISES

  	
  28

  
	
  40.

  	
  RELOCATION

  	
  29

  
	
  41.

  	
  ASSIGNMENT AND
  SUBLETTING

  	
  30

  
	
  42.

  	
  SALE

  	
  33

  
	
  43.

  	
  LIMITATION OF LIABILITY

  	
  33

  
	
  44.

  	
  BROKER DISCLOSURE

  	
  34

  
	
  45.

  	
  JOINT AND SEVERAL

  	
  34

  
	
  46.

  	
  CONSTRUCTION OF THIS
  AGREEMENT

  	
  34

  
	
  47.

  	
  NO ESTATE IN LAND

  	
  34

  
	
  48.

  	
  PARAGRAPH TITLES;
  SEVERABILITY

  	
  34

  
	
  49.

  	
  CUMULATIVE RIGHTS

  	
  34

  

 

i

 

	
  50.

  	
  ENTIRE AGREEMENT

  	
  34

  
	
  51.

  	
  SUBMISSION OF AGREEMENT

  	
  34

  
	
  52.

  	
  AUTHORITY

  	
  34

  
	
  53.

  	
  GUARANTY

  	
  35

  
	
  54.

  	
  OFAC CERTIFICATION

  	
  35

  
	
  55.

  	
  COUNTERPARTS;
  TELECOPIED OR ELECTRONIC SIGNATURES

  	
  35

  

 

	
   

  	
  LIST OF EXHIBITS

  
	
   

  	
   

  
	
  A-l

  	
  Plan of Suite 450

  
	
  A-2

  	
  Plan of Suite 610

  
	
  B

  	
  Work Agreement

  
	
  C

  	
  Commencement Letter

  
	
  D

  	
  Rules and
  Regulations

  
	
  E

  	
  Form of Guaranty

  
	
  F

  	
  Parking License

  

 

ii

 

BASIC LEASE PROVISIONS

 

The following sets
forth some of the Basic Provisions of the Lease. In the event of any conflict
between the terms of these Basic Lease Provisions and the referenced Sections
of the Lease, the referenced Sections of the Lease shall control.

 

1.        Building
(Section 1): The building located at 150 California Street, San
Francisco, California. The Building contains approximately 202,256 rentable
square feet.

 

2.        Property:       The
Building and the parcel(s) of land on which it is located and, at Landlord’s
discretion, the facilities and other improvements, if any, serving the Building
and the parcel(s) of land on which they are located

 

3.        Premises
(Section 1):

 

	
  Suites:

  	
   

  	
  450 and 610

  
	
  Floors:

  	
   

  	
  Fourth (4th) and Sixth
  (6th)

  
	
  Rentable Square Feet:

  	
   

  	
  5,416 (Suite 450)
  and 714 (Suite 610)

  

 

	
  4.       Term
  (Section 2):

  	
   

  	
  Three (3) years (Suite 450 only);

  
	
   

  	
   

  	
  Month-to-month (Suite 610 only)

  

 

Target Commencement Date
(Section 2):            October 1, 2009

Target Expiration Date (Suite 450
only) (Section 2): September 30, 2012

 

5.        Base
Rent (Section 5):

 

Suite 450

 

	
   

  	
   

  	
  Annual Rate Per

  	
   

  	
  Monthly

  	
   

  
	
  Period

  	
   

  	
  Rentable Square Foot

  	
   

  	
  Installment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Months
  1 - 12

  	
   

  	
  $

  	
  33.00

  	
   

  	
  $

  	
  14,894.00

  	
   

  
	
  Months
  13 - 24

  	
   

  	
  $

  	
  34.00

  	
   

  	
  $

  	
  15,345.33

  	
   

  
	
  Months
  25 - 36

  	
   

  	
  $

  	
  35.00

  	
   

  	
  $

  	
  15,796.67

  	
   

  

 

Suite 610

 

	
   

  	
   

  	
  Annual Rate Per

  	
   

  	
  Monthly

  	
   

  
	
  Period

  	
   

  	
  Rentable Square Foot

  	
   

  	
  Installment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commencement
  Date to Lease Termination for Suite 610

  	
   

  	
  $

  	
  33.00

  	
   

  	
  $

  	
  1,963.50

  	
   

  
								

 

i

 

6.         Rent
Payment Address (Section 5):

 

PPF OFF 150 CALIFORNIA
STREET, LP

150 California Street

P.O. Box 100762

Pasadena, CA 91189-0762

 

7.         Base
Year (Section 7):

 

	
  Tax Base Year:

  	
   

  	
  2010

  
	
  Operating
  Expense Base Year:

  	
   

  	
  2010

  
	
  Insurance Expense Base
  Year:

  	
   

  	
  2010

  

 

	
  8.        Tenant’s
  Share (Section 7):

  	
   

  	
  Suite 450: 2.68%

  
	
   

  	
   

  	
   

  	
  Suite 610: 0.35%

  
	
   

  	
   

  	
   

  	
   

  
	
  9.        Security
  Deposit (Section 10):

  	
   

  	
  $16,857.50

  
	
   

  	
   

  	
   

  	
   

  
	
  10.      Landlord’s
  Broker (Section 44):

  	
   

  	
  CB Richard
  Ellis, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
  Tenant’s Broker
  (Section 44):

  	
   

  	
  None

  

 

11.       Notice
Addresses (Section 29):

 

	
  Landlord

  	
   

  	
  Tenant

  
	
   

  	
   

  	
   

  
	
  PPF OFF 150 CALIFORNIA
  STREET, LP

  c/o Morgan Stanley US RE Investing Division

  555 California Street, Suite 2200, Floor 21

  San Francisco, California 94104

  Attention: Keith Fink

  	
   

  	
  Prior to Commencement
  Date:

   

  150 California Street,
  Suite 575

  San Francisco, California 94111

  Attention: Portia Kersten, CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Following Commencement
  Date:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  150 California Street,
  Suite 450

  San Francisco, California 94111

  Attention: Portia Kersten, CFO

  

 

12.       Guarantor
(Section 53):                  Velti PLC

 

ii

 

OFFICE LEASE AGREEMENT

 

THIS OFFICE LEASE
AGREEMENT (hereinafter called the “Lease”)
is entered into as of September 23, 2009 (the “Effective Date”), by and
between the Landlord and Tenant identified above.

 

1.         Premises and Common Areas; Existing Lease; Temporary
Space.

 

(a)       Premises;
Rentable Area. Landlord does hereby lease to Tenant and Tenant does hereby
lease from Landlord the Premises located in the Building identified in the
Basic Lease Provisions, situated on the Property, such Premises as further
shown on the drawing attached hereto as Exhibits
A-l and A-2 and made a
part hereof by reference. The Premises consist of (i) Suite 450,
consisting of 5,416 rentable square feet of office space located on the fourth
(4th) floor and Suite 610, consisting of 714 rentable square feet of
office space located on the sixth (6th) floor of the Building. Tenant is
currently in occupancy of Suite 610 pursuant to the terms of the Existing
Lease (defined in Section l(c) below). Suite 450 shall be
prepared for Tenant’s occupancy in the manner and subject to the provisions of
the Work Agreement attached hereto as Exhibit B
attached hereto and made a part hereof (the “Work
Agreement”). Landlord and Tenant agree that the rentable area of the
Premises as described in Paragraph 2 of the Basic Lease Provisions has been
confirmed and conclusively agreed upon by the parties. No easement for light,
air or view is granted hereunder or included within or appurtenant to the
Premises.

 

(b)       Common
Areas. Tenant shall have the nonexclusive right (in common with other
tenants or occupants of the Building, Landlord and all others to whom Landlord
has granted or may hereafter grant such rights) to use the Common Areas,
subject to the Rules and Regulations. Landlord may at any time close
temporarily any Common Areas to make repairs or changes therein or to effect
construction, repairs, or changes within the Building, or to prevent the
acquisition of public rights in such areas, or to discourage parking by parties
other than tenants, and may do such other acts in and to the Common Areas as in
its judgment may be desirable. Landlord may from time to time permit portions
of the Common Areas to be used exclusively by specified tenants. Landlord may
also, from time to time, place or permit customer service and information
booths, kiosks, stalls, push carts and other merchandising facilities in the
Common Areas. “Common Areas” shall mean any of the following or similar items: (a) to
the extent included in the Building the total square footage of areas of the
Building devoted to nonexclusive uses such as ground floor lobbies, seating
areas and elevator foyers; fire vestibules; mechanical areas; restrooms and
corridors on all floors; elevator foyers and lobbies on multi-tenant floors; electrical
and janitorial closets; telephone and equipment rooms; and other similar
facilities maintained for the benefit of Building tenants and invitees, but
shall not mean Major Vertical Penetrations (defined below); and (b) all
parking garage vestibules; loading docks; locker rooms, exercise and conference
facilities available for use by Building tenants (if any); walkways, roadways
and sidewalks; trash areas; mechanical areas; landscaped areas including
courtyards, plazas and patios; and other similar facilities maintained for the
benefit of Building tenants and invitees. As used herein, “Major Vertical
Penetrations” shall mean the area or areas within Building stairs (excluding
the landing at each floor), elevator shafts, and vertical ducts that service more
than one floor of the Building. The area of Major Vertical Penetrations shall
be bounded and defined by the dominant interior surface of the perimeter walls
thereof (or the extended plane of such walls over areas that are not enclosed).
Major Vertical Penetrations shall exclude, however, areas for the specific use
of Tenant or installed at the request of Tenant, such as special stairs or
elevators.

 

1

 

(c)       Existing
Lease. Pursuant to the provisions of that certain Lease dated as of February 28,
2009, as amended by that certain First Amendment to Office Lease Agreement
dated as of May 6, 2009 (collectively, the “Existing Lease”), Tenant occupies space on the fifth (5th)
floor of the Building (the “Fifth Floor Space”)
as well as Suite 610. The parties have agreed that the Existing Lease
shall be terminated upon the Commencement Date, and that Tenant will relocate
from the Fifth Floor Space to Suite 450 on the Commencement Date (defined
in Section 2(a) below). Concurrently with the parties’ execution and
delivery of this Lease, Landlord and Tenant shall additionally enter into an
agreement providing for the termination of the Existing Lease effective as of
the Commencement Date.

 

(d)       Temporary
Space. From and after the Effective Date, Landlord shall permit Tenant to
occupy and use space located on the second (2nd) of the Building designated as Suite 200,
containing 3979 rentable square feet (the “Temporary
Space”). Tenant shall accept the Temporary Space in its “as-is”
condition, and shall have no right to perform alterations (defined in Article 21
below) in the Temporary Space, nor shall Tenant have any right to assign its
interest in the Temporary Space or sublease all or any portion of the Temporary
Space. Tenant’s occupancy of the Temporary Space shall be subject to all the
terms and conditions of this Lease, except that Tenant shall not be responsible
for payment of Base Rent (defined in Article 5 below) for the Temporary
Space during the term that Tenant is permitted to occupy the Temporary Space
(the “Temporary Space Term”). The
Temporary Space Term shall expire as of midnight on the day immediately
preceding the Commencement Date and, as of such date, Tenant shall vacate the
Temporary Space and relocate into the Premises. If and to the extent that
Tenant fails to timely vacate from the Temporary Space, Tenant shall be deemed
to be holding over in the Temporary Space pursuant to the provisions of Article 6
below, except that the monthly Base Rent shall be $50.50 per rentable square
foot per annum (i.e. 150% of the Base Rent rate per rentable square foot
payable by Tenant for the Premises). Tenant shall, additionally, indemnify,
defend, protect and hold Landlord harmless from and against any and all loss, cost,
damage or liability arising in any manner out of Tenant’s holdover in the
Temporary’ Space.

 

2.         Term.

 

(a)       Commencement
Date. Tenant shall have and hold the Premises for the term (“Term”) identified in the Basic Lease
Provisions commencing on the date (the “Commencement
Date”) which is the earlier of (i) the date on which Landlord
notifies Tenant that the Tenant Improvements (defined in the Work Agreement) in
Suite 450 are Substantially Complete (defined a the Work Agreement) or
would have been Substantially Complete but for any Tenant Delay (defined in the
Work Agreement) or (ii) the date Tenant first occupies all or any portion
of Suite 450 for the conduct of its business. The parties estimate that
the Commencement Date will be the Target Commencement Date specified in the
Basic Lease Provisions.

 

(b)       Expiration
Date.

 

(i)        Suite 450.
The Term for Suite 450 shall terminate at midnight on the last day of the
Term (the “Expiration Date”),
unless sooner terminated or extended as hereinafter provided.

 

(ii)       Suite 610.
The Term with respect to Suite 610 will be a “month-to-month” term, which
may be terminable by either party upon at least thirty (30) days advance

 

2

 

written notice to the
other (the effective date of any such termination need not be the final day of
a calendar month).

 

(c)       Commencement
Letter. Promptly following the Commencement Date, Landlord and Tenant shall
enter into a letter agreement in the form attached hereto as Exhibit C, specifying and/or
confirming the Commencement Date and the Expiration Date (and the rentable area
of the Premises and the schedule of Base Rent payable hereunder, if such
numbers as finally determined differ from those set forth in the Basic Lease
Provisions); if Tenant fails to execute and deliver such letter agreement to
Landlord within ten (10) business days after Landlord’s delivery of same
to Tenant, said letter agreement will be deemed final and binding upon Tenant.

 

3.         Landlord’s Failure. to Give Possession.
Landlord shall not be liable for damages to Tenant for failure to deliver
possession of Suite 450 to Tenant by the Target Commencement Date set
forth in the Basic Lease Provisions. Subject to Tenant Delay, Landlord will use
commercially reasonable efforts to deliver possession of the Premises to Tenant
by the Target Commencement Date.

 

4.         Quiet Enjoyment. Tenant, upon payment
in full of the required Rent and full performance of the terms, conditions,
covenants and agreements contained in this Lease, shall peaceably and quietly
have, hold and enjoy the Premises during the Term. The foregoing is in lieu of
any implied covenant of quiet enjoyment. Landlord shall not be responsible for
the acts or omissions of any other tenant or third party that may interfere with
Tenant’s use and enjoyment of the Premises.

 

5.         Base Rent. Tenant shall pay to
Landlord, at the address stated in the Basic Lease Provisions or at such other
place as Landlord shall designate in writing to Tenant, annual base rent (“Base Rent”) in the amounts set forth in the
Basic Lease Provisions.

 

6.         Rent Payment

 

(a)       Generally.
The Base Rent shall be payable in equal monthly installments, due on the first
day of each calendar month, in advance, in legal tender of the United States of
America, without abatement, demand, deduction or offset whatsoever, except as
may be expressly provided in this Lease. One full monthly installment of Base
Rent shall be due and payable on the date of execution of this Lease by Tenant
and shall be applied to the first month’s Base Rent, and a like monthly
installment of Base Rent shall be due and payable on or before the first day of
each calendar month following the Commencement Date during the Term (provided,
that if the Commencement Date should be a date other than the first day of a
calendar month, the monthly Base Rent installment paid on the date of execution
of this Lease by Tenant shall be prorated to that partial calendar month, and
the excess shall be applied as a credit against the next monthly Base Rent installment).
Tenant shall pay, as additional Rent, all other sums due from Tenant under this
Lease (the term “Rent”, as used
herein, means all Base Rent, additional Rent and all other amounts payable
hereunder from Tenant to Landlord). Unless otherwise specified herein, all
items of Rent (other than Base Rent and amounts payable pursuant to Article 7
below) shall be due and payable by Tenant on or before the date that is ten (10) days
after billing by Landlord. Rent shall be made payable to the entity, and sent
to the address, Landlord designates (initially set forth in the Basic Lease
Provisions) and shall be made by good and sufficient check or by other means
acceptable to Landlord.

 

3

 

(b)       Abatement.
Notwithstanding the foregoing provisions of Section 6(a) to the
contrary, Tenant shall be entitled to an abatement of Base Rent, with respect
to Suite 450 only, for the first (1st) full calendar month following the
month in which the Commencement Date occurs (unless the Commencement Date is
the first (1st) day of a calendar month, in which event Base Rent will be
abated during the calendar month in which the Commencement Date occurs) (the “Abatement Period”). The total amount of
Base Rent abated during the Abatement Period is referred to herein as the “Abated Rent”. However, if at any time
Tenant is in Default (defined in Article 30 below) hereunder, then (i) if
such Default occurs before the expiration of the Abatement Period, there will
be no further abatement of Base Rent pursuant to this Section 6(b) and
(ii) at Landlord’s option, all then-unamortized previously abated Abated
Rent (assuming amortization of Abated Rent on a straight-line basis over the
Term) shall become immediately due and payable.

 

7.         Operating Expenses, Taxes and Insurance Expense.

 

(a)       Generally.
Tenant agrees to reimburse Landlord throughout the Term, as additional Rent
hereunder, for Tenant’s Share (defined below) of: (i) the annual Operating
Expenses (as defined below) in excess of the Operating Expenses for the
Operating Expense Base Year set forth in the Basic Lease Provisions
(hereinafter called the “Base Year Expense
Amount”); (ii) the annual Taxes (as defined below) in excess of
the Taxes for the Tax Base Year set forth in the Basic Lease Provisions
(hereinafter called the “Base Year Tax Amount”);
and (iii) the annual Insurance Expenses (as defined below) in excess of
the Insurance Expenses for the Insurance Expense Base Year set forth in the
Basic Lease Provisions (hereinafter called the “Base Year Insurance Amount”). The term “Tenant’s Share” as
used in this Lease shall mean the percentage determined by dividing the
rentable square footage of the Premises by the rentable square footage of the
Building and multiplying the quotient by 100. Landlord and Tenant hereby agree
that Tenant’s Share with respect to the Premises initially demised by this
Lease is as set forth in the Basic Lease Provisions. Tenant’s Share of excess
Operating Expenses, excess Taxes and excess Insurance Expenses for any calendar
year shall be appropriately prorated for any partial year occurring during the
Term. The obligations of the parties pursuant to this Article 7 will
survive the expiration or sooner termination of this Lease.

 

(b)       “Operating Expenses” shall mean all of those
expenses incurred or paid by Landlord in operating, servicing, managing,
maintaining and repairing the Property, Building, and all parking areas and all
related Common Areas. Operating Expenses shall include, without limitation, the
following: (1) all costs related to the providing of water, heating,
lighting, ventilation, sanitary sewer, air conditioning and other utilities,
but excluding those utility charges actually paid separately by Tenant or any
other tenants of the Building; (2) janitorial and maintenance expenses,
including: (a) janitorial services and janitorial supplies and other
materials used in the operation and maintenance of the Building; and (b) the
cost of maintenance and service agreements on equipment, window cleaning, grounds
maintenance, pest control, security, trash removal, and other similar services
or agreements; (3) management fees (or an imputed charge for management
fees if Landlord provides its own management services) and the market rental
value (as reasonably determined by Landlord) of a management office; (4) the
costs, including interest, amortized over the applicable useful life, of (a) any
capital improvement made to the Building by or on behalf of Landlord which is
required under any governmental law or regulation (or any judicial
interpretation thereof) or any insurance requirement that was not applicable
to, and enforced against, the Building as of the date of this Lease, (b) any
capital cost of acquisition and installation of any device or equipment designed
or anticipated to improve the

 

4

 

operating efficiency of
any system within the Building or which is reasonably intended to reduce
Operating Expenses and which is properly capitalized, or (c) the cost of any
capital improvement or capital equipment which is acquired to improve the
safety of the Building or Property, or (d) capital improvements which are
replacements or modifications of items located in the Common Areas required to
keep the Common Areas in good order or condition; (5) all services,
supplies, repairs, replacements or other expenses directly and reasonably
associated with servicing, maintaining, managing and operating the Building,
including, but not limited to the lobby, vehicular and pedestrian traffic areas
and other Common Areas; (6) wages and salaries of Landlord’s employees
(not above the level of Building or Property Manager or such other title
representing the on-site management representative primarily responsible for
management of the Building) engaged in the maintenance, operation, repair and
services of the Building, including taxes, insurance and customary fringe
benefits (which wages and salaries shall be prorated, in the case of employees
who perform services with respect to more than one property, based upon
Landlord’s good faith estimate of each such employee’s proportionate time spent
with respect to each applicable property); (7) legal and accounting costs
(but not including legal costs incurred in collecting delinquent rent from any
occupants of the Property); (8) costs to maintain and repair the Building
and Property; and (9) landscaping and security costs unless and to the
extent that Landlord hires a third party to provide such services pursuant to a
service contract and the cost of that service contract is already included in
Operating Expenses as described above.

 

Operating Expenses
shall specifically exclude the following: (i) costs of alterations of
tenant spaces (including all tenant improvements to such spaces); (ii) costs
of capital improvements, except as provided in the preceding paragraph; (iii) depreciation,
interest and principal payments on mortgages, and other debt costs, if any; (iv) real
estate brokers’ leasing commissions or compensation and advertising and other
marketing expenses; (v) payments to affiliates of the Landlord for goods
and/or services to the extent the same are materially in excess of what would
be paid to non-affiliated parties of similar experience, skill and expertise
for such goods and/or services in an arm’s length transaction; (vi) costs
or other services or work performed for the singular benefit of another tenant
or occupant (other than for common areas of the Building); (vii) legal,
space planning, construction, and other expenses incurred in procuring tenants
for the Building or renewing or amending leases with existing tenants or
occupants of the Building; (viii) costs of advertising and public
relations and promotional costs and attorneys’ fees associated with the leasing
of the Building; (ix) any expense to the extent that Landlord actually
receives reimbursement from insurance, condemnation awards, other tenants or
any other source; (x) costs incurred in connection with the sale,
financing, refinancing, mortgaging, or other change of ownership of the
Building; (xi) all expenses in connection with the installation, operation and
maintenance of any observatory, broadcasting facilities, luncheon club,
athletic or recreation club, cafeteria, dining facility or other facility not
generally available to all office tenants of the Building, including Tenant;
(xii) Taxes; (xiii) Insurance Expenses; and (xiv) rental under any ground or
underlying tease or leases.

 

(c)       “Taxes” shall mean all taxes and assessments
of every kind and nature which Landlord shall become obligated to pay with
respect to any calendar year of the Term or portion thereof because of or in
any way connected with the ownership, leasing, or operation of the Building and
the Property, as well as any assessment, tax, fee, levy or charge in addition
to, or in substitution, partially or totally, of any assessment, tax, fee, levy
or charge previously included within the definition of real property tax, it
being acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June 1978 election (“Proposition
13”) and that assessments, taxes, fees, levies and charges may be

 

5

 

imposed by governmental
agencies for such services as fire protection, street, sidewalk and road
maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants, and, in further
recognition of the decrease in the level and quality of governmental services
and amenities as a result of Proposition 13, Taxes shall also include any
governmental or private assessments or the Property’s contribution towards a
governmental or private cost-sharing agreement for the purpose of augmenting or
improving the quality of services and amenities normally provided by
governmental agencies. Notwithstanding anything to the contrary contained
herein, (i) Landlord shall include in Taxes each year hereunder
(including, without limitation, the Tax Base Year) the amounts levied, assessed,
accrued or imposed for such year, regardless of whether paid or payable in
another year (except that, with respect to personal property taxes, Landlord
shall include in Taxes the amounts paid during each such year), and Landlord
shall each year make any other appropriate changes to reflect adjustments to
Taxes for prior years (including, without limitation, the Tax Base Year) due to
error by the taxing authority, supplemental assessment or other reason,
regardless of whether Landlord uses an accrual system of accounting for other
purposes (the amount of any tax refunds received by Landlord during the Term of
this Lease shall be deducted from Taxes for the calendar year to which such
refunds are attributable); (ii) the amount of special taxes and special
assessments to be included shall be limited to the amount of the installments
(plus any interest, other than penalty interest, payable thereon) of such
special tax or special assessment payable for the calendar year in respect of
which Taxes are being determined; (iii) the amount of any tax or excise
levied by the State or the City where the Building is located; any political
subdivision of either, or any other taxing body, on rents or other income from
the Property (or the value of the leases thereon) to be included shall not be
greater than the amount which would have been payable on account of such tax or
excise by Landlord during the calendar year in respect of which Taxes are being
determined had the income received by Landlord from the Building [excluding
amounts payable under this subparagraph (iii)] been the sole taxable income of
Landlord for such calendar year; (iv) if any portion of the Taxes in the
Tax Base Year includes an assessment which is no longer payable in a subsequent
calendar year, Taxes for the Tax Base Year shall be adjusted to eliminate the
amount of the annual assessment originally included therein; and (v) Taxes
shall also include Landlord’s reasonable costs and expenses (including
reasonable attorneys’ fees) in contesting or attempting to reduce any Taxes.
Taxes will not include income taxes [except those which may be included
pursuant to subparagraph (iii) above], excess profits taxes, franchise,
capital stock, and inheritance or estate taxes. Without limiting the generality
of this Section 7(c), if at any time prior to or during the Term any sale,
refinancing or change in ownership of the Building is consummated, and if
Landlord reasonably anticipates that the Building will be reassessed for
purposes of Taxes as a result thereof, but that such reassessment may not be
completed during the calendar year in which such event is consummated, then for
all purposes under this Lease, Landlord will calculate Taxes applicable to such
calendar year and thereafter based upon Landlord’s good faith estimate of the
Taxes which will result from such reassessment. Upon the finalization of any
such reassessment and Landlord’s determination of actual Taxes applicable to
the Tax Base Year and all calendar years subsequent thereto, as applicable, Landlord
shall have the right to adjust the applicable Taxes therefor and, upon such
adjustment, Landlord or Tenant, as appropriate, shall promptly make such
reconciliation payment (which, in the case of Landlord, may be made in the form
of a credit against the installment(s) of Tenant’s Share of excess Taxes
next coming due) as may be necessary in order that Tenant pays Tenant’s Share
of actual Taxes for each such calendar year.

 

(d)       “Insurance Expenses” shall mean the amount
paid or incurred by Landlord (i) in insuring all or any portion of the
Property under policies of insurance and/or

 

6

 

commercially reasonable
self-insurance, which may include commercial general liability insurance,
property insurance, worker’s compensation insurance, rent interruption
insurance, contingent liability and builder’s risk insurance, and any insurance
as may from time to time be maintained by Landlord and (ii) for deductible
payments under any insured claims.

 

(e)       Cost
Pools. Landlord shall have the right, from time to time, to equitably
allocate some or all of the Operating Expenses and/or Insurance Expenses among
different portions or occupants of the Building (the “Cost Pools”), in Landlord’s discretion.
Such Cost Pools may, for example, include, but shall not be limited to, the
office space tenants of the Building, and the retail space tenants. The Operating
Expenses and/or Insurance Expenses allocable to each such Cost Pool shall be
allocated to such Cost Pool and charged to the tenants within such Cost Pool in
an equitable manner.

 

(f)        Procedure.
As soon as reasonably possible after the commencement of each calendar year
following the Base Year, Landlord will provide Tenant with a statement of the
estimated monthly installments of Tenant’s Share of excess Operating Expenses,
excess Taxes and excess Insurance Expenses which will be due for the remainder
of the calendar year in which the Commencement Date occurs or for the next
ensuing calendar year, as the case may be. Landlord shall deliver to Tenant
within one hundred twenty (120) days after the close of each calendar year
(including the calendar year in which this Lease terminates), or as soon
thereafter as reasonably practical, a statement (“Landlord’s Statement”) setting forth: (1) the amount of
any increases in Operating Expenses for such calendar year in excess of the
Operating Expenses for the Operating Expense Base Year, (2) the amount of
any increases in the Taxes for such calendar year in excess of the Taxes for
the Tax Base Year and (3) the amount of any increases in Insurance
Expenses for such calendar year in excess of the Insurance Expenses for the
Insurance Expense Base Year.

 

(i)        For
each year following the Base Year, Tenant shall pay to Landlord, together with
its monthly payment of Base Rent as provided in Section 5 above, as
additional Rent hereunder, the estimated monthly installment of Tenant’s Share
of the excess Operating Expenses, excess Taxes and excess Insurance Expenses
for the calendar year in question. At the end of any calendar year, and upon
Landlord’s completion of Landlord’s Statement for such year, if Tenant has paid
to Landlord an amount in excess of Tenant’s Share of excess Operating Expenses,
excess Taxes or and excess Insurance Expenses for such calendar year, Landlord
shall reimburse to Tenant any such excess amount (or shall apply any such
excess amount to any amount then owing to Landlord hereunder, and if none, to
the next due installment or installments of additional Rent due hereunder, at
the option of Landlord); if Tenant has paid to Landlord less than Tenant’s
Share of excess Operating Expenses, excess Taxes or excess Insurance Expenses
for such calendar year, Tenant shall pay to Landlord any such deficiency within
thirty (30) days after the date of delivery of the applicable Landlord’s
Statement.

 

(ii)       For
the calendar year in which this Lease terminates and is not extended or
renewed, the provisions of this Article 7 shall apply, but Tenant’s Share
of excess Operating Expenses, excess Taxes and excess Insurance Expenses for
such calendar year shall be subject to a pro rata adjustment based upon the
number of days in such calendar year prior to the expiration of the Term of
this Lease Tenant’s obligation to pay Tenant’s Share of excess Operating
Expenses, excess Taxes and excess Insurance Expenses (or any other amounts)
accruing during, or relating to, the period prior to expiration or earlier
termination of this Lease shall survive such expiration or termination.
Landlord may reasonably estimate all or any of

 

7

 

such obligations within a
reasonable time before, or any time after, such expiration or termination. On
or about the expiration of this Lease, Landlord, at Tenant’s written request,
will meet and confer with Tenant to review Landlord’s estimated year-to-date
variance between amounts paid by Tenant pursuant to this Section 7 and
Landlord’s then-current estimate of actual Operating Expenses, Taxes and
insurance Expenses for the then-current calendar year, in order to allow Tenant
to make a projection of any reconciliation due, provided that Tenant
acknowledges that any projection made by Landlord will be an estimate only, and
that actual amounts payable may vary from any such estimate. Tenant shall pay
the full amount of such estimate, and any additional amount due after the
actual amounts are determined, in each case within thirty (30) days after
Landlord sends a statement therefor. If the actual amount is less than the
amount Tenant has paid as an estimate. Landlord shall refund the difference
within thirty (30) days after such determination is made.

