Document:

ex10-54_maralease.htm

 

EXHIBIT 10.54

LEASE

BETWEEN

WESTWOOD GATEWAY II LLC

AND

MARATHON PATENT GROUP, INC.

  

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LEASE

(Short Form)

THIS LEASE is made as of the 14th day of October, 2013, by and between WESTWOOD GATEWAY II LLC, a Delaware limited liability company, hereafter called “Landlord,” and MARATHON PATENT GROUP, INC., a Nevada corporation, hereafter called “Tenant.”

ARTICLE 1.  BASIC LEASE PROVISIONS

Each reference in this Lease to the “Basic Lease Provisions” shall mean and refer to the following collective terms, the application of which shall be governed by the provisions in the remaining Articles of this Lease.

	
1.

	
Tenant’s Trade Name:  N/A

	
2.            Premises:

	
Suite No. 380

	
   Address of Building:

	
11100 Santa Monica Blvd., Los Angeles, CA 90025

	
   Project Description:

	
Westwood Gateway II

   (The Premises are more particularly described in Section 2.1).

	
3.

	
Use of Premises:   General office and for no other use.

	
4.

	
Commencement Date: May 1, 2014

	
5.

	
Lease Term:  The Term of this Lease will expire at midnight on April 30, 2021.

	
6.

	
Basic Rent:

	
Months of Term

or Period

	
Monthly Rate Per 

Rentable Square Foot

	
Monthly Basic Rent 

(rounded to the nearest dollar)

	
5/1/14 to 4/30/15

	
$3.05

	
$5,283.00

	
5/1/15 to 4/30/16

	
$3.19

	
$5,525.00

	
5/1/16 to 4/30/17

	
$3.33

	
$5,768.00

	
5/1/17 to 4/30/18

	
$3.48

	
$6,027.00

	
5/1/18 to 4/30/19

	
$3.64

	
$6,304.00

	
5/1/19 to 4/30/20

	
$3.80

	
$6,582.00

	
5/1/20 to 4/30/21

	
$3.97

	
$6,876.00

	
  

	
Notwithstanding the above schedule of Basic Rent to the contrary, as long as Tenant is not in Default (as defined in Section 14.1) under this Lease, Tenant shall be entitled to an abatement of 5 full calendar months of Basic Rent in the aggregate amount of $26,415.00 (i.e. $5,283.00 per month) (the “Abated Basic Rent”) for the first 5 full calendar months of the Term (the “Abatement Period”).  In the event Tenant Defaults at any time during the Term, all Abated Basic Rent shall immediately become due and payable.  The payment by Tenant of the Abated Basic Rent in the event of a Default shall not limit or affect any of Landlord's other rights, pursuant to this Lease or at law or in equity.  Only Basic Rent shall be abated during the Abatement Period and all other additional rent and other costs and charges specified in this Lease shall remain as due and payable pursuant to the provisions of this Lease.

	
7.

	
Property Tax Base:  The Property Taxes per rentable square foot incurred by Landlord and attributable to the

  

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twelve month period ending June 30, 2014 (the "Base Year").

Project Cost Base:  The Project Costs per rentable square foot incurred by Landlord and attributable to the Base Year.

Expense Recovery Period:  Every twelve month period during the Term (or portion thereof during the first and last Lease years) ending June 30.

	
8.

	
Floor Area of Premises:  approximately 1,732 rentable square feet (Landlord and Tenant stipulate and agree that the Floor Area of Premises is correct).

Floor Area of Building:  approximately 292,056 rentable square feet

	
9.

	
Security Deposit:  $7,564.00

	
10.

	
Broker(s):  Irvine Realty Company ("Landlord's Broker") and Guardian Commercial Realty ("Tenant's Broker")

	
11.

	
Parking:  6 parking passes in accordance with the provisions set forth in Exhibit F to this Lease.

	
12.

	
Address for Payments and Notices:

	
LANDLORD

	
TENANT

 

	
Payment Address:

 

WESTWOOD GATEWAY II LLC

PO Box #842470

Los Angeles, CA  90084-2470

 

Notice Address:

 

THE IRVINE COMPANY LLC

11100 Santa Monica Boulevard, Suite 100

Los Angeles, CA,  90025

Attn: Property Manager

 

with a copy of notices to:

 

THE IRVINE COMPANY LLC

550 Newport Center Drive

Newport Beach, CA 92660

Attn: Senior Vice President, Property Operations

Irvine Office Properties

	
Marathon Patent Group, Inc.

11100 Santa Monica Blvd., Suite 380

Los Angeles, CA 90025

 

	
13.

	
List of Lease Exhibits (all exhibits, riders and addenda attached to this Lease are hereby incorporated into and made a part of this Lease):

 

Exhibit A                          Description of Premises

Exhibit B                          Operating Expenses

Exhibit C                          Utilities and Services

Exhibit D                          Tenant’s Insurance

Exhibit E                          Rules and Regulations

Exhibit F                          Parking

Exhibit G                         Additional Provisions

Exhibit X                         Work Letter

  

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ARTICLE 2.  PREMISES

2.1.   LEASED PREMISES.  Landlord leases to Tenant and Tenant leases from Landlord the Premises shown in Exhibit A (the “Premises”), containing approximately the floor area set forth in Item 8 of the Basic Lease Provisions (the “Floor Area”).  The Premises are located in the building identified in Item 2 of the Basic Lease Provisions (the “Building”), which is a portion of the project described in Item 2 (the “Project”).

2.2.   ACCEPTANCE OF PREMISES.  Tenant is currently occupying the Premises under the terms of an existing sub-sublease agreement, which is currently scheduled to expire at midnight on April 30, 2014.  Tenant acknowledges that, except for the items required to be accomplished by Landlord under the Work Letter attached as Exhibit X, it is satisfied with the condition of the Premises.  In no event shall this clause nullify any Landlord obligations under the Lease.

ARTICLE 3.  TERM

3.1.   GENERAL.  The term of this Lease (“Term”) shall be for the period shown in Item 5 of the Basic Lease Provisions.  The Term shall commence (“Commencement Date") on the Commencement Date as set forth in Item 4 of the Basic Lease Provisions and shall end upon the expiration of the period set forth in Item 5 of the Basic Lease Provisions (“Expiration Date").

ARTICLE 4.  RENT AND OPERATING EXPENSES

4.1.   BASIC RENT.  From and after the Commencement Date, Tenant shall pay to Landlord without deduction or offset a Basic Rent for the Premises in the total amount shown (including subsequent adjustments, if any) in Item 6 of the Basic Lease Provisions (the “Basic Rent”).  If the Commencement Date is other than the first day of a calendar month, any rental adjustment shown in Item 6 shall be deemed to occur on the first day of the next calendar month following the specified monthly anniversary of the Commencement Date.  The Basic Rent shall be due and payable in advance commencing on the Commencement Date and continuing thereafter on the first day of each successive calendar month of the Term, as prorated for any partial month.  No demand, notice or invoice shall be required.  An installment in the amount of 1 full month’s Basic Rent at the initial rate specified in Item 6 of the Basic Lease Provisions shall be delivered to Landlord concurrently with Tenant’s execution of this Lease.

4.2.   OPERATING EXPENSES. Tenant shall pay Tenant’s Share of Operating Expenses in accordance with Exhibit B of this Lease.

 

4.3.   SECURITY DEPOSIT.  Concurrently with Tenant’s delivery of this Lease, Tenant shall deposit with Landlord the sum, if any, stated in Item 9 of the Basic Lease Provisions (the “Security Deposit”), to be held by Landlord as security for the full and faithful performance of Tenant’s obligations under this Lease, to pay any rental sums, including without limitation such additional rent as may be owing under any provision hereof, and to maintain the Premises as required by this Lease.  Upon any breach of the foregoing obligations by Tenant, Landlord may apply all or part of the Security Deposit as full or partial compensation.  If any portion of the Security Deposit is so applied, Tenant shall within 15 days after written demand by Landlord deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount.  Landlord shall not be required to keep this Security Deposit separate from its general funds, and Tenant shall not be entitled to interest on the Security Deposit.  In no event may Tenant utilize all or any portion of the Security Deposit as a payment toward any rental sum due under this Lease.  Any unapplied balance of the Security Deposit shall be returned to Tenant or, at Landlord’s option, to the last assignee of Tenant’s interest in this Lease within 30 days following the termination of this Lease and Tenant's vacation of the Premises.  Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code, or any similar or successor laws now or hereafter in effect.

  

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ARTICLE 5.  USES

5.1.   USE.  Tenant shall use the Premises only for the purposes stated in Item 3 of the Basic Lease Provisions and for no other use whatsoever.  Tenant shall not do or permit anything to be done in or about the Premises which will in any way interfere with the rights or quiet enjoyment of other occupants of the Building or the Project, or use or allow the Premises to be used for any unlawful purpose, nor shall Tenant permit any nuisance in the Premises or the Project. Tenant shall comply at its expense with all present and future laws, ordinances and requirements of all governmental authorities in all material respects that pertain to Tenant or its use of the Premises, and with all energy usage reporting requirements of Landlord.  As of the date of this Lease, there has been no inspection of the Building and Project by a Certified Access Specialist as referenced in Section 1938 of the California Civil Code.

5.2.   SIGNS.  Landlord shall affix and maintain a sign (restricted solely to Tenant’s name as set forth herein or such other name as Landlord may consent to in writing) adjacent to the entry door of the Premises, together with a directory strip listing Tenant's name as set forth herein in the lobby directory of the Building.  Tenant shall not place or allow to be placed any other sign, decoration or advertising matter of any kind that is visible from the exterior of the Premises.

5.3   HAZARDOUS MATERIALS.  Tenant shall not generate, handle, store or dispose of hazardous or toxic materials (as such materials may be identified in any federal, state or local law or regulation) in the Premises or Project without the prior written consent of Landlord.  Tenant acknowledges that it has read, understands and, if applicable, shall comply with the provisions of Exhibit H to this Lease, if that Exhibit is attached.

ARTICLE 6.  LANDLORD SERVICES

 

6.1.   UTILITIES AND SERVICES.  Landlord and Tenant shall be responsible to furnish those utilities and services to the Premises to the extent provided in Exhibit C, subject to the conditions and payment obligations and standards set forth in this Lease. Landlord’s failure to furnish, or any interruption, diminishment or termination of, services due to the application of laws, the failure of any equipment, the performance of repairs, improvements or alterations, utility interruptions or the occurrence of an event of force majeure (defined in Section 20.8) shall not render Landlord liable to Tenant, constitute a constructive eviction of Tenant, give rise to an abatement of Rent, nor relieve Tenant from the obligation to fulfill any covenant or agreement.

6.2.   OPERATION AND MAINTENANCE OF COMMON AREAS.  During the Term, Landlord shall operate all Common Areas within the Building and the Project.  The term “Common Areas” shall mean all areas within the Building, Project and other buildings in the Project which are not held for exclusive use by persons entitled to occupy space.

6.3.   USE OF COMMON AREAS.  The occupancy by Tenant of the Premises shall include the use of the Common Areas in common with Landlord and with all others for whose convenience and use the Common Areas may be provided by Landlord, subject, however, to compliance with Rules and Regulations described in Article 17 below.  Landlord shall at all times during the Term have exclusive control of the Common Areas, and may reasonably restrain or permit any use or occupancy.  Landlord may temporarily close any portion of the Common Areas for repairs, remodeling and/or alterations, to prevent a public dedication or the accrual of prescriptive rights, or for any other reasonable purpose.

ARTICLE 7.  REPAIRS AND MAINTENANCE

7.1.   TENANT’S MAINTENANCE AND REPAIR.  Subject to Articles 11 and 12, Tenant at its sole expense shall make all repairs necessary to keep the Premises and all improvements and fixtures therein in good condition and repair, excepting ordinary wear and tear.  Tenant’s maintenance obligation shall include without limitation all appliances, interior glass, doors, door closures, hardware, fixtures, electrical within the Premises, plumbing within the Premises, fire extinguisher equipment and other equipment installed in the Premises, together with any supplemental HVAC equipment servicing only the Premises.  Should Landlord or its management agent agree to make a repair on behalf of Tenant and at Tenant’s request, Tenant shall promptly reimburse Landlord as additional rent for all reasonable and documented costs incurred (including the standard 5% supervision fee) upon submission of an invoice.

  

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   7.2.   LANDLORD’S MAINTENANCE AND REPAIR.  Subject to Articles 11 and 12, Landlord shall provide service, maintenance and repair with respect to the heating, ventilating and air conditioning (“HVAC”) equipment of the Building (exclusive of any supplemental HVAC equipment servicing only the Premises) and shall maintain in good repair the Common Areas, roof, foundations, footings, the exterior surfaces of the exterior walls of the Building (including exterior glass), and the structural, electrical, mechanical and plumbing systems of the Building (including elevators, if any, serving the Building), except to the extent provided in Section 7.1 above.  Notwithstanding any provision of the California Civil Code or any similar or successor laws to the contrary, Tenant understands that it shall not make repairs at Landlord’s expense or by rental offset. Except as provided in Section 11.1 and Article 12 below, there shall be no abatement of rent and no liability of Landlord by reason of any injury to or interference with Tenant’s business arising from the making of any repairs, alterations or improvements to any portion of the Building, including repairs to the Premises, nor shall any related activity by Landlord constitute an actual or constructive eviction. Tenant hereby waives any and all rights under and benefits of subsection 1 of Section 1932, and Sections 1941 and 1942 of the California Civil Code, or any similar or successor laws now or hereafter in effect.

