Document:

EX 4.19 Mobile Interactive Group Share Purchase Agreement

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

	
		
	 

	DATED
	November 14, 2011

(1) BARRY HOULIHAN AND OTHERS

- and -

(2) VELTI PLC

	
			
	 
	

AGREEMENT
relating to
the sale and purchase of the entire issued share capital of Mobile Interactive Group Limited

	 

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

CONTENTS

		
	1.
	DEFINITIONS AND INTERPRETATION    1

		
	2.
	SALE AND PURCHASE OF SHARES    1

		
	3.
	CONSIDERATION    2

		
	4.
	COMPLETION    7

		
	5.
	WARRANTIES    8

		
	6.
	VENDOR LIMITATIONS    9

		
	7.
	RESTRICTIVE COVENANTS    9

		
	8.
	VENDORS' LIABILITY    12

		
	9.
	VENDORS' REPRESENTATIVE    12

		
	10.
	CONFIDENTIALITY AND ANNOUNCEMENTS    13

		
	11.
	ASSIGNMENT AND SUCCESSORS    14

		
	12.
	THIRD PARTY RIGHTS    15

		
	13.
	COSTS AND EXPENSES    17

		
	14.
	PAYMENTS    17

		
	15.
	FURTHER ASSURANCE    17

		
	16.
	ENTIRE AGREEMENT    17

		
	17.
	EFFECT OF COMPLETION    18

		
	18.
	SEVERANCE    18

		
	19.
	VARIATION    18

		
	20.
	WAIVER AND CUMULATIVE REMEDIES    18

		
	21.
	COUNTERPARTS    19

		
	22.
	NOTICES    19

		
	23.
	PROCESS OF SERVICE IN THE UK    21

		
	24.
	4TH SCREEN PERFORMANCE GUARANTEES    21

		
	25.
	WAIVER OF CLAIMS    21

		
	26.
	GOVERNING LAW AND JURISDICTION    22

SCHEDULE 1: DEFINITIONS AND INTERPRETATION    23
SCHEDULE 2: THE VENDORS, THE SHARES AND THE CONSIDERATION    38
Part 1: Main Vendors    38
Part 2: Options Vendors    43

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

SCHEDULE 3: INFORMATION    50
[Disclosure Schedules Omitted]

SCHEDULE 4: GENERAL WARRANTIES    87
Part 1: Ownership and Vendor matters    87
Part 2: General    88
Part 3: Accounts and financial    91
Part 4: Assets, commercial and trading    96
Part 5: Employees    111
Part 6: Pensions    115
Part 7: Properties    117
Part 8: Environmental, health and safety    120
SCHEDULE 5: TAX    122
Part 1: Definitions and interpretation    122
Part 2: Tax Warranties    126
Part 3: Tax Covenant    132
Part 4: Limitations and Procedure    134
SCHEDULE 6: VENDOR LIMITATIONS    141
SCHEDULE 7: PROVISIONS RELATING TO ESCROW    148
Part 1: Definitions    148
Part 2: Instruction Letter    149
SCHEDULE 8: COMPLETION OBLIGATIONS    152
Part 1: Vendors' obligations on Completion    152
Part 2: Purchaser's obligations on Completion    155
SCHEDULE 9: INITIAL CONSIDERATION ADJUSTMENT    156
Part 1: Calculation of Initial Consideration Adjustment    156
Part 2: Anniversary Net Current Assets    157
Part 3: Accounting Principles    159
SCHEDULE 10: CONTINGENT EARN OUT CONSIDERATION    161
Part 1: Calculation of the EBITDA    161
Part 2: Contingent Earn Out Consideration    165

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

Part 3: Earn Out Protections    167
Part 4: EBITDA    170
Part 5: USA Integration Plan    177
SCHEDULE 11: REGISTRATION RIGHTS    179
Part 1: Registration rights    179
Part 2: Company representations regarding certain US Securities Law matters    186

	
	
	Agreed Form documents

	Board minutes: Purchaser

	Completion power of attorney: Vendors

	Deed of termination of shareholders agreements

	Letter(s) of non‐crystallisation

	Post‐Completion powers of attorney re Shares

	Resignations of directors

	Service contracts

	Loan Note Instrument

	4th Screen Agreement

	4th Screen Services Agreement

	NL Subsidiary Documents

	Press Release

	USA Integration Plan

	 

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

This Agreement is made as a deed on     November 14, 2011
BETWEEN: 
		
	(1) 
	the persons whose names and addresses are set out in schedule 2 (together "Vendors", and each a "Vendor"); and

		
	(2) 
	VELTI PLc a company incorporated and registered in Jersey with number 103899 which has its registered business office at 22 Grenville Street, St Helier, JE4 8PX ("Purchaser").

BACKGROUND: 
		
	A
	Mobile Interactive Group Limited ("Company") is a private company limited by shares.  Further information relating to the Company and its Subsidiaries is set out in parts 1 and 2 of schedule 3.

		
	B
	The Vendors are the owners of the numbers of Shares set opposite their respective names in column (3) of schedule 2 and in the case of the Options Vendors shall have acquired such Shares immediately before Completion pursuant to the exercise of Options (to the extent that those Options have not been waived or lapsed).

		
	C
	The Vendors have agreed to sell and the Purchaser has agreed to purchase the Shares on the terms set out in this agreement.

IT IS AGREED: DEFINITIONS AND INTERPRETATION
		
	1.1
	Each word and expression used in this agreement shall have the meaning (if any) given to it in, and shall be interpreted in accordance with the provisions of, schedule 1.

		
	1.2
	This agreement incorporates the schedules to it.

		
	2.
	SALE AND PURCHASE OF SHARES

		
	2.1
	Subject to the terms of this agreement, each Vendor severally shall sell and the Purchaser shall purchase the number of Shares set opposite such Vendor's name in column (3) of schedule 2 with effect from Completion.

		
	2.2
	Each Vendor shall sell its Shares free from all Encumbrances and together with all rights of any nature that attach or which may at any time become attached to them, including the right to receive all dividends and distributions declared, paid or made by the Company on or after the Completion Date.

		
	2.3
	Each Vendor severally:

		
	2.3.1
	covenants with the Purchaser that it has the right to transfer or to procure the transfer of the full legal and beneficial interest in its Shares to the Purchaser on the terms set out in this agreement;

		
	2.3.2
	covenants with the Purchaser that it shall at its own expense do everything reasonably required by the Purchaser from time to time in order to vest any of its Shares in the Purchaser; and

		
	2.3.3
	irrevocably waives any right of pre‐emption or other restriction on transfer in respect of the Shares or any of them so as to enable the sale of the Shares to the Purchaser to proceed free of any such right or restriction.

		
	2.4
	Part 1 of the Law of Property (Miscellaneous Provisions) Act 1994 shall not apply to the sale and purchase of the Shares.

		
	3.
	CONSIDERATION

		
	3.1
	The consideration shall be the aggregate of the Initial Consideration (subject to the adjustments 

1

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

set out in clause 3.12), the Deferred Consideration (subject to the adjustment set out in paragraph 12 of schedule 6), the Initial Equity Consideration and the Contingent Earn Out Consideration ("Consideration").
Initial Consideration
		
	3.2
	The initial consideration shall be $25,133,986 (twenty five million one hundred and thirty three thousand nine hundred and eighty six dollars)  ("Initial Consideration"), which (subject to clauses 3.3, 3.5, 3.7, 3.8 and 3.10 below) shall be satisfied on Completion by payment in cash in the amounts set opposite each Vendor's name in column (4) of schedule 2.  

		
	3.3
	On Completion the Purchaser shall withhold from the cash payments due under clause 3.2 above, the following amounts in respect of the following Vendor:

	
			
	Vendor
	Amount to be withheld
	Option

	[***]
	$618,890.71
	A non-EMI option over 540,000 shares granted on 26 July 2007

		
	3.4
	The amounts withheld under clause 3.3 above shall be withheld on account of the income tax and national insurance contributions payable in relation to the exercise of options set out in the table.  The Purchaser shall, on behalf of the relevant Vendor, account for the amounts withheld to the Company and shall procure that the Company shall account for such amounts to HM Revenue & Customs in satisfaction of the relevant liabilities within the applicable time limits for the payment of such liabilities.  The Purchaser shall provide the relevant Vendor with evidence that such sums have been so accounted for.

		
	3.5
	On Completion the Purchaser shall withhold from the cash payments due under clause 3.2 above, the following amounts in respect of the following Vendors:

	
		
	Vendor
	Amount to be withheld

	[***]
	£316,180.52

	[***]
	£488,556.38

	[***]
	£52,341.99

	[***]
	£24,801.36

	[***]
	£38,071.13

	[***]
	£122,766.88

	[***]
	£6,333.65

	[***]
	£167,520.99

	[***]
	£321,426.01

	[***]
	£88,665.59

	[***]
	£142,409.58

	[***]
	£29,575.66

	[***]
	£336,375.67

	[***]
	£67,352.14

	[***]
	£46,761.68

	[***]
	£50,109.87

	[***]
	£13,950.78

	[***]
	£30,691.72

2

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	3.6
	The amounts withheld under clause 3.5 above shall be withheld on account of the amounts payable by the relevant Vendors in respect of subscription monies in 4th Screen Newco, and in turn on account of the amount payable by 4th Screen Newco to the Company in respect of the agreement for 4th Screen Newco to acquire the 4th Screen Holding from the Company and, on behalf of 4th Screen, the repayment of the outstanding loan of £350,000 from the Company to 4th Screen, and the Purchaser shall, on behalf of the relevant Vendors, 4th Screen Newco and 4th Screen, account for the amount so withheld to the Company in satisfaction of the above obligations and liabilities in accordance with 1.2 of part 2 of schedule 8 and provide the relevant Vendors and 4th Screen (as the case may be) with evidence that the amount has been so accounted for.

		
	3.7
	On Completion the Options Vendors each agree that the Purchaser shall withhold from the cash payments due under clause 3.2 the Aggregate Exercise Price and pay such Aggregate Exercise Price to the Company in accordance with 1.2 of part 2 of schedule 8.  The Purchaser shall provide the Option Vendors with evidence that such sums have been so accounted for.  Where such cash payments are insufficient to satisfy the Aggregate Exercise Price in full, the relevant Options Vendor shall provide the balance in respect of the Options being exercised by that Option Vendor to the Company upon Completion in cleared funds.

		
	3.8
	On Completion the Purchaser shall withhold from the cash payments due under clause 3.2 above, the following amount in respect of the following Vendor:

	
		
	Vendor
	Amount to be withheld

	[***]
	A loan repayment of £7,050

		
	3.9
	The amount withheld under clause 3.8 above shall be withheld on account of the amount payable by [***] to the Company in relation to the repayment of the outstanding loan of £7,050 from the Company to [***].  The Purchaser shall, on behalf of [***], account for the amount so withheld to the Company in satisfaction of the above liability and provide [***] with evidence that such sums have been so accounted for.

		
	3.10
	On Completion the Purchaser shall withhold from the cash payments due under clause 3.2 above, the following amount in respect of the following Vendor:

	
		
	Vendor
	Amount to be withheld

	[***]
	An aggregate amount of €87,526.25

		
	3.11
	The Purchaser shall, on behalf of [***], account for the aggregate amount so withheld to the Company in satisfaction of the above liability in accordance with 1.2 of part 2 of schedule 8 and provide [***] with evidence that such sums have been so accounted for.

		
	3.12
	Adjustment to the Initial Consideration

		
	3.12.1
	Following the Completion Date, the Initial Consideration shall be adjusted in the following manner:

		
	3.12.1.1
	the Purchaser shall pay to the Vendors such sum (if any) equal to the amount by which the Completion Net Current Assets exceed the Estimated Net Current Assets subject to a maximum payment of $1,000,000; or, as the case may be

3

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	3.12.1.2
	the Vendors shall repay to the Purchaser such sum (if any) equal to the amount by which the Completion Net Current Assets are less than the Estimated Net Current Assets.

		
	3.12.2
	Any adjustment to the Initial Consideration due by the Purchaser shall be paid in cleared funds within five (5) Business Days of agreement or determination of the adjustment to the Initial Consideration in accordance with this clause 3.12 and schedule 9 to the Nominated Account.

		
	3.12.3
	Any adjustment to the Initial Consideration due by the Vendors shall be repaid in cleared funds within five (5) Business Days of agreement or determination of the adjustment to the Initial Consideration in accordance with this clause 3.12 and schedule 9 to the Purchaser (such sum to be repaid by the Vendors in their CC Relevant Percentages). For the purposes of this clause 3.12 only, any payment due by a party shall be calculated in Sterling and shall be translated from pounds Sterling to US dollars on the date of the agreement or determination of the adjustment to the Initial Consideration in accordance with this clause 3.12 and schedule 9 using the quarterly average of the daily exchange rate for the previous quarter as released each Monday afternoon by the Federal Reserve of the United States of America posted at http://www.federalreserve.gov/releases/h10/current/.

Deferred Consideration
		
	3.13
	Subject, in each case, to adjustment in accordance with paragraph 12 of schedule 6, the deferred consideration shall be five million dollars ($5,000,000) ("Deferred Consideration"), which shall be satisfied as follows:

		
	3.13.1
	as to $2,500,0000, by the issue, in the DC Relevant Percentages, of Deferred Consideration Shares on the Interim DC Payment Date, credited as fully paid; and

		
	3.13.2
	as to $2,500,000, by the issue, in the DC Relevant Percentages, of Deferred Consideration Shares on the Final DC Payment Date, credited as fully paid.

		
	3.14
	The aggregate number of Deferred Consideration Shares to be issued and allotted pursuant to clause 3.13.1 above shall be a number equal to A/B where:

A is equal to $2,500,000 (less the amount of any cash paid pursuant to clause 3.16) to be satisfied by the issue and allotment of shares; and
B is equal to the average closing mid-market price of the Purchaser's ordinary share for the 20 Business Days prior to the Interim DC Payment Date, as derived from NASDAQ.
		
	3.15
	The aggregate number of Deferred Consideration Shares to be issued and allotted pursuant to clause 3.13.2 above shall be a number equal to A/B where:

A is equal to $2,500,000 (less the amount of cash paid pursuant to clause 3.16) to be satisfied by the issue and allotment of shares; and
B is equal to the average closing mid market price of the Purchaser's ordinary share for the 20 Business Days prior to the Final DC Payment Date, as derived from NASDAQ.
		
	3.16
	The Purchaser shall be entitled to serve notice on the Vendors' Representative at any time prior to the Interim DC Payment Date or the Final DC Payment Date (as the case may be) indicating that it wishes to satisfy all or any part of the relevant tranche of the Deferred Consideration (or both tranches, if applicable) by payment in cash, whereupon either or both of clauses 3.13.1 and 3.13.2 above (as applicable) shall be read as if some or all of the sums stated therein (as set out in the Purchaser's notice) were to be satisfied by a payment of cash by the Purchaser in the DC Relevant Percentages on the Interim DC Payment Date and/or the Final DC Payment Date 

4

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

(as the case may be), with the balance of such amount being satisfied by the issue, in the DC Relevant Percentages, of Deferred Consideration Shares, credited as fully paid.
		
	3.17
	The Purchaser shall instruct its registrars to update the register of members to reflect the issue and allotment of Consideration Shares (if any) pursuant to clause 3.13 within 10 Business Days of the Interim DC Payment Date or the Final DC Payment Date (as appropriate).

Initial Equity Consideration
		
	3.18
	Subject to clause 3.20, the Initial Equity Consideration shall be satisfied by the issue and allotment to the Vendors on the Initial Equity Consideration Payment Date of the Initial Equity Consideration Shares in the CC Relevant Percentages, credited as fully paid.

		
	3.19
	If the Purchaser elects to satisfy all or part of such payment by way of the issue and allotment of shares, then the aggregate number of Initial Equity Consideration Shares to be issued shall be equal to X/Y where X is the amount of the Initial Equity Consideration which the Purchaser elects not to satisfy in cash and Y is the average closing price of the Purchaser's ordinary share, as derived from NASDAQ for the 20 Business Days prior to the Initial Equity Consideration Payment Date.

		
	3.20
	The Purchaser shall be entitled to serve notice on the Vendors’ Representative at any time prior to the Initial Equity Consideration Payment Date indicating that it wishes to satisfy all or any part of the Initial Equity Consideration by payment in cash, whereupon clause 3.18 shall be read as if some or all of the Initial Equity Consideration (as set out in the Purchaser’s notice) were to be satisfied by a payment of cash by the Purchaser in the CC Relevant Percentages to the Vendors on the Initial Equity Consideration Payment Date, with the balance of such amount being satisfied by the issue, in the CC Relevant Percentages, of Initial Equity Consideration Shares, credited as fully paid.

		
	3.21
	If Initial Equity Consideration Shares are to be issued and allotted, then the Purchaser shall instruct its registrars to update the register of members to reflect the issue and allotment of such Shares within 10 calendar days of the Initial Equity Consideration Payment Date.

Contingent Earn Out Consideration
		
	3.22
	The Contingent Earn Out Consideration shall be calculated and satisfied in accordance with schedule 10.

Miscellaneous
		
	3.23
	A payment to be made to the Purchaser under this clause 3 shall be made by telegraphic transfer to the account which is notified by the Purchaser not later than three Business Days before the date of the payment.

		
	3.24
	The parties shall comply with the provisions of schedules 9, 10 and 11 with respect to the matters contained in those schedules.

		
	3.25
	Payments made by the Vendors to the Purchaser in connection with this agreement shall so far as possible be treated by the parties as a reduction in the Consideration.

		
	3.26
	If a party fails to pay any sum due by it under this agreement on the due date for payment in accordance with the provisions of this agreement, the party shall pay interest on the amount payable from the due date until the date on which the party's obligation to pay the sum is discharged at the rate of 8 per cent per annum (whether before or after judgment).  Interest accrues and is payable from day to day.

		
	3.27
	The Purchaser represents and warrants to the Vendors that the share certificates in respect of any Consideration Shares issued to the Vendors pursuant to this agreement shall bear only the following legend:

5

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT."
		
	3.28
	In the event that the Purchaser’s shares are no longer admitted to or traded or quoted on NASDAQ, NYSE or the Main Market of the LSE on any Payment Date, then the Purchaser shall be deemed to have served notice on the Vendors’ Representative prior to such Payment Date indicating that it wishes to satisfy all or any part of the Consideration by payment in cash or Loan Notes (as the case may be).

		
	3.29
	Any amount in this clause which is stated in a currency other than US$ (United States Dollars) shall (unless otherwise expressly provided in this agreement) for the purposes of this clause 3 be converted into US$ (at the following rates: £1=$1.5935 and €1=$1.1705).

		
	3.30
	Where the Purchaser is required to issue Loan Notes pursuant to the terms of this agreement, the parties acknowledge and agree that the issue of such Loan Notes by the Purchaser shall only be undertaken with the prior consent from the Jersey Financial Services Commission ("JFSC") (pursuant to Article 4 of the Control of Borrowing (Jersey) Order 1958) having been received in a form satisfactory to the Purchaser (acting reasonably) ("Satisfactory Consent"). In the event that such Satisfactory Consent has not been obtained 90 days prior to the date the Loan Notes are due for issue, then the   parties shall seek to agree, acting in good faith, an alternative to the existing structure for the issue of such Loan Notes (which alternative shall only be for an issue of loan notes or shares in the Purchaser) as set out in this agreement and/or re-apply for such consent. In the event that such agreement cannot be reached between the parties within 90 days and/or no further Satisfactory Consent has been received by the Purchaser within 90 days if a further application for consent of the JFSC has been submitted by the Purchaser, the Purchaser shall issue Consideration Shares in lieu of Loan Notes to the relevant Vendors on the date the Loan Notes would have been issued had such Satisfactory Consent originally been received by the Purchaser. The aggregate number of Consideration Shares to be issued and allotted in lieu of Loan Notes in accordance with this clause shall be a number equal to A/B where: 

A is equal to the principal amount of the Loan Notes which would have otherwise been due for issue had Satisfactory Consent been received by the Purchaser 
B is equal to the average closing mid market price of the Purchaser's ordinary shares for the 20 Business Days prior to the date the Loan Notes would have been issued had such Satisfactory Consent been received by the Purchaser, as derived from NASDAQ.
		
	3.31
	[***] hereby directs and authorises the Purchaser to issue and allot any Consideration Shares required to be assigned and allotted pursuant to this agreement to [***].

		
	4.
	COMPLETION

		
	4.1
	Completion of the sale and purchase of the Shares shall take place at the offices of the Purchaser's Solicitors in London on the Completion Date immediately after this agreement is entered into.

		
	4.2
	On Completion:

		
	4.2.1
	the Vendors shall severally comply with their respective obligations set out in part 1 of schedule 8; and

		
	4.2.2
	the Purchaser shall comply with the obligations set out in part 2 of schedule 8.

		
	4.3
	Following Completion, the Purchaser, the Vendors' Representative and the NL Vendor (or 

6

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

Jonathan Kenny on behalf of the NL Vendor) shall each use their reasonable endeavours to obtain a waiver of any change of control termination rights set out in any contract entered into by a Group Company with For Sale Communicate Amsterdam B.V..
		
	5.
	WARRANTIES

		
	5.1
	Each Vendor severally warrants to the Purchaser in the terms set out in part 1 of schedule 4 in respect of his own position only.

		
	5.2
	Each Vendor severally warrants to the Purchaser in the terms set out in schedule 4 (other than part 1 of schedule 4) and part 2 of schedule 5.

		
	5.3
	Subject to paragraph 3 (Disclosure) of schedule 6, no knowledge of the Purchaser (whether actual, constructive or imputed) shall prevent a Warranty Claim by the Purchaser or in any way limit the liability of the Vendors in relation to a Warranty Claim.  The Purchaser confirms as at the date of this agreement to the Vendors that it does not have any current intention of making a specific Warranty Claim, an Indemnity Claim or a Tax Claim.

		
	5.4
	Any claims under this agreement shall, subject to the Liability Amount and in respect of each Vendor an amount equal to that Vendor's Relevant Amount, first be settled by set off against the Deferred Consideration and/or the Contingent Earn Out Consideration pursuant to the provisions of paragraph 12 of schedule 6.

		
	5.5
	Each of the Warranties is separate and independent and, unless otherwise expressly provided, the Purchaser shall have a separate claim and right of action in respect of every breach of every Warranty.

		
	5.6
	Each Vendor severally undertakes that neither it nor any person claiming under or through it shall:

		
	5.6.1
	make any claim against any Group Company or any of their officers or employees (other than any claim by it against any other Vendor under any right of contribution or indemnity to which it is entitled);

		
	5.6.2
	enforce any right which it may have; or

		
	5.6.3
	raise any defence to any Warranty Claim,

in respect of any misrepresentation, inaccuracy or omission (other than as a result of fraud, wilful misstatement, wilful misconduct or wilful concealment) in or from any information or advice provided by any Group Company or any of their officers or employees for the purpose of assisting the Vendors to make any representation, give any Warranty, enter into this agreement and/or prepare the Disclosure Letter.
		
	5.7
	Where a Warranty is qualified by a reference (however expressed) to the knowledge or awareness of the Vendors, each Vendor shall be deemed to know or be aware of anything which is known to either himself or to any of the Group Executives and/or the Segment Leaders.

		
	5.8
	Without restricting the rights of the Purchaser or the ability of the Purchaser to claim damages on any basis available to it, each Vendor severally undertakes to the Purchaser that if there is a breach of any Warranty (other than a Tax Warranty) it shall, in accordance with the provisions of paragraph 12 of schedule 6, pay to the Purchaser as provided in clause 5.4 or, (in the case of a liability to another person which has not been discharged) at the Purchaser's direction (subject to clause 5.4), the person to whom the liability has been incurred, an amount equal to that Vendor's Relevant Amount of:

		
	5.8.1
	any shortfall or diminution in the value of any asset of any Group Company from that which it would have been had the Warranty not been breached;

		
	5.8.2
	any liability which any Group Company has incurred to the extent that it would not 

7

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

have incurred such liability had the Warranty not been breached; and
		
	5.8.3
	all costs and expenses (together with any VAT which is irrecoverable or not otherwise available for credit as input tax by the Purchaser, Group Company or member of the Purchaser Group (as the case may be) on such costs and expenses) which may be reasonably incurred by the Purchaser, any Group Company and/or any other member of the Purchaser Group as a result of or in connection with any breach of the Warranty.

The Vendors and the Purchaser agree that any payment made pursuant to this clause 5.8 shall be calculated (a) without reference to the common law rules relating to claims for damages for breach of warranty, and (b) on an After‐Tax Basis.
		
	6.
	VENDOR LIMITATIONS

		
	6.1
	Except as provided in clauses 6.2 and 6.3, the liability of the Vendors in respect of:

		
	6.1.1
	any General Warranty Claim shall be limited as set out in schedule 6; and

		
	6.1.2
	any Tax Claim shall be limited as set out in schedule 6 and part 4 of schedule 5,

but where there is any inconsistency between the provisions of schedule 6 or part 4 of schedule 5 and this clause 6, the latter shall prevail.
		
	6.2
	Nothing in schedule 6 or in part 4 of schedule 5 shall operate to exclude or limit any liability of a Vendor or any remedy available to the Purchaser in relation to any General Warranty Claim or Tax Claim against that Vendor that arises or is delayed as a result of the fraud, wilful misstatement, wilful misconduct or wilful concealment on the part of the relevant Vendor or any of its officers or employees (or former officers or employees), agents or advisers.

		
	6.3
	Except for the limitation set out in paragraph 3.1.1 of schedule 6 (disclosure), no limitation set out in schedule 6 shall apply to any General Warranty Claim in relation to any breach of a Fundamental Warranty.

		
	6.4
	Nothing in this agreement shall operate to exclude or limit any liability of a Vendor or any remedy available to the Purchaser in relation to any claim brought by the Purchaser pursuant to clause 24.1.

		
	6.5
	The Vendors shall not plead the Limitation Act 1980, nor invite any court to apply the provisions of such Act, in respect of any General Warranty Claim or Tax Claim.

		
	7.
	RESTRICTIVE COVENANTS

		
	7.1
	Each Covenantor severally covenants with the Purchaser, each Group Company and each other member of the Purchaser Group that it shall not at any time after Completion:

		
	7.1.1
	in connection with any activity whatsoever, use or procure or cause or (so far as it is able) permit the use of any Restricted Name; or

		
	7.1.2
	do or say anything which is:

		
	7.1.2.1
	intended to damage the goodwill or reputation of the Business; or

		
	7.1.2.2
	likely to lead any person to cease to do business with any Group Company or any other member of the Purchaser Group in relation to the Business on substantially equivalent terms to those previously offered, or not to engage in business with any Group Company or any other member of the Purchaser Group in relation to the Business.

		
	7.2
	Each Covenantor severally covenants with the Purchaser, each Group Company and each other member of the Purchaser Group that it shall not for the relevant period set out against the 

8

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

relevant Covenantor’s name in clause 7.4, either on its own behalf or jointly with or as an officer, employee, adviser, consultant or agent for any other person, directly or indirectly:
		
	7.2.1
	be engaged, concerned or interested in carrying on any Competing Business within any territory in which the Business was carried on to any material degree at the Completion Date or at any time during the period of 12 months ending on the Completion Date;

		
	7.2.2
	accept, approach, canvass or solicit the custom of any Customer or any Potential Customer to the detriment of the Business, or use its knowledge of or influence over any Customer or any Potential Customer for the benefit of any person carrying on a Competing Business;

		
	7.2.3
	to the detriment of the Business, seek to contract with or engage any person who has been contracted with or engaged to supply or deliver products, or services to any Group Company at any time during the period of 12 months ending on the Completion Date;

		
	7.2.4
	approach, canvass, solicit, engage or employ any person who at any time during the period of 12 months ending on the Completion Date was:

		
	7.2.4.1
	a director of any Group Company;

		
	7.2.4.2
	an employee, officer, consultant, sub‐contractor or agent of any Group Company, with a view to the specific knowledge or skills of such person being used by or for the benefit of any person carrying on a Competing Business,

		
	7.2.5
	otherwise than in a junior administrative or secretarial capacity and provided further that this clause shall not prohibit the placing of any bona fide job advertisement which is not specially targeted at such persons.

		
	7.3
	Each of the covenants contained in clauses 7.1 and 7.2 shall constitute an entirely separate and independent restriction on each Covenantor.

		
	7.4
	The covenants set out in 7.2 shall apply for the periods set opposite that Covenantor's name as follows:

	
		
	Covenantor
	Period after the Completion Date

	[***] and [***]
	Three years

	[***]
	Eighteen months

	[***],[***],[***]and [***]
	One year

		
	7.5
	Each Vendor severally undertakes to the Purchaser, each Group Company and each other member of the Purchaser Group that it shall at all times:

		
	7.5.1
	keep confidential any Confidential Information that (a) is within its knowledge, possession, custody or control at Completion or (b) subsequently becomes within its knowledge, possession, custody or control pursuant to the terms of this agreement;

		
	7.5.2
	use such Confidential Information only for the benefit of the Purchaser, any Group Company or any other member of the Purchaser Group; and

9

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	7.5.3
	use reasonable endeavours to prevent the disclosure or misuse of any such Confidential Information.

		
	7.6
	Clause 7.5 shall not apply:

		
	7.6.1
	if and to the extent that disclosure of Confidential Information is required by Law or by any Authority or securities exchange to which any Vendor is subject or submits;

		
	7.6.2
	to Confidential Information that has come into the public domain other than as a result of a breach of clause 7.5; and

		
	7.6.3
	to disclosure of Confidential Information by any Vendor to its officers, employees or professional advisers, or to officers, employees or professional advisers of any Group Company or any other member of the Purchaser Group or 4th Screen, in each case whose province it is to know the same.

		
	7.7
	Nothing in this clause 7 shall prohibit any Vendor from:

		
	7.7.1
	holding shares quoted or dealt in on a recognised investment exchange (as defined in the Financial Services and Markets Act 2000) as long as not more than three per cent of the shares of any class of any particular company (other than the Purchaser where no such limit shall be applicable) is so held; 

		
	7.7.2
	holding shares in the capitals of 4th Screen and/or 4th Screen Newco; and

		
	7.7.3
	performing his duties as an officer, employee or consultant of any Group Company, 4th Screen, 4th Screen Newco or any member of the Purchaser Group (provided 4th Screen does not become engaged, concerned or interested to any material extent in carrying out any Competing Business outside its core business of mobile advertising).

		
	7.8
	Nothing in this clause 7 shall prohibit [***] from holding shares in Charteris plc.

		
	7.9
	In this clause 7, any reference to the "Business" includes any Business that may for the time being be transferred by a Group Company to any other member of the Purchaser Group.

		
	7.10
	Each Vendor (having taken legal advice) agrees and acknowledges that the restrictions contained in this clause 7 are fair and reasonable and necessary to assure to the Purchaser the full value and benefit of the Shares.

		
	8.
	VENDORS' LIABILITY

		
	8.1
	Unless otherwise expressly provided in this agreement, any covenant, undertaking, warranty, indemnity or other obligation given or assumed by more than one Vendor in this agreement is given or assumed severally.

		
	8.2
	The Purchaser may release or compromise the liability of any Vendor under this agreement or grant any time or other indulgence to any Vendor without affecting the liability of any other Vendor provided that the liability of the other Vendors is not increased beyond their respective Relevant Amounts of such liability.

		
	8.3
	Where a liability of one or some but not all of the Vendors is or becomes illegal, invalid or unenforceable in any respect, that shall not affect or impair the liabilities of the other Vendors under this agreement, provided that the liability of the other Vendors is not increased beyond their respective Relevant Amounts of such liability.

		
	9.
	VENDORS' REPRESENTATIVE

		
	9.1
	Subject to clause 9.5, each Vendor irrevocably appoints the Vendors' Representative as its agent:

10

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	9.1.1
	to negotiate, compromise, agree and settle any Acquisition Dispute with the Purchaser on its behalf;

		
	9.1.2
	to act on its behalf in relation to any matter which this agreement expressly provides to be agreed or done by the Vendors' Representative (including, without limitation, in relation to the USA Integration Plan where specified in part 5 of schedule 10); and

		
	9.1.3
	to negotiate, agree and/or determine the Earn-Out Consideration and any adjustment to the Initial Consideration.

		
	9.2
	Without prejudice to clause 9.1, each Vendor irrevocably agrees that any Notice, consent or agreement, election, demand or other action to be given, made or taken by such Vendor (whether individually or with others) under or in connection with this agreement may be given, made or taken on its behalf by the Vendors' Representative.

		
	9.3
	Each Vendor irrevocably:

		
	9.3.1
	(subject to clause 9.5) undertakes to the Purchaser that the Vendors' Representative has and shall retain the authority to bind it in relation to the matters referred to in clauses 9.1 and 9.2 ("Relevant Matters");

		
	9.3.2
	agrees that the Purchaser shall be entitled to rely on any Notice or communication in writing provided by the Vendors' Representative in relation to any Relevant Matter as binding on it; and

		
	9.3.3
	agrees that any Notice or communication in writing by the Vendors' Representative to the Purchaser in relation to any Relevant Matter shall be deemed (unless the context requires otherwise) to be provided by the Vendors' Representative as agent for all of the Vendors.

		
	9.4
	Each Vendor:

		
	9.4.1
	(subject to clause 9.5) irrevocably appoints the Vendors' Representative as its agent to accept service on its behalf of (a) Notices and (b) process in any legal action or proceedings relating to any Acquisition Dispute;

		
	9.4.2
	irrevocably agrees that any Notice to be given to it is deemed to have been properly given if it is given to the Vendors' Representative in accordance with the provisions of clause 22 (whether or not such Notice is forwarded to or received by such Vendor); and

		
	9.4.3
	irrevocably agrees that failure by the Vendors' Representative to notify it of the process will not invalidate the legal action or proceedings concerned.

		
	9.5
	If, for any reason, the Vendors' Representative ceases to be able to act for the purposes of this clause 9, the Vendors shall immediately:

		
	9.5.1
	(subject to this clause 9.5) irrevocably appoint a substitute Vendors' Representative; and

		
	9.5.2
	notify the Purchaser of the name, relevant contact (where appropriate) and postal and email addresses of the substitute Vendors' Representative.

Such appointment and notice shall be effective on the fifth Business Day after the date on which the notice given pursuant to clause 9.5.2 is deemed to have been served or delivered in accordance with clause 22.
		
	9.6
	If, on any occasion, there is no Vendors' Representative:

		
	9.6.1
	the Purchaser shall be entitled to deal with the Vendors instead;

11

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	9.6.2
	(except in schedule 1 and in this clause 9) references in this agreement to the Vendors' Representative shall be construed accordingly; and

		
	9.6.3
	for the purposes of clause 22.3, the relevant contact (where appropriate) and postal and email addresses of the Vendors shall be as set out in column (2) of schedule 2.

		
	10.
	CONFIDENTIALITY AND ANNOUNCEMENTS

		
	10.1
	Subject to clause 10.2 and save for the Press Release, no party shall at any time issue any press release, circular or other publicity (nor permit any person connected with it to issue any press release, circular or other publicity) relating to the existence or provisions of this agreement or any other Acquisition Document or the sale of the Shares.

		
	10.2
	Clause 10.1 shall not apply:

		
	10.2.1
	if and to the extent that an announcement is required:

		
	10.2.1.1
	by Law; or

		
	10.2.1.2
	by any Authority or securities exchange to which the relevant party (or person connected with it) is subject or submits, wherever situated, whether or not the requirement for disclosure has the force of law,

		
	10.2.2
	if and to the extent that the announcement is expressly required or permitted by this agreement; and

		
	10.2.3
	if the announcement is made with the prior consent of the other party, such consent not to be unreasonably withheld or delayed.

		
	11.
	ASSIGNMENT AND SUCCESSORS

		
	11.1
	In this clause 11, any reference to a party's "rights under this agreement" includes all or any benefits or rights of that party under this agreement, including (in the case of the Purchaser) the Warranties (together with any cause of action arising out of or in connection with any Warranty).

		
	11.2
	Unless otherwise expressly provided in this agreement, no party may assign, transfer, grant any Encumbrance over, declare any trust over or deal in any way with its rights under this agreement without the prior consent of the other party, such consent not to be unreasonably withheld or delayed.

		
	11.3
	The Purchaser may, at any time and on more than one occasion, assign or grant any Encumbrance over its rights under this agreement by way of security in favour of any person who has agreed at any time to provide finance to the Purchaser or any other member of the Purchaser Group so long as such person remains a member of the Purchaser's Group, and/or to any agent or trustee of such person for the time being; and any such security may be enforced or released.

		
	11.4
	If there is an assignment, transfer, grant, declaration or dealing by a party as permitted by this clause 11:

		
	11.4.1
	such party shall, as soon as reasonably practicable, give notice of such dealing to the other party; and

		
	11.4.2
	the amount of loss or damage recoverable by any assignee or other person entitled to the rights under this agreement pursuant to this clause 11 shall not be greater than the amount of loss or damage which that party would have been able to recover had (a) such assignment, transfer, grant, declaration or dealing and (b) any related transfer of all or any of the Shares not taken place.

		
	11.5
	A party may disclose information that it is otherwise required to keep confidential under clause 10 to a proposed assignee or any other person with whom it is dealing as permitted by this 

12

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

clause 11, provided that it procures that such person complies with the provisions of clause 10 as if they were that disclosing party.
		
	11.6
	This agreement shall be binding on and continue for the benefit of the successors, estate and personal representatives and assignees (as the case may be) of each party.

		
	12.
	THIRD PARTY RIGHTS

		
	12.1
	In this clause:

"Purchaser Group Transferee" means a member of the Purchaser Group (other than the Purchaser and any Group Company) to which a Relevant Transfer has been made; and
"Relevant Transfer" means the transfer of all or any of the Shares.
		
	12.2
	The Vendors and the Purchaser agree that any Purchaser Group Transferee shall be entitled to, and may enforce (either on its own or together with the Purchaser and/or any other Purchaser Group Transferee), the benefit and rights of the Purchaser under the following provisions of this agreement as if such Purchaser Group Transferee had been originally named as the Purchaser in this agreement:

		
	12.2.1
	clause 2.3 (Title covenants);

		
	12.2.2
	clause 5 (Warranties) and schedule 4 (General Warranties); and

		
	12.2.3
	schedule 5 (Tax),

provided that:
		
	12.2.4
	any Purchaser Group Transferee which is entitled to make a claim under this clause 12.2 shall be subject to the limitations contained in this agreement as if it had been originally named as the Purchaser;

		
	12.2.5
	this clause 12.2 shall not result in the Vendors being liable to pay damages or other compensation or reimbursement more than once in respect of the same loss; and

		
	12.2.6
	the amount of loss or damage recoverable by any Purchaser Group Transferee shall not be greater than the amount of loss or damage which the Purchaser would have been able to recover had the Relevant Transfer not taken place.

		
	12.3
	Those persons named, or which fall within the class of person described, in column (1) of the table below ("Third Parties") may enforce against the parties the benefits and rights given to them under the clause(s) set out against their name or class in column (2), subject to and in accordance with:

		
	12.3.1
	the terms of such clause(s); and

		
	12.3.2
	(subject to clauses 12.4 and 12.6) the provisions of the Contracts (Rights of Third Parties) Act 1999 ("CRTPA"),

provided that a Third Party shall give written notice to the parties to this agreement confirming its agreement to clause 26 before bringing any legal action or proceedings to enforce any of its benefits or rights under this agreement.

13

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

	
		
	(1)
Third party
	(2)
May enforce clause

	Each Group Company 
	5.6
(No claim against any Group Company in respect of misrepresentation, etc)

	Each Group Company
	7
(Restrictive covenants)

	Member of the Purchaser Group (except the Purchaser)
	7
(Restrictive covenants)

	Member of the Purchaser Group (as such group is constituted immediately before Completion, but excluding the Purchaser)
	10
(Confidentiality)

	Purchaser Group Transferee
	12.2
(Third party rights)

	Those persons identified in clause 16.7
	16.4 and 16.7

		
	12.4
	Unless otherwise expressly provided in this agreement, no Third Party may assign, transfer, grant any Encumbrance over, declare any trust over or deal in any way with any benefit or right conferred on it by clause 12.3 without the prior consent of each party, such consent not to be unreasonably withheld or delayed.

		
	12.5
	The Purchaser may disclose information that it is otherwise required to keep confidential under clause 10 to a Third Party, provided that:

		
	12.5.1
	such disclosure is reasonably required for the Third Party to enjoy or enforce the benefits or rights conferred on it by clause 12.3; and

		
	12.5.2
	the disclosing party:

		
	12.5.2.1
	ensures that the Third Party to whom the information is to be disclosed is made aware of the provisions of clause 10 before such disclosure is made; and

		
	12.5.2.2
	procures that such Third Party agrees to comply with the provisions of clause 10 as if they were that disclosing party. 

		
	12.6
	The parties to this agreement may, without the consent of any Third Party, rescind or vary this agreement in such a way as to extinguish or reduce the benefits or rights conferred by clause 12.3.

		
	12.7
	Except as provided in clause 12.3, a person who is not a party to this agreement shall not have any right under the CRTPA to enforce any term of this agreement.  This clause does not affect any right or remedy of any person which exists or is available otherwise than pursuant to the CRTPA.

		
	12.8
	Without prejudice to clause 12.7, no successor or assignee of any party shall have any right under the CRTPA to enforce any term of this agreement, whether before or following its succession or the assignment to it.  The rights of such successor or assignee shall, subject to and following any succession or assignment, be governed by the terms of this agreement.

		
	13.
	COSTS AND EXPENSES

Unless otherwise expressly provided in this agreement, each party shall bear its own costs and 

14

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

expenses incurred in relation to the negotiation, preparation, execution and implementation of this agreement.
		
	14.
	PAYMENTS

		
	14.1
	Any payment to be made to any Vendor under this agreement shall be effected by transfer of immediately available funds through a UK clearing bank to the client account of the Vendors' Solicitors.  The Vendors' Solicitors are irrevocably and unconditionally authorised to receive any sum paid to them in accordance with this clause 14.1, receipt of such sum in their client account shall be an effective discharge of the Purchaser's obligation to pay or procure payment of such sum, and the Purchaser shall not be concerned to see to the application of it.

		
	14.2
	Before any amount due to the Vendors in accordance with this agreement is distributed, the Vendors agree and acknowledge to the deduction by the Vendors' Solicitors of costs and expenses incurred in relation to the negotiation, preparation, execution and implementation of this agreement, such costs and expenses to be deducted in the CC Relevant Percentages.

		
	14.3
	Any payment to be made to the Purchaser under this agreement shall be effected by transfer of immediately available funds through a UK clearing bank to the account of the Purchaser notified to the relevant Vendor for this purpose.

		
	14.4
	Where this agreement requires a payment to be made on a particular date, any notice to be given pursuant to clause 14.3 must be deemed to have been served or delivered in accordance with clause 22 not less than three Business Days before that date.

15.    FURTHER ASSURANCE
Without prejudice and in addition to the other provisions of this agreement (whether express or implied by Law), each Vendor severally in respect of its own obligations only shall, from time to time and at its own expense, promptly do (or procure to be done) all such other things and/or execute and deliver (or procure to be executed and delivered) all such other documents as the Purchaser may reasonably require and in a manner or form reasonably satisfactory to the Purchaser to give full effect to, and to secure to the Purchaser the full benefit of the rights and remedies conferred on it by, the Acquisition Documents.
		
	16.
	ENTIRE AGREEMENT

		
	16.1
	In this clause 16, "Pre‐Contractual Statement" means any representation, statement, assurance, covenant, undertaking, warranty, indemnity, guarantee or commitment (whether contractual or otherwise) made or given before the date of this agreement.

		
	16.2
	The Acquisition Documents supersede and extinguish all previous agreements, arrangements and understandings between, or Pre‐Contractual Statements given by, the parties relating to the subject matter of the Acquisition Documents (or any of them).

		
	16.3
	The Acquisition Documents (as varied in accordance with their terms) constitute the entire agreement and understanding between the parties in respect of the subject matter of the Acquisition Documents (or any of them).

		
	16.4
	Each party acknowledges and represents to the other that it has not relied on, or been induced to enter into this agreement or any other Acquisition Document by, any Pre‐Contractual Statement given by any person (whether a party to this agreement or not), other than the Pre‐Contractual Statements set out in the Acquisition Documents (or any of them).

		
	16.5
	No party shall be liable to the other in equity, contract or tort (including negligence), under the Misrepresentation Act 1967 or in any other way for any Pre‐Contractual Statement that is not set out in this agreement or any other Acquisition Document.

		
	16.6
	No party shall be liable to the other in tort (including negligence) or under the Misrepresentation 

15

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

Act 1967 for any Pre‐Contractual Statement that is set out in this agreement or any other Acquisition Document.
		
	16.7
	No member of the Purchaser Group (other than the Purchaser), nor any adviser to or funder of the Purchaser or such member, shall be liable to any Vendor (in equity, contract or tort (including negligence), under the Misrepresentation Act 1967 or in any other way) for any Pre‐Contractual Statement.

		
	16.8
	This clause 16 shall not exclude or limit any liability arising as a result of any fraud, wilful misstatement, wilful misconduct or wilful concealment.

		
	17.
	EFFECT OF COMPLETION

Each provision of this agreement which is not fully performed at Completion (but which remains capable of performance) shall remain in full force and effect despite Completion, and, in particular, the rights and remedies of the Purchaser in respect of any breach of the Warranties shall not be affected by Completion.
		
	18.
	SEVERANCE

		
	18.1
	If 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:

		
	18.1.1
	the legality, validity or enforceability in that jurisdiction of any other provision of this agreement; or

		
	18.1.2
	the legality, validity or enforceability under the Law of any other jurisdiction of that or any other provision of this agreement.

		
	18.2
	If any illegal, invalid or unenforceable provision of this agreement would be legal, valid or enforceable if some part or parts of it were deleted, such provision shall apply with the minimum deletion(s) necessary to make it legal, valid or enforceable.

		
	19.
	VARIATION

No variation of this agreement shall be valid unless it is in writing and signed by or on behalf of the Vendors' Representative and the Purchaser.
		
	20.
	WAIVER AND CUMULATIVE REMEDIES

		
	20.1
	The rights and remedies of each party under or in respect of this agreement may be waived only by express notice.  Any waiver shall apply only to the person to whom it is addressed and in the instance and for the purpose for which it is given.

		
	20.2
	Subject to the provisions of schedule 6, no right or remedy under or in respect of this agreement shall be precluded, waived or impaired by:

		
	20.2.1
	any failure to exercise or delay in exercising it;

		
	20.2.2
	any single or partial exercise of it;

		
	20.2.3
	any earlier waiver of it, whether in whole or in part; or

		
	20.2.4
	any failure to exercise, delay in exercising, single or partial exercise of or waiver of any other such right or remedy.

		
	20.3
	Where the Purchaser waives a right or remedy in relation to one or some but not all of the Vendors, or takes or fails to take or delays in taking any action against one or some but not all of the Vendors, such waiver, action, failure or delay shall not preclude, waive or impair its rights or remedies against the remaining Vendors, provided that such Vendors shall only be responsible severally in respect of such right or remedy in their respective Relevant Amounts.

16

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	20.4
	Unless otherwise expressly provided in this agreement, the rights and remedies under this agreement are in addition to, and do not exclude, any rights or remedies provided by Law or in equity.

		
	21.
	COUNTERPARTS

		
	21.1
	This agreement may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each party has executed at least one counterpart.

		
	21.2
	Each counterpart shall constitute an original of this agreement, but all the counterparts shall together constitute one and the same agreement.