 

(iii)      If
the Building is less than ninety-five percent (95%) occupied throughout any
calendar year of the Term, inclusive of the Operating Expense Base Year, then
those actual Operating Expenses and Insurance Expenses for the calendar year in
question which vary with occupancy levels in the Building (including for
example, but not limited to elevator maintenance costs and management fees)
shall be increased by Landlord, for the purpose of determining Tenant’s Share
of excess Operating Expenses and Insurance Expenses, to be the amount of
Operating Expenses and Insurance Expenses which Landlord reasonably determines
would have been incurred during that calendar year if the Building had been at
least 100% occupied throughout such calendar year.

 

(f)        Tenant’s Audit Right.
Tenant shall have the right to conduct an audit of Landlord’s books and
records relating to Operating Expenses in accordance with the following terms
and provisions, provided that Tenant delivers written notice of its intent to
audit within ninety (90) days after receipt by Tenant of Landlord’s Statement
and completes such audit within one hundred twenty (120) days after the date of
Tenant’s notice of intent to audit:

 

(i)        No
event of default is outstanding with respect to payment of Base Rent or
additional Rent.

 

(ii)       Tenant
shall have the right to have an employee of Tenant or a Qualified Auditor (as
defined below) inspect Landlord’s accounting records at Landlord’s office no
more than once per calendar year.

 

(iii)      Neither
the employee of Tenant nor the Qualified Auditor shall be employed or engaged
on a contingency basis, in whole or in part.

 

(iv)      Prior
to commencing the audit, Tenant and the auditor shall: (i) if the auditor
is not as employee of Tenant, provide Landlord with evidence that the auditor
is from a nationally recognized accounting firm and that the individual
performing the audit is a certified public accountant (a “Qualified Auditor”); (ii) each sign a
confidentiality letter to be provided by Landlord; and (iii) provide
Landlord with evidence of the fee arrangement between the auditor and Tenant.

 

(v)       The
audit shall be limited solely to confirming that the Operating Expenses
reported in the Landlord’s Statement are consistent with the terms of this
Lease. The auditor shall not make any judgments as to the reasonableness of any
item of expense and/or the

 

8

 

total Operating Expenses,
nor shall such reasonableness be subject to audit except where this Lease
specifically states that a particular item must be reasonable.

 

(vi)      If
Tenant’s auditor finds errors or overcharges in Landlord’s Statement that
Tenant wishes to pursue, then within the time period set forth above Tenant
shall advise Landlord thereof in writing with specific reference to claimed
errors and overcharges and the relevant Lease provisions disqualifying such
expenses. Landlord shall have a reasonable opportunity to meet with Tenant’s
auditor (and any third auditor selected hereinbelow, if applicable) to explain
its calculation of Operating Expenses, it being the understanding of Landlord
and Tenant that Landlord intends to operate the Building as a first-class
office building with services at or near the top of the market. If Landlord
agrees with said findings, appropriate rebates or charges shall be made to
Tenant. If Landlord does not agree, Landlord shall engage its own auditor to
review the findings of Tenant’s auditor and Landlord’s books and records. The
two (2) auditors and the parties shall then meet to resolve any difference
between the audits.

 

(vii)     If
agreement cannot be reached within two (2) weeks thereafter, then the
auditors shall together select a third auditor (who shall be a Qualified
Auditor not affiliated with and who does not perform services for either party
or their affiliates) to which they shall each promptly submit their findings in
a final report, with copies submitted simultaneously to the first two (2) auditors.
Tenant and Landlord. Within two (2) weeks after receipt of such findings,
the third auditor shall determine which of the two reports best meets the terms
of this Lease, which report shall become the “Final
Finding”. The third auditor shall not have the option of selecting a
compromise between the first two auditors’ findings, nor to make any other finding.

 

(viii)    If
the Final Finding determines that Landlord has overcharged Tenant, Landlord
shall credit Tenant toward the payment of additional Rent next due and payable
under this Lease the amount of such overcharge. If the Final Finding determines
that Tenant was undercharged, then within twenty (20) days after the Final
Finding, Tenant shall reimburse Landlord the amount of such undercharge.

 

(ix)       If
the Final Finding results in a determination that Landlord overstated Operating
Expenses by more than five percent (5%) of Tenant’s Share of the Operating
Expense for the calendar year subject to the audit, Landlord shall pay its own
audit costs and reimburse Tenant for its costs associated with said audits. If
the Final Finding results in a credit to Tenant of less than one percent (1%)
of Tenant’s Share of the Operating Expenses for the calendar year subject to
the audit (or in a determination that Tenant underpaid Operating Expense for
such year), Tenant shall pay its own costs and shall reimburse Landlord for
Landlord’s costs associated with said audits. In all other events, each party
shall pay its own audit costs, including one half (1/2) of the cost of the
third auditor.

 

(x)        The
results of any audit of Operating Expenses hereunder shall be treated by Tenant,
all auditors, and their respective employees and agents as confidential, and
shall not be discussed with nor disclosed to any third party, except for
disclosures required by applicable law, court rule or order or in
connection with any litigation or arbitration involving Landlord or Tenant.

 

8.         Late Charge. Other remedies for
non-payment of Rent notwithstanding, if any monthly installment of Base Rent or
additional Rent is not received by Landlord on or before the

 

9

 

date due, or if any
payment due Landlord by Tenant which does not have a scheduled due date is not
received by Landlord on or before the tenth (10th) business day following the
date Tenant was invoiced for such charge, a late charge of five percent (5%) of
such past due amount shall be immediately due and payable as additional Rent;
additionally, interest shall accrue on all delinquent amounts from the date
past due until paid at the lower of (a) the rate of one and one-half
percent (1-1/2%) per month or fraction thereof from the date such payment is
due until paid (Annual Percentage Rate = 18%), or (b) the highest rate
permitted by applicable law (the “Interest
Rate”).

 

9.         Partial Payment. No payment by Tenant
or acceptance by Landlord of an amount less than the Rent herein stipulated
shall be deemed a waiver of any other Rent due. No partial payment or
endorsement on any check or any letter accompanying such payment of Rent shall
be deemed an accord and satisfaction, but Landlord may accept such payment
without prejudice to Landlord’s right to collect the balance of any Rent due
under the terms of this Lease or any late charge or interest assessed against
Tenant hereunder.

 

10.       Security Deposit. Tenant shall pay
Landlord the amount identified as the Security Deposit in the Basic Lease
Provisions (hereinafter referred to as the “Security
Deposit”) as evidence of good faith on the part of Tenant in the
fulfillment of the terms of this Lease, which shall be held by the Landlord
during the Term, or any renewal thereof. Tenant will not be entitled to any
interest on the Security Deposit. The Security Deposit may be used by Landlord,
at its discretion, to apply to any amount owing to Landlord hereunder, or to
pay the expenses of repairing any damage (excepting normal wear and tear) to
the Premises which exists on the day Tenant vacates the Premises, but this
right shall not be construed to limit Landlord’s right to recover additional
sums from Tenant for damages to the Premises. If there are no payments to be
made from the Security Deposit pursuant to this Article 10, or if there is
any balance of the Security Deposit remaining after all payments have been
made, the Security Deposit, or such balance thereof remaining, will be refunded
to the Tenant within thirty (30) days after fulfillment by Tenant of all
obligations hereunder (including payment of the balance of any year-end
reconciliation of Operating Expenses, Taxes and Insurance Expenses and the
completion of any restoration obligations set forth herein). In no event shall
Tenant be entitled to apply the Security Deposit to any Rent due hereunder.
Upon sale or conveyance of the Building, Landlord may transfer or assign the
Security Deposit to any new owner of the Building, and upon such transfer all
liability of Landlord for the Security Deposit shall terminate. Landlord shall
be entitled to commingle the Security Deposit with its other funds. Tenant
hereby waives the provisions of Section 1950.7 of the California Civil
Code, and all other provisions of law, now or hereafter in force, which (a) establish
a time frame within which a landlord must refund a security deposit under a
lease, and/or (b) provide that Landlord may claim from a security deposit
only those sums reasonably necessary to remedy defaults in the payment of rent,
to repair damage caused by Tenant or to clean the Premises, it being agreed
that Landlord may, in addition, claim those sums reasonably necessary to
compensate Landlord for any other loss or damage caused by the default of Tenant
under this Lease, including without limitation all damages or rent due upon
termination of this Lease pursuant to Section 1951.2 of the California
Civil Code. Pursuant to the provisions of the Existing Lease, Tenant has
delivered to Landlord a security deposit in the aggregate amount of Six
Thousand Dollars ($6,000.00) (the “Existing
Security Deposit”). The Existing Security Deposit shall be held by
Landlord as part of the Security Deposit; accordingly, concurrently with Tenant’s
execution and delivery of this Lease to Landlord, Tenant shall deliver to
Landlord the sum of $10,857.50 to be added to the Existing Security Deposit and
become the Security Deposit.

 

10

 

11.       Use of Premises.

 

(a)       Generally.
Tenant shall use and occupy the Premises for general office purposes of a type
customary for first-class office buildings and for no other purpose. The
Premises shall not be used for any illegal purpose, nor in violation of any
valid regulation of any governmental body, nor in any manner to create any
nuisance or trespass, nor in any manner which will void the insurance or
increase the rate of insurance on the Premises or the Building, nor in any
manner inconsistent with the first-class nature of the Building, nor in any
manner that would cause the occupancy level of the Premises to exceed the
standard density limit for the Building.

 

(b)       Hazardous
Materials.

 

(i)        Tenant
shall not cause or permit the receipt, storage, use, location or handling on
the Property (including the Building and Premises) of any product, material or
merchandise which is explosive, highly inflammable, or a “Hazardous Material,”
as that term is hereafter defined. “Hazardous
Material” shall include all materials or substances which are listed
in, regulated by or subject to any applicable federal, state or local laws, rules or
regulations from time to time in effect, including, without limitation,
hazardous waste (as defined in the Resource Conservation and Recovery Act);
hazardous substances (as defined in the Comprehensive Emergency Response,
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act); gasoline or any other petroleum product or by-product or
other hydrocarbon derivative; toxic substances (as defined by the Toxic
Substances Control Act); insecticides, fungicides or rodenticide. (as defined
in the Federal Insecticide, Fungicide, and Rodenticide Act); and asbestos,
radon and substances determined to be hazardous under the Occupational Safety
and Health Act or regulations promulgated thereunder. Notwithstanding the
foregoing, Tenant shall not be in breach of this provision as a result of the
presence in the Premises of minor amounts of Hazardous Materials which are in
compliance with all applicable laws, ordinances and regulations and are
customarily present in a general office use (e.g., copying machine chemicals
and kitchen cleansers).

 

(ii)       Without
limiting in any way Tenant’s obligations under any other provision of this
Lease, Tenant and its successors and assigns shall indemnify, protect, defend
(with counsel approved by Landlord) and hold Landlord, its partners, officers,
directors, shareholders, employees, agents, lenders, contractors and each of
their respective successors and assigns (the “Indemnified
Parties”) harmless from any and all claims, damages, liabilities,
losses, costs and expenses of any nature whatsoever, known or unknown,
contingent or otherwise (including, without limitation, attorneys’ fees,
litigation, arbitration and administrative proceedings costs, expert and
consultant fees and laboratory costs, as well as damages arising out of the
diminution in the value of the Premises, the Property or any portion thereof,
damages for the loss of the Premises or the Property or any portion thereof,
damages arising from any adverse impact on the marketing of space in the
Premises, and sums paid in settlement of claims), which arise during or after
the Term in whole or in part as a result of the presence or suspected presence
of any Hazardous Materials, in, on, under, from or about the Premises due to
Tenant’s acts or omissions, unless such claims, damages, liabilities, losses,
costs and expenses arise out of or arc caused by the negligence or willful
misconduct of any of the Indemnified Parties. Landlord and its successors and
assigns shall indemnify and hold Tenant and its successors and assigns harmless
against all such claims or damages to the extent arising out of or caused by
the

 

11

 

negligence or willful
misconduct of Landlord, its agents or employees. The indemnities contained
herein shall survive the expiration or earlier termination of this Lease.

 

12.       Compliance with Laws. Tenant, at its
sole cost and expense, shall promptly comply with all statutes, codes,
ordinances, orders, rules and regulations of any municipal or governmental
entity which are now in force or which may hereafter be enacted or promulgated,
including, without limitation, the Americans with Disabilities Act of 1990, as
amended (collectively, “Law(s)”),
regarding the operation of Tenant’s business and the use, condition,
configuration and occupancy of the Premises. In addition, Tenant, at its sole
cost and expense, shall promptly comply with any Laws that relate to the “Base
Building” (defined below) and/or any areas of the Building or the Property
outside the Premises, but only to the extent such obligations are triggered by
Tenant’s particular use of the Premises (as opposed to office use in general),
Alterations or improvements in the Premises performed or requested by Tenant,
or Tenant’s occupancy of the Premises in excess of the standard density limit
for the Building. “Base Building”
shall include the structural portions of the Building, the public restrooms and
the Building mechanical, electrical, life-safety and plumbing systems and
equipment located in the internal core of the Building. Tenant shall promptly
provide Landlord with copies of any notices it receives regarding an alleged
violation of Law.

 

13.       Waste Disposal. All normal trash and
waste (i.e., waste that does not require special handling pursuant to the
provisions of this Article 13 set forth below) shall be disposed of
through the janitorial service. Tenant shall be responsible for the removal and
disposal of any waste deemed by any governmental authority having jurisdiction
over the matter to be hazardous or infectious waste or waste requiring special
handling, such removal and disposal to be in accordance with any and all
applicable governmental rules, regulations, codes, orders or requirements.
Tenant agrees to separate and mark appropriately all waste to be removed and
disposed of through the janitorial service pursuant to the immediately
preceding sentence and hazardous, infectious or special waste to be removed and
disposed of by Tenant pursuant to this sentence.

 

14.       Rules and Regulations. The current
rules and regulations of the Building (the “Rules and Regulations”), a copy of which is attached
hereto as Exhibit D, and all
reasonable rules and regulations and modifications thereto which Landlord
may hereafter from time to time adopt and promulgate after notice thereof to
Tenant are hereby made a part of this Lease and shall be observed and performed
by Tenant, its agents, employees and invitees.

 

15.       Services.

 

(a)       Generally.
The normal business hours of the Building (“Building
Service Hours”) shall be from 8:00 A. M. to 6:00 P.M. on Monday
through Friday, exclusive of Building holidays as reasonably designated by
Landlord (“Building Holidays”). Initially and until
further notice by Landlord to Tenant, the Building Holidays shall be: New Year’s
Day, Presidents Day, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day and Christmas Day. Landlord shall furnish the following services during the
Building Service Hours except as noted:

 

(i)        Passenger
elevator service at all times;

 

12

 

(ii)       Heating,
ventilation and air conditioning (“HVAC”)
reasonably adequate to allow for the comfortable occupancy of the Premises,
subject to governmental regulations (so long as the occupancy level of the
Premises and the heat generated by electrical lighting and fixtures do not
exceed the following thresholds:

 

(1)        Occupant
Load: One (1) per person per 200 rentable square feet;

 

(2)        Equipment &
Lighting Load: 3.0 watts per usable square foot.

 

(iii)      Water
at all times for all restrooms and lavatories;

 

(iv)      Janitorial
service Monday through Friday (exclusive of Building Holidays);

 

(v)       Electric
power for lighting and outlets not in excess of the total watts per usable
square foot of the Premises described in clause 15(a)(ii) above at 100%
connected load during Building Service Hours (Tenant shall pay for any
electrical sendee in excess of such amount, including, at Landlord’s option,
the cost of purchase and installation of any equipment necessary to meter such
usage); and

 

(vi)      Replacement
of Building standard lamps and ballasts as needed from time to time.

 

(b)       Extra
Services. Except as expressly set forth herein, Tenant shall have no right
to any services in excess of those provided herein; however:

 

(i)        Tenant
shall have the right to receive HVAC service during hours other than Building
Service Hours by paying Landlord’s then standard charge for additional HVAC
service and providing such prior notice as is reasonably specified by Landlord;

 

(ii)       if
Tenant is permitted to connect any supplemental HVAC units to the Building’s
condenser water loop or chilled water line, such permission shall be
conditioned upon Landlord having adequate excess capacity from time to time and
such connection and use shall be subject to Landlord’s reasonable approval and
reasonable restrictions imposed by Landlord, and Landlord shall have the right
to charge Tenant a connection fee and/or a monthly usage fee, as reasonably
determined by Landlord;

 

(iii)      Landlord
shall have the right to measure Tenant’s electrical usage by commonly accepted
methods, including the installation of measuring devices such as submeters and
check meters. If it is determined that Tenant is using electricity in such
quantities or during such periods as to cause the total cost of Tenant’s
electrical usage, on a monthly, per rentable square foot basis, to exceed that
which Landlord reasonably deems to be standard for the Building, Tenant shall
pay Landlord as additional Rent the estimated cost of such excess electrical
usage and, if applicable, for the cost of purchasing, installing and
maintaining the measuring device(s);

 

(iv)      If
Tenant installs or operates a server room or supplemental HVAC units or other
forms of high-consumption equipment or areas, Landlord will have the right to

 

13

 

install, at Tenant’s sole
cost and expense, a separate electrical meter to measure Tenant’s electrical
consumption in such areas or from such equipment and to require that Tenant pay
Landlord directly for the electricity consumed in such areas or by such
equipment, on a monthly basis, within ten (10) days after the delivery and
an invoice from Landlord.

 

(v)       if
Tenant uses any other services in an amount or for a period in excess of that
provided for herein, then Landlord reserves the right to charge Tenant as
additional Rent hereunder a reasonable sum as reimbursement for the cost of
such added service, and to charge Tenant for the cost of any administrative
time, additional equipment or facilities or modifications thereto which are
necessary to provide the additional services, and/or to discontinue providing
such excess services to Tenant.

 

(c)       Interruptions.
Landlord shall not be liable for any damages directly or indirectly resulting
from the interruption in any of the services described above, nor shall any
such interruption entitle Tenant to any abatement of Rent or any right to
terminate this Lease or be deemed an eviction, constructive or actual. Landlord
shall use reasonable efforts to furnish uninterrupted services as required
above. Notwithstanding the foregoing, in the event that any interruption or
discontinuance of services provided pursuant to this Article 15 was within
the reasonable control of Landlord to prevent (and was not caused in any way by
the act or omission of Tenant or Tenant’s employees, invitees or contractors), (ii) continues
beyond five (5) business days after the date of delivery of written notice
from Tenant to Landlord, (iii) materially and adversely affects Tenant’s
ability to conduct business in the Premises, or any material portion thereof,
and (iv) on account of such interruption or disturbance Tenant ceases doing
business in the Premises, Base Rent shall abate proportionately, beginning on
the sixth (6th) business day after delivery of said notice and continuing for
so long as Tenant remains unable to (and in fact does not) conduct its business
in the Premises or such portion thereof. To the extent within Landlord’s
reasonable control, Landlord agrees to use reasonable efforts to restore such
interrupted or discontinued service as soon as reasonably practicable.

 

16.       Telephone and Data Equipment. Landlord
shall have no responsibility for providing to Tenant any telephone or data
equipment, including wiring, within the Premises or for providing telephone or
data service or connections from the utility to the Premises, except as
required by law. Tenant shall not alter, modify, add to or disturb any
telephone or data wiring in the Premises or elsewhere in the Building without
the Landlord’s prior written consent. Tenant shall be liable to Landlord for
any damage to the telephone or data wiring in the Building due to the act,
negligent or otherwise, of Tenant or any employee, contractor or other agent of
Tenant. Tenant shall have no access to the telephone or data closets within the
Building, except in the manner and under procedures established by Landlord.
Tenant shall promptly notify Landlord of any actual or suspected failure of
telephone or data service to the Premises. All costs incurred by Landlord for
the installation, maintenance, repair and replacement of telephone or data
wiring within the Building shall be an Operating Expense unless and to the
extent Landlord is reimbursed for such costs by any tenants of the Building.
Landlord shall not be liable to Tenant and Tenant waives all claims against
Landlord whatsoever, whether for personal injury, property damage, loss of use
of the Premises, or otherwise, due to the interruption or failure of telephone
or data services to the Premises. Tenant hereby holds Landlord harmless and
agrees to indemnify, protect and defend Landlord from and against any liability
for any damage, loss or expense due to any failure or interruption of telephone
or data service to the Premises for any reason. Tenant agrees to obtain
business interruption insurance adequate to cover any damage, loss or expense
occasioned by the interruption of telephone or data service. All electronic,
fiber,

 

14

 

phone and data cabling
and related equipment that is installed by or for the exclusive benefit of
Tenant is referred to herein as “Cable”.
Landlord may designate specific contractors with respect to oversight,
installation, repair, connection to, and removal of vertical Cable. All Cable
shall be clearly marked with adhesive plastic labels (or plastic tags attached
to such Cable with wire) to show Tenant’s name, suite number, and the purpose
of such Cable (i) every 6 feet outside the Premises (specifically
including, but not limited to, the electrical room risers and any Common
Areas), and (ii) at the termination point(s) of such Cable.

 

17.       Signs.

 

(a)       Generally.
Tenant shall not paint or place any signs, placards, or other advertisements of
any character upon the windows of the Premises (except with the prior consent
of Landlord, which consent may be withheld by Landlord in its absolute
discretion), and Tenant shall place no signs upon the outside walls, common
areas or the roof of the Building.

 

(b)       Building-Standard
Signage. Landlord, at Landlord’s sole cost and expense, shall initially
provide Tenant with Building-standard signage in the Building’s ground floor
lobby, in the elevator lobby on the fourth (4th) and sixth (6th) floors of the
Building and at the entrance to the Premises. Any subsequent changes to, or
revisions or replacements of such signage, shall be at Tenant’s sole cost and
expense.

 

18.       Force Majeure. in the event of a
strike, lockout, labor trouble, civil commotion, an act of God, or any other
event beyond a party’s control (a “force majeure event”) which results in such
party being unable to timely perform its obligations hereunder (other than the
inability to pay any amount due hereunder), and so long as such party
diligently proceeds to perform such obligations after the end of such force
majeure event, such party shall not be in breach hereunder.

 

19.       Repairs and Maintenance By Landlord.
Tenant, by taking possession of the Premises, shall accept and shall be held to
have accepted the Premises as suitable for the use intended by this Lease. In
no event shall Tenant be entitled to compensation or any other damages or any
other remedy against Landlord in the event the Premises are not deemed suitable
for Tenant’s use. Landlord shall not be required, after possession of the
Premises has been delivered to Tenant, to make any repairs or improvements to
the Premises, except as expressly set forth in this Lease. Except for damage
caused by casualty and condemnation (which shall be governed by Articles 22 and
23 below), and subject to normal wear and tear. Landlord shall maintain in good
repair (i) the structural elements of the Building, including the exterior
wails and foundation, (ii) Common Areas, (iii) the mechanical,
electrical, plumbing and HVAC systems which serve the Building in general,
provided such repairs are not occasioned by Tenant, Tenant’s invitees or anyone
in the employ or control of Tenant. Tenant hereby waives any and all rights
under and benefits of subsection 1 of Section 1932, and Sections 1941 and
1942 of the California Civil Code, or any similar or successor Laws now or
hereafter in effect.

 

20.       Repairs By Tenant. Except as described
in Article 19 above, Tenant shall, at its sole cost and expense, maintain
the Premises in good repair and in a neat and clean, first-class condition,
including making all necessary repairs and replacements. Tenant’s repair and
maintenance obligations include, without limitation, repairs to: (a) floor
coverings; (b) interior partitions; (c) doors; (d) the interior
side of demising walls; (e) Alterations (described in Article 21); (f) supplemental
air conditioning units, kitchens (including hot water heaters), plumbing,

 

15

 

and similar facilities
exclusively serving Tenant, whether such items are installed by or on behalf of
Tenant or are currently existing in the Premises and (g) Cable. Tenant
shall further, at its own cost and expense, repair or restore any damage or
injury to all or any part of the Building or Property caused by Tenant or
Tenant’s agents, employees, invitees, licensees, visitors or contractors,
including but not limited to any repairs or replacements necessitated by (i) the
construction or installation of improvements to the Premises by or on behalf of
Tenant, and (ii) the moving of any property into or out of the Premises;
at Landlord’s option, Landlord will perform such work and Tenant will pay
Landlord the cost thereof plus a commercially reasonable administrative fee. If
Tenant fails to make such repairs or replacements within fifteen (15) days
after notice from Landlord, Landlord may, at its option, upon prior reasonable
notice to Tenant (except in an emergency) make the required repairs and
replacements and the costs of such repair or replacements (including Landlord’s
administrative charge) shall be charged to Tenant as additional Rent and shall
become due and payable by Tenant with the monthly installment of Base Rent next
due hereunder.

 

21.       Alterations
and Improvements/Liens.

 

(a) Generally.
Except for minor, decorative alterations performed below the ceiling of the
Premises which do not affect the Building’s structure or systems, will not
create excessive noise or result in the dispersal of odors or debris (including
dust or airborne particulate matter), are not visible from outside the
Premises, do not require the procurement of a building permit and do not cost
in excess of $10,000.00 in the aggregate. Tenant shall not make or allow-to be
made any alterations, physical additions or improvements in or to the Premises
(“Alterations”) without first
obtaining in writing Landlord’s written consent for such alterations or
additions, which consent will not be unreasonably withheld; provided, however,
that such consent may be granted or withheld in Landlord’s sole discretion if
the Alterations will affect the Building’s structure or systems, or will be
visible from outside the Premises. Prior to starting work, Tenant shall furnish
Landlord with plans and specifications (which shall be in CAD format if
requested by Landlord); names of contractors reasonably acceptable to Landlord
(provided that Landlord may designate specific contractors with respect to Base
Building and vertical Cable and may also require that Tenant use only union
labor for any work in the Building); required permits and approvals; evidence
of contractor’s and subcontractor’s insurance in amounts reasonably required by
Landlord and naming Landlord the managing agent for the Building and such other
person or entities, as Landlord may reasonably request as additional insureds;
and any security for payment and performance in amounts reasonably required by
Landlord. Tenant shall reimburse Landlord for any sums paid by Landlord for
third party examination of Tenant’s plans for Alterations. Landlord’s approval
of an Alteration shall not be deemed a representation by Landlord that the
Alteration complies with Law. In addition, Tenant shall pay Landlord a fee for
Landlord’s oversight and coordination of any Alterations equal to ten percent
(10%) of the cost of the Alterations. Upon completion, Tenant shall furnish
Landlord with at least (3) sets of “as-built” plans (as well as a set in
CAD format, if requested by Landlord) for Alterations, completion affidavits
and full and final, unconditional waivers of lien and will cause a Notice of
Completion to be recorded in the Office of the Recorder of the County of San
Francisco in accordance with Section 3093 of the California Civil Code or
any successor statute and will timely provide all notices required under Section 3259.5
of the California Civil Code or any successor statute or any successor statute.
Any Alterations shall at once become the property of Landlord; provided,
however, that Landlord, at its option, may require Tenant to remove any
Alterations prior to the expiration or sooner termination of this Lease (if
Landlord notified Tenant at the time of Landlord’s consent to any such
Alterations that Landlord reserved

 

16

 

the right to require the
removal thereof). All costs of any Alterations (including, without limitation,
the removal thereof) shall be borne by Tenant, If Tenant fails to promptly
complete the removal of any Alterations and/or to repair any damage caused by
the removal, Landlord may do so and may charge the cost thereof to Tenant. All
Alterations shall be made in a good, first-class, workmanlike manner and in a
manner that does not disturb other tenants (i.e., any loud work must be
performed during non-business hours) in accordance with Landlord’s then-current
guidelines for construction, and Tenant shall maintain appropriate liability
and builder’s risk insurance throughout the construction. Tenant will
indemnify, defend, protect and hold Landlord harmless from and against any and
all claims for injury to or death of persons or damage or destruction of
property arising out of or relating to the performance of any Alterations by or
on behalf of Tenant. Under no circumstances shall Landlord be required to pay,
during the Term (as the same may be extended or renewed), any ad valorem or
Property tax on such Alterations, Tenant hereby covenanting to pay all such
taxes when they become due.

 

(b)       Liens. Nothing
contained in this Lease shall authorize or empower Tenant to do any act which
shall in any way encumber Landlord’s title to the Building, Property, or
Premises, nor in any way subject Landlord’s title to any claims by way of lien
or encumbrance, whether claimed by operation of law or by virtue of any
expressed or implied contract of Tenant, and any claim to a lien upon the
Building, Property or Premises arising from any act or omission of Tenant shall
attach only against Tenant’s interest and shall in all respects be subordinate
to Landlord’s title to the Building, Property, and Premises. If Tenant has not
removed any such lien or encumbrance or (provided that Tenant is in good faith
contesting such lien or encumbrance) delivered to Landlord a title indemnity,
bond or other security reasonably satisfactory to Landlord, within ten (10) days
after written notice to Tenant by Landlord, Landlord may pay the amount
necessary to remove such lien or encumbrance, without being responsible for
making any investigation as to the validity thereof, and the amount so paid shall
be deemed additional Rent reserved under this Lease due and payable forthwith.

 

22.       Destruction or Damage.

 

(a)       Completion Estimate.
If all or any portion of the Premises becomes untenantable or inaccessible by
fire or other casualty to the Premises or the Common Areas (collectively a “Casualty”), Landlord, with reasonable
promptness, shall cause a general contractor selected by Landlord to provide
Landlord with a written estimate of the amount of time required, using standard
working methods, to substantially complete the repair and restoration of the
Premises and any Common Areas necessary to provide access to the Premises (“Completion Estimate”). Landlord shall
promptly forward a copy of the Completion Estimate to Tenant. If the Completion
Estimate indicates that the Premises or any Common Areas necessary to provide
access to the Premises cannot be made tenantable within two hundred seventy
(270) days from the date the repair is started, then Landlord shall have the
right to terminate this Lease upon written notice delivered to Tenant within
thirty (30) days following delivery of the Completion Estimate. In addition,
Landlord, by notice delivered to Tenant within ninety (90) days after the date
of the Casualty, shall have the right to terminate this Lease if: (1) the
Premises have been materially damaged and there are less than two (2) years
of the Term remaining on the date of the Casualty; (2) any Holder requires
that the insurance proceeds be applied to the payment of the mortgage debt; or (3) a
material uninsured loss to the Building or Premises occurs.