   7.3.   ALTERATIONS.  Tenant shall make no alterations, additions, decorations, or improvements, except as set forth in Exhibit X, (collectively referred to as “Alterations”) to the Premises without the prior written consent of Landlord, such consent not to be unreasonably withheld or delayed.  Landlord may impose, as a condition to its consent, any requirements that Landlord in its discretion may deem reasonable.  Tenant shall use Landlord’s designated mechanical and electrical contractors, obtain all required permits for the Alterations and shall perform the work in compliance with all applicable laws, regulations and ordinances with contractors reasonably acceptable to Landlord. Except for cosmetic alterations not requiring a permit, Landlord shall be entitled to a supervision fee in the amount of 5% of the cost of the Alterations.  Landlord may elect to cause its architect to review Tenant’s architectural plans, and the reasonable cost of that review shall be reimbursed by Tenant.  Should the Alterations proposed by Tenant and consented to by Landlord change the floor plan of the Premises, then Tenant shall, at its expense, furnish Landlord with as-built drawings and CAD disks compatible with Landlord’s systems.  Unless Landlord otherwise agrees in writing, all Alterations affixed to the Premises, including without limitation all Tenant Improvements constructed pursuant to the Work Letter (except as otherwise provided in the Work Letter), but excluding moveable trade fixtures and furniture, shall become the property of Landlord and shall be surrendered with the Premises at the end of the Term, except that Landlord may, by notice to Tenant given at least 30 days prior to the Expiration Date, require Tenant to remove by the Expiration Date, or sooner termination date of this Lease, all or any Alterations (including without limitation all telephone and data cabling) installed either by Tenant or by Landlord at Tenant’s request (collectively, the “Required Removables”).  In connection with its removal of Required Removables, Tenant shall repair any damage to the Premises arising from that removal and shall restore the affected area to its pre-existing condition, reasonable wear and tear excepted.

7.4.   MECHANIC’S LIENS.  Tenant shall keep the Premises free from any liens arising out of any work performed, materials furnished, or obligations incurred by or for Tenant.   In the event that Tenant shall not, within 15 days following the imposition of any lien, cause the lien to be released of record by payment or posting of a proper bond in accordance with California Civil Code Section 8424 or any successor statute, Landlord shall have, in addition to all other available remedies, the right to cause the lien to be released by any means it deems proper, including payment of or defense against the claim giving rise to the lien.  All expenses so incurred by Landlord shall be reimbursed by Tenant promptly following Landlord’s demand.  Tenant shall give Landlord no less than 20 days’ prior notice in writing before commencing construction of any kind on the Premises.

7.5.   ENTRY AND INSPECTION.  Landlord shall at all reasonable times and with reasonable prior verbal notice, except in emergencies or to provide Building services, have the right to enter the Premises to inspect them, to supply services in accordance with this Lease, to make repairs and renovations as reasonably deemed necessary by Landlord, and to submit the Premises to prospective or actual purchasers or encumbrance holders (or, during the final twelve months of the Term or when an uncured Default exists, to prospective tenants), all without being deemed to have caused an eviction of Tenant and without abatement of rent except as provided elsewhere in this Lease.  Notwithstanding the foregoing, Landlord will use reasonable efforts not to disrupt the Tenant’s day to day business activities.

  

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ARTICLE 8.  SPACE PLANNING AND SUBSTITUTION

Landlord shall have the right, upon providing not less than 60 days written notice, to move Tenant to other space of comparable size and corner location higher than the third floor in the Building.  The new space shall be provided with new improvements of comparable quality to those within the Premises.  Landlord shall pay the reasonable out-of-pocket costs to relocate and reconnect Tenant’s personal property and equipment within the new space.  Landlord shall also reimburse Tenant for such other reasonable out-of-pocket costs that Tenant may incur in connection with the relocation, including, but not limited to, Tenant’s notice of address change and new stationary. Within 10 days following request by Landlord, Tenant shall execute an amendment to this Lease prepared by Landlord to memorialize the relocation.

ARTICLE 9.  ASSIGNMENT AND SUBLETTING

 

9.1.   RIGHTS OF PARTIES.  Tenant shall not, directly or indirectly, assign, sublease, transfer or encumber any interest in this Lease or allow any third party to use any portion of the Premises (collectively or individually, a “Transfer”) without the prior written consent of Landlord, which consent shall not be unreasonably withheld if Landlord does not exercise its recapture rights.  Tenant agrees that it is not unreasonable for Landlord to withhold consent to a Transfer to a proposed assignee or subtenant who is an existing tenant or occupant of the Building or Project or to a prospective tenant with whom Landlord or Landlord's affiliate has been actively negotiating.  Within 30 days after receipt of executed copies of the transfer documentation and such other information as Landlord may request, Landlord shall either: (a) consent to the Transfer by execution of a consent agreement in a form reasonably designated by Landlord; (b) refuse to consent to the Transfer; or (c) recapture the portion of the Premises that Tenant is proposing to Transfer.  Tenant hereby waives the provisions of Section 1995.310 of the California Civil Code, or any similar or successor Laws, now or hereinafter in effect, and all other remedies, including, without limitation, any right at law or equity to terminate this Lease, on its own behalf and, to the extent permitted under all applicable laws, on behalf of the proposed transferee.  In no event shall any Transfer release or relieve Tenant from any obligation under this Lease, as same may be amended.  Tenant shall pay Landlord a review fee of $750.00 for Landlord’s review of any requested Transfer.  Tenant shall pay Landlord, as additional Rent, 50% of all rent and other consideration which Tenant receives as a result of a Transfer that is in excess of the Rent payable to Landlord for the portion of the Premises and Term covered by the Transfer. If Tenant is in Default, Landlord may require that all sublease payments be made directly to Landlord, in which case Tenant shall receive a credit against Rent in the amount of Tenant’s share of payments received by Landlord.

9.2.   PERMITTED TRANSFER.  Notwithstanding the foregoing, Tenant may assign this Lease to a successor to Tenant by merger, consolidation or the purchase of substantially all of Tenant’s assets, or assign this Lease or sublet all or a portion of the Premises to an Affiliate (defined below), without the consent of Landlord, provided that all of the following conditions are satisfied (a “Permitted Transfer”):  (i) Tenant is not then in Default hereunder; (ii) Tenant gives Landlord written notice prior to such Permitted Transfer; and (iii) the successor entity resulting from any merger or consolidation of Tenant or the sale of all or substantially all of the assets of Tenant in one or more related transactions, has a net worth at the time of the Permitted Transfer that is at least equal to the net worth of Tenant immediately before the Permitted Transfer.  “Affiliate” shall mean an entity controlled by, controlling or under common control with Tenant.

ARTICLE 10.  INSURANCE AND INDEMNITY

10.1.   TENANT’S INSURANCE.  Tenant, at its sole cost and expense, shall provide and maintain in effect the insurance described in Exhibit D.  Evidence of that insurance must be delivered to Landlord prior to the Commencement Date.

  

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10.2.   TENANT’S INDEMNITY.  To the fullest extent permitted by law, but subject to Section 10.4 below, Tenant shall defend, indemnify and hold harmless Landlord and Landlord’s agents, employees, lenders, and affiliates, from and against any and all negligence, claims, liabilities, damages, costs or expenses arising either before or after the Commencement Date which arise from or are caused by Tenant’s use or occupancy of the Premises, the Building or the Common Areas of the Project, or from the conduct of Tenant’s business, or from any activity, work, or thing done, permitted or suffered by Tenant or Tenant’s agents, employees, subtenants, vendors, contractors, invitees or licensees in or about the Premises, the Building or the Common Areas of the Project, or from any Default in the performance of any obligation on Tenant’s part to be performed under this Lease, or from any act, omission or negligence on the part of Tenant or Tenant’s agents, employees, subtenants, vendors, contractors, invitees or licensees.  Landlord may, at its option, require Tenant to assume Landlord’s defense in any action covered by this Section 10.2 through counsel reasonably satisfactory to Landlord.  Notwithstanding the foregoing, Tenant shall not be obligated to indemnify Landlord against any liability or expense to the extent that the same was caused by the negligence or willful misconduct of Landlord, its agents, contractors or employees.

10.3.   LANDLORD’S NONLIABILITY.  Landlord shall not be liable to Tenant, its employees, agents and invitees, and Tenant hereby waives all claims against Landlord, its employees and agents for loss of or damage to any property, or any injury to any person, resulting from any condition including, but not limited to, acts or omissions (criminal or otherwise) of third parties and/or other tenants of the Project, or their agents, employees or invitees, fire, explosion, falling plaster, steam, gas, electricity, water or rain which may leak or flow from or into any part of the Premises or from the breakage, leakage, obstruction or other defects of the pipes, sprinklers, wires, appliances, plumbing, air conditioning, electrical works or other fixtures in the Building, whether the damage or injury results from conditions arising in the Premises or in other portions of the Building, regardless of the negligence of Landlord, its agents or any and all affiliates of Landlord in connection with the foregoing.  Notwithstanding anything to the contrary contained in this Lease, in no event shall Landlord be liable for Tenant’s loss or interruption of business or income (including without limitation, Tenant’s consequential damages, lost profits or opportunity costs), or for interference with light or other similar intangible interests.

10.4.   WAIVER OF SUBROGATION.  Landlord and Tenant each hereby waives all rights of recovery against the other on account of loss and damage occasioned to the property of such waiving party to the extent that the waiving party is entitled to proceeds for such loss and damage under any property insurance policies carried or otherwise required to be carried by this Lease; provided however, that the foregoing waiver shall not apply to the extent of Tenant’s obligation to pay deductibles under any such policies and this Lease.

ARTICLE 11.  DAMAGE OR DESTRUCTION

11.1.   RESTORATION.

(a)           If the Building of which the Premises are a part is damaged as the result of an event of casualty, then subject to the provisions below, Landlord shall repair that damage as soon as reasonably possible unless Landlord reasonably determines that:  (i) the Premises have been materially damaged and there is less than 1 year of the Term remaining on the date of the casualty; (ii) any Mortgagee (defined in Section 13.1) requires that the insurance proceeds be applied to the payment of the mortgage debt; or (iii) proceeds necessary to pay the full cost of the repair are not available from Landlord’s insurance, including without limitation earthquake insurance.  Should Landlord elect not to repair the damage for one of the preceding reasons, Landlord shall so notify Tenant in the “Casualty Notice” (as defined below), and this Lease shall terminate as of the date of delivery of that notice, and Tenant shall have no further obligations to Landlord, financial or otherwise.  In such circumstance, Landlord shall promptly return the remaining balance of the Security Deposit and any prepayment of rent to the Tenant.

(b)           As soon as reasonably practicable following the casualty event but not later than 60 days thereafter, Landlord shall notify Tenant in writing (“Casualty Notice”) of Landlord’s election, if applicable, to terminate this Lease.  If this Lease is not so terminated, the Casualty Notice shall set forth the anticipated period for repairing the casualty damage.  If the anticipated repair period exceeds 270 days and if the damage is so extensive as to reasonably prevent Tenant’s substantial use and enjoyment of the Premises, then either party may elect to terminate this Lease by written notice to the other within 10 days following delivery of the Casualty Notice, and Tenant shall have no further obligations to Landlord, financial or otherwise.  In such circumstance, Landlord shall promptly return the remaining balance of the Security Deposit and any prepayment of rent to the Tenant.

  

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(c)           In the event that neither Landlord nor Tenant terminates this Lease pursuant to Section 11.1(b), Landlord shall repair all material damage to the Premises or the Building as soon as reasonably possible and this Lease shall continue in effect for the remainder of the Term.  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.  Within 15 days of demand, Tenant shall also pay Landlord for any additional excess costs that are reasonably determined during the performance of the repairs to such Alterations.

(d)           From and after the casualty event, the rental to be paid under this Lease shall be abated in the same proportion that the Floor Area of the Premises that is rendered unusable by the damage from time to time bears to the total Floor Area of the Premises.

(e)           Notwithstanding the provisions of subsections (a), (b) and (c) of this Section 11.1, but subject to Section 10.4, the cost of any repairs shall be borne by Tenant, and Tenant shall not be entitled to rental abatement or termination rights, if the damage is due to the fault or neglect of Tenant or its employees, subtenants, contractors, invitees or representatives.

11.2.   LEASE GOVERNS.  Tenant agrees that the provisions of this Lease, including without limitation Section 11.1, shall govern any damage or destruction and shall accordingly supersede any contrary statute or rule of law.

ARTICLE 12. 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 private purchase 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 Project which would have a material adverse effect on Landlord’s ability to profitably operate the remainder of the Building.  The termination shall be effective as of the effective date of any order granting possession to, or vesting legal title in, the condemning authority, and Tenant shall have no further obligations to Landlord, financial or otherwise.  In such circumstance, Landlord shall promptly return the remaining balance of the Security Deposit and any prepayment of rent to the Tenant.  All compensation awarded for a Taking shall be the property of Landlord.  Tenant agrees that the provisions of this Lease shall govern any Taking and shall accordingly supersede any contrary statute or rule of law.