		
	22.
	NOTICES

		
	22.1
	Any notice or other communication to be given or made to a party under this agreement ("Notice"):

		
	22.1.1
	shall be in writing and in English;

		
	22.1.2
	shall be sent to the postal or email address and (where appropriate) for the attention of the person specified in clause 22.3 (or such other address or person as may be notified to the others in accordance with clauses 9.5 or 22.6); and for the attention of the person specified in:

		
	22.1.2.1
	in the case of a Notice to any Vendor, column (2) of schedule 2; or

		
	22.1.2.2
	in the case of a Notice to the Purchaser, clause 22.3,

or such other address or person as each party may notify to the other in accordance with clause 22.6; and
		
	22.1.3
	may be served on or delivered to the relevant party:

		
	22.1.3.1
	personally or by hand delivery;

		
	22.1.3.2
	by special (or other recorded) delivery post; or

		
	22.1.3.3
	subject to clause 22.2, by email.

		
	22.2
	When a Notice is served on or delivered to a party ("Recipient") by email, the party serving or delivering the Notice ("Sender") must deliver a copy of such Notice to the Recipient in accordance with the provisions of clauses 22.1.3.1 and 22.4.1 or clauses 22.1.3.2 and 22.4.2 by 5.00 pm on the fifth Business Day after the date on which the original Notice is deemed to have been served or delivered in accordance with clause 22.4.3.  Failure by the Sender to deliver such copy Notice to the Recipient shall not invalidate the service or delivery of the original Notice (or delay the time of deemed service or delivery under clause 22.4.3).

		
	22.3
	The postal and email addresses of the parties for the purposes of clause 22.1.2 are: 

17

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

	
		
	Vendors:
	 

	Vendors' Representative:
	Barry Houlihan

	Address:
	As per column (2) of schedule 2

	Email:
	As per column (2) of schedule 2

	With a copy to
(a copy of which shall not constitute notice)
	Roger Keenan

	Address:
	As per column (2) of schedule 2

	Email:
	As per column (2) of schedule 2

	 
	 

	Purchaser:
	 

	For the attention of:
	Sally Rau

	Address:
	Velti, 150 California Street, San Francisco, CA 94111

	Email:
	Srau@velti.com

		
	22.4
	Any Notice which has been served or delivered in accordance with clause 22.1 shall be deemed to have been served or delivered:

		
	22.4.1
	if served or delivered personally or by hand, at the time of service or delivery;

		
	22.4.2
	if posted, at 10.00 am on the second Business Day after the date of posting unless there is evidence of earlier receipt; or

		
	22.4.3
	if sent by email, at the time the email is sent,

provided that if, under clauses 22.4.1 or 22.4.3, any Notice would be deemed to have been served or delivered after 5.00pm on a Business Day and before 9.00am on the next Business Day, such Notice shall be deemed to have been served or delivered at 9.00am on the second of such Business Days. 
		
	22.5
	In proving service or delivery of a Notice, it shall be sufficient to prove that Recipient has acknowledged the Notice or:

		
	22.5.1
	that service or delivery personally or by hand was made;

		
	22.5.2
	in the case of posting, that the envelope containing the Notice was properly addressed and posted by special (or other recorded) delivery post; or

		
	22.5.3
	in the case of an email, that the email was properly addressed and sent to the email address of the Recipient for the purposes of clause 22.1.2 (a confirmation setting out each Recipient to whom the email was sent being proof of service).

		
	22.6
	A party may notify the other party of a change to its name, postal or email address or relevant contact for the purposes of clause 22.1.2.  Such notice shall be effective on the fifth Business Day after the date on which such notice is deemed to have been served or delivered in accordance with this clause 22, or such later date as may be specified in the notice.

		
	23.
	PROCESS OF SERVICE IN THE UK

		
	23.1
	The Purchaser appoints Constance McFadden of 2 Paris Gardens, London SE1 8ND fax +44 (0)207633 5001 as its agent to receive on its behalf in England service of any proceedings including any arbitration proceedings arising out of or in connection with this agreement.  Service of any proceedings on such agent shall be effective whether or not a copy is served on the Purchaser itself.

18

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	23.2
	The appointment under clause 23.1 may not be revoked by the Purchaser unless the Purchaser has previously appointed a substitute process agent in England to act in place of Constance McFadden for the purposes set out in clause 23.1 and has given written notice to the Vendors of such appointment.

		
	24.
	4TH SCREEN PERFORMANCE GUARANTEES

		
	24.1
	Each Vendor hereby undertakes to indemnify and keep indemnified the Purchaser and any Group Company (without limitation) for that Vendor’s CC Relevant Percentage of any losses, demands, damages, costs, claims, expenses and interest incurred or suffered by any of the Purchaser and/or any Group Company out of or in respect of the Performance Guarantees.

		
	24.2
	The Vendors shall each use their reasonable endeavours to procure that the Performance Guarantees are released as soon as reasonably practicable after the Completion Date and in any event within 12 months of the Completion Date.

		
	25.
	WAIVER OF CLAIMS

Each Vendor, save in respect of any rights pursuant to (i) this agreement, (ii) any transaction referred to in this agreement, (iii) any document in the Agreed Form and (iv) the employment contract of such Vendor, hereby confirms that:
		
	25.1
	neither he nor any spouse or child of his nor any company of which he (and/or any spouse or child of his) has or have control (as defined in section 1124 of the CTA 2010) ("Controlled Company") has any right or claim against any Group Company;

		
	25.2
	there are no agreements or arrangements under which any Group Company has any actual, contingent or prospective obligation or liability to or in respect of him or any such spouse, child or Controlled Company (including, without limitation, any obligation under any guarantee entered into by any Group Company); and

		
	25.3
	any claim which he or any such spouse, child or Controlled Company have or has is hereby irrevocably waived and any obligation or liability owed to him or any such spouse, child or Controlled Company is hereby irrevocably released.

For the purposes of this clause 25, a person shall be deemed to be connected with him if that person is so connected within the meaning of section 1122 of the CTA 2010.
		
	26.
	GOVERNING LAW AND JURISDICTION

		
	26.1
	This agreement and any Acquisition Dispute are governed by and shall be construed in accordance with English Law.

		
	26.2
	Each party irrevocably agrees that the courts of England and Wales shall have exclusive jurisdiction to settle any Acquisition Dispute.

		
	26.3
	Each party irrevocably agrees that the courts of England and Wales are the most appropriate and convenient courts to settle Acquisition Disputes and, accordingly, no party will argue to the contrary.  Further, each party irrevocably agrees that a judgment in any legal action or proceedings brought in the courts of England and Wales in relation to an Acquisition Dispute shall be conclusive and binding on the parties and may be enforced in the courts of any other jurisdiction.

		
	26.4
	Each party irrevocably agrees that any process in any legal action or proceedings relating to any Acquisition Dispute may be served on it in accordance with the provisions of clause 22.

		
	26.5
	Nothing in this agreement shall affect the right of any party to serve any process in any legal action or proceedings relating to any Acquisition Dispute in any other manner permitted by Law.

19

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

SCHEDULE 1: DEFINITIONS AND INTERPRETATION
		
	1.
	Definitions

In this agreement:
"4th Screen" means 4th Screen Advertising Limited (company number 5700205) whose registered office is at 7th Floor, The Tower Building, 11 York Road, London SE1 7NX;
"4th Screen Agreement" means the agreement between (1) the Company and (2) 4th Screen Newco or the sale of the Company's shares in the capital of 4th Screen, in the Agreed Form;
"4th Screen Services Agreement" means the agreement between (1) the Company and (2) 4th Screen for the provision by the Company of services to 4th Screen, in the Agreed Form;
"4th Screen Holding" means the entire shareholding of the Company in 4th Screen as at the date of this agreement;
"4th Screen Newco" means 4th Screen Advertising Holdings Limited (company number 7807049) being the new company incorporated for the purpose of acquiring the 4th Screen Holding from the Company;
"Accounting Standards" means:
		
	(a)
	in respect of the Non-UK Group Companies, those generally accepted accounting principles as relevant to each such Group Company which are in force at the date to which annual accounts of such Group Company are prepared;

		
	(b)
	in respect of the UK Group Companies, Statements of Standard Accounting Practice, Financial Reporting Standards, Statements of Recommended Practice and abstracts of the Urgent Issues Task Force issued or adopted by the Accounting Standards Board of the Financial Reporting Council Limited, any other requirement of a United Kingdom accounting body having mandatory effect and other generally accepted accounting principles and practices in the United Kingdom;

"Accounts" means the audited financial statements as at and for the financial year ended on the Accounts Date of each Group Company, which is not a dormant company, comprising:
		
	(a)
	its balance sheet, profit and loss account, cashflow statement and statement of total recognised gains and losses, in each case if required (in the case of the UK Group Companies); 

		
	(b)
	its statement of financial position, income statement, statement of comprehensive income, statement of cashflows and statement of changes in equity, in each case if required (in the case of the Non‐UK Group Companies); and

		
	(c)
	in addition, in the case of the Company only, the consolidated balance sheet, consolidated profit and loss account, consolidated cashflow statement and statement of total recognised gains and losses of the Company and any relevant Subsidiaries (for the accounting period); and

		
	(d)
	the directors' and auditors' reports on and notes to them;

"Accounts Date" means 30 April 2010 other than in the case of Piri Limited where it means 30 June 2010 and in the case of Mobile Interactive Group Holdings (Netherlands) BV and its Subsidiaries where it means 31 December 2009;
"Acquisition Dispute" means any dispute or claim arising out of or in connection with this agreement, its subject matter or formation (including any non‐contractual dispute or claim);
"Acquisition Documents" means this agreement, the Disclosure Letter, documents in the Agreed 

20

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

Form and any other documents to be delivered on Completion (as set out in schedule 8);
"Activities" means any activity, operation or process, act or omission at any time either (a) carried out or made by or on behalf of any Group Company or (b) for which any Group Company may have any liability;
"Aggregate Exercise Price" means the total exercise price payable by an Options Vendor to exercise the Options Vendor's Options as detailed in column (7) of part 2 of schedule 2;
"Agreed Form", in relation to a document, means the form approved and for identification purposes initialled by (or on behalf of) the Vendors and the Purchaser;
"Anniversary Balance Sheet" shall have the meaning given to it in paragraph 1 of part 2 of schedule 9;
"Anniversary Net Current Assets" means the Net Current Assets on the date which is the last day of the month which is 12 months after the Completion Date, as shown by the Anniversary Balance Sheet; 
"Anti‐Corruption Laws" means all anti‐bribery and anti‐corruption Laws (including the Bribery Act 2010 and the United States Foreign Corrupt Practices Act 1977);
"Assets" means all assets used or held by any Group Company and which are material in connection with its business, other than the Property, but including any fixtures at the Property which are owned by any Group Company;
"Authority" means any supra‐national, national or sub‐national authority, commission, department, agency, regulator, regulatory body, court, tribunal or arbitrator in any jurisdiction;
"Bad Leaver" means [***] or [***], if such person dies or ceases to be employed by the Company (and is not employed by another company in the Purchaser’s Group) following Completion or if he (following Completion) continues to be employed by the Purchaser's Group and is in receipt of a permanent health insurance payment under a policy of health insurance pursuant to his employment contract, where such cessation of employment is as a result of him:
(a) resigning or giving notice of termination of his employment contract other than as a result of a repudiatory breach of contract by the Company; or
(b) being dismissed in any such case at the direction of the Purchaser having regard to the relevant circumstances as reasonably determined by the Purchaser's Board of Directors as a result of:
(i) acts or omissions constituting gross negligence, recklessness or willful misconduct on the part of such person with respect to such person’s obligations or otherwise relating to the business of any Group Company; or
(ii)  such person’s repudiatory breach of his employment agreement with the Company  and his failure to reasonably cure such breach after provision of 30 days written notice from the Company, the Purchaser or another member of the Purchaser's Goup of such alleged breach; or
(iii) his conviction or entry of a plea of nolo contendere for fraud, misappropriation or embezzlement, or any felony or crime of moral turpitude; or
(iv) his willful neglect of duties,
and for the purpose of this definition the deemed date of cessation of employment of such persons (as appropriate), shall be the date upon which 

21

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

his employment with the Purchaser's Group terminates, or the date upon which he is first in receipt of permanent health insurance in in respect of long term incapacity, or if earlier, the date upon which he gives or is given or purportedly gives or is given notice of termination of such employment pursuant to the above provisions;
"Borrowings" means borrowings or indebtedness in the nature of borrowing of any Group Company (including (a) loans and bank overdrafts; (b) liabilities under acceptances (otherwise than in respect of normal trade bills), acceptance credits, finance or equivalent leases, hire purchase agreements and conditional sale agreements; and (c) amounts raised by other transactions having the commercial effect of borrowing), other than trade credit arising in the ordinary and usual course of any Group Company's business;
"Business" means any business carried on by the Group Companies as at the Completion Date or during the period of 12 months ending on the Completion Date;
"Business Day" means a day other than a Saturday or Sunday on which banks are open for general business in London and New York;
"Business Intermediary" means any partner, agent, sales agent, commission agent, distributor, reseller, consultant or representative of a Group Company, or any other third party with whom a Group Company transacts or has transacted business that, in each case, is or was authorised to act in any way on its behalf;
"Cash Contingent Earn Out Consideration" means a sum equal to the Contingent Earn Out Consideration, less an amount equal to the value of the Contingent Earn Out Consideration Shares (as determined in accordance with part 2 of schedule 10) being the sum payable in cash (if any);
"CC Relevant Percentage" means the percentage set opposite the relevant Vendor's name in column (6) of schedule 2;
"Competing Business" means any business which competes with a material part of the mobile, messaging, secure micropayment solutions and/or advertising (including without limitation via web, mobile, social media and CRM) services of the Business;
"Competition Laws" means all competition, state aid, anti‐trust or anti‐restrictive trade practice or merger control Laws (including Articles 101, 102 and 106 to 109 of the Treaty on the Functioning of the European Union, sections 2 and 18 of the Competition Act 1998, section 188 of the Enterprise Act 2002 and Council Regulation 139/2004/EC on the control of concentrations between undertakings);
"Completion" means completion of the sale and purchase of the Shares in accordance with this agreement;
"Completion Balance Sheet" shall have the meaning given to it in paragraph 1 of part 1 of schedule 9;
"Completion Date" means the date of this agreement;
"Completion Net Current Assets" means the Net Current Assets on the date which is the last day of the month in which the Completion Date falls, as shown by the Completion Balance Sheet;
"Computer Systems" means any computer systems owned, used, leased or licensed by or to, or for the benefit of, any Group Company (including computer hardware and peripherals, telecommunications and network equipment and infrastructure and any operating systems for them), and any other information technology related plant and equipment and in each case the loss of which would have a materially adverse effect on the operation of and/or the business of any Group Company;

22

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

"Computer Systems Contracts" means all Contracts relating to the Computer Systems or the Software (including leasing, hiring, hire purchase, licensing, maintenance, support, services, deposit and escrow agreements, and any similar agreements or arrangements, but excluding all Contracts for office functions such as word processing);
"Computer Systems Data" means any information technology related documentation, documentation supporting any Software (including system documentation, notes and flowcharts) which is material to the Business and all data and information entered into, held or stored on or transmitted by the Computer Systems or created by any Group Company using the Computer Systems, whether or not that data or information is Confidential Information;
"Confidential Information" means all and any information which is not in the public domain and which relates to the business, trading or financial or other affairs of any Group Company (including information relating to the products or services, processes and operations of any Group Company, its customer and supplier lists, price lists, contractual arrangements, market opportunities, plans and intentions, developments, data, results, inventions (whether patentable or not), know‐how, show‐how, trade secrets, forecasts, analyses, evaluations, research methodologies, technical or business information, personnel information and other matters concerning the business, trading or financial or other affairs of, or relating to, any Group Company or its customers or other persons having dealings with it), whether such information is oral, in writing, electronic or other form, whether tangible or otherwise or marked in writing as "confidential", and all and any information which has been or may be derived or obtained from any such information;
"Consideration" means the consideration for the Shares set out in clause 3;
"Consideration Shares" means the Deferred Consideration Shares (if any), the Initial Equity Consideration Shares (if any) and the Contingent Earn Out Consideration Shares (if any) and the Consideration Shares shall rank pari passu in all respects with the existing ordinary shares of £0.05 each in the capital of the Purchaser and any dividend declared or paid by reference to a record date falling on or after the due date of issue and allotment;
"Contingent Earn Out Claim Amount" means a sum equal to 20% of the value of the Contingent Payment;
"Contingent Earn Out Consideration" means any sums which become due to the Vendors in accordance with part 2 of schedule 10;
"Contingent Earn Out Consideration Payment Date" means the date on which the Contingent Earn Out Consideration is due to be paid in accordance with paragraph 7 of part 2 of schedule 10;
"Contingent Earn Out Consideration Shares" means the ordinary shares of £0.05 each in the capital of the Purchaser, to be issued and allotted pursuant to part 2 of schedule 10;
"Contingent Payment" means the aggregate of the Contingent Earn Out Consideration and the Management Bonus as calculated in accordance with part 2 of schedule 10;
"Contract" means any agreement or other legally binding obligation which in either case is material to the Business to which any Group Company is a party or subject and under which such Group Company or any other person has a continuing right, obligation or liability, including the Computer Systems Contracts, the IP Licences In and any IP Licences Out, but excluding (a) the contracts of employment of the employees, (b) the Policies and (c) non disclosure agreements;
"Covenantors" means [***], [***], [***], [***], [***], [***] and [***] and each a "Covenantor"; 
"CTA 2010" means the Corporation Tax Act 2010;
"Customer" means any person who at any time during the period of 12 months ending on the Completion Date was a customer or client of any Group Company;

23

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

"Data Protection Laws" means all Laws relating to processing of personal data and privacy (including the Data Protection Act 1998, the EU Data Protection Directive (95/46/EC), the Regulation of Investigatory Powers Act 2000, the Telecommunications (Lawful Business Practice) (Interception of Communications) Regulations 2000, the Electronic Communications Data Protection Directive (2002/58/EC) and the Privacy and Electronic Communications (EC Directive) Regulations 2003);
"Data Room" means the virtual data room containing certain documents relating to the Group Companies made available to the Purchaser and its advisers as listed in the Data Room Index;
"Data Room Index" means the indices of the contents of the Data Room which are attached to the Disclosure Letter;
"DC Relevant Percentage" means the percentage set opposite the relevant Vendor's name in column (5) of schedule 2;
"Deferred Consideration" has the meaning given to it in clause 3.13;
"Deferred Consideration Shares" means the ordinary shares of £0.05 each in the capital of the Purchaser to be issued and allotted pursuant to clause 3.13;
"Disclosed" means:
		
	(a)
	for the purposes of schedule 4 and schedule 5, disclosed in the Data Room;

		
	(b)
	for the purposes of schedule 4 and part 2 of schedule 5, fairly disclosed to the Purchaser in the Disclosure Letter; and

		
	(c)
	otherwise, fairly disclosed to the Purchaser in the Disclosure Letter, with sufficient detail to enable the Purchaser to identify the nature, scope and effect of the matter or thing disclosed;

"Disclosed Schemes" means the Pension Schemes and the Insured Schemes;
"Disclosure Letter" means the letter of the same date as this agreement from the Vendors to the Purchaser relating to the Warranties, together with any documents annexed to it (including the Data Room);
"Dispute" means any dispute or civil, criminal, regulatory or administrative action, claim, proceeding, suit, investigation, arbitration or any form of alternative dispute resolution or any other proceeding or hearing whatsoever;
"Encumbrance" means any mortgage, charge, pledge, lien, deposit by way of security, bill of sale, option, assignment (contingent or otherwise), right to acquire, right of pre‐emption or agreement for or obligation as to any of the same;
"Environment" means all and any living organisms or ecosystems (including man, flora and fauna), the media of air (including air within buildings, other man‐made structures and natural structures above or below ground), water (including controlled waters as defined in section 104(1) of the Water Resources Act 1991 and water within drains and sewers) and land (including buildings and other man‐made structures above or below ground);
"Environmental Consents" means all licences, certificates, consents, exemptions, permits, registrations, authorisations, permissions, approvals, orders, filings, reporting or notice requirements and any related agreement required under any Environmental Laws;
"Environmental Laws" means all Laws which:
		
	(a)
	have as a purpose or effect the protection of, or prevention of harm to, human health or the Environment;

24

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	(b)
	relate to health and safety or compensation for harm; or

		
	(c)
	relate to the generation, transportation, storage, treatment, use or disposal of any Hazardous Substance;

"Estimated Net Current Assets" means minus £3,471,362; 
"Final DC Payment Date" means the date falling 18 months after the Completion Date;
"Fundamental Warranties" means any of the General Warranties in the following paragraphs of schedule 4:
		
	(a)
	paragraph 1 of part 1 (Capacity);

		
	(b)
	paragraph 2 of part 1 (Ownership of Shares); and

		
	(c)
	paragraph 1 of part 2 (Share capital);

"General Warranties" means the warranties given by the Vendors in clauses 5.1 and  5.2, other than the Tax Warranties;
"General Warranty Claim" means any claim for or in respect of any breach of the General Warranties;
"Group Executives" means [***], [***], [***], [***]and [***];
"Group Companies" means the Company and all its Subsidiaries (excluding 4th Screen), and "Group Company" means any of them;
"Hazardous Substance" means any natural or artificial substance or thing (whether solid, liquid or a gas), noise, ion, vapour, electromagnetic charge or radiation, whether alone or in combination, which:
		
	(a)
	is likely to cause harm to or have a deleterious effect on the Environment;

		
	(b)
	is likely to cause a nuisance;

		
	(c)
	is a controlled, special, hazardous, polluting, toxic or dangerous substance or waste; or

		
	(d)
	materially restricts or makes materially more costly the use, development, ownership or occupation of the Property;

"Indemnity Claim" means any claim under clause 5.8;
"Initial Consideration" has the meaning given to it in clause 3.2;
"Insolvency Event" means, in relation to a person, any of the following: 
		
	(a)
	the existence of circumstances by which it is likely to be deemed to be, or otherwise declare itself to be, insolvent or unable to pay its debts as they fall due;

		
	(b)
	the cessation or suspension of the payment of all, or a particular class of, its creditors or a threat to do so;

		
	(c)
	the taking of any formal or informal steps with a view to the deferral, rescheduling or other readjustment of all, or a particular class of, its creditors, or the taking of any formal steps to make a general assignment or arrangement or composition with or for the benefit of the relevant creditors;

		
	(d)
	any form of liquidation, receivership, administrative receivership, administration, arrangement or scheme with creditors, moratorium, stay or limitation of creditors' rights, interim or provisional supervision by the court or by persons appointed by the court (or 

25

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

any equivalent or similar procedure under the Laws of any jurisdiction in which the relevant person is incorporated, registered, domiciled or resident or carries on business or has assets) being commenced or otherwise in place or under way in relation to it, whether in or out of court; or
		
	(e)
	any distress, execution or other process being levied against any of its assets which has not been satisfied in full;

"Insured Schemes" means the AXA Private Medical Benefits Scheme and the Anthem Blue Cross of California HMO Medical Plan;
"Interim DC Payment Date" means the first anniversary of the Completion Date;
"Initial Equity Consideration" means a sum equal to $5,000,000;
"Initial Equity Consideration Payment Date" means 1 April 2012;
“Initial Equity Consideration Shares" means the ordinary shares of £0.05 each in the capital of the Purchaser to be issued and allotted pursuant to clause 3.18;
"IP" means:
		
	(a)
	patents, rights in inventions, know‐how, show‐how and trade secrets, copyright and related rights, moral rights, registered designs, design rights, database rights, semiconductor topography rights, trade marks and service marks, trade names, business names, brand names, get‐up, logos, domain names and URLs, rights in unfair competition, goodwill and rights to sue for passing‐off and any other intellectual property rights (in each case, whether or not registered, and including all applications to register and rights to apply to register any of them and all rights to sue for any past or present infringement of them); and

		
	(b)
	all rights or forms of protection having equivalent or similar effect in any jurisdiction;

"IP Licences In" means all material subsisting licences, permissions or other contractual rights (whether in writing or otherwise) granting the any Group Company rights to use IP owned by another person other than licences in respect of office functions such as word processing;
"IP Licences Out" means all material subsisting licences, permissions or other contractual rights (whether in writing or otherwise) by which any Group Company grants third parties rights to use any Owned IP or Licensed‐In IP on terms which restrict the Group's ability to freely use such IP or which could create any ownership interest in such IP on the part of such third party;
"Judgment" means any judgment, order, decree, award, demand, ruling, injunction or decision from any Authority;
"Leases" means the leases (which expression includes underleases and licences) under which each Property is held, occupied or used by the Relevant Group Companies;
"Liability Amount" means: 
		
	(a)
	in relation to a Tax Claim or a Specific IP Claim a sum equal to the aggregate of:

		
	(i)
	the Deferred Consideration to the extent it has not fallen due for payment at the date of the claim; and

		
	(ii)
	the Contingent Earn Out Claim Amount,

less any amounts claimed under (b) below;
and
		
	(b)
	in relation to all other claims under this agreement (other than a claim for a breach of 

26

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

a Fundamental Warranty) a sum equal to the aggregate of:
		
	(i)
	the Deferred Consideration to the extent it has not fallen due for payment at the date of the claim; and

		
	(ii)
	the Contingent Earn Out Claim Amount to the extent that the Contingent Earn Out Consideration has not fallen due for payment at the date of the claim,

less any amounts claimed under (a) above;
"Licences" means licences, certificates, consents, exemptions, permits, registrations, authorisations, permissions and approvals and which in each case are material to the Business;
"Licensed‐In IP" means IP which is the subject of the IP Licences In;
"Loan Notes" means the loan notes to be constituted pursuant to the Loan Note Instrument; 
"Loan Note Instrument" means the instrument, in the Agreed Form, constituting the Loan Notes;
"Management Accounts" means the unaudited balance sheets of each Group Company, and the unaudited consolidated balance sheet of the Group Companies, in each case as at the Management Accounts Date, and the unaudited profit and loss accounts and cashflow statements of each Group Company and the unaudited consolidated profit and loss account and cashflow statements of the Group Companies, in each case for the period from the Accounts Date to the Management Accounts Date;
"Management Accounts Date" means 30 June 2011;
"Management Bonus" means the bonus payable in accordance with part 2 of schedule 10;
"Material Customer" means any customer of any Group Company which (together with its connected persons) in the financial year ended on the Accounts Date accounted for, or in the current financial year is likely to account for, more than five per cent of the aggregate turnover of the Group Companies; 
"Material Supplier" means any supplier to any Group Company which either (a) (together with its connected persons) in the financial year ended on the Accounts Date accounted for, or in the current financial year is likely to account for, more than five per cent of the aggregate value of supplies of goods and services to the Group Companies; or (b) cannot readily be replaced without material disruption, interruption or cost to the Group Companies;
"NASDAQ" means the NASDAQ Global Select Market;
"Net Current Assets" means the consolidated current assets of the Group Companies less the consolidated current liabilities of the Group Companies, both determined in accordance with US GAAP, but excluding any impact of the exercise of Options on or about Completion (either in terms of the cash received therefrom or any Option Relief) and for the avoidance of doubt, any deferred tax liability in respect of capitalised software development shall be excluded from Net Current Assets and the Net Current Assets shall be calculated in GBP and converted to US$ at the quarterly average of the daily exchange rate for the previous quarter as released each Monday afternoon by the Federal Reserve of the United States of America posted at http://www.federalreserve.gov/releases/h10/current/;
"NL Subsidiary" means Mobile Interactive Group Holdings (Netherlands) BV (Dutch commercial registry number KVK27186604) whose principal place of business is at Baarsjesweg 285, 1058AE Amsterdam;
"NL Vendor" means [***] (company number [***]) whose registered office is at [***];

27

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

"Nominated Account" means the client account of the Vendors' Solicitors with account number [***], Sort Code [***], IBAN [***] Swift Code [***] at National Westminster Bank of Law Courts, Temple Bar Branch, PO Box 10720, 217 Strand, London WC2R 1AL;
"Non‐UK Group Companies" means those Subsidiaries set out in part 2 of schedule 3, which are not UK Group Companies;
"Notice" has the meaning given to it in clause 22.1;
"Open Source Software" means software, firmware or middleware which contains code which obliges any Group Company to (a) disclose such software, firmware or middleware; (b) license such software, firmware or middleware; or (c) permit any person to use, or not restrict any person from using, such software, firmware or middleware;
"Options" shall have the meaning set out in schedule 5;
"Options Vendors" means those persons listed in part 2 of schedule 2;
"Owned IP" means all registered IP, and all unregistered IP that is material to the Business, owned by any Group Company;
"Payment Dates" means the Interim DC Payment Date, the Final DC Payment Date, the Initial Equity Consideration Payment Date and the Contingent Earn Out Consideration Payment Date (in each case, if any) and each a "Payment Date";
"Pension Schemes" means the AEGON Scottish Equitable Group Personal Pension Plan for UK employees and Nationale Nederlanden for Netherlands employees;
"Performance Guarantees" means all indemnities, counter indemnities, guarantees or other letters of comfort given to any third parties by a Group Company in respect of any obligation of 4th Screen;
"Planning Laws" means all Laws relating to planning matters (including the Town and Country Planning Act 1990, the Planning (Listed Buildings and Conservation Areas) Act 1990, the Planning (Hazardous Substances) Act 1990, the Planning (Consequential Provisions) Act 1990, the Planning and Compensation Act 1991, the Planning and Compulsory Purchase Act 2004 and the Planning Act 2008);
"Policies" means all insurance policies in respect of which any Group Company has an interest (including any active historic policies which provide cover on an occurrence basis);
"Potential Customer" means any person who at any time during the period of 12 months ending on the Completion Date was negotiating with any Group Company with a view to that person becoming a customer or client of any Group Company;
"Press Release" means the press release in the Agreed Form relating to the subject matter of this agreement;
"Previous Accounts" means the audited financial statements of each Group Company, which is not a dormant company, as at and for the two consecutive financial years ended on 30 April 2009, other than in the case of Piri Limited where the date is 30 June 2009 and in the case of Mobile Interactive Group Holdings (Netherlands) BV and its Subsidiaries where the date is 31 December 2008, each comprising:
		
	(a)
	its balance sheet, profit and loss account, cashflow statement and statement of total recognised gains and losses, in each case if required (in the case of the UK Group Companies);

		
	(b)
	its statement of financial position, income statement, statement of comprehensive income, statement of cashflows and statement of changes in equity, in each case if required (in the case of the Non‐UK Group Companies);

28

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	(c)
	in addition, in the case of the Company only, the consolidated balance sheet, consolidated profit and loss account, consolidated cashflow statement and statement of total recognised gains and losses of the Company and any relevant Subsidiaries (for the accounting period); and

		
	(d)
	the directors' and auditors' reports on and notes to them;

"Properties" means all and any part or parts of the leasehold properties detailed in part 4 of schedule 3;
"Purchaser Group" means the Purchaser, any parent undertaking of the Purchaser for the time being, and any undertaking which, in relation to the Purchaser and/or any such parent undertaking, is a subsidiary undertaking for the time being, including each Group Company with effect from Completion (and references to a "member of the Purchaser Group" shall be construed accordingly);
"Purchaser's Solicitors" means DLA Piper UK LLP of Victoria Square House, Victoria Square, Birmingham B2 4DL;
"Relevant Amount" means (save in respect of paragraph 7 of part 4 of schedule 5), in respect of each Vendor an amount equal to the aggregate of
		
	(a)
	in respect of that part of any claim the amount of which is equal to or less than the amount of Deferred Consideration which has not fallen due for payment at the date of such claim, a sum equal to the amount of that part of the claim multiplied by the DC Relevant Percentage; and

		
	(b)
	in respect of that part of any claim the amount which exceeds the amount of Deferred Consideration which has not fallen due for payment at the date of such claim, a sum equal to the amount of that part of the claim multiplied by the CC Relevant Percentage;

"Relevant Group Company" in relation to a part of the Property means that Group Company which is set out in part 4 of schedule 3 as its lessee;
"Restricted Name" means:
		
	(a)
	any name or names identical or similar to or including the words "Mobile Interactive Group", "Golden Bytes", "Piri ", "Piri Enterprise", "MIG", "Jigsaw", "New Toy", "Quinsy", "AllData", "Kilrush" and "Digital Jigsaw" or any colourable imitation of such words;

		
	(b)
	any trade or service mark, business or domain name, design, logo, or any other get‐up or sign used by any Group Company; or

		
	(c)
	any other sign or signs or wording that suggest any connection with the any Group Company, but for the avoidance of doubt excluding "4th Screen", "4th Screen Advertising" and "Mpression";

"Ringfenced Funds" means the funds to be paid to the Company pursuant to clauses 3.6, 3.7 and 3.11 of this agreement;
"Segment Leaders" means [***], [***], [***] and [***];
"Shares" means the 21,788,261 fully paid ordinary shares of £0.001 each in the capital of the Company, which constitute the whole of the issued share capital of the Company;
"Software" means all software, firmware and middleware, whether source code or object code, used by any Group Company and which is material to the Business;
"Specific IP Claims" means a claim for or in respect of any breach of the Warranties set out at paragraphs 5, 6 and 7 of part 4 of schedule 4;

29

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

"Statutory Agreements" means any agreements or legally binding undertakings entered into or given under the provisions of sections 38 and 278 of the Highways Act 1980, section 33 of the Local Government (Miscellaneous Provisions) Act 1982, section 106 of the Town and Country Planning Act 1990 or section 104 of the Water Industry Act 1991, or any equivalent or similar Laws;
"Subsidiaries" means all the subsidiary undertakings of the Company (excluding 4th Screen), further information relating to which is set out in part 2 of schedule 3, and "Subsidiary" means any of them;
"Tax" has the meaning given to it in paragraph 1 of part 1 of schedule 5;
"Tax Authority" has the meaning given to it in paragraph 1 of part 1 of schedule 5;
"Tax Claim" means any claim for or in respect of any breach of the Tax Warranties or under the Tax Covenant;
"Tax Covenant" means any covenant set out in part 3 of schedule 5;
"Tax Warranties" means the warranties given by the Vendors set out in part 2 of schedule 5;
"Transaction Bonus" means any bonus payable to employees of a Group Company in connection with the acquisition of the Shares by the Purchaser (but excluding the Management Bonus);
"UK Group Companies" means the Company, Piri Limited, Digital Jigsaw Limited and Mobile Interactive Technology Limited;
"USA Integration Plan" means the integration plan prepared in relation to the US division of the Business in the Agreed Form;
"Vendors' Representative" means Barry Houlihan (or such other person appointed by the Vendors in accordance with clause 9.5);
"Vendors' Solicitors" means Taylor Wessing LLP of 5 New Street Square, London EC4A 3TW;
"Virus" means any virus or bug which materially and adversely affects software, firmware or middleware (including logic bombs, worms, trap doors, Trojan horses or other similar destructive programs or codes);
"Vulnerable Transaction" means any transaction or arrangement which is capable of being set aside, stayed, reversed or rescinded, avoided or otherwise affected in whole or in part under any Laws (including the Insolvency Act 1986 and any equivalent or similar Laws);
"Warranties" means the General Warranties and the Tax Warranties; and
"Warranty Claim" means any claim for or in respect of any breach of the Warranties.
		
	2.
	Interpretation

		
	2.1
	In this agreement (unless the context requires otherwise):

		
	2.1.1
	the terms "company", "body corporate", "subsidiary", "holding company", "undertaking", "subsidiary undertaking", "parent undertaking", "debenture", "paid up" and "officer" have the meanings given to them in the Companies Act 2006; but, for the purposes of section 1159(1) of the Companies Act 2006, a company shall be treated as a member of another company if any shares in that other company are registered in the name of either (a) a person by way of security (where the company has provided the security) or (b) a person as nominee for the company;

		
	2.1.2
	the term "employee" includes:

		
	2.1.2.1
	any director or other officer of any Group Company; and

30

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	2.1.2.2
	any individual who works or performs services under a contract of employment with any Group Company or any other contract, whether express or implied, under which the individual undertakes to do or perform personally any work or services for such Group Company (unless, by virtue of such a contract, such Group Company's status is that of client or customer of a profession or business undertaking carried on by that individual), and the terms "contract of employment" and "terms of employment" shall be construed to include such a contract for personal services;

		
	2.1.3
	the term "group", in relation to a body corporate, means the body corporate, any other body corporate which is its holding company or subsidiary, and any other body corporate which is a subsidiary of that holding company;

		
	2.1.4
	a person shall be deemed to be connected with another if that person is so connected within the meaning of section 1122 CTA 2010; and

		
	2.1.5
	"including", "includes" or "in particular" means including, includes or in particular without limitation.

		
	2.2
	In this agreement (unless the context requires otherwise), any reference to:

		
	2.2.1
	any party comprising more than one person includes each person constituting that party;

		
	2.2.2
	any gender includes all genders, the singular includes the plural (and vice versa), and persons includes individuals, bodies corporate, unincorporated associations, partnerships and Authorities (whether or not any of them have a separate legal personality);

		
	2.2.3
	any professional firm or company includes any firm or company effectively succeeding to the whole, or substantially the whole, of its practice or business;

		
	2.2.4
	any time of day or date is to that time or date in the United Kingdom;

		
	2.2.5
	"Law" or "Laws" includes all applicable:

		
	2.2.5.1
	laws (whether civil, criminal or administrative), common laws or civil codes, statutes, subordinate legislation, treaties, regulations, directives and bye‐laws in any jurisdiction, in each case for the time being in force (whether before, on or after the date of this agreement, except to the extent that any Law made after the date of this agreement would increase or extend the liability of any party under the Warranties or the Tax Covenant)); and

		
	2.2.5.2
	binding Judgments;

		
	2.2.6
	a specific Law or provision of a Law includes:

		
	2.2.6.1
	that Law or provision as amended or re‐enacted;

		
	2.2.6.2
	any Law which that Law or provision re‐enacts (with or without modification); and

		
	2.2.6.3
	any Law made under it,

in each case for the time being in force (whether before, on or after the date of this agreement, except to the extent that any amendment, re‐enactment or Law made after the date of this agreement would increase or extend the liability of any party under the Warranties or the Tax Covenant;
		
	2.2.7
	any indemnity or covenant to pay being given on an "After‐Tax Basis" or expressed to be "calculated on an After‐Tax Basis" shall be interpreted in accordance with 

31

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

paragraph 6 of part 1 of schedule 5; and
		
	2.2.8
	writing or written includes any method of representing or reproducing words in a legible form.

		
	2.3
	In this agreement (unless the context requires otherwise), any reference:

		
	2.3.1
	to a clause or schedule is to a clause of or schedule to this agreement;

		
	2.3.2
	to a part or paragraph is to a part or paragraph of a schedule to this agreement;

		
	2.3.3
	within a schedule to a part is to a part of that schedule;

		
	2.3.4
	within a part of a schedule to a paragraph is to a paragraph of that part of that schedule;

		
	2.3.5
	other than in clause 26 (Governing law and jurisdiction), to any English legal term for any action, remedy, method of judicial proceedings, legal document, legal status, court, official or any legal concept or thing shall in respect of any jurisdiction other than England be deemed to include what most nearly approximates to such English term in that jurisdiction, and any reference to any specific English Law shall be deemed to include any equivalent or similar Law in any other jurisdiction; and

		
	2.3.6
	to "dollars" or "$" shall be a reference to US dollars.

		
	2.4
	The contents list, headings and any descriptive notes are for ease of reference only and shall not affect the construction or interpretation of this agreement.

		
	2.5
	Any claim which is made in or referable to a currency other than US$ (United States Dollars) shall for the purposes of this agreement (including but not limited to the purposes of calculating the thresholds and caps on liability set out in schedule 6) be converted into US$ (United States Dollars) at the quarterly average of the daily exchange rate for the previous quarter as released each Monday afternoon by the Federal Reserve of the United States of America posted at http://www.federalreserve.gov/releases/h10/current/

32

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

SCHEDULE 2:    THE VENDORS, THE SHARES AND THE CONSIDERATION
Part 1:    Main Vendors	
								
	(1)
Name
	(2)
Address, email
	(3)
Number of Ordinary Shares
	(4)
Initial Cash Consideration ($)
	(5)
DC Relevant Percentage (%)
	(6)
CC Relevant Percentage (%)

	1
	

	[***]
	Address: [***]
Email: [***]
	2,833,000
	3,268,025.03
	13.60731%
	13.00241%

	2
	

	[***]
	Address: [***]
Email: [***]
	3,337,500
	3,849,994.19
	16.03050%
	15.31788%

	3
	

	[***]
	Address: [***]
Email: [***]
	8,325
	9,603.36
	0.00000%
	0.03821%

	4
	

	[***]
	Address: [***]
Email: [***]
	10,000
	11,535.56
	0.00000%
	0.04590%

	5
	

	[***]
	Address: [***]
Email: [***]
	23,750
	27,396.96
	0.00000%
	0.10900%

	6
	

	[***]
	Address: [***]
Email: [***]
	373,988
	431,416.22
	1.79632%
	1.71647%

	7
	

	[***]
	Address: [***]
Email: [***]
	222,222
	256,345.59
	1.06736%
	1.01992%

	8
	

	[***]
	Address: [***]
Email: [***]
	341,120
	393,501.13
	1.63845%
	1.56561%

	9
	

	[***]
	Address: [***]
Email: [***]
	1,875
	2,162.92
	0.00000%
	0.00861%

	10
	

	[***]
	Address: [***]
Email: [***]
	955,000
	1,101,646.28
	4.58700%
	4.38309%

	11
	

	[***]
	Address: [***]
Email: [***]
	53,000
	61,138.48
	0.00000%
	0.24325%

33

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

	
								
	(1)
Name
	(2)
Address, email
	(3)
Number of Ordinary Shares
	(4)
Initial Cash Consideration ($)
	(5)
DC Relevant Percentage (%)
	(6)
CC Relevant Percentage (%)

	12
	

	[***]
	Address: [***]
Email: [***]
	10,000
	11,535.56
	0.00000%
	0.04590%

	13
	

	[***]
	Address: [***]
Email: [***]
	6,000
	6,921.34
	0.00000%
	0.02754%

	14
	

	[***]
	Address: [***]
Email: [***]
	1,501,000
	1,731,488.02
	7.20952%
	6.88903%

	15
	

	[***]
	Address: [***]
Email: [***]
	2,880,000
	3,322,242.18
	13.83306%
	13.21813%

	16
	

	[***]
	Address: [***]
Email: [***]
	794,450
	916,442.81
	3.81586%
	3.64623%

	17
	

	[***]
	Address: [***]
Email: [***]
	1,041,625
	1,201,573.09
	5.00308%
	4.78067%

	18
	

	[***]
	Address: [***]
Email: [***]
	50,000
	57,677.82
	0.00000%
	0.22948%

	19
	

	[***]
	Address: [***]
Email: [***]
	125,000
	144,194.54
	0.60039%
	0.57370%

	20
	

	[***]
	Address: [***]
Email: [***]
	3,013,950
	3,476,761.05
	14.47644%
	13.83291%

	21
	

	[***]
	Address: [***]
Email: [***]
	603,480
	696,148.16
	2.89860%
	2.76975%

	22
	

	[***]
	Address: [***]
Email: [***]
	373,988
	431,416.22
	1.79632%
	1.71647%

	23
	

	[***]
	Address: [***]
Email: [***]
	373,988
	431,416.22
	1.79632%
	1.71647%

34

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

	
								
	(1)
Name
	(2)
Address, email
	(3)
Number of Ordinary Shares
	(4)
Initial Cash Consideration ($)
	(5)
DC Relevant Percentage (%)
	(6)
CC Relevant Percentage (%)

	24
	

	[***]
	Address: [***]
Email: [***]
	125,000
	144,194.54
	0.00000%
	0.57370%

	25
	

	[***]
	Address: [***]
Email: [***]
	3,281
	3,784.82
	0.00000%
	0.01506%

	26
	

	[***]
	Address: [***]
Email: [***]
	275,000
	317,227.99
	1.32087%
	1.26215%

35

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

Part 2:    Options Vendors
	
									
	 
	(1) 
Name
	(2) 
Address, email
	(3) 
Number of Ordinary Shares
	(4) 
Initial Cash Consideration ($)
	(5) 
DC Relevant Percentage (%)
	(6) 
CC Relevant Percentage (%)
	(7) 
Aggregate Exercise Price (£)

	1
	

	[***]
	Address: [***] 
Email: [***]
	2,500
	2,883.89
	0.00000%
	0.01147%
	1,875

	2
	

	[***]
	Address: [***] 
Email: [***]
	20,000
	23,071.13
	0.00000%
	0.09179%
	16,000

	3
	

	[***]
	Address: [***] 
Email: [***]
	30,000
	34,606.69
	0.00000%
	0.13769%
	17,750

	4
	

	[***]
	Address: [***] 
Email: [***]
	1,040,000
	1,199,698.56
	4.99527%
	4.77321%
	208,000

	5
	

	[***]
	Address: [***] 
Email: [***]
	5,000
	5,767.78
	0.00000%
	0.02295%
	3,125

	6
	

	[***]
	Address: [***] 
Email: [***]
	10,000
	11,535.56
	0.00000%
	0.04590%
	7,500

	7
	

	[***]
	Address: [***] 
Email: [***]
	75,000
	86,516.72
	0.00000%
	0.34422%
	63,750

	8
	

	[***]
	Address: [***] 
Email: [***]
	73,750
	85,074.78
	0.00000%
	0.33849%
	51,000

	9
	

	[***]
	Address: [***] 
Email: [***]
	35,000
	40,374.47
	0.00000%
	0.16064%
	17,500

	10
	

	[***]
	Address: [***] 
Email: [***]
	95,000
	109,587.85
	0.45630%
	0.43601%
	80,750

	11
	

	[***]
	Address: [***] 
Email: [***]
	22,500
	25,955.02
	0.00000%
	0.10327%
	8,250

	12
	

	[***]
	Address: [***] 
Email: [***]
	2,500
	2,883.89
	0.00000%
	0.01147%
	1,875

	13
	

	[***]
	Address: [***] 
Email: [***]
	7,500
	8,651.67
	0.00000%
	0.03442%
	3,000

36

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

	
									
	 
	(1) 
Name
	(2) 
Address, email
	(3) 
Number of Ordinary Shares
	(4) 
Initial Cash Consideration ($)
	(5) 
DC Relevant Percentage (%)
	(6) 
CC Relevant Percentage (%)
	(7) 
Aggregate Exercise Price (£)

	14
	

	[***]
	Address: [***] 
Email: [***]
	28,125
	32,443.77
	0.00000%
	0.12908%
	17,000

	15
	

	[***]
	Address: [***] 
Email: [***]
	10,000
	11,535.56
	0.00000%
	0.04590%
	5,000

	16
	

	[***]
	Address: [***] 
Email: [***]
	10,000
	11,535.56
	0.00000%
	0.04590%
	7,500

	17
	

	[***]
	Address: [***] 
Email: [***]
	10,000
	11,535.56
	0.00000%
	0.04590%
	8,500

	18
	

	[***]
	Address: [***] 
Email: [***]
	5,000
	5,767.78
	0.00000%
	0.02295%
	3,750

	19
	

	[***]
	Address: [***] 
Email: [***]
	7,500
	8,651.67
	0.00000%
	0.03442%
	4,375

	20
	

	[***]
	Address: [***] 
Email: [***]
	10,000
	11,535.56
	0.00000%
	0.04590%
	7,500

	21
	

	[***]
	Address: [***] 
Email: [***]
	10,000
	11,535.56
	0.00000%
	0.04590%
	7,500

	22
	

	[***]
	Address: [***] 
Email: [***]
	145,000
	167,265.67
	0.69646%
	0.66550%
	110,250

	23
	

	[***]
	Address: [***] 
Email: [***]
	3,750
	4,325.84
	0.00000%
	0.01721%
	1,500

	24
	

	[***]
	Address: [***] 
Email: [***]
	225,000
	259,550.17
	0.00000%
	1.03267%
	165,000

	25
	

	[***]
	Address: [***] 
Email: [***]
	35,000
	40,374.47
	0.00000%
	0.16064%
	21,000

	26
	

	[***]
	Address: [***] 
Email: [***]
	234,375
	270,364.76
	1.12574%
	1.07569%
	117,278.13

	27
	

	 [***]
	Address: [***] 
Email: [***]
	140,000
	161,497.88
	0.67244%
	0.64255%
	78,500

37

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

	
									
	 
	(1) 
Name
	(2) 
Address, email
	(3) 
Number of Ordinary Shares
	(4) 
Initial Cash Consideration ($)
	(5) 
DC Relevant Percentage (%)
	(6) 
CC Relevant Percentage (%)
	(7) 
Aggregate Exercise Price (£)

	28
	

	 [***]
	Address: [***] 
Email: [***]
	45,000
	51,910.03
	0.21614%
	0.20653%
	38,250

	29
	

	 [***]
	Address: [***] 
Email: [***]
	75,000
	86,516.72
	0.36024%
	0.34422%
	63,750

	30
	

	 [***]
	Address: [***] 
Email: [***]
	26,719
	30,821.87
	0.00000%
	0.12263%
	16,437.6

	31
	

	[***]
	Address: [***] 
Email: [***]
	2,500
	2,883.89
	0.00000%
	0.01147%
	1,875

	32
	

	[***]
	Address: [***] 
Email: [***]
	10,000
	11,535.56
	0.00000%
	0.04590%
	8,500

38

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

SCHEDULE 3:    INFORMATION
[Disclosure Schedules Omitted]

SCHEDULE 4:    GENERAL WARRANTIES
Part 1:    Ownership and Vendor matters
		
	1.
	Capacity

		
	1.1
	The Vendor has the right, power and authority and all necessary consents and authorisations to enter into and perform its obligations under the Acquisition Documents to be entered into by it.  The Vendor's obligations under the Acquisition Documents to be entered into by it is, or when executed will be, enforceable in accordance with their respective terms.