 

17

 

(b)       Landlord’s Repair;
Abatement. If this Lease is not terminated, Landlord shall promptly and
diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord’s reasonable control, restore the Premises and Common
Areas. Such restoration shall be to substantially the same condition that
existed prior to the Casualty, except for modifications required by Law or any other
modifications to the Common Areas deemed desirable by Landlord. Upon notice
from Landlord, Tenant shall assign or endorse over to Landlord (or to any party
designated by Landlord) all property insurance proceeds payable to Tenant under
Tenant’s insurance with respect to any Alteration; provided if the estimated
cost to repair such Alteration exceeds the amount of insurance proceeds
received by Landlord from Tenant’s insurance carrier, the excess cost of such
repairs shall be paid by Tenant to Landlord prior to Landlord’s commencement of
repairs. Within fifteen (15) days after demand, Tenant shall also pay Landlord
for any additional excess costs that are determined during the performance of
the repairs to any Alteration. In no event shall Landlord be required to spend
more for the restoration of the Premises and Common Areas than the proceeds
received by Landlord, whether insurance proceeds or proceeds from Tenant.
Landlord shall not be liable for any inconvenience to Tenant or injury to
Tenant’s business resulting in any way from the Casualty or the repair thereof.
Provided that Tenant is not in default, during any period of time that all or a
material portion of the Premises is rendered untenantable as a result of a
Casualty, Base Rent shall abate for the portion of the Premises that is
untenantable and not used by Tenant.

 

(c)       Statutory Waiver.
The provisions of this Lease, including this Article 22, constitute an
express agreement between Landlord and Tenant with respect to any and all
damage to, or destruction of, all or any part of the Premises, Building or
Property, and any Laws, including, without limitation, Sections 1932(2) and
1933(4) of the California Civil Code, with respect to any rights or
obligations concerning damage or destruction in the absence of an express
agreement between the parties, and any similar or successor Laws now or
hereafter in effect, shall have no application to this Lease or any damage or
destruction to all or any part of the Premises, Building or Property.

 

23.       Eminent Domain.
Either party may terminate this Lease if any material part of the Premises is
taken or condemned for any public or quasi-public use under Law, by eminent
domain or conveyance in lieu thereof (a “Taking”).
Landlord shall also have the right to terminate this Lease if there is a Taking
of any portion of the Building or Property that would have a material adverse
effect on Landlord’s ability to profitably operate the remainder of the
Building. The terminating party shall provide written notice of termination to
the other party within forty-five (45) days after it first receives notice of
the Taking. The termination shall be effective as of the effective date of any
order granting possession to, or vesting legal title in, the condemning
authority. If this Lease is not terminated, Base Rent and Tenant’s Share shall
be appropriately adjusted to account for any reduction in the square footage of
the Building or Premises. All compensation awarded for a Taking shall be the
property of Landlord. The right to receive compensation or proceeds is
expressly waived by Tenant, provided, however, Tenant may file a separate
claim, for Tenant’s personal property and Tenant’s reasonable relocation
expenses, provided the filing of such claim does not diminish the amount of Landlord’s
award. If only a part of the Premises is subject to a Taking and this Lease is
not terminated, Landlord, with reasonable diligence, will restore the remaining
portion of the Premises as nearly as practicable to the condition immediately
prior to the Taking. Tenant hereby waives any and all rights it might otherwise
have pursuant to Section 1265.130 of the California Code of Civil
Procedure, or any similar or successor Laws.

 

18

 

24.       Damage or Theft of Personal Property. All personal property brought
into the Premises shall be at the risk of Tenant only and Landlord shall not be
liable for theft thereof or any damage thereto occasioned by any acts of
co-tenants, other occupants of the Building, or any other person, except, with
respect to damage to the Premises, as may be occasioned by the negligence or
willful misconduct of Landlord, its employees and agents (but subject to the
waiver of subrogation provisions set forth below).

 

25.       Insurance; Waivers.

 

(a)       Tenant’s Insurance.
Tenant covenants and agrees that from and after the date of delivery of the
Premises from Landlord to Tenant, Tenant will carry and maintain, at its sole
cost and expense, the following types of insurance, in the amounts specified
and in the form hereinafter provided for:

 

(i)        Commercial General
Liability (“CGL”) Insurance
written on an occurrence basis, covering the Premises and all operations of
Tenant in or about the Premises against claims for bodily injury, death,
property damage and products liability and to include contractual liability
coverage insuring Tenant’s indemnification obligations under this Lease, to be
in combined single limits of not less than $2,000,000 each occurrence for
bodily injury, death and property damage, $2,000,000 for products/completed
operations aggregate, $2,000,000 for personal injury, and to have general
aggregate limits of not less than $2,000,000 (per location) and Umbrella
Liability Insurance in an amount not less than $5,000,000 for each policy year.
The general aggregate limits under the Commercial General Liability insurance
policy or policies shall apply separately to the Premises and to Tenant’s use
thereof (and not to any other location or use of Tenant) and such policy shall
contain an endorsement to that effect. The certificate of insurance evidencing
the CGL form of policy shall specify all endorsements required herein and shall
specify on the face thereof that the limits of such policy apply separately to
the Premises.

 

(ii)       Insurance covering all of
the items included in Tenant’s heating, ventilating and air conditioning
equipment maintained by Tenant, trade fixtures, merchandise and personal
property from time to time in, on or upon the Premises, and all Tenant
Improvements and any Alterations in an amount not less than one hundred percent
(100%) of their full replacement value from time to time during the Term,
providing protection against perils included within the standard form of “all-risk”
(i.e., “Special Cause of Loss”) fire and casualty insurance policy. Any policy
proceeds from such insurance shall be held in trust by-Tenant’s insurance
company for the repair, construction and restoration or replacement of the
property damaged or destroyed unless this Lease shall cease and terminate under
the provisions of Article 22 above.

 

(iii)      Workers’ Compensation
insurance in amounts required by law.

 

(iv)      Employer’s Liability
coverage of at least $1,000,000.00 per occurrence,

 

(v)       Business Interruption
Insurance equal to not less than fifty percent (50%) of the estimated gross
earnings (as defined in the standard form of business interruption insurance
policy) of Tenant at the Premises, which insurance shall be issued on an “all
risk” basis (or its equivalent).

 

19

 

(b)       Requirements
for Tenant’s Policies. All
policies of the insurance provided for in Section 25(a) above shall
be issued in form acceptable to Landlord by insurance companies with a rating
and financial size of not less than A:VIII in the most current available “Best’s
Insurance Reports”, and licensed to do business in the state in which the
Building is located. Each and every such policy:

 

(i)        shall designate Landlord
(as well as Landlord’s managing agent and any mortgagee of Landlord and any
other party reasonably designated by Landlord) as an additional insured, except
with respect to the insurance described in Sections 25(a)(iii) and 25(a)(iv) above;

 

(ii)       shall be delivered in its
entirety (or, in lieu thereof, a certificate in form and substance satisfactory
to Landlord) to each of Landlord and any such other parties in interest prior
to any entry by Tenant or Tenant’s employees or contractors onto the Premises
and thereafter within five (5) days after the inception (or renewal) of
each new policy, and as often as any such policy shall expire or terminate.
Renewal or additional policies shall be procured and maintained by Tenant in
like manner and to like extent;

 

(iii)      shall contain a provision
that the insurer will give to Landlord and such other parties in interest at
least thirty (30) days notice in writing (and ten (10) days in the case of
non-payment) in advance of any material change, cancellation, termination or
lapse, or the effective date of any reduction in the amounts of insurance; and

 

(iv)      shall be written as a
primary policy which does not contribute to and is not in excess of coverage
which Landlord may carry.

 

(c)       Additional Insurance
Obligations. Tenant shall carry and maintain during the entire Term, at
Tenant’s sole cost and expense, increased amounts of the insurance required to
be carried by Tenant pursuant to this Article 25 and such other reasonable
types of insurance coverage and in such reasonable amounts covering the
Premises and Tenant’s operations therein, as may be reasonably requested from
time to time by Landlord.

 

(d)       Landlord’s Insurance.
During the Term, Landlord shall keep in effect (i) commercial property
insurance on the Base Building (but not on any Alterations or any of Tenant’s
personal property), and (ii) a policy or policies of commercial genera!
liability insurance insuring against liability arising out of the risks of
death, bodily injury, property damage and personal injury liability with
respect to the Building and Property and (iii) such other types of
insurance coverage, if any, as Landlord, in Landlord’s sole discretion, may
elect to carry.

 

(e)       Subrogation.
Notwithstanding anything to the contrary set forth hereinabove, Landlord and
Tenant do hereby waive any and all claims against one another for damage to or
destruction of real or personal property to the extent such damage or
destruction can be covered by “all risks” property insurance of the type
described in Section 25(a)(ii) and Section 25(d) above. The
risk to be borne by each party shall also include the satisfaction of any
deductible amounts required to be paid under the applicable “all risks” fire
and casualty insurance carried by the party whose property is damaged, and each
party agrees that the other party shall not be responsible for satisfaction of
such deductible (this will not preclude Landlord from including deductible
payments in Insurance Expenses). These waivers shall apply if the damage would
have been covered by a customary “all risks” insurance policy, even if the party

 

20

 

fails to obtain such
coverage. The intent of this provision is that each party shall look solely to
its insurance with respect to property damage or destruction which can be
covered by “all risks” insurance of the type described in Section 25(a)(ii) and
Section 25(d). Each such policy shall include a waiver of all rights of
subrogation by the insurance carrier against the other party, its agents and
employees with respect to property damage covered by the applicable “all risks”
fire and casualty insurance policy.

 

26.       Indemnities.

 

(a)       Tenant’s Indemnity.
Except to the extent caused by the negligence or willful misconduct of
Landlord, Tenant will indemnify, defend, protect and hold harmless Landlord from
and against any and all loss, cost, damage or liability arising in any manner (i) caused
anywhere in the Building or on the Property due to the negligence or willful
misconduct of Tenant, its agents, contractors or employees or (ii) due to
any occurrence in the Premises (or arising out of actions taking place in the
Premises) unless such damage is caused by the negligence or willful misconduct
of Landlord, its agents, or employees, or (iii) arising out of Tenant’s
breach or default under the terms of this Lease. Tenant hereby waives all
claims against and releases Landlord and its trustees, members, principals,
beneficiaries, partners, officers, directors, employees, Holders (defined in Section 38(a))
and agents from all claims for any injury to or death of persons, damage to
property or loss of profits or revenue in any manner related to (a) force
majeure, (b) acts of third parties, (c) the bursting or leaking of
any tank, water closet, drain or other pipe, (d) the inadequacy or failure
of any security or protective services, personnel or equipment.

 

(b)       Landlord’s
Indemnity. Except to the extent caused by the negligence or willful misconduct
of Tenant or Tenant’s employees, contractors, invitees, subtenants or
assignees. Landlord will indemnify, defend, protect and hold Tenant harmless
from and against all loss, cost, damage or liability caused by the negligence
or willful misconduct of Landlord, its agents or employees which occur on the
Property or Common Areas.

 

(c)       General Conditions.
The indemnities set forth hereinabove shall include the application to pay
reasonable expenses incurred by the indemnified party, including, without
limitation, reasonable, actually incurred attorney’s fees. Notwithstanding any
other provision of this Lease to the contrary, in no case shall Landlord be
liable to Tenant for any lost profits, damage to business, or any form of
special, indirect or consequential damage on account of any breach of this
Lease or otherwise, notwithstanding anything to the contrary contained in this
Lease.

 

(d)       Subject to Subrogation
Waivers. The indemnities contained herein do not override the waivers
contained in Section 25(e) above,

 

27.       Acceptance, .and Waiver. Except to the extent caused by
the negligence or willful misconduct of Landlord, its agents and employees (but
subject to the insurance provisions in Article 25 above), Landlord shall
not be liable to Tenant, its agents, employees, guests or invitees (and, if
Tenant is a corporation, its officers, agents, employees, guests or invitees) for
any damage caused to any of them due to the Building or any part or
appurtenances thereof being improperly constructed or being or becoming out of
repair, or arising from the leaking of gas, water, sewer or steam pipes, or
from electricity; provided, however, that this Section shall not

 

21

 

preclude Tenant from
seeking recovery from any third party responsible for such damage or injury.

 

28,       Estoppel. Tenant shall, from time to
time, upon, not less than ten (10) days prior written request by Landlord,
execute, acknowledge and deliver to Landlord a written statement certifying
that this Lease is unmodified and in full force and effect (or, if there have
been modifications, that the same is in full force and effect as modified and
stating the modifications), the dates to which the Rent has been paid, that
Tenant is not in default hereunder and whether Tenant has any offsets or
defenses against Landlord under this Lease, and whether or not to the best of
Tenant’s knowledge Landlord is in default hereunder (and if so, specifying the
nature of the default) and any other information reasonably requested by
Landlord regarding this Lease, it being intended that any such statement
delivered pursuant to this paragraph may be relied upon by a prospective
purchaser of Landlord’s interest or by a mortgagee of Landlord’s interest or
assignee of any security deed upon Landlord’s interest in the Premises. If
Tenant fails to timely deliver an executed estoppel certificate to Landlord,
the estoppel prepared by Landlord will be deemed true and correct and binding
upon Tenant and at Landlord’s option, such failure will constitute a default
hereunder without the necessity of additional notice or the passage of
additional grace periods.

 

29.       Notices.
Any notice which is required or permitted to be given by either party under
this Lease shall be in writing and must be given only by certified mail, return
receipt requested, by hand delivery or by nationally recognized overnight
courier service at the addresses set forth in the Basic Lease Provisions. Any
such notice shall be deemed given on the earlier of two (2) business days
after the date sent in accordance with one of the permitted methods described
above or the date of actual receipt thereof unless receipt occurs on a weekend
or holiday, in which case notice will be deemed given on the next-succeeding
business day. The time period for responding to any such notice shall begin on
the date the notice is actually received, but refusal to accept delivery or
inability to accomplish delivery because the party can no longer be found at
the then current notice address, shall be deemed receipt. Either party may
change its notice address by notice to the other party in accordance with the terms
of this Article 29.

 

30.       Default.  The occurrence of any of the
following events shall constitute a default on the part of Tenant without
notice from Landlord (“Default”)
unless otherwise provided:

 

(a)       Vacation or Abandonment.
Vacation or abandonment of the Premises;

 

(b)       Payment. Failure to
pay any installment of Base Rent, Additional Rent or other monies due and
payable hereunder upon the date when said payment is due, where such failure
continues for a period of three (3) days after receipt by Tenant of
written notice from Landlord of such failure to pay when due (which notice
shall be in lieu of, and not in addition to, any notice required under
California Code of Civil Procedure Section 1161 or any similar successor
statute);

 

(c)       Performance. Default
in the performance of any of Tenant’s covenants, agreements or obligations
hereunder (except default in the payment of Rent), where such default continues
for thirty (30) days after written notice thereof from Landlord (which notice
shall be in lieu of, and not in addition to, any notice required under
California Code of Civil Procedure Section 1161 or any similar successor
statute); provided, however, that if the nature of Tenant’s

 

22

 

default is such that more
than thirty (30) days are reasonably required for its cure, then Tenant shall
not be deemed to be in default if Tenant shall promptly commence such cure
within such thirty (30) day period and thereafter continuously and diligently
prosecute such cure to completion within ninety (90) days after such default
(such ninety (90) day period not to be extended for force majeure);

 

(d)          Estoppel Certificate; Subordination Agreement. Tenant’s failure to timely deliver a
duly executed estoppel certificate, subordination agreement or any other
document or statement within the time periods specified in Articles 28 or 38;

 

(e)          Assignment. A general assignment by Tenant for the benefit of
creditors;

 

(f)           Bankruptcy. The filing of a voluntary petition by Tenant, or the
filing of an involuntary petition by any of Tenant’s creditors seeking the
rehabilitation, liquidation or reorganization of Tenant under any law relating
to bankruptcy, insolvency or other relief of debtors and not removed within
ninety (90) days of filing;

 

(g)          Receivership. The appointment of a receiver or other custodian to
take possession of substantially all of Tenant’s assets or of the Premises or
any interest of Tenant therein;

 

(h)          Insolvency or Dissolution. Tenant shall become insolvent or unable
to pay its debts, or shall fail generally to pay its debts as they become due;
or any court shall enter a decree or order directing the winding up or
liquidation of Tenant or of substantially all of its assets; or Tenant shall
take any action toward the dissolution or winding up of its affairs or the
cessation or suspension of its use of the Premises; and

 

(i)           Attachment. Attachment, execution or other judicial seizure of
substantially all of Tenant’s assets or the Premises or any interest of Tenant
under this Lease.

 

31.  Landlord’s Remedies. Upon the occurrence of any default under
this Lease, whether enumerated in Article 30 or not, Landlord shall have
the option to pursue any one or more of the following remedies without any
notice (except as expressly prescribed herein) or demand whatsoever (and
without limiting the generality of the foregoing, Tenant hereby specifically
waives notice and demand for payment of Rent or other obligations, except for
those notices specifically required pursuant to the terms of Article 30 or
this Article 31, and waives any and all other notices or demand
requirements imposed by applicable Law):

 

(a)          Termination. Terminate this Lease and Tenant’s right to
possession of the Premises and recover from Tenant an award of damages equal to
the sum of the following:

 

(i)       The Worth at the Time of Award of the unpaid Rent
which had been earned at the time of termination;

 

(ii)      The Worth at the Time of Award of the amount by which
the unpaid Rent which would have been earned after termination until the time
of award exceeds the amount of such Rent loss that Tenant affirmatively proves
could have been reasonably avoided;

 

23

 

(iii)     The Worth at the Time of Award of the amount by which
the unpaid Rent for the balance of the Term after the time of award exceeds the
amount of such Rent loss that Tenant affirmatively proves could be reasonably
avoided;

 

(iv)    Any other amount necessary to compensate Landlord for
all the detriment either proximately caused by Tenant’s failure to perform
Tenant’s obligations under this Lease or which in the ordinary course of things
would be likely to result therefrom; and

 

(v)     All such other amounts in addition to or in lieu of
the foregoing as may be permitted from time to time under applicable law.

 

The “worth at the
time of award” of the amounts referred to in parts (i) and (ii) above,
shall be computed by allowing interest at the lesser of a per annum rate equal
to the Interest Rate. The “Worth at the Time
of Award” of the amount referred to in part (iii), above, shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus 1%;

 

(b)          Continue Lease. Employ the remedy described in California Civil Code
Section 1951.4 (Landlord may continue this Lease in effect after Tenant’s
breach and abandonment and recover Rent as it becomes due, if Tenant has the
right to sublet or assign, subject only to reasonable limitations); provided
that notwithstanding Landlord’s exercise of the remedy described in California
Civil Code Section 1951.4 in respect of an event or events of default, at
such time thereafter as Landlord may elect in writing, to terminate this Lease
and Tenant’s right to possession of the Premises and recover an award of
damages as provided above in Section 31(a).

 

(c)          Acceptance Not Waiver. The subsequent acceptance of Rent hereunder by
Landlord shall not be deemed to be a waiver of any preceding breach by Tenant
of any term, covenant or condition of this Lease, other than the failure of
Tenant to pay the particular Rent so accepted, regardless of Landlord’s
knowledge of such preceding breach at the time of acceptance of such Rent. No
waiver by Landlord of any breach hereof shall be effective unless such waiver
is in writing and signed by Landlord.

 

(d)          Waiver of Redemption. TENANT HEREBY WAIVES ANY AND ALL RIGHTS CONFERRED BY
SECTION 3275 OF THE CIVIL CODE OF CALIFORNIA AND BY SECTIONS 1174 (c) AND
1179 OF THE CODE OF CIVIL PROCEDURE OF CALIFORNIA AND ANY AND ALL OTHER LAWS
AND RULES OF LAW FROM TIME TO TIME IN EFFECT DURING THE LEASE TERM OR
THEREAFTER PROVIDING THAT TENANT SHALL HAVE ANY RIGHT TO REDEEM, REINSTATE OR
RESTORE THIS LEASE FOLLOWING ITS TERMINATION BY REASON OF TENANT’S BREACH.

 

(e)          Jury Trial. THE PARTIES HEREBY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF
OR RELATING TO THIS LEASE. IF THE JURY WAIVER PROVISIONS OF THIS SECTION 31(e) ARE
NOT ENFORCEABLE UNDER CALIFORNIA LAW, THEN THE FOLLOWING PROVISIONS SHALL
APPLY. It is the desire and intention of the parties to agree upon a mechanism
and procedure under which controversies and disputes arising out of this Lease
or related to the Premises will be resolved in a prompt and expeditious manner.
Accordingly, except with respect to actions for unlawful or forcible detainer
or with

 

24

 

respect to the
prejudgment remedy of attachment, any action, proceeding or counterclaim brought
by either party hereto against the other (and/or against its officers,
directors, employees, agents or subsidiaries or affiliated entities) on any
matters whatsoever arising out of or in any way connected with this Lease,
Tenant’s use or occupancy of the Premises and/or any claim of injury or damage,
whether sounding in contract, tort, or otherwise, shall be heard and resolved
by a referee under the provisions of the California Code of Civil Procedure,
Sections 638 — 645.1, inclusive (as same may be amended, or any successor
statute(s) thereto) (the “Referee Sections”). Any fee to initiate the
judicial reference proceedings and all fees charged and costs incurred by the
referee shall be paid by the party initiating such procedure (except that if a
reporter is requested by either party, then a reporter shall be present at all
proceedings where requested and the fees of such reporter - except for copies
ordered by the other parties - shall be borne by the party requesting the
reporter); provided however, that allocation of the costs and fees, including
any initiation fee, of such proceeding shall be ultimately determined in
accordance with Article 37 below. The venue of the proceedings shall be in
the county in which the Premises are located. Within ten (10) days of
receipt by any party of a written request to resolve any dispute or controversy
pursuant to this Section 31(e), the parties shall agree upon a single
referee who shall try all issues, whether of fact or law, and report a finding
and judgment on such issues as required by the Referee Sections. If the parties
are unable to agree upon a referee within such ten (10) day period, then
any party may thereafter file a lawsuit in the county in which the Premises are
located for the purpose of appointment of a referee under the Referee Sections.
If the referee is appointed by the court, the referee shall be a neutral and
impartial retired judge with substantial experience in the relevant matters to
be determined, from Jams/Endispute, Inc., the American Arbitration
Association or similar mediation/arbitration entity. The proposed referee may
be challenged by any party for any of the grounds listed in the Referee
Sections. The referee shall have the power to decide all issues of fact and law
and report his or her decision on such issues, and to issue all recognized
remedies available at Law or in equity for any cause of action that is before
the referee, including an award of attorneys’ fees and costs in accordance with
this Lease. The referee shall not, however, have the power to award punitive
damages, nor any other damages which are not permitted by the express
provisions of this Lease, and the parties hereby waive any right to recover any
such damages. The parties shall be entitled to conduct all discovery as
provided in the California Code of Civil Procedure, and the referee shall
oversee discovery and may enforce all discovery orders in the same manner as
any trial court judge, with rights to regulate discovery and to issue and
enforce subpoenas, protective orders and other limitations on discovery
available under California law. The reference proceeding shall be conducted in
accordance with California law (including the rules of evidence), and in
all regards, the referee shall follow California law applicable at the time of
the reference proceeding. The parties shall promptly and diligently cooperate
with one another and the referee, and shall perform such acts as may be
necessary to obtain a prompt and expeditious resolution of the dispute or
controversy in accordance with the terms of this Section 31 (e). In this
regard, the parties agree that the parties and the referee shall use best
efforts to ensure that (a) discovery be conducted for a period no longer
than six (6) months from the date the referee is appointed, excluding
motions regarding discovery, and (b) a trial date be set within nine (9) months
of the date the referee is appointed. In accordance with Section 644 of
the California Code of Civil Procedure, the decision of the referee upon the
whole issue must stand as the decision of the court, and upon the filing of the
statement of decision with the clerk of the court, or with the judge if there
is no clerk, judgment may be entered thereon in the same manner as if the
action had been tried by the court. Any decision of the referee and/or judgment
or other order entered thereon shall be appealable to the same extent and in
the same manner that such decision, judgment, or order would be appealable if
rendered by a judge of the superior court in

 

25

 

which venue is proper
hereunder. The referee shall in his/her statement of decision set forth his/her
findings of fact and conclusions of law. The parties intend this general
reference agreement to be specifically enforceable in accordance with the Code
of Civil Procedure. Nothing in this Section 31(e) shall prejudice the
right of any party to obtain provisional relief or other equitable remedies
from a court of competent jurisdiction as shall otherwise be available under
the Code of Civil Procedure and/or applicable court rules.

 

(f)        Remedies Cumulative.
No right or remedy herein conferred upon or reserved to Landlord is intended to
be exclusive of any other right or remedy, and each and every right and remedy
shall be cumulative and in addition to any other right or remedy given
hereunder or now or hereafter existing by agreement, applicable Law or in
equity. In addition to other remedies provided in this Lease, Landlord shall be
entitled, to the extent permitted by applicable Law, to injunctive relief, or
to a decree compelling performance of any of the covenants, agreements,
conditions or provisions of this Lease, or to any other remedy allowed to
Landlord at law or in equity. Forbearance by Landlord to enforce one or more of
the remedies herein provided upon an event of default shall not be deemed or
construed to constitute a waiver of such default.

 

(g)       Landlord’s Right to
Perform. If Tenant is in default of any of its non-monetary obligations
under this Lease, Landlord shall have the right to perform such obligations.
Tenant shall reimburse Landlord for the cost of such performance upon demand
together with an administrative charge equal to ten percent (10%) of the cost
of the work performed by Landlord.

 

(h)       Unenforceability.
This Article 31 shall be enforceable to the maximum extent such
enforcement is not prohibited by applicable Law, and the unenforceability of
any portion of this Article 31 shall not thereby render unenforceable any
other portion.

 

32.       Service of Notice.
Except as otherwise provided by law, Tenant hereby appoints as its agent to
receive the service of all dispossessary or distraint proceedings and notices
thereunder, the person in charge of or occupying the Premises at the time of
such proceeding or notice; and if no person is then in charge of or occupying
the Premises, then such service may be made by attaching the same to the front
entrance of the Premises.

 

33.       Advertising.
Landlord may advertise the Premises as being “For Rent” at any time following a
Default by Tenant and at any time within one hundred eighty (180) days prior to
the expiration, cancellation or termination of this Lease for any reason, and
during any such periods Landlord may exhibit the Premises to prospective tenants
upon prior reasonable notice to Tenant.

 

33.       Surrender of Premises. Whenever under the terms hereof
Landlord is entitled to possession of the Premises, Tenant at once shall
surrender the Premises and the keys thereto to Landlord. The Premises will be
delivered in broom clean condition and otherwise in the same condition as on
the Commencement Date, ordinary wear and tear associated with the responsible
use of first-class office space only excepted, and Tenant shall remove all of
its personal property therefrom and shall, if directed to do so by Landlord,
remove all improvements and restore the Premises to its original condition
prior to the construction of any improvements which have been made therein by
or on behalf of Tenant, including any improvements made prior to the
Commencement Date. Landlord may forthwith re-enter the Premises and repossess
itself thereof and remove all persons and effects therefrom, using such force
as may be reasonably necessary

 

26

 

without being guilty of
forcible entry, detainer, trespass or other tort. Tenant’s obligation to
observe or perform these covenants shall survive the expiration or other
termination of the Term. If the last day of the Term or any renewal falls on a
Saturday, Sunday or a legal holiday, this Lease shall expire on the business
day immediately preceding.

 

35.       Removal of Fixtures.
If Tenant is not in default hereunder, Tenant may, prior to the expiration of
the Term, or any extension thereof, remove any fixtures and equipment which
Tenant has placed in the Premises which can be removed without significant
damage to the Premises, provided Tenant promptly repairs all damages to the
Premises caused by such removal.

 

36.       Holding Over.
In the event Tenant remains in possession of the Premises after the expiration
of the Term, with Landlord’s written consent, Tenant shall be a tenant at will
and such tenancy shall be subject to all the provisions hereof, except that the
monthly Base Rent shall be at the higher of 150% of the monthly Base Rent
payable hereunder upon such expiration of the Term, or 100% of the then-current
fair market rental value of the Premises, as determined by Landlord in good
faith, which monthly Base Rent shall increase from 150% to 200% of such monthly
Base Rent (or 100% of current fair market rental value, as the case may be) if
such holding over continues more than thirty (30) days. In the event Tenant
remains in possession of the Premises after the expiration of the Term hereof,
or any renewal term, without Landlord’s written consent, Tenant shall be a
tenant at sufferance and may be evicted by Landlord without any notice, but
Tenant shall be obligated to pay Base Rent for such period that Tenant holds
over without written consent at the same rate provided in the previous sentence
and shall also be liable for any and all other damages Landlord suffers as a
result of such holdover including, without limitation, the loss of a
prospective tenant for such space. There shall be no renewal of this Lease by
operation of law or otherwise. Nothing in this Article 36 shall be
construed as a consent by Landlord for any holding over by Tenant after the
expiration of the Term or to prevent Landlord from immediate recovery of
possession of the Premises by summary proceedings or otherwise.

 

37.       Attorney’s Fees.
In the event of any action, suit or proceeding brought by Landlord or Tenant to
enforce any of the other’s covenants and agreements in this Lease, the
prevailing party shall be entitled to recover from the non-prevailing party any
costs, expenses and reasonable attorneys’ fees incurred in connection with such
action, suit or proceeding. Without limiting the generality of the foregoing,
if Landlord utilizes the services of an attorney for the purpose of collecting
any Rent due and unpaid by Tenant or in connection with any other breach of
this Lease by Tenant following a written demand of Landlord to pay such amounts
or cure such breach, Tenant agrees to pay Landlord reasonable actual attorneys’
fees as determined by Landlord for such services, irrespective of whether any
legal action may be commenced or filed by Landlord.

 

38.       Mortgagee’s Rights.

 

(a)       This Lease shall be subject
and subordinate (i) to any ground lease, mortgage, deed of trust or other
security interest now encumbering the Property and to all advances which may be
hereafter made, to the full extent of all debts and charges secured thereby and
to all renewals or extensions of any part thereof, and to any ground lease,
mortgage, deed of trust or other security interest which any owner of the
Property may hereafter, at any time, elect to place on the Property; (ii) to
any assignment of Landlord’s interest in the leases and rents from the Building
or Property which includes this Lease which now exists or which any

 

27

 

owner of the Property may
hereafter, at any time, elect to place on the Property; and (iii) to any
Uniform Commercial Code Financing Statement covering the personal property
rights of Landlord or any owner of the Property which now exists or any owner
of the Properly may hereafter, at any time, elect to place on the foregoing
personal property (all of the foregoing instruments set forth in (i), (ii) and
(iii) above being hereafter collectively referred to as “Security Documents”). Tenant agrees upon
request of the holder of any Security Documents (“Holder”) to hereafter execute any documents which Landlord or
Holder may reasonably deem necessary to evidence the subordination of this
Lease to the Security Documents. Within ten (10) days after request
therefor, if Tenant fails to execute any such requested documents, Landlord or
Holder is hereby empowered to execute such documents in the name of Tenant
evidencing such subordination, as the act and deed of Tenant, and this
authority is hereby declared to be coupled with an interest and not revocable;
additionally, at Landlord’s option, such failure will be deemed a default
hereunder without the necessity of additional notice or the passage of additional
grace periods.