ARTICLE 13.  SUBORDINATION; ESTOPPEL CERTIFICATE

13.1.   SUBORDINATION.  Tenant accepts this Lease subject and subordinate to any mortgage(s), deed(s) of trust, ground lease(s) or other lien(s) now or subsequently arising upon the Premises, the Building or the Project, and to renewals, modifications, refinancings and extensions thereof (collectively referred to as a “Mortgage”).  The party having the benefit of a Mortgage shall be referred to as a “Mortgagee.”  This clause shall be self-operative, but upon request from a Mortgagee, Tenant shall execute a commercially reasonable subordination and attornment agreement in favor of the Mortgagee, provided such agreement provides a non-disturbance covenant benefitting Tenant.  Alternatively, a Mortgagee shall have the right at any time to subordinate its Mortgage to this Lease.  Upon request, Tenant, without charge, shall attorn to any successor to Landlord’s interest in this Lease in the event of a foreclosure of any mortgage.   Tenant agrees that any purchaser at a foreclosure sale or lender taking title under a deed in lieu of foreclosure shall not be responsible for any act or omission of a prior landlord, shall not be subject to any offsets or defenses Tenant may have against a prior landlord, and shall not be liable for the return of the Security Deposit not actually recovered by such purchaser nor bound by any rent paid in advance of the calendar month in which the transfer of title occurred; provided that the foregoing shall not release the applicable prior landlord from any liability for those obligations.  Tenant acknowledges that Landlord’s Mortgagees and their successors-in-interest are intended third party beneficiaries of this Section 13.1.

13.2.   ESTOPPEL CERTIFICATE.  Tenant shall, within 10 days after receipt of a written request from Landlord, execute and deliver a commercially reasonable estoppel certificate in favor of those parties as are reasonably requested by Landlord (including a Mortgagee or a prospective purchaser of the Building or the Project).

  

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ARTICLE 14.  DEFAULTS AND REMEDIES

14.1.   TENANT’S DEFAULTS.  In addition to any other event of default set forth in this Lease, the occurrence of any one or more of the following events shall constitute a “Default” by Tenant:

(a)           The failure by Tenant to make any payment of Rent required to be made by Tenant, as and when due, where the failure continues for a period of 5 business days after written notice from Landlord to Tenant.  The term “Rent” as used in this Lease shall be deemed to mean the Basic Rent and all other sums required to be paid by Tenant to Landlord pursuant to the terms of this Lease.

(b)           Except where a specific time period is otherwise set forth for Tenant’s performance in this Lease (in which event the failure to perform by Tenant within such time period shall be a Default), the failure or inability by Tenant to observe or perform any of the covenants or provisions of this Lease to be observed or performed by Tenant, other than as specified in any other subsection of this Section 14.1, where the failure continues for a period of 30 days after written notice from Landlord to Tenant.

The notice periods provided herein are in lieu of, and not in addition to, any notice periods provided by law, and Landlord shall not be required to give any additional notice under California Code of Civil Procedure Section 1161, or any successor statute, in order to be entitled to commence an unlawful detainer proceeding.

 

14.2.   LANDLORD’S REMEDIES.

(a)           Upon the occurrence of any Default by Tenant, then in addition to any other remedies available to Landlord, Landlord may exercise the following remedies:

(i)              Landlord may terminate Tenant’s right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Tenant shall immediately surrender possession of the Premises to Landlord.  Such termination shall not affect any accrued obligations of Tenant under this Lease.  Upon termination, Landlord shall have the right to reenter the Premises and remove all persons and property.  Landlord shall also be entitled to recover from Tenant:

(1)       The worth at the time of award of the unpaid Rent which had been earned at the time of termination;

(2)       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 loss that Tenant proves could have been reasonably avoided;

(3)       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 loss that Tenant proves could be reasonably avoided;

(4)       Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result from Tenant’s default, including, but not limited to, the cost of recovering possession of the Premises, commissions and other expenses of reletting, including necessary repair, renovation, improvement and alteration of the Premises for a new tenant, reasonable attorneys’ fees, and any other reasonable costs; and

(5)       At Landlord’s election, all other amounts in addition to or in lieu of the foregoing as may be permitted by law.  Any sum, other than Basic Rent, shall be computed on the basis of the average monthly amount accruing during the 24 month period immediately prior to Default, except that if it becomes necessary to compute such rental before the 24 month period has occurred, then the computation shall be on the basis of the average monthly amount during the shorter period.  As used in subparagraphs (1) and (2) above, the “worth at the time of award” shall be computed by allowing interest at the rate of 10% per annum.  As used in subparagraph (3) above, the “worth at the time of award” shall be computed by discounting the amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus 1%.

  

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(ii)              Employ the remedy described in California Civil Code § 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).

(b)           The various rights and remedies reserved to Landlord in this Lease or otherwise shall be cumulative and, except as otherwise provided by California law, Landlord may pursue any or all of its rights and remedies at the same time.  No delay or omission of Landlord to exercise any right or remedy shall be construed as a waiver of the right or remedy or of any breach or Default by Tenant.  The acceptance by Landlord of rent shall not be a (i) waiver of any preceding breach or Default by Tenant of any provision of this Lease, other than the failure of Tenant to pay the particular rent accepted, regardless of Landlord’s knowledge of the preceding breach or Default at the time of acceptance of rent, or (ii) a waiver of Landlord’s right to exercise any remedy available to Landlord by virtue of the breach or Default.  No payment by Tenant or receipt by Landlord of a lesser amount than the rent required by this Lease shall be deemed to be other than a partial payment on account of the earliest due stipulated rent, nor shall any endorsement or statement on any check or letter be deemed an accord and satisfaction and Landlord shall accept the check or payment without prejudice to Landlord’s right to recover the balance of the rent or pursue any other remedy available to it.  Tenant hereby waives any right of redemption or relief from forfeiture under California Code of Civil Procedure Section 1174 or 1179, or under any successor statute, in the event this Lease is terminated by reason of any Default by Tenant.  No act or thing done by Landlord or Landlord’s agents during the Term shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept a surrender shall be valid unless in writing and signed by Landlord.

14.3.   LATE PAYMENTS.  Any Rent due under this Lease that is not paid to Landlord within 5 days of the date when due shall bear interest at the maximum rate permitted by law from the date due until fully paid and if any Rent due from Tenant shall not be received by Landlord or Landlord’s designee within 5 days after the date due, then Tenant shall pay to Landlord, in addition to the interest, a late charge for each delinquent payment equal to the greater of (i) 5% of that delinquent payment or (ii) $100.00.

14.4.   DEFAULT BY LANDLORD.  Landlord shall not be deemed to be in default in the performance of any obligation under this Lease unless and until it has failed to perform the obligation within 30 days after written notice by Tenant to Landlord specifying in reasonable detail the nature and extent of the failure; provided, however, that if the nature of Landlord’s obligation is such that more than 30 days are required for its performance, then Landlord shall not be deemed to be in default if it commences performance within the 30 day period and thereafter diligently pursues the cure to completion.

14.5.   EXPENSES AND LEGAL FEES.  Should either Landlord or Tenant bring any action in connection with this Lease, the prevailing party shall be entitled to recover as a part of the action its reasonable attorneys’ fees, and all other reasonable costs.  The prevailing party for the purpose of this paragraph shall be determined by the trier of the facts.

 

14.6.   WAIVER OF JURY TRIAL/JUDICIAL REFERENCE.

(a)           LANDLORD AND TENANT EACH ACKNOWLEDGES THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHT TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER (AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, TENANT’S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE.

 

 

  

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(b)           In the event that the jury waiver provisions of Section 14.6 (a) are not enforceable under California law, then, unless otherwise agreed to by the parties, the provisions of this Section 14.6 (b) shall apply.  Landlord and Tenant agree that any disputes arising in connection with this Lease (including but not limited to a determination of any and all of the issues in such dispute, whether of fact or of law) shall be resolved (and a decision shall be rendered) by way of a general reference as provided for in Part 2, Title 8, Chapter 6 (§§ 638 et. seq.) of the California Code of Civil Procedure, or any successor California statute governing resolution of disputes by a court appointed referee.  Nothing within this Section 14.6 shall apply to an unlawful detainer action.

14.7.   SATISFACTION OF JUDGMENT.  The obligations of Landlord do not constitute the personal obligations of the individual partners, trustees, directors, officers, members or shareholders of Landlord or its constituent partners or members. Should Tenant recover a money judgment against Landlord, such judgment shall be satisfied only from the interest of Landlord in the Project and out of the rent or other income from such property receivable by Landlord, and no action for any deficiency may be sought or obtained by Tenant.

ARTICLE 15.  END OF TERM

15.1.   HOLDING OVER.  If Tenant holds over for any period after the Expiration Date (or earlier termination of the Term), such tenancy shall constitute a tenancy at sufferance only and possession shall be subject to all of the terms of this Lease, except that the monthly rental shall be 150% of the total monthly rental for the month immediately preceding the date of termination.  The acceptance by Landlord of monthly hold-over rental in a lesser amount shall not constitute a waiver of Landlord's right to recover the full amount due unless otherwise agreed in writing by Landlord.  If Tenant fails to surrender the Premises upon the expiration of this Lease despite demand to do so by Landlord, Tenant shall indemnify and hold Landlord harmless from all loss or liability, including without limitation, any claims made by any succeeding tenant relating to such failure to surrender. The foregoing provisions of this Section 15.1 are in addition to and do not affect Landlord’s right of re-entry or any other rights of Landlord under this Lease or at law.

15.2.   SURRENDER OF PREMISES; REMOVAL OF PROPERTY.  Upon the Expiration Date or upon any earlier termination of this Lease, Tenant shall quit and surrender possession of the Premises to Landlord in as good order, condition and repair as when received or as hereafter may be improved by Landlord or Tenant, reasonable wear and tear and repairs which are Landlord’s obligation excepted, and shall remove or fund to Landlord the cost of removing all wallpapering, voice and/or data transmission cabling installed by or for Tenant and Required Removables, together with all personal property and debris, and shall perform all work required under Section 7.3 of this Lease.   If Tenant shall fail to comply with the provisions of this Section 15.2, Landlord may effect the removal and/or make any repairs, and the cost to Landlord shall be additional rent payable by Tenant upon demand.

ARTICLE 16.  PAYMENTS AND NOTICES

All sums payable by Tenant to Landlord shall be paid, without deduction or offset, in lawful money of the United States to Landlord at its address set forth in Item 12 of the Basic Lease Provisions, or at any other place as Landlord may designate in writing.  Unless this Lease expressly provides otherwise, all payments shall be due and payable within 5 days after demand.  All payments requiring proration shall be prorated on the basis of the number of days in the pertinent calendar month or year, as applicable.  Any notice, election, demand, consent or approval to be given or other document to be delivered by either party to the other may be delivered to the other party, at the address set forth in Item 12 of the Basic Lease Provisions, by personal service or by any courier or “overnight” express mailing service.  Either party may, by written notice to the other, served in the manner provided in this Article, designate a different address.  The refusal to accept delivery of a notice, or the inability to deliver the notice (whether due to a change of address for which notice was not duly given or other good reason), shall be deemed delivery and receipt of the notice as of the date of attempted delivery.

ARTICLE 17.  RULES AND REGULATIONS

Tenant agrees to comply with the Rules and Regulations attached as Exhibit E, and any reasonable and nondiscriminatory amendments, modifications and/or additions as may be adopted by Landlord from time to time.

  

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ARTICLE 18.  BROKER’S COMMISSION

The parties recognize as the broker(s) who negotiated this Lease the firm(s) whose name(s) is (are) stated in Item 10 of the Basic Lease Provisions, and agree that Landlord shall be responsible for the payment of brokerage commissions to those broker(s) unless otherwise provided in this Lease.  Tenant agrees to indemnify and hold Landlord harmless from any cost, expense or liability (including reasonable attorneys’ fees) for any compensation, commissions or charges claimed by any other real estate broker or agent employed or claiming to represent or to have been employed by Tenant in connection with the negotiation of this Lease.

ARTICLE 19.  TRANSFER OF LANDLORD’S INTEREST

Landlord shall have the right to transfer and assign, in whole or in part, all of its ownership interest, rights and obligations in the Building, Project or Lease, including the Security Deposit, and upon transfer Landlord shall be released from any further obligations hereunder, and Tenant agrees to look solely to the successor in interest of Landlord for the performance of such obligations and the return of any Security Deposit.

ARTICLE 20.  INTERPRETATION

20.1.   NUMBER.  Whenever the context of this Lease requires, the words “Landlord” and “Tenant” shall include the plural as well as the singular.

20.2.   JOINT AND SEVERAL LIABILITY.  If more than one person or entity is named as Tenant, the obligations imposed upon each shall be joint and several and the act of or notice from, or notice or refund to, or the signature of, any one or more of them shall be binding on all of them with respect to the tenancy of this Lease, including, but not limited to, any renewal, extension, termination or modification of this Lease.

20.3.   SUCCESSORS.  The expiration of the Term, whether by lapse of time, termination or otherwise, shall not relieve either party of any obligations which accrued prior to or which may continue to accrue after the expiration or termination of this Lease.

20.4.   TIME OF ESSENCE.  Time is of the essence with respect to the performance of every provision of this Lease in which time of performance is a factor.

20.5.   CONTROLLING LAW/VENUE.  This Lease shall be governed by and interpreted in accordance with the laws of the State of California.

20.6.   SEVERABILITY.  If any term or provision of this Lease, the deletion of which would not adversely affect the receipt of any material benefit by either party or the deletion of which is consented to by the party adversely affected, shall be held invalid or unenforceable to any extent, the remainder of this Lease shall not be affected and each term and provision of this Lease shall be valid and enforceable to the fullest extent permitted by law.