		
	1.2
	The entry into, and performance of its obligations under, the Acquisition Documents by the Vendor will not breach:

		
	1.2.1
	any agreement or instrument to which the Vendor is a party or by which it is bound; or

		
	1.2.2
	any Judgment to which the Vendor is subject or bound.

		
	2.
	Ownership of Shares

		
	2.6
	The Vendor is the sole legal and beneficial owner of those Shares set opposite its name in column (3) of schedule 2.  There is no Encumbrance affecting those Shares, nor any agreement to create any, and no person has claimed to be entitled to any of such things.

		
	2.7
	None of the Shares set opposite the Vendor's name in column (3) of schedule 2 has been, or represents assets which were, the subject of a Vulnerable Transaction.

		
	2.8
	No Share was subscribed for or purchased by the Vendor with funds derived from the proceeds of crime.

		
	2.9
	There are no existing, pending or threatened Disputes affecting any of the Shares set opposite the Vendor's name in column (3) of schedule 2 or the Vendor's ownership or entitlement to dispose of any of them.  So far as the Vendor is aware, there are no circumstances which are likely to give rise to any such Disputes.

		
	3.
	No competing businesses

The Vendor has no direct or indirect interest in any business which is or is likely to become competitive with the business of any Group Company.  So far as the Vendor is aware, no person connected with the Vendor has any such interest.
		
	4.
	No claims

Neither the Vendor nor any person connected with the Vendor has made a claim of any nature against any Group Company that remains outstanding, and there are no circumstances which entitle or are likely to entitle any of them to make such a claim.
Part 2:    General
		
	1.
	Share capital

		
	1.3
	The Shares constitute the entire issued share capital of the Company.  The Shares have been properly allotted and are fully paid up or credited as fully paid up.

		
	1.4
	The Company or another Group Company is the sole legal and beneficial owner of the entire issued share capital of each of the Subsidiaries.  All the issued shares of the Subsidiaries have been properly 

39

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

allotted and are fully paid up or credited as fully paid up.
		
	1.5
	Save for the charges listed in schedule 3, there is no Encumbrance affecting any of the shares in the Subsidiaries, nor any agreement to create any, and no person has claimed to be entitled to any of such things.

		
	1.6
	No person has any right (whether contingent or otherwise) to require any Group Company:

		
	1.6.1
	to allot or grant rights to subscribe for any shares; or

		
	1.6.2
	to convert any existing securities into shares or issue securities that have rights to convert into shares.

So far as the Vendors are aware, no person has claimed to be entitled to any of such things.
		
	2.
	Corporate information

		
	2.10
	Each Group Company is validly incorporated, validly existing and duly registered under the laws of its jurisdiction of incorporation and each Group Company has full power to conduct its business as the same is conducted at the date of this agreement.  No action has been or is being taken to strike any Group Company off any relevant companies' registry or other official public, trade or commerce register.

		
	2.11
	The particulars set out in parts 1 and 2 of schedule 3 relating to each Group Company are true and accurate.

		
	2.12
	No Group Company has repaid, redeemed or purchased any of its own shares, reduced its share capital or capitalised any reserves or profits, or agreed to do any of such things.

		
	2.13
	No Group Company has any issued loan capital (including debentures, loan notes and loan stock), or has agreed to issue any such loan capital.

		
	2.14
	Copies of the articles of association, by‐laws or other relevant constitutional documents of each Group Company have been Disclosed.

		
	2.15
	There are no subsisting shareholder agreements in relation to any Group Company to which any Group Company is a party.

		
	3.
	Interest in other undertakings

		
	3.1
	Since its incorporation, no Group Company has:

		
	3.1.1
	had any subsidiary or subsidiary undertaking (other than the Subsidiaries); or

		
	3.1.2
	been the subsidiary or subsidiary undertaking of any other company or undertaking (other than another Group Company).

		
	3.2
	No Group Company:

		
	3.2.1
	is the legal or beneficial owner of, or has agreed to acquire, any shares, securities or other interests in, any other company or undertaking (other than the shares of a Subsidiary);

		
	3.2.2
	controls or takes part in the management of any other company or undertaking (other than the Subsidiaries), or has agreed to do so; and

		
	3.2.3
	carries on business in partnership with any other person, or has agreed to do so.

		
	4.
	Branches etc

No Group Company has any branch, agency, permanent establishment or other place of business outside of the jurisdictions set out in parts 1 and 2 of schedule 3.

40

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	5.
	Insolvency and unlawful transactions

		
	5.1
	No Insolvency Event has occurred in relation to any Group Company.  So far as the Vendors are aware, there are no circumstances at Completion which they believe are likely to result in such an Insolvency Event.  

		
	5.2
	So far as the Vendors are aware, no Group Company has entered into any Vulnerable Transactions.

		
	5.3
	No Group Company has received any financial assistance given by another company in contravention of section 151 of the Companies Act 1985 or sections 678 or 679 of the Companies Act 2006.

		
	5.4
	So far as the Vendors are aware, no Group Company has received any unlawful distribution (as defined in section 829 of the Companies Act 2006).

		
	6.
	Corporate administration and compliance

		
	6.1
	All registers required by Law to be kept by each Group Company have been properly kept, are up to date and contain a true and accurate record of the matters which should be dealt with in them.  No Group Company has received any notice or allegation that any of them is incorrect or should be rectified.

		
	6.2
	Each Group Company has kept and maintained proper records in all material respects in accordance with applicable laws and regulations.

		
	6.3
	No Group Company has registered to use the Companies House WebFiling service.

		
	7.
	Documents

All title documentation relating to the Assets, all documents evidencing the complete terms of its Contracts, contracts of employment and Policies and all other material documents belonging to each Group Company are in its possession or under its direct control.
		
	8.
	4th Screen

		
	8.1
	No Asset (including without limitation Owned IP, Software, Licences and Contracts) is shared by any Group Company (excluding 4th Screen) with 4th Screen which is required for the operation of that Group Company's business.

		
	8.2
	All the employees of 4th Screen work exclusively for 4th Screen and do not provide services to any other Group Company.

		
	8.3
	The principal terms upon which 4th Screen occupies any Property are Disclosed.

		
	8.4
	Details of all contracts entered into between 4th Screen and any other Group Company are Disclosed.

		
	8.5
	4th Screen does not carry out any business which is competitive in any material manner with the business of any other Group Company outside its core business of mobile advertising.

		
	8.6
	4th Screen does not have a claim of any nature against any other Group Company that remains outstanding, and the Vendors are not aware of any circumstances which entitle or are likely to entitle 4th Screen to make such a claim.

Part 3:    Accounts and financial
		
	1.
	Disclosure of accounts

Copies of the Accounts, the Previous Accounts and the Management Accounts are Disclosed.
		
	2.
	Accounts

The Accounts:

41

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	2.16
	have been prepared in accordance with all Laws using the accounting policies, principles, estimation techniques, measurement bases, practices and procedures used in the preparation of the Previous Accounts on a consistent basis;

		
	2.17
	comply with Accounting Standards in force at the date to which they were prepared;

		
	2.18
	give a true and fair view of the assets and liabilities and state of affairs of each UK Group Company (and, in relation to the consolidated financial statements of the Company, of any relevant Group Companies (for the accounting period) as a whole) as at the Accounts Date and of the profit or loss and cash flows of each UK Group Company (and, in relation to the consolidated financial statements of the Company, of any relevant Group Companies (for the accounting period) as a whole) for the financial year ended on the Accounts Date.

		
	3.
	Assets and liabilities in Accounts

		
	3.3
	In the Accounts:

		
	3.3.1
	the value attributed to each fixed asset did not exceed its market value as at the Accounts Date;

		
	3.3.2
	no asset has been revalued upwards and no value has been attributed to any intangible asset owned by the relevant Group Company at the date of the Previous Accounts which had no value attributed to it in the Previous Accounts;

		
	3.3.3
	no value has been attributed to work in progress in respect of eventual profit and appropriate provision was made for such losses that as at the Accounts Date were foreseeable as arising or likely to arise on completion and/or realisation of such work in progress; and

		
	3.3.4
	any redundant, obsolete or unsaleable stock has been wholly written off and all damaged or slow‐moving stock has been written down appropriately, and the value attributed to the remaining stock and work in progress did not exceed the lower of cost or net realisable value as at the Accounts Date.

		
	3.4
	So far as the Vendors are aware, the bases and rates of depreciation and amortisation used in the Accounts and the Previous Accounts are sufficient to ensure that each fixed asset of each Group Company will be written down to its residual value by the end of its useful life.

		
	3.5
	The Accounts make appropriate provision for or, as appropriate, expressly disclose or make note of all bad and doubtful debts and all accruals, liabilities and provisions (whether actual, contingent, quantified, unquantified or disputed) of each Group Company (and, in relation to the consolidated financial statements of the Company, of the Group Companies as a whole) as at the Accounts Date.

		
	4.
	Previous Accounts

The Previous Accounts:
		
	4.1
	have been prepared in accordance with all Laws;

		
	4.2
	comply with Accounting Standards in force at the dates to which they were prepared; and

		
	4.3
	give a true and fair view of the assets and liabilities and state of affairs of each UK Group Company (and, in relation to the consolidated financial statements of the Company, of any relevant Group Companies (for the accounting period) as a whole) as at the dates to which they were prepared and of the profit or loss and cash flows of each UK Group Company (and, in relation to the consolidated financial statements of the Company, of any relevant Group Companies (for the accounting period) as a whole) for the financial years ended on such dates.

		
	5.
	Management Accounts

42

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

Having regard for the purpose for which they are prepared, the Management Accounts:
		
	5.5
	have been carefully prepared in accordance with good business practice and the Group Companies' normal practice from their accounting records using the accounting policies, estimation techniques, measurement bases, practices and procedures used in the preparation of the Accounts; and

		
	5.6
	disclose with reasonable accuracy the financial position of each Group Company and the Group Companies as a whole as at the date to which they were prepared and their respective incomes, expenses and profitability for the period for which they were prepared.

		
	6.
	Financial track record

The profits shown by the Accounts and the Management Accounts have not been affected by:
		
	6.4
	any extraordinary, exceptional, unusual or non‐recurring item;

		
	6.5
	transactions of an abnormal or an unusual nature or which have been entered into otherwise than on normal arm's length commercial terms; or

		
	6.6
	any other circumstances,

making the profits or losses for all or any of the periods covered by such accounts unusually high or low.
		
	7.
	Accounting records

		
	7.1
	All accounting records of each Group Company, however held:

		
	7.2
	have been properly kept and maintained, are up to date and do not contain or reflect any material inaccuracies or discrepancies;

		
	7.3
	disclose with reasonable accuracy its assets, liabilities, trading transactions and financial, contractual and trading position and all matters required by Law; and

		
	7.4
	are in its possession or under its direct control, and where they are held by electronic means, they are held on and are readily accessible via the Computer Systems.

		
	7.5
	The Group Companies maintain a system of internal controls over financial reporting that the Vendors reasonably believe is sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorisation, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with applicable Laws and Accounting Standards, as applicable, and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management's general or specific authorisation, and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  No Group Company, nor, so far as the Vendors are aware any (statutory) auditor or accountant of any Group Company has received any written complaint, allegation, assertion or claim from any person regarding the accounting or auditing practices, procedures, methodologies or methods of the Group Companies or their internal accounting controls, including any complaint, allegation, assertion or claim that the Group Companies have engaged in questionable accounting or auditing practices.

		
	8.
	Change in accounting reference date

There has been no change in the accounting reference date of any Group Company in the last five years.
		
	9.
	Period since Accounts Date

Since the Accounts Date:
		
	9.1
	the business of each Group Company has been carried on in the ordinary and usual course of its 

43

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

business, without any disruption or interruption, and so as to maintain the same as a going concern;
		
	9.2
	nothing has happened which has materially prejudiced the Group Companies' goodwill or, so far as the Vendors are aware, is likely to do so;

		
	9.3
	there has been no material deterioration in the turnover or profitability (compared with the same periods during each of the last two financial years), in the financial or trading position of any Group Company and, so far as the Vendors are aware, no such deterioration is expected;

		
	9.4
	no Group Company has acquired or disposed of any business or material asset (except for stock in the ordinary and usual course of its business and the Shares in each of 4th Screen and NL Subsidiary), or agreed to do so;

		
	9.5
	no debt in excess of £10,000 or debts in excess of £100,000 in aggregate owed to any Group Company has or have been released, deferred, subordinated, written off or had a credit issued against it or them (in whole or in part) or has or have proved to any extent irrecoverable;

		
	9.6
	no Group Company has assumed or incurred any liability, obligation or expense (whether actual or contingent) other than as a result of trading activities in the ordinary and usual course of its business, or agreed to do so;

		
	9.7
	each Group Company has paid its creditors in the ordinary and usual course of business; 

		
	9.8
	there has been no acceleration of the invoicing and/or collection of any Group Company's debts;

		
	9.9
	no dividend or other distribution of profits or assets (including any distribution within the meaning of CTA 2010) has been, or has been agreed to be, declared, paid or made by any Group Company; and

		
	9.10
	no Borrowings have been repaid (in whole or in part) by any Group Company, or become liable to be so repaid, before their stated maturity date.

		
	10.
	Funding

		
	10.1
	Details of all current Borrowings and facilities available for additional Borrowings of each Group Company (together, "Facilities") are Disclosed, including copies of documents containing the terms and conditions relating to the Facilities and the amounts outstanding and available under them.

		
	10.2
	None of the Facilities is dependent on the guarantee or indemnity of, or security provided by, any other person (other than another Group Company).

		
	10.3
	So far as the Vendors are aware, there are no circumstances existing, alleged or, likely to arise (including the entry into and performance of obligations under the Acquisition Documents) which:

		
	10.3.1
	require repayment of any Borrowings before their stated maturity date (at the option of the lender or otherwise);

		
	10.3.2
	constitute an event of default under or a breach of the terms of any of the Facilities; or

		
	10.3.3
	entitle the holder to enforce any Encumbrance created in relation to any of the Facilities,

		
	10.4
	So far as the Vendors are aware, there are no circumstances which are likely to prejudice the continuation of any of the Facilities or give rise to a material and adverse alteration to their terms.

		
	10.5
	No Group Company has engaged in financing of a type which would not need to be shown or fully reflected in its statutory accounts.

		
	10.6
	No Group Company has any outstanding obligations or liabilities (whether actual or contingent) in respect of any derivative transaction, including any foreign exchange or interest rate hedging transaction.

		
	11.
	Bank and other accounts

44

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	11.1
	Details of all of the Group Companies' bank, deposit or other accounts (whether in credit or overdrawn) are Disclosed (including the name, address and sort code of the entity with which the account is kept, the nature of the account, its name and account number and copies of the mandate under which it is operated).

		
	11.2
	No Group Company has any overdrawn accounts which exceed applicable overdraft limits.

		
	12.
	Capital commitments

Except as specifically provided for or noted in the Accounts, no Group Company had any outstanding capital commitments as at the Accounts Date.  Since 30 June 2011, save as provided for or noted in the Management Accounts, no Group Company has entered into any capital commitments exceeding £50,000, in aggregate, or agreed to do so.
Part 4:    Assets, commercial and trading
		
	1.
	Encumbrances

Save as set out in schedule 3, no Group Company has given, created or granted any present or future Encumbrance affecting any of its assets, undertaking or goodwill, or agreed to do so.  Save as set out in schedule 3, no person has claimed to be entitled to any such Encumbrance.
		
	2.
	Assets

		
	2.19
	Each Asset is:

		
	2.19.1
	legally and beneficially owned by a Group Company;

		
	2.19.2
	not the subject of any leasing, hiring, hire purchase, conditional sale or credit sale agreement, agreement for payment on deferred terms, sale or return arrangement or any similar agreement or arrangement;

		
	2.19.3
	used exclusively by the Group Companies; and

		
	2.19.4
	(where capable of possession) in the exclusive possession or under the direct control of a Group Company.

		
	2.20
	The Assets are not surplus to the current requirements of the Group Companies, and so far as the Vendors are aware comprise all of the assets necessary for the continuation of the business of each Group Company as currently carried on.

		
	2.21
	So far as the Vendors are aware, all tangible Assets (other than stock and the Computer Systems):

		
	2.21.1
	are suitable for their current use;

		
	2.21.2
	are in good repair and condition (subject to fair wear and tear), in satisfactory working order, and comply with all health and safety Laws in all material respects; and

		
	2.21.3
	have been regularly and satisfactorily serviced and maintained.

		
	2.22
	The plant registers of each Group Company (copies of which are Disclosed) constitute a reasonably accurate record of all machinery, vehicles and equipment used by it and which is material to the Business.

		
	3.
	Stock and work in progress

Each Group Company's stock and work in progress are at their normal levels for the time of year, are not excessive and, so far as the Vendors are aware, are adequate for the current requirements of its business, having regard to current and reasonably anticipated demand.
		
	4.
	Debtors

		
	4.4
	All debts owing to each Group Company are trade debts arising in the ordinary and usual course of 

45

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

its business.  
		
	4.5
	No debt owing to any Group Company:

		
	4.5.1
	has been factored, discounted or otherwise agreed to be sold by it;

		
	4.5.2
	has been outstanding for more than three months from its due date for payment; or  

		
	4.5.3
	has been or, so far as the Vendors are aware, is likely to be disputed or subject to any set‐off or counterclaim.

		
	4.6
	Details of any bad and doubtful debts of each Group Company arising in the last 12 months are Disclosed.

		
	5.
	IP

		
	5.7
	Save for licences in respect of office functions such as word processing; the Owned IP and the Licensed‐In IP comprise all the IP that is necessary to carry on the business of each Group Company as it has been carried on in the last 12 months.

		
	5.8
	A Group Company is the sole legal and beneficial owner of (and, where registered, the sole registered owner of) each item of Owned IP.

		
	5.9
	Particulars of all Owned IP which is registered in any jurisdiction are set out in part 3 of schedule 3, and such particulars are accurate in all material respects and not misleading in any material respect.

		
	5.10
	Any Owned IP that is capable of registration has been registered in the name of the Group Company which owns such IP.  There are no applications for registration of any Owned IP in progress.

		
	5.11
	Details of all Owned IP that is not registered in any jurisdiction, and is material to the business of the Group Companies, are Disclosed.

		
	5.12
	Details of all IP Licences In are Disclosed.

		
	5.13
	There are no IP Licences Out and no Group Company is under any obligation (whether contingent or otherwise) to grant any.

		
	5.14
	Each Group Company:

		
	5.14.1
	only employs and has only employed its employees; and

		
	5.14.2
	only uses and has only used independent contractors, freelancers and consultants,

on terms pursuant to which all of the IP in the work which they carry out or produce (in the case of independent contractors, freelancers and consultants, for any Group Company) vests solely in the relevant Group Company, both legally and beneficially, and they have waived all moral rights they may have in the work.
		
	6.
	Validity of IP

		
	6.7
	All of the Owned IP and, so far as the Vendors are aware, the Licensed‐In IP is valid, subsisting and enforceable, and, so far as the Vendors are aware, nothing has been done or omitted to be done which is likely to affect adversely such validity, subsistence or enforceability.

		
	6.8
	Steps required to maintain and protect the Owned IP have been taken in all relevant jurisdictions (including payment of maintenance and renewal fees and taxes when due).  Details of any such steps required in the next three months are Disclosed.

		
	6.9
	None of the Owned IP or, so far as the Vendors are aware, the Licensed‐In IP is, or in the last six years has been, subject to challenge, opposition or attack or the subject of any claim for ownership or compensation.  No Group Company is on notice that any Owned IP or, Licensed‐In IP is likely to be subject to challenge, opposition or attack or any claim for ownership or compensation.

46

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	6.10
	There is not (and would not be if valid), and has not in the last six years been, any actual or threatened infringement or, so far as the Vendors are aware, unauthorised use by any person of any Owned IP or, so far as the Vendors are aware, Licensed‐In IP.  So far as the Vendors are aware, there are no circumstances which are likely to give rise to any such actual or threatened infringement or unauthorised use.

		
	7.
	Infringement of third party IP

		
	7.6
	There are no existing, pending or threatened claims against any Group Company in respect of any infringement of the IP of any other person, and no such claims have been made or threatened in the last six years.

		
	7.7
	So far as the Vendors are aware, the activities of the Group Companies do not infringe, have not in the last six years infringed, the IP of any other person.

		
	8.
	Business and trade names

		
	8.7
	No Group Company uses or operates its business under any name or style other than its full company name.

		
	8.8
	No Group Company has made an application to, or been the subject of an application to, the Company Names Tribunal.  So far as the Vendors are aware, there are no circumstances which are likely to give rise to such an application.

		
	9.
	Confidential information

		
	9.11
	Save for Confidential Information which has been passed to third parties subject to a valid and enforceable agreement under which the recipient is obliged to maintain its confidentiality, the Confidential Information:

		
	9.11.1
	is in the exclusive possession or under the direct control of a Group Company;

		
	9.11.2
	is and has been kept strictly confidential;

		
	9.11.3
	is adequately and properly documented and accessible, such that the Purchaser will be able to take the full benefit of it; and

		
	9.11.4
	is not subject to any third party restriction as to its use, exploitation or disclosure.

		
	9.12
	Each Group Company has always had in place and operated adequate procedures to maintain the confidentiality of the Confidential Information.

		
	9.13
	No Group Company has disclosed, or is obliged to disclose, any of the Confidential Information to any person, except:

		
	9.13.1
	to its employees who are bound by obligations of confidence; or

		
	9.13.2
	to third parties in the ordinary and usual course of such Group Company's business subject to a valid and enforceable agreement under which the recipient is obliged to maintain its confidentiality and to use it only for the purposes for which it was disclosed by the relevant Group Company.

		
	9.14
	There has not been:

		
	9.14.1
	so far as the Vendors are aware, any breach of any confidentiality obligations given by third parties in relation to the Confidential Information; or

		
	9.14.2
	so far as aware any actual or alleged misuse by any person of the Confidential Information,

and, so far as the Vendors are aware, there are no circumstances which are likely to give rise to any such breach or actual or alleged misuse.

47

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	9.15
	So far as the Vendors are aware, no Confidential Information has been subject to disclosure pursuant to the Freedom of Information Act 2000 or the Environmental Information Regulations 2004.

		
	9.16
	No Group Company has used, or uses, any confidential information which it has received from any third party other than in accordance with the confidentiality protection that is applicable to that confidential information.

		
	10.
	IT systems

		
	10.7
	The Computer Systems are legally and beneficially owned by a Group Company or validly leased or licensed to each Group Company that uses them.

		
	10.8
	The Group Companies have the right to the exclusive and unrestricted use of the Computer Systems, which is not dependent (in whole or in part) on any facilities or services that are not exclusively owned by or under the direct control of a Group Company (other than elements of the Computer Systems validly leased or licensed to any Group Company that uses them).

		
	10.9
	The Software is legally and beneficially owned by a Group Company or licensed to each Group Company that uses it.

		
	10.10
	The Computer Systems Data is legally and beneficially owned by a Group Company or each Group Company that uses it is licensed to do so.

		
	10.11
	The Computer Systems and the Software:

		
	10.11.1
	are not the subject of any failed acceptance testing;

		
	10.11.2
	are functioning properly and in accordance with applicable specifications in all material respects;

		
	10.11.3
	have adequate capability and capacity for the requirements of the business of each Group Company as currently carried on, and there are no plans to change, replace, develop or update them or any part of them;

		
	10.11.4
	are configured and maintained to minimise the effects of externally introduced Viruses;

		
	10.11.5
	include sufficient user information to enable a user to make use of their functionality (as currently used by any Group Company), and to operate and administer them effectively;

		
	10.11.6
	have been regularly and satisfactorily maintained, supported and replaced, are in satisfactory working order and are suitable for their current use; and

		
	10.11.7
	have the benefit of warranty and/or maintenance, support and services agreements which are sufficient to remedy or compensate any material defect and include emergency support.

		
	10.12
	Each Group Company has at all material times had in place and operated:

		
	10.12.1
	adequate procedures, processes and Software to ensure the security, confidentiality and integrity of the Computer Systems, the Software and the Computer Systems Data (including procedures for taking and storing, on‐site and off‐site, back‐up copies of Software and Computer Systems Data);

		
	10.12.2
	adequate procedures to prevent the infection of the Computer Systems or the Software with Viruses; and

		
	10.12.3
	adequate back‐up systems and disaster recovery plans and procedures that ensure that the business of each Group Company is able to continue to function and the Computer Systems and/or the Software can be replaced or substituted without material disruption, interruption or loss to the business of any Group Company,

48

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

and such procedures, processes, systems and plans have been documented.
		
	10.13
	In the last 12 months, there has not been:

		
	10.13.1
	any breakdown, defect or failure in the Computer Systems or the Software;

		
	10.13.2
	any Virus affecting the Software or the Computer Systems Data;

		
	10.13.3
	any destruction, corruption or loss of access to any of the Computer Systems Data; or

		
	10.13.4
	any breach of security or any unauthorised access to the Computer Systems or any Computer Systems Data,

which has had a material adverse effect on any Group Company or caused material disruption, interruption or loss to the business of any Group Company.  So far as the Vendors are aware, there are no circumstances which are likely to give rise to such a disruption, interruption, loss or effect.
		
	10.14
	All source code relating to the Software is:

		
	10.14.1
	in the exclusive possession or under the direct control of a Group Company, or each Group Company that uses the Software has all necessary rights to gain access to such source code and all related technical and other information under the terms of source code deposit or escrow agreements with the owners of the rights in the relevant source codes and reputable deposit or escrow agents;

		
	10.14.2
	of a sufficient level to enable a reasonably skilled computer programmer to understand, maintain, modify, correct, support, replicate and develop the relevant Software without the need for assistance from a third party; and

		
	10.14.3
	not Open Source Software.

		
	10.15
	Each Group Company has sufficient technically competent and trained employees to ensure the proper handling, operation, monitoring and use of the Computer Systems and the Software.

		
	10.16
	The Computer Systems and the Software are capable of:

		
	10.16.1
	performing their respective functions in multiple currencies, including the euro;

		
	10.16.2
	satisfying all applicable legal requirements relating to the euro, including those relating to currency conversion and rounding;

		
	10.16.3
	displaying and printing the generally accepted symbols for the euro and any other currency; and

		
	10.16.4
	processing the generally accepted codes for the euro and any other currency.

		
	10.17
	So far as the Vendors are aware, all facilities and services relating to the Computer Systems and the Software are being and have been provided in all material respects in accordance with all applicable specifications and the terms of the relevant Computer Systems Contracts.

		
	10.18
	So far as the Vendors are aware, no person is in a position, by virtue of his rights in, knowledge of or access to any part of the Computer Systems, Software or Computer Systems Data, lawfully:

		
	10.18.1
	to prevent or impair the proper and efficient function of the Computer Systems or the Software; or

		
	10.18.2
	to demand any payment in excess of any current licence fee or in excess of reasonable remuneration for services rendered or to impose any onerous conditions, in each case in order to preserve the proper and efficient functioning of the Computer Systems or the Software in the future.

		
	11.
	Data protection

49

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	11.3
	Each Group Company has complied in all material respects with all Data Protection Laws relevant to it, including:

		
	11.3.1
	requirements relating to the registration and/or notification of processing of personal data;

		
	11.3.2
	requirements relating to requests from individuals for access to personal data held by it;

		
	11.3.3
	data protection principles set out in the Data Protection Laws;

		
	11.3.4
	requirements relating to the processing of personal data by a data processor on its behalf; and

		
	11.3.5
	the obtaining of necessary consents from data subjects to the processing of personal data relating to them.

		
	11.4
	Each Group Company has at all material times had in place and operated adequate procedures to ensure continued compliance with Data Protection Laws relevant to it.

		
	11.5
	Details of each Group Company's privacy and other internal policies and procedures relating to the handling or processing of personal data and subject access requests are Disclosed.

		
	11.6
	So far as the Vendors are aware, no Group Company has transferred or authorised the transfer of personal data outside the European Economic Area.

		
	11.7
	Each Group Company has in place appropriate agreements, as required by relevant Data Protection Laws, with all data processors processing personal data on its behalf.

		
	11.8
	So far as the Vendors are aware, the data processed by and/or transferred to any third parties by any Group Company has been lawfully obtained, used, processed and/or transferred in accordance with Data Protection Laws.

		
	11.9
	No Group Company has received any notices or any other communications from, been subject to inquiries by or, so far as the Vendors are aware, been the subject of complaints to any Authority in relation to Data Protection Laws.  So far as the Vendors are aware, there are no circumstances which are likely to give rise to any such notices, communications, inquiries or complaints.

		
	11.10
	No person or other body has:

		
	11.10.1
	so far as the Vendors are aware, alleged that any Group Company has failed to comply with the provisions of any Data Protection Laws;

		
	11.10.2
	complained to any Group Company about its use of personal data; or

		
	11.10.3
	been awarded compensation, claimed or taken action against any Group Company for breach of any Data Protection Laws, or, so far as the Vendors are aware, has any right to do so.

		
	11.11
	The entry into and performance of obligations under the Acquisition Documents will not result in the processing of personal data by or on behalf of any Group Company being in breach of Data Protection Laws due to any notifications or consents becoming invalid.

		
	12.
	Guarantees, etc

No Group Company has any outstanding obligations or liabilities (whether actual or contingent) under:
		
	12.1
	any guarantee, indemnity or counterindemnity; or

		
	12.2
	any other agreement or arrangement under which the relevant Group Company secures or incurs a financial or other obligation,

50

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

in respect of any obligations or liabilities of another person (other than another Group Company).
		
	13.
	Nature of Contracts

No Group Company is (or has agreed to become) a party to, bound by or liable under any Contract which:
		
	13.1
	relates to the acquisition or subscription by any Group Company of shares or other interests in any other company or entity or the sale of shares or other interests held by any Group Company in any other company or entity;

		
	13.2
	relates to the acquisition by any Group Company of the business and/or assets of any other company, entity or person (other than the purchase of shares in the NL Subsidiary from the NL Vendor);

		
	13.3
	relates to the sale by any Group Company of its business or any part of it (other than the sale of the shares in 4th Screen);

		
	13.4
	restricts the manner or geographical operation of any part of its business or use of its assets;

		
	13.5
	is dependent on any guarantee, indemnity or security provided by any other person (other than another Group Company);

		
	13.6
	is otherwise than on normal arm's length commercial terms in the ordinary and usual course of its business;

		
	13.7
	cannot be performed by it on time in accordance with its terms without undue or unusual expenditure or application of money, effort or personnel, or is likely to result in a material loss to it on completion of performance;

		
	13.8
	is of a long‐term nature, being:

		
	13.8.1
	for a fixed term of six months or more;

		
	13.8.2
	for an indefinite term which cannot be terminated by it in accordance with its terms on six months' notice or less without compensation; or

		
	13.8.3
	unlikely to have been fully performed, in accordance with its terms, within six months after the date on which it was entered into, made or undertaken;

		
	13.9
	involves or is likely to involve expenditure by it or other liability on its part of more than £100,000 in aggregate or payments to it of more than £100,000 in aggregate;

		
	13.10
	is for the supply by or to it of goods and/or services:

		
	13.10.1
	at fixed prices for a period of more than six months from the date of order;

		
	13.10.2
	where prices relate to minimum purchasing requirements, targets or similar incentive schemes; or

		
	13.10.3
	exclusively to or from any person.

		
	14.
	Contract terms, compliance and termination

		
	14.1
	Copies of each Group Company's standard terms of business are Disclosed.  No Group Company has entered into any Contract with a Material Customer for the supply of goods and/or the provision of services or with a Material Supplier for the purchase of goods and/or services other than on such standard terms.

		
	14.2
	Each Contract is in full force and effect and binding on the parties to it.

		
	14.3
	No Group Company is and, so far as the Vendors are aware, no other party is in breach of any Contract.  So far as the Vendors are aware, there are no circumstances which are likely to give rise to such a breach.

51

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	14.4
	No notice of termination of or intention to terminate any Contract has been received by any Group Company and, so far as the Vendors are aware, none is anticipated.  No notice of termination of or intention to terminate any Contract has been given by any Group Company, and (but for this agreement) it would have no intention to do so.

		
	14.5
	So far as the Vendors are aware, there are no grounds for termination, rescission, avoidance, repudiation or material change in the terms of any Contract.

		
	15.
	Material Customers and Material Suppliers

		
	15.1
	Details of:

		
	15.1.1
	each Material Customer and Material Supplier (including the type of goods and/or services supplied to or obtained from it, and the aggregate value of sales to or purchases from it in the financial year ended on the Accounts Date and in the current financial year); and

		
	15.1.2
	the principal terms of all Contracts with Material Customers and Material Suppliers (including any restrictions imposed on any party to them)

are Disclosed.
		
	15.2
	In the last 12 months, no Material Customer or Material Supplier has:

		
	15.2.1
	stopped or reduced substantially its trading with any Group Company;

		
	15.2.2
	substantially changed the terms of its trading (including prices) with any Group Company; or

		
	15.2.3
	notified any Group Company of its intention to do so,

and, so far as the Vendors are aware, there are no circumstances which are likely to result in any of such things.
		
	15.3
	No Group Company has given, paid or received (or agreed to give, pay or receive) any discount, volume rebates, allowances, commission payments or the like (whether or not legally binding) to any of its Material Customers or from any of its Material Suppliers.

		
	15.4
	No Group Company has agreed any unusual credit terms with any of its Material Customers or Material Suppliers.  In the last 12 months, no Material Customer has been regularly more than 60 days late in making payments due to any Group Company.

		
	15.5
	So far as the Vendors are aware, no Insolvency Event has occurred there is no subsisting Insolvency Event in relation to any Material Customer or Material Supplier, and, so far as the Vendors are aware. There are no circumstances which are likely to give rise to such an Insolvency Event.

		
	16.
	Tenders

No offer, tender or the like made by any Group Company is outstanding which is capable of being converted into a Contract by an acceptance or other act of a third party (other than offers, tenders or the like made in the ordinary and usual course of such Group Company's business).  None of such offers, tenders or the like made by a Group Company in the ordinary and usual course of its business involves or will involve, individually, expenditure by any Group Company in excess of £50,000.
		
	17.
	Anti‐corruption

		
	17.1
	Each Group Company and its current and former directors, officers and employees have complied with all applicable Anti‐Corruption Laws.  So far as the Vendors are aware (having made no enquiry), each Business Intermediary has conducted its business relating to the Group Companies in compliance with all applicable Anti‐Corruption Laws.

52

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	17.2
	Each Group Company has instituted and maintained appropriate policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, compliance by such Group Company and its directors, officers, employees and Business Intermediaries for the time being with all applicable Anti‐Corruption Laws in relation to the businesses of the Group Companies.  Details of such policies and procedures are Disclosed.

		
	18.
	Vendor related arrangements

		
	18.1
	No Group Company is, or has during the past six years been, a party to any agreement or arrangement (whether legally binding or not) in which any Vendor or any person connected with any Vendor is or has been interested (other than contracts of employment for individual Vendors and for the issue and award of options over shares in the Company).

		
	18.2
	No Group Company owes any sums to, or is owed any sums by, any Vendor (other than accrued emoluments for the current month) or any person connected with any Vendor.

		
	19.
	Powers of attorney and authorities, etc

		
	19.1
	No Group Company has given any power of attorney that remains in force.

		
	19.2
	No Group Company has given any authority (whether express, implied or ostensible) which is still subsisting to any person to enter into any agreement or to incur any obligation or liability on its behalf, other than to its officers and employees to enter into routine trading contracts in the ordinary and usual course of its business in the normal course of their duties.

		
	20.
	Product liability/service liabilities

		
	20.1
	There is no outstanding claim against any Group Company in relation to any goods or services manufactured, sold, supplied or provided by it.  So far as the Vendors are aware, there are no circumstances which are likely to result in any such claim.

		
	20.2
	Details of any Material Customer complaints or claims made to any Group Company in the last two years are Disclosed.

		
	20.3
	No Group Company has given any guarantee or warranty or made any representation in respect of goods or services that have been, or will be, sold, supplied or provided by it and which is material in the context of the Business (save for those materially in accordance with those contained in the current standard terms of business and any guarantee, warranty or representation implied by any Law).

		
	20.4
	No Group Company is obliged to service, repair, maintain, take back, make good or otherwise do or not do anything in respect of goods or services that have been, or will be, sold, supplied or provided by it and which is material in the context of the Business (save for those materially in accordance with those contained in the current standard terms of business or by any Law).  In the last two years, no Group Company has, after such goods or services have been sold, supplied or provided by it, serviced, repaired, maintained, taken back, made good or otherwise done anything in respect of such goods or services which is not covered by any guarantee, warranty or representation made or given by the relevant Group Company (or required by any Law).

		
	20.5
	No Group Company has manufactured, sold, supplied or provided any goods or services (and there are no goods in stock or in the course of design or production or services part provided) which in any material respect:

		
	20.5.1
	are defective;

		
	20.5.2
	do not comply with any specifications or terms of sale agreed with customers in respect of them or warranties and representations expressly or impliedly made by a Group Company; or

53

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	20.5.3
	do not comply with all Laws and applicable standards.

		
	21.
	Insurance

		
	21.1
	All of the assets of each Group Company which are of an insurable nature are insured in amounts representing their full replacement or reinstatement value (with no provision for deduction or excess) against fire and other risks considered by the relevant Group Company to be prudent.

		
	21.2
	Each Group Company is and has at all material times been covered against employers' liability, public liability, professional liability, product liability and accident, damage, injury, third party loss, loss of profits, loss of rent, credit risk and other risks considered by the relevant Group Company to be prudent.

		
	21.3
	Each Group Company has complied with all Laws in relation to insurances, including the requirements to provide and retain evidence of insurances.

		
	21.4
	The public liability and professional indemnity or other insurance required by any contractual obligations of any Group Company has been continuously in full force and effect for the period and at the level of cover required by such obligations.

		
	21.5
	Details of the Policies are Disclosed.  In particular, in relation to employers' liability insurance, details of the name of the insurer, the level of cover, any applicable excess, the relevant policy number(s) and the dates of cover for all periods since the incorporation of each Group Company are Disclosed.  So far as the Vendors are aware, none of the insurers under the Policies is insolvent.

		
	21.6
	Each of the Policies is in full force and effect and, so far as the Vendors are aware, there are no circumstances which are likely to make any of the Policies void or voidable.  No insurer has disputed or given any indication that it intends to dispute the validity of any of the Policies on any grounds.  All premiums in relation to the Policies have been duly paid when they were due.

		
	21.7
	Details of all claims made by or on behalf of any Group Company under any employers' liability insurance policy in the last 10 years and under any other insurance policy in the last three years are Disclosed.

		
	21.8
	Details of each Group Company's outstanding insurance claims are Disclosed.  In respect of any outstanding insurance claims:

		
	21.8.1
	they have been notified to the insurers in accordance with the terms of the relevant insurance policies;

		
	21.8.2
	the aggregate loss represented by such claims does not exceed the amount of cover available to the relevant Group Company under the relevant insurance policies; and

		
	21.8.3
	no insurer has refused, or given any indication that it intends to refuse, to indemnify the relevant Group Company in whole or in part in respect of any such claims, and, so far as the Vendors are aware, nothing has been done or omitted to be done which could entitle any insurer to do so.

		
	21.9
	There are no circumstances which have given or, so far as the Vendors are aware, are likely to give rise to any claim or which require notification under any of the Policies which have not been notified to the relevant insurers.

		
	21.10
	No insurer has ever cancelled or refused to accept or continue any insurance in relation to any Group Company.

		
	21.11
	So far as the Vendors are aware, there are no circumstances which are likely to result in the renewal of any of the Policies being refused, an increase in premium or less advantageous policy terms and conditions and which would not apply to insurance policies generally.

		
	21.12
	No insurer has imposed any requirements on any Group Company as a condition to provide, renew 

54

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

or continue insurance cover which required or requires any capital expenditure or any change in the business processes or practices of any Group Company.  There are no outstanding requirements by an insurer for risk improvements that are likely to impact on the renewal of the Policies.
		
	22.
	Licences and consents

		
	22.1
	Each Group Company has all Licences required to own and use its assets and to carry on its business as currently carried on.  Details of all subsisting Licences and any outstanding or pending applications for any Licence are Disclosed.

		
	22.2
	All of the Licences held by each Group Company are in full force and effect.  None of such Licences is due for renewal in the next six months.  No Group Company is or has been in breach of any terms and conditions of any such Licence.  So far as the Vendors are aware, there are no circumstances which are likely to:

		
	22.2.1
	result in any such Licence being suspended, terminated, varied, revoked or not renewed (in whole or in part);

		
	22.2.2
	require material expenditure to comply with the terms of any such Licence; or

		
	22.2.3
	prejudice the renewal or extension of any such Licence.

		
	23.
	Trade associations

No Group Company is a member of any trade association or similar body, and no such body is relevant to or has any material influence over the business of any Group Company as currently carried on.
		
	24.
	Competition

		
	24.1
	No Group Company has received any communication from any person suggesting that it may enjoy a dominant position in any relevant market.  So far as the Vendors are aware, no Group Company enjoys or has enjoyed a dominant position in any such market.

		
	24.2
	No Group Company nor, so far as the Vendors are aware, any person for whose acts or defaults any Group Company is vicariously liable is or has been party to or involved in any agreement, understanding, arrangement, concerted practice or conduct which (in whole or in part) are likely to infringe or has infringed any Competition Laws.

		
	24.3
	No Group Company has:

		
	24.3.1
	received any notice, request for information, order, letter, process or other communication of any kind from any Authority in relation to any Competition Law;

		
	24.3.2
	received any written complaint or threat to complain under, or by reference to any alleged infringement of, any Competition Law from any person;

		
	24.3.3
	so far as the Vendors are aware, been the subject of or affected by any investigation, reference or proceedings in relation to any Competition Law; or

		
	24.3.4
	been party to any proceedings in which any Competition Law was pleaded or relied on,

and, so far as the Vendors are aware, there are no circumstances which are likely to give rise to any of such things.
		
	24.4
	No Group Company has:

		
	24.4.1
	notified or registered any agreement or other arrangement (whether for negative clearance, exemption, guidance, a decision or any other reason) to or with any Authority; or

		
	24.4.2
	given any written assurance or undertaking to any Authority, nor is it subject to any 

55

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

undertaking, decision, order or other instrument made,
in relation to any Competition Law.
		
	24.5
	So far as the Vendors are aware, no Group Company is or has been subject to or affected by any existing or pending act, decision, guidance, report or Judgment made by any Authority having jurisdiction under Competition Laws.

		
	24.6
	No Group Company has been a party to any merger, acquisition or joint venture which was legally required to have been notified to any Authority for approval under any Law on the control of mergers or concentrations but which was not so notified or which was so notified but was put into effect before any such approval was obtained or contrary to a decision of the relevant Authority prohibiting the merger, acquisition or joint venture.

		
	25.
	Grants and state aid

		
	25.1
	No Group Company has applied for or received nor is it currently proposing to apply for any grant, subsidy, allowance, loan, payment, guarantee or other financial assistance or other aid of any kind from any Authority or any entity whose funding comes substantially from any Authority.

		
	25.2
	All Grants received by the Group Companies are lawful under Competition Laws, and there has been no actual or alleged breach by any Group Company of any terms or conditions of any such Grant.

		
	25.3
	No Group Company is under any obligation (whether contingent or otherwise) to repay any Grant (in whole or in part).

		
	26.
	Compliance with Laws

		
	26.1
	Each Group Company has conducted its business and dealt with its assets in accordance with all Laws in all material respects.

		
	26.2
	No Group Company nor, so far as the Vendors are aware, any person for whose acts or defaults any Group Company is vicariously liable has done or omitted to do anything which is or is likely to be in contravention of any Law in any material respect.

		
	27.
	Disputes

		
	27.1
	No Group Company nor, so far as the Vendors are aware, any person for whose acts or defaults any Group Company is vicariously liable is involved, or in the last two years has been involved, in any Dispute.

		
	27.2
	No Disputes are pending or threatened.  So far as the Vendors are aware, there are no circumstances which are likely to give rise to any Dispute.

		
	28.
	Judgments, orders and investigations

		
	28.1
	There is no Judgment against any Group Company which remains outstanding or by which any Group Company or any of its assets is bound, subject or affected.

		
	28.2
	So far as the Vendors are aware, there is not and has not been any governmental, regulatory or other investigation, inquiry or proceedings concerning any Group Company, its business or any of its assets and, so far as the Vendors are aware, none is pending or threatened.

		
	28.3
	No Group Company has given any assurances or undertakings (whether legally binding or not) to any Authority.

		
	28.4
	So far as the Vendors are aware, there are no circumstances which are likely to give rise to any of the matters in paragraphs 28.1, 28.2 or 28.3.

		
	29.
	Effect of the transaction

56

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

The entry into and performance of obligations under the Acquisition Documents will not:
		
	29.1
	breach or require the consent of any person under:

		
	29.1.1
	any Contract, Policy, Licence held by any Group Company or other agreement, arrangement or obligation binding on any Group Company or any Group Company's assets; or

		
	29.1.2
	any Judgment or, so far as the Vendors are aware, any Law;

		
	29.2
	result in the termination of, or enable any person to terminate or alter the terms of, any Contract, Policy, Licence held by any Group Company or other agreement, arrangement or obligation binding on any Group Company or any Group Company's assets;

		
	29.3
	relieve any person from any obligation to, or restriction benefiting, any Group Company or any Group Company's assets, or enable any person to determine any such obligation or restriction or to alter its terms;

		
	29.4
	enable any person to exercise a right in respect of any Group Company;

		
	29.5
	result in the creation, imposition, crystallisation or enforcement of any Encumbrance affecting any of the assets, undertaking or goodwill of any Group Company; or

		
	29.6
	so far as the Vendors are aware, result in any Material Customer or Material Supplier ceasing to deal with any Group Company, or dealing with any Group Company on a smaller scale or on less advantageous terms.