 

(b)       In the event of a
foreclosure pursuant to any Security Documents, Tenant shall at the election of
Landlord, thereafter remain bound pursuant to the terms of this Lease as if a
new and identical Lease between the purchaser at such foreclosure (“Purchaser”), as landlord, and Tenant, as
tenant, had been entered into for the remainder of the Term hereof and Tenant
shall attorn to the Purchaser upon such foreclosure sale and shall recognize
such Purchaser as the Landlord under this Lease. Such attornment shall be
effective and self-operative without the execution of any further instrument on
the part of any of the parties hereto. Tenant agrees, however, to execute and
deliver at any time and from time to time, upon the request of Landlord or of
Holder, any instrument or certificate that may be necessary or appropriate in
any such foreclosure proceeding or otherwise to evidence such attornment.

 

(c)       If the Holder of any
Security Document or the Purchaser upon the foreclosure of any of the Security
Documents shall succeed to the interest of Landlord under this Lease, such
Holder or Purchaser shall have the same remedies, by entry, action or otherwise
for the non-performance of any agreement contained in this Lease, for the
recovery of Rent or for any other Default hereunder that Landlord had or would
have had if any such Holder or Purchaser had not succeeded to the interest of
Landlord. Any such Holder or Purchaser which succeeds to the interest of
Landlord hereunder, shall not be (a) liable for any act or omission of any
prior Landlord (including Landlord); or (b) subject to any offsets or
defenses which Tenant might have against any prior Landlord (including
Landlord); or (c) bound by any Rent which Tenant might have paid for more
than the current month to any prior Landlord (including Landlord); or (d) bound
by any amendment or modification of the Lease made without its consent.

 

(d)       Notwithstanding anything to
the contrary set forth in this Article 38, the Holder of any Security
Documents shall have the right, at any time, to elect to make this Lease
superior and prior to its Security Document. No documentation, other than
written notice to Tenant, shall be required to evidence that this Lease has
been made superior and prior to such Security Documents, but Tenant hereby
agrees to execute any documents reasonably requested by Landlord or Holder to
acknowledge that the Lease has been made superior and prior to the Security
Documents.

 

39.       Entering Premises. Landlord may enter
the Premises at reasonable hours provided that Landlord will use reasonable
efforts not to unreasonably interrupt Tenant’s

 

28

 

business operations and
that prior notice (which notice may be telephonic) is given when reasonably
possible (and, if in the opinion of Landlord any emergency exists, at any time
and without notice): (a) to make repairs, perform maintenance and provide
other services (no prior notice is required to provide routine services) which
Landlord is obligated to make to the Premises or the Building pursuant to the
terms of this Lease or to the other premises within the Building pursuant to
the leases of other tenants; (b) to inspect the Premises in order to
confirm that Tenant is complying with all of the terms and conditions of this
Lease and with the rules and regulations hereof, (c) to remove from
the Premises any articles or signs kept or exhibited therein in violation of
the terms hereof; (d) to run pipes, conduits, ducts, wiring, cabling or any
other mechanical, electrical, plumbing or HVAC equipment through the areas
behind the walls, below the floors or above the drop ceilings in the Premises
and elsewhere in the Building; (e) to show the Premises to prospective
purchasers, lenders or tenants and (f) to exercise any other right or
perform any other obligation that Landlord has under this Lease. Landlord shall
be allowed to take all material into and upon the Premises that may be required
to make any repairs, improvements and additions, or any alterations, without in
anyway being deemed or held guilty of trespass and without constituting a
constructive eviction of Tenant. The Rent reserved herein shall not abate while
such repairs, alterations or additions are being made and Tenant shall, not be
entitled to maintain a set-off or counterclaim for damages against Landlord by
reason of loss from interruption to the business of Tenant or otherwise because
of the prosecution of any such work. Unless any work would unreasonably
interfere with Tenant’s use of the Premises if performed during business hours,
all such repairs, decorations, additions and improvements shall be done during
ordinary business hours, or, if any such work is at the request of Tenant to be
done during any other hours, Tenant shall pay all overtime and other extra
costs.

 

40.                    Relocation. At any time or from time to
time during the Term or any renewal thereof, Landlord shall have the
unrestricted right to relocate Tenant from the Premises to any other office
space of reasonably comparable size in the Building with views that are
reasonably comparable to the views from the initial Premises (“Relocation
Space”). The Relocation Space must contain similar finishes
as the Premises, and approximately the same rentable area as the Premises and
approximately the same number of work stations, offices, breakrooms , windows
and reception areas as are contained in the Premises as of the date Tenant
receives Landlord’s notice of relocation. Landlord shall provide Tenant at
least ninety(90) days’ prior written notice of any such relocation and Landlord
shall reimburse Tenant for all reasonable expenses incurred by Tenant in
connection with such relocation, including moving expenses, telecommunications
and data cabling and hookup and the cost of a reasonable supply of replacement
stationery. In the event of any such relocation, Landlord shall move Tenant’s
effects to the Relocation Space over a weekend, at Landlord’s sole cost and
expense. If Tenant is relocated in accordance with the provisions of this Section 40,
and the rentable area of the Relocation Space is not equal to the rentable area
of the Premises, all amounts, percentages and figures appearing or referred to
in this Lease based upon such rentable area shall be modified accordingly;
provided, however, that notwithstanding the foregoing, Tenant’s Base Rent shall
not increase as a result of any such relocation. Prior to any such relocation,
Landlord shall, at its sole expense, renovate or construct improvements in the
Relocation Space that are substantially similar to those in the Premises.
Following any such relocation, Landlord and Tenant shall enter into an
amendment to this Lease to reflect that the Premises consists of such
Relocation Space. All other terms and conditions of the Lease shall remain
unchanged following such relocation.

 

29

 

41.                   Assignment
and Subletting.

 

(a)                      Generally.
Tenant may not, without the prior written consent of Landlord, assign this
Lease or any interest hereunder, or sublet the Premises or any part thereof, or
permit the use of the Premises by any party other than Tenant. In the event
that Tenant is a corporation or entity other than an individual, any transfer
of a majority or controlling interest in Tenant (whether by stock transfer,
merger, operation of law or otherwise) shall be considered an assignment for
purposes of this paragraph and shall require Landlord’s prior written consent.
Consent to one assignment or sublease shall not nullify or waive this
provision, and all later assignments and subleases shall likewise be made only
upon the prior written consent of Landlord. Subtenants or assignees shall
become liable to Landlord for all obligations of Tenant hereunder, without
relieving Tenant’s liability hereunder and, in the event of any default by
Tenant under this Lease, Landlord may, at its option, but without any
obligation to do so, elect to treat such sublease or assignment as a direct
Lease with Landlord and collect rent directly from the subtenant.

 

(b)                     Transfer
Notice. If Tenant desires to assign or sublease (“Transfer”), Tenant shall provide written
notice to Landlord describing the proposed transaction in detail (“Transfer Notice”) and shall provide all
documentation (including detailed financial information for the proposed
assignee or subtenant (a “Transferee”))
reasonably necessary to permit Landlord to evaluate the proposed transaction,
including without limitation the following:

 

(i)                         the
proposed effective date of the Transfer, which shall not be less than
forty-five (45) days nor more than one hundred eighty (180) days after the date
of delivery of the Transfer Notice;

 

(ii)                      a
description of the portion of the Premises to be transferred (the “Subject Space”);

 

(iii)                   all of the
terms of the proposed Transfer and the consideration therefor, including a
calculation of the “Transfer Premium,” as that term is defined in Section 4l(e) below,
in connection with such Transfer, the name and address of the proposed
Transferee, and a copy of all existing and/or proposed documentation pertaining
to the proposed Transfer, including all existing operative documents to be
executed to evidence such Transfer or the agreements incidental or related to
such Transfer; and,

 

(iv)                  current
financial statements of the proposed Transferee certified by an officer,
partner or owner thereof, and any other information required by Landlord, which
will enable Landlord to determine the financial responsibility character, and
reputation, of the proposed Transferee, nature of such Transferee’s business
and proposed use of the Subject Space, and such other information as Landlord
may reasonably require. Any Transfer made without Landlord’s prior written
consent or not in compliance with this Article 41 shall, at Landlord’s
option, be null, void and of no effect, and shall, at Landlord’s option,
constitute an incurable default by Tenant under this Lease.

 

(c)                     Landlord’s
Options. Upon any request by Tenant for Landlord’s consent to a Transfer,
Landlord may elect to terminate this Lease and recapture all of the Premises
(in the event of an assignment request) or the Subject Space (in the event of a
subleasing request). Landlord shall notify Tenant within thirty (30) days after
Landlord’s receipt of the subject Transfer Notice and all other documentation
and information required to be provided pursuant to Section 41 (b) above,
whether Landlord elects to exercise Landlord’s recapture right and, if not,

 

30

 

whether Landlord consents
to the requested Transfer; in such event, Landlord’s consent to a Transfer will
not be unreasonably withheld. The parties hereby agree that it shall be
reasonable under this Lease and under any applicable Law for Landlord to
withhold consent to any proposed Transfer where one or more of the following
apply:

 

(i)                         The
Transferee is of a character or reputation or engaged in a business which is
not consistent with the quality of the Building;

 

(ii)                      The
Transferee intends to use the Subject Space for purposes which are not
permitted hereunder;

 

(iii)                   The Transferee
is either a governmental agency or instrumentality thereof;

 

(iv)                  The Transfer
will result in more than five (5) occupants per 1,000 square feet of
rentable area;

 

(v)                     The
Transferee is not a party of reasonable financial worth and/or financial
stability in light of the responsibilities involved under this Lease on the
date consent is requested;

 

(vi)                  The proposed
Transfer would cause Landlord to be in violation of another lease or agreement
to which Landlord is a party, or would give an occupant of the Building a right
to cancel or seek monetary or injunctive relieve under its lease;

 

(vii)               The terms of the
proposed Transfer will allow the Transferee to exercise any right of renewal,
right of expansion, right of first offer, or any other similar right held by
Tenant (or will allow the Transferee to occupy space leased by Tenant pursuant
to any such right);

 

(viii)            Either the proposed
Transferee, or any person or entity which directly or indirectly, controls, is
controlled by, or is under common control with, the proposed Transferee, (1) occupies
space in the Building at the time of the request for consent, (2) is
negotiating with Landlord to lease space in the Building at such time, or (3) has
negotiated with Landlord during the twelve (12) month period immediately
preceding the Transfer Notice; or

 

(ix)                    With respect
to a Transfer proposed to be entered into during the first year of the Term of
this Lease, the rent proposed to be paid by the Transferee is less than the
Rent payable by Tenant under this Lease.

 

(d)                     Landlord’s
Consent. Concurrently with Tenant’s delivery of each Transfer Notice,
Tenant shall pay Landlord a review fee of $1,500.00 for Landlord’s review of
any requested Transfer, regardless of whether consent is granted, plus all
reasonable costs incurred by Landlord in preparing the documents for any
requested Transfer, including but not limited to Landlord’s attorneys’ fees. If
Landlord consents to any Transfer pursuant to the terms of this Article 41,
Tenant may within six (6) months after Landlord’s consent, but not later
than the expiration of said six (6) month period, enter into such Transfer
of the subject space, upon substantially the same terms and conditions as are
set forth in the Transfer Notice furnished by Tenant to Landlord, provided that
if there are any changes in the terms and conditions from those specified in
the Transfer Notice (i) such that Landlord would initially have been
entitled to refuse

 

31

 

its consent to such
Transfer under this Article 41, or (ii) which would cause the
proposed Transfer to be more favorable to the Transferee than the terms set forth
in Tenant’s original Transfer Notice, Tenant shall again submit the Transfer to
Landlord for its approval and other action under this Article 41.

 

(e)                      Transfer
Premium. If Landlord consents to any Transfer request and the assignee or
subtenant pays to Tenant an amount in excess of the Rent due under this Lease
(after deducting Tenant’s reasonable, actual expenses in obtaining such
assignment or sublease, amortized in equal monthly installments over the then
remainder of the Term, such expenses being limited to (i) any Alterations
to the subject space made in order to achieve the Transfer, or contributions to
the cost thereof and (ii) any commercially reasonable brokerage
commissions, reasonable attorneys’ fees and reasonable advertising and
marketing costs reasonably incurred by Tenant in connection with the Transfer)
(“Transfer Premium”), Tenant shall
pay fifty percent (50%) of such Transfer Premium to Landlord as and when the
monthly payments are received by Tenant. “Transfer Premium” shall also include,
but not be limited to, key money and bonus money paid by the Transferee to
Tenant in connection with such Transfer, and any payment in excess of fair
market value for services rendered by Tenant to Transferee or for assets,
fixture, inventory, equipment or furniture transferred by Tenant to Transferee
in connection with such Transfer.

 

(f)                        No
Releases. No Transfer shall release or discharge Tenant of or from any
liability, whether past, present or future, under this Lease, and Tenant shall
continue to be fully liable hereunder. Each subtenant or assignee shall agree
in a form reasonably satisfactory to Landlord to comply with and be bound by
all of the terms, covenants, conditions, provisions and agreements of this
Lease (but, with respect to a subtenant of less than, all of the Premises only
to the extent of the Subject Space), and Tenant shall deliver to Landlord
promptly after execution, an executed copy of each such Transfer and an
agreement of compliance by each such subtenant or assignee. Tenant agrees to
pay to Landlord all reasonable out-of-pocket costs incurred by Landlord
(including fees paid to consultants (as may be required) and attorneys) in
connection with any request by Tenant for Landlord’s consent to any Transfer.

 

(g)                     Conditions.
If Landlord consents to a Transfer, (i) the terms and conditions of this
Lease shall in no way be deemed to have been waived or modified, (ii) such
consent shall not be deemed consent to any further Transfer by either Tenant or
any Transferee, (iii) Tenant shall deliver to Landlord, promptly after
execution, an original executed copy of all documentation pertaining to the
Transfer in form reasonably acceptable to Landlord, (iv) Tenant shall
furnish upon Landlord’s request a complete statement, certified by an independent
certified public accountant, or Tenant’s chief financial officer, setting forth
in detail the computation of any Transfer Premium Tenant has derived and shall
derive from such Transfer, (v) any assignee shall assume in writing ail
obligations and covenants of Tenant thereafter to be performed or observed
under this Lease, and (vi) no Transfer relating to this Lease or agreement
entered into with respect thereto, whether with or without Landlord’s consent,
shall relieve Tenant or any guarantor of this Lease from liability under this
Lease, Landlord or its authorized representatives shall have the right at all
reasonable times to audit the books, records and papers of Tenant relating to
any Transfer, and shall have the right to make copies thereof. If the Transfer
Premium respecting any Transfer shall be found understated, Tenant shall,
within thirty (30) days after demand, pay the deficiency and Landlord’s costs
of such audit, and if understated by more than ten percent (10%), Landlord
shall have the right to cancel this Lease upon thirty (30) days’ notice to
Tenant.

 

32

 

(h)                     Affiliates.
Notwithstanding anything to the contrary contained in this Article 41,
Tenant may assign this Lease or sublet the Premises without the need for
Landlord’s prior consent if such assignment or sublease is to any parent,
subsidiary or affiliate business entity which the initially named Tenant
controls, is controlled by or is under common control with (each, an “Affiliate”) provided that: (i) at
least thirty (30) days prior to such assignment or sublease, Tenant delivers to
Landlord the financial statements or other financial and background information
of the assignee or sublessee as required for other Transfers; (ii) if the
transfer is an assignment, the assignee assumes, in fall, the obligations of
Tenant under this Lease (or if a sublease, the Transferee of a portion of the
Premises or term assumes, in full, the obligations of Tenant with respect to
such portion); (iii) the financial audited net worth of the assignee or
sublessee as of the time of the proposed Transfer is sufficient for such
assignee or sublessee to fulfill its obligations pursuant to such assignment or
sublease; (iv) Tenant remains fully liable under this Lease; and (v) the
use of the Premises set forth herein remains unchanged. As used in this
section, “control” (including, with its correlative meanings, “controlled by”
and “under common control with”) shall mean possession, directly or indirectly,
of power to direct or cause the direction of management or policies through
ownership of at least fifty-one percent (51%) of the securities or partnership
or other ownership interests of the entity subject to control.

 

(i)                         Statutory
Waiver. Tenant hereby waives the provisions of Section 1995.310 of the
California Civil Code, or any similar or successor Laws, now or hereafter in
effect, and all other remedies, including, without limitation, any right at law
or equity to terminate this Lease, on its own behalf and, to the extent
permitted under all applicable Laws, on behalf of the proposed Transferee.

 

(j)                         Prohibited
Transaction. Notwithstanding anything to the contrary contained in this Article 41,
neither Tenant nor any other person having a right to possess, use, or occupy
(for convenience, collectively referred to in this subsection as “Use”) the Premises shall enter into any
lease, sublease, license, concession or other agreement for Use of all or any
portion of the Premises which provides for rental or other payment for such Use
based, in whole or in part, on the net income or profits derived by any person
that leases, possesses, uses, or occupies all or any portion of the Premises
(other than an amount based on a fixed percentage or percentages of receipts or
sales), and any such purported lease, sublease, license, concession or other
agreement shall be absolutely void and ineffective as a transfer of any right
or interest in the Use of all or any part of the Premises.

 

42.                    Sale.
In the event the original Landlord hereunder, or any successor owner of the
Building, shall sell or convey the Building, all liabilities and obligations on
the part of the original Landlord, or such successor owner, under this Lease
accruing thereafter shall terminate, and thereupon all such liabilities and
obligations shall be binding upon the new owner. Tenant agrees to attorn to
such new owner.

 

43.                    Limitation of Liability. Landlord’s obligations and
liability with respect to this Lease shall be limited solely to the lesser of (a) the
interest of Landlord in the Property, or (b) the equity interest Landlord
would have in the Property if the Property were encumbered by third party debt
in an amount equal to seventy percent (70%) of the value of the Property.
Neither Landlord nor any partner of Landlord, or any officer, director,
shareholder, or partner or member of any partner or member of Landlord, shall
have any individual or personal liability whatsoever with respect to this
Lease.

 

33

 

44.                    Broker Disclosure.
The Landlord’s Broker identified in the Basic Lease Provisions has acted as
agent for Landlord in this transaction; Landlord’s Broker has not represented
Tenant. Tenant represents that no broker has acted as agent for Tenant in this
transaction. Landlord represents that Landlord has dealt with no other broker
other than Landlord’s Broker. Tenant agrees that, if any broker makes a claim
for a commission based upon the actions of Tenant, Tenant shall indemnify,
defend, protect and hold Landlord harmless from any such claim.

 

45.                    Joint and Several.
If there is more than one Tenant, the obligations imposed upon Tenant under
this Lease shall be joint and several.

 

46.                    Construction of this Agreement. No failure of Landlord to
exercise any power given Landlord hereunder, or to insist upon strict
compliance by Tenant of its obligations hereunder, and no custom or practice of
the parties at variance with the terms hereof shall constitute a waiver of
Landlord’s right to demand exact compliance with the terms hereof. No amendment
of this Lease shall be valid unless the same is in writing and signed by the
parties. Subject to the provisions of Article 41, this Lease shall be
binding upon and inure to the benefit of the parties hereto and their
respective legal representatives, successors, and permitted assigns. This Lease
shall be construed in accordance with and governed by the laws of the State of
California. Nothing in this Lease creates any relationship between the parties
other than that of lessor and lessee and nothing in this Lease constitutes
Landlord a partner of Tenant or a joint venturer or member of a common
enterprise with Tenant.

 

47.                    No Estate In Land.
This contract shall create the relationship only of landlord and tenant between
Landlord and Tenant; no estate shall pass out of Landlord; Tenant has only a
right of use, not subject to levy or sale, and not assignable by Tenant except
with Landlord’s consent.

 

48.                    Paragraph Titles; Severability. The paragraph titles used herein
are not to be considered a substantive part of this Lease, but merely
descriptive aids to identify the paragraph to which they refer. Use of the
masculine gender includes the feminine and neuter, and vice versa, where
necessary to impart contextual continuity. If any paragraph or provision herein
is held invalid by a court of competent jurisdiction, all other paragraphs or
severable provisions of this Lease shall not be affected thereby, but shall
remain in Full force and effect.

 

49.                    Cumulative Rights.
All rights, powers and privileges conferred hereunder upon Landlord hereto
shall be cumulative but not restrictive to those given by law.

 

50.                    Entire Agreement.
This Lease contains the entire agreement of the parties and no representations,
inducements, promises or agreements, oral or otherwise, between the parties not
embodied herein shall be of any force or effect.

 

51.                    Submission of Agreement. Submission of this Lease to
Tenant for signature does not constitute a reservation of space or an option to
acquire a right of entry. This Lease is not binding or effective until
execution by and delivery to both Landlord and Tenant.

 

52.                    Authority.
If Tenant or Landlord executes this Lease as a corporation, limited
partnership, limited liability company or any other type of entity, each of the
persons executing this Lease on behalf of Tenant or Landlord, as the case may
be, does hereby personally represent and warrant that Tenant or Landlord, as
the case may be, is a duly organized and validly existing

 

34

 

corporation, limited
partnership, limited liability company or other type of entity, that Tenant or
Landlord, as the case may be, is qualified to do business in the state where
the Building is located, that Tenant or Landlord, as the case may be, has full
right, power and authority to enter into this Lease, and that each person
signing on behalf of Tenant or Landlord, as the case may be, is authorized to
do so. In the event any such representation and warranty is false, all persons
who execute this Lease shall be individually, jointly and severally, liable as
Tenant or Landlord, as the case may be. Upon Landlord’s or Tenant’s request, as
the case may be, the requested party shall provide to the requesting party
evidence reasonably satisfactory to the requesting party confirming the
foregoing representations and warranties.

 

53.                    Guaranty. Tenant shall cause the
Guarantor identified in the Basic Lease Provisions to execute and deliver to
Landlord, within ten (10) business days after the Effective Date, a
Guaranty of the obligations of Tenant under this Lease in the form of Exhibit E attached hereto and made a
part hereof.

 

54.                    OFAC and Anti-Money Laundering Compliance
Certifications. Tenant hereby
represents, certifies and warrants to Landlord as follows: (i) Tenant is
not named and is not acting, directly or indirectly, for or on behalf of any
person, group, entity or nation named by any Executive Order, including without
limitation Executive Order 13224, or the United States Treasury Department as a
terrorist “Specially Designated National and Blocked Person,” or other banned
or blocked person, entity, nation or transaction pursuant to any law, order, rule or
regulation that is enacted, enforced or administered by the Office of Foreign
Assets Control (“OFAC”); (ii) Tenant
is not engaged in this transaction, directly or indirectly, for or on behalf
of, or instigating or facilitating this transaction, directly or indirectly on
behalf of, any such person, group, entity or nation; and (iii) none of the
proceeds used to pay rent have been or will be derived from a “specified
unlawful activity” as defined in, and Tenant is not otherwise in violation of,
the Money Laundering Control Act of 1986, as amended, or any other applicable
laws regarding money laundering activities. Furthermore, Tenant agrees to
immediately notify Landlord if Tenant was, is, or in the future becomes, a “senior
foreign political figure” or an immediate family member or close associate of a
“senior foreign political figure,” within the meaning of Section 312 of
the USA PATRIOT Act of 2001. Notwithstanding anything in this Lease to the
contrary, Tenant understands that this Lease is a continuing transaction and
that the foregoing representations, certifications and warranties are ongoing
and shall be and remain true and in force on the date hereof and throughout the
Term of this Lease and that any breach thereof shall be a Default (not subject
to any notice or cure rights) giving rise to any and all Landlord remedies
hereunder, and Tenant hereby agrees to defend, indemnify and hold harmless
Landlord from and against any and all claims, damages, losses, risks,
liabilities, fines, penalties, forfeitures and expenses (including without
limitation costs and attorneys’ fees) arising from or related to any breach of
the foregoing representations, certifications and warranties.

 

55.                    Counterparts; Telecopied or Electronic Signatures. This Lease may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which, together, shall constitute one and the same instrument. In order to
expedite the transaction contemplated herein, telecopied signatures or
signatures transmitted by electronic mail in so-called “pdf’ format may be used
in place of original signatures on this Lease. Landlord and Tenant intend to be
bound by the signatures on the telecopied or e-mailed document, are aware that
the other party will rely on the telecopied or e-mailed signatures, and hereby
waive any defenses to the enforcement of the terms of this Lease based on such

 

35

 

telecopied or e-mailed
signatures. Promptly following request by either party, the other party shall
provide the requesting party with original signatures on this Lease.

 

IN WITNESS
WHEREOF, Landlord and Tenant have executed this instrument as of the date set
forth on the first page hereof.

 

LANDLORD:

 

PPF OFF
150 CALIFORNIA STREET, LP, a Delaware limited partnership

 

	
  By: 

  	
  PPF
  OFF GP, LLC, a Delaware limited liability company,

  
	
   

  	
  its
  General Partner

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  PPF
  OFF, LLC,

  
	
   

  	
   

  	
  a
  Delaware limited liability company, its Member

  
	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  PPF
  OP, LP, a Delaware limited partnership, its Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By: 

  	
  PPF
  OPGP, LLC,

  
	
   

  	
   

  	
   

  	
   

  	
  a
  Delaware limited liability company, its General Partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By: 

  	
  Prime
  Property Fund, LLC, a Delaware limited liability company, its Member

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By: 

  	
  Morgan
  Stanley Real Estate Advisor, Inc., a Delaware corporation, its Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Keith Fink

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name: 

  	
  Keith Fink

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title: 

  	
  Executive Director

  
										

 

[SIGNATURES CONTINUE ON FOLLOWING
PAGE]

 

36

 

	
  TENANT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AD INFUSE INC., a Delaware corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Portia M. Kersten

  	
   

  	
   

  
	
  Print Name: 

  	
  Portia M. Kersten

  	
   

  	
   

  
	
  Its:

  	
  CFO

  	
   

  	
   

  

 

37

 

EXHIBIT “A-1”

 

SUITE 450

 

 

A-1-1

 

EXHIBIT “A-2”

 

SUITE 610

 

 

A-2-1

 

EXHIBIT “B”

 

WORK AGREEMENT

 

THIS WORK
AGREEMENT (“Work Agreement”) is
attached to and made a part of that certain Lease (the “Lease”) between PPF OFF 150 CALIFORNIA STREET,
LP, a Delaware limited partnership (“Landlord”)
and AD INFUSE INC., a Delaware corporation (“Tenant”),
pursuant to which Tenant has agreed to lease space containing approximately
5,416 rentable square feet (“Suite 450”)
on the fourth (4th) floor of the building located at 150 California Street, San
Francisco, California (the “Building”).
All capitalized terms used but not defined herein shall have the respective
meanings given such terms in the Lease.

 

This Work
Agreement shall set forth the terms and conditions relating to the construction
of the tenant improvements in Suite 450.

 

SECTION 1

 

CONSTRUCTION DRAWINGS FOR SUITE 450

 

Landlord and
Tenant have approved that certain space plan prepared by Brereton Architects,
attached hereto as Exhibit A (the “Space
Plan”). Immediately following Tenant’s execution and delivery of the
Lease, Tenant shall cooperate in good faith with Landlord’s architects and
engineers to supply such information as is necessary to allow the Landlord’s
architects and engineers to complete the architectural and engineering
drawings, and the final architectural working drawings in a form which is
complete to allow subcontractors to bid on the work and to obtain all
applicable permits and in a manner consistent with, and which are a logical
extension of, the Space Plan (as reasonably determined by Landlord) and
otherwise in accordance with Building standards (collectively, the “Approved Working Drawings”). Landlord, at
Landlord’s sole cost (except as expressly set forth herein), shall construct
the improvements in Suite 450 (the “Tenant
Improvements”) pursuant to the Approved Working Drawings. Tenant
shall make no changes or modifications to (i) the Space Plan, (ii) the
Approved Working Drawings, or (iii) the Tenant Improvements without the
prior written consent of Landlord. The Tenant Improvements will be constructed
using Building-standard materials. Notwithstanding the foregoing to the
contrary, in no event shall Landlord be required to spend more than $108,320.00
(i.e., $20.00 per rentable square foot of Suite 450) towards the design
and construction of the Tenant Improvements; if and to the extent, for any
reason, that the aggregate cost of design and construction of the Tenant
Improvements exceeds such amount, Tenant shall be solely responsible for such
excess cost. Notwithstanding the foregoing to the contrary, if the cost of
design and construction of the Tenant Improvements exceeds $20.00 per rentable
square foot of the Premises, Tenant shall have the right, to be exercised by written
notice delivered to Landlord, to borrow up to an additional $10.00 per rentable
square foot of the Premises (i.e., $54,160.00) (the “Allowance”) from Landlord in order to finance the additional
cost of the Tenant Improvements which would otherwise be borne directly by
Tenant. No portion of the Allowance shall be applied as a credit against Base
Rent or otherwise to pay any cost other than the cost of design and
construction of the Tenant Improvements. Any Allowance borrowed by Tenant
hereunder shall be repaid to Landlord as additional Base Rent in equal monthly
installments over the Term, together with interest at the rate equal to six
percent (6%) per annum. If Tenant is in Default under the Lease at any time, at
Landlord’s option, the entire unamortized balance of the Allowance borrowed by
Tenant shall become immediately due and payable and,

 

B-1

 

except to the extent
required by applicable Law, shall not be subject to mitigation or reduction in
connection with a reletting of the Premises by Landlord.

 

SECTION 2

 

TENANT’S COSTS

 

If any revisions,
changes, or substitutions shall be made to (i) the Space Plan, (ii) the
Approved Working Drawings, or (iii) the Tenant Improvements, or in the
event that Tenant requests revisions, changes, or substitutions which cause the
Approved Working Drawings to not be a logical extension of the Space Plan, then
any additional costs which arise in connection with such revisions, changes or
substitutions shall be paid by Tenant to Landlord within ten (10) business
days following Landlord’s request, together with a construction supervision and
management fee payable to Landlord in an amount equal to five percent (5%) of
such additional costs.