20.7.   WAIVER.  One or more waivers by Landlord or Tenant of any breach of any term, covenant or condition contained in this Lease shall not be a waiver of any subsequent breach of the same or any other term, covenant or condition.  Consent to any act by one of the parties shall not be deemed to render unnecessary the obtaining of that party’s consent to any subsequent act.  No breach of this Lease shall be deemed to have been waived unless the waiver is in a writing signed by the waiving party.

20.8.   INABILITY TO PERFORM.  In the event that either party shall be delayed or hindered in or prevented from the performance of any work or in performing any act required under this Lease by reason of any cause beyond the reasonable control of that party, then the performance of the work or the doing of the act shall be excused for the period of the delay and the time for performance shall be extended for a period equivalent to the period of the delay.  The provisions of this Section 20.8 shall not operate to excuse Tenant from the prompt payment of Rent.

  

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20.9.   ENTIRE AGREEMENT.  This Lease constitutes the entire agreement between the parties and supersedes all prior agreements and understandings related to the Premises. This Lease may be modified only by a written agreement signed by Landlord and Tenant.

20.10.   QUIET ENJOYMENT.  Upon the observance and performance of all the covenants, terms and conditions on Tenant’s part to be observed and performed, and subject to the other provisions of this Lease, Tenant shall have the right of quiet enjoyment and use of the Premises for the Term without hindrance or interruption by Landlord or any other person claiming by or through Landlord.

20.11.   SURVIVAL.  All covenants of Landlord or Tenant which reasonably would be intended to survive the expiration or sooner termination of this Lease, including without limitation any warranty or indemnity hereunder, shall so survive and continue to be binding upon and inure to the benefit of the respective parties and their successors and assigns.

ARTICLE 21.  EXECUTION

21.1.   COUNTERPARTS.  This Lease may be executed in one or more counterparts, each of which shall constitute an original and all of which shall be one and the same agreement.

21.2.   CORPORATE AND PARTNERSHIP AUTHORITY.  Tenant represents and warrants to Landlord, and agrees, that each individual executing this Lease on behalf of Tenant is authorized to do so on behalf of Tenant.

21.3.   EXECUTION OF LEASE; NO OPTION OR OFFER.  The submission of this Lease to Tenant shall be for examination purposes only, and shall not constitute an offer to or option for Tenant to lease the Premises unless and until Landlord has executed and delivered this Lease to Tenant.

ARTICLE 22.  MISCELLANEOUS

22.1.  MORTGAGEE PROTECTION.  No act or failure to act on the part of Landlord which would otherwise entitle Tenant to be relieved of its obligations hereunder or to terminate this Lease shall result in such a release or termination unless (a) Tenant has given notice by registered or certified mail to any Mortgagee of a Mortgage covering the Building whose address has been furnished to Tenant and (b) such Mortgagee is afforded a reasonable opportunity to cure the default by Landlord.  Tenant shall comply with any written directions by any Mortgagee to pay Rent due hereunder directly to such Mortgagee without determining whether a default exists under such Mortgagee’s Mortgage.

  

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22.2.   SDN LIST.  Tenant hereby represents and warrants that neither Tenant nor any officer, director, employee, partner, member or other principal of Tenant (collectively, "Tenant Parties") is listed as a Specially Designated National and Blocked Person ("SDN") on the list of such persons and entities issued by the U.S. Treasury Office of Foreign Assets Control (OFAC).  In the event Tenant or any Tenant Party is or becomes listed as an SDN, Tenant shall be deemed in breach of this Lease and Landlord shall have the right to terminate this Lease immediately upon written notice to Tenant.

	
LANDLORD:

 

WESTWOOD GATEWAY II LLC,

a Delaware limited liability company

 

By/s/ Steven M. Case                                                           

Steven M. Case

Executive Vice President

Office Properties

 

By/s/ Betty R. Casties                                                           

Betty R. Casties

Vice President, Operations

Office Properties

	
TENANT:

 

MARATHON PATENT GROUP, INC.,

a Nevada corporation

 

By /s/ Douglas B. Croxall                                                         

Printed Name Douglas B. Croxall                                                            

Title CEO                                                            

 

By                                                            

Printed Name                                                            

Title                                                            

  

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DESCRIPTION OF PREMISES

11100 Santa Monica Boulevard

Suite 380

 

  

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EXHIBIT A

  

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EXHIBIT B

Operating Expenses and Taxes

(Base Year)

(a)           Commencing 12 months following the Commencement Date, Tenant shall pay Landlord, as additional rent, for Tenant’s Share of the amount, if any, by which “Project Costs” (defined below) for each Expense Recovery Period during the Term exceed Project Costs for the Project Cost Base and the amount, if any, by which “Property Taxes” (defined below) for each Expense Recovery Period during the Term exceed Property Taxes for the Property Tax Base.  Property Taxes and Project Costs are mutually exclusive and may be billed separately or in combination as determined by Landlord.  “Tenant’s Share” shall mean that portion of any Operating Expenses determined by multiplying the cost of such item by a fraction, the numerator of which is the Floor Area and the denominator of which is the total rentable square footage, as determined from time to time by Landlord, of (i) the Floor Area of the Building as defined in Item 8 of the Basic Lease Provisions, for expenses determined by Landlord to benefit or relate substantially to the Building rather than the entire Project, or (ii) all or some of the buildings in the Project, for expenses determined by Landlord to benefit or relate substantially to all or some of the buildings in the Project rather than any specific building. Tenant acknowledges Landlord’s rights to make changes or additions to the Building and/or Project from time to time pursuant to Section 6.4 of the Lease, in which event the total rentable square footage within the Building and/or Project may be adjusted.  For convenience of reference, Property Taxes and Project Costs may sometimes be collectively referred to as “Operating Expenses.”

(b)           Commencing prior to the start of the first full “Expense Recovery Period” of the Lease (as defined in Item 7 of the Basic Lease Provisions) following the Base Year, and prior to the start of each full or partial Expense Recovery Period thereafter, Landlord shall give Tenant a written estimate of the amount of Tenant’s Share of Project Costs and Property Taxes for the Expense Recovery Period or portion thereof.  Commencing 12 months following the Commencement Date, Tenant shall pay the estimated amounts to Landlord in equal monthly installments, in advance, with Basic Rent.  Landlord may from time to time change the Expense Recovery Period to reflect a calendar year or a new fiscal year of Landlord, as applicable, in which event Tenant’s share of Operating Expenses shall be equitably prorated for any partial year. From time to time during an Expense Recovery Period, Landlord may revise the estimate based on increases in any of the Operating Expenses.

(c)           Within 180 days after the end of each Expense Recovery Period, Landlord shall furnish to Tenant a statement setting forth the actual or prorated Property Taxes and Project Costs attributable to that period, and the parties shall within 30 days thereafter make any payment or allowance necessary to adjust Tenant’s estimated payments, if any, to Tenant’s actual Tenant’s Share as shown by the annual statement.  If actual Property Taxes or Project Costs allocable to Tenant during any Expense Recovery Period are less than the Property Tax Base or the Project Cost Base, respectively, Landlord shall not be required to pay that differential to Tenant, although Landlord shall refund any applicable estimated payments collected from Tenant.  Should Tenant fail to object in writing to Landlord’s determination of actual Operating Expenses within 60 days following delivery of Landlord’s expense statement, Landlord’s determination of actual Operating Expenses for the applicable Expense Recovery Period shall be conclusive and binding on Tenant.

(d)           Even though the Lease has terminated and the Tenant has vacated the Premises, when the final determination is made of Tenant’s share of Property Taxes and Project Costs for the Expense Recovery Period in which the Lease terminates, Tenant shall upon notice pay the entire increase due over the estimated expenses paid; conversely, any overpayment made in the event expenses decrease shall be promptly (and in any event within 30 days) rebated by Landlord to Tenant.

  

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(e)           The term “Project Costs” shall include all charges and expenses pertaining to the operation, management, maintenance and repair of the Building and the Project, together with all appurtenant Common Areas (as defined in Section 6.2), and shall include the following charges by way of illustration but not limitation:  water and sewer charges; insurance premiums and deductibles and/or reasonable premium equivalents and deductible equivalents should Landlord elect to self-insure any risk that Landlord is authorized to insure hereunder; license, permit, and inspection fees; heat; light; power; janitorial services; the cost of equipping, staffing and operating an on-site and/or off-site management office for the Building and Project; all labor and labor-related costs for personnel applicable to the Building and Project, including both Landlord's personnel and outside personnel; a commercially reasonable Landlord overhead/management fee; reasonable fees for consulting services; access control/security costs, inclusive of the reasonable cost of improvements made to enhance access control systems and procedures; repairs; air conditioning; supplies; materials; equipment; tools; tenant services; programs instituted to comply with transportation management requirements; any expense incurred pursuant to Sections 6.1, 6.2, 7.2, and 10.2 and Exhibits C and F below; costs incurred (capital or otherwise) on a regular recurring basis every 3 or more years for normal maintenance projects (e.g., parking lot slurry coat or replacement of lobby, corridor and elevator cab carpets and coverings); and the amortized cost of capital improvements (as distinguished from replacement parts or components installed in the ordinary course of business) which are intended to reduce other operating costs or increases thereof, or upgrade Building and/or Project security, or which are required to bring the Building and/or Project into compliance with applicable laws and building codes.  Landlord shall amortize the cost of capital improvements on a straight-line basis over the lesser of the Payback Period (as defined below) or the useful life of the capital improvement as reasonably determined by Landlord.  Any amortized Project Costs item may include, at Landlord's option, an actual or imputed interest rate that Landlord would reasonably be required to pay to finance the cost of the item, applied on the unamortized balance.  "Payback Period" shall mean the reasonably estimated period of time that it takes for the cost savings, if any, resulting from a capital improvement item to equal the total cost of the capital improvement.  It is understood that Project Costs shall include competitive charges for direct services provided by any subsidiary or division of Landlord.  If any Project Costs are applicable to one or more buildings or properties in addition to the Building, then that cost shall be equitably prorated and apportioned among the Building and such other buildings or properties.  The term “Property Taxes” as used herein shall include the following:  (i) all real estate taxes or personal property taxes, as such property taxes may be increased from time to time due to a reassessment or otherwise; and (ii) other taxes, charges and assessments which are levied with respect to this Lease or to the Building and/or the Project, and any improvements, fixtures and equipment and other property of Landlord located in the Building and/or the Project, except that general net income and franchise taxes imposed against Landlord shall be excluded; and (iii) any tax, surcharge or assessment which shall be levied in addition to or in lieu of real estate or personal property taxes; and (iv) costs and expenses incurred in contesting the amount or validity of any Property Tax by appropriate proceedings.  A copy of Landlord’s unaudited statement of expenses shall be made available to Tenant upon request.  The Project Costs, inclusive of those for the Base Year, shall be extrapolated by Landlord to reflect at least 95% occupancy of the rentable area of the Building.

  

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EXHIBIT C

UTILITIES AND SERVICES

The following standards for utilities and services shall be in effect at the Building.  Landlord reserves the right to adopt nondiscriminatory modifications and additions to these standards.  In the case of any conflict between these standards and the Lease, the Lease shall be controlling.  Subject to all of the provisions of the Lease, the following shall apply:

1.   Landlord shall make available to the Premises during the hours of 8:00 a.m. to 6:00 p.m., Monday through Friday, and if requested by Tenant on a week-by-week basis, from 8:00 a.m. to 1:00 p.m. on Saturday ("Building Hours"), generally recognized national holidays excepted, reasonable HVAC services.  Subject to the provisions set forth below, Landlord shall also furnish the Building with elevator service (if applicable), reasonable amounts of electric current for normal lighting by Landlord’s standard overhead fluorescent and incandescent fixtures and for the operation of office equipment consistent in type and quantity with that utilized by typical office tenants of the Building and Project, and water for lavatory purposes.  Tenant will not, without the prior written consent of Landlord, not to be unreasonably withheld or delayed, connect any apparatus, machine or device with water pipes or electric current (except through existing electrical outlets in the Premises) for the purpose of using electric current or water.

2.   Upon written request from Tenant delivered to Landlord at least 24 hours prior to the period for which service is requested, but during normal business hours, Landlord will provide any of the foregoing building services to Tenant at such times when such services are not otherwise available.  Tenant agrees to pay Landlord for those after-hour services at rates that Landlord may establish from time to time.  If Tenant requires electric current in excess of that which Landlord is obligated to furnish under this Exhibit C, Tenant shall first obtain the consent of Landlord, and Landlord may cause an electric current meter to be installed in the Premises to measure the amount of electric current consumed.  The cost of installation, maintenance and repair of the meter shall be paid for by Tenant, and Tenant shall reimburse Landlord promptly upon demand for all electric current consumed for any special power use as shown by the meter.

3.   Landlord shall furnish water for drinking, personal hygiene and lavatory purposes only.

4.   In the event that any utility service to the Premises is separately metered or billed to Tenant, Tenant shall pay all charges for that utility service to the Premises and the cost of furnishing the utility to tenant suites shall be excluded from the Operating Expenses as to which reimbursement from Tenant is required in the Lease.

5.   Landlord shall provide janitorial services 5 days per week, equivalent to that furnished in comparable buildings, and window washing as reasonably required; provided, however, that Tenant shall pay for any additional or unusual janitorial services requested by Tenant in writing to the Landlord.

6.   Tenant shall have access to the Building 24 hours per day, 7 days per week, 52 weeks per year; provided that Landlord may install access control systems as it deems advisable for the Building.  Landlord may impose a reasonable charge for access control cards and/or keys issued to Tenant.