		
	30.
	Transaction costs, etc

No Group Company has paid, or is liable for, any finder's fee, brokerage or other commission or advisers' fees, costs or expenses in connection with the transactions contemplated by the Acquisition Documents.
Part 5:    Employees
		
	1.
	Current employees

		
	1.7
	A list of all employees of each Group Company is Disclosed.  All such employees are employed by a Group Company exclusively in its business.

		
	1.8
	No Group Company uses the services of outworkers, agency workers or persons treated as self‐employed, contracted labour or agents.

		
	1.9
	No person is currently seconded to any Group Company, and no Group Company is under any obligation to have any person seconded to it.

		
	1.10
	No Group Company has entered into or made any outsourcing agreements or other arrangements with any third party under which any person will become or cease to be an employee of a Group Company upon the termination or expiry of such agreements or arrangements.

		
	1.11
	No offer of a contract of employment or engagement has been made by any Group Company to any person with a basic annual salary in excess of £40,000 which has not yet been accepted, or which has been accepted but the individual's employment or engagement has not yet commenced.

		
	1.12
	Each Group Company has in its possession a copy of an original document validly evidencing the right of each of its employees to work for it.

		
	2.
	Terms of employment

		
	2.23
	Details of the material terms of employment of each employee of each Group Company are Disclosed, including:

57

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	2.23.1
	the employee's name, job title, the employing Group Company, date of birth, start date and, if different, date of commencement of continuous service;

		
	2.23.2
	(if the employee works and/or is paid outside the United Kingdom) the country in which the employee works and/or is paid;

		
	2.23.3
	remuneration (including salary, all bonuses, commission, profit‐sharing arrangements, incentive payments and other payments), share option schemes, insurance schemes and any other contractual or non‐contractual benefits or payments whatsoever which any Group Company provides or which it is bound to provide whether during any periods of sickness, incapacity, disablement or leave, on termination of employment or otherwise;

		
	2.23.4
	the length of notice required to terminate the contract of employment or, if the contract is for a fixed term, the expiry date of the fixed term together;

		
	2.23.5
	whether the employee is on maternity, paternity, parental or adoption leave or secondment or other leave, or has been absent due to ill health or for any other reason for a continuous period of one month or more;

		
	2.23.6
	any reasonable adjustments currently being made for any employee who is a disabled person under the Equality Act 2010, if applicable;

		
	2.23.7
	a copy of the contract of employment of any employee who is a director of any Group Company who is engaged in the capacity of a "Group Executive" or "Segment Leader" or, otherwise, whose aggregate remuneration before tax is equal to or exceeds £80,000; and

		
	2.23.8
	a copy of each standard form contract of employment applicable to any of the employees, together with a complete and accurate list of the employees to whom such contract applies.

No employee referred to in paragraph 2.1.8 is employed on terms which differ materially from such standard contracts supplied.
		
	2.24
	Copies of the staff handbooks and written policies and procedures of each Group Company are Disclosed and details of all of the employees of each Group Company to whom each applies are Disclosed.

		
	2.25
	No Group Company has made any loan to any of its employees which remains outstanding for an amount which exceed £1,000 per employee or, or has agreed to make any such loan to any employee.

		
	2.26
	Since the Management Accounts Date:

		
	2.26.1
	(other than as required by Law) no Group Company has changed, or agreed to change, the material terms of employment of any of its employees (including any change resulting in or likely to result in an increase in the total annual remuneration payable to or benefits receivable by its employees), and there are no requests or negotiations for any such change as at Completion which, so far as the Vendors are aware, are likely to take place within the six month period following Completion; and

		
	2.26.2
	no Group Company has provided, or agreed to provide, a gratuitous payment or benefit to any of its employees or former employees, or to any of their respective dependants.

		
	2.27
	No amounts due from any Group Company to or in relation to any of its employees or former employees (including PAYE and national insurance and pension contributions) are in arrears or unpaid (other than salary and expenses for the current month.

		
	3.
	Termination

58

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	3.6
	No employee of any Group Company has given or received notice terminating his contract of employment, nor, so far as the Vendors are aware, is any such notice pending or threatened.

		
	3.7
	Each contract between a Group Company and any of its employees can be terminated by such Group Company giving three months' notice or less without giving rise to the making of a payment in lieu of notice or a claim for damages or compensation for breach of contract.

		
	3.8
	No employee of any Group Company has been given notice of retirement pursuant to paragraph 2 of Schedule 6 to the Employment Equality (Age) Regulations 2006 in the last 12 months.

		
	4.
	Trade unions and employee representatives

		
	4.7
	No Group Company has entered into any recognition or other agreement with a trade union or received any request from a trade union for recognition in the last three years.

		
	4.8
	No Group Company has received or issued any request for the establishment of information and consultation arrangements, whether under the Information and Consultation of Employees Regulations 2004 or otherwise.

		
	5.
	Disputes

		
	5.15
	No Group Company has any Dispute or liability outstanding with or in relation to any of its employees or former employees.  No such Dispute is pending or threatened and, so far as the Vendors are aware, there are no circumstances as at the date of this agreement which are likely to give rise to such a Dispute or liability.

		
	5.16
	No Group Company has any current disciplinary investigations, proceedings or appeals in respect of any of its employees or former employees and, so far as the Vendors are aware, there are no circumstances which are likely to give rise to any such investigations or proceedings.

		
	6.
	Inquiries and investigations

So far as the Vendors are aware, there are no inquiries, investigations or proceedings existing, pending or threatened affecting any Group Company in relation to any of its employees, former employees or groups of employees or former employees by the Commission for Equality and Human Rights or the Health and Safety Executive or any other Authorities with similar functions or powers in relation to any employee.
		
	7.
	TUPE

In the last two years, no Group Company has been a party to a relevant transfer (as defined in the Transfer of Undertakings (Protection of Employment Regulations) 2006) and, within this period, none of its employees or former employees has transferred to a Group Company under any such regulations.
		
	8.
	Effect of the transaction

The entry into and performance of obligations under the Acquisition Documents will not:
		
	8.9
	other than in relation to the sale of Shares, result in any payment or other benefit to any employee of any Group Company;

		
	8.10
	entitle any employee of any Group Company to give notice to terminate his contract of employment or to any additional period of notice;

		
	8.11
	so far as the Vendors are aware, result in any senior employees of any Group Company giving notice to terminate their employment; or

		
	8.12
	so far as the Vendors are aware (having made no enquiry), adversely affect any Group Company's employee relations.

59

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	9.
	Contractors

		
	9.17
	All contractors, whether individuals or companies or agents or consultants, engaged by the Company to do or perform services for the Company or customers of any Group Company ("Contractors") are engaged on the terms which are Disclosed.

		
	9.18
	None of the Contractors have ever been subject to any Group Company's disciplinary procedures by any Group Company.

		
	9.19
	The Group Companies are not involved in any dispute with, and so far as the Vendors are aware there are no circumstances which are likely to result in any dispute involving, any of the Contractors.

		
	9.20
	No amounts due to or in respect of the Contractors by any Group Company are in arrears or unpaid beyond those due for payment in the ordinary course of business and in the timescales specified in any Group Company's normal terms of trading.  No sums will become due or payable by any Group Comp any to any Contractor as a result of the execution, completion and performance of any of the Acquisition Documents.

		
	9.21
	The Company does not pay any PAYE and/or national insurance in respect of the Contractors.

		
	9.22
	None of the Contractors are employees of any Group Company.

		
	10.
	Group Companies incorporated in Belgium and Netherlands ("Benelux Group Companies")

		
	10.19
	There is no social plan adopted or in effect in respect of the employees of the Benelux Group Companies.

		
	10.20
	There are no collective bargaining agreements or any other collective agreements applicable to the employees of the Benelux Group Companies.

Part 6:    Pensions
		
	1.
	Pension arrangements

Other than the Disclosed Schemes, there is not and has not been in operation, no proposal has been announced to enter into or establish, and no Group Company contributes, is bound to contribute either now or in the future or has contributed to, any agreement, arrangement, scheme, custom or practice (whether or not (a) enforceable, (b) a registered pension scheme under the Finance Act 2004 and/or (c) funded for in advance) for the payment of any pensions, allowances, lump sums or other benefits on death, retirement, early retirement (VUT) or termination of employment (whether voluntary or not), or during any period of sickness or disablement, for or in respect of any of the Group Companies' employees or former employees, or any dependant of such an employee or former employee.
		
	2.
	Disclosed Schemes 

		
	2.28
	Details of the Disclosed Schemes, including current details of the rate(s) at which each Group Company is obliged to contribute in respect of each of its employees who are members of the Disclosed Schemes, are Disclosed.

		
	2.29
	All contributions due to or premiums due in respect of the Disclosed Schemes have been paid on or before the date on which payment falls due.  No contribution to or premium due to the Disclosed Schemes in respect of a period before Completion is unpaid and there are no other costs or contributions paid by any Group Company in respect of the Disclosed Schemes.

		
	2.30
	Details of the names of all the members of the Disclosed Schemes are Disclosed and there are no other employees of any Group Company who are currently eligible for or who have been offered membership of the Disclosed Schemes.

		
	2.31
	No undertaking or assurance (whether or not legally enforceable) has been given or discretion or 

60

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

power exercised by or on behalf of any Group Company:
		
	2.31.1
	to any person that any benefits under the Disclosed Schemes (other than lump sum benefits on death in service) will be calculated by reference to any person's remuneration or length of service or will be approximately or exactly any amount; 

		
	2.31.2
	to any person as to the continuance of the Disclosed Schemes or the continuance, increase or improvement of any benefit provided by, or contribution to, the Disclosed Schemes; or

		
	2.31.3
	to admit to membership any person who would not normally be eligible for membership of the Disclosed Schemes or on terms other than those that would normally be applicable under the Disclosed Schemes.

		
	2.32
	The Pension Scheme is a registered scheme under the Finance Act 2004.

		
	2.33
	No employee of any Group Company is in contracted‐out employment as defined in section 7 of the Pension Schemes Act 1993 by reference to the Disclosed Schemes.

		
	2.34
	There are no benefits (other than refunds of contributions with interest where appropriate) payable under the Pension Schemes upon the death of a member.  All benefits payable under the Insured Schemes are insured with an insurance company as defined in section 275 of the Finance Act 2004.

		
	2.35
	So far as the Vendors are aware, the Pension Scheme is and has at all times been administered in accordance with all applicable laws and the requirements of HM Revenue & Customs, and otherwise in accordance with its governing provisions.

		
	2.36
	No employees or former employees of any Group Company have been excluded from membership of the Pension Scheme who would otherwise have been eligible either under the governing documentation of the Pension Scheme, under any applicable laws or under any announcement or other contractual obligations and every such employee has been properly notified of that right.

		
	2.37
	All benefits (other than lump sum benefits on death in service) payable under the Pension Scheme are money purchase benefits (as defined in section 181 of the Pension Schemes Act 1993).

		
	3.
	Claims

No person has made or threatened any claim (other than a routine claim for benefits under the Pension Scheme) or complaint against any Group Company or, so far as the Vendors are aware, against the trustees or administrator of the Pension Scheme or made any complaint or report to the Pensions Regulator in respect of any act, event or omission arising out of or in connection with the Pension Scheme. So far as the Vendors are aware, there are no circumstances which are likely to give rise to any such claim, complaint or report being made.
		
	4.
	Stakeholder compliance

There are no circumstances which could result in any penalty for failure to comply with Part I of the Welfare Reform and Pensions Act 1999 or the Stakeholder Pension Schemes Regulations 2000 becoming payable by any Group Company.
		
	5.
	TUPE

No employee or former employee of any Group Company has ever had his contract of employment transferred to such Group Company from another employer in circumstances where:
		
	5.17
	the Transfer of Undertakings (Protection of Employment) Regulations 1981 or the Transfer of Undertakings (Protection of Employment) Regulations 2006 applied; and

		
	5.18
	the employee or former employee was entitled to defined benefit occupational pension scheme rights in respect of his employment before such transfer to such Group Company.

61

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	6.
	Moral hazard issues

		
	6.11
	So far as the Vendors are aware, no Group Company is or has been connected with, or an associate of, an employer (within the meaning of sections 249 and 435 of the Insolvency Act 1986 respectively) in relation to a defined benefit occupational pension scheme.

		
	6.12
	No contribution notices or financial support directions have been issued by the Pensions Regulator against any Group Company.  So far as the Vendors are aware, there are and have been no circumstances which could give rise directly or indirectly to a liability on any Group Company or the Purchaser arising out of the operation of sections 38 to 57 (inclusive) of the Pensions Act 2004.

Part 7:    Properties
		
	1.
	Properties

		
	1.13
	The Properties comprise:

		
	1.13.6
	all the land and premises owned, occupied or otherwise used by any Group Company whether in the United Kingdom or elsewhere; and

		
	1.13.7
	all the estate, interest, right and title whatsoever (including interests in the nature of options, rights of pre‐emption or other contractual relationships) of any Group Company in respect of any land or premises.

		
	1.14
	The particulars of the Properties set out in part 4 of schedule 3 are complete, accurate and not misleading.

		
	2.
	Title

		
	2.38
	The Relevant Group Companies are the legal and beneficial owners of the Properties.

		
	2.39
	So far as the Vendors are aware (having made no enquiry), no insurance policy relating to defective title or restrictive covenant indemnity is or has been in force in respect of the Properties.

		
	2.40
	So far as the Vendors are aware, there are no circumstances which are likely to render any transaction affecting the Relevant Group Companies' title to the Properties liable to be set aside under the Insolvency Act 1986.

		
	2.41
	No Properties have been transferred or conveyed to any Group Company in the last three years pursuant to an intra‐group transfer on which relief from stamp duty land tax has been claimed pursuant to schedule 7 to the Finance Act 2003.

		
	3.
	Encumbrances

		
	3.9
	So far as the Vendors are aware (having made no enquiry), the Properties are free from any Encumbrance or rent charge securing the repayment of monies or any other obligation or liability (whether of any Group Company or of any other person) and from any agreement to create the same.  So far as the Vendors are aware (having made no enquiry), no person has claimed to be entitled to any such Encumbrance or rent charge.

		
	3.10
	The Properties are not subject to any liability for the payment of any outgoings other than national non‐domestic rates, water and sewerage services charges, insurance premiums, rents and service charges.

		
	3.11
	Except as is apparent from the title documentation Disclosed, so far as the Vendors are aware, the Properties are not subject to:

		
	3.11.1
	any covenants, restrictions, stipulations, easements, profits à prendre, wayleaves, licences, grants, exceptions or reservations, or any unregistered interests which override either first registration (where appropriate) or registrable disposition under Schedules 1 and 3 respectively to the Land Registration Act 2002, or other such rights the benefit of 

62

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

which is vested in third parties; or
		
	3.11.2
	any agreement to create the same.

		
	3.12
	The Properties are not subject to any agreement or right to acquire the same, or any option, right of pre‐emption or right of first refusal.

		
	3.13
	The Group Companies are in actual occupation of each of the Properties to the exclusion of all other persons.  So far as the Vendors are aware, there is no person who has or claims any rights or easements of any kind in respect of any of the Properties adverse to the estate, interest, right or title of any Relevant Group Company to the Properties.

		
	3.14
	There are no outstanding demands or Disputes affecting or in respect of any of the Properties (including any relating to the exercise of any easement or right benefiting or burdening any of the Properties, to boundary walls or fences or to the means of access to any of the Properties), and none is pending or threatened.  So far as the Vendors are aware, there are no circumstances which are likely to give rise to any such demands or Disputes.

		
	4.
	Planning matters, building regulations, etc

		
	4.9
	So far as the Vendors are aware, the use of each of the Properties is the permitted or lawful use for the purposes of Planning Laws.

		
	4.10
	All development carried out in relation to the Properties by or on behalf of any Group Company has been lawful and all necessary consents and permissions have been obtained for that development.

		
	4.11
	Building regulation and bye‐law consents and approvals have been obtained in respect of the development of the Properties (and any subsequent alteration, extension or other improvement to it) carried out by or on behalf of any Group Company.

		
	4.12
	Compliance is being (and, so far as the Vendors are aware, during the ownership, occupation or use of the Properties by any Group Company has been) made in all material respects with all planning permissions and building regulation and bye‐law consents and approvals for the time being in force in relation to the Property and with all orders, directions and regulations made under Planning Laws and building regulations.

		
	4.13
	Compliance is being (and has been) made with all Statutory Agreements relating to the Properties.

		
	4.14
	No planning contravention notices, breach of condition notices, enforcement notices or stop notices have been issued by any local planning authority in respect of the Properties, nor has any other enforcement action (including the exercise of any right of entry) been taken by any such authority.  So far as the Vendors are aware, there are no circumstances which are likely to lead to the same.

		
	5.
	Documents relating to condition of the Properties

There are no collateral warranties, guarantees, indemnities or latent defect or similar insurance policies in relation to the Properties the benefit of which is vested in any Group Company.
		
	6.
	Leasehold Properties

		
	6.13
	The Relevant Group Companies have paid the rent reserved by the Leases and have not received any notice of breach of the lessee's covenants or the conditions in the Leases.  All Leases are valid and in full force.

		
	6.14
	All licences, consents and approvals required from the landlords and any superior landlords under the Leases ("Approvals") have been obtained and the lessee's covenants and the conditions contained in the Approvals have been duly performed and observed.  Save for the Approvals, there are no collateral agreements, undertakings, waivers or concessions which are binding on either the landlords or any Group Company in relation to the Leases.

63

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	6.15
	There are no notices, negotiations or proceedings pending concerning rent reviews in relation to any of the Properties.

		
	6.16
	There is no unfulfilled obligation to reinstate any of the Properties by removing or dismantling any alteration made to it by any Group Company or any predecessor in title to any Group Company.

		
	6.17
	Except to the extent provided for in the Accounts, no Group Company has incurred, or so far as the Vendors are aware, is likely to incur any material liability for dilapidations.

		
	6.18
	No notices have been served or received under section 25, 26 or 27 of the Landlord and Tenant Act 1954 in relation to any Lease.

		
	6.19
	So far as the Vendors are aware (having made no enquiry), there is no major item of expenditure either already incurred by the landlord of any Properties or expected to be incurred by any such landlord within the next 12 months which is recoverable in whole or in part from any Group Company.

		
	7.
	General matters

		
	7.8
	No Group Company has any continuing liability in respect of any property (other than the Property) either as:

		
	7.8.1
	an original contracting party or by virtue of any direct covenant having been given on a sale or assignment to any Group Company; or

		
	7.8.2
	a guarantor of the obligations of any other person (other than another Group Company).

		
	7.9
	All replies given by or on behalf of the Vendors to enquiries before contract raised by or on behalf of the Purchaser relating to the Properties and Disclosed are complete and accurate and not misleading.

Part 8:    Environmental, health and safety

		
	1.
	Environmental Consents

		
	1.15
	Each Group Company has all Environmental Consents required for the Activities.  Copies of all subsisting Environmental Consents and of any outstanding or pending applications by any Group Company for any Environmental Consents are Disclosed.

		
	1.16
	All Environmental Consents held by each Group Company are in full force and effect.  No Group Company is or has been in material breach of any terms and conditions of any such Environmental Consent.  So far as the Vendors are aware, there are no circumstances which are likely to:

		
	1.16.1
	result in any such Environmental Consent being suspended, terminated, varied, revoked or not renewed (in whole or in part);

		
	1.16.2
	require material expenditure to comply with the terms of any such Environmental Consent; or

		
	1.16.3
	prejudice the renewal, extension or grant of any Environmental Consent required for the Activities.

		
	2.
	Compliance with Environmental Laws

		
	2.42
	Each Group Company and its officers, agents and employees have complied in all material respects with, and have not caused any liabilities to arise under, Environmental Laws.

		
	2.43
	So far as the Vendors are aware, there are no circumstances in relation to the Activities or the condition of the Property which are likely to give rise to:

		
	2.43.5
	the need for capital expenditure within the next five years; or

64

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	2.43.6
	fines, penalties, losses, damages, costs, expenses or liabilities

		
	2.43.7
	as a result of or under Environmental Laws.

		
	3.
	Actions

		
	3.15
	There are no, and in the last three years have not been, any actual, pending or threatened Disputes against or involving any Group Company arising from or relating to Environmental Laws and, so far as the Vendors are aware, there are no circumstances which are likely to give rise to any such Disputes.

		
	3.16
	No Group Company has in the last three years:

		
	3.16.1
	received any fixed or variable monetary penalty;

		
	3.16.2
	received any enforcement, prohibition, improvement, remediation, compliance, restoration or stop notice or other notice of equivalent nature from any Authority; or

		
	3.16.3
	entered into any enforcement undertaking,

which relates to Environmental Laws.
		
	3.17
	No Group Company is subject to any Judgment which relates to Environmental Laws.

		
	3.18
	In the last three years, there have been no material complaints, investigations, inquiries, requests for information or other formal or informal indications of any possible Disputes or the need for any investigation, remediation or other works in respect of the Property or the Environment from any person (including any Authority) that involve any Group Company.

		
	4.
	CRC Energy Efficiency Scheme

The Company has undertaken an assessment as to whether any Group Company is required to register or has any other obligations in respect of the CRC Energy Efficiency Scheme under The CRC Energy Efficiency Scheme Order 2010.  All information relevant to that assessment is Disclosed.  No Group Company is required to so register, nor does it have any other such obligations.
		
	5.
	Reports

Copies of all environmental, health and safety and asbestos reports, surveys, assessments and investigations in respect of the Property or the Activities in the possession or under the control of the Vendors or any Group Company are Disclosed.  All material steps to comply with the recommendations contained in them have been completed.
		
	6.
	Other liabilities

		
	6.20
	So far as the Vendors are aware, the condition of any properties formerly in the ownership, occupation or use of any Group Company is not such that costs for any investigation, remediation or other works which could be required under Environmental Laws and which will be recovered from any Group Company.

		
	6.21
	No Group Company has given any covenant, warranty, undertaking, representation, indemnity or similar provision entailing liability (actual or potential) because of any adverse condition relating to the Environment or any breach of Environmental Laws.

		
	6.22
	So far as the Vendors are aware, there are no environmental taxes or fees in respect of the Activities for which any Group Company is liable.

SCHEDULE 5:    TAX
Part 1:    Definitions and interpretation
		
	1.
	In this schedule 5 the following words and expressions shall (except where the context otherwise 

65

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

requires) have the following meanings:
"Accounts Relief" means any of:
		
	(a)
	a Relief which has been treated as an asset (other than a deferred tax asset, unless expressly taken into account in the Completion Net Current Assets) in the Completion Balance Sheet; or

		
	(b)
	a Relief which has been taken into account in computing a provision for deferred tax which appears in the Completion Balance Sheet or has resulted in no provision for deferred tax being made in the Completion Balance Sheet;

"Actual Tax Liability" means any liability of any Group Company to make a payment or increased payment of or in respect of Tax;
"CAA 2001" means the Capital Allowances Act 2001;
"Claim for Tax" means any claim, notice, demand, assessment, letter or other document issued or any action taken by or on behalf of any Tax Authority whether before or after the date of this agreement from which it appears that any Group Company has or is likely to have a Tax Liability;
"CTA 2009" means the Corporation Tax Act 2009;
"Effective Tax Liability" means:
		
	(c)
	the non-availability in whole or in part of any Accounts Relief;

		
	(a)
	the utilisation or set-off of any Post Completion Relief or any Accounts Relief against any Tax or against income, profit or gains in circumstances where but for such utilisation or set-off an Actual Tax Liability would have arisen in respect of which the Vendors would have been liable to the Purchaser under paragraph 1 of part 3 of this schedule 5;

"Event" includes any act, omission, event or transaction and, without limitation, the receipt or accrual of any income, profit or gain, the declaration, making or payment of any distribution, membership of or ceasing to be a member of any group or partnership or any other association, death, any residence or change in the residence of any person for Tax purposes, the expiry of any period of time and Completion;
"FA" followed by a year means the Finance Act of that year or, where there was more than one, "FA" followed by a number in brackets and a year shall be construed accordingly;
"Group Relief" means any of the following:
		
	(a)
	any amount eligible for surrender by way of group relief under part 5 of the CTA 2010;

		
	(b)
	any eligible unrelieved foreign tax which may be surrendered in accordance with The Double Taxation Relief (Surrender of Relievable Tax Within a Group) Regulations 2001 (SI 2001/1163); or

		
	(c)
	any refund of Tax eligible to be surrendered or claimed under section 963 of the CTA 2010;

		
	(d)
	any other amounts or Reliefs of a similar nature to (a), (b) and (c) which are capable of being surrendered between persons for Tax purposes in jurisdictions outside the UK;

"IHTA" means the Inheritance Tax Act 1984;
"ITEPA" means the Income Tax (Earnings and Pensions) Act 2003;
"Loan Relationship" has the meaning given by section 302 of the CTA 2009;
"NL Subsidiary Options" means the share options in the NL Subsidiary exercised by the NL 

66

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

Vendor on the Completion Date;
"non-availability" means loss, reduction, modification, cancellation, non-availability or non-availability ab initio;
"Option Relief" means any corporation tax deduction (whether of the UK or elsewhere) arising to a Group Company under Chapter 3 of Part 12 CTA 2009 (or any equivalent provisions in the Netherlands) in respect of the exercise of any of the Options or any of the NL Subsidiary Options and, if relevant, the amount by which any loss for corporation tax (or its equivalent in the Netherlands) purposes of a Group Company is created or increased by the use of such deduction;  
"Options" means those options exercised by the Options Vendors by virtue of which they acquired those Shares shown against their names in part 2 of schedule 2 of this agreement;
"Post Completion Relief" means a Relief to the extent that it arises either:
		
	(a)
	after Completion; or

		
	(b)
	at any time to any person other than a Group Company;  

excluding, for the avoidance of any doubt, any Option Relief;
"Relief" includes any loss, relief, allowance, credit, deduction, exemption, set-off or right to repayment of Tax including, without limitation, any deduction in computing income, profits or gains for the purposes of any Tax;
"Tax" or "Taxation" means any form of taxation, duty, impost, contribution, levy or tariff of any nature whatsoever, whether of the United Kingdom or elsewhere, and includes without limitation, any withholding amount subject to PAYE or other amount of or in respect of any of the foregoing payable by virtue of any Tax Statute and any penalty, charge, surcharge, fine or interest payable in connection with any such taxation, duty, impost, contribution, levy or tariff;
"Tax Authority" means HM Revenue and Customs or any authority or body, whether of the United Kingdom or elsewhere and whether national or otherwise, having the power or authority or other function in relation to Tax;
"Tax Covenant" means any covenant set out in part 3 of this schedule 5;
"Tax Liability" means any Actual Tax Liability or Effective Tax Liability of any Group Company;
"Tax Statute" means any primary or secondary statute, instrument, enactment, order, law, by-law or regulation making any provision for or in relation to Tax;
"TCGA" means the Taxation of Chargeable Gains Act 1992;
"VATA" means the Value Added Tax Act 1994.
		
	2.
	The value of an Effective Tax Liability shall be as follows:

		
	2.1
	where the Effective Tax Liability involves the non-availability of any Accounts Relief:

		
	2.1.1
	if the Accounts Relief was not or is not a right to repayment of Tax, the amount of Tax which could have been saved but for the non-availability of the Accounts Relief; or

		
	2.1.2
	if the Accounts Relief was or is a right to repayment of Tax, the amount of the repayment which is not available;

		
	2.2
	where the Effective Tax Liability involves the utilisation or set-off of a Post Completion Relief or an Accounts Relief, the value of the Effective Tax Liability shall be the amount of Tax saved by such utilisation or set-off.

67

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	3.
	The rule known as the ejusdem generis rule shall not apply and accordingly:

		
	3.1
	general words introduced by the word "other" shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things; and

		
	3.2
	general words shall not be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words.

		
	4.
	Any reference to an Event or the consequences of an Event occurring on or before Completion shall include the combined effect of any two or more Events all of which shall have taken place or be deemed (for the purposes of Tax) to have taken place on or before Completion).

		
	5.
	Any reference to a Tax Liability in respect of income, profits or gains earned, accrued or received shall include a Tax Liability in respect of income, profits or gains deemed to have been or treated or regarded as earned, accrued or received (for any Taxation purpose) and any reference to a Tax Liability on the happening of any Event shall include a Tax Liability where such Event (for the purposes of the Tax Statute in question) is deemed to have occurred or is treated or regarded as having occurred.

		
	6.
	Any reference to any indemnity, payment obligation or covenant to pay ("Payment Obligation") being given on an "After‐Tax Basis" or expressed to be calculated or paid on an "After‐Tax Basis" means that, to the extent that the amount payable pursuant to such Payment Obligation ("Payment") (other than a payment of interest) is subject to a deduction or withholding required by law in respect of Tax or is chargeable to any Tax in the hands of the recipient, such amount shall be increased so as to ensure that, after taking into account the amount of Tax required to be deducted or withheld from, and the Tax chargeable on, such amount (including on the increased amount), the recipient of the Payment is in the same position as it would have been in if no such Tax, deduction or withholding had been payable (provided that no additional payment shall be required where the payment is not made to the Purchaser unless and to the extent that, if the payment in question had been made to the Purchaser, it would have been subject to such deduction, withholding or Tax).

Part 2:    Tax Warranties
Tax returns and compliance
		
	1.
	Each Group Company has at all times submitted to all relevant Tax Authorities by the requisite dates every computation, return and all information required to be submitted for the purpose of Tax and each such computation, return and information was and remains true, complete and accurate and, so far as the Vendors are aware, is not likely to be the subject of any dispute with any Tax Authority.

		
	2.
	Each Group Company has paid all Tax that it has been liable to pay and there is no Tax Liability in respect of which the date for payment has been postponed by agreement with the relevant Tax Authority or by virtue of any right under any Tax Statute or the practice of any Tax Authority.

		
	3.
	Each Group Company has properly made all deductions, withholdings and retentions required by law to be made in respect of any actual or deemed payment made or benefit provided on or before Completion and has accounted for all such deductions, withholdings and retentions to each relevant Tax Authority and complied with its obligations under Tax Statutes in connection with the same.

		
	4.
	No Group Company nor any director or officer of any Group Company (in his capacity as such) has or will at Completion have any liability for any interest, fine, penalty or surcharge in connection with Tax.

		
	5.
	Every claim, election and disclaimer which has been taken into account for the purposes of the Accounts has been duly submitted by the relevant Group Company within the requisite periods and either has been accepted as valid or its validity has not been and, so far as the Vendors are aware, is not likely to be questioned or challenged by the relevant Tax Authority.

68

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	6.
	Each Group Company has maintained and has in its possession and under its control all records and documentation that it is required by any Tax Statute to maintain and preserve.

		
	7.
	The Disclosure Letter contains details of every subsisting formal or informal arrangement or agreement entered into by each Group Company with any Tax Authority with regard to any of its Tax affairs.

		
	8.
	No Group Company has been subject to any audit, investigation, discovery or access order by any Tax Authority and so far as the Vendors are aware, no audit, investigation, discovery or access order by any Tax Authority is likely to take place.  

		
	9.
	The Disclosure Letter contains details of all applications made by any Group Company (or on its behalf) for any statutory consent or clearance relating to Tax.  All particulars furnished to any Tax Authority in connection with any such applications were full and accurate and any transaction for which such consent or clearance was obtained has been carried into effect in accordance with the terms of the relevant consent or clearance.

General provisions for tax
		
	10.
	To the extent required by generally accepted accounting principles, provision or reserve was made in the Accounts in respect of all Taxation for which any Group Company at the Accounts Date was liable.  

Non-arms length transactions
		
	11.
	Each Group Company is not and has not been a party to any transaction or arrangement under which it has been or is or may be required to pay for any asset or any services or facilities of any kind an amount which is in excess of the market value of such asset, services or facilities; or under which it has been or is or may be required to provide any asset or any services or facilities for a consideration which is less than the market value of such goods, services or facilities.

		
	12.
	Each Group Company has retained documents and other evidence demonstrating that the terms of or the provisions made by means of or imposed by all transactions, agreements and arrangements to which the relevant Group Company is or has been a party are such as would have been made between independent enterprises and the nature, form and content of such documents and other evidence complies with all relevant legislative provisions and Tax Authority guidelines.

Base values
		
	13.
	If each of the capital assets of each Group Company were disposed of, otherwise than to an associate of a Vendor, for a consideration equal to the value attributed to such asset in the Accounts or, in the case of an asset acquired since the Accounts Date, for a consideration equal to the consideration actually given upon its acquisition, no liability to corporation tax would arise (disregarding any statutory right to claim an allowance or relief).

		
	14.
	The value used for each asset or class of assets in respect of which a separate computation for capital allowances is required is such that, on a disposal of that asset or all of the assets in that class for a consideration equal to the value attributed to that asset or class of assets in the Accounts, no balancing charge would arise (disregarding any statutory right to claim an allowance or relief).

Chargeable gains
		
	15.
	No Group Company has joined in making, and has not incurred an obligation to join in making, any election under section 171A or section 179A TCGA.

		
	16.
	No Group Company has made any claim under sections 152 or 153 TCGA to which section 154 TCGA applies in relation to any assets owned by any Group Company on or after the Accounts Date.

		
	17.
	No Group Company has received any asset by way of gift.

69

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	18.
	No Group Company has been a party to or involved in any share for share exchange nor any scheme of reconstruction or amalgamation such as are mentioned in sections 135, 136 or 139 TCGA under which shares or debentures have been issued or any transfer of assets effected.

Capital allowances
		
	19.
	No Group Company has entered into any agreement or lease pursuant to which an election under sections 177, 183 or 199 CAA 2001 has been or may be made.

		
	20.
	Each Group Company is not and has not been a party to any transaction to which the provisions of chapter 17 of part 2 CAA 2001 apply.

		
	21.
	No Group Company has made any election under section 83 CAA 2001 nor is it taken to have made such an election under section 89(4) CAA 2001.

Distributions 
		
	22.
	No Group Company has issued or agreed to issue securities in respect of which the payment of interest falls to be treated as a distribution under either sections 1000(1)E or F of the CTA 2010.

		
	23.
	No Group Company has been concerned in any exempt distribution as defined by section 1075(2) of the CTA 2010 nor has it received a chargeable payment connected with an exempt distribution for the purposes of section 1086 of that Act.

Intangible fixed assets
		
	24.
	No Group Company has made an election under section 730 CTA 2009 in respect of any intangible fixed asset.

		
	25.
	No intangible fixed asset of any Group Company was created or acquired by any Group Company before 1 April 2002.

Loan relationships
		
	26.
	All interest, discounts and premiums payable by any Group Company in respect of its Loan Relationships are eligible to be brought into account by the relevant Group Company as debits for the purposes of part 5 CTA 2009 at the time and to the extent that such debits are recognised in the statutory accounts of the relevant Group Company.

		
	27.
	Each Group Company has used an amortised cost basis of accounting which is an authorised accounting method for the purposes of part 5 CTA 2009 with regard to all Loan Relationships to which it is or has been a party.

		
	28.
	No Group Company is nor has been a party to a Loan Relationship which has or had an unallowable purpose (within the meaning of section 442 CTA 2009) or is one to which section 445 CTA 2009 applies.

		
	29.
	No credit would need to be brought into account pursuant to part 5 or part 6 CTA 2009 as a result of any debt being settled in full or in part at Completion.

Group matters
		
	30.
	No Group Company has been a member of a group for any Tax purposes (other than one consisting solely of other Group Companies), been owned by or been a member of a consortium, or been an associated company (other than of another Group Company).

		
	31.
	No Group Company has:

		
	31.1
	acquired any asset, loan relationship or derivative contract from any other company which at any relevant time was a member of the same group of companies as the Group Company or was an associated company;

70

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	31.2
	made any intra‐group transfers of assets in circumstances such that any Group Company could be regarded as realising a chargeable gain on the appropriation of the asset to or from trading stock under section 173 of the TCGA;

		
	31.3
	incurred any liability under section 176 or section 190 of the TCGA;

		
	31.4
	entered into or become subject to any arrangement for the group payment of Tax; or

		
	31.5
	been a party to or agreed to make an election under section 179A of the TCGA to reallocate any gain or loss arising under section 179 of the TCGA within a group.

		
	32.
	In respect of every surrender or claim for Group Relief or consortium relief made or received or agreed to be made or received by any Group Company in the six years ending on Completion, no payment remains due or outstanding.

		
	33.
	No Tax Liability will arise for any Group Company as a result of or by reference to the disposal of any interest in any of the 4th Screen Holding by the Company on, before or around Completion (or the agreement to dispose of any of the same).

Close companies
		
	34.
	Each Group Company is and has at all times been a close company within the meaning of section 439 of the CTA 2010, but is not and has not at any time been a close investment-holding company as defined by section 34 of that Act.

		
	35.
	No Group Company has incurred any expense which is or was required to be treated as a distribution by virtue of section 1064 of the CTA 2010.

		
	36.
	The Disclosure Letter provides details of all loans or advances made or agreed to be made by any Group Company within section 455 of the CTA 2010 and no Group Company has released or written off the whole or any part of the debt in respect of any such loan or advance.

VAT
		
	37.
	Each Group Company:

		
	37.1
	is duly registered for the purposes of the VATA (or, in the case of Group Companies incorporated outside of the UK, for the purposes of the relevant sales tax in the country of incorporation); and

		
	37.2
	has complied with all statutory provisions, rules, regulations, orders, directions and public guidance in respect of VAT (or other relevant sales tax), has promptly submitted accurate returns and each Group Company maintains records which are materially complete and accurate, for the purposes of the VATA (or the legislation governing the relevant sales tax in jurisdictions outside of the UK).

		
	38.
	No Group Company has been required to give security under paragraph 4 of schedule 11 VATA.

		
	39.
	No Group Company is, nor has been, a member of any group of companies for the purpose of section 43 VATA and no act or transaction has been effected in consequence of which any Group Company is or is likely to be held liable for any VAT (or other sales tax) arising from supplies made by another company and no direction has been given nor will be given under Schedule 9A VATA as a result of which any Group Company would be treated as a member of a group for the purposes of the VATA.

		
	40.
	No Group Company owns any asset which is a capital item, the input tax on which may be subject to adjustment in accordance with Part XV Value Added Tax Regulations 1995.

		
	41.
	No Group Company, nor any company of which the relevant Group Company is a relevant associate (as defined by paragraph 3 of schedule 10 VATA) has exercised an option to tax any land except as disclosed in the Disclosure Letter.  

Stamp duty and stamp duty land tax

71

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	42.
	All documents required by any Group Company to prove or register title to an asset in which any Group Company is interested have been duly stamped and no such document which is outside the UK would attract stamp duty if it were to be brought into the UK.

		
	43.
	The Disclosure Letter contains details of all chargeable interests (as defined by section 48 FA 2003) acquired or held by any Group Company in respect of which any Group Company may be required to file a land transaction return or pay stamp duty land tax on or after Completion and gives details of the circumstances in which such requirement might arise.

		
	44.
	The Disclosure Letter contains details of all land transactions entered into by each Group Company as purchaser before Completion that may, so far as the Vendors are aware, become notifiable transactions (as defined by section 77 FA 2003) by virtue of any transaction occurring on or after Completion.

		
	45.
	No Group Company has made any claim for relief from stamp duty land tax or stamp duty.

Inheritance tax
		
	46.
	No Group Company has made:

		
	46.1
	any transfers of value within sections 94 or 202 IHTA;

		
	46.2
	received a transfer of value in circumstances such that a liability to inheritance tax might arise under section 199 IHTA; or

		
	46.3
	been party to any associated operation (as defined by section 268 of IHTA) in relation to any transfer of value.

		
	47.
	There is no unsatisfied liability to inheritance tax attached to or attributable to the shares in or any asset of any Group Company. 

		
	48.
	Neither the shares in nor any asset owned by any Group Company are subject to or liable to become subject to any sale, mortgage or charge by virtue of sections 212, 237 or 238 of the IHTA.

Overseas elements
		
	49.
	Each Group Company is and has always been resident for Tax purposes only in the jurisdiction in which it is incorporated and does not have and has never had a permanent establishment in any other jurisdiction.

		
	50.
	No Group Company is liable to account or be registered for Tax in any jurisdiction other than the one in which it is incorporated.

		
	51.
	No Group Company is liable to corporation tax by virtue of section 13 TCGA in respect of chargeable gains accruing to any non‐UK resident company.

Miscellaneous
		
	52.
	Other than the Vendors (or any one of them), no person has at any time held any security (as defined in section 420 ITEPA), or any interest in such security, where the right or opportunity to acquire the security or interest in a security was made available by reason of the employment of that person or any other person with any Group Company.

		
	53.
	There are no subsisting options (or similar rights) in respect of shares in any Group Company.

		
	54.
	No Group Company has been party to or concerned with any scheme or arrangement of which the main purpose or one of the main purposes was the avoidance of or a reduction in liability to Tax.

Part 3:    Tax Covenant
		
	1.
	Covenant

72

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	1.1
	The Vendors severally covenant to pay to the Purchaser an amount, whether or not that amount is a liability of or recoverable from another person, equal to:

		
	1.1.1
	any Actual Tax Liability (whether or not discharged prior to, on or after Completion) which arises directly, indirectly, before or after or on Completion by reference to an Event occurring or income, profits or gains earned, accrued or received on or before Completion;

		
	1.1.2
	any Effective Tax Liability (quantified in accordance with paragraph 2 of part 1);

		
	1.1.3
	any Tax Liability arising by reference to the non-payment of Tax by any of the Vendors or any person (other than a Group Company) which is or has been connected with any of the Vendors (at any time) or any Group Company (on or before Completion);

		
	1.1.4
	any stamp duty (together with any interest and penalties) (such sum being recoverable from the Vendors as a liquidated sum payable as a debt) in respect of which there is a breach of any of the Tax Warranties relating to stamp duty;

		
	1.1.5
	such amount as any Group Company is liable to pay or repay (other than to another Group Company) in respect of any surrender of Group Relief or any arrangement for the group payment of Tax entered into prior to Completion;

		
	1.1.6
	any liability for inheritance tax which:

		
	1.1.6.1
	has, at Completion, given rise to a charge on any of the shares or assets of any Group Company or given rise to a power to sell, mortgage or charge any of the shares or assets of any Group Company;

		
	1.1.6.2
	after Completion, gives rise to a charge on any of the shares or assets of any Group Company or gives rise to a power to sell, mortgage or charge any of the shares or assets of any Group Company and which arises as a result of a transfer of value occurring or being deemed to occur on or before Completion (whether or not in conjunction with the death of any person whenever occurring);

provided that any right to pay inheritance tax by instalments shall be disregarded and the provisions of section 213 of IHTA shall not apply to any payment falling to be made under this schedule;
		
	1.1.7
	any Tax Liability arising as a result of or by reference to:

		
	1.1.7.1
	the exercise of any option (including, without limitation, any Option) granted on or before Completion in respect of any shares in any Group Company and/or the issue of any shares pursuant thereto but excluding any Tax Liability to the extent that an amount in respect of such Tax Liability has been withheld from the Consideration in accordance with clause 3.3;  

		
	1.1.7.2
	any delay in paying or failure to pay the relevant Group Company an amount in respect of any Tax Liability referred to in paragraph 1.1.7.1 in the time period required by section 222 ITEPA; 

		
	1.1.8
	any liability of any Group Company or the Purchaser to account for income tax or national insurance contributions (or their foreign equivalents) which arise as a result of or by reference to:  

		
	1.1.8.1
	the payment of all or any part of the Consideration;

		
	1.1.8.2
	the issue of or subsequent disposal of any Consideration Shares and/or Loan Notes;  and/or

73

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	1.1.8.3
	any delay in paying or failure to pay (on the part of any Vendor) to the Purchaser or relevant Group Company any amount in respect of any Tax Liability or liability to Tax referred to in paragraph 1.1.8.1 or 1.1.8.2 above in the time period required by section 222 ITEPA; 

together with any associated interest and penalties;
		
	1.1.9
	any Tax Liability arising as a result of or by reference to:

		
	1.1.9.1
	the exercise (or waiver) of any options in respect of shares in the NL Subsidiary which were granted on or before Completion (or the issue of any shares pursuant to any such exercise) and/or the transfer or sale of any shares in the NL Subsidiary to the Company on or before Completion and/or the issue or transfer of any shares in the Company to the NL Vendor on or before Completion;

		
	1.1.9.2
	the sale, disposal or transfer of any shares in 4th Screen by the Company (including any Tax Liability arising as a result of or by reference to 4th Screen ceasing to be a member of the same group as (or otherwise connected with) any Group Company);  and/or

		
	1.1.9.3
	the issue or transfer of any shares in 4th Screen Newco before, on or around Completion;

		
	1.1.10
	the reasonable costs and expenses properly incurred by the Purchaser and/or any Group Company in connection with a successful claim under this schedule or any Tax Liability which is the subject of such a claim.

		
	2.
	Deductions from payments

		
	2.1
	All sums payable by the Vendors in respect of any Tax Claim shall be paid on an After-Tax Basis.

Part 4:    Limitations and Procedure
		
	1.
	Limitations

The Vendors shall not be liable under any Tax Warranty or any claim under the Tax Covenant in respect of any Tax Liability or other liability to the extent that:
		
	1.1
	provision or reserve in respect of such liability has been made in or reflected in the Completion Balance Sheet; 

		
	1.2
	payment or discharge of such liability has been taken into account in the Completion Balance Sheet;

		
	1.3
	the provision for Tax made in the Completion Balance Sheet in relation to such liability is only insufficient by reason of any increase in the rates of Tax after the Completion Date with retrospective effect;

		
	1.4
	the income in respect of which the liability arises was actually earned, accrued or received by a Group Company prior to Completion but was not (but should have been) reflected in the Completion Balance Sheet provided that this paragraph 1.4 shall only apply to the extent (a) such income exceeds the amount of the liability and (b) the relevant income is actually received by the Group Company after Completion;

		
	1.5
	such liability arises or is increased as a result of any change in legislation (primary or delegated) or the published practice of a Tax Authority occurring after the Completion Date (but not announced before that date);

		
	1.6
	such liability arises or is increased as a direct result of any voluntary act, transaction or omission of 

74

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

a Group Company or the Purchaser after Completion (other than the sale, transfer or disposal of any shares in 4th Screen (or any agreement to do any of the same)) which the Purchaser or, as appropriate, the relevant Group Company knew or ought reasonably to have known would give rise to or increase the liability in question, otherwise than any voluntary act, transaction or omission:
		
	1.6.1
	in the ordinary course of business of the relevant Group Company as carried on at Completion; or

		
	1.6.2
	pursuant to a legally binding obligation incurred on or before Completion; or

		
	1.6.3
	pursuant to any law or generally accepted accounting practice in force on or before Completion; or

		
	1.6.4
	carried out at the request of any of the Vendors;

		
	1.7
	the liability arises or is increased as a result of any voluntary change in the accounting reference date of a Group Company made after Completion or a voluntary change in the accounting policy or practice of a Group Company made after Completion (save that this paragraph 1.7 shall not apply where such change is required to conform such policy or practice with generally accepted policies or practices applicable to the relevant Group Company as at (or before) Completion) or as a result of a change in generally accepted accounting practice made after Completion (and not announced before Completion) with retrospective effect;

		
	1.8
	it is a Tax Liability comprising interest and penalties arising in connection with any failure to make or insufficiency of an instalment payment under the Corporation Tax (Instalment Payments) Regulations 1998 by a Group Company in relation to its accounting period current at Completion, where that failure or insufficiency arises only as a consequence of the profits, gains or income earned, accrued or received by the Company after Completion proving greater in amount than the profits, gains or income expected at the date of payment of the relevant instalment to be earned, accrued or received by the Company after Completion;

		
	1.9
	the liability arises or is increased by the Purchaser’s failure to give notice of the relevant Claim for Tax to the Vendors' Representative in accordance with paragraph 5 below;

		
	1.10
	it is a liability which would not have arisen but for the failure or omission after Completion on the part of a Group Company or the Purchaser or any member of the Purchaser Group to make any claim, election, surrender or disclaimer or give any notice or consent or do any other thing under the provisions of any enactment relating to Tax, the making, giving or doing of which was properly taken into account in computing the provision for Tax in the Completion Balance Sheet and the material details of which were notified in writing to the Purchaser by the Vendors no later than 20 Business Days before the last date on which they may validly be made, given or done provided that this paragraph 1.10 shall not apply to the extent that the failure or omission is at the request or direction of the Vendors;

		
	1.11
	a Relief (other than an Accounts Relief or a Post Completion Relief) is available at no cost to the Group Company to offset or reduce such liability and is so used;  or

		
	1.12
	an amount in respect of such liability is withheld from the Consideration in accordance with the provisions of clause 3.3.