 

SECTION 3

 

CONTRACTOR’S WARRANTIES AND GUARANTIES

 

Landlord hereby
assigns to Tenant, on a nonexclusive basis, all warranties and guaranties by
the contractor who constructs the Tenant Improvements (the “Contractor”) relating to the Tenant
Improvements, and Tenant hereby waives all claims against Landlord relating to,
or arising out of the design or construction of, the Tenant improvements.

 

SECTION 4

 

COMPLETION OF THE TENANT  IMPROVEMENTS;

COMMENCEMENT DATE

 

4.1                    Substantial
Completion. For purposes of the Lease, “Substantial
Completion” of the Tenant Improvements shall occur upon the
completion of construction of the Tenant Improvements pursuant to the Approved
Working Drawings (as reasonably determined by Landlord), with the exception of
any punch list items and any tenant fixtures, equipment (including security and
other Tenant systems), work-stations (including any related fixture and/or
equipment electrification), built-in furniture, and telecommunications and data
cabling and equipment, all of which shall be the responsibility of Tenant to
purchase and install at Tenant’s sole cost and expense.

 

4.2                    Delay in
Substantial Completion. If there shall be a delay or there are delays in
the Substantial Completion of the Tenant Improvements or in the occurrence of
any of the other conditions precedent to the Commencement Date, as set forth in
of the Lease, as a direct, indirect, partial, or total result of:

 

4.2.1            Tenant’s failure to
timely approve any matter requiring Tenant’s approval;

 

4.2.2            A breach by Tenant of
the terms of this Work Agreement or the Lease;

 

4.2.3            Tenant’s request for
changes (a) in the Space Plan, (b) which cause the Approved Working
Drawings to not be a logical extension of the Space Plan, (c) to the

 

B-2

 

Approved  Working Drawings, or (d) to the Tenant
Improvements during  the course  of construction;

 

4.2.4            Tenant’s requirement
for materials, components, finishes or improvements which are not available in
a commercially reasonable time given the estimated Completion Date, as set
forth in the Lease, or which are different from, or not included in, Landlord’s
standard improvement package items for the Building;

 

4.2.5            Changes to the base,
shell and core of the Building required by the Approved Working Drawings; or

 

4.2.6            Any other acts or
omissions of Tenant, or its agents, or employees;

 

(each of the foregoing, a
“Tenant Delay”) then,
notwithstanding anything to the contrary set forth in the Lease or this Work
Agreement and regardless of the actual date of the Substantial Completion of
the Tenant Improvements, the date of Substantial Completion of the Tenant
Improvements shall be deemed to be the date the Substantial Completion of the
Tenant Improvements would have occurred if no Tenant Delay had occurred.

 

SECTION 5

 

MISCELLANEOUS

 

5.1                    Tenant’s
Entry Into Suite 450 Prior to Substantial Completion.  Provided that Tenant and its agents do not
interfere with Contractor’s work in the Building and Suite 450, Contractor
shall allow Tenant access to 450 prior to the Substantial Completion of the
Tenant Improvements for the purpose of Tenant installing equipment or fixtures
(including Tenant’s data and telephone equipment) in 450. Prior to Tenant’s
entry as permitted by the terms of this Section 5.1, Tenant shall submit a
schedule to Landlord and Contractor, for their approval, which schedule shall
detail the timing and purpose of Tenant’s entry.  Tenant shall hold Landlord harmless from and
indemnify, protect and defend Landlord against any loss or damage to the
Building or 450 and against injury to any persons caused by Tenant’s actions
pursuant to this Section 5.1.

 

5.2                    Freight
Elevators. Landlord shall, consistent with its obligations to other tenants
of the Building, make the freight elevator reasonably available to Tenant in
connection with initial decorating, furnishing and moving into 450.

 

5.3                    Tenant’s  Representative.    Tenant has designated Portia Kersten
as  its sole representative with respect
to the matters set forth in this Work Agreement, who, until further notice to
Landlord, shall have full authority and responsibility to act on behalf of
Tenant as required in this Work Agreement.

 

5.4                    Landlord’s
Representative.  Landlord has
designated Stacia Keisner as its sole representative with respect to the
matters set forth in this Work Agreement, who, until further notice to Tenant,
shall have full authority and responsibility to act on behalf of Landlord as
required in this Work Agreement.

 

B-3

 

5.5                    Tenant’s
Agents. All contractors, subcontractors, laborers, materialmen, and
suppliers retained by or through Tenant shall be union labor in compliance with
the then existing master labor agreements.

 

5.6                    Time of the
Essence in This Work Agreement. Unless otherwise indicated, all references
herein to a “number of days” shall mean and refer to calendar days. In all
instances where Tenant is required to approve or deliver an item, if no written
notice of approval is given or the item is not delivered within the stated time
period, at Landlord’s sole option, at the end of such period the item shall
automatically be deemed approved or delivered by Tenant and the next succeeding
time period shall commence.

 

5.7                    Tenant’s
Lease Default. Notwithstanding any provision to the contrary contained in the
Lease, if an event of default as described in the Lease, or a default by Tenant
under this Work Agreement, has occurred at any time on or before the
Substantial Completion of the Tenant Improvements, then (i) in addition to
all other rights and remedies granted to Landlord pursuant to the Lease,
Landlord shall have the right to cause Contractor to cease the construction of
the Tenant Improvements (in which case, any delay in the Substantial Completion
of the Tenant Improvements caused by such work stoppage shall be Tenant
Delay), and (ii) all other obligations of Landlord under the terms of this
Work Agreement shall be forgiven until such time as such default is cured
pursuant to the terms of the Lease.

 

5.8                    Cooperation
by Tenant. Tenant acknowledges that the timing of the completion of the
Approved Working Drawings and the Tenant Improvements is of the utmost
importance to Landlord. Accordingly, Tenant hereby agrees to fully and
diligently cooperate with all reasonable requests by Landlord in connection with
or related to the design and construction of the Tenant Improvements, and in
connection therewith, shall respond to Landlord’s requests for information
and/or approvals, except as specifically set forth herein to the contrary,
within two (2) business days following request by Landlord.

 

B-4

 

EXHIBIT “A”

to

EXHIBIT “B”

 

SPACE PLAN

 

 

B-5

 

EXHIBIT “C”

 

COMMENCEMENT LETTER

 

Date                       ,
2009

 

Re:                  Lease dated as
of                       ,
2009, by and between PPF OFF 150 CALIFORNIA STREET, L.P., a Delaware limited
partnership, Landlord, and AD INFUSE, INC., a Delaware corporation, as Tenant,
for 5,416 rentable square feet on the fourth (4th) floor (“Suite 450”) and 714 rentable square
feet on the sixth (6th) floor (“Suite 610”)
of the Building located at 150 California Street, San Francisco, California.

 

Dear                       :

 

In accordance with
the terms and conditions of the above referenced Lease, Tenant accepts
possession of the Premises and agrees:

 

1.                          The
Commencement Date is                       ;

 

2.                          The Rent
Abatement Period is the calendar month of                       ,
2009;

 

3.                          The term
for Suite 610 is a month-to-month term, terminable by either party upon at
lest thirty (30) days’ advance written notice to the other; and

 

4.                          The
Expiration Date for Suite 450 is                       .

 

Please acknowledge
your acceptance of possession and agreement to the terms set forth above by
signing all 3 counterparts of this Commencement Letter in the space provided
and returning 2 fully executed counterparts to my attention.

 

	
  Sincerely,

  	
   

  	
  Agreed and Accepted: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tenant:     
  AD INFUSE. INC.

  
	
  Property
  Manager

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

[EXHIBIT - - DO NOT SIGN]

 

C-1

 

EXHIBIT “D”

 

RULES AND REGULATIONS

 

1.                          The
sidewalks, entry passages, corridors, halls, elevators and stairways shall not
be obstructed by Tenant or used for any purpose other than that of ingress and
egress. The floors, skylights and windows that reflect or admit light into any
place in the Building shall not be covered or obstructed by Tenant. The
toilets, drains and other water apparatus shall not be used for any other
purpose than those for which they were constructed and no rubbish or other
obstructing substances shall be thrown therein.

 

2.                          No
advertisement, signs, pictures, placards or other notice shall be inscribed,
painted or affixed on any part of the outside or inside of the Building, except
upon the doors, and of such order, size and style, and at such places, as shall
be approved and designated by Landlord. Interior signs on doors will be ordered
for Tenant by Landlord, the cost thereof to be charged to and paid for by
Tenant.

 

3.                          Tenant
shall not do or permit to be done in the Premises, or bring or keep anything
therein, which shall in any way increase the rate of insurance carried by
Landlord on the Building, or on the Property, or obstruct or interfere with the
rights of other tenants or in any way injure or annoy them, or violate any
applicable laws, codes or regulations. 
Tenant, its agents, employees or invitees shall maintain order in the Premises
and the Building, shall not make or permit any improper noise in the Premises
or the Building or interfere in any way with other tenants, or those having
business with them. Nothing shall be thrown by Tenant, its clerks or servants,
out of the windows or doors, or down the passages or skylights of the Building.
No rooms shall be occupied or used as sleeping or lodging apartments at any
time. No part of the Building shall be used or in any way appropriated for
gambling, immoral or other unlawful practices, and no intoxicating liquor or liquors
shall be sold in the Building.

 

4.                          Tenant
shall not employ any persons other than the janitors of Landlord (who will be
provided with pass-keys into the offices) for the purpose of cleaning or taking
charge of the Premises, except as may be specifically provided otherwise in the
Lease.

 

5.                          No
animals, birds, bicycles or other vehicles shall be allowed in the offices,
halls, corridors, elevators or elsewhere in the Building, without the approval
of Landlord.

 

6.                          No
painting shall be done, nor shall any alterations be made to any part of the
Building or the Premises by putting up or changing any partitions, doors or
windows, nor shall there be any nailing, boring or screwing into the woodwork
or plastering, nor shall any connection be made in the electric wires or gas or
electric fixtures, without the consent in writing on each occasion of Landlord.
All glass, locks and trimmings in or upon the doors and windows of the Building
shall be kept whole and, when any part thereof shall be broken by Tenant or Tenant’s
agent, the same shall be immediately replaced or repaired by Tenant (subject to
Tenant’s compliance with Section 22 of the Lease) and put in order under
the direction and to the satisfaction of Landlord, or its agents, and shall be
kept whole and in good repair. Tenant shall not injure, overload, or deface the
Building, the woodwork or the walls of the Premises, nor carry on upon the
Premises any noxious, noisy or offensive business.

 

D-1

 

7.                          Two (2) keys
will be furnished Tenant without charge. No additional locks or latches shall
be put upon any door and no locks shall be changed without the written consent
of Landlord. Tenant, at the termination of their Lease, shall return to
Landlord all keys to doors in the Building. Tenant shall not alter locks or
install new locks without approval from Landlord.

 

8.                          Landlord
in all cases retains the power to prescribe the weight and position of iron
safes or other heavy articles. Tenant shall make arrangements with the
superintendent of the Building when the elevator is required for the purpose of
the carrying of any kind of freight.

 

9.                          The use
of burning fluid, camphene, benzine, kerosene or anything except gas or
electricity, for lighting the Premises, is prohibited. No offensive gases or
liquids will be permitted.

 

10.                    If Tenant
desires blinds, coverings or drapes over the windows, they must be of such
shape, color and material as may be prescribed by Landlord, and shall be
erected only with Landlord’s consent and at the expense of Tenant. No awnings
shall be placed on the Building. Window covering shall be closed when the
effect of sunlight would impose unnecessary loads on the air conditioning
system.

 

11.                    All wiring and
cabling work shall be done only by contractors approved in advance by Landlord
and Landlord shall have the right to have all such work supervised by Building
engineering/maintenance personnel. No antenna or cabling shall be installed on
the roof or exterior walls of the Building.

 

12.                    At Landlord’s
discretion, Landlord may hire security personnel for the Building, and every
person entering or leaving the Building may be questioned by such personnel as
to the visitor’s business in the Building and shall sign his or her name on a
form provided by the Building for so registering such persons. Landlord shall
have no liability with respect to breaches of the Building security, if any.

 

13.                    Landlord shall
have the right, exercisable without notice and without liability to Tenant, to
change the name or street address of the Building or the room or suite number
of the Premises.

 

14.                    The freight
elevator shall be available for use by all tenants in the Building subject to
such reasonable scheduling as Landlord in its discretion shall deem
appropriate. The persons employed to move such equipment in or out of the
Building must be acceptable to Landlord and any costs incurred by Landlord
shall be reimbursed by Tenant.

 

15.                    Canvassing,
peddling, soliciting and distribution of handbills or any other written materials
in the Building are prohibited and each tenant shall cooperate to prevent the
same.

 

16.                    Each tenant
shall ensure that all doors to its premises are locked and all water faucets or
apparatus and office equipment are shut off before the tenant or its employees
leave such premises at night. On multiple tenancy floors, all tenants shall
keep the doors to the Building corridors closed at all times except for ingress
and egress.

 

D-2

 

17.                    The toilets,
urinals, wash bowls and other restroom facilities shall not be used for any
purpose other than for which they were constructed, no foreign substance of any
kind whatsoever may be thrown therein and the expense of any breakage, stoppage or
damage resulting from a violation of this rule shall be borne by the
tenant who, or whose employees or invitees, shall have caused it.

 

18.                    Each tenant
shall store its refuse within its Premises. No material shall be placed in the
refuse boxes or receptacles if such material is of such a nature that it may
not be disposed of in the ordinary and customary manner of removal without
being in violation of any law or ordinance governing such disposal.

 

19.                    Landlord
reserves the right to make such other and reasonable rules and regulations
as in its judgment may from time to time be needed for the safety, care and
cleanliness of the Building and for the preservation of good order therein.

 

D-3

 

EXHIBIT “E”

 

CONTINUING GUARANTY OF LEASE

 

In order to induce
PPF OFF 150 CALIFORNIA STREET, LP
(“Landlord”) to enter into that
certain Lease dated as of September 23, 2009, for certain office space
(the “Premises”) in the building
located at 150 California Street, San Francisco, California, with Ad Infuse, Inc.,
a Delaware corporation (“Tenant”)
(the “Lease”) and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
undersigned guarantor, Velti PLC (“Guarantor”)
hereby agrees as follows:

 

1.                          Guaranty.
Guarantor absolutely, presently, continually, unconditionally and irrevocably
guarantees the faithful and prompt performance by Tenant of each and every one
of the terms, conditions, and covenants of the Lease to be kept and performed
by Tenant including, without limitation, the prompt payment by Tenant of Rent
and any other sums payable by Tenant under the Lease as and when the same
become due (collectively, the “Guaranteed
Obligations”).

 

2.                          Modification
or Assignment of Lease. It is specifically agreed and understood that the
terms, covenants and conditions of the Lease may be altered, affected,
modified, amended, compromised, released, or otherwise changed by agreement
between Landlord and Tenant, and Guarantor does guaranty and promise to pay all
of the Guaranteed Obligations of Tenant under the Lease as so altered,
affected, modified, amended, compromised, released, or changed, and that the
Lease may be assigned by or with the consent of Landlord or any assignee of Landlord
without consent of Guarantor, and that this Guaranty shall thereupon and
thereafter guaranty the performance of the Guaranteed Obligations as so
changed, modified, amended, compromised, released, altered or assigned.

 

3.                          No
Release. This Guaranty shall not be released, modified, or affected by
failure or delay on the part of Landlord to enforce any of the rights or
remedies of Landlord under the Lease, whether pursuant to the terms thereof or
at law or in equity, or by any release of any person liable under the terms of
the Lease (including, without limitation, Tenant or Guarantor).

 

4.                          Continuing
Liability; Termination. Guarantor’s liability under this Guaranty shall
continue until the Lease Term under the Lease has expired and all Guaranteed
Obligations due under the Lease have been paid in full in cash and all of the
other Guaranteed Obligations to Landlord have been satisfied, subject to the
last sentence of this paragraph. If all or any portion of the Guaranteed
Obligations under the Lease are paid by Tenant or performed by Tenant, the
obligations of Guarantor hereunder shall continue and remain in full force and
effect with respect to such payment(s) or performance(s) if all or
any part of such payment(s)or performance(s) is/are avoided or recovered
directly or indirectly from Landlord as a preference, fraudulent transfer or
otherwise. Following termination of this Guaranty in accordance with the terms
of this paragraph and upon request by Guarantor to Landlord, Landlord shall
return the original executed copy of this Guaranty to Guarantor marked as
“cancelled”.

 

5.                          Representations
and Warranties of Guarantor. Guarantor acknowledges and agrees that
Guarantor now has and will continue to have full and complete access to any and
all

 

E-1

 

information that
Guarantor needs or desires concerning the Lease, the value of any assets owned
or to be acquired by Tenant, Tenant’s financial status and Tenant’s ability to
pay and perform the obligations owed to Landlord under the Lease. Guarantor
further acknowledges and agrees that Guarantor has reviewed and approved copies
of the Lease (including all amendments, addenda, or other modifications
thereto) and is fully informed of the remedies Landlord may pursue, with or
without notice to Tenant, in the event of default under the Lease. So long as
any of Guarantor’s obligations hereunder remain unsatisfied or owing to
Landlord, Guarantor shall keep fully informed as to all aspects of Tenant’s
financial condition and the performance of said obligations.

 

6.                          Cure
of Defaults. Guarantor hereby covenants and agrees with Landlord that if a
Default (as defined in Article 30 of the Lease) shall at any time occur in
the payment of any sums due under the Lease by Tenant or in the performance of
any other Guaranteed Obligations, Guarantor shall and will forthwith upon
demand pay all sums and any arrears thereof owed to Landlord, with payment to
Landlord in legal currency of the United Stales of America for the payment of
public and private debts, and Guarantor shall further take all other actions
necessary to cure such Default and perform such obligations of Tenant.

 

7.                          Guaranty
of Payment and Performance. The liability of Guarantor under this Guaranty
is a guaranty of payment and performance and not of collectability, and is not
conditioned or contingent upon the genuineness, validity, regularity, or
enforceability of the Lease or the pursuit by Landlord of any remedies which it
now has or may hereafter have with respect thereto, at law, in equity or
otherwise.

 

8.                          Waivers
by Guarantor. Guarantor hereby waives and agrees not to assert or take
advantage of to the extent permitted by law: (i) other than any notice to
Guarantor required under this Guaranty, all notices to Guarantor, to Tenant, or
to any other person, including, but not limited to, notices of the acceptance
of this Guaranty or the creation, renewal, extension, assignment, modification,
or accrual of any of the obligations owed to Landlord under the Lease and
enforcement of any right or remedy with respect thereto, and notice of any
other matters relating thereto; (ii) notice of acceptance of this
Guaranty; (iii) demand of payment, presentation and protest; (iv) any
right to require Landlord to apply to any default any security deposit or other
security it may hold under the Lease; (v) any defense or right arising
from the absence, impairment or loss of any right of reimbursement,
contribution, or subrogation, or any other right of Guarantor against Landlord,
(vi) any defense or right arising from the exercise by Tenant of any
remedies against Landlord; and (vii) any right or defense that may arise
by reason of the incapacity, lack of authority, death or disability of Tenant
or any other person. Moreover, Guarantor agrees that Guarantor’s obligations
shall not be affected by any circumstances which constitute a legal or
equitable discharge of any guarantor or surety. Guarantor agrees that Landlord
may enforce this Guaranty against Guarantor without the necessity of proceeding
against Tenant or any other person or entity, or the obligation to pursue any
other remedy or to enforce any other right. Subject to the foregoing, Guarantor
may assert the rights and defenses of prior payment (whether by offset,
recoupment or otherwise) of the Guaranteed Obligations and the non-occurrence
of an event of default by Tenant under the Lease if and to the extent Tenant
could raise such rights and defenses and within the time period that Tenant
could raise such defense (i.e., if Tenant under the Lease would no longer have
the right to raise such defense, Guarantor would not have the right to raise
such defense). Without limiting any other

 

E-2

 

terms of this Guaranty,
Guarantor hereby expressly waives any and all benefits under California Civil
Code §§2809, 2810, 2819, 2821, 2845, 2848, 2849 and 2850 and the second
sentence of California Civil Code Section 2822(a).

 

9.                          No
Discharge of Guarantor. Guarantor agrees that nothing contained herein
shall prevent Landlord from suing on the Lease or from exercising any rights
available to Landlord thereunder and that the exercise of any of the aforesaid
rights shall not constitute a legal or equitable discharge of Guarantor.

 

10.                    No Right of
Subrogation. Guarantor agrees that any rights of subrogation Guarantor may
have against Tenant shall be junior and subordinate to any rights Landlord may
have against Tenant.

 

11.                    Bankruptcy.
The obligations of Guarantor under this Guaranty shall not be altered, limited
or affected by any ease, voluntary or involuntary, involving the bankruptcy,
insolvency, receivership, reorganization, liquidation or arrangement of Tenant
(collectively, “Tenant Insolvency Proceeding”),
or any defense which Tenant may have by reason of order, decree, or decision of
any court or administrative body resulting from any such case. Guarantor
acknowledges and agrees that any payment which accrues with respect to the
Guaranteed Obligations (including, without limitation, the payment of rent) after
the commencement of any such proceeding (or, if any such payment ceases to
accrue by operation of law by reason, of the commencement of such proceeding,
such payment as would have accrued if said proceedings had not been commenced)
shall be included in Guarantor’s obligations hereunder because it is the
intention, of the parties that said obligations should be determined without
regard to any rule or law or order which may relieve Tenant of any of the
Guaranteed Obligations. In any Tenant Insolvency Proceeding, Guarantor hereby
permits any trustee in bankruptcy, receiver, debtor-in-possession, assignee for
the benefit of creditors, or similar person to pay Landlord, or allow the claim
of Landlord in respect of, any such payment accruing after the date on which
such proceeding is commenced. Guarantor hereby assigns to Landlord, to the
extent of any payment which accrues with respect to the Guaranteed Obligations
(including, without limitation, the payment of rent) that is due and owing but
not paid by Tenant or Guarantor, Guarantor’s rights to receive in any Tenant
Insolvency Proceeding any payments from any trustee in bankruptcy, receiver,
debtor-in-possession, assignee for the benefit of creditors or similar person
by way of dividend, adequate protection payment or otherwise.

 

12.                    Notices.
Any notice, statement, demand, consent, approval, or other communication
required or permitted to be given, rendered or made by either party to the
other, pursuant to this Guaranty or pursuant to any applicable law or requirement
of public authority, shall be in writing (whether or not so stated elsewhere in
this Guaranty) and shall be deemed to have been properly given, rendered or
made only if hand-delivered or sent by commercial overnight carrier, addressed
to the recipient(s) at the address set forth for notices for such
recipient(s) under the Lease, provided that the address for notices to
Guarantor shall be the same as for Tenant under the Lease. Such notices shall
be deemed to have been given upon the earlier of actual receipt by the intended
recipient and one day after deposit with commercial overnight carrier. By
giving notice as provided above, any party may designate a different address
for notices, statements, demands, consents, approvals or other communications intended
for it.

 

E-3

 

13.                    Authority;
Representations and Warranties. Guarantor represents and warrants to
Landlord as follows:

 

13.1               No consent of any
other person or entity, including, without limitation, any creditors of
Guarantor, and no license, permit, approval or authorization of, exemption by,
notice or report to, or registration, filing or declaration with, any
governmental authority is required by Guarantor in connection with this
Guaranty or the execution, delivery, performance, validity, or enforceability
of this Guaranty and all obligations required hereunder. This Guaranty has been
duly executed and delivered by Guarantor.

 

13.2               To Guarantor’s
knowledge, the execution, delivery and performance of this Guaranty will not
violate any provision of any existing law or regulation binding on Guarantor,
or any order, judgment, award or decree of any court, arbitrator or
governmental authority binding on Guarantor, or of any mortgage, indenture,
lease, contract or other agreement, instrument or undertaking to which a
Guarantor is a party or by which Guarantor or any of a Guarantor’s assets may
be bound, and will not result in, or require, the creation or imposition of any
lien on any of Guarantor’s property, assets or revenues pursuant to the
provisions of any such mortgage, indenture, lease, contract, or other agreement
instrument or undertaking.

 

13.3               Except for the
rights and defenses of prior payment (whether by offset, recoupment or
otherwise) of the Guaranteed Obligations and of the non-occurrence of an event
of default by Tenant under the Lease (as and to the extent Guarantor may raise
the same pursuant to Section 8), the liability of Guarantor hereunder
shall not be impaired, abated, deferred, diminished, modified, released,
terminated or discharged, in whole or in part, or otherwise affected, by any
event, condition, occurrence, circumstance, proceeding, action or failure to
act, with or without notice to, or the knowledge or consent of, Guarantor, including,
without limitation:

 

(a)                      any
amendment, modification or extension of the Lease;

 

(b)                     any extension
of time for performance, whether in whole or in part, given prior to or after
default under the Lease;

 

(c)                      any
exchange, surrender or release, in whole or in part, of any security which may
be held by Landlord at any time for or under the Lease;

 

(d)                     any other
guaranty now or hereafter executed by Guarantor or anyone else;

 

(e)                      any waiver
of or assertion or enforcement or failure or refusal to assert or enforce, in
whole or in part, of any provision, claim, cause of action, right or remedy
which Landlord may, at any time, have under the Lease or with respect to any
guaranty or any security which may be held by Landlord at any time for or under
the Lease or with respect to Tenant;

 

E-4

 

(f)                        any act or
thing or omission or delay to do any act or thing which (i) may in any
manner or to any extent modify the risk of Guarantor, or (ii) would
otherwise operate as a discharge of Guarantor as a matter of law;

 

(g)                     Landlord’s
consent to any assignment or subletting or the assignment or successive
assignments of the Lease by Tenant, or any subletting of the premises demised
under the Lease by Tenant;

 

(h)       the failure to give Guarantor any notice
whatsoever, other than any notice that Landlord is required to give pursuant to
this Guaranty; or,

 

(i)                         any
right, power or privilege that Landlord may now or hereafter have against any
party or collateral.

 

14.                     Estoppel
Statements. The obligations of Tenant under the Lease to execute and
deliver estoppel statements, as therein provided, shall be deemed to also
require Guarantor hereunder to do and provide the same relative to Guarantor.

 

15.                     Successors
and Assigns. This Guaranty shall be binding upon Guarantor, and Guarantor’s
heirs, representatives, administrators, executors, successors and assigns and
shall inure to the benefit of and shall be enforceable by Landlord, its
successors, endorsees and assigns. Any married person liable under this
Guaranty agrees that recourse may be had against community assets and against
his separate property for the satisfaction of all obligations herein
guaranteed. As used herein, the singular shall include the plural, and the
masculine shall include the feminine and neuter and vice versa, if the context
so requires.

 

16.                     Definition
of Landlord. The term “Landlord” whenever used herein refers to and means
the Landlord specifically named in the Lease and also any assignee of said
Landlord, other than assignment for security, and also any successor to the
interest of said Landlord or of any assignee in the Lease or any part thereof,
whether by assignment or otherwise. So long as the Landlord’s interest in or to
the demised premises or the rents, issues and profits therefrom, or in, to or
under the Lease, are subject to any mortgage or deed of trust or assignment for
security, no acquisition by Guarantor of the Landlord’s interest in the demised
premises or under the Lease shall affect the continuing obligations of
Guarantor under this Guaranty, which obligations shall continue in full force
and effect for the benefit of the mortgagee, beneficiary, trustee or assignee
under such mortgage, deed of trust or assignment, or any purchaser at sale by
judicial foreclosure or under private power of sale, and of the successors and
assigns of any such mortgagee, beneficiary, trustee, assignee or purchaser.

 

17.                     Definition
of Tenant. The term “Tenant” whenever used herein refers to and means the
Tenant in the Lease specifically named and also any assignee or Tenant of said
Lease and also any successor to the interests of said Tenant, assignee or
Tenant of such Lease or any part thereof, whether by assignment, Lease or
otherwise.

 

18.                     Costs and
Expenses. In the event of any dispute or litigation with regard to a
default by Tenant under the Lease or a default by Guarantor under this
Guaranty, or with regard to the enforcement or validity of the Lease or this
Guaranty, the prevailing party shall be obligated to pay all actual and
reasonable charges, costs and expenses (including, without

 

E-5

 

limitation, reasonable
attorneys’ fees) incurred by the other party in connection therewith, whether
or not any action or proceeding is commenced regarding such dispute and whether
or not such litigation is prosecuted to judgment, including without limitation,
any cost and expenses (including attorneys’ fees) incurred in connection with
the enforcement or collection of any judgment against Tenant and/or Guarantor.

 

19.                    Governing
Law; Waiver of Jury Trial.

 

19.1               This Guaranty shall
be governed by and construed in accordance with the laws of the State of
California.

 

19.2               To the fullest
extent permitted by law, including laws enacted after the date of this
Guaranty, each of Guarantor and Landlord shall not seek a jury trial, and each
of them hereby waives trial by jury, in any action or proceeding or
counterclaim brought by any party hereto against the other on any matter
whatsoever arising out of or in any way connected with the Lease, this
Guaranty, or any claim of injury or damage, or the enforcement of any remedy
under any statute, emergency or otherwise. Neither Landlord nor Guarantor will
seek to consolidate any such action in which a jury has been waived with any
other action in which a jury trial cannot or has not been waived. It is the
intention of the parties that these provisions shall be subject to no
exceptions.

 

20.                    Severability.
Every provision of this Guaranty is intended to be severable. In the event any
term or provision hereof is declared to be illegal or invalid for any reason
whatsoever by a court of competent jurisdiction, such illegality or invalidity
shall not affect the balance of the terms and provisions hereof which terms and
provisions shall remain binding and enforceable.

 

21.                    Counterparts.
This Guaranty may be executed in any number of counterparts each of which shall
be deemed an original and all of which together shall constitute one and the
same Guaranty with the same effect as if all parties had signed the same
signature page. Any signature page of this Guaranty may be detached from
any counterpart of this Guaranty and re-attached to any other counterpart of
this Guaranty identical in form hereto but having attached to it one or more
additional signature pages.

 

22.                    No Waiver.
No failure or delay on the part of Landlord to exercise any power, right or
privilege under this Guaranty shall impair any such power, right or privilege,
or be construed to be a waiver of any default or any acquiescence therein, nor
shall any single or partial exercise of such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege.