7.   The costs of operating, maintaining and repairing any supplemental air conditioning unit serving only the Premises shall be borne solely by Tenant.  Such installation shall be subject to Landlord’s prior written approval, such approval not to be unreasonably withheld or delayed, at Tenant's sole expense and shall include installation of a separate meter for the operation of the unit.  Landlord may require Tenant to remove at Lease expiration any such unit installed by or for Tenant and to repair any resulting damage to the Premises or Building.

  

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EXHIBIT D

TENANT’S INSURANCE

The following requirements for Tenant’s insurance shall be in effect during the Term, and Tenant shall also cause any subtenant to comply with the requirements.  Landlord reserves the right to adopt reasonable nondiscriminatory modifications and additions to these requirements.

1.    Tenant shall maintain, at its sole cost and expense, during the entire Term:  (i) commercial general liability insurance with respect to the Premises and the operations of Tenant in, on or about the Premises, on a policy form that is at least as broad as Insurance Service Office (ISO) CGL 00 01 (if alcoholic beverages are sold on the Premises, liquor liability shall be explicitly covered), which policy(ies) shall be written on an “occurrence” basis and for not less than $2,000,000 combined single limit per occurrence for bodily injury, death, and property damage liability; (ii) workers’ compensation insurance coverage as required by law, together with employers’ liability insurance coverage of at least $1,000,000 each accident and each disease; (iii) with respect to Alterations constructed by Tenant under this Lease, builder’s risk insurance, in an amount equal to the replacement cost of the work; and (iv) insurance against fire, vandalism, malicious mischief and such other additional perils as may be included in a standard “special form” policy, insuring all Alterations, trade fixtures, furnishings, equipment and items of personal property in the Premises, in an amount equal to not less than 90% of their replacement cost (with replacement cost endorsement), which policy shall also include business interruption coverage in an amount sufficient to cover 1 year of loss.  In no event shall the limits of any policy be considered as limiting the liability of Tenant under this Lease.

2.    All policies of insurance required to be carried by Tenant pursuant to this Exhibit D shall be written by insurance companies authorized to do business in the State of California and with a general policyholder rating of not less than “A-” and financial rating of not less than “VIII” in the most current Best’s Insurance Report.  The deductible or other retained limit under any policy carried by Tenant shall be commercially reasonable, and Tenant shall be responsible for payment of such deductible or retained limit with waiver of subrogation in favor of Landlord.  Any insurance required of Tenant may be furnished by Tenant under any blanket policy carried by it or under a separate policy.  A certificate of insurance, certifying that the policy has been issued, provides the coverage required by this Exhibit and contains the required provisions, together with endorsements acceptable to Landlord evidencing the waiver of subrogation and additional insured provisions required below, shall be delivered to Landlord prior to the date Tenant is given the right of possession of the Premises.  Proper evidence of the renewal of any insurance coverage shall also be delivered to Landlord not less than thirty (30) days prior to the expiration of the coverage.  In the event of a loss covered by any policy under which Landlord is an additional insured, Landlord shall be entitled to review a copy of such policy.

3.    Tenant’s commercial general liability insurance shall contain a provision that the policy shall be primary to and noncontributory with any policies carried by Landlord, together with a provision including Landlord, The Irvine Company LLC, and any other parties in interest designated by Landlord as additional insureds.  Tenant’s policies described in Subsections 1 (ii), (iii) and (iv) above shall each contain a waiver by the insurer of any right to subrogation against Landlord, its agents, employees, contractors and representatives.  Tenant also waives its right of recovery for any deductible or retained limit under same policies enumerated above.  All of Tenant’s policies shall contain a provision that the insurer will not cancel or change the coverage provided by the policy without first giving Landlord 30 days prior written notice.  Tenant shall also name Landlord as an additional insured on any excess or umbrella liability insurance policy carried by Tenant.

NOTICE TO TENANT:  IN ACCORDANCE WITH THE TERMS OF THIS LEASE, TENANT MUST PROVIDE EVIDENCE OF THE REQUIRED INSURANCE TO LANDLORD’S MANAGEMENT AGENT PRIOR TO BEING AFFORDED ACCESS TO THE PREMISES.

  

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EXHIBIT E

RULES AND REGULATIONS

The following Rules and Regulations shall be in effect at the Building.  Landlord reserves the right to adopt reasonable nondiscriminatory modifications and additions at any time and Landlord shall use reasonable efforts to promptly notify Tenant of such modifications.  In the case of any conflict between these regulations and the Lease, the Lease shall be controlling.

 

1.         The sidewalks, halls, passages, elevators, stairways, and other common areas shall not be obstructed by Tenant or used by it for storage, for depositing items, or for any purpose other than for ingress to and egress from the Premises.  Should Tenant have access to any balcony or patio area, Tenant shall not place any furniture other personal property in such area without the prior written approval of Landlord, such approval not to be unreasonably delayed or withheld.

 

2.         Neither Tenant nor any employee or contractor of Tenant shall go upon the roof of the Building without the prior written consent of Landlord, other than in case of an emergency.

 

3.         Tenant shall, at its expense, be required to utilize the third party contractor designated by Landlord for the Building to provide any telephone wiring services from the minimum point of entry of the telephone cable in the Building to the Premises.

 

4.         No antenna or satellite dish shall be installed by Tenant without the prior written agreement of Landlord, such consent not to be unreasonably withheld or delayed.

 

5.         The sashes, sash doors, windows, glass lights, solar film and/or screen, and any lights or skylights that reflect or admit light into the halls or other places of the Building shall not be covered or obstructed.  If Landlord, by a notice in writing to Tenant, shall object to any curtain, blind, tinting, shade or screen attached to, or hung in, or used in connection with, any window or door of the Premises, the use of that curtain, blind, tinting, shade or screen shall be immediately discontinued and removed by Tenant.  No awnings shall be permitted on any part of the Premises.

 

6.         The installation and location of any unusually heavy equipment in the Premises, including without limitation file storage units, safes and electronic data processing equipment, shall require the prior written approval of Landlord.  The moving of large or heavy objects shall occur only between those hours as may be designated by, and only upon previous notice to, Landlord.  No freight, furniture or bulky matter of any description shall be received into or moved out of the lobby of the Building or carried in any elevator other than the freight elevator (if available) designated by Landlord unless approved in writing by Landlord.

 

7.         Any pipes or tubing used by Tenant to transmit water to an appliance or device in the Premises must be made of copper or stainless steel, and in no event shall plastic tubing be used for that purpose.

 

8.         Tenant shall not place any lock(s) on any door in the Premises or Building without Landlord’s prior written consent, which consent shall not be unreasonably withheld.  Upon the termination of its tenancy, Tenant shall deliver to Landlord all the keys to offices, rooms and toilet rooms and all access cards which shall have been furnished to Tenant or which Tenant shall have had made.

 

9.         Tenant shall not install equipment requiring electrical or air conditioning service in excess of that to be provided by Landlord under the Lease without prior written approval from Landlord, such approval not to be unreasonably withheld or delayed.

 

10.         Tenant shall not use space heaters within the Premises.

 

11.         Tenant shall not do or permit anything to be done in the Premises, or bring or keep anything in the Premises, which shall in any way increase the insurance on the Building, or on the property kept in the Building, or interfere with the rights of other tenants, or conflict with any government rule or regulation.

 

12.         Tenant shall not use or keep any foul or noxious gas or substance in the Premises.

  

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13.         Tenant shall not permit the Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the Building by reason of noise, odors and/or vibrations, or interfere in any way with other tenants or those having business with other tenants.

 

14.         Tenant shall not permit any animals or birds be kept by Tenant in or about the Building.

 

15.         Neither Tenant nor its employees, agents, contractors, invitees or licensees shall bring any firearm, whether loaded or unloaded, into the Project at any time.

 

16.         Smoking anywhere within the Premises or Building is strictly prohibited, and Landlord may enforce such prohibition pursuant to Landlord’s leasehold remedies.  Smoking is permitted outside the Building and within the project only in areas designated by Landlord.

 

17.         Tenant shall not install an aquarium of any size in the Premises unless otherwise approved by Landlord.

 

18.         Unless as required by law, judicial process or governmental or regulatory body, Tenant shall not utilize any name selected by Landlord from time to time for the Building and/or the Project as any part of Tenant’s corporate or trade name.  Landlord shall have the right to change the name, number or designation of the Building or Project without liability to Tenant. Tenant shall not use any picture of the Building in its advertising, stationery or in any other manner.

 

19.         Tenant shall, upon request by Landlord, supply Landlord with the names and telephone numbers of personnel designated by Tenant to be contacted on an after-hours basis should circumstances warrant.

 

20.         Landlord may from time to time grant tenants individual and temporary variances from these Rules, provided that any variance does not have a material adverse effect on the use and enjoyment of the Premises by Tenant.

  

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EXHIBIT F

PARKING

The following parking regulations shall be in effect at the Building In the case of any conflict between these regulations and the Lease, the Lease shall be controlling.

1.      Landlord agrees to maintain, or cause to be maintained, an automobile parking area (“Parking Area”) in reasonable proximity to the Building for the benefit and use of the visitors and patrons and, except as otherwise provided, employees of Tenant, and other tenants and occupants of the Building.  Landlord shall have the right to determine the nature and extent of the automobile Parking Area, and of making such changes to the Parking Area from time to time which in its opinion are desirable.  Landlord shall not be liable for any damage to motor vehicles of visitors or employees, for any loss of property from within those motor vehicles, or for any injury to Tenant, its visitors or employees, unless ultimately determined to be caused by the sole active negligence or willful misconduct of Landlord.  Landlord shall also have the right to establish, and from time to time amend, and to enforce against all users of the Parking Area all reasonable rules and regulations (including the designation of areas for employee parking) as Landlord may deem necessary and advisable for the proper and efficient operation and maintenance of the Parking Area.

2.      Landlord may, if it deems advisable in its sole discretion, charge for parking and may establish for the Parking Area a system or systems of permit parking for Tenant, its employees and its visitors.  In no event shall Tenant or its employees park in reserved stalls leased to other tenants or in stalls within designated visitor parking zones, nor shall Tenant or its employees utilize more than the number of Parking Passes (defined below) allotted in this Lease to Tenant.   Tenant shall, upon request of Landlord from time to time, furnish Landlord with a list of its employees’ names and of Tenant’s and its employees’ vehicle license numbers.  Parking access devices, if applicable, shall not be transferable.  Landlord may impose a reasonable fee for access devices and a replacement charge for devices which are lost or stolen.  Each access device shall be returned to Landlord promptly following the Expiration Date or sooner termination of this Lease.

3.      Washing, waxing, cleaning or servicing of vehicles, or the parking of any vehicle on an overnight basis, in the Parking Area (other than emergency services) by any parker or his or her agents or employees is prohibited unless otherwise authorized by Landlord.

4.      It is understood that the employees of Tenant and the other tenants of Landlord within the Building and Project shall not be permitted to park their automobiles in the portions of the Parking Area which may from time to time be designated for patrons of the Building and/or Project.  Tenant may purchase all or a portion of the parking passes for unreserved parking set forth in Item 11 of the Basic Lease Provisions (the "Parking Passes"), in monthly amounts as Landlord shall from time to time determine.  Landlord agrees that Tenant may convert up to 1 of its Parking Passes to a reserved stall by providing written notice of such election to Landlord prior to the Commencement Date (the “Converted Stall”), at Landlord’s asking rate for reserved parking from time to time.  Tenant acknowledges that if such written notice of election is not delivered to Landlord prior to the Commencement Date, then the conversion of the Parking Pass to a reserved stall shall be subject to the month to month availability of such reserved stall as determined by Landlord.  Should any monthly parking charge not be paid within 5 days following the date due, then a late charge shall be payable by Tenant equal to the greater of (i) 5% of the delinquent installment or (ii) $100.00, which late charge shall be separate and in addition to any late charge that may be assessed pursuant to Section 14.3 of the Lease for other than delinquent monthly parking charges.

5.      Landlord shall be entitled to pass on to Tenant its proportionate share of any charges or parking surcharge or transportation management costs levied by any governmental agency and Tenant shall cooperate in any voluntary or mandated transportation management programs.

6.      Tenant shall not assign or sublet any of the Parking Passes, either voluntarily or by operation of law, without the prior written consent of Landlord, except in connection with an authorized assignment of this Lease or subletting of the Premises.