		
	2.
	The Vendors shall not be liable in respect of any breach of the Tax Warranties if and to the extent that the loss incurred is or has been included in any claim under the Tax Covenant which has been satisfied in full in cleared funds, nor shall the Vendors be liable in respect of a claim under the Tax Covenant if and to the extent that the amount claimed is or has been included in a claim for breach of the Tax Warranties which has been satisfied in full in cleared funds.

75

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	3.
	Duration and extent

The Vendors shall not be liable in respect of any Tax Claim unless details of the Tax Claim have been notified in writing to the Vendors' Representative within seven years of Completion provided that paragraph 1 of this part 4 and this paragraph 3 shall not apply to any Tax Claim which has arisen as a result of fraud or neglect on the part of any of the Vendors (at any time) or any Group Company (prior to Completion).
		
	4.
	Monetary limits

The monetary limits set out in paragraph 1 of schedule 6 shall, for the avoidance of doubt, apply to Tax Claims (to the extent they are expressed to provide to Tax Claims in schedule 6).

		
	5.
	Conduct of claims

		
	5.1
	If the Purchaser or any Group Company becomes aware (after Completion) of any Claim for Tax which gives or is likely to give rise to a Tax Claim, the Purchaser shall or shall procure that the relevant Group Company shall give notice of the Claim for Tax to the Vendors' Representative but such notice shall not be a condition precedent to the liability of the Vendors under this schedule 5.

		
	5.2
	If the Vendors' Representative so requests in writing, the Purchaser shall or shall procure that the relevant Group Company shall supply the Vendors' Representative with such available and relevant details, documentation, correspondence and information relating to the relevant Claim for Tax and shall (subject to paragraph 5.3) take such action as the Vendors' Representative may reasonably request in writing to negotiate, avoid, dispute, resist, compromise, defend or appeal against the Claim for Tax and any adjudication in respect of the Claim for Tax provided that:

		
	5.2.1
	the Vendors' Representative shall not be entitled to require any Group Company to delegate the conduct of such action to any person; and

		
	5.2.2
	the Vendors shall first indemnify each relevant Group Company and the Purchaser to the reasonable satisfaction of the Purchaser against any costs, expenses and liabilities (including any additional Tax) which may be incurred as a consequence of any action taken in accordance with this paragraph 5.

		
	5.3
	If the Vendors' Representative does not request the Purchaser or any Group Company to take action pursuant to paragraph 5.2, or the Vendors fail to indemnify the Purchaser or the relevant Group Company concerned as provided in that paragraph, within 21 days of the said notice to the Vendors' Representative, the Purchaser or any Group Company shall be free to pay or settle the Claim for Tax on such terms as they may in their absolute discretion think fit.

		
	5.4
	The Purchaser shall not be obliged to take or procure the taking of the following action pursuant to paragraph 5.2:

		
	5.4.1
	contesting any Claim for Tax before any court, tribunal or other appellate body (excluding the First-tier Tribunal) unless, at the sole expense of the Vendors, the Vendors obtain the written opinion of Tax counsel of at least ten years' call after disclosure of all relevant information and documents and having regard to all the circumstances that it is more likely than not that the action will succeed;

		
	5.4.2
	any action whatsoever requested by any agent or representative of any Vendor including, without limitation, any receiver, administrator or trustee in bankruptcy.

		
	5.5
	If it is alleged by any Tax Authority in writing that any Vendor (at any time) or any Group Company (prior to Completion) has committed any act or omission constituting fraudulent or negligent conduct relating to Tax, paragraph 5.2 shall not apply and the Vendors' Representative shall cease to have any rights under that paragraph.

76

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	6.
	Date for payment

		
	6.1
	Where a Tax Claim involves the Purchaser or any Group Company being under a liability to make a payment to any Tax Authority, the Vendors shall pay to the Purchaser in cleared funds the amount claimed on or before the later of the fifth Business Day after demand is made for such payment and the fifth Business Day before the date on which the amount in question is payable to the relevant Tax Authority without any interest, penalty, fine or surcharge arising in respect of it.

		
	6.2
	Where a Tax Claim is made under the Tax Covenant in respect of the non-availability of a right to repayment of Tax, the Vendors shall pay to the Purchaser in cleared funds the amount in question on the later of the fifth Business Day after demand is made for such amount to be paid and the fifth Business Day after the date on which the Tax in question would have been repaid but for that non-availability.

		
	6.3
	Where a Tax Claim is made under the Tax Covenant in respect of the utilisation or set-off of a Relief, the Vendors shall pay to the Purchaser in cleared funds the amount in question on the later of the fifth Business Day after the date on which the Tax in question would have arisen but for such utilisation or set-off and the fifth Business Day after demand is made for such amount to be paid.

		
	6.4
	Where the Vendors are liable to make any payment under any Tax Claim, the date for the payment of which is not determined under paragraphs 6.1, 6.2 or 6.3 of part 4 of this schedule 5, the Vendors shall pay to the Purchaser the amount in question on the fifth Business Day after demand is made for such amount to be paid.

		
	7.
	Over provisions and corresponding benefit

		
	7.1
	If, before the seventh anniversary of the date of this agreement:

		
	7.1.1
	any provision for Tax (excluding deferred tax) in the Completion Balance Sheet which was taken into account in calculating the Completion Net Current Assets proves to be an over-provision (applying the accounting policies adopted for the purposes of the Completion Balance Sheet); or

		
	7.1.2
	a payment by the Vendors in respect of any Tax Liability under a Tax Claim results in a Group Company or the Purchaser receiving any Relief (other than an Accounts Relief or Option Relief) including by way of obtaining a repayment of Tax ("Corresponding Relief"),

then an amount equal to such over-provision or the Tax saved by the Corresponding Relief at the date such Corresponding Relief is utilised ("Relevant Saving") shall be dealt with in accordance with paragraph 7.2 of this schedule 5 part 4, provided that no account shall be taken of any over-provision to the extent that it arises as a consequence of the utilisation of any Post Completion Relief, Option Relief or Accounts Relief or any action taken by any Group Company after Completion or any change in law after Completion.
		
	7.2
	The Relevant Saving:

		
	7.2.1
	shall first be set off against any payment then due from the Vendors under a Tax Claim;

		
	7.2.2
	to the extent there is an excess of the Relevant Saving after any application of it under paragraph 7.2.1 of part 4 of this schedule 5, a refund shall be made to the Vendors of any previous payment or payments made by the Vendors under a Tax Claim in respect of the matter or thing giving rise to the Relevant Saving and which has not previously been refunded under this paragraph 7.2.2 or otherwise up to the amount of such excess; and

		
	7.2.3
	to the extent that the excess referred to in paragraph 7.2.2 of part 4 of this schedule 5 is not exhausted under that paragraph, the remainder of that excess shall be carried forward and set off against any future payment or payments which become due from the Vendors under a Tax Claim.

77

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	7.3
	The Vendors' Representative may, at the expense of the Vendors, require the auditors for the time being of the relevant Group Company to certify the existence and quantum of any Relevant Saving and the date on which the Corresponding Relief is utilised and in the absence of manifest error their decision shall be final and binding.

		
	8.
	Third party claims

		
	8.1
	If any Group Company or the Purchaser or any member of the Purchaser Group is before the seventh anniversary of the date of this agreement entitled to recover from another person (excluding any other Group Company or any member of the Purchaser Group and also excluding (save in the case of the enforcement of any indemnity given by them in respect of their Options) any employee of any of the same) or a Tax Authority a sum in respect of any Tax Liability to which a Tax Claim relates, the Purchaser shall give notice of such fact to the Vendors' Representative and if the Vendors indemnify the Purchaser or as appropriate the relevant Group Company or member of the Purchaser Group (to the Purchaser's reasonable satisfaction) against the reasonable and properly incurred costs of the Purchaser or as appropriate the relevant Group Company or member of the Purchaser Group in connection with taking the following action, the Purchaser shall or shall procure that the relevant Group Company or member of the Purchaser Group shall take such action as is reasonably requested by the Vendors' Representative to enforce recovery against that person or Tax Authority. 

		
	8.2
	In the event that any sum referred to in paragraph 8.1 of part 4 of this schedule 5 is recovered after taking any action at the request of the Vendors' Representative under that paragraph, the Purchaser shall as soon as reasonably practicable account to the Vendors for the lesser of:

		
	8.2.1
	the sum recovered by the Group Company or other member of the Purchaser Group net of any Tax on the sum and the costs and expenses of recovering the same; and 

		
	8.2.2
	any amount paid by the Vendors in respect of the Tax Liability giving rise to the relevant Tax Claim,

provided that if such recovery takes place before the Vendors have made a payment in respect of the relevant Tax Claim an amount equal to the sum recovered (net of any Tax on the sum and the costs and expenses of recovering the same) shall instead be set off against the Vendors’ liability for that Tax Claim.

		
	9.
	Options Consideration  

		
	9.1
	The Purchaser hereby agrees to pay to the Vendors (pro rata to the number of Shares sold by them) an amount equal to any corporation tax (whether in the UK or the Netherlands) actually saved by a Group Company in its accounting period current at Completion (or any subsequent accounting periods) as a result of the utilisation of any Option Relief by that Group Company that has not been taken into account in computing and so reducing (or eliminating) any provision for Tax in the Completion Balance Sheet.  Payments due under this paragraph 9.1 shall be made within 20 Business Days of the Final Date in respect of the relevant utilisation of the Option Relief.

		
	9.2
	For the purposes of paragraph 9.1, an Option Relief shall be deemed to be utilised as and when (and to the extent that) the relevant Group Company makes a reduced payment of corporation tax to the relevant Taxation Authority (including where a Group Company does not have a liability to make a payment of corporation tax at all) as a result of the utilisation of that Option Relief.  The Purchaser shall procure that the relevant Group Company (or Group Companies, as the case may be) utilise (to the extent permitted by law) any available Option Relief as soon as is permitted by law and, wherever possible, in priority to any other available Relief and undertakes not to, and will procure that no Group Company will, facilitate or take steps with the main intention of preventing the utilisation of the Option Relief (including, but not limited to, the surrender of Group Relief to a Group Company to reduce taxable profits that the relevant Option Relief could otherwise have been 

78

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

utilised against) or deliberately reduce or eliminate the taxable profits of the relevant Group Company against which such Option Relief could otherwise have been utilised.  
		
	9.3
	In the event that any payment has been made by the Purchaser under this paragraph 9 in respect of any utilisation of an Option Relief and it is determined that the amount of corporation tax saved by the Group Company by utilising that Option Relief is less than was assumed for the purposes of calculating the payment under paragraph 9.1, the Vendors shall refund to the Purchaser that part of the payment which is attributable to the corporation tax which was not saved.  Any payment due under this paragraph 9.3 shall be made within 20 Business Days of written demand.

		
	9.4
	Any payments made under this paragraph 9 shall (to the extent permitted by law) be treated as increasing or reducing (as the case may be) the consideration for the Shares.

		
	9.5
	No payment shall be due under paragraph 9.1 to the extent that the corporation tax which is saved by the utilisation of the Option Relief is corporation tax for which the Vendors would have been liable under the Tax Covenant had it actually been payable by the Group Member (ignoring only any financial limits on liability).

		
	9.6
	Any amounts payable to the Vendors pursuant to this paragraph 9 shall be satisfied by the issue of Loan Notes, save for those persons expressly named in paragraph 4 of part 2 of schedule 10 to this agreement, whose entitlement to any such payment shall be satisfied by the payment of cash (rather than Loan Notes) by the Purchaser into the Nominated Account on behalf of those Vendors.

		
	9.7
	The Vendors’ Representative shall be entitled, at any time (but at the cost of the Vendors), to request that the auditors for the time being of the relevant Group Company verify and determine the amount of Option Relief utilised and the amount of any payment to be made to the Vendors in accordance with this paragraph 9, and whether any amount of Option Relief carried forward has been utilised in accordance with this paragraph 9.  Any such determination made by the auditors shall (save in the absence of manifest error) be binding on the parties.  The Vendors' Representative shall only be entitled to make one request pursuant to this paragraph 9.7 in respect of any single accounting period of a Group Company.

		
	9.8
	For the purposes of this paragraph 9:

		
	9.8.1
	"Final Date" shall mean the date of the expiry of the normal enquiry period in relation to the relevant corporation tax return in which the relevant Option Relief is reflected as utilised, unless a Tax Authority has opened a Relevant Enquiry which is subsisting at such date, in which case the Final Date shall mean ten Business Days after the date on which that Relevant Enquiry is finally closed;

		
	9.8.2
	"Relevant Enquiry" shall mean an enquiry (or similar) by a Tax Authority into the relevant corporation tax return of the relevant Group Company which relates or may relate to the availability and/or value of any Option Relief (or part thereof).

		
	10.
	Conduct of tax affairs 

		
	10.1
	The Company and/or the Purchaser shall at their own cost prepare the corporation tax returns for the Group Companies in respect of all accounting periods of the Company commencing prior to Completion (the "Relevant Periods") to the extent the same have not been submitted prior to Completion.  The Company and/or the Purchaser shall prepare any such corporation tax returns in draft and shall submit the said returns to the Vendors' Representative no less than 30 days before the date on which they are required to be submitted to the appropriate authorities.  The Company and/or the Purchaser shall incorporate such amendments to the said returns as the Vendors' Representative, acting reasonably, may request (within 20 days of delivery of the relevant returns) before submitting such returns to the relevant authorities.  The Vendors shall use their reasonable endeavours to provide such information as the Company and/or the Purchaser may reasonably request as may be required to enable the Company and/or the Purchaser to prepare the said returns.  

79

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	10.2
	The Purchaser will not (and will procure that no Group Company will) submit any substantive correspondence to a Tax Authority or submit or agree any corporation tax return or computation for any such accounting period ended on or before Completion without giving the Vendors' Representative a reasonable opportunity to comment and taking account of the Vendors' Representative's reasonable comments or, where such actions will result in a liability of the Vendors to make a payment under this schedule, without first obtaining the written consent of the Vendors’ Representative (such consent not to be unreasonably withheld or delayed).

		
	10.3
	The Purchaser will procure that no Group Company amends or withdraws any corporation tax return or computation in respect of any accounting period ending on or before Completion or withdraws or amends any claim, election, surrender or consent relating to corporation tax made by it in respect of any accounting period ending on or before Completion without giving the Vendors' Representative a reasonable opportunity to comment and taking account of the Vendors' Representative's reasonable comments.

		
	11.
	Release

The Purchaser may release or compromise the liability under this schedule 5 of any Vendor or grant time or other indulgence to any Vendor without releasing or reducing the liability of the other Vendor.
		
	12.
	Miscellaneous

Any payment to the Purchaser or any Group Company under any Tax Claim shall be deemed (to the extent permitted by law) to be a reduction of the total consideration payable under this agreement for the Shares. 

SCHEDULE 6:    VENDOR LIMITATIONS  
		
	1.
	Monetary limits

		
	1.17
	Subject to clauses 6.2 and 6.3 the aggregate liability of the Vendors in respect of all claims under this agreement (excluding claims for a breach of the Fundamental Warranties) (including all legal, professional and other costs and expenses incurred by the Purchaser or any member of the Purchaser Group in connection with such breaches or claims) shall not exceed an amount equal to the Liability Amount and the maximum liability of each Vendor in respect of any individual claim shall be the Relevant Amount applicable to that Vendor.

		
	1.18
	The Vendors shall not be liable for any General Warranty Claim, Indemnity Claim or Tax Claim where the aggregate estimated liability of the Vendors claimed against is less than $35,000 and any such potential liability of less than $35,000 shall be disregarded in calculating the figure of $350,000 referred to in paragraph 1.3, provided that to the extent that the same set of facts, matters or circumstances are capable of giving rise to liability for breach(es) of the Warranties and/or Indemnity Claim and/or Tax Claim and the liability for such breach(es) exceeds $35,000 all such breach(es) shall be aggregated as one claim and shall be regarded in calculating the figure of $350,000 referred to in paragraph 1.3 of this schedule.

		
	1.19
	The Vendors shall not be liable for any General Warranty Claim, Indemnity Claim or Tax Claim unless and until the aggregate liability of the Vendors in respect of all Warranty Claims, Indemnity Claims or Tax Claims exceeds $350,000 (excluding interest and costs), in which case the Vendors shall (subject to paragraphs 1.1 and 1.2) be liable for both the initial $350,000 and the excess.

		
	2.
	Time limits

		
	2.44
	As soon as reasonably practicable after it becomes aware of the possible breach, the Purchaser shall give written notice to the Vendors regarding the claim giving all reasonably ascertainable 

80

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

particulars of the factual matters giving rise to the claim and include the Purchaser's best genuine pre‐estimate of the Vendors' liability in respect of such claim but the Purchaser's failure to comply with such requirements shall not prejudice the Purchaser's ability to make a claim under this agreement.
		
	2.45
	Subject to paragraphs 10.2 and 11 of this schedule, the Vendors shall not be liable for any General Warranty Claim or Indemnity Claim unless the Purchaser has given notice to the Vendors of such General Warranty Claim or Indemnity Claim (specifying such details of the matter or thing giving rise to such General Warranty Claim or Indemnity Claim as are then readily available) to the Purchaser before:

		
	2.45.1
	5.00 pm on the date falling eighteen months after the Completion Date (in the case of all General Warranty Claims (excluding Specific IP Claims)); and

		
	2.45.2
	5.00pm on the second anniversary of the Completion Date (in the case of Specific IP Claims only).

		
	2.46
	The liability of the Vendors for any claim notified under this paragraph 2 shall (if it has not been previously satisfied, settled or withdrawn), cease nine months after the date on which the claim was notified, unless court proceedings have been started in respect of it or it has been submitted to arbitration and the proceedings or submission to arbitration has not been withdrawn or terminated with court proceedings not having been commenced within three months following such withdrawal or termination.

		
	2.47
	The Vendors shall not be liable in respect of any General Warranty Claim or Indemnity Claim based on a liability which is contingent until it becomes an actual liability.

		
	3.
	Disclosure and Scope

		
	3.19
	The Vendors shall not be liable for:

		
	3.19.1
	any General Warranty Claim or Indemnity Claim in relation to a Fundamental Warranty to the extent that the matter or thing giving rise to such General Warranty Claim or Indemnity Claim has been Disclosed with an express reference in the Disclosure Letter to that particular Fundamental Warranty; and

		
	3.19.2
	any other Warranty Claim or Indemnity Claim to the extent that the matter or thing giving rise to such Warranty Claim or Indemnity Claim has been Disclosed.

		
	3.20
	Any of the Warranties and any part of the Tax Warranties that are given or provided by the Vendors in respect of the Subsidiaries shall in respect of the period before the date on which such companies were Group Companies be deemed to be qualified by the statement "so far as the Vendors are actually aware".

		
	4.
	Accounts

		
	4.15
	No claim against the Vendors under this agreement (excluding a Tax Claim) shall be made if the subject matter of the claim is the subject matter of a provision or an allowance in the Completion Balance Sheet, unless (and then only to the extent that) such provision or allowance is insufficient.

		
	4.16
	If and to the extent that:

		
	4.16.1
	the amount of any allowance, provision or reserve (other than in respect of Tax) made in the Completion Balance Sheet, the 2011 Accounts (as defined in schedule 10) or the 2012 Accounts (as defined in schedule 10) ("Relevant Accounts") or otherwise taken into account or reflected in them in respect of any matter (other than Tax) is found to be in excess of the amount which was in the event required;

		
	4.16.2
	any sum is received by the Purchaser which has previously been written off as 

81

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

irrecoverable in the Relevant Accounts; or 
		
	4.16.3
	the assets are understated or the liabilities are overstated (other than any assets or liabilities in respect of Tax) in the Relevant Accounts,

the amount of any such excess, receipt under value or over value shall be credited against and applied in relieving the Vendors from any liability they would otherwise have incurred in respect of any claims under the Warranties or, at the option of the Vendors, under the Tax Covenant.
		
	4.17
	The Vendors shall not be liable in respect of any General Warranty Claim or Indemnity Claim to the extent that the claim arises or is increased as a result of any changes after Completion in the accounting bases, policies, practice or methods applied in preparing any accounts or valuing any assets or liabilities of any Group Company from those used in preparing the Relevant Accounts.

		
	5.
	Third party claims

		
	5.19
	The Purchaser shall notify the Vendors of:

		
	5.19.1
	any claim by a third party against any Group Company which has given rise to, or in the Purchaser's opinion is likely to give rise to, a General Warranty Claim or Indemnity Claim; and/or

		
	5.19.2
	any right that any Group Company has to recover any sum from a third party in relation to any matter or thing that has given rise to, or is likely to give rise to, a General Warranty Claim or Indemnity Claim,

(each a "Third Party Claim") as soon as reasonably practicable after the Purchaser becomes aware of it, but such notification shall not be a condition precedent to the liability of the Vendors in respect of any General Warranty Claim or Indemnity Claim.
		
	5.20
	Subject to:

		
	5.20.1
	the requirements (if any) of the Group Companies' insurers; and

		
	5.20.2
	not waiving privilege of the Purchaser or any Group Company,

the Purchaser shall procure that the Group Companies shall consult fairly with the Vendors in relation to any Third Party Claim, supply the Vendors with such information and copies of documents relating to any Third Party Claim that the Vendors reasonably require and deal with any Third Party Claim taking into account (having given due consideration) the reasonable representations and views of the Vendors (but without prejudice to the protection of the legitimate commercial interests of the Purchaser and the Group Companies).
		
	6.
	Receipts from third parties

		
	6.23
	If:

		
	6.23.1
	the Vendors have made a payment in respect of a General Warranty Claim or Indemnity Claim ("Claim Payment");

		
	6.23.2
	any Group Company subsequently recovers from some other person any sum in respect of any matter or thing giving rise to such General Warranty Claim or Indemnity Claim that was not taken into account in the determination or agreement of the Claim Payment ("Third Party Recovery"); and

		
	6.23.3
	the aggregate of the Claim Payment and the Third Party Recovery exceeds the loss suffered by the Purchaser for or in respect of the matter or thing giving rise to such General Warranty Claim or Indemnity Claim (such excess being the "Excess Recovery"),

		
	6.23.4
	then the Purchaser shall repay promptly to the Vendors an amount equal to the lesser 

82

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

of (a) the Claim Payment and (b) the Excess Recovery, less (in each case, but only to the extent not reflected in the Claim Payment or Third Party Recovery) any Tax on, and all costs and expenses reasonably incurred by the Purchaser and/or any Group Company in relation to, the relevant General Warranty Claim and/or Indemnity Claim and/or Third Party Recovery.
		
	6.24
	If any repayment is made to any Vendor pursuant to paragraph 6.1, an amount equal to such repayment shall be deemed never to have been paid by the relevant Vendor to the Purchaser for the purposes of calculating the liability of the relevant Vendor under paragraphs 1.1 and 1.3.

		
	7.
	No double recovery

The Vendors shall not be liable to pay damages or other compensation or reimbursement more than once in respect of the same loss in relation to any claim under this agreement or otherwise.
		
	8.
	Mitigation

The provisions of this schedule are without prejudice to the Purchaser's common law duty to mitigate its loss in relation to any General Warranty Claim or any Indemnity Claim.
		
	9.
	Changes in legislation

The Vendors' liability for any General Warranty Claim or any Indemnity Claim shall be reduced to the extent that:
		
	9.23
	it arises or is increased as a result of:

		
	9.23.1
	the introduction of any new legislation;

		
	9.23.2
	the changing of any existing legislation;

		
	9.23.3
	the changing or withdrawal of any statutory concession by HM Revenue & Customs or any other fiscal authority,

		
	9.23.4
	after the date of this agreement whether or not such introduction, change or withdrawal are effective retrospectively;

		
	9.24
	it arises or is increased as a result of any change in the basis or method of calculation of, or of any increase in the rate of Tax made or imposed by legislation after Completion with effect to any period ending before Completion.

		
	10.
	Insurance

		
	10.21
	If the Vendors wish to take out insurance against their liability under this agreement, the Purchaser shall promptly provide such information as the prospective insurer may require in order to effect such insurance.

		
	10.22
	Before making a claim under this agreement (other than a claim under the Tax Covenant) in respect of any loss which is insured, the Purchaser shall notify the Vendors pursuant to paragraph 2.2 of this schedule 6 of a claim under the insurance.  If the insurers deny liability or do not accept full liability within 90 days of such claim, the Purchaser may make the claim against the Vendors and the relevant time limits referred to in paragraph 2.2 of this schedule shall each be extended by 90 days (as appropriate) in relation to such breach.  During any period where the Purchaser is in discussion with the relevant insurers, the provisions of paragraph 2.3 of this schedule 6 shall not apply.  To the extent that the insurer has failed to settle such claim in full on any Relevant Payment Date (as defined in paragraph 12.1 of this schedule below) then the provisions of paragraph 12 of this schedule below shall apply.  For the avoidance of doubt, the provisions of paragraph 6 shall apply to any subsequent payment by the insurers

		
	11.
	Remediable breaches

83

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

A breach of this agreement which is remediable in the Purchaser's opinion  (acting in good faith having heard the opinions of the relevant Vendors' Representative) shall not entitle the Purchaser to make a claim under this agreement, General Warranty Claim or any Indemnity Claim, unless it is not remedied by the Vendors without cost to or obligation upon the Purchaser within 60 days after the date of receipt of the notice (as referred to in paragraph 2.1 of this schedule) and the relevant time limits referred to in paragraphs 2.2 and 2.3 of this schedule shall each be accordingly extended by 60 days (as appropriate) in relation to such breach.
		
	12.
	Set‐off of Claims

		
	12.3
	Subject always to the Liability Amount of the relevant Vendor and to paragraphs 12.2 and 12.4 below, in the event that prior to the Initial DC Payment Date or the Final DC Payment Date or the Contingent Earn Out Consideration Payment Date (each a "Relevant Payment Date") the Purchaser shall have become entitled to assert against the Vendors any claim under this agreement ("Relevant Claim") the following provisions shall apply:

		
	12.3.1
	if the Relevant Claim has been settled by the Relevant Payment Date:

		
	12.3.1.1
	and the value of the sum due to the Purchaser from the Vendors in respect of the Relevant Claim ("Outstanding Sum") is equal to or less than the payment due to the Vendors on the Relevant Payment Date the Purchaser shall (subject to the Liability Amount of the relevant Vendor) set‐off a sum equal to the Outstanding Sum against the Consideration otherwise payable on the Relevant Payment Date and shall treat its obligation to discharge the Consideration otherwise payable on the Relevant Payment Date as being reduced by a sum equal to the Outstanding Sum; and

		
	12.3.1.2
	if the value of the Outstanding Sum is greater than the Consideration otherwise due to the Vendors on the Relevant Payment Date, the Purchaser's liability to pay that part of Consideration shall be reduced to $Nil and (subject to the Liability Amount of the relevant Vendor) the balance of the Outstanding Sum shall remain outstanding and shall be set‐off against any Consideration otherwise payable on the next Relevant Payment Date;

		
	12.3.2
	if the Relevant Claim has not been settled by the Relevant Payment Date then, provided that the Relevant Claim is a Pending Claim, the Purchaser shall be entitled to deduct from the Consideration otherwise due to the Vendors on the Relevant Payment Date an amount equal to the amount claimed which shall be the Purchaser's best genuine pre‐estimate of the Vendors' liability in respect of the Relevant Claim (which in the event of the relevant barrister having provided an opinion on quantum, as contemplated by paragraph 12.4 below, shall be the amount stated in such opinion) and the Purchaser shall immediately pay such amount into the Escrow Account and the Purchaser and Vendors' Representative shall sign and deliver the Instruction Letter to the Solicitors and the provisions of schedule 7 shall apply;

		
	12.3.3
	as soon as reasonably practicable following settlement of any Relevant Claim which is a Pending Claim where the relevant amount has been paid into the Escrow Account pursuant to 12.1.2, the Purchaser and the Vendors' Representative shall instruct the Solicitors to:

		
	12.3.3.1
	pay to the Purchaser a sum equal to the aggregate sum then remaining due to the Purchaser in respect of all Pending Claims which have been settled and paid into the Escrow Account pursuant to paragraph 12.1.2 (and the Purchaser shall be entitled to treat its obligation to pay the Consideration otherwise payable as being reduced pro tanto by the amount settled in 

84

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

respect of those Pending Claims); and
		
	12.3.3.2
	shall pay to the Vendors the balance (if any) of the amount of Consideration which was otherwise payable and paid into the Escrow Account pursuant to paragraph 12.1.2.

		
	12.4
	Subject to the Liability Amount, nothing in paragraph 12.1 shall prejudice or limit the right of the Purchaser to make any claim against the Vendors either under this agreement or under any of the documents executed pursuant to this agreement.

		
	12.5
	A claim shall be treated as settled for the purposes of this paragraph 12 if:

		
	12.5.1
	the Vendors and the Purchaser shall so agree in writing; or

		
	12.5.2
	a court of competent jurisdiction has awarded judgment in respect of the claim and no right of appeal lies in respect of such judgment or the parties are debarred by passage of time or otherwise from making an appeal.

		
	12.6
	A claim shall be treated as a "Pending Claim" for the purposes of this paragraph 12 if a Relevant Claim in respect of which the Purchaser has obtained a written opinion from a barrister of at least ten years' call experienced in claims of the type of the Relevant Claim (such barrister to be nominated by the Purchaser) reviewing the circumstances giving rise to the Relevant Claim and which confirms that the Purchaser has, on the balance of probabilities, a greater chance of succeeding in the Relevant Claim than not and, to the extent reasonably practicable only in the sole opinion of the barrister, specifying the likely amount of such recovery by the Purchaser (an "Opinion").  The Purchaser shall be obliged to (1) request that such barrister opines upon the likely amount of recovery and (2) supply to the Vendors' Representative a copy of the Opinion obtained by it no later than five Business Days after receipt and shall make a copy available at the same time to the Vendors' Solicitors.  The Purchaser shall notify any barrister from whom it seeks an Opinion in writing of the provisions of this schedule 6 and shall confirm to him or her that the Opinion is being sought expressly for the provisions of this schedule 6 and shall supply to the Vendors' Representative and the Vendors' Solicitors a copy of the relevant notification as soon as reasonably practicable after such notification being made.

		
	12.7
	Notwithstanding any other provision of this agreement the maximum amount which may be a Pending Claim and paid into the Escrow Account by the Purchaser pursuant to this paragraph 12 shall, be limited to the aggregate of the Deferred Consideration not previously paid to the Vendors plus an amount equal to 20% of the Contingent Earn Out Consideration which actually becomes payable to the Vendors less any amount which has previously been satisfied in respect of settled claims.

		
	12.8
	Where any element of the Consideration is to be satisfied by the issue and allotment of Consideration Shares and the provisions of this paragraph 12 apply so as to reduce the amount of Consideration payable then for the purpose of calculating the number of Consideration Shares to be allotted and issued the following formula shall be used:

A/B
Where A is a sum equal to the amount of Consideration due to be paid by the Purchaser on the Relevant Payment Date after the operation of paragraph 12.1 above; and
B is equal to the average closing mid‐market price of an ordinary share in the Purchaser for twenty Business Days prior to the agreement or determination of the Consideration, as derived from NASDAQ.
SCHEDULE 7:    PROVISIONS RELATING TO ESCROW
Part 1:    Definitions
		
	1.
	Definitions

85

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

In this schedule:
"Bank" means National Westminster Bank of Law Courts, Temple Bar Branch, PO Box 10720, 217 Strand, London WC2R 1AL or such other bank as the Purchaser and the Vendors’ Representative may agree;
"Escrow" means the sum of to be credited to the Escrow Account (if any) by the Purchaser in accordance with paragraph 12.1.2 of schedule 6;
"Escrow Account" means an interest bearing solicitor's reserve account in the joint names of the Solicitors opened in accordance with the Instruction Letter;
"Instruction Letter" means a letter from the Purchaser and the Vendors' Representative to the Solicitors relating to the Escrow in Agreed Form a draft of which is set out in part 2 of this schedule;
"Related Interest" means, in relation to any part of the Escrow Account withdrawn in accordance with this agreement, that portion of the interest accruing from the time of deposit into the Escrow Account as is attributable to the sum withdrawn net of any taxation required by law to be deducted from it; and
"Solicitors" means the Purchaser's Solicitors and the Vendors' Solicitors. 
		
	2.
	Escrow Account

		
	2.48
	The following provisions shall apply in respect of the Escrow Account:

		
	2.48.1
	all interest earned in respect of the Escrow shall be credited to the Escrow Account;

		
	2.48.2
	no other credit shall be made to the Escrow Account without the written consent of the Solicitors;

		
	2.48.3
	no withdrawal shall be made from the Escrow Account except in accordance with the Instruction Letter or as may otherwise be ordered by a court of competent jurisdiction;

		
	2.48.4
	neither the Purchaser nor the Vendors shall have any entitlement to interest until payment of the principal to which it relates.

		
	3.
	Pending Claims

		
	3.21
	Upon any Pending Claim being settled, the Purchaser and the Vendors' Representative shall promptly give written notice to their Solicitors stating the grounds on which the Pending Claim has been settled; and the amount of the Pending Claim as finally settled.

Part 2:    Instruction Letter
	
		
	Velti plc
Address
	[Barry Houlihan]
Address

                           201●
To:
Taylor Wessing LLP
5 New Street Square
London EC4A 3TW
and

86

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

DLA Piper UK LLP
Victoria Square House
Victoria Square
Birmingham B2 4DL

Dear Sirs
This is the Instruction Letter as defined in schedule 6 to the agreement between the Purchaser and the Vendors dated [ ● ] 2011 (the "Agreement") a copy of such schedule being set out in the schedule to this letter (the "Escrow Schedule").
Terms defined in the Agreement and in the Escrow Schedule shall have the same meaning when used in this letter.
You are hereby authorised and instructed:
		
	(a)
	to open an interest bearing solicitor's reserve account in your joint names at the Bank and to place funds on the money markets;

		
	(b)
	to receive and hold all sums paid to you in accordance with the Escrow Schedule and all sums from time to time standing to the credit of the Escrow Account, on trust to pay such sums either to the Purchaser or to the Vendors, or partly to one and partly to the other, on the terms of this letter;

		
	(c)
	no later than five Business Days after the giving by the Purchaser and the Vendors' Representative of a notice in accordance with paragraph 3.1 of the Escrow Schedule, to pay out to the relevant party the sum so notified and the Related Interest attributable to it;

		
	(d)
	to pay out of the Escrow Account:

		
	(i)
	any taxation which may be payable as a matter of law in respect of interest accrued on the amount standing from time to time to the credit of the Escrow Account; and

		
	(ii)
	all bank charges payable in respect of the Escrow Account;

		
	(e)
	on instruction from the Purchaser and the Vendors' Representative, to pay out of the Escrow Account to the Purchaser the amount of Pending Claims as finally settled and the Related Interest attributable to it less:

		
	(i)
	the amount not subject of a settled claim and the Related Interest attributable to it which shall be paid to the Vendors in the Relevant Amount;

		
	(ii)
	any amounts payable out of the Escrow Account in accordance with paragraph (d) above; and

		
	(iii)
	the Related Interest attributable to the sums referred to in (i) and (ii) above.

In consideration of your agreeing to act in accordance with our instructions we agree that:
		
	(a)
	you are not obliged to take any action with respect to the Escrow Account except in accordance with the terms of this letter or our joint written instructions;

		
	(b)
	you may place the sums in the Escrow Account on deposit for such period as we agree or, failing agreement, on overnight deposit.  You have no responsibility for the rate or amount of interest earned;

87

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	(c)
	we will pay your fees and expenses (including VAT) incurred in connection with establishing and operating the Escrow Account;

		
	(d)
	we will indemnify you against all liabilities incurred by you in respect of the operation of the Escrow Account and in particular against any costs (on a full indemnity basis) of defending or being party to any claim arising out of the operation of the Escrow Account.

The provisions of clause 26 of the Agreement shall apply to the agreement contained in this letter as if set out in full in this letter.
Yours faithfully
........................................
On behalf of the Purchaser

Yours faithfully
........................................
On behalf of the Vendors
We acknowledge receipt of the above instructions.

....................................
On behalf of Taylor Wessing LLP

...........................................
On behalf of DLA Piper UK LLP

SCHEDULE 8:    COMPLETION OBLIGATIONS
Part 1:    Vendors' obligations on Completion
		
	1.
	Authorities and Title to Shares

		
	1.20
	Each Vendor shall severally deliver or procure to be delivered to the Purchaser:

		
	1.21
	as evidence of the authority of any person signing any Acquisition Document on behalf of that Vendor a copy of the dmuly executed power of attorney in the Agreed Form under which any Acquisition Document has been or is to be executed by that Vendor certified as a true copy of the original by the Vendors' Solicitors;

		
	1.22
	duly executed transfers of the Shares being sold by that Vendor in favour of the Purchaser or its nominee(s);

		
	1.23
	the share certificates for the Shares being sold by that Vendor (or an express indemnity in a form satisfactory to the Purchaser if any share certificate is found to be missing);

		
	1.24
	paperwork exercising or waiving any Options held in the capital of the Company; and

		
	1.25
	duly executed powers of attorney in the Agreed Form from that Vendor in favour of the Purchaser or its nominee(s) to enable the beneficiary to exercise all rights attaching to the Shares until the Purchaser or its nominee(s) becomes the registered holder of them.

88

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	2.
	Title to shares in other Group Companies

		
	2.49
	The Group Executives shall deliver or procure to be delivered to the Purchaser:

		
	2.50
	share certificates for all issued shares in the capital of each Subsidiary, together with duly executed transfers in favour of the Purchaser or its nominee(s) of any such shares that are not registered in the name of a Group Company;

		
	2.51
	such waivers, consents or other documents as the Purchaser may require to enable the Purchaser or its nominee(s) to become the registered holder of the Shares;

		
	2.52
	share certificates for all shares held by any Group Company;

		
	2.53
	in relation to the bank accounts of each Group Company bank statements dated not earlier than two Business Days before Completion for all such bank accounts, together with cash book balances of any Group Company as at Completion and reconciliation statements reconciling such balances with the bank statements;

		
	3.
	Encumbrances, indebtedness and banking arrangements

		
	3.22
	letters of non‐crystallisation in the Agreed Form in respect of:

		
	3.22.1
	the debenture granted by the Company in favour of HSBC Bank plc created on 18 June 2004; and

		
	3.22.2
	the debenture granted in favour of Close Invoice Finance Limited created on 23 November 2005.

		
	4.
	Officers and employees

		
	4.1
	the written resignations in the Agreed Form of Roger Louis Keenan and John Peter Williams as director of the Company;

		
	4.2
	in relation to Roger Keenan and John Peter Williams (whose office is resigned on Completion in accordance with paragraph 4.1 of this part):

		
	4.2.1
	all credit cards in the name of or for the account of any Group Company;

		
	4.2.2
	all motor vehicles owned or leased by any Group Company, together with the keys, registration documents and related certificates of insurance;

		
	4.2.3
	all access cards and keys to the Property; and

		
	4.2.4
	other property of any Group Company,

in his possession or under his control;
		
	4.3
	a service contract in the Agreed Form between the Company and each of [***], [***], [***], [***], [***], [***], [***], [***], [***] and [***], duly executed by all parties;

		
	4.4
	a service contract in the Agreed Form between NL Subsidiary and [***], duly executed by the parties thereto.

		
	5.
	Records

		
	5.21
	the statutory registers and minute books made up to the Completion Date, the common seal (if any), share certificate books, the certificate of incorporation and any certificates of incorporation on change of name of each Group Company;

		
	5.22
	to the extent not in the possession or under the control of any Group Company, all books of account and other records relating to its business, including all insurance policies;

		
	5.23
	the security and authentication codes for the Companies House WebFiling service and Protected 

89

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

Online Filing Scheme for each UK Group Company.
		
	6.
	Other documents

		
	6.25
	a duly executed deed of termination in the Agreed Form terminating any shareholders' agreements to which any Group Company is a party and releasing it absolutely and unconditionally from any liability arising out of or in connection with such agreements (provided that the shareholders agreement relating to 4th Screen shall not be terminated but instead shall be novated and all Group Companies released from any obligations under it);

		
	6.26
	a duly executed 4th Screen Agreement;

		
	6.27
	a duly executed 4th Screen Services Agreement;

		
	6.28
	a duly executed NL Subsidiary Documentation.

		
	7.
	Payments to the Group Companies

Each Vendor shall pay or procure the payment of all sums owed by it or any person connected with it to any Group Company, whether or not then due.
		
	8.
	Board meeting of the Company

The Group Executives shall procure that a meeting of the board of directors of the Company is held at which:
		
	8.12.1
	the transfers of the Shares are approved for registration (subject only to being duly stamped) and share certificates are authorised to be delivered to the Purchaser or its nominee(s) in respect of the Shares (in the case of the Company only);

		
	8.12.2
	the resignations referred to in paragraph 4.1 be accepted with effect from the end of the meeting;

		
	8.12.3
	such persons as the Purchaser nominates be appointed as directors and the secretary with effect from the end of the meeting;

		
	8.12.4
	the accounting reference date be changed to 31 December (such that the accounting period ended on 30 June 2012 is shortened); and

		
	8.12.5
	the execution of each of the agreements and other documents referred to in this part to which the Company is party be approved and authorised.

Part 2:    Purchaser's obligations on Completion and post Completion
		
	1.
	Satisfaction of the Consideration

		
	1.26
	The Purchaser shall on Completion:

		
	1.26.1
	pay the Initial Consideration to the Nominated Account by transfer of funds through a UK clearing bank.  The receipt by the Vendors' Solicitors will give a full and valid discharge to the Purchaser; 

		
	1.26.2
	make payments to the Company as required by clauses 3.4 and  3.9  on behalf of the relevant Vendors.

		
	1.27
	The Purchaser shall within 3 Business Days of the bank account of the Company being opened (being the bank account referred to in paragraph 8 of part 3 of schedule 10) make payments to the Company as required by clauses 3.6, 3.7 and 3.11 on behalf of the relevant Vendors, 4th Screen Newco and 4th Screen in accordance with such clauses and paragraph 8 of part 3 of schedule 10. Pending the payments to such bank account as aforesaid the relevant monies constituting such payments shall be held in the bank account of the Purchaser's Solcitors on behalf of the Company.

90

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

SCHEDULE 9:    INITIAL CONSIDERATION ADJUSTMENT
Part 1:    Calculation of Initial Consideration Adjustment
		
	1.
	Following Completion, the Vendors shall prepare a consolidated balance sheet of the Group Companies as at the last day of the calendar month in which the Completion Date falls ("Completion Balance Sheet"), in accordance with the Accounting Requirements (as defined in schedule 10) and the principles set out in paragraph 1 part 3 of this schedule ("Completion Balance Sheet Principles").  The Vendors shall then determine: (i) the Completion Net Current Assets and, on this basis, (ii) the proposed adjustment to the Initial Consideration (collectively, the "Determinations").  The Vendors shall deliver the Completion Balance Sheet and the Determinations to the Purchaser not more than sixty (60) calendar days following the Completion Date. The Completion Balance Sheet shall be prepared in pound sterling. 

		
	2.
	After receipt of the Completion Balance Sheet and the Determinations, the Purchaser will have thirty (30) calendar days to review the Completion Balance Sheet and the Determinations.  Not later than thirty (30) calendar days following the date of receipt of the Completion Balance Sheet and the Determinations, the Purchaser shall provide the Vendors' Representative with a notice ("Initial Consideration Dispute Notice") listing those items, if any, to which the Purchaser takes exception ("Initial Consideration Disputed Items"), which notice shall also (i) specifically identify, and provide a reasonably detailed explanation of (1) any deviation that the Purchaser believes to exist between Completion Balance Sheet Principles and the methodology used to calculate the Completion Balance Sheet and (2) any other basis upon which the Purchaser has delivered such list, including, without limitation, the applicable provisions of this agreement on which the dispute set forth in such Initial Consideration Dispute Notice is based, (ii) set forth the amount of Completion Net Current Assets that the Purchaser has calculated based on the information contained in the Completion Balance Sheet, and (iii) specifically identify (to the extent possible) the Purchaser's proposed adjustment(s).  All other undisputed items (and all calculations relating thereto) will be final, binding and conclusive.  Unless the Purchaser delivers an Initial Consideration Dispute Notice to the Vendors' Representative setting forth the specific items disputed by the Purchaser on or prior to the thirtieth (30th) calendar day after the Purchaser's receipt of the Completion Balance Sheet and the Determinations, the Purchaser will be deemed to have accepted and agreed to the Completion Balance Sheet and the Determinations and such statements (and the calculations contained therein) will be final, binding and conclusive and shall be used to compute the adjustment to the Initial Consideration.

		
	3.
	If the Purchaser timely provides the Vendors' Representative with an Initial Consideration Dispute Notice, the Vendors' Representative and the Purchaser will, for twenty (20) calendar days following receipt of such Initial Consideration Dispute Notice by the Vendors' Representative ("Initial Consideration Resolution Period"), attempt to resolve their differences with respect to the Initial Consideration Disputed Items.  Any written resolution by the Vendors' Representative and the Purchaser during the Initial Consideration Resolution Period as to any Initial Consideration Disputed Items will be final, binding and conclusive.

		
	4.
	If the Vendors' Representative and the Purchaser do not resolve all Initial Consideration Disputed Items by the end of the Initial Consideration Resolution Period, then all Initial Consideration Disputed Items remaining in dispute shall be submitted to an independent auditor for resolution.  The independent auditor shall act as arbitrator and shall be appointed by the President for the time being of the Institute of Chartered Accountants in England and Wales at the request of the most diligent party, within a period of ten (10) calendar days from the receipt of said request ("Independent Auditor").  If requested by the Independent Auditor, each party agrees to execute, within the time period that shall be set by the Independent Auditor, an engagement letter addressed to the Independent Auditor outlining the subject matter of the dispute and summarising the party's position.  Should one party refuse or fail to execute such engagement letter, the Independent Auditor shall proceed notwithstanding such refusal or failure.  If Initial Consideration Disputed Items are submitted 

91

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

to the Independent Auditor for resolution, then:
		
	4.22
	the Vendors and the Purchaser shall fully cooperate in providing such information as the Independent Auditor requests to complete his work and the Vendors' Representative and the Purchaser shall have access to present information to the Independent Auditor;

		
	4.23
	the Independent Auditor shall review and determine the Determinations in a written report within sixty (60) calendar days of being appointed (such report to include a work sheet setting forth all material calculations used in arriving at such determination by the Independent Auditor and to be based solely on information provided to the Independent Auditor by the Vendors' Representative and the Purchaser); 

		
	4.24
	the determinations of the Independent Auditor shall become final, binding and conclusive on all parties; and 

		
	4.25
	the cost of the Independent Auditor shall be borne by the party whose claimed amount is furthest from the amount determined by the Independent Auditor.  