 

23.                    Entire
Agreement. This Guaranty shall constitute the entire agreement between
Guarantor and Landlord with respect to the subject matter hereof. No provision
of this Guaranty or right of Landlord hereunder may be waived nor may Guarantor
be released from any obligation hereunder except as provided in Section 15
above or by a writing duly executed by an authorized member, manager, officer,
director, trustee or other representative of Landlord.

 

24.                    Cumulative
Rights and Remedies. The liability of Guarantor and all rights, powers and
remedies of Landlord hereunder and under any other agreement now or at any time

 

E-6

 

hereafter in force
between Landlord and Guarantor relating to the Lease shall be cumulative and
not alternative and such rights, powers and remedies shall be in addition to
all rights, powers and remedies given to Landlord by law.

 

25.                    Financial
Statements. Within ten (10) days after written request from Landlord
from time to time during the term of this Guaranty, Guarantor shall provide
Landlord with current financial statements setting forth its financial
condition and net worth for the most recent quarter, including balance sheets
and statements of profits and losses. Such statements shall be prepared by an
independent accountant or certified by Guarantor’s president, chief executive
officer or chief financial officer. Landlord shall keep such financial
information confidential and shall only disclose such information to Landlord’s
lenders, consultants, purchasers or investors (who shall be subject to the same
confidentiality obligations) on a need to know basis in connection with the administration of the Lease of this Guaranty.

 

26.                    Jurisdiction
and Venue.

 

26.1               Guarantor
irrevocably submits to the jurisdiction of any state or federal court with
jurisdiction sitting in the county in which the Building is located over any
suit, action or proceeding arising out of or relating to this Guaranty.
Guarantor hereby agrees that Landlord shall have the option, in its sole
discretion, to lay the venue of any such suit, action or proceeding in the
courts of the State of California or the United States of America for the
Northern District of California, and irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in such
court and any claim that any such suit, action or proceeding brought in such a
court has been brought in an inconvenient forum.

 

26.2               Guarantor hereby
irrevocably appoints Portia Kersten, having an address at 150 California
Street, Suite 450 San Francisco, California 94111, as its authorized agent
to accept and acknowledge, on behalf of Guarantor, service of any and all
process which may be served in any suit, action or proceeding of the nature
referred to above. Guarantor represents and warrants that such agent has agreed
to accept such appointment. Said designation and appointment shall be
irrevocable. If such agent shall cease to act, Guarantor covenants and agrees that
it shall irrevocably designate and appoint without delay another such agent
satisfactory to Landlord and shall promptly deliver to Landlord evidence in
writing of such other agent’s acceptance of such appointment. Guarantor further
agrees and consents that, in addition to any other methods of service of
process provided for under applicable law. all service of process in any
proceeding (i) by the mailing of copies thereof by registered or certified
air mail, postage prepaid, return receipt requested, to Guarantor at its
address set forth above or to such other address of which Guarantor shall have
given written notice to Landlord, or (ii) by serving a copy thereof upon
such authorized agent. Guarantor agrees that either such service shall be
deemed in every respect effective service of process upon Guarantor in any such
suit, action or proceedings and shall, to the fullest extent permitted by law,
be taken and held to be the valid personal service upon and personal delivery
to Guarantor. Nothing in this paragraph shall affect the right of Landlord to
serve process in any manner permitted by law and that service so made shall be
complete upon receipt; except that if Guarantor shall refuse to accept
delivery, service shall be deemed complete on the date such delivery was
attempted or refused.

 

E-7

 

27.                    Capitalized
Terms. Except as otherwise provided herein., all capitalized terms used
herein shall have the same meanings given such terms in the Lease.

 

IN WITNESS WHEREOF,
Guarantor has caused this Guaranty to be duly executed as of the date first
above set forth.

 

	
   

  	
   

  	
  VELTI PLC,

  
	
   

  	
   

  	
  a(n)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Pantelis
  Papageorgiou

  
	
   

  	
   

  	
  Name: 

  	
  Pantelis Papageorgiou

  
	
   

  	
   

  	
  Its: 

  	
  Director of Finance

  
					

 

E-8

 

EXHIBIT “F”

 

PARKING LICENSE

 

This Exhibit (the
“Parking Agreement”) is attached to and made a part of the Lease by and between
PPF OFF 150 CALIFORNIA STREET, LP, a Delaware limited partnership (“Landlord”) and Ad Infuse, Inc., a
Delaware corporation (“Tenant”)
for space in the Building located at 150 California Street, San Francisco,
California.

 

1.                          During
the Term, Tenant agrees to lease from Landlord and Landlord agrees to lease to
Tenant one (1) parking space (the “Space”)
for the use of Tenant and its employees in the parking garage beneath the
Building (the “Garage”). The Space is currently made available on a “valet
park” basis, and Landlord will continue to provide the Space to Tenant on a
“valet park” basis so long as Landlord is not prevented from doing so by
applicable governmental authority. The rent for such space will initially be as
follows; Tenant will pay $450.00 per month for the Space; said rate is subject
to adjustment from time to time. Such charges, if any, shall be payable in
advance to Landlord or such other entity as designated by Landlord, and shall
be sent concurrent with Tenant’s payment of monthly Base Rent to the address
Landlord designates from time to time. Except as otherwise set forth herein
below, no deductions from such charges, if any, shall be made for days on which
the applicable Garage is not used by Tenant.

 

2.                          Tenant
shall at all times comply with all applicable ordinances, rules, regulations,
codes, laws, statutes and requirements of all federal, state, county and
municipal governmental bodies or their subdivisions respecting the use of the
Garage. Landlord reserves the right to adopt, modify and enforce reasonable rules (“Rules”) governing the use of the Garage
from time to time including any key-card, sticker or other identification or
entrance system and hours of operation. Landlord may elect to provide parking
cards or keys to control access to the Garage. In such event, Landlord shall
provide Tenant with one card or key for the Space, provided that Landlord shall
have the right to require Tenant to place a deposit on such access cards or
keys and to pay a fee for any lost or damaged cards or keys. Landlord may
refuse to permit any person who violates such Rules to park in the Garage,
and any violation of the Rules shall subject the car to removal from the
Garage following reasonable notice. Tenant shall comply with and cause its
employees to comply with all the Rules as well as all reasonable additions
and amendments thereto.

 

3.                          Unless
specified to the contrary above, the parking spaces hereunder shall be provided
on a non-designated “first-come, first-served” basis. Subject to Tenant’s
rights to the reserved spaces set forth above, if any, Landlord reserves the
right to assign other specific parking spaces, and to reserve other parking
spaces for visitors, small cars, handicapped persons and for other tenants,
guests of tenants or other parties, which assignment and reservation or spaces
may be relocated as determined by Landlord from time to time, and Tenant and
persons designated by Tenant hereunder shall not park in any such location
designated for such assigned or reserved parking spaces.

 

4.                          Tenant
shall not store or permit its employees to store any automobiles in the Garage
without the prior written consent of the operator. Except for emergency
repairs, Tenant

 

F-1

 

and its employees shall
not perform any work on any automobiles while located in the Garage. If it is
necessary for Tenant or its employees to leave an automobile in the Garage
overnight, Tenant shall provide the operator with prior notice thereof
designating the license plate number and model of such automobile.

 

5.                          Landlord
shall have the right to temporarily close the Garage, or certain areas therein
in order to perform necessary repairs, maintenance and improvements to the
Garage, and in such events, Landlord shall refund any prepaid parking fee
hereunder for any Space affected by such closure, prorated on a per diem basis.

 

6.                          LANDLORD SHALL NOT BE LIABLE FOR ANY LOSS, INJURY OR
DAMAGE TO PERSONS USING THE GARAGE OR AUTOMOBILES OR OTHER PROPERTY THEREIN, IT
BEING AGREED THAT, TO THE FULLEST EXTENT PERMITTED BY LAW, THE USE OF THE
SPACES SHALL BE AT THE SOLE RISK OF TENANT AND ITS EMPLOYEES. WITHOUT LIMITING
THE FOREGOING, TENANT HEREBY VOLUNTARILY RELEASES, DISCHARGES, WAIVES AND
RELINQUISHES ANY AND ALL ACTIONS OR CAUSES OF ACTION FOR PERSONAL INJURY OR
PROPERTY DAMAGE OCCURRING TO TENANT ARISING AS A RESULT OF PARKING IN THE
GARAGE, OR ANY ACTIVITIES INCIDENTAL THERETO, WHEREVER OR HOWEVER THE SAME MAY OCCUR,
AND FURTHER AGREES THAT TENANT WILL NOT PROSECUTE ANY CLAIM FOR PERSONAL INJURY
OR PROPERTY DAMAGE AGAINST LANDLORD OR ANY  OF
THE LANDLORD RELATED PARTIES FOR ANY SAID CAUSES OF ACTION. IN ALL EVENTS,
TENANT AGREES TO LOOK FIRST TO ITS INSURANCE CARRIER AND TO REQUIRE THAT
TENANT’S EMPLOYEES LOOK FIRST TO THEIR RESPECTIVE INSURANCE CARRIERS FOR
PAYMENT OF ANY LOSSES SUSTAINED IN CONNECTION WITH ANY USE OF THE GARAGE. TENANT
HEREBY WAIVES ON BEHALF OF ITS INSURANCE CARRIERS ALL RIGHTS OF SUBROGATION
AGAINST LANDLORD OR LANDLORD RELATED PARTIES.

 

7.                          Tenant
shall not assign its rights under this Parking Agreement or sublease any of the
parking spaces without the consent of Landlord. Landlord shall have the right
to terminate this Parking Agreement with respect to any parking spaces that
Tenant desires to sublet or assign its rights thereto.

 

8.                          Landlord
hereby reserves the right to enter into a management agreement or lease with
another entity for the operation of the Garage (“Operator”). In such event, Tenant, upon request of Landlord,
shall enter into a parking agreement upon substantially the same terms
hereunder with the Operator and pay the Operator the monthly charge established
hereunder, and Landlord shall have no liability for claims arising through acts
or omissions of the Operator. It is understood and agreed that the identity of
the Operator may change from time to time during the Term. In connection
therewith, any parking lease or agreement entered into between Tenant and any
Operator shall be freely assignable by such Operator or any successors thereto.

 

F-2

 

 

FIRST AMENDMENT TO LEASE

 

THIS
FIRST AMENDMENT TO LEASE (“First
Amendment”) is made and entered into as of March 5, 2010 (“Execution Date”), by and between PPF OFF
150 CALIFORNIA STREET, LP, a Delaware limited partnership (“Landlord”), and VELTI USA, INC., a Delaware corporation (“Tenant”), with reference to the following
facts:

 

A.       Landlord and Tenant (as
successor-in-interest to Ad Infuse, Inc., a Delaware corporation) are
parties to that certain lease dated as of September 23, 2009 (the “Lease”), pursuant to which Landlord leases
to Tenant certain space in the building located at 150 California Street, San
Francisco, California (the “Building”),
which space currently consists of approximately 5,416 rentable square feet on
the fourth (4th) floor of the Building (commonly known as Suite 450), and
approximately 714 rentable square feet on the sixth (6th) floor of the Building
(commonly known as Suite 610), all as more particularly described in the
Lease (the “Original Premises”).

 

B.        Landlord and Tenant are currently
contemplating entering into an amendment to the Lease (the “10th Floor Amendment”) pursuant to which
Tenant will lease certain space on the tenth (10th) floor of the Building (the “Substitution Space”). In order to address
certain immediate additional space needs of Tenant, Landlord and Tenant desire
to enter into this First Amendment to provide, on a temporary basis, for the
addition to the Original Premises of certain space containing approximately
3,972 rentable square feet on the second (2nd) floor of the Building and
commonly known as Suite 200 (the “Temporary
Space”), on and subject to the terms and conditions of this First
Amendment. The Temporary Space is more particularly shown on Exhibit A attached hereto.

 

NOW,
THEREFORE, in consideration of the above recitals which by
this reference are incorporated herein, the mutual covenants and conditions
contained herein and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Landlord and Tenant agree as follows:

 

1.         Lease of
Temporary Space. Effective as of one (1) business day after
the Execution Date (the “Temporary Space
Effective Date”), the Original Premises is increased by the addition
of the Temporary Space, and from and after the Temporary Space Effective Date,
the Original Premises and the Temporary Space, collectively, shall be deemed
the Premises, as defined in the Lease. The term of the Lease for the Temporary
Space (the “Temporary Space Term”)
shall commence on the Temporary Space Effective Date and shall end on the
earlier of (a) three (3) Business Days after the date on which
Landlord notifies Tenant, pursuant to the provisions thereof that the work to
be performed by Landlord in the Substitution Space is substantially complete,
and (b) the date Tenant first occupies all or any portion of the
Substitution Space for the conduct of its business, unless sooner terminated in
accordance with the terms of the Lease (the “Temporary
Space Termination Date”). The Temporary Space is subject to all the
terms and conditions of the Lease, as expressly modified hereby.

 

2.         Base Rent.  In addition to Tenant’s obligation to pay Base Rent for the
Original Premises, Tenant shall pay Landlord Base Rent for the Temporary Space
in an amount equal to

 

 

$7,240.75 per month. All
such Base Rent shall be payable by Tenant in accordance with the terms of the
Lease. Notwithstanding the foregoing to the contrary, Landlord hereby agrees to
waive Tenant’s obligation to pay Base Rent for the Temporary Space for the
Temporary Space Term (the “Abated Base Rent”);
provided, however, if for any reason the 10th Floor Amendment is not fully
executed and delivered by Landlord and Tenant prior to the Temporary Space
Termination Date, then Tenant shall pay to Landlord on the Temporary Space
Termination Date an amount equal to the Abated Base Rent. Such amount shall be
deemed additional Rent under the Lease. Notwithstanding the foregoing, if (i) the
10th Floor Amendment is not executed and delivered by Landlord prior to the
Temporary Space Termination Date, for any reason other than delays by Tenant,
or Tenant’s bad faith in negotiating the 10th Floor Amendment, and/or (ii) there
are delays in delivering the Substitution Space to Tenant by the Temporary
Space Termination Date which are not caused by Tenant Delay (collectively, “Excused Delay”), the Temporary Space Term
will be deemed extended for the period of such Excused Delay, and Tenant shall
not be required to pay the Abated Rent solely due to such Excused Delay.

 

3.         Operating Expenses, Taxes
and Insurance Expenses.
Tenant shall not be obligated to pay Tenant’s Share of Operating
Expenses, Taxes or Insurance Expenses with respect to the Temporary Space,
provided, however, the foregoing shall not affect Tenant’s obligation to pay
Tenant’s Share of Operating Expenses, Taxes and Insurance Expenses with respect
to the Original Premises as provided in the Lease.

 

4.         Condition
of Temporary Space. Tenant has inspected the Temporary Space and
agrees to accept the same “as is” without any agreements, representations,
understandings or obligations on the part of Landlord to (i) perform any
alterations, additions, repairs or improvements in the Temporary Space, (ii) fund
or otherwise pay for any alterations, additions, repairs or improvements to the
Temporary Space, or (iii) except as expressly set forth in Sections 2 and
3 above, grant Tenant any free rent, concessions, credits or contributions of
money with respect to the Temporary Space. Tenant shall vacate the Temporary
Space on or prior to the Temporary Space Termination Date and deliver up the
Temporary Space to Landlord in as good condition as the Temporary Space was
delivered to Tenant, ordinary wear and tear excepted.

 

5.         [INTENTIONALLY DELETED]

 

6.         No
Extension or Expansion options. The parties hereto acknowledge
and agree that any options or other rights contained in the Lease which entitle
Tenant to extend the term of the Lease or expand the Premises shall apply only
to the Original Premises and shall not be applicable to the Temporary Space in
any manner.

 

7.         Holding
Over. Tenant may remain in the Tempporary Space for up to five (5) days
following the expiration of the Temporary Space Term at no cost or charge to
Tenant; however, if Tenant should remain in possession of the Temporary Space
for more than five (5) days after the expiration or earlier termination of
the Temporary Space Term, such holding over shall be subject to the provisions
of Section 36 of the Lease. In addition, such holding over shall be deemed
a default by Tenant under the Lease, and Landlord shall have all rights and
remedies available to Landlord under the Lease with respect thereto.

 

2

 

8.         Miscellaneous.

 

(a)       This First Amendment and
the attached exhibit, which is hereby incorporated into and made a part of this
First Amendment, set forth the entire agreement between the parties with
respect to the matters set forth herein. There have been no additional oral or
written representations or agreements.

 

(b)       Except as herein modified
or amended, the provisions, conditions and terms of the Lease shall remain
unchanged and in full force and effect.

 

(c)       In the case of any
inconsistency between the provisions of the Lease and this First Amendment, the
provisions of this First Amendment shall govern and control.

 

(d)       Submission of this First
Amendment by Landlord is not an offer to enter into this First Amendment but
rather is a solicitation for such an offer by Tenant. Landlord shall not be
bound by this First Amendment until Landlord has executed and delivered the
same to Tenant.

 

(e)       The capitalized terms used
in this First Amendment shall have the same definitions as set forth in the
Lease to the extent that such capitalized terms are defined therein and not
redefined in this First Amendment.

 

(f)        Tenant hereby represents
to Landlord that Tenant has dealt with no broker in connection with the
Temporary Space or this First Amendment. Tenant agrees to defend, indemnify and
hold Landlord harmless from all claims of any brokers claiming to have
represented Tenant in connection with the Temporary Space or this First
Amendment. Landlord hereby represents to Tenant that Landlord has dealt with no
broker in connection with this First Amendment other than CB Richard Ellis.
Landlord agrees to defend, indemnify and hold Tenant harmless from all claims
of any brokers claiming to have represented Landlord in connection with this
First Amendment.

 

(g)       Each signatory of this
First Amendment represents hereby that he or she has the authority to execute
and deliver the same on behalf of the party hereto for which such signatory is
acting.

 

(h)       At Landlord’s option, this
First Amendment shall be of no force and effect unless and until accepted by
any guarantors of the Lease, who by signing below agree that their guaranty
shall apply to the Lease as amended herein, unless such requirement is waived
by Landlord in writing.

 

(i)        Tenant represents and
warrants to Landlord that Tenant is currently in compliance with and shall at
all times during the term of the Lease (including any extension thereof) remain
in compliance with the regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury
(including those named on OFAC’s Specially Designated and Blocked Persons List)
and any statute, executive order (including the September 24, 2001,
Executive Order Blocking Property and Prohibiting Transactions with Persons Who
Commit, Threaten to Commit, or Support Terrorism), or other governmental action
relating thereto.

 

3

 

(j)        This First Amendment may
be executed in multiple counterparts, each of which is deemed an original but
together constitute one and the same instrument. This First Amendment may be
executed in so-called “pdf’ format
and each party has the right to rely upon a pdf counterpart of this First
Amendment signed by the other party to the same extent as if such party had
received an original counterpart.

 

IN
WITNESS WHEREOF, Landlord and Tenant have duly executed this
First Amendment as of the day and year first above written.

 

[SIGNATURES ON FOLLOWING PAGE]

 

4

 

LANDLORD:

 

PPF OFF
150 CALIFORNIA STREET, LP, a Delaware limited partnership

 

By:          PPF OFF GP, LLC, a
Delaware limited liability company, 

its General Partner

 

By:          PPF OFF,
LLC,

a Delaware limited
liability company, its Member

 

By:          PPF OP, LP, a Delaware
limited partnership, its Member

 

By:          PPF OPGP, LLC,

a Delaware limited liability company, its General Partner

 

By:          Prime Property Fund,
LLC, a Delaware limited liability company, its Member

 

	
   

  	
  By:

  	
  Morgan Stanley Real
  Estate Advisor, Inc., a Delaware corporation, its Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kevin Pirozzoli

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  Kevin Pirozzoli

  
	
   

  	
   

  	
   

  	
  Title: 

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TENANT

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VELTI USA, INC.,

  	
   

  	
   

  	
   

  
	
  A Delaware corporation

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ David J. Power

  	
   

  	
   

  	
   

  
	
  Print
  Name: 

  	
  David J. Power

  	
   

  	
   

  	
   

  
	
  Its:

  	
  General Counsel

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GUARANTOR:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VELTI PLC,

  	
   

  	
   

  	
   

  
	
  a(n)

  	
  Jersey,
  Channel Islands Company

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Alex Moukas

  	
   

  	
   

  	
   

  
	
  Print
  Name: 

  	
  Alex Moukas

  	
   

  	
   

  	
   

  
	
  Its:
  

  	
  CEO

  	
   

  	
   

  	
   

  

 

5

 

EXHIBIT A

 

LOCATION OF TEMPORARY SPACE

 

 

 

SECOND AMENDMENT TO LEASE

 

THIS
SECOND AMENDMENT TO LEASE (“Second
Amendment”) is entered into as of March 17, 2010 (the “Effective Date”), by and between PPF OFF 150 CALIFORNIA STREET LP, a
Delaware limited partnership (“Landlord”)
and VELTI USA, INC., a Delaware
corporation (“Tenant”), with
reference to the following facts:

 

A.       Landlord and Tenant (successor in interest to
Ad Infuse, Inc.) are parties to that certain lease dated as of September 23,
2009 (the “Original Lease”), which
lease has been previously amended by that certain First Amendment to Lease
dated as of March     , 2010 (the “First Amendment”) (the Original Lease, as
so amended, being referred to herein as the “Lease”),
pursuant to which Landlord leases to Tenant space (the “Original Premises”) currently containing (i) approximately
5,416 rentable square feet on the fourth (4th) floor and (ii) approximately
714 rentable square feet on the sixth (6th) floor, described as Suites No. 460
and 610, respectively, in the building located at 150 California, San
Francisco, California (the “Building”).
Pursuant to the First Amendment, Tenant also occupies certain Temporary Space
on the second (2nd) floor of the Building.

 

B.        Landlord and Tenant agree to relocate Tenant
from the Original Premises and the Temporary Space to 9,875 rentable square
feet of space described as Suite No. 1000 and consisting of the
entire tenth (10th) floor of the Building as further shown on the drawing
attached hereto as Exhibit A
(the “Substitution Space”), on the
terms and conditions set forth herein.

 

C.        The term of the Lease is scheduled to expire
on November 8, 2012 (“Current
Termination Date”), and the parties desire to extend the term of the
Lease, all on the terms and conditions as set forth herein.

 

NOW, THEREFORE, in consideration of the above recitals
which by this reference are incorporated herein, the mutual covenants and
conditions contained herein and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:

 

1.         Substitution.

 

(a)       Generally. Effective as of the earlier of (i) one (1) business day
after the date on which Landlord notifies Tenant that the work to be performed
by Landlord in the Substitution Space pursuant to Section 6 below is
substantially complete, subject to the completion of minor “punch list” items
or would have been substantially complete but for any Tenant Delay (defined in Section 6
below) or (ii) the date Tenant first occupies all or any portion of the
Substitution Space for the conduct of its business (the “Substitution Date”), the Substitution Space
is substituted for the Original Premises and the Temporary Space and, from and
after the Substitution Date, the Premises, as defined in the Lease, shall be
deemed to mean the Substitution Space. The parties estimate that the
Substitution Date will be May 15, 2010 (the “Target Substitution Date”). Promptly following the
Substitution Date, Landlord and Tenant shall enter into a letter agreement in
the form attached hereto as Exhibit B,
specifying and/or confirming the Substitution Date and the schedule of Base
Rent payable hereunder. Notwithstanding the foregoing, if Landlord is unable to
deliver the Substitution Space to Tenant

 

 

by August 1, 2010
(the “Outside Delivery Date”), for
any reason other than Tenant Delay (defined in Section 6 below) or delays
attributable to Force Majeure, Tenant shall have the right to terminate the
provisions of this Second Amendment which govern Tenant’s leasing of the
Substitution Space by written notice to Landlord delivered on or before the
date that is ten (10) days following the Outside Delivery Date, and in
such event Landlord shall refund to Tenant, all Rent and other amounts
previously delivered to Landlord with respect to the Substitution Space,
including any increase in the Security Deposit applicable to the Substitution
Space.

 

(b)       Term. The term for the Substitution Space shall commence on the
Substitution Date and end on the Extended Termination Date (defined in Section 2
below). The Substitution Space shall be subject to all the terms and conditions
of the Lease except as expressly modified herein. Effective as of the
Substitution Date, the Lease shall be terminated with respect to the Original
Premises and Temporary Space, and, unless otherwise specified, “Premises” shall mean the Substitution
Space. Tenant shall be permitted to remain in partial occupancy of the Original
Premises and/or the Temporary Space for a period of five (5) days after
the Substitution Date (the “Relocation Period”)
in order to facilitate the phasing of Tenant’s move to the Substitution Space,
with no obligation to pay Rent for the Original Premises or Temporary Space
during the Relocation Period. On or before the expiration of the Relocation
Period, Tenant will vacate the Original Premises and the Temporary Space and
return the same to Landlord in “broom clean” condition, with all improvements
constructed therein by Tenant, as well as any cabling installed by or on behalf
of Tenant in the Original Premises and/or the Temporary Space, removed and any
damage caused by such removal repaired, to Landlord’s reasonable satisfaction
and otherwise in accordance with the terms and conditions of the Lease.

 

2.         Extension. The term of the Lease is hereby extended for
a period of four (4) years following the Substitution Date and shall
expire on the date immediately preceding the fourth (4th) anniversary of the
Extension Date, defined below (the “Extended
Termination Date”), unless sooner terminated in accordance with the
terms of the Lease, as amended hereby. That portion of the term of the Lease
commencing on the day immediately following the Current Termination Date (the “Extension Date”) and ending on the Extended
Termination Date shall be referred to herein as the “Extended Term”, and unless the context clearly provides
otherwise, from and after the Extension Date, references in the Lease to the “Term”
shall be deemed to include the Extended Term, and references in the Lease to
the “Expiration Date” shall mean the Extended Termination Date.

 

3.         Base Rent. From and after the Substitution Date,
through the Extended Term, the Base Rent for the Substitution Space shall be as
follows:

 

	
  Period Following Substitution Date

  	
   

  	
  Annual Rate Per

  Rentable Square Foot

  	
   

  	
  Monthly

  Base Rent*

  	
   

  
	
  Months 1 - 12

  	
   

  	
  $

  	
  34.50

  	
   

  	
  $

  	
  20,125.00

  	
   

  
	
  Months 13 - 18

  	
   

  	
  $

  	
  35.50

  	
   

  	
  $

  	
  24,989.04

  	
   

  
	
  Months 19 - 24

  	
   

  	
  $

  	
  35.50

  	
   

  	
  $

  	
  29,213.54

  	
   

  
	
  Months 25 - 36

  	
   

  	
  $

  	
  36.50

  	
   

  	
  $

  	
  30,036.46

  	
   

  
	
  Months 37 - 48

  	
   

  	
  $

  	
  37.50

  	
   

  	
  $

  	
  30,859.36

  	
   

  

 

*     During “Months
1-12”, Base Rent will be calculated as if the Substitution Space contains 7,000
rentable square feet of space and during “Months 13-18”, Base Rent will be
calculated as if the Substitution Space contains 8,447 rentable square feet.

 

2

 

4.         Additional Security Deposit. Concurrently with Tenant’s execution and
delivery of this Second Amendment to Landlord, Tenant shall pay Landlord the
sum of $10,624.29 which will be added to and become a part of the Security
Deposit held by Landlord. Accordingly, the Security Deposit will be increased
to $29,266.79.

 

5.         Tenant’s Share; Base Year. From and after Substitution Date, Tenant’s
Share shall be adjusted to be 4.9%, and the Base Year shall remain 2010.

 

6.         Condition of Substitution
Space.

 

(a)       “As-Is”. Except as expressly set forth herein, Tenant has inspected the
Substitution Space and agrees to accept the same “as is” without any
agreements, representations, understandings or obligations on the part of
Landlord to (i) perform any alterations, additions, repairs or
improvements, (ii) fund or otherwise pay for any alterations, additions,
repairs or improvements to the Substitution Space, or (iii) grant Tenant
any free rent, concessions, credits or contributions of money with respect to
the Substitution Space. Tenant will be responsible for Tenant’s costs of
relocation, including the cost of cable installation and any custom signage.

 

(b)       Tenant Improvements.

 

(i)        Generally. Landlord shall, prior to the Substitution Date (subject to Tenant
Delay, as described below) construct improvements in the Substitution Space
(the “Substitution Space Tenant Improvements”).
The Tenant Improvements shall be constructed using Building-standard materials
and specifications pursuant to plans approved by Landlord, as described below.

 

(ii)       Plans. Tenant shall cause Brereton Architects to complete the architectural
drawings for the Substitution Space Tenant Improvements in a form which is
complete to allow subcontractors to bid on the work and to obtain all
applicable permits (collectively, the “Plans”)
and shall submit draft Plans to Landlord for Landlord’s approval, which will
not be unreasonably withheld and will be granted or withheld within five (5) Business
Days following submission. If Landlord disapproves the draft Plans, Tenant
shall, within three (3) Business Days, revise the Plans to address
Landlord’s concerns and resubmit the same to Landlord for review. Tenant will
submit draft Plans to Landlord in sufficient time to allow Landlord to approve
the Plans on or before April 15, 2010 (the “Plan Approval Date”). If Landlord disapproves Tenant’s second
(2nd) submission of draft Plans, Tenant will, within three (3) Business
Days, further revise the Plans to address Landlord’s concerns (the “Second
Revision”) and resubmit the same to Landlord for review. This process will
continue until Landlord shall have approved Plans.

 

(iii)      Tenant Delay. If there is a delay in Landlord’s
construction of the Substitution Space Tenant Improvements beyond the Target
Substitution Date as a result of any of the following (each a “Tenant Delay”), then, for the purposes of
establishing the date upon which Tenant’s obligation to pay Base Rent for the
Substitution Space commences, the Substitution Date shall be deemed to be date
upon the construction of the Tenant Improvements would have been completed
absent such Tenant Delay:

 

3

 

(1)        Any (x) failure on the part of the
Tenant to revise draft Plans within the time period described in Section (b)(ii) above,
if such failure results in the Plans not being approved as of the Plan Approval
Date or (y) delay in the process of Landlord’s approval of the Plans
beyond the Plan Approval Date due to the necessity for revisions to the Plans
beyond the Second Revision;

 

(2)        Tenant’s change in the Plans after Landlord’s
approval of the Plans; or

 

(3)        Tenant’s request that construction of the
Substitution Space Tenant Improvements be delayed.

 

(c)       Cost of Construction.