  

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EXHIBIT G

ADDITIONAL PROVISIONS

1.   RIGHT OF FIRST OFFER.  Provided Tenant is not then in Default hereunder, and provided further that Tenant has not exercised its termination right pursuant to Paragraph 2 of this Exhibit G below, Landlord hereby grants Tenant a one-time right (“First Right”) to lease any office space contiguous to the Premises on the third floor of the Building (“First Right Space”) in accordance with and subject to the provisions of this Section.  Except as otherwise provided below, prior to leasing the First Right Space to any other party during the period that this First Right is in effect, Landlord shall give Tenant written notice of the basic economic terms including but not limited to the Basic Rent, term, operating expense base, security deposit, and tenant improvement allowance (collectively, the “Economic Terms”), upon which Landlord is willing to lease such particular First Right Space to Tenant or to a third party; provided that the Economic Terms shall exclude brokerage commissions and other Landlord payments that do not directly inure to the tenant’s benefit.  It is understood that should Landlord intend to lease other office space in addition to the First Right Space as part of a single transaction, then Landlord’s notice shall so provide and all such space shall collectively be subject to the following provisions.  Within 3 business days after receipt of Landlord’s notice, Tenant must give Landlord written notice pursuant to which Tenant shall elect to (i) lease all, but not less than all, of the space specified in Landlord’s notice (the “Designated Space”) upon such Economic Terms and the same non-Economic Terms as set forth in this Lease; (ii) refuse to lease the Designated Space, specifying that such refusal is not based upon the Economic Terms, but upon Tenant’s lack of need for the Designated Space, in which event Landlord may lease the Designated Space upon any terms it deems appropriate; or (iii) refuse to lease the Designated Space, specifying that such refusal is based upon said Economic Terms, in which event Tenant shall also specify revised Economic Terms upon which Tenant shall be willing to lease the Designated Space.  In the event that Tenant does not so respond in writing to Landlord’s notice within said period, Tenant shall be deemed to have elected clause (ii) above.  In the event Tenant gives Landlord notice pursuant to clause (iii) above, Landlord may elect to either (x) lease the Designated Space to Tenant upon such revised Economic Terms and the same other non-Economic Terms as set forth in this Lease, or (y) lease the Designated Space to any third party upon Economic Terms which are not materially more favorable to such party than those Economic Terms proposed by Tenant.  Should Landlord so elect to lease the Designated Space to Tenant, then Landlord shall promptly prepare and deliver to Tenant an amendment to this Lease consistent with the foregoing, and Tenant shall execute and return same to Landlord within 10 days.  Tenant’s failure to timely return the amendment shall entitle Landlord to specifically enforce Tenant’s commitment to lease the Designated Space, to lease such space to a third party, and/or to pursue any other available legal remedy.  Notwithstanding the foregoing, it is understood that Tenant’s First Right shall be subject to any extension or expansion rights previously granted by Landlord to any third party tenant in the Building, as well as to any such rights which may hereafter be granted by Landlord to any third party tenant occupying the First Right Space or any portion thereof, and Landlord shall in no event be obligated to initiate this First Right prior to leasing any portion of the First Right Space to the then-current occupant thereof.  Tenant’s rights under this Section shall be personal to the original Tenant named in this Lease and may not be assigned or transferred (except in connection with a Permitted Transfer of this Lease to an Affiliate as described in Section 9.2 hereof).  Any other attempted assignment or transfer shall be void and of no force or effect.

2.   RIGHT TO TERMINATE.  Provided Tenant is not in Default under any provision of this Lease, Tenant shall have a one-time right to terminate this Lease effective as of the expiration of the 42nd month of the initial Term.  Tenant shall exercise such termination right by giving written notice thereof to Landlord (the "Termination Notice") at least 9 months prior to the effective date of termination.  All Rent and other costs due under this Lease for the Premises shall be due and payable by Tenant to Landlord through the effective date of termination.  In addition, should Tenant exercise the foregoing right to terminate, Tenant shall pay to Landlord, concurrently with its delivery of the Termination Notice, a separate termination fee, as reasonably computed by Landlord, comprised of the unamortized portion (based upon a constant amortization over a 7 year period with 7% interest) as of the effective date of termination of (A) brokerage commissions paid by Landlord in connection with the Lease, and (B) tenant improvement costs funded by Landlord.  Any such termination shall not abrogate any obligation existing under the Lease as of the termination date or otherwise attributable to Tenant’s occupancy thereof.

  

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EXHIBIT X

WORK LETTER

DOLLAR ALLOWANCE

[SECOND GENERATION SPACE]

The Tenant Improvement work (herein “Tenant Improvements”) shall consist of any work required to complete the Premises pursuant to plans and specifications approved by both Landlord and Tenant.  All of the Tenant Improvement work shall be performed by a contractor selected by Landlord and in accordance with the procedures and requirements set forth below.

I.           ARCHITECTURAL AND CONSTRUCTION PROCEDURES

	
  

	
A.

	
Tenant and Landlord shall approve both (i) a detailed space plan for the Premises, prepared by the architect engaged by Landlord for the work described herein (“Landlord’s Architect”), which includes interior partitions, ceilings, interior finishes, interior office doors, suite entrance, floor coverings, window coverings, lighting, electrical and telephone outlets, plumbing connections, heavy floor loads and other special requirements (“Preliminary Plan”), and (ii) an estimate, prepared by the contractor engaged by Landlord for the work herein (“Landlord’s Contractor”), of the cost for which Landlord will complete or cause to be completed the Tenant Improvements (“Preliminary Cost Estimate”). Tenant shall approve or disapprove each of the Preliminary Plan and the Preliminary Cost Estimate by signing copies of the appropriate instrument and delivering same to Landlord within 5 business days of its receipt by Tenant.  If Tenant disapproves any matter, Tenant shall specify in detail the reasons for disapproval and Landlord shall attempt to modify the Preliminary Plan and the Preliminary Cost Estimate to incorporate Tenant’s suggested revisions in a mutually satisfactory manner; provided that in no event shall Tenant have the right to request changes or additions to the Preliminary Plan for the purpose of utilizing any unused portion of the Landlord Contribution (as defined below).

	
  

	
B.

	
On or before its approval of the Preliminary Plan, Tenant shall provide in writing to Landlord or Landlord’s Architect all specifications and information reasonably requested by Landlord for the preparation of final construction documents and costing, including without limitation Tenant’s final selection of wall and floor finishes, complete specifications and locations (including load and HVAC requirements) of Tenant’s equipment, and details of all other non-building standard improvements to be installed in the Premises (collectively, “Programming Information”).  Tenant understands that final construction documents for the Tenant Improvements shall be predicated on the Programming Information, and accordingly that such information must be accurate and complete.

	
  

	
C.

	
Upon Tenant’s approval of the Preliminary Plan and Preliminary Cost Estimate and delivery of the complete Programming Information, Landlord’s Architect and engineers shall prepare and deliver to the parties working drawings and specifications (“Working Drawings and Specifications”), and Landlord’s Contractor shall prepare a final construction cost estimate (“Final Cost Estimate”) for the Tenant Improvements in conformity with the Working Drawings and Specifications.  Tenant shall have 5 business days from the receipt thereof to approve or disapprove the Working Drawings and Specifications and the Final Cost Estimate, and any disapproval or requested modification shall be limited to items not contained in the approved Preliminary Plan or Preliminary Cost Estimate; provided that in no event shall Tenant have the right to request changes or additions to the Working Drawings and Specifications for the purpose of utilizing any unused portion of the Landlord Contribution. In no event shall Tenant disapprove the Final Cost Estimate if it does not exceed the approved Preliminary Cost Estimate. Should Tenant disapprove the Working Drawings and Specifications and the Final Cost Estimate, such disapproval shall be accompanied by a detailed list of revisions.  Any revision requested by Tenant and accepted by Landlord shall be incorporated by Landlord’s Architect into a revised set of Working Drawings and Specifications and Final Cost Estimate, and Tenant shall approve same in writing within 5 business days of receipt without further revision.

 

  

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D.

	
In the event that Tenant requests in writing a revision in the approved Working Drawings and Specifications (“Change”), then provided such Change is acceptable to Landlord, Landlord shall advise Tenant by written change order as soon as is practical of any increase in the Completion Cost such Change would cause.  Tenant shall approve or disapprove such change order in writing within 2 business days following its receipt from Landlord.  Tenant’s approval of a Change shall be accompanied by Tenant’s payment of any resulting increase in the Completion Cost, regardless of any unutilized portion of the “Landlord Contribution” as defined below.  It is understood that Landlord shall have no obligation to interrupt or modify the Tenant Improvement work pending Tenant’s approval of a change order.

	
  

	
E.

	
It is understood that the Preliminary Plan and the Working Drawings and Specifications, together with any Changes thereto, shall be subject to the prior approval of Landlord.  Landlord shall identify any disapproved items within 3 business days (or 2 business days in the case of Changes) after receipt of the applicable document.  Should Landlord approve work requested in writing by the Tenant that would necessitate any ancillary Building modification or other expenditure by Landlord, then except to the extent of any remaining balance of the Landlord Contribution, Tenant shall, in addition to its other obligations herein, promptly fund the cost thereof approved by the Tenant to Landlord.

	
  

	
F.

	
It is understood that all of the Tenant Improvements shall be done during Tenant’s occupancy of the Premises.  In this regard, Tenant agrees to assume any risk of injury, loss or damage which may result.  Tenant further agrees that it shall be solely responsible for relocating its office equipment and furniture in the Premises in order for Landlord to complete the work in the Premises and that no rental abatement shall result while the Tenant Improvements are completed in the Premises.

	
  

	
G.

	
Tenant hereby designates Doug Croxall, Telephone No. (____) __________, as its representative, agent and attorney-in-fact for the purpose of receiving notices, approving submittals and issuing requests for Changes, and Landlord shall be entitled to rely upon authorizations and directives of such person(s) as if given directly by Tenant.  Tenant may amend the designation of its construction representative(s) at any time upon delivery of written notice to Landlord.

II.           COST OF TENANT IMPROVEMENTS

	
  

	
A.

	
Landlord shall complete, or cause to be completed, the Tenant Improvements, at the construction cost shown in the approved Final Cost Estimate (subject to the provisions of this Work Letter), in accordance with final Working Drawings and Specifications approved by both Landlord and Tenant.  Landlord shall pay towards the final construction costs (“Completion Cost”) as incurred a maximum of $51,380.00 (“Landlord Contribution”), based on $35.00 per usable square foot of the Premises, and Tenant shall be fully responsible for the remainder (“Tenant Contribution”). Tenant understands and agrees that any portion of the Landlord Contribution not requested by Tenant in accordance with this Exhibit X by December 31, 2014, shall inure to the benefit of Landlord and Tenant shall not be entitled to any credit or payment; provided, however, that Tenant may, upon written request delivered to Landlord not later than December 31, 2014, apply a portion of the unused Landlord Contribution not to exceed $25,690.00 to the next then due Basic Rent.  Landlord shall promptly memorialize any such reduction in the Basic Rent on a form provided by Landlord.  In addition, Tenant may utilize a portion of the unused Landlord Contribution not to exceed $14,680.00 toward the out-of-pocket expenses incurred by Tenant for (1) relocating to the Premises, including moving costs (not to exceed $7,340.00 in the aggregate) (“Moving Costs”) and (2) for the purchase, refurbishment or relocation of furniture, fixtures and equipment for the Premises (not to exceed $7,340.00 in the aggregate) (“FF&E Costs”).  Tenant shall be reimbursed for Moving Costs and/or FF&E Costs by submitting copies of all supporting third-party invoices to Landlord by August 1, 2014.  Landlord shall reimburse Tenant in one installment for Moving Costs and one installment for FF&E Costs within 30 days following receipt of all such respective invoices.

 

  

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B.

	
The Completion Cost shall include all direct costs of Landlord in completing the Tenant Improvements, including but not limited to the following:  (i) payments made to architects, engineers, contractors, subcontractors and other third party consultants in the performance of the work, (ii) permit fees and other sums paid to governmental agencies, (iii) costs of all materials incorporated into the work or used in connection with the work (excluding any furniture, fixtures and equipment relating to the Premises), and (iv) keying and signage costs.  The Completion Cost shall also include an administrative/supervision fee to be paid to Landlord in the amount of 3% of all such direct costs, cosmetic alterations not requiring a permit excluded.

	
  

	
C.

	
Prior to start of construction of the Tenant Improvements, Tenant shall pay to Landlord the amount of the Tenant Contribution set forth in the approved Final Cost Estimate.  In addition, if the actual Completion Cost of the Tenant Improvements is greater than the Final Cost Estimate because of modifications or extras requested by Tenant and not reflected on the approved working drawings, or because of delays caused by Tenant, then notwithstanding any unused portion of the Landlord Contribution, Tenant shall pay to Landlord, within 10 days following submission of an invoice therefor, all such additional costs, including any additional architectural fee.  If Tenant defaults in the payment of any sums due under this Work Letter, Landlord shall (in addition to all other remedies) have the same rights as in the case of Tenant’s failure to pay rent under the Lease.Unassociated Document

 

EXHIBIT 10.55

PATENT PURCHASE AGREEMENT

 

This PATENT PURCHASE AGREEMENT (this “Agreement”) is entered into on October 31, 2013 (the “Effective Date”) by and between DELPHI TECHNOLOGIES, INC., a Delaware corporation, of 5725 Delphi Drive, Troy, MI 48098-2815 USA (“Seller”) and Loopback Technologies, Inc., a Delaware corporation of 2331 Mill Road Suite 100 Alexandria, VA 22314 (“Purchaser”). The parties hereby agree as follows:

 

	
1.  

	
Background

 

	
1.1  

	
Seller owns certain United States patents and patent applications and related foreign patents and applications.

 

	
1.2  

	
Seller wishes to sell to Purchaser all of Seller’s right, title and interest in the Acquisition Patents (as defined below) and any and all rights associated therewith, including, without limitation, the rights to further develop the technology, to commercialize and to enforce the constitutional right to exclude others from practicing the technology.

 

	
1.3  

	
Purchaser wishes to purchase from Seller all right, title and interest in the Assigned Patent Rights (as defined below).

 

	
2.  

	
Definitions

 

	
2.1  

	
“Acquisition Patents” means the Patent Families listed on Exhibit A-1 hereto, as the same shall be finalized at Closing in accordance with Section 3.3 below.