		
	5.
	The Independent Auditor will consider only those Initial Consideration Disputed Items that the Vendors' Representative on the one hand and the Purchaser on the other hand are unable to resolve.  The scope of the disputes to be arbitrated by the Independent Auditor is limited to whether the Completion Balance Sheet and the Determinations were prepared in accordance with the Completion Balance Principles consistently applied, and whether there were mathematical errors in the preparation of the Completion Balance Sheet and the Determinations by the Purchaser.  The Independent Auditor shall not make any other determination.  

Part 2:    Anniversary Net Current Assets
		
	1.
	Following the first anniversary of Completion, the Vendors shall prepare a consolidated balance sheet of the Group Companies as at the last day of the calendar month that is 12 months following the Completion Date ("Anniversary Balance Sheet"), in accordance with the Accounting Requirements (as defined in schedule 10) and the principles set out within paragraph 2 of part 3 of this schedule ("Anniversary Balance Sheet Principles").  The Vendors shall then determine: (i) the Anniversary Net Current Assets and, on this basis, (ii) the proposed adjustment to the Contingent Payment (collectively, the "Determinations").  The Vendors shall deliver the Anniversary Balance Sheet and the Determinations to the Purchaser not more than sixty (60) calendar days following the first anniversary of the Completion Date. The Anniversary Balance Sheet shall be prepared in pound sterling. 

		
	2.
	After receipt of the Anniversary Balance Sheet and the Determinations, the Purchaser will have thirty (30) calendar days to review the Anniversary Balance Sheet and the Determinations.  Not later than thirty (30) calendar days following the date of receipt of the Anniversary Balance Sheet and the Determinations, the Purchaser shall provide the Vendors' Representative with a notice ("Anniversary Balance Sheet Dispute Notice") listing those items, if any, to which the Purchaser takes exception ("Anniversary Balance Sheet Disputed Items"), which notice shall also (i) specifically identify, and provide a reasonably detailed explanation of (1) any deviation that the Purchaser believes to exist between Anniversary Balance Sheet Principles and the methodology used to calculate the Anniversary Balance Sheet and (2) any other basis upon which the Purchaser has delivered such list, including, without limitation, the applicable provisions of this agreement on which the dispute set forth in such Anniversary Balance Sheet Dispute Notice is based, (ii) set forth the amount of Anniversary Net Current Assets that the Purchaser has calculated based on the information contained in the Anniversary Balance Sheet, and (iii) specifically identify (to the extent possible) the Purchaser's proposed adjustment(s).  All other undisputed items (and all calculations relating thereto) will be final, binding and conclusive.  Unless the Purchaser delivers an Anniversary Balance Sheet Dispute Notice to the Vendors' Representative setting forth the specific items disputed by the Purchaser on or prior to the thirtieth (30th) calendar day after the Purchaser's receipt of the 

92

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

Anniversary Balance Sheet and the Determinations, the Purchaser will be deemed to have accepted and agreed to the Anniversary Balance Sheet and the Determinations and such statements (and the calculations contained therein) will be final, binding and conclusive and shall be used to compute the adjustment to the Contingent Payment (if any).
		
	3.
	If the Purchaser timely provides the Vendors' Representative with an Anniversary Balance Sheet Dispute Notice, the Vendors' Representative and the Purchaser will, for twenty (20) calendar days following receipt of such Anniversary Balance Sheet Dispute Notice by the Vendors' Representative ("Anniversary Balance Sheet Resolution Period"), attempt to resolve their differences with respect to the Anniversary Balance Sheet Disputed Items.  Any written resolution by the Vendors' Representative and the Purchaser during the Anniversary Balance Sheet Resolution Period as to any Anniversary Balance Sheet Disputed Items will be final, binding and conclusive.

		
	4.
	If the Vendors' Representative and the Purchaser do not resolve all Anniversary Balance Sheet Disputed Items by the end of the Anniversary Balance Sheet Resolution Period, then all Anniversary Balance Sheet Disputed Items remaining in dispute shall be submitted to the Independent Auditor for resolution.  The Independent Auditor shall act as arbitrator and shall be appointed by the President for the time being of the Institute of Chartered Accountants in England and Wales at the request of the most diligent party, within a period of ten (10) calendar days from the receipt of said request.  If requested by the Independent Auditor, each party agrees to execute, within the time period that shall be set by the Independent Auditor, an engagement letter addressed to the Independent Auditor outlining the subject matter of the dispute and summarising the party's position.  Should one party refuse or fail to execute such engagement letter, the Independent Auditor shall proceed notwithstanding such refusal or failure.  If Anniversary Balance Sheet Disputed Items are submitted to the Independent Auditor for resolution, then:

		
	4.26
	the Vendors and the Purchaser shall fully cooperate in providing such information as the Independent Auditor requests to complete his work and the Vendors' Representative and the Purchaser shall have access to present information to the Independent Auditor; 

		
	4.27
	the Independent Auditor shall review and determine the Determinations in a written report within sixty (60) calendar days of being appointed (such report to include a work sheet setting forth all material calculations used in arriving at such determination by the Independent Auditor and to be based solely on information provided to the Independent Auditor by the Vendors' Representative and the Purchaser); 

		
	4.28
	the determinations of the Independent Auditor shall become final, binding and conclusive on all parties; and 

		
	4.29
	the cost of the Independent Auditor shall be borne by the party whose claimed amount is furthest from the amount determined by the Independent Auditor.  

		
	5.
	The Independent Auditor will consider only those Anniversary Balance Sheet Disputed Items that the Vendors' Representative on the one hand and the Purchaser on the other hand are unable to resolve.  The scope of the disputes to be arbitrated by the Independent Auditor is limited to whether the Anniversary Balance Sheet and the Determinations were prepared in accordance with the Anniversary Balance Principles consistently applied, and whether there were mathematical errors in the preparation of the Anniversary Balance Sheet and the Determinations by the Purchaser.  The Independent Auditor shall not make any other determination.  

Part 3:    Accounting Principles
		
	1.
	Completion Balance Sheet Principles:

		
	1.1
	Provision shall be made for the Transaction Bonus and related costs payable at Completion as a result of or in connection with the transaction contemplated by this agreement;

93

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	1.2
	Full provision shall be made in respect of all costs and expenses of the Vendors directly incurred in relation to the negotiation, preparation, execution and implementation of this agreement (including, without limitation, any professional fees (legal, accounting, corporate finance or otherwise) which are, have been or are to be invoiced to the Company), but for the avoidance of doubt, any fees which are paid for by the Vendors shall not be provided for;

		
	1.3
	Provision shall be made for an amount equal to the refund to be paid or paid by any Group Company to Channel 5 following the late delivery of an iPhone/android application to Channel 5 in September 2011;

		
	1.4
	Full provision shall be made in respect of all Taxation (including deferred Taxation);

		
	1.5
	Any costs in relation to the following transaction-related matters shall be added back to Net Current Assets so as to remove their impact from Net Current Assets:

		
	1.5.1
	any share option charge and the income tax and national insurance contributions payable in relation to the exercise of share options;

		
	1.5.2
	any accrual for all or part of the Management Bonus;

		
	1.5.3
	exceptional costs, such as restructuring costs as agreed between the Purchaser and the Vendors;

		
	1.6
	Provision shall be made for any redecoration costs required to be incurred at the Property located at Newton Abbot, Devon in accordance with the lease of such Property;

		
	1.7
	Any funds owed or received by the Company pursuant to clauses 3.6, 3.7 and 3.11 (less any amounts spent as directed by the Purchaser prior to the date to which the Net Current Assets are calculated) shall be deducted from the Net Current Assets. 

		
	2.
	Anniversary Balance Sheet Principles:

		
	2.1
	Provision shall be made for the Transaction Bonus and related costs payable at Completion as a result of or in connection with the transaction contemplated by this agreement;

		
	2.2
	Full provision shall be made in respect of all costs and expenses of the Vendors directly incurred in relation to the negotiation, preparation, execution and implementation of this agreement (including, without limitation, any professional fees (legal, accounting, corporate finance or otherwise) which are, have been or are to be invoiced to the Company), but for the avoidance of doubt, any fees which are paid for by the Vendors shall not be provided for;

		
	2.3
	Provision shall be made for an amount equal to the refund to be paid or paid by any Group Company to Channel 5 following the late delivery of an iPhone/android application to Channel 5 in September 2011;

		
	2.4
	Full provision shall be made in respect of all Taxation (including deferred Taxation);

		
	2.5
	Any costs in relation to the following transaction-related matters shall be added back to the Anniversary Net Current Assets so as to remove their impact from the Anniversary Net Current Assets:

		
	2.5.1
	any share option charge and the income tax and national insurance contributions payable in relation to the exercise of share options;

		
	2.5.2
	any accrual for all or part of the Management Bonus;

		
	2.5.3
	exceptional items, such as restructuring costs as agreed between the Purchaser and the Vendors;

		
	2.6
	Provision shall be made for any redecoration costs required to be incurred at the Property located at Newton Abbot, Devon in accordance with the lease of such Property;

94

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	2.7
	Any funds owed or received by the Company pursuant to clauses 3.6, 3.7 and 3.11 ( less any amounts spent as directed by the Purchaser prior to the date to which the Anniversary Net Current Assets are calculated)  shall be deducted from the Anniversary Net Current Assets, .

SCHEDULE 10:    CONTINGENT EARN OUT CONSIDERATION
Part 1:    Calculation of the EBITDA
Definitions
		
	1.
	In this schedule 10:

		
	1.1
	"2011 Accounts" means the consolidated accounts of the Company and the Subsidiaries for the 12 month period ending on 31 December 2011 as prepared in accordance with the provisions of paragraph 2 of part 1 of this schedule;

		
	1.2
	"2011 EBITDA" means the EBITDA as shown in the 2011 EBITDA Statement, as finally determined in accordance with part 1 of this schedule;

		
	1.3
	"2011 EBITDA Statement" means a statement setting out the Vendors' calculation of the 2011 EBITDA together with a written explanation of the adjustments made from the 2011 Accounts in calculating the 2011 EBITDA;

		
	1.4
	"2012 Accounts" means the consolidated accounts of the Company for the 12 month period ended on 31 December 2012 as prepared in accordance with the provisions of paragraph 7 of part 1 of this schedule;

		
	1.5
	"2012 EBITDA" means the EBITDA as shown in the 2012 EBITDA Statement, as finally determined in accordance with part 1 of this schedule;

		
	1.6
	"2012 EBITDA Statement" means a statement setting out the Vendors' calculation of the 2012 EBITDA together with a written explanation of the adjustments made from the 2012 Accounts in calculating the 2012 EBITDA;

		
	1.7
	"Accounting Requirements" means generally accepted accounting principles in the United States of America as promulgated by the Financial Accounting Standards Board; 

		
	1.8
	"Earn Out Period" means the period commencing on the Completion Date and ending on 31 December 2012;

		
	1.9
	"EBITDA" shall be calculated in accordance with part 4 of this schedule;

		
	1.10
	"Total Aggregate Amount" means an amount (in US dollars) calculated pursuant to the following formula:

A = (7.5 x B) + (7.5 x C)
Where:
A    = Total Aggregate Amount;
B    = 2011 EBITDA x 25%; and
C    = 2012 EBITDA x 75%.
2011 EBITDA
		
	2.
	The 2011 Accounts shall be:

		
	2.1
	prepared as soon as reasonably practicable after 31 December 2011 and, in any event, on or before 16 February 2012;

		
	2.2
	prepared in accordance with applicable Accounting Requirements in force as at the preparation of 

95

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

the 2011 Accounts; and
		
	2.3
	the 2011 Accounts shall be calculated quarterly and translated from pounds Sterling to US dollars using the quarterly average of the daily exchange rate for the previous quarter as released each Monday afternoon by the Federal Reserve of the United States of America posted at http://www.federalreserve.gov/releases/h10/current/.

		
	3.
	Within thirty (30) calendar days of the earliest to occur of the following:

		
	3.1
	the date upon which the 2011 Accounts are finalised; and

		
	3.2
	16 February 2012,

the Vendors' Representative shall submit to the Purchaser a copy of the 2011 Accounts and the 2011 EBITDA Statement together with such working papers and explanations as the Purchaser reasonably considers necessary to understand the basis upon which the 2011 EBITDA has been calculated.
		
	3.3
	For the purposes of reviewing the draft 2011 Accounts and draft 2011 EBITDA Statement the Vendors shall procure that the Purchaser and its accountants are given reasonable access at reasonable times to:

		
	(a)
	the accounting records and working papers (including any audit working papers) required or used for; and

		
	(b)
	all staff of the other party and their accountants who have been engaged in,

the preparation of the 2011 Accounts and the 2011 EBITDA Statement and that the staff referred to in paragraph (b) of this paragraph answer all reasonable questions put to them.
		
	4.
	The Purchaser shall be entitled at any time within the period of 30 calendar days following the date of receipt by it of the 2011 EBITDA Statement (and any accompanying working papers and explanations) to dispute the amount of 2011 EBITDA disclosed therein by the Purchaser giving notice in writing to the Vendors' Representative ("Dispute Notice").  Such Dispute Notice shall set out in reasonable detail the grounds for dispute and any suggested adjustment.  If the Purchaser confirms in writing to the Vendors' Representative that the 2011 EBITDA Statement is approved or if no Dispute Notice is given by the Purchaser or within a period of 20 calendar days following the giving of a Dispute Notice the Vendors' Representative and the Purchaser shall agree the amount of 2011 EBITDA as set out in the 2011 EBITDA Statement, or any amended amount, then the 2011 EBITDA as set out in the original 2011 EBITDA Statement or any amended amount subsequently agreed shall be final and binding on the parties.

		
	5.
	If the Purchaser gives a Dispute Notice pursuant to paragraph 4 but no agreement shall be reached within the period of 20 calendar days following the giving of a Dispute Notice as to the 2011 EBITDA then such dispute shall be submitted to the Independent Auditor for resolution.  The Independent Auditor shall be appointed by the President for the time being of the Institute of Chartered Accountants in England and Wales (in the event the Purchaser and the Vendors' Representatives cannot first agree upon the identity of the Independent Auditor within two Business Days of receipt of the said request) within a period of ten (10) calendar days from the receipt of said request.  Independent Auditor shall act as arbitrator.  If requested by the Independent Auditor, each party agrees to execute, within the time period that shall be set by the Independent Auditor, an engagement letter addressed to the Independent Auditor outlining the subject matter of the dispute and summarising the party's position.  Should one party refuse or fail to execute such engagement letter, the Independent Auditor shall proceed notwithstanding such refusal or failure.  If the 2011 Accounts and/or the 2011 EBITDA Statement are submitted to the Independent Auditor for resolution, then:

		
	5.1
	the Vendors and the Purchaser shall fully cooperate in providing such information as the Independent Auditor requests to complete his work and the Vendors' Representative and the Purchaser shall 

96

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

have access to present information to the Independent Auditor; 
		
	5.2
	the Independent Auditor shall review and determine the items the subject of the Dispute Notice in a written report within sixty (60) calendar days of being appointed (such report to include a work sheet setting forth all material calculations used in arriving at such determination by the Independent Auditor and to be based solely on information provided to the Independent Auditor by the Vendors' Representative and the Purchaser); 

		
	5.3
	the determinations of the Independent Auditor shall become final, binding and conclusive on all parties; and 

		
	5.4
	the cost of the Independent Auditor shall be borne by the party whose claimed amount is furthest from the amount determined by the Independent Auditor.  

		
	6.
	The Independent Auditor will consider only those items the subject of the Dispute Notice that the Vendors' Representative on the one hand and the Purchaser on the other hand are unable to resolve.  The scope of the disputes to be arbitrated by the Independent Auditor is limited to items the subject of the Dispute Notice.  The Independent Auditor shall not make any other determination.

2012 EBITDA
		
	7.
	The 2012 Accounts shall be:

		
	7.1
	prepared as soon as reasonably practicable after 31 December 2012 and, in any event, on or before 16 February 2013;

		
	7.2
	prepared on a basis consistent with the Accounting Requirements in force as at the preparation of the 2011 Accounts; and

		
	7.3
	the 2012 Accounts shall be calculated quarterly and translated from pounds Sterling to US dollars using the quarterly average of the daily exchange rate for the previous quarter as released each Monday afternoon by the Federal Reserve of the United States of America posted at http://www.federalreserve.gov/releases/h10/current/.

		
	8.
	Within thirty (30) calendar days of the earliest to occur of the following:

		
	8.1
	the date upon which the 2012 Accounts are finalised; and

		
	8.2
	16 February 2013,

the Vendors' Representative shall submit to the Purchaser a copy of the 2012 Accounts and the 2012 EBITDA Statement together with such working papers and explanations as are reasonably necessary to understand the basis upon which the 2012 EBITDA has been calculated.
		
	8.3
	For the purposes of reviewing the draft 2012 Accounts and draft 2012 EBITDA Statement the Vendors shall procure that the Purchaser and its accountants are given reasonable access at reasonable times to:

		
	(a)
	the accounting records and working papers (including any audit working papers) required or used for; and

		
	(b)
	all staff of the other party and their accountants who have been engaged in,

the preparation of the 2012 Accounts and the 2012 EBITDA Statement and that the staff referred to in paragraph (b) of this paragraph answer all reasonable questions put to them.
		
	9.
	The Purchaser shall be entitled at any time within the period of 30 calendar days following the date of receipt by it of the 2012 EBITDA Statement (and any accompanying working papers and explanations) to dispute the amount of 2012 EBITDA disclosed therein by the Purchaser giving notice in writing to the Vendors' Representative ("Dispute Notice").  Such Dispute Notice shall set out in reasonable detail the grounds for dispute and any suggested adjustment.  If the Purchaser 

97

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

confirms in writing to the Vendors' Representative that the 2012 EBITDA Statement is approved or if no Dispute Notice is given by the Purchaser or within a period of 20 calendar days following the giving of a Dispute Notice the Vendors' Representative and the Purchaser shall agree the amount of 2012 EBITDA as set out in the 2012 EBITDA Statement, or any amended amount, then the 2012 EBITDA as set out in the original 2012 EBITDA Statement or any amended amount subsequently agreed shall be final and binding on the parties.
		
	10.
	If the Purchaser gives a Dispute Notice pursuant to paragraph 9 but no agreement shall be reached within the period of 20 calendar days following the giving of a Dispute Notice as to the 2012 EBITDA then such dispute shall be submitted to the Independent Auditor for resolution.  The Independent Auditor shall be appointed by the President for the time being of the Institute of Charted Accountants in England and Wales (in the event the Purchaser and the Vendors' Representatives cannot first agree upon the identity of the Independent Auditor within two Business Days of receipt of the said request) within a period of ten (10) calendar days from the receipt of said request.  If requested by the Independent Auditor, each party agrees to execute, within the time period that shall be set by the Independent Auditor, an engagement letter addressed to the Independent Auditor outlining the subject matter of the dispute and summarising the party's position.  Should one party refuse or fail to execute such engagement letter, the Independent Auditor shall proceed notwithstanding such refusal or failure.  If the 2012 Accounts and/or the 2012 EBITDA Statement are submitted to the Independent Auditor for resolution, then:

		
	10.1
	the Vendors and the Purchaser shall fully cooperate in providing such information as the Independent Auditor requests to complete his work and the Vendors' Representative and the Purchaser shall have access to present information to the Independent Auditor;

		
	10.2
	the Independent Auditor shall review and determine the items the subject of the Dispute Notice in a written report within sixty (60) calendar days of being appointed (such report to include a work sheet setting forth all material calculations used in arriving at such determination by the Independent Auditor and to be based solely on information provided to the Independent Auditor by the Vendors' Representative and the Purchaser); 

		
	10.3
	the determinations of the Independent Auditor shall become final, binding and conclusive on all parties; and 

		
	10.4
	the cost of the Independent Auditor shall be borne by the party whose claimed amount is furthest from the amount determined by the Independent Auditor.

		
	11.
	The Independent Auditor will consider only those items the subject of the Dispute Notice that the Vendors' Representative on the one hand and the Purchaser on the other hand are unable to resolve.  The scope of the disputes to be arbitrated by the Independent Auditor is limited to items the subject of the Dispute Notice.  The Independent Auditor shall not make any other determination.

Part 2:    Contingent Earn Out Consideration
		
	1.
	Subject to adjustment in accordance with paragraph 12 of schedule 6 and paragraph 3 of this part, the Contingent Payment shall be calculated as follows:

		
	1.1
	if the Total Aggregate Amount is less than $30,000,000, then the Contingent Payment shall be nil; or

		
	1.2
	if the Total Aggregate Amount is greater than $59,000,000, then the Contingent Payment shall be the sum of $29,000,000 plus X where X is equal to $0.01 for each complete tranche of $1,000,000 by which the Total Aggregate Amount exceeds $59,000,000; or

		
	1.3
	if the Total Aggregate Amount is equal to or greater than $30,000,000 but less than or equal to $59,000,000, then the Contingent Payment shall be calculated pursuant to the following formula:

98

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

A = B - C
Where:
		
	A 
	= the amount of the Contingent Payment (which sum will never be less than $0 (zero) or greater than $29,000,000);

		
	B 
	= Total Aggregate Amount (being a sum equal to or greater than $30,000,000 but less than or equal to $59,000,000);

		
	C 
	= $30,000,000.

		
	2.
	The Vendors shall be entitled to Contingent Earn Out Consideration in an amount equal to the Contingent Payment less the Management Bonus.  The Management Bonus shall be an amount equal to 2/25ths of the Contingent Payment, subject to a maximum amount of $2,000,000.

3.There shall be deducted from the Contingent Payment a sum equal to the amount by which the Anniversary Net Current Assets as derived from the Anniversary Balance Sheet is less than the Estimated Net Current Assets ("Contingent Earn Out Deduction"), provided that the Contingent Payment will never be less than $0 (zero). For the purposes of this paragraph only, any such payment due shall be calculated in Sterling and shall be translated from pounds Sterling to US dollars on the date of the agreement or determination of the Anniversary Net Current Assets in accordance with schedule 9 using the quarterly average of the daily exchange rate for the previous quarter as released each Monday afternoon by the Federal Reserve of the United States of America posted at http://www.federalreserve.gov/releases/h10/current/.
		
	4.
	Fifty per cent (50%) of the Contingent Earn Out Consideration (if any) shall be satisfied on the Contingent Earn Out Consideration Payment Date by the issue of Loan Notes in the CC Relevant Percentages to all of the Vendors save for  [***], [***], [***], [***], [***], [***], [***], [***], [***], [***], [***], [***], [***] and  [***], whose entitlements to such part of the Contingent Earn Out Consideration shall be satisfied by the payment in cash (rather than Loan Notes) by the Purchaser into the Nominated Account on behalf of those Vendors.

		
	5.
	Subject to paragraph 8 of this part, the balance of the Contingent Earn Out Consideration (if any) shall be satisfied by the issue and allotment to the Vendors on the Contingent Earn Out Consideration Payment Date of the Contingent Earn Out Consideration Shares in the CC Relevant Percentages, credited as fully paid.

		
	6.
	If the Contingent Earn Out Consideration Shares are payable and the Purchaser elects to satisfy all or part of such payment by way of the issue and allotment of shares, then the aggregate number of Contingent Earn Out Consideration Shares to be issued shall be equal to X/Y where X is the amount of the Contingent Earn Out Consideration due to be satisfied by the issue of the Contingent Earn Out Consideration Shares which the Purchaser elects not to satisfy by the issue of Loan Notes (or payment in cash) and Y is the average closing price of the Purchaser's ordinary share, as derived from NASDAQ for the 20 Business Days prior to the agreement or determination of the 2012 EBITDA.

		
	7.
	The Contingent Earn Out Consideration (if any) shall be paid within 10 calendar days of the amount of 2012 EBITDA being agreed or determined pursuant to the provisions of this schedule 10.  In the event that any part of the Contingent Earn Out Consideration is the subject of a Dispute Notice which has not been agreed or determined pursuant to the provisions of this schedule, then that part of the Contingent Earn Out Consideration which is not the subject of such dispute shall be paid and the balance (if any) shall be paid within 10 calendar days of the disputed amount being agreed or determined pursuant to the provisions of this schedule.

		
	8.
	The Purchaser shall be entitled to serve notice on the Vendors’ Representative at any time prior to the Contingent Earn Out Consideration Payment Date indicating that it wishes to satisfy that all or any part of the part of the Contingent Earn Out Consideration which is to be satisfied by the issue of Contingent Earn Out Consideration Shares by the issue of Loan Notes and payment of cash (as 

99

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

set out below), whereupon paragraph 5 of this part shall be read as if some or all of the part of the Contingent Earn Out Consideration which is to be satisfied by the issue of Contingent Earn Out Consideration Shares (as set out in the Purchaser’s notice) were to be satisfied by the issue of Loan Notes in the CC Relevant Percentage to all of the Vendors save for [***], [***], [***], [***], [***], [***], [***], [***], [***], [***], [***], [***], [***] and [***], whose entitlements to such Contingent Earn Out Consideration shall be satisfied by the payment in cash (rather than Loan Notes) by the Purchaser into the Nominated Account on behalf of those Vendors, with the balance of such amount being satisfied by the issue, in the CC Relevant Percentages, of Contingent Earn Out Consideration Shares, credited as fully paid.
		
	9.
	The Purchaser shall instruct its registrars to update the register of members to reflect the issue and allotment of any Consideration Shares pursuant to paragraphs 5 and 8 above of this part 2 and update the register of loan note holders to reflect the issue of any Loan Notes pursuant to paragraphs 4 and 8 of this part 2, in each case within 10 Business Days of the Contingent Earn Out Consideration Payment Date.

		
	10.
	The Purchaser covenants with the Vendors to procure that the Management Bonus shall be paid in cash, net of the adjustment in paragraph 11 below, by the Company (or, failing the Company, shall either procure that another Group Company shall pay or shall itself pay) to managers of the Company as directed by the Vendors’ Representative.  For the avoidance of doubt, the parties agree and acknowledge that the Vendors have a legitimate interest in sharing Confidential Information with the Vendors' Representative in order for the Vendors' Representative to agree the allocation of the Management Bonus for the purposes of this part 2 and accordingly agree that the provisions of clauses 10 and 7.5 shall not apply to the disclosure of Confidential Information (if any) in such circumstances.

		
	11.
	The Management Bonus shall be reduced by an amount computed in accordance with the following formula:

(Applicable rate of employer’s NICs / (100 + applicable rate of employer’s NICs)) x Management Bonus;
(the resulting net amount being the "Payable Management Bonus").  The Purchaser shall procure that the Company pays the Payable Management Bonus to the managers in accordance with paragraph 10 above subject only to deduction for PAYE and employee’s national insurance contributions, as applicable to each manager.
		
	12.
	The Payable Management Bonus (if any) shall be paid within 10 calendar days of the amount of 2012 EBITDA being agreed or determined pursuant to the provisions of this schedule.  In the event that any part of the Management Bonus is the subject of a Dispute Notice which has not been agreed or determined pursuant to the provisions of this schedule, then that part of the Management Bonus which is not the subject of such dispute shall be paid and the balance (if any) shall be paid within 10 calendar days of the disputed amount being agreed or determined pursuant to the provisions of this schedule.

Part 3:    Earn Out Protections
		
	1.
	The Purchaser acknowledges that the Vendors have a legitimate interest in ensuring that the EBITDA of the Group Companies is as high as may be achieved by the Group Companies in the Earn Out Period.

		
	2.
	The Purchaser and the Vendors agree during the Earn Out Period to procure that each Group Company operates its business in the ordinary course and in a manner consistent with its past practices prior to Completion (including maintaining an appropriate level of employees) provided that such action does not breach any applicable law and/or internal policies of the Purchaser's Group from time to time (provided that all such policies are applicable to all members of the Purchaser's 

100

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

Group and no such policies shall be solely applied to any Group Company) and further provided that the Purchaser may require each Group Company to enter into such dealings and transactions as are outside the ordinary course of the conduct of such businesses where this will not affect the 2011 EBITDA or the 2012 EBITDA or where equitable adjustments are made or are capable of being made in the calculation of the 2011 EBITDA and the 2012 EBITDA for any relevant period for the purposes of preventing any distortion in the amount of the Contingent Earn Out Consideration.
		
	3.
	During the Earn Out Period the Purchaser undertakes on behalf of itself and each member of the Purchaser's Group that:

		
	3.1
	it will not (save in respect of 4th Screen) require any Group Company to dispose of the whole or any material part of its assets or business by a single/transaction or multiple transactions to parties other than members of the Purchaser's Group;

		
	3.2
	it will not take any steps to wind‐up any Group Company (save where the directors of such Group Company have been advised that such company is insolvent);

		
	3.3
	it will not initiate any insolvency or creditor‐protection process affecting any Group Company save where such Group Company is insolvent;

		
	3.4
	it will not deliberately transfer, divert or direct elsewhere any orders or enquiries for products or services available from any Group Company (except where a member of the Purchaser Group (excluding a Group Company) has a competitive product or service and where such company has sold the product or service without any involvement whatsoever from any Group Company;

		
	3.5
	[***] and [***] (or such of them as are living and employed by any Group Company from time to time) will have responsibility for day‐to‐day operational management of the Group Companies and the Purchaser’s UK Mobile Marketing Business Unit subject to the overall direction of the boards of the Purchaser Group (excluding any Group Company), provided that during the Earn Out Period no member of the Purchaser Group shall require [***] or [***] to assume additional responsibilities to those set out above in this paragraph 3.5;

		
	3.6
	save as required by law, it will not cease to be the sole ultimate beneficial owner of the whole of the ordinary share capital of the Group Companies;

		
	3.7
	it will procure that each Group Company may retain cash balances or have access to working capital facilities at a level in accordance with the agreed business plan (being the document set out at AO.19 in the Data Room) save that any deviations necessary outside of such agreed business plan will be agreed in good faith between the parties to ensure that the ordinary course of business can be maintained;

		
	3.8
	it will procure that no Group Company will lend any money or make any distribution, or if it does, any impact will be excluded from the determination of Net Current Assets and EBITDA;

		
	3.9
	no Group Company shall acquire any material investment or interest in any business or company (other than its present business);

		
	3.10
	it will use its best endeavours to procure that all transactions whether of a trading nature or on capital account entered into between any Group Company and any Purchaser or any member of the Purchaser Group shall be entered into on an arm's length basis including any licensing of any Group Company's software, platform SaaS or IP;

		
	3.11
	it will not, and will use its reasonable endeavours to procure that each member of the Purchaser's Group will not, solicit an existing loyalty contract which any Group Company has entered into with Vodafone or Orange;

		
	3.12
	no Group Company shall guarantee or enter into any surety arrangement or indemnity for the Purchaser or any member of the Purchaser Group, or if it does, any impact will be excluded from 

101

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

the determination of Net Current Assets and EBITDA; 
		
	3.13
	it will not do or permit to be done any act or thing calculated artificially to decrease the 2011 EBITDA and/or the 2012 EBITDA of any Group Company; and

		
	3.14
	the employment contracts of neither [***] nor [***] shall be terminated by the Company nor shall either or both be placed on "garden leave" as set out in the relevant employment contract (dated on or about the date of this agreement), other than in the event that the employment contract of either or both of [***] or [***] are terminated where one or both of such persons (as appropriate) are determined as being a Bad Leaver, in which event the employment contract of the relevant Bad Leaver may be terminated.

		
	4.
	If at any time during the Earn Out Period, the Purchaser elects to pay the maximum amount of the Contingent Earn Out Consideration which could remain to be paid, the restrictions set out in paragraph 3 shall cease to apply on a payment of that amount.

		
	5.
	In the event of a change of control of Purchaser during the Earn‐Out Period, where such acquirer of the Purchaser does not expressly assume the obligations of the Purchaser under this agreement, the Purchaser shall immediately pay the maximum amount of the Contingent Earn Out Consideration which could fall due, the restrictions set out in paragraph 3 shall cease to apply on a payment of that amount.

		
	6.
	The Purchaser shall, and the Purchaser shall use its reasonable endeavours to procure that each member of the Purchaser Group shall, and the Vendors’ Representative shall cooperate in good faith to implement the USA Integration Plan.  

		
	7.
	During the Earn Out Period each Vendor severally undertakes (to the extent that he can reasonably procure the same) that:

		
	7.1
	it will provide an on-going quarterly forecast and budget for the business for tracking and governance purposes;

		
	7.2
	it will not make any material change (and for these purposes the Purchaser, acting reasonably, shall determine whether any change is material) to any Group Company's existing business model, pricing or contracts without mutual consent of the Purchaser;

		
	7.3
	it will not do and will not permit to be done any act or thing calculated artificially to increase the 2011 EBITDA and/or the 2012 EBITDA of any Group Company;

		
	7.4
	it will make best reasonable efforts to plan and consolidate product platforms where such efforts will not have a prejudicial effect on the 2011 EBITDA or the 2012 EBITDA or where equitable adjustments are made or are capable of being made in the calculation of the 2011 EBITDA and the 2012 EBITDA for any relevant period for the purposes of preventing any distortion in the amount of the Contingent Earn Out Consideration.

		
	8.
	Nothing in this schedule 10 shall operate so as to place any restriction on any Group Company distributing or otherwise loaning the Ringfenced Funds in such manner as the Purchaser shall or any member of the Purchaser's Group (excluding a Group Company) shall direct. Furthermore the Company (including for the avoidance of doubt any of its officers, employees, consultants or agents) shall not use, distribute, spend or otherwise encumber the Ringfenced Funds without the prior written consent of a member of the Purchaser's board of directors (which consent is deemed given in respect of existing encumbrances of any Group Company) and the Ringfenced Funds shall be placed in a separate bank account of the Company in relation to which the Purchaser shall specify the authorised signatories of such bank account.

Part 4:    EBITDA
EBITDA will be calculated as follows:

102

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

Net Income(1) before provision for:
		
	•
	income taxes(1) 

		
	•
	interest expense (net of interest income) (1) 

		
	•
	foreign exchange gains and losses(1) 

		
	•
	gains or losses from equity method investments (1) 

		
	•
	depreciation(1)  

		
	•
	amortization(1) 

		
	•
	share‐based compensation expenses(1) 

		
	•
	capitalized software development costs (see accounting policy notes below)

		
	•
	gains or losses attributed to any minority interest in a subsidiary that is 100% owned by the Purchaser after completion (i.e. no deduction for Benelux and Jigsaw for past periods prior to 100% owned)

		
	•
	EBITDA contribution (whether negative or positive) from 4th Screen prior to Completion

		
	•
	exceptional costs and expenses as defined below

		
	•
	UK Mobile Marketing Business Unit

		
	◦
	2011 EBITDA and 2012 EBITDA will each exclude the EBITDA of the Purchaser's UK Mobile Marketing Business Unit save in respect of those contracts and employees which the Vendors' Representative and the Purchaser agree (such agreement to have been reached by, at the latest, 31 December 2011) shall be assumed and integrated into a Group Company and shall be included in the calculations of 2011 EBITDA and 2012 EBITDA.

(1) In accordance with the Accounting Requirements
Exceptional costs and expenses:
		
	1.
	Prior to completion

		
	1.1
	transaction‐related costs incurred by a Group Company (up to [***]USD) relating to:

		
	1.1.1
	Acquisition costs of the Goldenbytes transaction (now Mobile Interactive Group Netherlands BV and subsidiaries) (up to [***]USD (but excluding for the avoidance of doubt any deferred consideration obligations))

		
	1.1.2
	Acquisition cost of the Zaypay transaction (up to [***]USD (but excluding for the avoidance of doubt any deferred consideration obligations))

		
	1.1.3
	redundancy and restructuring costs completed and disclosed prior to completion (up to [***]USD)

		
	1.1.4
	costs calculated under US GAAP relating to deemed payroll expense in relation to the payment of salaries to the PIRI Limited founders at less than market value (up to [***]USD per annum i.e. [***]USD for 2011 prior to completion assuming a completion date of 1 November 2011

		
	1.2
	software development costs up to 30 June 2011 in the amount of $1,624,000 (as set out in the document attached to the Disclosure Letter entitled "US GAAP Software Development Costs"); to the extent that such costs do not fall within the definition of "Research and Development - Internal Software Development Costs" in the section entitled "Significant Accounting Policies listed in this part 4 by virtue of the historical records maintained by the Group not being at the standard required 

103

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

by such policy:
		
	1.10
	software development costs from 1 July 2011 to 30 November 2011 as calculated on a consistent basis to those prior to 30 June 2011 under paragraph 1.2 (as set out immediately above for the avoidance of doubt).

		
	2.
	Relating to completion (whether incurred before or after completion)

		
	2.8
	Costs directly attributable to the acquisition of the Company by the Purchaser

		
	2.9
	Costs in relation to the purchase by the Company of the minority interests in NL Subsidiary

		
	2.10
	Sale or demerger of 4th Screen

		
	2.11
	The income tax and national insurance contributions payable in relation to the exercise of share options

		
	2.12
	Any loss on exchange incurred by the Company relating to the receipt of funds in US $ in relation to either (a) the exercise of share options or (b) the sale of 4th Screen

		
	3.
	After completion

		
	3.1
	Costs relating to the restructuring, relocation or rebranding of the Company's business or assets in accordance with an integration plan to be agreed between the Purchaser and the Purchaser (up to the amounts agreed in such plan)

		
	3.2
	Incremental costs incurred by any Group Company in respect of the integration of the financial management and reporting required by the Purchaser, including any additional external audit and advisory fees in connection therewith including but not limited to as a consequence of any financial year end change 

		
	3.3
	Such specific costs that  the Vendors' Representative and the Purchaser agree on a case by case basis will be excluded from the calculation of EBITDA which are incurred by a Group Company relating to the roll out of new business lines in messaging and payments

		
	3.4
	Any cost recharges or additional expense imposed on the Company by the Purchaser

		
	3.5
	Deemed payroll expense in relation to the payment of salaries to the Piri Limited founders at less than market value (up to [***]USD per annum from completion) 

		
	3.6
	The amount of the Management Bonus (being the aggregate amount of such Management Bonus after deducting any professional costs or fees incurred in connection with the Management Bonus)

		
	3.7
	In relation to warranty claims, where a cost incurred by a Group Company is subject to a successful warranty claim by the Purchaser under this Agreement, the lower of the cost and the amount successfully claimed shall be treated as an exceptional cost and will therefore be added back to EBITDA such that the Purchaser does not benefit from both the warranty claim and an EBITDA adjustment.

Significant Accounting Policies
Below mentioned are the key definitions under US GAAP, for Revenue recognition and Software capitalizations.
Revenue Recognition
Revenue is accounted in accordance with Accounting Standards Codification (ASC) and SAB 101/104.
Topic 605 — Revenue Recognition and ASC Topic 985-605 — Certain Revenue Arrangements that Include Software Elements
Revenue is recognized when all of the following conditions are satisfied: (i) there is persuasive evidence 

104

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

of an arrangement; (ii) the service has been rendered or delivery has occurred; (iii) the fee to be paid by the customer is fixed or determinable; and (iv) collectability of the fee is reasonably assured.
SaaS revenue generated from "usage-based" services, including subscription fees for use of individual software modules and our automated mobile marketing campaign creation templates, and fees charged for access to our technology platform, are recognized ratably over the period of the agreement as the fees are earned.
SaaS revenue generated from "performance-based" services is generally based on specified metrics, typically relating to the number of transactions performed or number of text messages generated during the campaign multiplied by the cost per transaction or response in accordance with the terms of the related contracts. Some of the performance‐based contracts include performance incentive provisions that link a portion of revenue that may be earned under the contract to the performance of the customer's campaign relative to quantitative or other milestones, such as the growth in the consumer base, reduced consumer churn, or the effectiveness of the end‐user response. For the variable performance‐based fees, revenue is recognized when the transaction is completed, the specific quantitative goals are met, or the milestone is achieved. Revenue is recognized when the company acts as the principal and contract directly with suppliers for purchase of media and other third party production costs, and are responsible for payment of such costs as the primary obligor. Revenue generated on fees charged for such third party costs is recognized using the gross method. Revenue is recognized at the gross amount billed when revenue is earned for services rendered and record the associated fees paid as third party costs in the period such costs are incurred.
License and software revenue consists of fees charged for mobile marketing and advertising technology provided on a perpetual license, and fees charged for services to customize and implement the specific software solution, including fees to customize the platform for use with the different media used by the customer in a campaign. Revenue related to perpetual licensing arrangements is recognized upon the delivery of the license. Fees charged to customize our software solution are recognized using the completed contract or percentage‐of‐completion method according to ASC 605‐35, "Revenue Recognition — Construction‐Type and Production‐Type Contracts", based on the ratio of costs incurred to the estimated total costs at completion
Managed services revenue, when sold with software and support offerings, are accounted for separately when these services (i) have value to the customer on a standalone basis, (ii) are not essential to the functionality of the software and (iii) there is objective and reliable evidence of selling price of each deliverable. When accounted for separately, revenues are recognized as the services are rendered for time and material contracts, and ratably over the term of the contract when accepted by the customer for fixed price contracts. For revenue arrangements with multiple deliverables, such as an arrangement that includes license, support and professional services, we allocate the total amount the customer will pay to the separate units of accounting based on their relative selling prices, as determined by the price of the undelivered items when sold separately.
The timing of revenue recognition in each case depends upon a variety of factors, including the specific terms of each arrangement and the nature of deliverables and obligations, and the existence of evidence to support recognition of revenue as of the reporting date. For contracts with extended payment terms for which there has not been established a successful pattern of collection history, revenue is recognized when all of the criteria are met and when the fees under the contract are due and payable.
In the event that costs have been incurred associated with a specific revenue arrangement prior to the execution of the related contract, those costs are expensed as incurred.
Fees that have been invoiced are recorded in trade receivables and in revenue when all revenue recognition criteria have been met. Fees that have not been invoiced as of the reporting date but all revenue recognition criteria are met, are accrued and reported as accrued contract receivables on the balance sheets and recognized as revenue in the period when the fees are earned.

105

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

Revenue is presented net of value‐added tax, sales tax, excise tax and other similar assessments.
Third Party, Datacenter, and Direct Project Costs
We incur certain operating costs that directly relate to revenue. These costs are classified into two categories: third‐party, and datacenter and direct project.
Third Party Costs
Third party costs are fees paid to third parties to secure advertising space or content, or to obtain media inventory for the placement of advertising and media messaging services, as well as fees paid to third parties for creative development and other services in connection with the creation and execution of marketing and advertising campaigns. 
Third party costs also include the costs of certain content, media, or advertising that is acquired for a campaign, and costs associated with incentives and promotional costs provided to consumers in order to participate in the campaigns, as well as certain computer hardware or software that might be acquire for a customer. Third party costs relate directly to SaaS revenue.
Datacenter and Direct Project Costs
Datacenter and direct project costs consist primarily of personnel and outsourcing costs for operating the datacenters, which host our Velti mGage platform on behalf of our customers. Additional expenses include costs directly attributable to a specific campaign, as well as allocated facility rents, power, bandwidth capacity, IT maintenance and support. In addition, direct project costs include personnel costs to customize software solutions for specific customer contracts. These costs may relate to SaaS revenue and/or license and software revenue. To date, the vast majority of these costs are related to SaaS revenue and the amount attributable to license and software revenue was immaterial and inseparable.
Research and Development - Internal Software Development Costs 
Research and Development – ASC 730-10/ASC 985-25
All costs incurred to establish the technological feasibility of a computer software product to be sold, leased, or otherwise marketed are research and development costs. Those costs shall be charged to expense when incurred as required by Subtopic 730‐10. 
 
25‐2  For purposes of this Subtopic, the technological feasibility of a computer software product is established when the entity has completed all planning, designing, coding, and testing activities that are necessary to establish that the product can be produced to meet its design specifications including functions, features, and technical performance requirements. At a minimum, the entity shall have performed the activities in either (a) or (b) as evidence that technological feasibility has been established:
a. If the process of creating the computer software product includes a detail program design, all of the following:
1. The product design and the detail program design have been completed, and the entity has established that the necessary skills, hardware, and software technology are available to the entity to produce the product. 
2. The completeness of the detail program design and its consistency with the product design have been confirmed by documenting and tracing the detail program design to product specifications. 
3. The detail program design has been reviewed for high‐risk development issues (for example, novel, unique, unproven functions and features or technological innovations), and any uncertainties related to identified high‐risk development issues have been resolved through coding and testing.
b. If the process of creating the computer software product does not include a detail program design with 

106

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

the features identified in (a), both of the following:
1. A product design and a working model of the software product have been completed. 
2. The completeness of the working model and its consistency with the product design have been confirmed by testing.
Internal Software Development Costs – ASC 985-20
Internal software development costs consist primarily of internal salaries and consulting fees for developing software platforms for sale to or use by customers in mobile marketing and advertising campaigns. We capitalize costs related to the development of our software products, as all of our products are to be used as an integral part of a product or process to be sold or leased. Such software is primarily related to our Velti mGage platform, including underlying support systems.
We capitalize costs related to software developed for new products and significant enhancements of existing products once technological feasibility has been reached and all research and development for the components of the product have been completed. Such costs are amortized on a straight‐line basis over the estimated useful life of the related product, not to exceed three years, commencing with the date the product becomes available for general release to our customers. 
Amortization expenses associated with our software development costs are recorded in costs and expenses within the accompanying consolidated statements of operations.
25‐3 Costs of producing product masters incurred subsequent to establishing technological feasibility shall be capitalized. Those costs include coding and testing performed subsequent to establishing technological feasibility. 
 
25‐4 Software production costs for computer software that is to be used as an integral part of a product or process shall not be capitalized until both of the following conditions have been met:
a. Technological feasibility has been established for the software. 
b. All research and development activities for the other components of the product or process have been completed.
25‐5 An entity may capitalize an allocated amount of indirect costs, such as overhead related to programmers and the facilities they occupy. However, an allocation of general and administrative expenses is not appropriate because those costs relate to the period in which they are incurred. 
 
25‐6 Capitalization of computer software costs shall cease when the product is available for general release to customers. Costs of maintenance and customer support shall be charged to expense when related revenue is recognized or when those costs are incurred, whichever occurs first.
Overhead absorption methodology
When calculating the cost of R&D in order to capitalise, as well as other P&L functions,
		
	•
	Salaries, benefits, payroll taxes and everything specifically identifiable to an individual are allocated person by person based on timesheets or other suitable resource allocation records,

		
	•
	Allocable costs include IT and facilities (including inter alia rent, rates, service charges, utilities and other infrastructure related costs), which are allocated based on the total full time equivalents allocated to each cost category (one of which is the capitalized software development).   

Part 5:  USA Integration Plan

107

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	1.
	The Vendors and the Purchaser have agreed that the Company's USA operations shall be integrated into the Purchaser's USA operations from 1 January 2012 with the intention of continuing to sell the Company's products and services into the USA for the benefit of both the Vendors and the Purchaser and on the following terms.

		
	2.
	The operations of any Group Company in the USA, including all revenue, costs of sales and overheads, will be transferred or otherwise recharged from the relevant Group Company to the Purchaser from 1 January 2012.

		
	3.
	The Company will be paid a delivery fee ("USA Delivery Fee") in relation to the proportion of revenue which is derived from any customer of the combined USA operations of the Purchaser Group and any Group Companies (a "USA Combined Customer") which is delivered using the resources or technology of a Group Company ("Attributable USA Revenue").

		
	4.
	The USA Delivery Fee for Attributable USA Revenue shall be calculated for each USA Combined Customer on a monthly basis as follows:

"Gross Margin" shall be Attributable USA Revenue less directly attributable costs of delivery payable to a party outside of a Group Company.  Such third party costs may include but are not limited to SMS messaging, third party technology licencing costs, hardware and hosting. 
		