 

(i)        Allowance. Landlord agrees to contribute a sum of $182,000 (the “Allowance”) toward the cost of the design
and construction of the Tenant Improvements. The Allowance may only be used for
(x) the cost of preparing design and construction documents and mechanical
and electrical plans and any required permits (inclusive of any such costs
incurred leading up to and as of the Effective Date), (y) hard costs of
construction, and (z) payment of Landlord’s construction management fee as
described below (collectively, the “Allowance
Items”). The Allowance may not be used for furniture, equipment,
trade fixtures, cabling, or moving expenses.

 

(ii)       Excess Costs. If the aggregate of the Allowance Items
exceeds the Allowance (“Excess Costs”),
Tenant shall be solely responsible for the payment of such excess costs as
additional rent; initially, Tenant will pre-pay any Excess Costs prior to the
commencement of Construction; thereafter, if any charges result in an increase
in Excess Costs, Tenant will pay such increased Excess Costs within ten (10) Business
Days following delivery of Landlord’s invoice therefor to Tenant.

 

(iii)      Construction Management Fee. Landlord shall be entitled to a
construction management fee with respect to the construction of the Tenant
Improvements in the amount of five percent (5%) of the costs described in
clauses (x) and (y) of Section 6(c)(i) above.

 

(d)       Landlord’s Work. In addition to the construction of the
Tenant Improvements, Landlord, at Landlord’s sole cost and expense, will
construct one (1) additional stall in the women’s restroom on the tenth
(10th) floor of the Building, using Building-standard designs and materials.

 

7.         Holding Over. If Tenant continues to occupy the Original
Premises and/or Temporary Space after the expiration of the Relocation Period,
occupancy of the Original Premises and/or Temporary Space subsequent to the
expiration of the Relocation Period shall be subject to all the terms and
provisions of Article 36 of the Original Lease (for such purposes, the
Rent payable by Tenant for the Temporary Space will be at the same rate as the
Rent payable for the Original Premises).

 

4

 

 

8.         Right of First Opportunity.

 

(a)       Generally. From and after the Substitution Date, Tenant shall have a continuing
right of first opportunity (the “Right of
First Opportunity”) to lease any Available (defined below) space
located on the eleventh (11th) floor of the Building (all or any portion of
which is referred to herein as “ROFO Space”)
for a term that is the greater of (i) the then-remaining Extended Term or (ii) three
(3) full years following the ROFO Delivery Date, defined below (the “ROFO Term”).

 

(b)       ROFO Interest Notice. At any time, but no more often than twice
in any calendar year (and in any event only during the calendar months of April and
September), Tenant may provide Landlord written notice of its interest in
leasing ROFO Space within the ensuing six (6) month period and requesting
a schedule of any ROFO Space which is anticipated to become Available during
such period (the “ROFO Interest Notice”).
Within fifteen (15) business days after Tenant’s delivery of a ROFO Interest
Notice, Landlord shall notify Tenant if any portion of the ROFO Space is
Available or is expected to become Available during the ensuing six (6) month
period. If any portion of the ROFO Space is expected to become Available during
the applicable year period, Landlord shall promptly notify Tenant of such fact
(“Landlord’s Availability Notice”).
Landlord’s Availability Notice will set forth the location and configuration of
any such ROFO Space, the date upon which such ROFO Space is anticipated to
become Available (“ROFO Target Date”)
and the terms upon which Landlord proposes to lease such ROFO Space to Tenant
for the ROFO Term. If the ROFO Term would extend beyond the Extended
Termination Date, then Landlord’s Availability Notice shall so specify, and
shall expressly permit Tenant to extend the term of the Lease with respect to
the Substitution Space so as to be coterminous with the ROFO Term and will set
forth the terms and conditions upon which Landlord is willing to so extend the
term of the Lease with respect to the Substitution Space. If Tenant desires to
lease any ROFO Space which Landlord has included as Available in Landlord’s
Availability Notice, and provided the conditions described below are satisfied,
Tenant shall have ten (10) business days following delivery of Landlord’s
Availability Notice in which to provide Landlord with a notice exercising the
Right of First Offer with respect to all (but not a portion) of one or more
specific ROFO Spaces described in Landlord’s Availability Notice (a “ROFO Exercise Notice”).

 

(c)       Available. ROFO Space shall be deemed Available if (i) the existing tenant
in such space is expected to actually vacate the space, (ii) Landlord is
not contemplating negotiating a renewal of the existing tenant’s lease for such
space and, (iii) as of the date of ROFO Interest Notice, there are not
ongoing negotiations in existence pursuant to which Landlord and any third
party are attempting to reach agreement upon the terms and conditions of a
proposed lease (or other occupancy agreement) of all or any substantial portion
of such space to a third party.

 

(d)       Conditions. Notwithstanding any other provision of this Section 8 to the
contrary, the Right of First Opportunity shall be available to Tenant if and
only if each of the following conditions are satisfied:

 

(i)        Tenant is not in Default under the Lease (as
amended hereby) on the date that any Landlord’s Availability Notice is
delivered;

 

5

 

(ii)       Tenant (without reference to any subtenants)
is in occupancy of at least 85% of the Premises pursuant to the Lease, as
amended hereby, at the time of Tenant’s exercise of the Right of First
Opportunity;

 

(iii)      Tenant has not assigned its interest in the
Lease (other than an assignment to an Affiliate) at the time of Tenant’s
exercise of the Right of First Opportunity.

 

(e)       Delivery and Condition of ROFO Space. If Tenant exercises the Right of First
Opportunity, Landlord will use its diligent efforts to make the applicable ROFO
Space available for delivery to Tenant on the applicable ROFO Target Date.
Landlord shall deliver the applicable ROFO Space to Tenant in vacant,
broom-clean condition, but otherwise in its then “as built” condition and
configuration (the date of such delivery being referred to herein as the “ROFO Delivery Date”). If Landlord fails to
deliver the ROFO Space to Tenant by sixty (60) days after the ROFO Target Date
for any reason other than delays caused or requested by Tenant or delay caused
by Force Majeure, Tenant may terminate the Lease as to the ROFO Space upon
written notice to Landlord delivered within ten (10) days after the ROFO
Target Date, and Landlord shall refund to Tenant all Rent and other amounts
previously delivered to Landlord with respect to the ROFO Space, including any
increase in the Security Deposit applicable to the ROFO Space.

 

(f)        Term; Rent Commencement. The term for any ROFO Space shall commence
on the ROFO Delivery Date. Any such ROFO Space shall be subject to all the
terms and conditions of the Lease, as amended hereby, except as set forth
herein and except that the Base Rent and allowances, credits, abatements or
other concessions (if any) applicable to the ROFO Space shall be as set forth
in the applicable Landlord’s Availability Notice.

 

(g)       ROFO Amendment. If Tenant is entitled to and properly
exercises the Right of First Opportunity, then Landlord shall prepare and
deliver to Tenant an amendment (the “ROFO
Amendment”) to reflect the commencement date of the term for the
applicable ROFO Space and the Base Rent, other economic terms, rentable area of
the Premises, applicable Tenant’s Share and other appropriate terms. Tenant
shall execute (or make good faith comments to) and return the ROFO Amendment to
Landlord within fifteen (15) business days after Tenant’s receipt of same, but
an otherwise valid exercise of the Right of First Opportunity shall be fully
effective upon delivery of the ROFO Exercise Notice, whether or not the ROFO
Amendment is executed and delivered.

 

(h)       Tenant’s Failure to Exercise ROFO. Notwithstanding the foregoing, if following
delivery of Landlord’s Availability Notice with respect to any ROFO Space,
Tenant does not timely exercise the Right of First Opportunity by delivering
the ROFO Exercise Notice, with respect to any space described in Landlord’s
Availability Notice, then, Landlord shall be free to negotiate and enter into
leases for such ROFO Space with any other parties of its choosing, upon such
terms and conditions as it chooses, with no obligation to Tenant.

 

9.         Revisions to Original Lease. Landlord and Tenant agree that certain
provisions of the Original Lease shall be revised as follows:

 

(a)       Section 7(d) (Insurance Expenses). The following is hereby added to the end of
clause (ii) of Section (d):

 

6

 

“;
provided, that to the extent that any deductible payment incurred by Landlord
in any calendar year pursuant to Landlord’s policy of earthquake insurance
coverage is in excess of $250,000 (any such excess being referred to herein as
the “Excess Deductible Payment”),
then for the purposes of inclusion in Insurance Expenses, any such Excess
Deductible Payment shall be amortized, with interest, over a period of ten (10) years.

 

(b)       Section 7(f) (Audit Right). The first phrase of Section 7(f) of
the Original Lease is hereby deleted in its entirety and replaced with the
following:

 

“Tenant shall have the right to conduct an audit of
Landlord’s books and records relating to Operating Expenses, Taxes and
Insurance Expenses in accordance with the following terms and provisions,
provided that Tenant delivers written notice of its intent to audit within
ninety (90) days after receipt by Tenant of Landlord’s Statement and complete
such audit within one hundred twenty (120) days after the date of Tenant’s
notice of intent to audit:”

 

The first sentence of Section 7(f)(v) of the Original Lease
is hereby deleted in its entirety and replaced with the following:

 

“The audit shall be limited solely to confirming
that the Operating Expenses, Taxes and Insurance Expenses reported in the
Landlord’s Statement are consistent with the terms of the Lease.”

 

(c)       Section 22(b) (Landlord’s Repair; Abatement). The last sentence of Section 22(b) of
the Original Lease is hereby deleted in its entirety and replaced with the
following:

 

“Provided that Tenant is not in default (after the
expiration of applicable notice and cure periods), during any period of time
that all or a material portion of the Premises is rendered untenantable as a
result of a Casualty, Rent shall abate for the portion of the Premises that is
untenantable and not used by Tenant.”

 

(d)       Article 30 (Relocation). Landlord agrees that, provided Tenant has
vacated the Original Premises and occupied the Substitution Space as described
in this Second Amendment, Landlord may only relocate Tenant pursuant to the
provisions of Article 40 of the Original Lease to space on the seventh
(7th) floor of the Building or higher.

 

(e)       4th Floor Tenant Improvement Loan. Pursuant to the provisions of Section 1
of the Work Agreement attached to the Original Lease, Tenant had the right to
borrow up to $54,160.00 from Landlord in order to finance the cost of
constructing Tenant’s

 

7

 

Improvements within the
Original Premises; Tenant exercised such right and borrowed the sum of
$44,174.24. Upon the Substitution Date and Tenant’s relocation from the
Original Premises to the Substitution Space, provided Tenant is not in Default
under the Lease (as amended hereby), all such sums which were loaned by
Landlord to Tenant pursuant to the provisions of Section 1 of the Work
Agreement, and all interest accrued thereon, shall be deemed forgiven, and
Tenant shall have no further obligation to pay Landlord any additional Base
Rent installments representing repayment of such sums.

 

10.       Signage. Landlord, at Landlord’s sole cost and
expense, shall provide Tenant with Building-standard signage in the Building’s
ground floor lobby directory. In the event Tenant occupies any ROFO Space in
accordance with the terms and conditions of the Lease (as hereby amended),
Landlord, at Landlord’s cost and expense, shall provide Tenant with
Building-standard signage in the Building’s ground floor lobby, in the elevator
lobby on the 11th floor of the Building unless Tenant occupies the entire
floor, and at the entrance of the ROFO Space unless Tenant occupies the entire
floor. Tenant will have the right to install custom signage, at Tenant’s
expense, in the Substitution Space or on any other full floor occupied by Tenant
subject to Landlord’s approval and to the requirement that Tenant
remove/restore such signage at the expiration of the Lease or Tenant’s
occupancy of any such floor.

 

11.       Miscellaneous.

 

(a)       This Second Amendment and the attached
exhibits, which are hereby incorporated into and made a part of this Second
Amendment, set forth the entire agreement between the parties with respect to
the matters set forth herein. There have been no additional oral or written
representations or agreements.

 

(b)       Except as herein modified or amended, the
provisions, conditions and terms of the Lease shall remain unchanged and in
full force and effect.

 

(c)       In the case of any inconsistency between the
provisions of the Lease and this Second Amendment, the provisions of this Second
Amendment shall govern and control.

 

(d)       Submission of this Second Amendment by
Landlord is not an offer to enter into this Second Amendment but rather is a
solicitation for such an offer by Tenant. Landlord shall not be bound by this
Second Amendment until Landlord has executed and delivered the same to Tenant.

 

(e)       The capitalized terms used in this Second
Amendment shall have the same definitions as set forth in the Lease to the
extent that such capitalized terms are defined therein and not redefined in
this Second Amendment.

 

(f)        Tenant hereby represents to Landlord that
Tenant has dealt with no broker in connection with this Second Amendment.
Tenant agrees to defend, indemnify and hold Landlord harmless from all claims
of any brokers claiming to have represented Tenant in connection with this
Second Amendment. Landlord hereby represents to Tenant that Landlord has dealt
with no broker in connection with this Second Amendment, other than CB Richard
Ellis (“Landlord’s Broker”), and
Landlord shall be responsible for all fees and/or commissions payable to
Landlord’s Broker in connection with this Second Amendment. Landlord agrees to

 

8

 

defend,
indemnify and hold Tenant harmless from all claims of any brokers claiming to
have represented Landlord in connection with this Second Amendment.

 

(g)       Each signatory of this Second Amendment
represents hereby that he or she has the authority to execute and deliver the
same on behalf of the party hereto for which such signatory is acting.

 

(h)       At Landlord’s option, this Second Amendment
shall be of no force and effect unless and until accepted by Velti PLC, the
original Guarantor of the Lease, who by signing below shall agree that its
guaranty shall apply to the Lease as amended herein.

 

(i)        Tenant represents and warrants to Landlord
that Tenant is currently in compliance with and shall at all times through and
including the Extended Termination Date (including any extension thereof),
remain in compliance with the regulations of the Office of Foreign Asset
Control (“OFAC”) of the Department
of the Treasury and any statute, executive order (including the September 24,
2001, Executive Order Blocking Property and Prohibiting Transactions with
Persons Who Commit, Threaten to Commit, or Support Terrorism), or other
governmental action relating thereto.

 

(j)        This Second Amendment may be executed in
multiple counterparts each of which is deemed an original but together
constitute one and the same instrument. This Second Amendment may be executed
in so-called “pdf” format and each party has the right to rely upon a pdf
counterpart of this Second Amendment signed by the other party to the same
extent as if such party had received an original counterpart.

 

[SIGNATURES
ARE ON FOLLOWING PAGE]

 

9

 

IN WITNESS WHEREOF, Landlord and Tenant have duly executed this
Second Amendment as of the day and year first above written.

 

LANDLORD:

 

PPF OFF 150 CALIFORNIA STREET, LP, a Delaware limited partnership

 

	
  By:

  	
  PPF OFF GP, LLC, a
  Delaware limited liability company,

  
	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PPF
  OFF, LLC,

  
	
   

  	
   

  	
  a
  Delaware limited liability company, its Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PPF
  OP, LP, a Delaware limited partnership, its Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  PPF
  OPGP, LLC,

  
	
   

  	
   

  	
  a
  Delaware limited liability company, its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Prime
  Property Fund, LLC, a Delaware limited liability company, its Member

  

 

	
   

  	
   

  	
  By:

  	
  Morgan
  Stanley Real Estate Advisor, Inc., 

  a Delaware corporation, its Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Keith Fink

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Keith Fink

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Executive Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TENANT:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VELTI
  USA, INC.,

  a Delaware corporation

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Wilson Cheung

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
  Wilson Cheung

  	
   

  	
   

  	
   

  
	
  Its:

  	
  CFO

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  GUARANTOR:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VELTI
  PLC,

  	
   

  	
   

  	
   

  
	
  a(n)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Alex Moukas

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
  Alex Moukas

  	
   

  	
   

  	
   

  
	
  Its:

  	
  CEO

  	
   

  	
   

  	
   

  

 

10

 

EXHIBIT A

 

SUBSTITUTION SPACE

 

 

 

EXHIBIT B

 

SUBSTANTIAL COMPLETION/ACCEPTANCE
LETTER

 

Date
              ,
2010

 

Re:      Second Amendment to Lease
dated as of
              ,
2010, by and between PPF OFF 150 CALIFORNIA
STREET LP, as Landlord, and VELTI
USA, INC., as Tenant, (the “Second Amendment”)
for 9,875 rentable square feet on the tenth (10th) floor of the building
located at 150 California Street, San Francisco, California

 

Dear
              :

 

In accordance with the terms and conditions of the above referenced
Second Amendment, Tenant accepts possession of the Substitute Space and agrees
that the Substitution Date is               ,
2010, that the Extended
Termination Date is               ,
20    , and the
schedule of Base Rent payable for the Substitution Space is the following:

 

	
  Period

  	
   

  	
  Monthly Base Rent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

Please acknowledge your acceptance of possession and agreement to the
terms set forth above by signing all 3 counterparts of this Letter in the space
provided and returning 2 fully executed counterparts to my attention.

 

	
  Sincerely,

  	
   

  	
  Agreed and Accepted:

  

  Tenant: Velti USA, Inc.

  
	
  

  	
   

  	
  By: 

  	
  

  
	
  Property Manager

  	
   

  	
  Name: 

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

[EXHIBIT - - DO NOT SIGN]Exhibit 10.15

 

	
   

  	
  DATED                        

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (1)

  	
  VELTI  PLC                   

  
	
   

  	
   

  	
   

  
	
   

  	
  (2)

  	
   

  

 

 

 

SERVICE AGREEMENT

 

Effective from 1 January 2010

 

 

 

CONTENTS

 

	
  Clause

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS AND INTERPRETATION

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  APPOINTMENT

  	
  2

  
	
   

  	
   

  	
   

  
	
  3.

  	
  DUTIES

  	
  3

  
	
   

  	
   

  	
   

  
	
  4.

  	
  HOURS OF WORK

  	
  5

  
	
   

  	
   

  	
   

  
	
  5.

  	
  DIRECTORSHIPS

  	
  6

  
	
   

  	
   

  	
   

  
	
  6.

  	
  PLACE OF WORK

  	
  6

  
	
   

  	
   

  	
   

  
	
  7.

  	
  SALARY

  	
  7

  
	
   

  	
   

  	
   

  
	
  8.

  	
  EXPENSES

  	
  7

  
	
   

  	
   

  	
   

  
	
  9.

  	
  PENSION AND OTHER BENEFITS

  	
  8

  
	
   

  	
   

  	
   

  
	
  10.

  	
  HOLIDAYS

  	
  9

  
	
   

  	
   

  	
   

  
	
  11.

  	
  SHARE DEALINGS

  	
  9

  
	
   

  	
   

  	
   

  
	
  12.

  	
  CONFLICTS OF INTEREST

  	
  11

  
	
   

  	
   

  	
   

  
	
  13.

  	
  INVENTIONS

  	
  11

  
	
   

  	
   

  	
   

  
	
  14.

  	
  RESTRICTIVE COVENANTS

  	
  12

  
	
   

  	
   

  	
   

  
	
  15.

  	
  CONFIDENTIALITY

  	
  15

  
	
   

  	
   

  	
   

  
	
  16.

  	
  DISCIPLINARY AND GRIEVANCE PROCEDURES

  	
  16

  
	
   

  	
   

  	
   

  
	
  17.

  	
  TERMINATION

  	
  17

  
	
   

  	
   

  	
   

  
	
  18.

  	
  SICKNESS AND INCAPACITY

  	
  18

  
	
   

  	
   

  	
   

  
	
  19.

  	
  TERMINATION BY RECONSTRUCTION

  	
  19

  
	
   

  	
   

  	
   

  
	
  20.

  	
  MISCELLANEOUS

  	
  20

  

 

 

	
  21.

  	
  DEDUCTIONS

  	
  20

  
	
   

  	
   

  	
   

  
	
  22.

  	
  DATA PROTECTION

  	
  21

  
	
   

  	
   

  	
   

  
	
  23.

  	
  CONTINUING PROVISIONS

  	
  21

  
	
   

  	
   

  	
   

  
	
  24.

  	
  NOTICES

  	
  21

  
	
   

  	
   

  	
   

  
	
  25.

  	
  WAIVER

  	
  21

  
	
   

  	
   

  	
   

  
	
  26.

  	
  INVALIDITY

  	
  22

  
	
   

  	
   

  	
   

  
	
  27.

  	
  GOVERNING LAW AND JURISDICTION

  	
  22

  
	
   

  	
   

  	
   

  
	
  28.

  	
  PREVIOUS AGREEMENTS

  	
  22

  

 

 

THIS AGREEMENT is made on                             

 

BETWEEN:

 

(1)                                  VELTI  PLC (a company incorporated in Jersey with registered number
103899) whose registered office is at 22 Grenville Street, St Helier, Jersey,
JE4 8PX (the “Company”); and

 

(2)                                                                 (the “Executive”)

 

IT IS HEREBY AGREED as follows:

 

1.                                       DEFINITIONS
AND INTERPRETATION

 

In this
Agreement, unless the context requires otherwise:

 

“AIM” means the AIM Market of the London Stock Exchange;

 

“AIM Rules” means the “AIM Rules for
Companies” (including the guidance notes thereto) published by the
London Stock Exchange governing interactive admission to AIM and the continuing
obligations of AIM companies and their nominated advisors as may be amended
from time to time:

 

“appointment” means the appointment of the Executive as an employee
and director of the Company under this Agreement;

 

“Board” means the board of directors
of the Company as from time to time constituted and includes any committee of
the Board;

 

“Commencement Date” means 1 January 2010;

 

“EEA” means the European
Economic Association;

 

“financial year” has the meaning given to that
expression in section 390 of the UK Companies Act 2006;

 

“Garden Leave Period” has the meaning given to that expression in Clause
3.2;

 

“Group Company” any company in the Group (other than the Company);

 

“Group” means the Company and any
holding company from time to time of the Company and any subsidiary from time
to time of the Company or of any such holding 

 

1

 

company (for
which purpose “holding company”
and “subsidiary” have the meanings
ascribed to them by section 1159 of the UK Companies Act 2006);

 

“Recognised Investment
Exchange”
has the meaning given to that expression by section 285 of the UK Financial
Services and Markets Act 2000;

 

“subsidiary” has the meaning given in
section 1159 of the UK Companies Act 2006;

 

“Working Day” means a day which is not a
Saturday, Sunday or a public holiday in England and Wales, and for the
purposes of Clauses 10.1, 18.1 and 18.4, a day which is not a Saturday, Sunday or a
public holiday in England and Wales.

 

1.1                                 In this Agreement, unless the
context requires otherwise:

 

(a)                                  references to Clauses are
references to clauses of this Agreement;

 

(b)                                 headings are included for ease
of reference only and shall not affect the interpretation of this Agreement;

 

(c)                                  the singular shall include the
plural and vice versa;

 

(d)                                 the expression “person” shall include corporations, unincorporated
associations and partnerships; and

 

(e)                                  any reference to any statute
or statutory provision shall include that statute or statutory provision as
from time to time amended, modified, replaced or re-enacted (whether before or
after the date of this Agreement) and any order, regulation, instrument or
other subordinate legislation made under it.

 

2.                                       APPOINTMENT

 

2.1                                 The Executive warrants and
represents to the Company that he will not be in breach of any existing or any
former terms of employment applicable to him whether express or implied or of
any other obligation binding on him by reason of him entering into this
Agreement or performing all or any of his duties and obligations under it.

 

2.2                                 The Company shall employ the
Executive and the Executive shall serve the Company as Chief Executive Officer
of the Company and director of the Company upon the terms and conditions
set out in this Agreement.

 

2.3                                 The Executive shall, without
additional remuneration, if and for so long as required by the Board make his
services available to any Group Company and the Executive shall 

 

2

 

co-operate fully and follow all lawful
directions and instructions from such Group Company consistent with his
existing status.

 

2.4                                 Subject to earlier termination
as provided in this Agreement, the Executive’s employment shall be for a period
starting on or with effect from the Commencement Date and continuing until
terminated by either party giving to the other not less than 9 months’ notice
in writing of termination.

 

2.5                                 The Executive agrees that at
its sole and absolute discretion the Company may terminate the Executive’s
employment under this Agreement with immediate effect at any time (whether or not notice to terminate has already been given) by paying to the Executive in
full and final settlement of all claims which he has or may have against the
Company or any director, employee or agent of the Company or any Group Company
under or arising out of his employment with the Company or any such Group
Company, the termination of his employment or otherwise salary in lieu of the
notice period referred to in Clause 2.4 above or remainder of the notice period
if at the Company’s request the Executive has served part of the notice period.

 

2.6                                 The Company may at its
discretion make such a payment as a lump sum or in equal instalments on the
nominated day of the month when the Executive would normally have received his
basic salary if he had worked through his notice period.

 

2.7                                 If the Company decides to make
such payments in instalments such payments will be reduced by any remuneration
earned by the Executive from alternative employment during what would have been
the notice period.  The Executive agrees
to notify the Company without delay if he accepts an offer of employment or any
directorship and if so requested by the Company to provide supporting
documentary evidence regarding his remuneration from subsequent employment.

 

2.8                                 The Executive’s period of
continuous employment with the Company began on                                     .

 

3.                                       DUTIES

 

3.1                                 The Executive shall:

 

(a)                                  devote the whole of his
working time and attention to the performance of his duties under this
Agreement (including, where necessary, outside the Company’s normal office
hours without additional remuneration);

 

(b)                                 use his best endeavours to
promote the business and interests of the Group;

 

3

 

(c)                                  render his services in a
professional and workmanlike manner in willing co-operation with others;

 

(d)                                 diligently perform the duties
and exercise the powers in relation to the Group that are from time to time
assigned to or vested in him by or under the authority of the Board, either
alone or jointly with any other person appointed for such purpose by the Board;

 

(e)                                  promptly notify the Board of any
matter which may come to his attention and which ought properly to be brought
to the attention of the Board;

 

(f)                                    obey all reasonable and lawful
directions given to him by or under the authority of the Board;

 

(g)                                 whenever required to do so by
the Board, give an account to the Board (in writing, if so requested) of all
matters relating to the Group for which he is responsible; and

 

(h)                                 comply with all rules and
regulations from time to time issued by the Company and/or the Group to its
employees and/or officers, so far as applicable to him.

 

3.2                                 Without prejudice to Clause
3.1 after notice of termination has been given by either party pursuant to
Clause 2.4 or if the Executive seeks to or indicates an intention to resign as
a director of the Company or terminate his employment without notice, provided
that the Executive continues to be paid and enjoys his full contractual
benefits until his employment terminates in accordance with the terms of this
Agreement, without giving rise to any claim against the Company or any Group
Company, the Company shall be entitled for all or part of the notice period to:

 

(a)                                  require the Executive to cease
to perform all or any of his duties under this Agreement;

 

(b)                                 exclude the Executive from any
premises of the Company or of any other Group Company other than the Company,
to such extent as the Company may from time to time determine;

 

(c)                                  announce to employees,
suppliers, customers and the London Stock Exchange that the Executive has been
given notice of termination or has resigned (as the case may be), having first
consulted with the Executive with a view to seeking his agreement (such
agreement not to be  unreasonably
withheld) to the form of announcement; and/or

 

4

 

(d)                                 instruct the Executive:

 

(i)                                     not to communicate orally or
in writing with suppliers of the Group in relation to the business of the
Group, or with employees, agents or representatives of the Company or any Group
Company; and

 

(ii)                                  to communicate orally or in writing
with customers of the Group only to the extent that such communication is not
in relation to the business of the Group and is required for the proper
discharge of the Executive’s duties as an employee of or a consultant to any
person other than the Group;

 

until the
Executive’s employment hereunder has terminated and the period during which the
Executive is required to cease to perform all or any of his duties under or is
excluded from any premises under this Clause 3.2 shall be referred to as the “Garden Leave Period”.

 

3.3                                 On commencement of the Garden
Leave Period the Executive will:

 

(a)                                  deliver up to the Company in
accordance with Clause 15.5 all property belonging to the Company and any Group
Company; and

 

(b)                                 resign from all offices and
appointments he holds in the Company and any Group Company.

 

3.4                                 If the Company exercises any
rights it may have under Clause 3.2, the Executive may not be employed by,
become a director of or consultant to, or provide services to any third party
(other than as previously approved for the purposes of this Agreement) without
the prior written consent of the Company (such consent not to be unreasonably
withheld).

 

3.5                                 Whether or not the Company
exercises any rights it has under Clause 3.2 during any period of notice the
Executive shall make reasonable endeavours to be available to perform any of
the Executive’s duties if called upon to do so by the Board.  Except as provided in Clause 3.2 this
Agreement (including, without limitation, the provisions of Clause 14) shall
remain in full force and effect.

 

4.                                       HOURS OF WORK

 

4.1                                 The Company’s normal working
hours are from 9.00 am to 5.00 pm Monday to Friday.  However, owing to the nature of the Executive’s
position his working time is unmeasured and the Executive should work such
hours as are necessary to enable him to perform his duties properly.

 

5

 

4.2                                 The Executive hereby waives
his right not to work in excess of an average of 48 hours per week under the
provisions of the UK Working Time Regulations 1998, which waiver may be
withdrawn by the Executive giving 3 months’ notice in writing to the Company.

 

5.                                       DIRECTORSHIPS

 

5.1                                 The Executive shall be a
director of the Company and, if requested by the Board, shall become and remain
a director of any Group Company as the Board may from time to time
specify.  During the course of the
appointment, the Executive shall not voluntarily resign from any such
directorship except at the request of the Board (and if required to retire by rotation
under the articles of association of the Company, shall stand for re-election)
nor do or refrain from doing anything that would lead to the Executive being
prevented from holding the office of director.

 

5.2                                 In acting as a director of the
Company, the Executive shall at all times comply with the articles of
association from time to time of the Company, the Companies (Jersey) Law 1991
and all other applicable laws.

 

5.3                                 The Executive shall resign
without entitlement to compensation:

 

(a)                                  his office as a director of
the Company on request by the Board on or at any time after termination of his
employment under this Agreement; and

 

(b)                                 any office held by the
Executive in any subsidiary of the Company on request by the Board at any time
(whether during or after the appointment).

 

5.4                                 As security for the
performance of his obligations under Clause 5.3 the Executive irrevocably
appoints the Company (acting by any director) as his attorney in his name
and/or on his behalf to execute and deliver the appropriate resignation
documents and to take any other action necessary to give effect to such
resignation of his directorship of the Company.

 

6.                                       PLACE OF
WORK

 

6.1                                 The Executive shall perform
his duties at any location where the Company or a Group Company has an office
and in accordance with the instructions provided by the Company or Group
Company.