 

	
2.2  

	
“Affiliate” means, with respect to any Person, any Entity in any country that controls, is controlled by or is under common control with such Person. The term “control” means possession directly or indirectly of the power to direct or cause the direction of the management and policies of an Entity, whether through the ownership of voting securities, by trust, management agreement, contract or otherwise; provided, however, that beneficial ownership of at least fifty percent (50%) of the voting equity interests of an entity shall be deemed to be control

 

	
2.3  

	
“Assigned Patent Rights” means the Acquisition Patents and (a) all causes of action (whether currently pending, filed, or otherwise) and other enforcement rights under the Acquisition Patents including, without limitation, all rights to sue, to countersue and to pursue damages, injunctive relief, and any other remedies of any kind for past, current and future infringement; and (b) all rights to recover and collect settlement arrangements, license payments (including lump sum payments), royalties and other payments due now or hereafter due or payable with respect thereto, under or on account of any of the Acquisition Patents or any of the foregoing and (c) any and all privileges, including the benefit of all attorney client privilege and attorney work product privilege.

 

	
2.4  

	
“Entity” means any corporation, partnership, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization, governmental entity (or any department, agency, or political subdivision thereof) or any other legal entity.

 

	
2.5  

	
“Executed Assignment” means an executed original of the Patent Assignment Agreement in Exhibit B.

 

	
2.6  

	
“Patents” means any patents and patent applications, including but not limited to all reissues, reexaminations, extensions, continuations, continuations in part, continuing prosecution applications, provisionals and divisions of such patents, and any patents and patent applications which claim priority to any of the foregoing, and all foreign counterparts of the foregoing.

 

	
2.7  

	
 "Patent Families" means a group of one or more Patents which are all related to each other by way of claiming a common priority date from one of the Patents in that group, including, for the avoidance of doubt, any Additional Inventions and Patents (as defined below) of such Patents.

 

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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2.8  

	
“Person” means any individual or Entity.

 

	
3.  

	
Selection of Patents; Document Delivery; Broker

 

	
3.1  

	
As of the Effective Date, Exhibit A-1 identifies the fifteen (15) Patent Families that Purchaser is contemplating acquiring at Closing (as defined below).  At any point prior to the Closing, Purchaser shall be permitted to amend Exhibit A-1 in accordance with the provisions set forth in Section 3.3 below.

 

	
3.2  

	
Document Delivery.  As soon as reasonably practicable after the Effective Date, Seller shall send to Purchaser, via Federal Express or other reliable overnight delivery service or by hand delivery, all prosecution files and all other documents, communications and files (electronic or otherwise) regarding the ownership, prosecution, maintenance and enforcement of the fifteen (15) Patent Families identified in Exhibit A-1 on the Effective Date to the extent the same are in the possession or control of the patent department of Seller, any affiliate of Seller or their respective counsel, agents or related parties, including, but not limited to those documents listed on the Document Request Form attached hereto as Exhibit C (collectively, the “Documents”), and in addition will sign the affidavit attached to the Document Request Form as Attachment 1 or alternatively, the affidavit attached to the Document Request Form as Attachment 2.

 

	
3.3  

	
Substitute Patent Families.  At any time between the Effective Date and the Closing Date, Purchaser will have the right to inform the Seller of the potential substitution of a different available Patent Family listed in Exhibit A-2 in place of any of the Patent Families listed in Exhibit A-1 (each a “Substitute Patent Family”) or the removal of a Patent Family listed on Exhibit A-1.  After such substitution, Seller will provide Documents for such Substitute Patent Family as forth in Section 3.2 and Purchaser will promptly review such Documents after receipt thereof to accept or reject the Substitute Patent Family, in its sole discretion and such process shall continue until Closing.  Once a Patent Family has been accepted by Purchaser for purchase, it shall remain on Exhibit A-1 and Exhibit A-1 shall be further updated by Purchaser to reflect any substitutions and/or removals and shall become final at Closing, unless certified as final by Purchaser on an earlier date if the reviews of the Acquisition Patents and Substitute Patent Families have been earlier concluded.  In the event that after Purchaser’s review of available Substitute Patent Families, Purchaser has exhausted the list of available Patent Families on Exhibit A-2 without confirming fifteen (15) Patent Families as Acquisition Patents,  (i) Seller will update Exhibit A-2 to provide additional Patent Families for Purchaser’s consideration until such time as Purchaser has designated fifteen (15) Patent Families as Acquisition Patents or (ii) if Seller if unable or otherwise fails to provide additional Patent Families acceptable to Purchaser as set forth in Section 3.3(i) by the Closing Date, the Purchase Price will be reduced by an amount equal to the product of * multiplied by a fraction (a) the numerator of which shall be the number of Patent Families listed on the final Exhibit A-1 constituting the Acquisition Patents and (b) the denominator of which shall be fifteen (15).

 

	
3.4  

	
Notwithstanding Seller’s delivery obligations under Section 3.2 and Section 3.3 above, in the event that a Document related to ownership, prosecution, maintenance, notice of claims of prior art, validity or Seller’s enforcement is discovered at any time following the Closing that was not provided to Purchaser in accordance with Section 3.2 or Section 3.3 above as well as other Documents that are knowingly withheld (any such Document, an “Undisclosed Document”), Seller will promptly provide to Purchaser the Undisclosed Document.     To the extent that any Undisclosed Document is material to any of the Acquisition Patents (including but not limited to, the validity or enforceability thereof or chain of title thereto), in addition to of any other rights or remedies Purchaser may have under law or this Agreement, Purchaser shall be entitled to demand and Seller will promptly pay, a refund of a portion of the Purchase Price, equal to the product of the Purchase Price multiplied by a fraction (a) the numerator of which shall be the number of Patent Families constituting the Acquisition Patents impacted by the Undisclosed Document and (b) the denominator shall be the total number of Patent Families constituting the Acquisition Patents.  In the event of any refund pursuant to this paragraph, Purchaser will assign ownership to Seller of the Acquisition Patents within the pertinent Patent Family.  In the event that Purchaser has received any revenues from third parties attributable to such pertinent Patent Family, * of such revenues will be netted out against that portion of the Purchase Price to be refunded.

 

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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3.5  

	
Broker Activity.  Promptly after Closing, Purchaser shall engage a third party patent broker (“Broker”) to make the Acquisition Patents available for purchase by third parties for a minimum period of thirty (30) days on terms and conditions acceptable to Purchaser.  Notwithstanding anything to the contrary contained herein, Purchaser shall be permitted to provide to such interested third parties, subject to obligations of confidentiality at least as stringent as those contained herein, a copy of this Agreement and access to any Documents.

 

	
4.  

	
  Cash Consideration

 

	
4.1  

	
Subject to any adjustment under Section 3.3 above, in addition to all other consideration to which Seller is entitled hereunder, Purchaser shall pay to Seller * ($*) (the “Purchase Price”) as consideration for the sale, assignment, transfer and conveyance of the Assigned Patent Rights to Purchaser under this Agreement.  Subject to the Closing, the Purchase Price shall be paid on the Closing Date (as defined below).

 

	
4.2  

	
All payments shall be made by wire transfer of funds to Seller:

 

*

 

	
5.  

	
License Back Under Patents.

 

	
5.1  

	
License Back.  As additional valuable consideration hereunder, subject to the Closing, Purchaser grants to Seller and its Affiliates, under the Acquisition Patents, a royalty-free, irrevocable, perpetual, non-exclusive, non-divisible, nontransferable (except as provided in Section 10.4 below) worldwide right and license, without the right to sublicense, to make, have made, use, sell, offer for sale, import and otherwise distribute Licensed Products (as defined below) (the “License”). Seller (and its Affiliates) will not act with intent to provide any third party the benefits of this License, by entering into transactions outside the ordinary course of Seller’s (and its Affiliates’) business.  Except as set forth in Section 10.4, the License, as to any Affiliate of Seller, will terminate as to such member if and when such member ceases to meet the requirements of being an Affiliate of Seller.  Notwithstanding the foregoing, with respect to Seller, the term “Affiliates” excludes any Person that is a party to a pending patent infringement claim or lawsuit filed with respect to the Acquisition Patents at such time, following the Effective Date, as the Person becomes an Affiliate.

 

“Licensed Products” means any and all products and processes of Seller and its Affiliates which incorporate subject matter claimed or protected by the Acquisition Patents.

 

	
5.2  

	
Pass-Through Rights. For the avoidance of doubt and notwithstanding anything to the contrary contained herein, the License may be passed through to Seller’s and Seller’s Affiliates’ purchasers, sellers, importers, distributors or users of the Licensed Products, as applicable,  and extends to  an integrated system  (a “Combined Licensed Product”)  only as required to the extent that the manufacture, sale, offering to sell, import, use or other disposal of the Combined Licensed Product would not infringe (including without limitation any forms of indirect infringement) one or more claims or any of the Acquisition Patents but for the inclusion of a Licensed Product within the Combined Licensed Product;

 

	
5.3  

	
 No Third Party Rights. Neither Seller nor any of Seller’s Affiliates will  act with the primary intent to provide any third party the benefit of the rights under the License.

 

	
5.4  

	
No License Transfer.  Except as explicitly permitted in Section 10.4 hereunder, Seller shall not assign nor transfer this License or any right, benefit or obligation hereunder, including by a change of control (which shall be deemed an assignment and similarly limited), operation of law or otherwise without the prior written consent of Licensor.

 

	
5.5  

	
Limited Release.  Upon the Closing, Purchaser hereby irrevocably releases Seller and its Affiliates and their product and service distributors, resellers, retailers, customers and other recipients duly in possession of Licensed Products from any and all liability for any infringement of the Acquisition Patents prior to the Closing solely with respect to such Licensed Products.

 

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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6.  

	
Transfer of Patents and Additional Rights

 

	
6.1  

	
Assignment of Patents.  Seller hereby  sells, assigns, transfers and conveys to Purchaser all right, title and interest in and to the Assigned Patent Rights and will provide Purchaser with the Executed Assignment for the Assigned Patent Rights upon receipt of the Purchase Price.  Purchaser shall be responsible for recording the Executed Assignment with the United States Patent and Trademark Office (or its foreign counterparts as applicable) and shall provide Seller with written evidence thereof promptly after doing so.

 

	
6.2  

	
Additional Patents.  Seller hereby represents and warrants to Purchaser that all patents, reissues, reexaminations, extensions, continuations, continuations in part, continuing prosecution applications, provisionals and divisions of the Acquisition Patents and patents and patent applications that claim priority to any of the foregoing are (or will be at Closing) listed on Exhibit A-1. In the event that Purchaser discovers, at any time any patents, reissues, reexaminations, extensions, continuations, continuations in part, continuing prosecution applications, provisionals and divisions of the Acquisition Patents or patents or patent applications that claim priority to any of the foregoing that are owned by Seller other than those listed in Exhibit A-1 (the “Additional Inventions and Patents”), then the Additional Inventions and Patents shall be sold, including by transferring, assigning and setting over, to Purchaser, all right, title and interest thereto, for no additional consideration, and the Additional Inventions and Patents shall be deemed “Acquisition Patents”, as applicable, under this Agreement, for all intents and purposes. In such event, the Parties shall sign an amended Exhibit A-1 to add the Additional Inventions and Patents thereto and in the event that Purchaser’s notification to Seller is subsequent to the Closing, then the Parties shall conduct a subsequent closing and the provisions of Section 7.1 shall apply to the sale, assignment transfer and setting over to Purchaser of the Additional Inventions and Patents, mutatis mutandis.

 

	
6.3  

	
No Assumption of Liabilities.  It is expressly understood and agreed that Purchaser shall not be liable for and hereby disclaims any assumption of any of the obligations, claims or liabilities of Seller and/or its Affiliates and/or of any third party of any kind or nature whatsoever arising from or in connection with any circumstances, causes of action, breach, violation, default or failure to perform with respect to the Assigned Patent Rights prior to the Closing and/or for any liability in connection with the Preexisting Licenses (as defined below).  To the extent that any of the Assigned Patent Rights relate to inventions that by law or regulations governing employee inventions require compensation to be paid to the employee inventors (“Employee Inventors”), the Seller shall be responsible for paying each of the Employee Inventors named in the Assigned Patent Rights their respective portion of any required inventor compensation.

 

	
7.  

	
  Closing and Additional Obligations

 

	
7.1  

	
The closing of the purchase and sale of the Assigned Patent Rights (the “Closing”) shall take place on or before  December 15, 2013,unless otherwise agreed, above (the “Closing Date”).

 

	
(a)  

	
At the Closing, Seller shall execute and deliver to Purchaser (i) the Executed Assignment, as well as (ii) a copy of all corporate approvals required by it in order to executive, deliver and perform this Agreement and the transactions contemplated hereunder.

 

	
(b)  

	
At the Closing, to the extent that there is (i) any amendment or material change to the representations and/or warranties of Seller as provided herein (and any related Exhibits), including but not limited to, as the result of the designation of any Substitute Patent Families as Acquisition Patents pursuant to Section 3.3 above, Seller shall bring down its representations and warranties as of immediately prior to the Closing Date (the “Bring Down Schedule”) and deliver such Bring Down Schedule to Purchaser or (ii) no such amendment or material change to the representations and/or warranties of Seller as provided herein, Seller shall provide written confirmation that no such amendments or materials changes so exist (the “Bring Down Certification”) .