	5.
	The USA Delivery Fee shall be equal to the sum of (a) any third party costs incurred by a Group Company plus (b) the share of Gross Margin ("Gross Margin Share") calculated as set out below:

	
		
	 
	Gross Margin Share 
as a % of Gross Margin

	USA Combined Customers account managed by the Purchaser's staff where cumulative.  If the Gross Margin for the period after 31 December 2011 is less than GBP[***], then the Group Margin Share is:
	[***]%

	USA Combined Customers account managed by the Purchaser's staff where cumulative.  If the Gross Margin for the period after 31 December 2011 is greater than GBP[***], then the Group Margin Share on the amount up to GBP[***] is [***]% and the amount over GBP[***] is:
	[***]%

	The Gross Margin Share attributed to USA Combined Customers until 1 January 2012 is:
	[***]%

	The Gross Margin Share of any USA Combined Customer that is offered to the Purchaser or any member of the Purchaser's Group, but which the Purchaser or any member of the Purchaser's Group declines to assume after 31 December 2011 is:
	[***]%

		
	6.
	The Gross Margin threshold of £[***]m is proposed as it is simple to measure by both the Purchaser and the Vendors' Representative throughout the Earn-Out Period.  However the Vendors and the Purchaser agree that this intention is to change the margin split once the Company has derived the same benefit from US revenue at the EBITDA level as under its original forecast.  The Purchaser and the Vendors' Representative agree in good faith to review the position after the end of calendar 

108

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

Q3 2012 and accelerate the switch to the [***]:[***]margin split if the EBITDA target has been achieved even if the margin threshold has not.
		
	7.
	In the instance that any customer which is a Company Prospect requires services which a Group Company is unable to deliver, then the appropriate share of Gross Margin between Purchaser and the Company shall be negotiated dependent on the roles and effort provided. 

		
	8.
	In the instance that a Company Prospect requires services which a Group Company is able to deliver but the Purchaser chooses to deliver such services using its own delivery resources, then the Purchaser and the Vendors' Representative shall negotiate in good faith to ensure that the Company is paid a fee equal to the delivery fee that it would have otherwise earned.

		
	9.
	The Purchaser and the Vendors will each ensure that it provides the other with transparent information on all revenues, costs and Gross Margins that are necessary to calculate the proper delivery fee.

For the purposes of this part 6, references to "Company Prospect" means the following customers or prospective customers:
[***]

SCHEDULE 11:    REGISTRATION RIGHTS
Part 1:    Registration rights
Section 1.    Definitions; Construction.  As used throughout this schedule, the following terms shall have the following meanings:
		
	(i)
	"Exchange Act" means the Securities Exchange Act of 1934, as amended.

		
	(ii)
	"Form 20-F" means Form 20-F under the Exchange Act or any successor forms thereto.

		
	(iii)
	"Form F-1", "Form F-3", "Form F-4" and "Form S-8" means Form F-1, Form F-3, Form F-4 and Form S-8, respectively, under the Securities Act or any successor forms thereto.

		
	(iv)
	"Governmental Authority" means any domestic or foreign government or political subdivision thereof, whether on a federal, state or local level and whether executive, legislative or judicial in nature, including any agency, authority, board, bureau, commission, court, department or other instrumentality thereof.

		
	(v)
	"Ordinary Shares" means the ordinary shares, nominal value £0.05 per share, of the Purchaser.

		
	(vi)
	"Other Shares" means, at any time, those Ordinary Shares or other share capital in the Purchaser which do not constitute Registrable Shares or Primary Shares.

		
	(vii)
	"Other Shareholders" means, collectively, all Shareholders, other than the Vendors, party hereto from time to time.

		
	(viii)
	"Person" shall be construed as broadly as possible and shall include an individual person, a partnership (including a limited liability partnership), a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization and a Governmental Authority.

		
	(ix)
	"Primary Shares" means, at any time, the authorized but unissued Ordinary Shares or Ordinary Shares held in the treasury of the Purchaser.

109

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	(x)
	"Prospectus" means the prospectus included in any Registration Statement, including any amendment or prospectus subject to completion, and any such prospectus as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Shares and, in each case, by all other amendments and supplements to such prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein.

		
	(xi)
	"Public Offering" means the closing of a public offering of Ordinary Shares pursuant to a Registration Statement declared effective under the Securities Act, except that a Public Offering shall not include an offering of Securities to be issued as consideration in connection with a business acquisition pursuant to a registration statement on Form S-4 or F-4 (or comparable form) (for clarity this shall not include a "resale registration statement") or an offering of Securities issuable pursuant to an equity incentive plan pursuant to a registration statement on Form S-8 (or comparable form) for use with employees, consultants and comparable service providers.

		
	(xii)
	"Registrable Shares" means, at any time, and with respect to any Shareholder, the Ordinary Shares held by such Shareholder (or any shares issued in exchange therefore); provided, however, that any Ordinary Shares that are sold in a Public Offering pursuant to an effective Registration Statement under the Securities Act or that may be sold or distributed without limitation or restriction pursuant to Rule 144 under the Securities Act shall not be deemed to be Registrable Shares.

		
	(xiii)
	"Registration Statement" means any registration statement of the Purchaser that covers an offering of any of the Registrable Shares, and all amendments and supplements to any such Registration Statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.

		
	(xiv)
	"Requisite Vendors" means, on any date of determination, those Vendors who hold in the aggregate more than fifty percent (50%) of the Registrable Shares held by all of the Vendors on such date of determination.

		
	(xv)
	"Securities" means "securities" as defined in Section 2(1) of the Securities Act and includes, with respect to any Person, such Person’s capital stock or other equity interests or any options, warrants or other securities that are directly or indirectly convertible into, or exercisable or exchangeable for, such Person’s capital stock or other equity or equity-linked interests, including phantom stock and stock appreciation rights.

		
	(xvi)
	"Securities Act" means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect from time to time.

		
	(xvii)
	"Shareholders" means the Vendors and/or the Other Shareholders, in each case, only for so long as such Persons hold Registrable Shares.

		
	Section 2.
	Registrations on Form F-3.

		
	(a)
	Subject to Section 2(c), at such time as the Purchaser shall have qualified for the use of Form F-3, the Requisite Vendors shall have the right to request up to a total of four (4) registrations on Form F-3 during the term of this agreement, with not more than two (2) requests in any twelve (12) month period, and to effect a registration under the Securities Act of Registrable Shares in accordance with the terms of this Section 2.

		
	(b)
	If the Purchaser shall be requested in writing by the Requisite Vendors to effect a registration under the Securities Act of Registrable Shares in accordance with this Section 2, then the Purchaser shall promptly, and in any event, within ten (10) days, give written notice of such proposed registration to all Shareholders and shall include in such proposed registration any 

110

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

Registrable Shares requested to be included in such proposed registration by all Shareholders provided that such Shareholders respond in writing to the Purchaser’s notice within fourteen (14) days after delivery by the Purchaser of such notice (which response shall specify the number of Registrable Shares proposed to be included in such registration).  The Purchaser shall use commercially reasonable efforts to promptly (but in no event more than forty-five (45) days from the date of the request) cause the effectiveness of the Registration Statement of all Registrable Shares on Form F-3 (or a comparable successor form) to the extent requested by such Shareholders.  
		
	(c)
	Notwithstanding anything in this agreement to the contrary, the Purchaser shall not be obligated to effect any registration under the Securities Act requested by the Shareholders under this Section 2:

		
	(i)
	with respect to any request made pursuant to this Section 2, if the Shareholders request registration of less than fifty percent (50%) of the Registrable Shares outstanding as of the date of the request excluding those previously registered pursuant to a Registration Statement; or

		
	(ii)
	during the period following a Public Offering that is contemplated by Section 4 hereof; or

		
	(iii)
	if the effective date of any Registration Statement filed would require pursuant to the Securities Act (and the rules and regulations promulgated by the SEC thereunder) the Purchaser to include audited financials for its most recently completed fiscal year, in advance of its requirement to produce such audited financials in connection with the filing of its Annual Report on Form 20-F for such fiscal year in which case the Purchaser may, in its sole discretion, delay the effectiveness of such Registration Statement until the earlier of (a) such period as is reasonably necessary to include therein the Company’s audited financial statements for such fiscal year or (b) five (5) business days following the filing of the Purchaser’s Annual Report on Form 20-F for such fiscal year. 

		
	(d)
	The number of requests by the Requisite Vendors permitted by this Section 2 shall be four (4) during the term of this agreement.

		
	(e)
	Whenever required under this Section 2 to effect the registration of any Registrable Shares, the Purchaser shall, as expeditiously as reasonably possible: 

		
	(i)
	prepare and file with the SEC a Registration Statement with respect to such Registrable Shares and use its commercially reasonable efforts to cause such registration statement to become effective, and, upon the request of the Shareholders of a majority of the Registrable Shares registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the Registration Statement has been completed;

		
	(ii)
	prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement;

		
	(iii)
	furnish to the Shareholders such number of copies of a prospectus, including a preliminary prospectus and any free writing prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Shares owned by them;

		
	(iv)
	use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or "blue sky" laws of such jurisdictions as shall be reasonably requested by the Shareholders, provided that the Purchaser shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;

111

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	(v)
	in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering;

		
	(vi)
	notify each holder of Registrable Shares covered by such registration statement at any time when a prospectus or free writing prospectus (to the extent prepared by or on behalf of the Purchaser) relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and, at the request of any such Shareholder, the Purchaser will, as soon as reasonably practicable, file and furnish to all such Shareholders a supplement or amendment to such prospectus or free writing prospectus (to the extent prepared by or on behalf of the Purchaser) so that, as thereafter delivered to the purchasers of such Registrable Shares, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading in light of the circumstances under which they were made;

		
	(vii)
	cause all such Registrable Shares registered pursuant to this Section 2 to be listed on a national exchange or trading system and on each securities exchange and trading system on which similar securities issued by the Purchaser are then listed; and

		
	(viii)
	provide a transfer agent and registrar for all Registrable Shares registered pursuant to this schedule and a CUSIP number for all such Registrable Shares, in each case not later than the effective date of such registration

		
	Section 3.
	Piggyback Registration.

		
	(a)
	If the Purchaser at any time proposes for any reason to register Primary Shares or Other Shares under the Securities Act (other than on Form F-4 or Form S-8 and, for the sake of clarity, including for this purpose a registration effected by the Purchaser for stockholders other than the Shareholders), it shall promptly, and in any event, within ten (10) days, give written notice to each Shareholder of its intention to register the Primary Shares or Other Shares and, upon the written request of any Shareholder (given within fourteen (14) days after delivery of any such notice to each Shareholder by the Purchaser) to include in such registration Registrable Shares (which request shall specify the number of Registrable Shares proposed to be included in such registration), the Purchaser shall use its commercially reasonable efforts to cause all such Registrable Shares of the requesting Shareholders to be registered under the Securities Act and qualified for sale under any state securities or "blue sky" law, all to the extent reasonably required to permit such sale or other disposition of their Registrable Shares; provided, however, that, if such registration involves an underwritten Public Offering and the managing underwriter determines in good faith and advises the Purchaser that the inclusion of all Registrable Shares or Other Shares proposed to be included in such registration would adversely affect the offering and sale (including pricing) of Primary Shares proposed to be offered and sold by the Purchaser, then the number of Primary Shares, Registrable Shares and Other Shares proposed to be included in such registration shall be included in the following order:

		
	(i)
	first, the Primary Shares; 

		
	(ii)
	second, the Registrable Shares held by the Vendors and Other Shareholders (or, if necessary, such Registrable Shares pro rata among the holders thereof based upon the number of Registrable Shares requested to be registered by each such holder); and

		
	(iii)
	third, the Other Shares; 

		
	(b)
	The number of requests by the Shareholders permitted by this Section 3 shall be unlimited.

112

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	(c)
	This Section 3 shall be terminated and of no further force and effect twelve (12) months following the final release of Registrable Shares by Purchaser pursuant to this agreement.

		
	Section 4.
	Holdback Agreement.

If the Purchaser at any time shall register an offering and sale of Ordinary Shares under the Securities Act in an underwritten offering pursuant to any registration under the Securities Act (other than on Form F-4 or Form S-8), any Shareholder who is selling Ordinary Shares in such offering or is, at the time of such offering, an employee of the Company shall not sell, make any short sale of, grant any option for the purchase of, or otherwise dispose of any Securities of the Purchaser (other than (i) those Registrable Shares included in such registration pursuant to Section 2 and Section 3 hereof; or (ii) a Relevant Transfer by a Vendor to a transferees permitted by the managing underwriters) in each case, without the prior written consent of the Purchaser (a "Holdback Consent") for a period as shall be determined by the managing underwriters, which period cannot begin more than thirty (30) days prior to the effectiveness of such Registration Statement and cannot last more than ninety (90) days after the effective date of such Registration Statement.
		
	Section 5.
	Termination.  

This schedule shall terminate and be of no further force or effect (i) upon the approval of such termination by the Purchaser and the Requisite Shareholders, (ii) when all Registrable Shares can be sold in any single ninety (90) day period under Rule 144(b)(1)(i) under the Securities Act or (iii) when there shall not be any Registrable Shares outstanding.
		
	Section 6.
	Registration Expenses.  

All expenses other than (i) underwriting discounts and commissions and (ii) legal counsel fees for any selling Shareholders incurred in connection with registrations, filings or qualifications pursuant to Section 2 and Section 3 of this part, including, without limitation, all registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Purchaser shall be borne by the Purchaser.  Notwithstanding the foregoing, the Purchaser shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2 of this part if the registration request is subsequently withdrawn at the request of the Shareholders of a majority of the Registrable Shares to be registered (in which case all participating Shareholders shall bear such expenses pro rata based upon the number of Registrable Shares that were to be included in the withdrawn registration); provided, however, that if at the time of such withdrawal, the Shareholders have learned of a material adverse change in the condition, business or prospects of the Purchaser from that known to the Shareholders at the time of their request and have withdrawn the request with reasonable promptness following disclosure by the Purchaser of such material adverse change, then the Shareholders shall not be required to pay any of such expenses and shall retain their rights pursuant to Section 2 of this part.
		
	Section 7.
	Assignment of Registration Rights.  

The rights to cause the Purchaser to register Registrable Shares pursuant to each of Section 2 and Section 3 hereof may be assigned (but only with all related obligations) by a Shareholder to a transferee or assignee of such securities that (a) is an affiliate, subsidiary, parent, partner, limited partner, retired partner, member or stockholder of a Shareholder or (b) is a Shareholder’s family member or trust for the benefit of an individual Shareholder or any of such Shareholder’s family members, provided:  (i) the Purchaser is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; and (ii) such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this schedule.
		
	Section 8.
	Indemnification and Contribution.  

In the event any Registrable Securities are included in a Registration Statement under Section 2 or Section 3 hereof:

113

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

		
	(a)
	To the extent permitted by law, the Purchaser will indemnify and hold harmless each Shareholder, the partners, members, officers, directors and stockholders of each Shareholder, any underwriter (as defined in the Securities Act) for such Shareholder, each Person, if any, who controls such Shareholder or underwriter within the meaning of the Securities Act or the Exchange Act, and legal counsel or accountants for such Shareholder, against any losses, claims, damages or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act, any state securities laws or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities laws, insofar as such losses, claims, damages, or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively, a "Violation"):  

		
	(i)
	any untrue or alleged untrue statement of a material fact contained in such Registration Statement, including any preliminary prospectus, final prospectus, or free writing prospectus contained therein or any amendments or supplements thereto, any issuer information (as defined in Rule 433 of the Securities Act) filed or required to be filed pursuant to Rule 433(d) under the Securities Act or any other document incident to such registration prepared by or on behalf of the Purchaser or used or referred to by the Company, 

		
	(ii)
	the omission or alleged omission of a material fact required to be stated in such Registration Statement, or necessary to make the statements therein not misleading or 

		
	(iii)
	any violation or alleged violation by the Purchaser of the Securities Act, the Exchange Act, any state securities laws or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities laws, and the Purchaser will reimburse each such Shareholder, underwriter, controlling Person or other aforementioned Person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage,  liability, action or proceeding as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 8(a) shall not apply to amounts paid in settlement of any such expense, loss, claim, damage, liability, action or proceeding if such settlement is effected without the consent of the Purchaser (which consent shall not be unreasonably withheld), nor shall the Purchaser be liable in any such case for any such expense, loss, claim, damage, liability, action or proceeding to the extent that it arises out of or is based upon a Violation that occurs in reliance upon, and in conformity with, written information furnished by or on behalf of any such Shareholder, partner, officer or director, underwriter or controlling person expressly and solely for use in connection with such registration by any such Shareholder, partner, officer, director, underwriter, controlling Person or other aforementioned Person.

		
	(b)
	To the extent permitted by law, each selling Shareholder, severally and not jointly, will indemnify and hold harmless the Purchaser, each of its directors, each of its officers who has signed the Registration Statement, each Person, if any, who controls the Purchaser within the meaning of the Securities Act, legal counsel and/or accountants for the Purchaser, any underwriter and any other Shareholder selling securities under such Registration Statement or any such other Shareholder’s partners, directors or officers or any controlling Person of any such underwriter or other Shareholder, against any expenses, losses, claims, damages or liabilities (joint or several) to which any of the foregoing Persons may become subject, under the Securities Act, the Exchange Act, any state securities laws or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities laws, insofar as such expenses, losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation arises out of or is based on actions or omissions made in reliance upon and in conformity with written information furnished by such Shareholder or on behalf of such Shareholder expressly for use in connection with such registration; and each such Shareholder will reimburse the Purchaser and any such other Persons entitled to indemnification 

114

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

hereunder for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, action or proceeding as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 8(b) shall not apply to amounts paid in settlement of any such expense, loss, claim, damage, liability, action or proceeding if such settlement is effected without the consent of the Shareholder (which consent shall not be unreasonably withheld), and provided further that total amounts payable in indemnity by a Shareholder (when taken together with amounts paid pursuant to Section 8(d)) under this Section 8(b) shall not exceed the proceeds from the offering actually received by such Shareholder out of which such Violation arises except in the case of fraud or willful misconduct by such Shareholder (net of any expenses paid by such Shareholder).
		
	(c)
	Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 8, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, jointly with any other indemnifying party to which notice has been given, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action or proceeding, if prejudicial to its ability to defend such action or proceeding, shall relieve such indemnifying party of liability to the indemnified party under this Section 8 to the extent of such prejudice, but the omission to so deliver written notice to the indemnifying party will not relieve such indemnifying party of any liability that it may have to any indemnified party otherwise than under this Section 8.

		
	(d)
	If the indemnification provided for in this Section 8 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party on the other hand in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations; provided, however, that (i) no contribution by any Shareholder, when combined with any amounts paid by such Shareholder pursuant to Section 8(b), shall exceed the proceeds from the offering actually received by such Shareholder, except in the case of fraud or willful misconduct by such Shareholder and (ii) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall a Shareholder’s liability pursuant to this Section 8(d), when combined with the amounts paid or payable by such Shareholder pursuant to Section 8(b), exceed the proceeds from the offering actually received by such Shareholder, except in the case of fraud or willful misconduct by such Shareholder (net of any expenses paid by such Shareholder).  The relative fault of the indemnifying party and the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact or the omission or alleged omission of a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and 

115

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

opportunity to correct or prevent such statement or omission.
		
	(e)
	Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

		
	(f)
	The obligations of the Purchaser and Shareholders under this Section 8 shall survive the completion of any offering of Registrable Shares in a Registration Statement under Section 2, Section 3 or otherwise under this schedule, and otherwise shall survive the termination of this agreement.

		
	Section 9.
	Reports Under the Exchange Act.  

With a view to making available to the Shareholders the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a Shareholder to sell securities of the Purchaser to the public without registration or pursuant to a registration on Form F 3, the Purchaser agrees to use commercially reasonable efforts to:
		
	(a)
	make and keep public information available, as those terms are understood and defined in Rule 144, at all times;

		
	(b)
	file with the SEC in a timely manner all reports and other documents required of the Purchaser under the Securities Act and the Exchange Act; and

		
	(c)
	furnish to any Shareholder, so long as the Shareholder owns any Registrable Shares, forthwith upon request (i) a written statement by the Purchaser that it has complied with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Purchaser), the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form F 3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Purchaser and such other reports and documents so filed by the Purchaser and (iii) such other information as may be reasonably requested to avail any Shareholder of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to such form.

Part 2:    Company representations regarding certain US Securities Law matters
		
	(i)
	With respect to each Shareholder who, at the time of signing this agreement and at each time that such Shareholder receives any Consideration Shares, is (a) outside the United States and (b) not a U.S. Person (as defined in Regulation S under the Securities Act (as defined below)), the Purchaser shall issue the Consideration Shares to such Shareholder pursuant to an exemption from registration under the U.S. Securities Act of 1933, as amended (the "Securities Act") provided by Regulation S thereunder.  Such Consideration Shares shall be freely transferable without registration or other restriction under the Securities Act on the forty-first day after the issuance of such Consideration Shares by the Shareholder if, at the time that the Shareholder receives such Consideration Shares, the Shareholder is (a) outside the United States and (b) not a U.S. Person, and the Purchaser shall instruct its share transfer agent to permit such transfer and shall deliver to its share transfer agent any legal opinion required in connection therewith.  

		
	(ii)
	With respect to each Shareholder not included within paragraph (i) of this part ("a U.S. Shareholder"), the Purchaser shall issue the Consideration Shares to such Shareholder pursuant to an exemption from registration under the Securities Act provided by Regulation D thereunder, in reliance, in part, on such Shareholder's representation and warranty that such Shareholder is an "accredited investor" (as defined in Rule 501 under Regulation D) and has such knowledge and experience in financial and business matters that such Shareholder is 

116

Confidential Treatment Request - EDITED Copy
	
	
	  *** Confidential treatment has been requested for certain portions of this Exhibit.  Confidential portions of this Exhibit are designated by [***].  A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission. 

capable of evaluating the merits and risks of an investment in the Purchaser.  Notwithstanding any other provision of this agreement, Consideration Shares shall not be issuable to any U.S. Shareholder unless such U.S. Shareholder has reasonably demonstrated that such Shareholder is an "accredited investor" through signing and returning a customary questionnaire requiring factual representations to assert such U.S. Shareholder 's status as an "accredited investor."   Purchaser shall use its commercially reasonable efforts to assist with, and to direct its share transfer agent to facilitate, transfers by any U.S. Shareholder pursuant to, and subject to, Rule 144 under the Securities Act.

117

EXECUTED by the parties:

Signed for and on behalf of
Mobile Interactive Group Limited

    
By:     /s/    Barry Houlihan
Name:     Barry Houlihan
Title:     President and CEO

Signature Page to SPA

Signature Page to SPA
Signed for and on behalf of
Velti PLC

    
By:     /s/    Sally Rau    
Name:    Sally Rau
Title:    Chief Administrative Officer and General Counsel

Signature Page to SPAEX 4.23 One Market Plaza Office Lease

OFFICE LEASE AGREEMENT
Between
		
	Landlord:
	PPF PARAMOUNT ONE MARKET PLAZA OWNER, L.P.,

a Delaware limited partnership
and
		
	Tenant:
	VELTI USA, INC., 

a Delaware corporation
ONE MARKET PLAZA 
SAN FRANCISCO, CALIFORNIA

TABLE OF CONTENTS

	
				
	 
	Page
	 

	 
	 
	 

	1.
	Premises and Common Areas
	1
	

	2.
	Term
	3
	

	3.
	[INTENTIONALLY OMITTED]
	3
	

	4.
	Quiet Enjoyment
	3
	

	5.
	Base Rent
	3
	

	6.
	Rent Payment
	3
	

	7.
	Operating Expenses, Taxes and Insurance Expenses
	4
	

	8.
	Late Charge
	9
	

	9.
	Partial Payment
	9
	

	10.
	Letter of Credit
	9
	

	11.
	Use of Premises
	13
	

	12.
	Compliance with Laws
	14
	

	13.
	Waste Disposal
	15
	

	14.
	Rules and Regulations
	15
	

	15.
	Services
	16
	

	16.
	Telephone and Data Equipment
	18
	

	17.
	Signs
	18
	

	18.
	Parking
	19
	

	19.
	Force Majeure
	19
	

	20.
	Repairs and Maintenance By Landlord
	19
	

	21.
	Repairs by Tenant
	19
	

	22.
	Alterations and Improvements/Liens
	20
	

	23.
	Destruction or Damage
	21
	

	24.
	Eminent Domain
	22
	

	25.
	Insurance; Waivers
	23
	

	26.
	Indemnities
	25
	

	27.
	Tenant's Waiver
	25
	

	28.
	Estoppel
	25
	

	29.
	Notices
	26
	

	30.
	Default
	26
	

- 2 -

TABLE OF CONTENTS
(continued)

	
				
	 
	Page
	 

	 
	 
	 

	31.
	Landlord's Remedies
	27
	

	32.
	Default by Landlord
	30
	

	33.
	[INTENTIONALLY OMITTED]
	31
	

	34.
	Surrender of Premises
	31
	

	35.
	Removal of Fixtures
	31
	

	36.
	Holding Over
	31
	

	37.
	Attorney's Fees
	32
	

	38.
	Mortgagee's Rights
	32
	

	39.
	Entering Premises
	34
	

	40.
	Relocation [INTENTIONALLY OMITTED]
	34
	

	41.
	Assignment and Subletting
	34
	

	42.
	Sale
	38
	

	43.
	Limitation of Liability
	39
	

	44.
	Broker Disclosure
	39
	

	45.
	Joint and Several
	39
	

	46.
	Construction of this Agreement
	39
	

	47.
	Paragraph Titles; Severability
	39
	

	48.
	Cumulative Rights
	40
	

	49.
	Entire Agreement
	40
	

	50.
	Submission of Agreement
	40
	

	51.
	Authority
	40
	

	52.
	Options
	40
	

	53.
	Guaranty
	44
	

	54.
	Asbestos Notification
	44
	

	55.
	OFAC and Anti-Money Laundering Compliance Certifications
	44
	

	56.
	Counterparts; Telecopied or Electronic Signatures
	45
	

- 3 -

LIST OF EXHIBITS
A-1    Suite 600
A-2    Suite 700A
B-1    Work Agreement -- Tenant Managed Construction
B-2    Work Agreement -- Landlord Managed Construction
C    Form of SNDA
D    Rules and Regulations
E    Parking Agreement
F    Form of Guaranty
G    Asbestos Notification
H    Form of Letter of Credit 

- 4 -

BASIC LEASE PROVISIONS
The following sets forth some of the basic provisions of the Lease (the “Basic Lease Provisions”). 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.
Building (Section 1): The 43-story office tower (the “Spear Tower”), the 28-story office tower (the “Steuart Tower”), the 6-story base out of which such towers rise, the glass enclosed galleria and a portion of the ground floor of the Southern Pacific Transportation Company General Office Building (currently known as the Landmark Building), together with all appurtenant plazas, subgrade areas and garages bounded by Market, Spear, Mission and Steuart Streets in the City of San Francisco, California, known collectively as One Market Plaza.  The Building contains approximately 1,605,263 rentable square feet.
Property (Section 1):  The Building and the parcel(s) of land on which it is located and, at Landlord’s discretion, the off-site parking facilities and other improvements, if any, serving the Building and the parcel(s) of land on which they are located.

	
		
	Premises (Section 1):
	 

	 
	 

	Suites:
	600 and 700A

	 
	 

	Floors:
	Sixth (6th) and Seventh (7th)

	 
	 

	Tower:
	Steuart Tower

	 
	 

	Rentable Square Feet:
	37,521 feet, as follows: Suite 600 contains 35,969 rentable square feet, and Suite 700A contains 1,552 rentable square feet

	 
	 

	Term (Section 2):
	66 months

	 
	 

	Commencement Date (Section 2):
	May 1, 2013

	 
	 

	Expiration Date (Section 2):
	October 31, 2018

	 
	 

	Base Rent (Section 5):
	 

- 5 -

	
			
	Months of Term
	Annual Rate Per 
Rentable Square Foot
	Monthly 
Installment

	Month 1 - Month 12
	$50
	$156,337.50*

	Month 13 - Month 24
	$51
	$159,464.25

	Month 25 - Month 36
	$52
	$162,591

	Month 37 - Month 48
	$53
	$165,717.75

	Month 49 - Month 60
	$54
	$168,844.5

	Month 61 - Month 66
	$55
	$171,971.25

* Subject to abatement pursuant to Section 6(b) below. 

- 6 -

	
		
	Rent Payment Address (Section 6):

	 
	 

	PPF PARAMOUNT ONE MARKET PLAZA OWNER, L.P.
P.O. Box 11558
New York, NY  10286-1558
Tax ID No.: 06-1822510

	 
	 

	Base Year (Section 7):
	 

	 
	 

	Tax Base Year:
	2013

	 
	 

	Operating Expense Base Year:
	2013

	 
	 

	Insurance Expense Base Year:
	2013

	 
	 

	Tenant’s Share (Section 7):
	2.34%

	 
	 

	Letter of Credit Amount (Section 10):
	$1,031,827.50

	 
	 

	Parking Spaces (Section 18): Initially, Fifteen (15) total Spaces (as defined in Exhibit E) consisting of:

	 
	 

	(a) Three (3) unreserved Spaces in the On-Site Garage; and

	 
	 

	(b) Twelve (12) unreserved Spaces in the Off-Site Garage.

	 
	 

	Landlord’s Broker (Section 44):
	Jones Lang LaSalle Americas, Inc.

	 
	 

	Tenant’s Broker (Section 44):    
	Cushman & Wakefield of California, Inc.

	 
	 

	Notice Addresses (Section 29):
	 

	 
	 

	Landlord
	Tenant

	 
	 

	PPF PARAMOUNT ONE MARKET PLAZA OWNER, L.P.
c/o PARAMOUNT GROUP, INC.
Spear Tower, One Market Plaza, Suite 345
San Francisco, CA  94105
Attention:  Area Asset Manager/General Manager
	VELTI USA, INC. 
150 California St. 10th Floor
San Francisco, CA 94111
Attn: Dir. of Administration

	 
	 

	with a copy to:
	Following commencement of Sedgwick Sub-sublease (defined below):

	 
	 

	PARAMOUNT GROUP, INC.
1633 Broadway, Suite 1801
New York, NY 10019
Attention:Bernard A. Marasco
	VELTI USA, INC.
Steuart Street Tower, Ste 600
San Francisco, CA 94111
Attn: Dir. of Administration 

	Vice President of Leasing
	 

	 
	 

	Guarantor (Section 52):
	Velti Plc, a public limited company formed 
under the laws of Jersey (Channel Islands)

- 7 -

OFFICE LEASE AGREEMENT
THIS OFFICE LEASE AGREEMENT (hereinafter called the “Lease”) is entered into as of __________, 2011 (the “Effective Date”), by and between the Landlord and Tenant identified above.
1.Premises and Common Areas. 
(a)    Premises; Rentable Area.  Landlord does hereby lease to Tenant and Tenant does hereby lease from Landlord the Premises identified in the Basic Lease Provisions, such Premises being further shown on the drawing attached hereto as Exhibit A and made a part hereof.  The Premises shall be prepared for Tenant’s occupancy in the manner and subject to the provisions of the Work Agreement attached hereto as Exhibit B and made a part hereof.  The “rentable square feet” or “rentable area” of the Premises has been determined based upon the ANSI/BOMA Z65.1-1996 standard promulgated by the Building Owners and Managers Association, as interpreted by Landlord’s architect for the Building.  Landlord and Tenant agree that the rentable area of the Premises as described in Paragraph 3 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.  At all times during the Term, but subject to any Casualty, Force Majeure Event (as such terms are defined below) or Landlord’s security procedures, Tenant shall have access to the Premises 24 hours a day, 7 days a week, 365 days a year.
(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 (defined below), subject to the Rules and Regulations (defined below).  Landlord may at any time alter, renovate, rearrange, expand or reduce some or all of the Common Areas or temporarily close any Common Areas to make repairs or changes therein or to effect construction, repairs, or changes within the Building or Property, 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, as so designated from time to time by Landlord:  (a) 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 multi-tenant floors; elevator foyers and lobbies on multi-tenant floors; electrical and janitorial closets; telephone and equipment rooms; and other similar facilities in the Building maintained for the benefit of Building tenants, 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; landscaped areas including courtyards, plazas and patios; and other similar facilities on the Property maintained for the benefit of Building tenants.  As used herein, “Major Vertical Penetrations” shall mean the area or areas within Building stairs 

- 8 -

(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.
(c)    Sedgwick Sublease.  As of the Commencement Date, Tenant will be in occupancy of the Premises as a sub-subtenant pursuant to the provisions of that certain sub-sublease by and between Sedgwick LLP (“Sedgwick”), as sub-sublandlord, and Tenant, as sub-subtenant, dated as of July 1, 2011 (the “Sedgwick Sub-sublease”).  Sedgwick subleases the Premises from Clifford Chance LLP (“Clifford Chance”) pursuant to a Sublease dated as of August 13, 2004 (the “Sedgwick Sublease”); Clifford Chance leases the Premises from Landlord pursuant to a Lease dated as of July 25, 2002 (as subsequently amended, the “Clifford Chance Lease”).  Accordingly, Tenant will accept the Premises as of the Commencement Date in their then-current “as-is” condition.  If and to the extent that the Sedgwick Sublease and the Clifford Chance Lease are both terminated prior to the Commencement Date (unless due to a default by Tenant under the Sedgwick Sub-Sublease which constitutes a default under the Clifford Chance Lease or due to casualty or condemnation), then so long as Tenant has fully complied with all the terms and conditions of the Sedgwick Sub-Sublease, Landlord agrees to recognize Tenant as a direct tenant of Landlord, as of the Effective Date of termination of the Sedgwick Sublease, upon the terms and conditions set forth in the Sedgwick Sub-Sublease, the same as if Landlord were the “Sub-Sublandlord” thereunder, for a term which expires on the day immediately preceding the Commencement Date, provided that the Rent payable for the Premises during any such period will be $35.00 per rentable square foot per annum, and during such period, Tenant will pay Operating Expenses, Taxes and Insurance Expenses pursuant to Article 7 below, provided that, for such purpose, the Base Year for Operating Expenses, Taxes and Insurance Expenses will be the calendar year 2003.  Landlord represents to Tenant that (i) the foregoing represents the economic terms upon which Clifford Chance is obligated to pay Landlord for the Premises under the Clifford Chance Lease (except that there is not a separate category for Insurance Expenses in the Clifford Chance Lease), and (ii) as of the Effective Date, the aggregate Base Rent and Additional Rent which would be payable by Tenant for the Premises pursuant to the terms described in the immediately preceding sentence is $44.84 per rentable square foot per annum.  Tenant may, from time to time, confirm the economic terms upon which Clifford Chance is obligated to pay Landlord for the Premises under the Clifford Chance Lease as follows:  no more than once per calendar quarter, a representative of Tenant may, upon reasonable prior notice to Landlord, meet with a representative of Landlord in the Building’s management office, to view (but not photocopy) a copy of the then-current rental invoice to Clifford Chance.
(d)    Tenant Improvements.  Landlord has agreed to provide an allowance to Tenant to be applied towards certain costs associated with the design and construction of improvements in the Premises (the “Tenant Improvements”, and said allowance being referred to as the “Allowance”).  Tenant may elect to perform the Tenant Improvements itself, in which event Work Agreement attached hereto as Exhibit B-1 shall apply.  Alternatively, Tenant may elect to have Landlord manage the construction of the Tenant Improvements, in which event, the Work Agreement attached hereto as Exhibit B-2 shall apply.  Tenant shall have the right to the Allowance, and to construct the Tenant Improvements, at any time following the Effective Date and during the 

- 9 -

term of the Sedgwick Sub-sublease, provided that, prior to any disbursement of the Allowance by Landlord, Tenant shall notify Landlord as to whether Tenant has elected to manage the construction of the Tenant Improvements or Tenant has elected to retain Landlord to manage the construction of the Tenant Improvements.  Following delivery of any such notice from Tenant, the applicable Work Agreement (i.e., either Exhibit B-1 or Exhibit B-2) will govern the design and construction of the Tenant Improvements and the disbursement of the Allowance.
(e)    Internal Stairwell.  The parties acknowledge that, as of the Effective Date, there is an internal stairwell connecting the fifth (5th) and sixth (6th) floors of the Steuart Tower.  Said stairwell was constructed by Sedgwick, and Sedgwick has the obligation, under the Sedgwick Sublease, to remove such stairwell on or before the expiration of the Sedgwick Sublease.  Neither Landlord nor Tenant have any obligation to perform any work associated with the removal of the internal stairwell, but Landlord will use reasonable efforts to enforce Sedgwick’s obligation to remove such stairwell on a timely basis.
2.    Term.  Tenant shall have and hold the Premises for the term (“Term”) identified in the Basic Lease Provisions, commencing on the Commencement Date specified in the Basic Lease Provisions (the “Commencement Date”).  This Lease shall terminate at midnight on the Expiration Date specified in the Basic Lease Provisions (the “Expiration Date”), unless sooner terminated or extended pursuant hereto.  
3.    [INTENTIONALLY OMITTED]
4.    Quiet Enjoyment.  Tenant, upon payment in full of the required Rent (as defined below) 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 without interference by Landlord.  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, unless such tenant or third party is claiming rights to the Premises under, by, or through Landlord.  This Section 4 is in lieu of any implied covenant of quiet enjoyment.
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.  Base Rent shall be payable in equal monthly installments, due on the first day of each calendar month during the Term, 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.  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 Section 7 below) shall be 

- 10 -

due and payable by Tenant on or before the date that is thirty (30) days after billing by Landlord.  Rent shall be made payable to the entity, and sent to the address, Landlord designates (initially set forth in Paragraph 6 of the Basic Lease Provisions) and shall be made by good and sufficient check or by other means acceptable to Landlord.
(b)    Abatement.  Notwithstanding Section 6(a) above to the contrary, so long as Tenant is not in Default, Tenant shall be entitled to an abatement of Base Rent for the calendar months of May, June, July, August, September and October, 2013 (the “Abatement Period”).  The total amount of Base Rent abated during the Abatement Period is referred to herein as the “Abated Rent”.  If Tenant is in Default at any time during the Term, (i) at Landlord’s option, all then-unamortized Abated Rent credited to Tenant prior to the occurrence of the Default (assuming amortization of Abated Rent on a straight-line basis over the Term) shall become due and payable to Landlord; and (ii) if the Default occurs prior to the expiration of the Abatement Period, there will be no further abatement of Base Rent pursuant to this Section 6(b).  No such recapture by Landlord of the Abated Rent pursuant to clause (i) above shall constitute a waiver of any Default of Tenant or any election of remedies by Landlord.  
7.    Operating Expenses, Taxes and Insurance Expenses. 
(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 Section 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, including, without limitation, the Building, parking areas and 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 

- 11 -

agreements on equipment, window cleaning, grounds maintenance, pest control, security, trash removal, any compost and/or recycle program, and other similar services or agreements; (3) management fees (or a reasonable 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 or Property 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 or Property as of the date of this Lease, or (B) any capital cost of acquisition and installation of any device or equipment designed or anticipated to improve the 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 made or acquired to improve the safety of the Building or Property or which represents the replacement of obsolete or worn-out equipment; (5) all services, supplies, repairs, replacements or other expenses directly and reasonably associated with servicing, maintaining, managing and operating the Building or Property, including, but not limited to the Building 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 General Manager or such other title representing the on-site management representative primarily responsible for management of the Building) to the extent engaged in the maintenance, operation, repair and services of the Building, including taxes, insurance and customary fringe benefits; (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/or Property; (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; and (10) costs or payments under any easement, license, operating agreement, declaration, restrictive covenant or other instrument pertaining to the sharing of costs by the Building or Property or related to the use or operation of the Building or Property.
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 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 incurred or services or work performed for the singular benefit of another tenant or occupant (other than with respect to 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, 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 (other than through the collection of Operating Expenses); (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 

- 12 -

installation, operation and maintenance of any observatory, broadcasting facilities, luncheon club, athletic or recreation club, cafeteria, dining facility; (xii) Taxes; (xiii) Insurance Expenses; and (xiv) rental under any ground or underlying lease 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 (inclusive of ten percent (10%) of the land under the adjoining Landmark Building), 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 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 assessments or the Property’s contribution towards a governmental cost-sharing agreement for the purpose of augmenting or improving the quality of services and amenities normally provided without charge 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, transfer, and inheritance or estate taxes.  Without limiting the generality of this Section 7(c), if at any time prior to or during 

- 13 -

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 shall have the right to 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 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, 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 other 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 actual amount of any increases in the Operating Expenses for such calendar year in excess of the Operating Expenses for the Operating Expense Base Year, (2) the actual amount of any increases in the Taxes for such calendar year in excess of the Taxes for the Tax Base Year and (3) the actual amount of any increases in the 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 

- 14 -

hereunder, the estimated monthly installments 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 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 Section 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 such obligations within a reasonable time before, or any time after, such expiration or termination.  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 one hundred percent (100%) occupied throughout any calendar year of the Term, inclusive of the Base Year, then those 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 excess 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 100% occupied throughout such calendar year.
(g)    Other Taxes Payable by Tenant.  In addition to payment of Tenant’s Share of excess Taxes, Tenant shall pay before delinquency any and all taxes levied or assessed and which become payable by Tenant (or directly or indirectly by Landlord) during the Term (excluding, however, state and federal personal or corporate income taxes measured by the net income of Landlord from all sources, capital stock taxes, and estate and inheritance taxes), whether or not now customary or within the contemplation of the parties hereto, which are based upon, measured by or otherwise calculated with respect to:  (i) the gross or net rental income of Landlord under this Lease, including, without limitation, any gross receipts tax levied by any taxing authority, or any other gross income tax or excise tax levied by any taxing authority with respect to the receipt of 

- 15 -

the rental payable hereunder, except to the extent Landlord elects to include any of the foregoing in Taxes; (ii) the value of Tenant’s equipment, furniture, fixtures or other personal property located in the Premises; (iii) the possession, lease, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion thereof; (iv) the value of any leasehold improvements, alterations or additions made in or to the Premises, regardless of whether title to such improvements, alterations or additions shall be in Tenant or Landlord; or (v) this transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Premises.
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 due date, 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 thirtieth (30th) 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 (provided, however, that Tenant shall be entitled to notice and a five (5) day grace period prior to the imposition of such late charge on the first (1st) occasion in any calendar year in which any installment of Rent is not paid when due); 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, 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.    Letter of Credit.  
(a)    Generally.  Concurrently with Tenant’s execution and delivery of  this Lease to Landlord, Tenant shall deliver to Landlord, as collateral for the full performance by Tenant of all of its obligations under this Lease and for all losses and damages Landlord may suffer as a result of Tenant’s failure to comply with one or more provisions of this Lease, including, but not limited to, any post lease termination damages under Section 1951.2 of the California Civil Code, a standby, unconditional, irrevocable, transferable (and Tenant will be responsible for the payment of any transfer fee or charge imposed by the Issuing Bank, as defined below) letter of credit (the “Letter of Credit”) in the form of Exhibit H attached hereto or such other form approved in writing in advance by Landlord and containing the terms required herein, in the face amount of $1,031,827.50 (the “Letter of Credit Amount”), naming Landlord as beneficiary, issued (or confirmed) by a financial institution acceptable to Landlord  (the “Issuing Bank”), permitting multiple and partial draws thereon from a location in San Francisco, California or Manhattan, New York (or, alternatively, permitting draws via overnight courier or facsimile), and otherwise in form acceptable to Landlord in its reasonable discretion.  Tenant shall cause the Letter of Credit to be continuously maintained 

- 16 -

in effect (whether through replacement, amendment, renewal or extension) in the Letter of Credit Amount through the date (the “Final LC Expiration Date”) that is the later to occur of (x) the date that is forty-five (45) days after the scheduled expiration of the Term or any renewal Term and (y) the date that is forty-five (45) days after Tenant vacates the Premises and completes any restoration or repair obligations.  If the Letter of Credit held by Landlord expires earlier than the Final LC Expiration Date (whether by reason of a stated expiration date or a notice of termination or non-renewal given by the Issuing Bank), Tenant shall deliver a new or amended Letter of Credit or certificate of renewal or extension to Landlord not later than thirty (30) days prior to the expiration or termination of the Letter of Credit then held by Landlord.  Any renewal, amended or replacement Letter of Credit shall comply with all of the provisions of this Section 10, shall be irrevocable and transferable and shall remain in effect (or be automatically renewable) through the Final LC Expiration Date upon the same terms as the expiring Letter of Credit or such other terms as may be acceptable to Landlord in its reasonable discretion.
(b)    Drawing under Letter of Credit.  Landlord, or its then managing agent, without prejudice to any other remedy provided in this Lease or by law, shall have the right to draw down an amount up to the face amount of the Letter of Credit if any of the following shall have occurred or be applicable:  (i) such amount is due to Landlord under the terms and conditions of this Lease as a result of a Default by Tenant, or (ii) Tenant has filed a voluntary petition under the U. S. Bankruptcy Code or any State bankruptcy code (collectively, "Bankruptcy Code"), or (iii) an involuntary petition has been filed against Tenant under the Bankruptcy Code, or (iv) Tenant executes an assignment for the benefit of creditors, or (v) Tenant is placed into receivership or conservatorship, or becomes subject to similar proceedings under Federal or State law, or (vi) the Issuing Bank has notified Landlord that the Letter of Credit will not be renewed or extended through the Final LC Expiration Date.  Upon any such draw, Landlord may use all or any part of the proceeds as set forth in this Section 10.  In addition, if Tenant fails to furnish a renewal or replacement Letter of Credit at least thirty (30) days prior to the stated expiration date or other termination of the Letter of Credit then held by Landlord, Landlord may draw upon such Letter of Credit and hold the proceeds thereof in accordance with the terms of this Section 10.
(c)    Use of Proceeds by Landlord.  The proceeds of the Letter of Credit shall constitute Landlord’s sole and separate property (and not Tenant’s property or the property of Tenant’s bankruptcy estate) and need not be segregated from any other funds of Landlord.  Landlord may immediately upon any draw permitted hereunder (and without notice to Tenant except as may be expressly provided in this Lease) apply or offset the proceeds of the Letter of Credit: (i) against any Rent payable by Tenant under this Lease that is not paid when due following any applicable notice and cure periods; (ii) against all losses and damages that Landlord has suffered or that Landlord reasonably estimates that it may suffer as a result of Tenant’s failure to comply with one or more provisions of this Lease, including any damages arising under Section 1951.2 of the California Civil Code following termination of this Lease; (iii) against any costs incurred by Landlord permitted to be reimbursed pursuant to this Lease (including reasonable attorneys’ fees); and (iv) against any other amount that Landlord may spend or become obligated to spend by reason of Tenant’s default for which Landlord shall be entitled to seek reimbursement in accordance with this Lease.  Provided Tenant has performed all of its obligations under this Lease, Landlord agrees to pay to Tenant by the Final LC Expiration Date the amount of any proceeds of the Letter of Credit received by Landlord 

- 17 -

and not applied as allowed above; provided, that if prior to the Final LC Expiration Date a voluntary petition is filed by Tenant, or an involuntary petition is filed against Tenant by any of Tenant’s creditors, under the Bankruptcy Code, then Landlord shall not be obligated to make such payment in the amount of the unused Letter of Credit proceeds until either all preference issues relating to payments under this Lease have been resolved in such bankruptcy or reorganization case or such bankruptcy or reorganization case has been dismissed, in each case pursuant to a final court order not subject to appeal or any stay pending appeal.
(d)    Additional Covenants of Tenant.
(i)    Replacement of Letter of Credit if Issuing Bank No Longer Satisfactory to Landlord.  If, at any time during the Term, Landlord determines that (A) the Issuing Bank is closed for any reason, whether by the Federal Deposit Insurance Corporation (“FDIC”), by any other governmental authority, or otherwise, or (B) the Issuing Bank fails to meet any of the following three ratings standards as to its unsecured and senior, long-term debt obligations (not supported by third party credit enhancement): (x) “A2” or better by Moody’s Investors Service, or its successor, (y) “A” or better by Standard & Poor’s Rating Service, or its successor; or (z) “A” or better by Fitch Ratings, or its successor, or (C) the Issuing Bank is no longer considered to be well capitalized under the “Prompt Corrective Action” rules of the FDIC (as disclosed by the Issuing Bank’s Report of Condition and Income (commonly known as the “Call Report”) or otherwise), or (D) the Issuing Bank has been placed into receivership by the FDIC, or has entered into any other form of regulatory or governmental receivership, conservatorship or other similar regulatory or governmental proceeding, or is otherwise declared insolvent or downgraded by the FDIC or other governmental authority, then, within ten (10) calendar days following Landlord’s notice to Tenant, Tenant shall deliver to Landlord a new Letter of Credit meeting the terms of this Section 10 issued by  an Issuing Bank meeting Landlord’s credit rating standards  and otherwise acceptable to Landlord, in which event, Landlord shall return to Tenant the previously held Letter of Credit.  If Tenant fails to timely deliver such replacement Letter of Credit to Landlord, such failure shall be deemed a Default by Tenant under this Lease, without the necessity of additional notice or the passage of additional grace periods.
(ii)    Replacement of Letter of Credit Upon Draw.  If, as result of any application or use by Landlord of all or any part of the Letter of Credit, the amount of the Letter of Credit plus any cash proceeds previously drawn by Landlord and not applied pursuant to Section 10(c) above shall be less than the Letter of Credit Amount, Tenant shall, within ten (10) days thereafter, provide Landlord with additional Letter(s) of Credit in an amount equal to the deficiency (or a replacement or amended Letter of Credit in the total Letter of Credit Amount), and any such additional (or replacement or amended) Letter of Credit shall comply with all of the provisions of this Section 10; notwithstanding anything to the contrary contained in this Lease, if Tenant fails to timely comply with the foregoing, the same shall constitute a Default by Tenant under this Lease, without the necessity of additional notice or the passage of additional grace periods.  Tenant further covenants and warrants that it will neither assign nor encumber the Letter of Credit or any part thereof and that neither Landlord nor its successors or assigns will be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance.