 

6.2                                 The Executive shall also
travel to and render his services at such locations and on such occasions as
the Company may from time to time reasonably require.

 

6

 

7.                                       SALARY

 

7.1                                 The Company shall pay to the
Executive during the continuance of the appointment a basic salary at the rate
of €                         
per annum  (or such higher rate as may
from time to time be determined by the Board and notified in writing to the
Executive).  The Executive’s basic salary
shall accrue from day to day and shall be payable in arrears by equal monthly
instalments on or before the last Working Day of each month.

 

7.2                                 The Executive’s basic salary
shall be inclusive of any fees or other remuneration to which the Executive may
be or may become entitled as a director of the Company or any other Group Company.

 

7.3                                 The
rate of the Executive’s salary shall be reviewed by the Board annually at the
beginning of each calendar year, but without thereby imposing any obligation on
the Company to increase the Executive’s salary on any such review.  Any increase in salary granted on any such
review shall be effective from 1 January in that year.

 

7.4                                 In respect of any financial
year of the Company the Executive may be paid a performance related bonus (a “Bonus”) in addition to the basic salary referred to in
Clause 7.1 if the Remuneration Committee in its absolute discretion so
determines.  Any Bonus in respect of any
financial year of the Company shall be payable to the Executive only if the
appointment continues for the whole of the relevant financial year, and no
Bonus shall be payable at any time after the appointment has terminated or
after the Executive has given or received notice to terminate the
appointment.  For the avoidance of doubt,
payment of a Bonus in any one or more years shall not create any entitlement
for the Executive to be paid any Bonus in any subsequent years nor will it
fetter the Remuneration Committee’s discretion in any way in respect of any
future award of the Bonus.

 

7.5                                 The Executive will be granted
such share options in the Company as the Board at its absolute discretion shall
determine and subject to the rules of any relevant share option scheme
from time to time in force.

 

8.                                       EXPENSES

 

8.1                                 The Executive shall be
reimbursed by the Company in respect of all travelling, entertaining, hotel and
other expenses reasonably and properly incurred by him in carrying out his
duties under this Agreement and vouched for in the manner required by the
Company from time to time.

 

8.2                                 Any credit or charge card
supplied to the Executive by the Company or any Group Company shall be used
solely for expenses incurred by him in the course of the

 

7

 

appointment.  On the termination of the appointment, for
whatever reason, or at the request in writing of the Company or the relevant
Group Company, the Executive shall immediately cease using all such credit and
charge cards and shall forthwith return all such credit and charge cards to the
Company or the relevant Group Company.

 

9.                                       PENSION
AND OTHER BENEFITS

 

9.1                                The Company will meet the
Executive’s compulsory annual contribution to TEBE or any equivalent state
insurance or pension fund provided always that this contribution does not
exceed the maximum cap under these schemes for executive directors of €3,000 in
2010 or such cap as shall be in place in each year.

 

9.2                                Subject to the rules of any applicable
scheme (and such costs not being unreasonable) the Company shall bear the cost
of membership of up to €4,000 of the Executive and his dependants of a private
medical insurance scheme with BUPA or such other reputable medical expenses
insurance scheme as the Company shall decide from time to time. The level of
insurance cover to be provided shall be determined by the Company from time to
time and notified to the Executive.

 

9.3                                 The Executive shall be
protected against loss of life under a policy of insurance to the value of four
times his salary and against personal accident under a policy of insurance,
with sums insured specified from time to time by the Company.

 

9.4                                During the appointment the
Company shall, so long as the Executive is legally entitled to drive, provide
the Executive with a car allowance of €21,000 a year (or such other sum as may
be agreed from time to time) paid in equal monthly instalments together with
the Executive’s salary.  The Executive
will ensure that at all times he has an appropriate car available for use in
carrying out his duties under this Agreement.

 

9.5                                If the Executive uses any car
for the business of the Company or any Group Company, upon the production of
invoices or receipts or other evidence satisfactory to the Company the Company
shall reimburse the Executive in respect of fuel expenses for travel on the
business of the Company or any Group Company.

 

9.6                                If the Executive is convicted
of any offence under road traffic legislation he shall forthwith notify the
Company and shall supply such information in connection therewith as the
Company may request.

 

9.7                                The entitlement of the
Executive to any benefits provided by the Company shall be governed by the
regulations from time to time governing any scheme established or administered
by the Company under which the Company provides such benefits and those
regulations shall be incorporated into this Agreement.

 

8

 

9.8                                The Company reserves the right
to discontinue its membership of any such scheme or to change the provider of the
scheme or amend its terms after giving notice to the Executive.  The Executive shall have no claim against the
Company or any Group Company in respect of any such discontinuance, change of
provider or amendment.

 

9.9                                The provision to the Executive
by the Company of permanent health insurance (if any) shall not affect any
right of the Company to terminate the Executive’s appointment, and the Company
shall not be required to retain the Executive in its employment in order
to  maintain his rights under any such
insurance.

 

10.                                 HOLIDAYS

 

10.1                          The Executive shall be
entitled (without loss of remuneration) in addition to bank and public holidays
to take 22 Working Days’ holiday in each holiday year.  For these purposes, the holiday year shall
start on 1 January each year and run to the next following 31
December.  Holidays shall only be taken
at times agreed between the  Board and
the Executive.

 

10.2                          The Executive’s holiday
entitlement shall accrue pro rata through each year of the appointment.

 

10.3                          The Executive may not, without
the prior written consent of the Board, carry forward any unused part of his
holiday entitlement to a subsequent holiday year and, subject to Clause 10.4,
shall not be entitled to payment in lieu of any unused part of his holiday entitlement.

 

10.4                          On the termination of his
appointment, the Executive shall be entitled to payment in lieu of any
outstanding holiday entitlement in respect of the holiday year in which such
termination occurs and shall repay to the Company any salary received for
holiday taken in excess of his actual entitlement in that holiday year.  Any such repayment may be debited from any
salary or other moneys due to the Executive.

 

10.5                          The Company may at its entire
discretion during any notice period require the Executive to take any holiday
accrued but not taken during the period of his appointment.

 

11.                                 SHARE
DEALINGS

 

11.1                           The Executive
undertakes that whilst he is a director of the Company or any Group Company:

 

(a)                                  he shall not deal in any securities of the Company
or any Group Company unless prior written notice of such proposed dealing has
been given to the 

 

9

 

chairman of the Company (or one or more
other directors appointed for this specific purpose) and he has received
clearance for such dealing from the chairman (or other director, as
appropriate);

 

(b)                                 he shall not deal in any securities of the Company
or any Group Company at any time when he is in possession of inside information
in relation to those securities;

 

(c)                                  he shall use his best endeavours to prevent any
dealings in securities of the Company or any Group Company by any person
connected with him (within the meaning of the articles of association of the
Company) or any investment manager on his behalf or on behalf of any person
connected with him at any time when he would himself be prevented from dealing
in such securities under this Clause 11;

 

(d)                                 he shall use his reasonable endeavours to prevent
any dealings in securities of the Company or any Group Company by any person
connected with him (within the meaning of the articles of association of the
Company) or any investment manager on his behalf or on behalf of any person
connected with him at any time when he would himself be prevented from dealing in
such securities under this Clause 11;

 

(e)                                  he shall comply with all laws and the
terms of the share dealing code adopted by the Company or any Group Company from time to time
 relating to dealings in securities of the
Company and of any other company or any Group Company with which the Company
has any dealings including (without limitation) Part V of the Criminal
Justice Act 1993 and the Financial Services (Jersey) Law 1998; and

 

(f)                                    so long as any securities of the Company or any
Group Company are:

 

(i)    listed on the London Stock Exchange, he
shall observe and comply at all times with the Model Code on dealings in such
securities issued by the UK Financial Services Authority, as amended from time
to time (the “Model Code”); or

 

(ii)   admitted to trading on the AIM Market
operated by the London Stock Exchange, he shall observe and comply at all times
with Rule 21 of the AIM Rules.

 

References in
this Clause 11 to “dealing”, “securities” and “inside information” shall have the meanings given to them in
the UK Listing Rules issued
by the UK Financial Services Authority.

 

10

 

12.                                CONFLICTS OF
INTEREST

 

12.1                          The Executive will not during
his employment introduce to any other person, firm, company or organisation
business of any kind with which the Company or any Group Company for which he
has performed services under this Agreement is able to deal and he will not
have any financial interest in, or derive any financial or other benefit from,
contracts or transactions entered into by the Company or any Group Company for
which he has performed services under this Agreement with any third party
without first disclosing such interest or benefit to the Board and obtaining
its written approval.

 

12.2                          The Executive shall not without
the written consent of the Company during the continuance of his appointment
hereunder (including for the avoidance of doubt during the period of any notice
given pursuant to Clause 2.4 and during any Garden Leave Period) directly or
indirectly (whether as a shareholder, officer, partner, consultant, employee,
agent or principal or in any other capacity) engage or be concerned or
interested in any other business of any kind whatsoever other than the business
of the Company and any Group Company.

 

12.3                          Nothing in Clause 12 shall
prevent the Executive from being interested in up to 3 per cent in nominal
amount of the securities of any class of any company which are listed or dealt
in on any Recognised Investment Exchange. 
In this Clause 12, references to the Executive being “interested” in
securities of a company include all interests which he would be required to
notify to that company if he were a director of that company and that company
were a company incorporated in England and Wales.

 

13.                                INVENTIONS

 

13.1                          In this Clause 13, “Intellectual Property” includes patents, trade marks,
designs, copyrights, database rights, confidential information, know-how and
rights of like nature arising or subsisting anywhere in the world.

 

13.2                          If at any time in the course
of the appointment the Executive makes or discovers or participates in the
making or discovery of any Intellectual Property relating to or capable of
being used in the business for the time being carried on by the Company or any
Group Company, the Executive shall immediately communicate full details of such
Intellectual Property to the Company and the relevant Group Company and such
Intellectual Property shall from its making or discovery be the absolute
property of the Company or the relevant Group Company.  At the request and expense of the Company the
Executive shall give and supply all such information, data, drawings and
assistance as may be required to enable the Company to exploit such
Intellectual Property to the best advantage and shall execute all documents and
do all things which may be necessary or desirable for obtaining patent or other
protection for the Intellectual Property in such parts of the world as may be
specified by the Company and/or any 

 

11

 

Group Company and for vesting the same in
the Company or any Group Company.  This
Clause 13.2 shall take effect subject to the statutory rights of the Executive.

 

13.3                           As security for the
performance of his obligations under this Clause 13, the Executive irrevocably
appoints the Company (acting by any director) as his attorney to sign, execute
or do any such instrument or thing in the name of and on behalf of the
Executive and generally to use his name for the purpose of giving to the
Company and/or Group Company the full benefit of the provisions of this Clause
13 and in favour of any third party a certificate in writing signed by any
director or the secretary of the Company that any instrument or act falls
within the authority conferred by this Clause 13.3 shall be conclusive evidence
that such is the case.

 

14.                                 RESTRICTIVE COVENANTS

 

14.1                           In this Clause 14 the
following expressions have the following meanings:

 

“Critical Person” means any person who was an employee, agent,
director, consultant or independent contractor employed, appointed or engaged
by the Company or any Relevant Group Company at any time within the Relevant
Period who by reason of such employment, appointment or engagement and in
particular his/her seniority and expertise or knowledge of trade secrets or
confidential information of the Company or any Group Company or knowledge of or
influence over the clients, customers or suppliers of the Company or any Group
Company is likely to be able to assist or benefit a business in or proposing to
be in competition with the Company or any Relevant Group Company;

 

“Relevant Customer” means any person, firm, company or organisation who
or which at any time during the Relevant Period is or was:

 

(a)                                  negotiating with the Company
or a Relevant Group Company for the sale or supply of Relevant Products or
Services; or

 

(b)                                 a client or customer of the
Company or any Relevant Group Company for the sale or supply of Relevant
Products or Services; or

 

(c)                                  in the habit of dealing with
the Company or any Relevant Group Company for the sale or supply of Relevant
Products or Services

 

and in each
case with whom or which the Executive was directly concerned or connected or of
whom or which the Executive had personal knowledge during the Relevant Period
in the course of his employment hereunder;

 

12

 

“Relevant Group Company” means any Group Company (other than the Company) for
which the Executive has performed services under this Agreement or for which he
has had responsibility at any time during the Relevant Period;

 

“Relevant Period” means the period of 12 months immediately before the
Termination Date;

 

“Relevant Products or Services” means products or services which are of
the same kind as or of a materially similar kind to or competitive with any
products or services sold or supplied by the Company or any Relevant Group
Company within the Relevant Period and with which sale or supply the Executive
was directly concerned or connected or of which he had personal knowledge
during the Relevant Period in the course of his employment hereunder;

 

“Termination Date” means the date on which the Executive’s employment
under this Agreement terminates and references to “from the Termination Date”
mean from and including the date of termination;

 

“Restricted Territory” means England and any other territory where not less
than 5% of the annual turnover of the Group for the financial period of the
Group ended immediately prior to the Termination Date was generated and in which
the Executive worked or to which the Executive was assigned by the Company or
any Relevant Group Company at any time during the Relevant Period.

 

14.2                           The Executive will not without
the prior written consent of the Company (such consent not to be unreasonably
withheld) directly or indirectly and whether alone or in conjunction with or on
behalf of any other person and whether as a principal, shareholder, director,
employee, agent, consultant, partner or otherwise:

 

(a)                                  within
the Restricted Territory for a period of 6 months from the Termination Date be
engaged, concerned or interested in, or provide technical, commercial or
professional advice to, any other business which:

 

(i)                                     supplies Relevant Products or
Services in competition with the Company or any Relevant Group Company; or

 

(ii)                                  is or was at any time during
the Relevant Period a Relevant Customer of the Company or any Relevant Group
Company if such engagement, concern or interest causes or would cause the
Relevant Customer to cease or materially to reduce its orders or contracts with
the Company or any Relevant Group Company; or

 

13

 

(b)                                 for a period of 6 months from
the Termination Date so as to compete with the Company or any Relevant Group
Company canvass, solicit or approach or cause to be canvassed, solicited or
approached any Relevant Customer for the sale or supply of Relevant Products or
Services or endeavour to do so; or

 

(c)                                  for a period of 6 months from
the Termination Date so as to compete with the Company or any Relevant Group
Company deal or contract with any Relevant Customer in relation to the sale or
supply of any Relevant Products or Services, or endeavour to do so; or

 

(d)                                 for a period of 6 months from
the Termination Date solicit, induce or entice away from the Company or any
Relevant Group Company or, in connection with any business in or proposing to
be in competition with the Company or any Relevant Group Company, employ,
engage or appoint or in any way cause to be employed, engaged or appointed a
Critical Person whether or not such person would commit any breach of his or
her contract or employment or engagement by leaving the service of the Company
or any Relevant Group Company; or

 

(e)                                  use in connection with any
business any name which includes the name of any Group Company or any
colourable imitation of it.

 

14.3                          Whilst the restrictions in
this Clause 14 are regarded by the parties as fair and reasonable, it is hereby
declared that each of the restrictions in this Clause 14 is intended to be
separate and severable.  If any
restriction is held to be unreasonably wide but would be valid if part of the
wording (including in particular but without limitation the defined expressions
referred to in Clause 14.1) were deleted, such restriction will apply with so
much of the wording deleted as may be necessary to make it valid.

 

14.4                          The parties agree that the
period referred to in sub-clauses 14.2(a), 14.2(b), 14.2(c) and 14.2(d) above
will be reduced by one day for every day during which at the Company’s
direction and pursuant to Clause 3.2 the Executive has been excluded from the
Company’s and/or any Group Company’s premises and/or has not carried out any
duties or has carried out duties other than his normal duties.

 

14.5                          If the Executive breaches any
of the provisions in this Clause 14 the Company will be entitled by written
notice to the Executive to extend the period during which the provisions of
Clause 14 which have been breached apply by an equivalent period to that during
which the breach or breaches have continued, such additional period to commence
on the date on which the said period would have otherwise expired.  The Executive hereby agrees that if the
Company so extends the periods of any such restriction, this will not prejudice
the right of the Company to apply to the Courts for 

 

14

 

injunctive relief in order to compel the
Executive to comply with the provisions of Clause 14 and/or damages, as the
case may be.

 

14.6                           For the purposes of Clauses 14
and 15 the Company has entered into this Agreement as agent for and trustee of
all Relevant Group Companies.

 

14.7                           If the Executive applies for
or is offered a new employment, appointment or engagement, before entering into
any related contract, the Executive will bring the terms of this Clause 14 and
15 to the attention of a third party proposing directly or indirectly to
employ, appoint or engage him.

 

15.                                 CONFIDENTIALITY

 

15.1                          The Executive acknowledges
that in the ordinary course of his employment he will be exposed to information
about the Company’s business and the business of Group Companies and that of
the Company’s and the Group Companies’ suppliers and customers which amounts to
a trade secret, is confidential or is commercially sensitive and which may not
be readily available to others engaged in a similar business to that of the
Company or any of the Group Companies or to the general public and which if
disclosed will be liable to cause significant harm to the Company or such Group
Companies.  The Executive has therefore
agreed to accept the restrictions in this Clause 15.

 

15.2                          Without prejudice to Clause
15.3 or 15.4 and subject to Clause 15.3 the Executive will not during the
period of his employment with the Company:

 

(a)                                  sell or seek to sell to anyone
information acquired by him in the course of his employment with the Company;

 

(b)                                 obtain or seek to obtain any
financial advantage (direct or indirect) from disclosure of such information.

 

15.3                           The Executive will not either
during his employment or after its termination without limit in time for his
own purposes or for any purposes other than those of the Company or any Group
Company (for any reason and in any manner) use or divulge or communicate to any
person, firm, company or organisation except to those officials of any Group
Company whose province it is to know the same any secret or confidential
information or information constituting a trade secret acquired or discovered
by him in the course of his employment with the Company relating to the private
affairs or business of the Company or any Group Company or their suppliers,
customers, management or shareholders.

 

15

 

15.4                           The restrictions contained in
this Clause do not apply to:

 

(a)                                  any disclosure authorised by
the Board or required in the ordinary and proper course of the Executive’s
employment or as required by the order of a court of competent jurisdiction or
any appropriate regulatory authority or otherwise required by law; or

 

(b)                                 any information which the
executive can demonstrate was known to the Executive prior to the commencement
of the Executive’s employment by the Company or a Group Company or is in the
public domain otherwise than as a result of a breach by him of this Clause; or

 

(c)                                  in relation to periods after
termination of the Executive’s employment only, any information disclosed to
the Executive by a third party who is not bound by any duty of confidence to
the Company or any Group Company.

 

15.5                          On termination of his
employment for any reason (or earlier if requested) the Executive will
immediately deliver up to the Company all property (including but not limited
to documents and software, credit cards, keys and security passes) belonging to
it or any Group Company in the Executive’s possession or under his
control.  Documents and software include
(but are not limited to) correspondence, diaries, address books, databases,
files, reports, minutes, plans, records, documentation or any other medium for
storing information.  The Executive’s
obligations under this Clause includes the return of all copies, drafts,
reproductions, notes, extracts or summaries (however stored or made) of all
documents and software.

 

15.6                          The provisions of this Clause
15 are without prejudice to the duties and obligations of the Executive to be
implied into this Agreement at common law and any other duties or obligations
to which the Executive is subject pursuant to any other agreement with the
Company or any third parties.  In
addition to the restrictions in Clause 14 and this Clause 15 the Executive
hereby agrees that at the request and expense of the Company he will enter into
a direct agreement or undertaking with any Group Company whereby he will accept
restrictions and provisions corresponding to the restrictions and provisions in
Clause 14 and this Clause 15 (or such of them as may be appropriate in the
circumstances) in relation to such information and such area and for such
period as such Group Company may reasonably require for the protection of its
legitimate interests.

 

16.                                DISCIPLINARY
AND GRIEVANCE PROCEDURES

 

16.1                          The Executive is subject to
the Company’s disciplinary and grievance procedures as laid down by the Company
from time to time for employees generally. 
A copy of the 

 

16

 

current rules and procedures can be
obtained from the Company.  These
procedures do not have contractual status.

 

16.2                           If the Executive wishes to
appeal against a disciplinary decision he may apply in writing to the Chairman
of the Board in accordance with the Company’s disciplinary procedure.

 

16.3                           If the Executive wishes to
raise a grievance, he may apply in writing to the Chairman of the Board in
accordance with the Company’s grievance procedure.

 

17.                                 TERMINATION

 

17.1                           The appointment may be
terminated by either party by notice in writing given in accordance with Clause
2.4.

 

17.2                           The appointment shall
terminate automatically at the end of the month in which the Executive reaches
his 65th birthday.

 

17.3                           The appointment may be
terminated by the Company in accordance with Clause 17.4.

 

17.4                           In addition to any other right
of the Company to terminate the appointment, the Company may, without prejudice
to any remedy which it may have against the Executive for breach or
non-performance of any of the provisions of this Agreement, at any time
terminate the appointment by summary notice in writing and without any payment
in lieu of notice if the Executive:

 

(a)                                  becomes prohibited by law from
being a director;

 

(b)                                 commits any serious breach or
repeats or continues (after written warning) any breach of any of the terms of
this Agreement or is guilty of any serious neglect in the discharge of his
duties under this Agreement;

 

(c)                                  is guilty (whether or not in
the course of his employment) of gross misconduct or other conduct which in the
reasonable opinion of the Board tends to or is likely to bring the Executive or
the Company or any Group Company into disrepute or otherwise to affect
prejudicially the interests of the Company or any Group Company;

 

(d)                                 becomes bankrupt or enters
into or make any arrangement or composition with or for the benefit of his
creditors generally;

 

(e)                                  is of unsound mind or becomes
a patient for the purpose of any statute relating to mental health;

 

17

 

(f)                                    is convicted of any criminal
offence (other than an offence under road traffic legislation in the United
Kingdom or elsewhere for which a penalty other than imprisonment is imposed);

 

(g)                                 commits, or is reasonably
believed by the Board to have committed, any act of dishonesty whether relating
to the Company, any Group Company, other employees or otherwise;

 

(h)                                 fails to maintain a
satisfactory standard of conduct or performance within a reasonable time of
receiving written warning from the Board relating to his conduct and/or
performance; or

 

(i)                                     without the prior consent of
the Board, resigns from being a director of the Company or any Group Company or
fails to stand for re-election following retirement by rotation under the
Company’s articles of association.

 

17.5                           The Company may suspend the
Executive on full pay at any time for up to 8 weeks if the Board wishes to
consider whether an event specified under Clause 17.4 has taken place, or for
the purpose of investigating any complaint against the Executive.

 

17.6                           Without limiting the operation
of Clauses 8.2 and 15.5, on termination of the appointment, for whatever
reason, (or, if earlier, the date of commencement of any Garden Leave Period)
the Executive shall immediately deliver to the Company all property of the
Company or any Group Company which may then be in the Executive’s possession or
under his control.

 

18.                                 SICKNESS AND INCAPACITY

 

18.1                           If the Executive cannot
because of illness or accident or other incapacity perform his duties under
this Agreement, he shall as soon as possible (and in any event on the first
Working Day after commencement of the incapacity) notify or ensure that the
Company is notified of the fact and nature of the incapacity.  For so long as the incapacity continues the
Executive shall keep the Company informed of the reason for his continued
absence and its expected duration and shall produce medical certificates to the
Company as often as the Company reasonably requires.

 

18.2                           If and whenever reasonably
requested by the Company the Executive shall, at the Company’s expense, undergo
a medical examination by a doctor nominated by the Company and the Executive
authorises the Company to have unconditional access to any report produced as a
result of any such examination.

 

18.3                           The Company shall continue to
pay the Executive’s salary during any period of incapacity for a maximum of 120
days in aggregate in any period of 12 consecutive 

 

18

 

calendar months, such payment shall be inclusive of
the amount of any statutory sick pay or other state sickness benefit paid or
payable to him and the amount of any benefit payable under any disability or
permanent health insurance scheme maintained by the Company for the benefit of
the Executive (which amounts shall be deducted from the Executive’s salary
hereunder).

 

18.4                           If the incapacity continues
for not less than 120 Working Days in aggregate in any period of 12 consecutive
calendar months then the Company may by notice in writing given to the
Executive at any time during the continuance of the incapacity:

 

(a)                                  discontinue payment in whole
or in part of the Executive’s salary, contractual benefits and other
entitlements under this Agreement on and from such date as may be specified in
the notice until the incapacity shall cease; or

 

(b)                                 (whether or not payment of the
Executive’s salary has been discontinued under Clause 18.4(a)) terminate the
appointment with immediate effect.

 

18.5                           If the Executive’s absence has
been or appears to have been occasioned by the actionable negligence of a third
party in respect of which damages are or may be recoverable, all sums paid by
the Company to the Executive under this Agreement shall constitute loans to the
Executive.  The Executive shall forthwith
notify the Company of the relevant circumstances and of any claim, compromise,
settlement or judgment made or awarded in connection therewith and shall give
to the Company all such particulars of such matters as the Company may
reasonably require.  The Executive shall,
if the Company shall so require, refund to the Company such sum as the Company
shall determine, not exceeding the smaller of:

 

(a)                                  the amount of damages
recovered by him under such compromise settlement or judgment; and

 

(b)                                 the amounts advanced to him in
respect of the period of the incapacity.

 

19.                                 TERMINATION BY RECONSTRUCTION

 

If the Company
wishes to terminate the appointment or the appointment is terminated in
anticipation of or by reason of an internal or external reorganisation,
reconstruction or amalgamation of the Group (whether or not involving the
winding up of the Company or any Group Company) and the Executive is offered
employment with any company resulting from the reorganisation, reconstruction
or amalgamation, on terms no less favourable than the terms of this Agreement,
the Executive shall have no claim against the Company or any Group Company in
respect of or in connection with the termination of the appointment.

 

19

 

20.                                 MISCELLANEOUS

 

20.1                           This Agreement shall operate
from the Commencement Date in substitution for any terms of service previously
in force (whether written or oral) between the Executive and the Company or any
Group Company but without prejudice to any rights or obligations of either
party which may have accrued prior to that date.  Any remuneration paid or payable to the
Executive under any terms of service previously in force for any period
subsequent to the Commencement Date shall be set off against any amounts which would
otherwise be payable to the Executive under this Agreement in respect of the
same period.

 

20.2                           The Executive shall if so
requested by the Company enter into a separate agreement or undertaking
directly with any other Group Company in terms of any agreement or
undertaking by the Executive in this Agreement relating to the Company or any other Group Company.

 

20.3                           Any Group Company may enforce
the terms of this Agreement pursuant to the UK Contracts (Rights of Third
Parties) Act 1999.  No other person who
is not a party to this Agreement shall have any right under that Act to enforce
any term of this Agreement but this shall not affect any right or remedy of a
third party which exists or is available apart from that Act.  The Executive and the Company may rescind or
vary this Agreement without the consent of any Group Company.

 

20.4                           This Agreement (together with
any other documents referred to in it) contains the entire agreement of the
parties in relation to the matters contemplated under this agreement.  This Agreement may only be varied by an
agreement in writing signed by each of the parties.

 

20.5                           No collective agreement
affects the terms of this employment.

 

21.                                 DEDUCTIONS

 

The Executive
authorises the Company to deduct from his salary (including accrued holiday
pay) any sums which he may owe to the Company or any Group Company including,
without limitation, any credit card charges not incurred in connection with the
discharge of the Executive’s duties under this Agreement, overpayments made by
the Company or any Group Company or advances or loans made to the Executive by
the Company or any Group Company (but subject to the agreed terms on which such
advances or loans were made).

 

20

 

22.                                 DATA PROTECTION

 

For the purposes
of the Data Protection (Jersey) Law 2005  the
Executive consents to processing of all or any personal data (in manual,
electronic or any form) relevant to his employment, by the Company and or any
Group Company and/or any agent or third party nominated by the Company and
bound by a duty of confidentiality. 
Processing includes but is not limited to obtaining, recording, listing
and holding data and includes the transfer of data to any country either inside
or outside the EEA.

 

23.                                 CONTINUING PROVISIONS

 

The expiry or
termination of the appointment (however arising and notwithstanding that the
termination may be held to be illegal or improper) shall not terminate any of
the provisions of this Agreement which expressly or impliedly operate or have
effect after expiry or termination of the appointment.

 

24.                                 NOTICES

 

Notices by either
party may be given by letter or facsimile transmission (“fax”)
addressed to the other party at, in the case of the Company, its registered
office for the time being and, in the case of the Executive, his last known
address and any such notice sent by post or fax shall be deemed to have been
given at the time at which the letter or fax would be delivered in the ordinary
course of post or transmission, as the case may be.

 

25.                                 WAIVER

 

25.1                           No
waiver of any breach or default under this Agreement or any of its terms shall
be effective unless such waiver is in writing and has been signed by the party
against which it is asserted.

 

25.2                           No
delay by either party in exercising, or failure to exercise, any right, power
or remedy under or by virtue of this Agreement shall constitute a waiver of the
right, power or remedy or a waiver of any other right, power or remedy and no
single or partial exercise of any right, power or remedy under or by virtue of
this Agreement shall prevent any further exercise of the right, power or remedy
or the exercise of any other right, power or remedy.

 

25.3                           The
rights, powers and remedies of the parties under this Agreement are cumulative
and not exclusive of any rights, powers or remedies provided by law.

 

21

 

26.                                 INVALIDITY

 

If at any time
any provision of this Agreement is or becomes illegal, invalid or unenforceable
in any respect under the law of any jurisdiction, that shall not affect or
impair the legality, validity or enforceability in that jurisdiction of any
other provision of the Agreement nor the legality, validity or enforceability
in any other jurisdiction of that or any other provision of this Agreement.

 

27.                                 GOVERNING LAW AND JURISDICTION

 

This Agreement
shall be governed by and construed in accordance with English law.  Each of the parties submits to the
non-exclusive jurisdiction of the courts of England.

 

28.                                 PREVIOUS AGREEMENTS

 

The present agreement supersedes any other oral or written agreements
between the Company and the Executive.

 

IN WITNESS whereof this Agreement has been duly executed as a
deed and is intended to be and is delivered on the date first above written.

 

SIGNED AND DELIVERED AS A
DEED

by VELTI PLC

acting by:

 

	
  Signature of Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Print name of Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  in the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Occupation

  	
   

  	
   

  	
   

  

 

22

 

	
  SIGNED AND DELIVERED AS A DEED

  	
   

  	
   

  
	
  By 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  in the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Occupation

  	
   

  	
   

  	
   

  
					

 

23

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