- 18 -

(e)    Nature of Letter of Credit.  Landlord and Tenant (1) acknowledge and agree that in no event or circumstance shall the Letter of Credit or any renewal thereof or substitute therefor or any proceeds thereof be deemed to be or treated as a “security deposit” under any law applicable to security deposits in the commercial context, including, but not limited to, Section 1950.7 of the California Civil Code, as such Section now exists or as it may be hereafter amended or succeeded (the “Security Deposit Laws”), (2) acknowledge and agree that the Letter of Credit (including any renewal thereof or substitute therefor or any proceeds thereof) is not intended to serve as a security deposit, and the Security Deposit Laws shall have no applicability or relevancy thereto, and (3) waive any and all rights, duties and obligations that any such party may now, or in the future will, have relating to or arising from the Security Deposit Laws.  Without limiting the generality of the foregoing, Tenant hereby agrees that Landlord may claim those sums specified in Section 10(c) above and/or those sums reasonably necessary to compensate Landlord for any loss or damage caused by the acts or omissions of Tenant or Tenant's breach of this Lease, including any damages Landlord suffers following termination of this Lease, and/or to compensate Landlord for any and all damages arising out of, or incurred in connection with, the termination of this Lease, including, without limitation, those specifically identified in Section 1951.2 of the California Civil Code.
(f)    Reduction in Letter of Credit Amount.  Provided that Tenant has not previously been in Default prior to the effective date of the applicable reduction request and further provided that Tenant is not in Default at the time of such request (the “Reduction Conditions”), upon written request by Tenant, the face amount of the Letter of Credit may be reduced as follows.  At any time, and from time to time, from and after May 1, 2015, Tenant may deliver a notice to Landlord, requesting a reduction in the Letter of Credit Amount, and including with such letter evidence, reasonably satisfactory to a landlord, that Tenant’s EBITDA (described below) for the immediately preceding fiscal year equals at least $78,000,000 (the “Reduction Threshold”).  If Landlord approves Tenant’s EBITDA calculations (such approval not to be unreasonably withheld) and provided the Reduction Conditions are met, then the Letter of Credit Amount may be reduced as follows:
	
		
	Tenant’s EBITDA
	Amount of Reduction  
From Original Letter 
of Credit Amount

	78,000,000-100,999,999
	$171,971.5

	101,000,000-131,999,999
	$343,942.5

	$132,000,000 or greater
	$515,913.75

As used herein, “EBITDA” shall mean the figure arrived at by adding to Tenant’s net income for the relevant period Tenant’s (1) interest expenses, (2) taxes, (3) depreciation and amortization expenses, (4) acquisition related charges, (5) stock compensation, (6) equity method investment income, (7) foreign exchange gains and losses, and (8) other non-recurring expenses.  Any request made by Tenant for a reduction in the Letter of Credit Amount must be accompanied, without 

- 19 -

limitation, by Tenant’s (x) audited income statement and (y) audited cash flow statement for the relevant period, prepared in accordance with generally accepted accounting principles and certified as true and correct by an officer of Tenant.  If Landlord is satisfied that Tenant’s EBITDA exceeds the reduction Threshold, the Letter of Credit amount may be reduced (either through delivery of a new Letter of Credit in a face amount equal to the reduced Letter of Credit Amount, or through an amendment of the then-existing Letter of Credit).  Tenant may request more than one reduction in the Letter of Credit Amount (for example, but not by way of limitation, if Tenant initially requests a reduction in the Letter of Credit Amount of $171,971.50, based upon Tenant having EBITDA in excess of the Reduction Threshold, but below $101,000,000.00, and the Letter of Credit Amount is reduced by $171,971.50, but Tenant subsequently establishes, in a future earnings period, that Tenant’s EBITDA has exceeded $101,000,000.00, but not exceeded $131,999,999.00, Tenant may request a further reduction in the Letter of Credit Amount such that the initial Letter of Credit Amount will have been reduced by an aggregate of $343,942.50).  Notwithstanding of the foregoing provisions of this Section 10(f) to the contrary, in no event will the Letter of Credit Amount be reduced below $515,913.75.
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, including employee training, 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 rodenticides (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, 

- 20 -

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, except to the extent such claims, damages, liabilities, losses, costs and expenses arise out of or are caused by the act, 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 act, 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. 
(a)    By Tenant.  Tenant, at its sole cost and expense, shall promptly comply with all laws, 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, but only to the extent such obligations are triggered by Tenant’s particular use of the Premises (as opposed to office use in general) or by work performed by or on behalf of Tenant in 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.  Notwithstanding the foregoing, Tenant, at Tenant's expense, may contest by appropriate proceedings in good faith the legality or applicability of any Law affecting the Premises, provided that (i) the Property or any part thereof (including the Premises) shall not be subject to being condemned or vacated by reason 

- 21 -

of non-compliance or otherwise by reason of such contest, (ii) no unsafe or hazardous condition remains unremedied as a result of such contest, (iii) such non-compliance or contest is not prohibited under any Security Documents (defined in Section 38) and Tenant posts any security required under such Security Documents in connection with such contest (or the non-compliance that is the subject thereof), (iv) such non‐compliance or contest shall not prevent Landlord from obtaining any and all permits and licenses then required by applicable Laws in connection with the operation of the Building, and (v) the Certificate of Occupancy for the Building (or any portion) is neither subject to being suspended by reason such of non-compliance or contest (any such proceedings instituted by Tenant being referred to herein as a “Compliance Challenge”).  If Landlord may be subject to any civil fines or penalties or other criminal penalties or may be liable to any third party by reason of the Compliance Challenge, then Tenant shall furnish to Landlord, at Tenant's option, either (x) a bond of a surety company that is issued by, and in form and substance, reasonably satisfactory to Landlord, or (y) such other security that is reasonably satisfactory to Landlord, and, in either case, in an amount equal to one hundred twenty percent (120%) of the sum of (A) the cost of such compliance, (B) any criminal or civil penalties or fines that may accrue by reason of such non-compliance (as reasonably estimated by Landlord), and (C) the amount of such liability to third parties (as reasonably estimated by Landlord).  If Tenant initiates any Compliance Challenge, then Tenant shall keep Landlord advised regularly as to the status of such proceedings.  Landlord shall have the right to use the aforesaid bond or other security to satisfy any such fines or penalties that are levied or assessed against Landlord as a result of the Compliance Challenge; Landlord’s obligation to so return such bond or other security shall survive the expiration or sooner termination of this Lease.  Landlord shall return to Tenant the aforesaid bond or other security (or the unapplied portion thereof, as the case may be), promptly after Tenant completes the Compliance Challenge.  If Tenant institutes a Compliance Challenge which concludes on or after the date of expiration or termination of this Lease, Tenant’s obligations hereunder with respect to the compliance in question will survive the expiration or sooner termination of this Lease to the extent that the result of any Compliance Challenge is that Tenant is required to perform any compliance work.
(b)    By Landlord.  Landlord shall comply with all Laws relating to the Base Building (exclusive of any Base Building systems that were constructed by or for the benefit of Tenant) and the Common Areas, provided that such compliance with Laws is not the responsibility of Tenant under this Lease, and provided further that Landlord’s failure to comply therewith would prohibit Tenant from obtaining or maintaining a temporary certificate of occupancy or its equivalent for the Premises, or would unreasonably and materially affect the safety of Tenant’s employees or create a significant health hazard for Tenant’s employees, or would otherwise materially, adversely affect Tenant’s use of the Premises.  Notwithstanding the foregoing, Landlord shall have the right to contest in good faith any alleged violation of Law, including, without limitation, the right to apply for and obtain a waiver or deferment of compliance, the right to assert any and all defenses allowed by Law and the right to appeal any decisions, judgments or rulings to the fullest extent permitted by Law.  Landlord shall be permitted to include in Operating Expenses any costs or expenses incurred by Landlord under this Section 12(b) to the extent consistent with the terms of Section 7(b) above.
13.    Waste Disposal.  All normal trash and waste (i.e., waste that does not require special handling pursuant to the second sentence of this Section 13) shall be disposed of through the Building’s janitorial service.  Tenant shall be responsible for the removal and disposal of any waste 

- 22 -

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 Laws. Tenant agrees to separate and mark appropriately all waste to be removed and disposed of through the Building’s janitorial service and hazardous, infectious or special waste to be removed and disposed of by Tenant pursuant to the immediately preceding sentence.
14.    Rules and Regulations.  The current rules and regulations of the Building, 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 (collectively, the “Rules and Regulations”) 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 7:00 A. M. to 6:00 P.M. on Monday through Friday, exclusive of Building holidays as designated by Landlord in Landlord’s sole discretion (“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;
(ii)    Heating, ventilation and air conditioning (“HVAC”) reasonably adequate to allow for the comfortable occupancy of the Premises, subject to governmental regulations and provided that the occupancy level of the Premises and the heat generated by electrical lighting and fixtures do not exceed the following thresholds:
		
	(A)
	Occupant Load:  One (1) person per 200 rentable square feet; and

		
	(B)
	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)(B) above at 100% connected load during Building Service Hours (the “Standard Electricity Allocation”) (Tenant shall pay for any electrical service in excess of the Standard Electricity Allocation); and

- 23 -

(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.  The charge for after hours HVAC service as of the Effective Date is $260 per hour per floor, and $65 per hour per zone.  The charge for fans only as of the Effective Date is $80 per hour per floor, and $20 per hour per zone.  All of the foregoing charges are subject to change by Landlord during the Term;
(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 the Standard Electricity Allocation, 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 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 of an invoice from Landlord; and
(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 services, 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 

- 24 -

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.  Tenant hereby waives the provisions of California Civil Code Section 1932(1) and any other applicable existing or future Law permitting the termination of this Lease due to an interruption, failure or inability to provide any services.  Notwithstanding the foregoing, in the event that any interruption or discontinuance of services provided by Landlord pursuant to Section 15(a) above (i) 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, agents, 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 or such portion thereof, 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 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, agent, invitee or contractor 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 separately 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, except to the extent caused by the gross negligence or willful misconduct of Landlord, its agents, or employees.  All electronic, fiber, 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. 

- 25 -

(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, the 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 seventh (7th) floor of the Steuart Tower and at the entrance to Suite 700A.  Any subsequent changes to, or revisions or replacements of such signage, shall be at Tenant’s sole cost and expense. 
(c)    Custom Signage.  Tenant will be entitled to install custom signage identifying Tenant in the elevator lobby on the sixth (6th) floor of the Steuart Tower, provided that Landlord’s prior written consent (not to be unreasonably withheld or delayed) is produced for the materials and method of installation of such signage.  Any such signage will be automatically deemed a Specialty Alteration for the purposes of Section 22 below. 
18.    Parking.  Tenant will have the license to park in the number of Spaces described in the Basic Lease Provisions pursuant to the terms of Exhibit E attached hereto.
19.    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.
20.    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 or any Taking (which shall be governed by Sections 23 and 24 below), and subject to normal wear and tear, Landlord shall maintain in good repair (i) the structural elements of the Building, including the exterior walls and foundation, (ii) the Common Areas, and (iii) the mechanical, electrical, plumbing and HVAC systems which serve the Building in general, provided such repairs are not occasioned by Tenant or any employee, agent, invitee or contractor 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, and any similar or successor Laws now or hereafter in effect.
21.    Repairs By Tenant.  Except as described in Section 20 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 

- 26 -

obligations include, without limitation, repairs to: (a) floor coverings; (b) interior partitions; (c) doors; (d) the interior side of demising walls; (e) Alterations (as defined in Section 22); (f) supplemental air conditioning units, kitchens (including hot water heaters), plumbing, and similar facilities exclusively serving Tenant, whether such items are installed by or on behalf of Tenant or are currently existing in the Premises (except to the extent such facilities are part of the Building systems, which shall be governed by Section 20 above) 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 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 any repairs or replacements required pursuant to this Section 21 within fifteen (15) days after notice from Landlord (or within such shorter period as Landlord may specify in the event of an emergency), Landlord may, at its option, upon prior reasonable notice to Tenant (except in an emergency) make the required repairs or replacements and the costs of such repairs or replacements (including Landlord’s administrative charge) shall be charged to Tenant as additional Rent and shall be due and payable within thirty (30) days following written demand.
22.    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 $25,000.00 per calendar quarter, 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, 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 the 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 contractors’ and subcontractors’ insurance in amounts reasonably required by Landlord and naming Landlord, any successor to Landlord, Landlord’s property manager, and their respective members, beneficiaries, partners, officers, directors, employees and agents and such other persons or entities as Landlord may reasonably request as additional insureds (any contract between Tenant and Tenant’s contractors must expressly require that Landlord and such other parties be so designated as additional insureds and Landlord must be provided with a copy of the relevant endorsement); 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 

- 27 -

Landlord’s oversight and coordination of any Alteration equal to five percent (5%) of the total cost of the Alteration, to the extent the cost of the Alteration is equal to or less than $500,000.00; plus four percent (4%) of the cost of the Alteration to the extent that the cost of the Alteration is in excess of $500,000.00, but not more than $1,000,000.00; plus three percent (3%) of any portion of the cost of the Alteration in excess of $1,000,000.00.  Upon completion, Tenant shall furnish Landlord with at least three (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.  Any Alterations shall at once become the property of Landlord; provided, however, that Landlord, at its option, concurrently with Landlord’s approval of any Specialty Alterations (defined below) may require Tenant to remove any Alterations prior to the expiration or sooner termination of this Lease.  All costs of any Alterations (including, without limitation, the removal of any Specialty Alterations) shall be borne by Tenant.  If Tenant fails to promptly complete the removal of any Specialty 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.  As used herein, “Specialty Alterations” shall mean Alterations that (i) perforate, penetrate or require reinforcement of a floor slab (including, without limitation, interior stairwells or high-density filing or racking systems), (ii) consist of the installation of a raised flooring system, (iii) consist of the installation of a vault or other similar device or system intended to secure the Premises or a portion thereof in a manner that exceeds the level of security necessary for ordinary office space, (iv) involve material plumbing connections (such as, for example but not by way of limitation, kitchens, saunas, showers, and executive bathrooms outside of the Building core and/or special fire safety systems), (v) consist of the dedication of any material portion of the Premises to non-office usage (such as classrooms), or (vi) consist of non-Building standard improvements, fixtures or finishes.
(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 in the Premises 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, 

- 28 -

within twenty (20) 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.
23.    Destruction or Damage. 
(a)    Completion Estimate.  If, as a result of fire or other casualty (each, a “Casualty”), all or any portion of the Premises becomes untenantable or inaccessible, 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 ten (210) days from the date the repair is started (when such repair is made without the payment of overtime or other premiums), then either Landlord or Tenant shall have the right to terminate this Lease upon written notice delivered to the other 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 the Building or Property shall be damaged by Casualty, whether or not the Premises are affected, and one or more of the following conditions is present: (i) in Landlord’s reasonable judgment, repairs cannot reasonably be completed within two hundred seventy (270) days from the date the repairs are started (when such repairs are made without the payment of overtime or other premiums); (ii) any Holder (defined below) requires that the insurance proceeds or any portion thereof be applied to the payment of the mortgage debt; (iii) the damage is not fully covered by Landlord’s insurance policies plus the amount of any deductible included in Insurance Expenses; (iv) Landlord decides to rebuild the Building or Common Areas so that they will be substantially different structurally or architecturally; or (v) the damage occurs during the last twenty-four (24) months of the Term.
(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 Alterations; provided if the estimated cost to repair such Alterations 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 under Landlord’s insurance 

- 29 -

or insurance proceeds or other amounts received 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 Section 23, 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.
24.    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, and any similar or successor Laws.
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 

- 30 -

liability coverage insuring Tenant’s indemnification obligations under this Lease, to be in combined single limits of not less than $1,000,000 each occurrence for bodily injury, death and property damage, $1,000,000 for products/completed operations aggregate, $1,000,000 for personal injury, and to have general aggregate limits of not less than $1,000,000 (per location) and Umbrella Liability Insurance in an amount not less than $6,000,000 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 the heating, ventilating and air conditioning equipment maintained by Tenant, Tenant’s 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. 
(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, which insurance shall be issued on an “all risk” basis (or its equivalent).
(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 authorized to do business in the state in which the Building is located. Each and every such policy:
(i)    shall designate Landlord, any successor to Landlord, Landlord’s property manager, and their respective members, beneficiaries, partners, officers, directors, employees and agents, and any other party reasonably designated by Landlord, as additional insureds with respect to the insurance described in Section 25(a)(i) 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;

- 31 -

(iii)    shall contain a provision that the insurer will endeavor to give Landlord at least thirty (30) days notice in writing (ten (10) days in the case of non-payment of premiums) in advance of any cancellation of coverage; 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 with respect to the insurance described in Section 25(a)(i) above.
(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 Section 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 the Tenant Improvements or any Alterations or any of Tenant’s personal property), and (ii) a policy or policies of commercial general 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 in this Lease, 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)(i) 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 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)(i). 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.  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, except to the extent caused by the negligence or willful misconduct of Landlord, its agents, or employees, or (ii) due to any occurrence in the Premises (or 

- 32 -

arising out of actions taking place in the Premises), except to the extent 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.  
(b)    Landlord’s Indemnity.  Landlord will indemnify, defend, protect and hold Tenant harmless from and against any loss of or damage to any property and any injury to or death of any person arising from any occurrence in the Common Areas, to the extent caused by the negligence or willful misconduct of Landlord, its agents or employees.  
(c)    General Provisions.  The indemnities set forth hereinabove shall include the obligation to pay reasonable expenses incurred by the indemnified party, including, without limitation, reasonable, actually incurred attorneys’ fees, and shall survive the expiration or earlier termination of this Lease.  The indemnities contained herein do not override the waivers contained in Section 25(e) above.
27.    Tenant’s Waiver.  Tenant hereby waives all claims against and releases Landlord and its trustees, members, principals, beneficiaries, partners, officers, directors, employees, Holders 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) any Force Majeure Event, (b) acts of third parties, (c) the bursting or leaking of any tank, water closet, drain or other pipe, and (d) the inadequacy or failure of any security or protective services, personnel or equipment; provided, however, that the foregoing shall not (x) apply to claims for injury to or death of persons arising out of the negligence of willful misconduct of Landlord, its agents or employees, or (y) 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) business 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 Section 28 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 within three (3) business days following delivery of a second (2nd) notice to Tenant requesting such certificate (which second (2nd) notice must specify that failure to respond may constitute a Default), 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 by Tenant under this Lease, without the necessity of additional notice or the passage of additional grace periods.
29.    Notices.  All notices, demands or requests required or permitted to be given by either party under this Lease (referred to in this Section 29 as a “notice”) shall be in writing and must be 

- 33 -

given only by certified mail, postage prepaid and return receipt requested, by personal 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 date (“Notice Delivery Date”) that is the earliest of:  (i) two (2) business days after the date sent in accordance with one of the permitted methods described above and (ii) the date of actual receipt or refusal thereof unless receipt or refusal 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 Notice Delivery Date.  Either party may change its notice address by giving not less than ten (10) business days’ prior notice thereof to the other party in accordance with the terms of this Section 29, provided that such new address shall be in the United States of America and, with respect to Tenant, shall not be a post office box.  If the Basic Lease Provisions include (or Tenant otherwise designates in writing in accordance with this Section 29) more than one person or address to receive notices on Tenant's behalf hereunder, Landlord shall use commercially reasonable efforts to send any notice to all requested persons or addresses; however, it shall not be a condition to the effectiveness of any notice given by Landlord to Tenant that more than one person or address receive such notice.  Similarly, if the Basic Lease Provisions include (or Landlord otherwise designates in writing in accordance with this Section 29) more than one person or address to receive notices on Landlord's behalf hereunder, Tenant shall use commercially reasonable efforts to send any notice to all requested persons or addresses; however, it shall not be a condition to the effectiveness of any notice given by Tenant  to Landlord that more than one person or address receive such notice.
30.    Default.  The occurrence of any of the following events shall constitute a default on the part of Tenant (“Default”) without notice from Landlord unless otherwise provided:
(a)    Vacation or Abandonment.  Vacation or abandonment of the Premises beyond the time period specified in Section 1951.3 of the California Civil Code;
(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 five (5) business 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 or successor statute);
(c)    Performance.  Except as set forth in Section 30(b) above and Section 30(d) below, Tenant’s failure to perform any of Tenant’s covenants, agreements or obligations hereunder, where such failure continues for twenty (20) 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 or successor statute); provided, however, that if the nature of Tenant’s failure is such that more than twenty (20) 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 twenty (20) day period and thereafter continuously and diligently prosecute such cure to completion;
(d)    Estoppel Certificate; Subordination Agreement.  Tenant’s failure to timely 

- 34 -

deliver a duly executed estoppel certificate, subordination agreement or any other document or statement within the time periods specified in Section 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, 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 Section 30 or this Section 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 Rental loss that Tenant proves could have been reasonably avoided;
(iii)    The worth at the time of award of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the amount of such Rental loss that Tenant proves could be reasonably avoided;

- 35 -

(iv)    Any other amount necessary to compensate Landlord for all the detriment 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 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 any Default, at any time thereafter as Landlord may elect in writing, Landlord may 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 CALIFORNIA CIVIL CODE AND BY SECTIONS 1174(c) AND 1179 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE 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 respect to the prejudgment remedy of attachment, any action, proceeding or counterclaim brought by either party hereto against the 

- 36 -

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 related 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) (collectively, 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 Section 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 (i) discovery be conducted for a period no longer than six (6) months from the date the referee is appointed, excluding motions regarding discovery, and (ii) 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 

- 37 -

manner that such decision, judgment, or order would be appealable if rendered by a judge of the superior court in 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 California 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 California Code of Civil Procedure and/or applicable court rules.
(f)    Remedies Cumulative.  No right or remedy herein conferred upon or reserved to either party 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, each party 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 at law or in equity.  Forbearance by either party to enforce one or more of the remedies herein provided upon a Default shall not be deemed or construed to constitute a waiver of such Default.
(g)    Landlord’s Right to Perform.  If Tenant is in breach 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 Section 31 shall be enforceable to the maximum extent such enforcement is not prohibited by applicable Law, and the unenforceability of any portion of this Section 31 shall not thereby render unenforceable any other portion.
(i)    Service of Notice.  Except as otherwise provided by applicable Law, Tenant hereby appoints as its agent to receive the service of all dispossessory or distraint proceedings and notices thereunder, the person in charge of or occupying the Premises at the time of such proceeding or notice.
32.    Default by Landlord.  Landlord shall not be considered to be in default in the performance of any obligation to be performed by Landlord under this Lease unless (a) Landlord fails to perform any of its obligations hereunder and said failure continues for a period of thirty (30) days after the date of delivery of written notice of such failure by Tenant to Landlord; provided, however, that if such failure cannot reasonably be cured within said thirty (30) day period (other than Landlord’s payment of any monetary obligation to Tenant), Landlord shall not be in default hereunder unless Landlord fails to commence the cure of said failure as soon as reasonably practicable under the circumstances, or fails diligently to pursue the same to completion; and (b) each Holder of whose identity Tenant has been notified in writing shall have failed to cure such default within thirty (30) days (or such longer period of time as may be specified in any written agreement between Tenant and such Holder regarding such matter) after receipt of written notice from Tenant of Landlord’s failure to cure within the time periods provided above (a “Landlord 

- 38 -

Default”).  In the event of a Landlord Default, Tenant shall use reasonable efforts to mitigate its damages and losses arising from any such Landlord Default and Tenant may pursue any and all remedies available to it at law or in equity; provided, however, in no event shall Tenant claim a constructive or actual eviction or that the Premises have become unsuitable or untenantable prior to a Landlord Default and failure to cure by Landlord and its Holder under this Lease and, further, in no event shall Tenant be entitled to receive more than its actual direct damages arising from any Landlord Default, it being agreed that for all purposes under this Lease, Tenant waives any claim it otherwise may have for special or consequential damages or any damages attributable to lost profits or revenue or loss of or interruption to Tenant’s business operations.
33.    [INTENTIONALLY OMITTED]
34.    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 in accordance with Section 22 above, remove any Alterations and restore the Premises to its original condition prior to the construction of such Alterations.  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 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 this Lease.  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.  Tenant shall, prior to the expiration or any earlier termination of this Lease, or any extension of the Term hereof, remove any and all personal property, fixtures and equipment which Tenant has placed in the Premises which can be removed without significant damage to the Premises, and Tenant shall promptly repair all damage to the Premises, Building or Property caused by such removal.
36.    Holding Over.  In the event Tenant remains in possession of the Premises after the expiration or any earlier termination of the Term, such tenancy shall be from month-to-month only, and shall not constitute a renewal hereof or an extension for any further term, and in such case (in addition to Tenant’s other monetary obligations under this Lease) Tenant shall be obligated to pay Base Rent for such period that Tenant holds over at the higher of 150% of the monthly Base Rent payable hereunder upon such expiration of the Term, or 150% 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 payable hereunder upon such expiration of the Term (or the then current fair market rental value of the Premises, as determined by Landlord in good faith, as the case may be) if such holding over continues more than sixty (60) days.  Tenant shall also be liable for any and all other damages Landlord suffers as a result of such holding over including, without limitation, any loss of a prospective tenant for such space. There shall be no 

- 39 -

renewal of this Lease by operation of law or otherwise.  Nothing in this Section 36 shall be construed as a consent by Landlord to any holding over by Tenant after the expiration or any earlier termination 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 either party shall, without fault on its part, be made a party to any litigation commenced by or against the other party, such other party shall pay all costs, expenses and reasonable attorneys’ fees incurred or paid by the first party in connection with such litigation.  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 all or any portion of 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 all or any portion 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 owner of all or any portion 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 all or any portion of the Property which now exists or which any owner of all or any portion of the Property 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.  If Tenant fails to execute any such requested documents within ten (10) business days after an initial request therefor, and three (3) business days following a subsequent request therefor (which second (2nd) notice must specify that failure to respond may constitute a Default), 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 under this Lease without the necessity of additional notice or the passage of additional grace periods.

- 40 -

(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, Holder or Purchaser, 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 breach or 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 this Lease made without its consent.
(d)    Notwithstanding anything to the contrary set forth in this Section 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.
(e)    Notwithstanding anything to the contrary set forth in this Section 38, Landlord will use reasonable efforts to obtain a subordination, non-disturbance and attornment agreement (“SNDA”) from the current Holder on the form attached hereto as Exhibit C and from any future Holder on such Holder’s then current standard form of agreement.  “Reasonable efforts” of Landlord shall not require Landlord to incur any cost, expense or liability to obtain such SNDA, and Tenant shall be responsible for any fees or review costs charged by the Holder.  Upon Landlord’s request, Tenant shall execute the Holder’s form of SNDA and return the same to Landlord for execution by the Holder.  Landlord’s failure to obtain a SNDA for Tenant shall have no effect on the rights, obligations and liabilities of Landlord or Tenant hereunder, nor be considered a default by Landlord hereunder.
39.    Entering Premises.  Landlord may enter the Premises at reasonable hours provided that Landlord will use reasonable efforts not to unreasonably interrupt Tenant’s business operations and that prior notice (which notice may be telephonic) is given when reasonably possible (provided 

- 41 -

that if in the opinion of Landlord any emergency exists, entry by Landlord may occur 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, alterations and/or additions, without in any way 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, improvements, alterations and/or additions are being made, and Tenant shall not be entitled to any set-off against Rent or to any claim 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, improvements, alterations and/or additions shall be performed during ordinary business hours.  If any such work is, at the request of Tenant, performed during other than ordinary business hours, Tenant shall pay all overtime and other extra costs arising as a result thereof.
40.    Relocation. [INTENTIONALLY OMITTED]
41.    Assignment and Subletting. 
(a)    Generally.  Tenant shall not, by operation of law or otherwise, mortgage, pledge, hypothecate, encumber or permit any lien to attach to this Lease, any interest hereunder or all or any portion of the Premises.  Further, 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. The foregoing shall not apply so long as Tenant is an entity whose outstanding stock is listed on a recognized security exchange, or if at least 80% of its voting stock is owned by another entity, the voting stock of which is so listed.  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 breach or Default by Tenant, Landlord may, at its option, but without any obligation to do so, elect to treat any sublease as a direct lease with Landlord and collect rent directly from the subtenant.

- 42 -

(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 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 defined in Section 41(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 Section 41 shall, at Landlord’s option, be null, void and of no effect.
(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, whether Landlord consents to the requested Transfer; if Landlord does not elect to exercise its recapture right, Landlord’s consent to a Transfer will not be unreasonably withheld.  If Landlord gives notice of its exercise of the recapture right, Tenant may, no more than once per calendar year, elect to rescind its Transfer Notice, by notice to Landlord within ten (10) business days after Tenant’s receipt of the Landlord’s notice of the election to recapture, in which event the Lease will continue in full force and effect without modification.  If Landlord does elect to exercise its recapture right, and Tenant does not elect to rescind its Transfer Notice, such recapture will be effective ninety (90) days following Landlord’s notice of same.  Without limiting the grounds upon which Landlord may reasonably withhold its consent, 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 

- 43 -

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 relief 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;
(viii)    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;
(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; or
(x)    The Transferee fails to execute Landlord’s standard form of consent to assignment or subleasing.
(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 the requested Transfer, regardless of whether consent is granted, and thereafter, Tenant shall be obligated to pay all reasonable costs incurred by Landlord in connection with any requested Transfer, including but not limited to Landlord’s attorneys’ fees.  If Landlord consents to any Transfer pursuant to the terms of this Section 41, Tenant may within six (6) months after Landlord’s consent, but not later than 

- 44 -

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, however, that if there are any changes in the terms and conditions from those specified in the Transfer Notice, or if there are any changes in any of the documentation delivered in connection therewith, (i) such that Landlord would initially have been entitled to refuse its consent to such Transfer under this Section 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, then Tenant shall again submit the Transfer to Landlord for its approval or other action under this Section 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.  Any 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 Release.  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.
(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 all 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 

- 45 -

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.
(h)    Affiliates.  Notwithstanding anything to the contrary contained in this Section 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 full, the obligations of Tenant under this Lease (or if a sublease, the sublessee of all or any portion of the Premises, for all or any portion of the remaining Term assumes, in full, the obligations of Tenant with respect thereto); (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, and 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 applicable Law, on behalf of the proposed Transferee.
(j)    Prohibited Transaction.  Notwithstanding anything to the contrary contained in this Section 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, or as a grant of the right to Use, 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.

- 46 -

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, any partner or member 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.  Notwithstanding any other provision of this Lease to the contrary, in no event 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 default or breach by Landlord under this Lease or otherwise.
44.    Broker Disclosure.  The Landlord’s Broker identified in the Basic Lease Provisions has acted as agent for Landlord in this transaction and is to be paid a commission by Landlord pursuant to a separate agreement.  The Tenant’s Broker identified in the Basic Lease Provisions has acted as agent for Tenant in this transaction and is to be paid its commission out of Landlord’s Broker’s commission pursuant to a separate agreement with Landlord’s Broker.  Landlord represents that Landlord has dealt with no other broker other than the broker(s) identified herein. Landlord agrees that, if any other broker makes a claim for a commission based upon the actions of Landlord, Landlord shall indemnify, defend, protect and hold Tenant harmless from any such claim.  Tenant represents that Tenant has dealt with no broker other than the broker(s) identified herein.  Tenant agrees that, if any other broker makes a claim for a commission based upon the alleged actions of Tenant, Tenant shall indemnify, defend, protect and hold Landlord harmless from any such claim.  The indemnity obligations set forth herein shall survive the expiration or any earlier termination of this Lease.
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 Section 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.    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 respective paragraphs 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 

- 47 -

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.
48.    Cumulative Rights.  All rights, powers and privileges conferred hereunder upon Landlord shall be cumulative with those available under applicable Law.
49.    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.
50.    Submission of Agreement.  Submission of this Lease to Tenant for signature does not constitute an offer, a reservation of space or an option to lease or to acquire a right of entry.  This Lease is not binding or effective until execution by and delivery to both Landlord and Tenant.
51.    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 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.
52.    Options.
(a)    Right of First Offer.  
(i)    Generally.  Subject to the rights of Building tenants existing as of the Effective Date (“Superior Rights”), Tenant shall have a one-time right of first offer with respect to any space which becomes Available for Lease (described below) on the fifth (5th)  floor of the Steuart Tower (the “Offering Space”).  Offering Space shall be deemed to be “Available for Lease” as follows: (i) with respect to any Offering Space that is under lease from time to time to third parties, such Offering Space shall be deemed to be Available for Lease when Landlord has determined that such third party will not extend or renew the term of its lease for the Offering Space and no occupant has a Superior Right which is subject to exercise, or (ii) with respect to any Offering Space that is not under lease, such Offering Space shall be deemed to be Available for lease when Landlord has determined to market such space for lease and no occupant has a Superior Right which is subject to exercise.  After Landlord has determined that any portion of Offering Space is Available for Lease, Landlord shall advise Tenant (the “Advice”) of the terms under which Landlord is prepared 

- 48 -

to lease such portion of the Offering Space to Tenant for a term which is the greater of (x) the remainder of the  Term and (y) three (3) years. Except in the case of unexpected availability due to the default by an existing occupant of any Offering Space under their lease for such space, Landlord shall not deliver an Advice to Tenant regarding any portion of the Offering Space less than three (3) months prior to the anticipated date of availability of the applicable Offering Space.  If Landlord delivers an Advice to Tenant,  Tenant may lease the Offering Space described in such Advice in its entirety only, under such terms, by delivering written notice of exercise to Landlord (“Notice of Exercise”) within ten (10) business days after the date of delivery of the Advice, except that Tenant shall have no such Right of First Offer and Landlord need not provide Tenant with an Advice, if:
(A)    Tenant is in Default at the time Landlord would otherwise deliver the Advice; or
(B)    the Premises, or any portion thereof, is sublet (other than pursuant to a transaction meeting the requirements of Section 41(h) of the Lease) at the time Landlord would otherwise deliver the Advice; or
(C)    the Lease has been assigned (other than pursuant to a transaction meeting the requirements of Section 41(h) of the Lease) prior to the date Landlord would otherwise deliver the Advice; or
(D)    Tenant is not occupying all of the Premises on the date Landlord would otherwise deliver the Advice.
(ii)    Terms.  The term for the Offering Space shall commence upon the commencement date stated in the Advice and thereupon such Offering Space shall be considered a part of the Premises, provided that all of the terms stated in the Advice shall govern Tenant’s leasing of the Offering Space and only to the extent that they do not conflict with the Advice, the terms and conditions of the Lease shall apply to the Offering Space.  
(iii)    Limitation on Right of First Offer. The rights of Tenant hereunder with respect to any portion of the Offering Space shall terminate on the earlier to occur of: (i) with respect to any portion of the Offering Space that is the subject of an Advice, Tenant’s failure to exercise its Right of First Offer within the ten (10) business day period described above, and (ii) with respect to any portion of the Offering Space which would otherwise have been the subject of an Advice, the date Landlord would have provided Tenant an Advice if Tenant had not been in violation of one or more of the conditions set forth in clauses (A) through (D) of Section 5.2(a)(i) above.
(iv)    Offering Amendment.  If Tenant exercises its Right of First Offer, Landlord shall prepare an amendment (the “Offering Amendment”) adding the Offering Space to the Premises on the terms set forth in the Advice and reflecting the changes in the Base Rent, Rentable Square Footage of the Premises, Tenant’s Share and other appropriate terms.  A copy of the Offering Amendment shall be (i) sent to Tenant within a reasonable time after receipt of the 

- 49 -

Notice of Exercise executed by Tenant, and (ii) executed by Tenant and returned to Landlord within fifteen (15) Business Days thereafter, but an otherwise valid exercise of the Right of First Offer shall be fully effective whether or not the Offering Amendment is signed.
(b)    Renewal Option.
(i)    Grant of Option; Conditions.  Tenant shall have the right to extend the Term of the Lease (the “Renewal Option”) for one (1) additional period of five (5) years, commencing on November 1, 2018 and ending on October 31, 2023 (the “Renewal Term”), if:
(A)    Landlord receives irrevocable notice of exercise (“Initial Renewal Notice”) no earlier than September 30, 2017 and no later than April 30, 2018; and
(B)    Tenant is not in Default both at the time that Tenant delivers its Initial Renewal Notice and as of the Expiration Date; and
(C)    Tenant, without reference to any subtenants (other than pursuant to a transaction meeting the requirements of Section 41(h)), occupies at least seventy five percent (75%) of the rentable area of the Premises both at the time that Tenant delivers its Initial Renewal Notice and as of the Expiration Date; and
(D)    Tenant’s interest in the Lease has not been assigned (other than pursuant to a transaction meeting the requirements of Section 41(h)) prior to the date that Tenant delivers its Initial Renewal Notice and as of the Expiration Date.
(ii)    Terms Applicable to Premises During Renewal Term.  The initial Base Rent rate per rentable square foot of the Premises during the Renewal Term shall equal the Prevailing Market (hereinafter defined) rate per rentable square foot for the Premises as of the date that is one (1) year prior to the Expiration Date.  Base Rent during the Renewal Term shall increase by $1.00 per rentable square foot per annum during the Renewal Term.  Tenant shall pay Expenses, Taxes and Insurance Expenses for the Premises during the Renewal Term in accordance with the terms of the Lease, with a Base Year of 2018.
(iii)    Initial Procedure for Determining Prevailing Market.  Within thirty (30) days after receipt of Tenant’s Initial Renewal Notice, Landlord shall advise Tenant of the applicable Base Rent rate for the Premises for the Renewal Term.  Within thirty (30) days after the date on which Landlord advises Tenant of the applicable Base Rent rate for the Renewal Term, Tenant shall either (i) give Landlord final binding written notice (“Binding Notice”) of Tenant’s agreement with Landlord’s determination of the Prevailing Market rate for the Renewal Term, or (ii) if Tenant disagrees with Landlord’s determination, provide Landlord with written notice of rejection (the “Rejection Notice”).  If Tenant fails to provide Landlord with either a Binding Notice or Rejection Notice within such thirty (30) day period, Tenant will be deemed to have delivered a Rejection Notice.  If Tenant provides (or is deemed to have provided) Landlord with a Binding Notice, Landlord and Tenant shall enter into the Renewal Amendment (as defined below) upon the 

- 50 -

terms and conditions set forth herein.  If Tenant provides (or is deemed to have provided) Landlord with a Rejection Notice, Landlord and Tenant shall work together in good faith to agree upon the Prevailing Market rate for the Premises during the Renewal Term.  Upon agreement, Landlord and Tenant shall enter into the Renewal Amendment in accordance with the terms and conditions hereof.  Notwithstanding the foregoing, if Landlord and Tenant fail to agree upon the Prevailing Market rate within thirty (30) days after the date Tenant provides (or is deemed to have provided) Landlord with a Rejection Notice (the “Negotiation Period”), the Prevailing Market rate will be determined in accordance with the arbitration procedures described below.
(iv)    Arbitration Procedure.
(A)    Landlord and Tenant, within five (5) days after the date of expiration of the Negotiation Period, shall each simultaneously submit to the other, in a sealed envelope, its good faith estimate of the Prevailing Market rate for the Premises during the Renewal Term (collectively referred to as the “Estimates”).  If the higher of such Estimates is not more than 105% of the lower of such Estimates, then Prevailing Market rate shall be the average of the two Estimates.  If the Prevailing Market rate is not resolved by the exchange of Estimates, then, within fourteen (14) days after the exchange of Estimates, Landlord and Tenant shall each select a real estate broker to determine which of the two Estimates most closely reflects the Prevailing Market rate for the Premises during the Renewal Term.  Each such real estate broker so selected shall have had at least the immediately preceding ten (10) years’ experience as a real estate broker leasing first-class office space in the San Francisco financial district, with working knowledge of current rental rates and practices.
(B)    Upon selection, Landlord’s and Tenant’s brokers shall work together in good faith to agree upon which of the two Estimates most closely reflects the Prevailing Market rate for the Premises.  The Estimate chosen by the brokers shall be binding on both Landlord and Tenant.  If either Landlord or Tenant fails to appoint a broker within the fourteen (14) day period referred to above, the broker appointed by the other party shall be the sole broker for the purposes hereof.  If the two brokers cannot agree upon which of the two Estimates most closely reflects the Prevailing Market within twenty (20) days after their appointment, then, within fourteen (14) days after the expiration of such twenty (20) day period, the two brokers shall select a third broker meeting the aforementioned criteria.  Once the third broker (the “Arbitrator”) has been selected as provided for above, then, as soon thereafter as practicable but in any case within fourteen (14) days, the Arbitrator shall make his or her determination of which of the two Estimates most closely reflects the Prevailing Market rate and such Estimate shall be binding on both Landlord and Tenant.  The parties shall share equally in the costs of the Arbitrator.  Any fees of any appraiser, counsel or experts engaged directly by Landlord or Tenant, however, shall be borne by the party retaining such appraiser, counsel or expert.
(C)    If the Prevailing Market rate has not been determined by the commencement date of the Renewal Term, Tenant shall pay Base Rent upon the terms and conditions in effect during the last month of the Term for the Premises until such time as the Prevailing Market rate has been determined.  Upon such determination, the Base Rent for the Premises shall be 

- 51 -

retroactively adjusted to the commencement of the Renewal Term.  If such adjustment results in an underpayment of Base Rent by Tenant, Tenant shall pay Landlord the amount of such underpayment within thirty (30) days after the determination thereof.  If such adjustment results in an overpayment of Base Rent by Tenant, Landlord shall credit such overpayment against the next installment of Base Rent due under the Lease and, to the extent necessary, any subsequent installments, until the entire amount of such overpayment has been credited against Base Rent.
(v)    Renewal Amendment.  If Tenant is entitled to and properly exercises the Renewal Option, Landlord shall prepare an amendment (the “Renewal Amendment”) to reflect changes in the Base Rent, Base Year, term, termination date and other appropriate terms.  Tenant shall execute and return the Renewal Amendment to Landlord within fifteen (15) Business Days after Tenant’s receipt of same, but an otherwise valid exercise of the Renewal Option shall be fully effective whether or not the Renewal Amendment is executed.
(vi)    Prevailing Market.  For purposes hereof, “Prevailing Market” shall mean the arms’ length fair market annual rental rate per rentable square foot under new and renewal leases and amendments with terms commencing on or about the date on which the Prevailing Market is being determined hereunder, for tenants of comparable credit worthiness to the Tenant, for space comparable to the Premises in the Building and in the following office buildings: 101 California Street, Four Embarcadero Center, 555 California Street and the Transamerica Pyramid.  The determination of Prevailing Market shall take into account any material economic differences between the terms of this Lease and any comparison lease or amendment, such as, but not limited to, lease term, escalations, condition of the premises, rent abatements, construction costs and other concessions and the manner, if any, in which the landlord under any such lease is reimbursed for operating expenses and taxes, as well as the level of improvements existing in the Premises.
53.    Guaranty.  Concurrently with Tenant’s execution and delivery of this Lease to Landlord, Tenant shall cause the Guarantor identified in the Basic Lease Provisions to execute a Guaranty of the obligations of Tenant under this Lease in the form of Exhibit F attached hereto and made a part hereof.  Guarantor’s execution and delivery of such Guaranty is an express condition precedent of Landlord’s obligations and Tenant’s rights hereunder.  If Tenant does not deliver the Guaranty, duly executed by Guarantor, to Landlord within ten (10) business days after the Effective Date, Landlord, at Landlord’s sole discretion, may terminate this Lease by notice to Tenant.
54.    Asbestos Notification.  Tenant acknowledges that Tenant has received the asbestos notification letter attached to this Lease as Exhibit G hereto, disclosing the existence of asbestos in the Building.  As part of Tenant’s obligations under this Lease, Tenant agrees to comply with the California “Connelly Act” and other applicable Laws, including providing copies of Landlord’s asbestos notification letter to all of Tenant’s “employees” and “owners,” as those terms are defined in the Connelly Act and other applicable Laws.
55.    OFAC and Anti-Money Laundering Compliance Certifications.  Each party hereby represents, certifies and warrants to the other party as follows:  (i) it is not named and is not acting, directly or indirectly, for or on behalf of any person, group, entity or nation named by any 

- 52 -

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) it 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.  Tenant further represents, certifies and warrants to Landlord that none of the proceeds used to pay rent have been or will be derived from a “specified unlawful activity” as defined in the Money Laundering Control Act of 1986, as amended, or any other applicable laws regarding money laundering activities.  Furthermore, each party agrees to immediately notify the other if it 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, as the same may be amended from time to time.  Notwithstanding anything in this Lease to the contrary, the parties understand 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 remedies hereunder, and each party hereby agrees to defend, indemnify and hold the other harmless 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.
56.    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 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 PARAMOUNT ONE MARKET PLAZA OWNER, L.P., a Delaware limited partnership
By:     PPF PARAMOUNT GP, LLC, a Delaware limited liability company
By:    /s/ JOLANTA K. BOTT         
Name:        JOLANTA K. BOTT     
Title:        Vice President        

- 53 -

TENANT: 
 
VELTI USA, Inc., a Delaware corporation     

By:    /s/ SALLY J. RAU         
Name:        SALLY J. RAU         
Its:    Chief Administrative Officer, 
General Counsel and Secretary    
Tenant’s Federal Tax I.D. Number     20-3774475

- 54 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00203-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00203-of-00352.parquet"}]]