 

	
(c)  

	
The obligation of Purchaser to consummate the Closing (all of which shall be deemed waived if the Closing occurs) is subject to the satisfaction or waiver by Purchaser of the following conditions:

 

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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(i)  

	
Seller shall have performed all of its obligations hereunder required to be performed by it at or prior to the Closing;

 

	
(ii)  

	
the representations and warranties of Seller contained in this Agreement shall be true at and as of the Closing, as if the Closing was substituted for the date in such representations and warranties; and no information contained in Seller’s Bring Down Schedule shall reflect a material adverse change in the representations and warranties of the Seller from the Effective Date until the Closing Date (unless otherwise waived in writing by Purchaser, in its sole discretion);

 

	
(iii)  

	
no court, arbitrator or governmental authority shall have issued any order, and there shall not be any applicable law, restraining the effective operation or use by Purchaser of any of the Assigned Patent Rights on or after the Closing;

 

	
(iv)  

	
all corporate and other proceedings in connection with the transactions contemplated by this Agreement shall have been performed by Seller, all documents and instruments incident to such transactions and reasonably requested by Purchaser shall be reasonably satisfactory in substance and form to Purchaser and its counsel, shall have been executed and Purchaser and its counsel shall have received counterpart originals or certified or other copies of such documents and instruments as Purchaser or its counsel may reasonably request; and

 

	
(v)  

	
Purchaser being satisfied, in its sole discretion and in consultation with counsel, that the Acquisition Patents are valid and enforceable, taking into consideration any information contained in the Documents.

 

	
7.2  

	
Further Assurance.  At the reasonable request of Purchaser, Seller will execute and deliver such other instruments and do and perform such other acts and things as may be necessary or desirable for effecting completely the consummation of the transactions contemplated hereby, including execution, acknowledgment and recordation of other such papers for fully perfecting and conveying unto Purchaser the benefit of the transactions contemplated hereby.  Without limiting the foregoing, Seller will direct its counsel to work cooperatively with Purchaser’s counsel, in a timely manner and, in any event, as soon as practical, including but not limited to responding to any third-party requests for information as authorized by Purchaser and by granting access to inventors currently employed by Seller. To induce Seller to enter into this Agreement, Purchaser will conduct its business in accordance with good business practices.

 

	
7.3  

	
Inventor Agreements.  Seller will make every reasonable effort to cooperate with Purchaser and Purchaser's counsel, in obtaining and delivering to Purchaser inventor agreements, in the form attached hereto as Exhibit E, signed by each of the inventors under the Acquisition Patents, and if asked by such inventors will encourage the inventors to so sign the inventor agreements.

 

	
7.4  

	
Inventor Oath and Declaration.  Seller shall obtain and deliver to Purchaser fully executed declarations from each employee inventor under those of the Acquisition Patents which are, as of the Effective Date, pending before the United States Patent and Trademark Office (a “Pending Patent”), in the form attached hereto as Exhibit F or in another form compliant with 37 CFR 1.63 as in force on the filing date of the Pending Patent and on the Effective Date, in connection with any Pending Patent.  The foregoing shall not apply to any Pending Patent(s) which are reissue applications.  All Pending Patents that are reissue applications will be particularly designated as such by the Seller.  Upon request by Purchaser, Seller will permit Purchaser’s counsel to conduct telephone interviews with each inventor currently employed by Seller at a mutually convenient time for Purchaser’s counsel and such inventor.

 

	
7.5  

	
Payment of Fees.  Purchaser will be responsible for any maintenance fees, annuities, and the like due or payable on the Acquisition Patents following the Closing Date and will reimburse Seller for any such fees, annuities incurred after the Closing Date and the like that are paid by Seller.

 

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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8.  

	
Representations And Warranties Of Seller

 

Seller hereby represents and warrants to Purchaser as follows that, as of the Effective Date:

 

	
8.1  

	
Authority.  Seller has the full power and authority, and has obtained all third party consents, approvals or other authorizations required, to enter into this Agreement and to carry out its obligations hereunder, including, without limitation, the assignment of the Assigned Patent Rights to Purchaser. The execution and delivery of this Agreement and the related transaction documents and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate actions on the part of Seller. This Agreement and the other transaction documents have been duly executed and delivered by the Seller, and constitute legal, valid and binding obligations of Seller, enforceable in accordance with their terms.

 

	
8.2  

	
Non-Contravention.  Seller’s execution, delivery, and performance of its obligations under this Agreement will not conflict with or violate the corporate documents of Seller or any laws to which Seller is subject, or any agreement or other obligation of Seller or binding upon Seller’s assets or result in the creation or imposition of any mortgage, lien, charge, pledge, security interest, other encumbrance or third party right upon any of the Assigned Patent Rights.

 

	
8.3  

	
Title and Contest.  Seller owns all right, title, and interest to the Assigned Patent Rights, including all right, title, and interest to sue for infringement of the Acquisition Patents and all attorney-client privilege. The Assigned Patent Rights are free and clear of all liens, claims, mortgages and security interests. There are no actions, suits, investigations, claims or proceedings threatened, pending or in progress relating in any way to the Assigned Patent Rights. Seller is not obligated or under any liability whatsoever to make any payments by way of royalties, fees or otherwise to any owner or licensee of, or other claimant with respect to the use of any of the Assigned Patent Rights or subject matter disclosed and claimed in the Acquisition Patents or in connection with the licensing or sale of any of the Assigned Patent Rights to third parties, in each case, other than under the Preexisting Licenses.

 

	
8.4  

	
Preexisting Licenses.  No licenses under the Acquisition Patents, or interest or rights in any of the Assigned Patent Rights, have been granted or retained other than as set forth on Exhibit G and those to be granted at Closing as set forth in Article 5 (the “Preexisting Licenses”). To Seller’s best knowledge, the Preexisting Licenses are non-sublicensable (except as to have-made or similar rights and further, except as to affiliates and to suppliers of the licensees) and non-transferable (except in connection with a merger, acquisition, or similar transaction) and non-assignable. Seller represents and warrants that no exclusive licenses under the Patents have been granted.  The Preexisting Licenses are not being assigned hereunder and Seller shall continue to remain liable as the “licensor” thereunder, however title is taken subject to Preexisting Licenses.

 

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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8.5  

	
Conduct.  Seller or its agents or representatives have not knowingly engaged in any conduct, or omitted to perform any necessary act, the result of which would invalidate any of the Acquisition Patents or hinder their enforcement, including, without limitation, misrepresenting Seller’s patent rights to a standard-setting organization.

 

	
8.6  

	
Enforcement.  Seller has not put a third party on notice of actual or potential infringement of any of the Acquisition Patents. Seller has not invited any third party to enter into a license under any of the Acquisition Patents. Seller has not initiated any enforcement action with respect to any of the Acquisition Patents.

 

	
8.7  

	
Patent Office Proceedings.  To Seller’s best knowledge, none of the Acquisition Patents has been or is currently involved in any reexamination, reissue, interference proceeding, or any similar proceeding, or that any such proceedings are pending or threatened.

 

	
8.8  

	
Fees.  All maintenance fees, annuities, and the like due on the Acquisition Patents until the lapse of ninety (90) days following the Closing Date have been timely paid.

 

	
8.9  

	
Validity and Enforceability.  The Acquisition Patents have never been found invalid or unenforceable for any reason in any administrative, arbitration, judicial or other proceeding, and Seller does not know of and has not received any notice or information of any kind from any source suggesting that the Acquisition Patents may be invalid or unenforceable.

 

	
8.10  

	
No Joint Development Activity. To Seller’s best knowledge, no Acqusition Patent (i) is the product or subject of any joint development activity or agreement with any third party; (ii) is the subject of any consortia agreement; or (iii) has been financed in whole or in part by any third party.

 

	
8.11  

	
Terminal Disclaimers.  There are no terminal disclaimers of any kind related to or affecting any of the Assigned Patent Rights.

 

	
8.12  

	
Pending United States Applications.  There are no pending US patent applications of any kind constituting an Assigned Patent Right. 

 

	
8.13  

	
Patent Marking.  Seller has addressed patent marking for its products and services by maintaining a website at www.delphi.com/pdf/dti/delphi-us-patents-august-2012.pdf.  To Seller’s best knowledge, no licensee under the Assigned Patent Rights would be required to mark any product or services under the Acquisition Patents and/or their containers, labels, and/or other packaging with any applicable patent numbers.

 

	
9.  

	
Representations And Warranties Of Purchaser.

 

Purchaser hereby represents and warrants to Seller as follows that, as of the Effective Date:

 

	
9.1  

	
Purchaser is a corporation organized under the laws of Delaware.

 

	
9.2  

	
Purchaser has the full power and authority, and has obtained all third party consents, approvals or other authorizations required, to enter into this Agreement and to carry out its obligations hereunder.

 

	
10.  

	
Miscellaneous

 

	
10.1  

	
Limitation of Liability.  SELLER’S TOTAL LIABILITY UNDER THIS AGREEMENT WILL NOT EXCEED THE AGGREGATE OF THE AMOUNTS PAID TO SELLER.  PURCHASER ACKNOWLEDGES THAT THIS LIMITATION ON SELLER’S POTENTIAL LIABILITY WAS AN ESSENTIAL ELEMENT IN SETTING CONSIDERATION UNDER THIS AGREEMENT.

 

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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10.2  

	
Limitation on Consequential Damages.  NEITHER PARTY WILL HAVE ANY OBLIGATION OR LIABILITY (WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, AND NOTWITHSTANDING ANY FAULT, NEGLIGENCE (WHETHER ACTIVE, PASSIVE OR IMPUTED), REPRESENTATION, STRICT LIABILITY OR PRODUCT LIABILITY), FOR ANY INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OR LOSS OF REVENUE, PROFIT, SAVINGS OR BUSINESS ARISING FROM OR OTHERWISE RELATED TO THIS AGREEMENT, EVEN IF A PARTY OR ITS EMPLOYEES HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

	
10.3  

	
Compliance With Laws. Notwithstanding anything contained in this Agreement to the contrary, the obligations of the parties will be subject to all laws, present and future, of any government having jurisdiction over the parties and this transaction, and to orders, regulations, directions or requests of any such government.

 

	
10.4  

	
Assignment.  Except as permitted hereunder, Seller shall not assign nor transfer this Agreement, or any right, benefit or obligation hereunder, including for the avoidance of doubt, the License, including by a change of control (which shall be deemed an assignment and similarly limited), operation of law or otherwise other than as provided in Section 10.4(a) below.

 

	
(a)  

	
  Notwithstanding the foregoing limitations on assignment, Seller may assign all or the pertinent part of its rights, benefits and obligations under this Agreement to an Affiliate or to any Person that acquires, by purchase of stock, purchase of assets, merger, or other form of transaction, all or substantially all of Seller’s equity or assets or all or substantially all of a portion of Seller’s business or assets primarily relating to any of the Acquisition Patents (an “Acquirer” and a “Sale Transaction,”respectively); provided that (i) the Acquirer is not a party to a patent assertion claim or infringement action or suit involving one or more of the Acquisition Patents prior to the Sale Transaction; (ii)  the Acquirer’s use of the License will be limited to the terms thereof, shall apply strictly to the Licensed Products in existence as of the date of such Sale Transaction (and updates and upgrades thereto and natural evolutions thereof) and in no event will extend to any other products, processes or services of the Acquirer or its Affiliates; and (iii) within thirty (30) days after the transaction with the Acquirer, Seller provides Purchaser with written notice of the transaction, which notice will contain: (x) the effective date of the transaction, (y) a description of the transaction, and (z) a representation and warranty that to Seller’s knowledge the condition set forth in (i) above is met.

 

	
(b)  

	
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Any attempted assignment in violation of Section 10.4(a) shall be void. For the avoidance of doubt, Purchaser is permitted to sell, assign, or otherwise transfer any of the Acquisition Patents (“Transferred Patents”) without Seller’s consent; provided that the License and covenants of Purchaser contained herein with respect to the License shall run with the rights being sold, assigned, or transferred and the Transferred Patents and shall be binding on any successors-in-interest, transferees, or assigns thereof.

 

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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10.5  

	
Confidentiality of Terms.  The parties hereto will keep the terms and existence of this Agreement and the identities of the parties and their Affiliates hereto confidential and will not now or hereafter divulge any of this information to any third party except (a) with the prior written consent of the other party; (b) as otherwise may be required by law or legal process to any governmental body having jurisdiction and specifically requiring such disclosure; (c) subject to obligations of confidentiality and/or privilege at least as stringent as those contained herein, to legal and financial advisors in their capacity of advising a party in such matters; (d) during the course of litigation, so long as the disclosure of such terms and conditions is restricted in the same manner as is the confidential information of other litigating parties; (e) in confidence to its legal counsel, accountants, banks and financing sources and their advisors solely in connection with complying with financial obligations hereunder; (f) subject to obligations of confidentiality and/or privilege at least as stringent as those contained herein, to a counterparty engaged in due diligence in connection with a proposed merger, acquisition, reorganization, or financing of all or substantially of a Party’s assets or equity or in connection with a proposed sale or exclusive license of the Assigned Patent Rights, as applicable;  (g) by Purchaser, in order to perfect Purchaser’s interest in the Assigned Patent Rights with any governmental patent office (including, without limitation, recording the Executed Assignment in any governmental patent office); (h) to enforce Purchaser’s right, title and interest in and to the Assigned Patent Rights; or (i) for the purposes of disclosure in connection with the Securities and Exchange Act of 1934, as amended, the Securities Act of 1933, as amended, and any other reports filed with the Securities and Exchange Commission, or any other filings, reports or disclosures that may be required under applicable laws or regulations provided that, in (b) and (d) above, (1) the disclosing party will use all legitimate and legal means available to minimize the disclosure to third parties, including, without limitation, seeking a confidential treatment request or protective order whenever appropriate or available; and (2) the disclosing party will provide the other party with at least ten (10) days’ prior written notice of such disclosure.

 

	
10.6  

	
Governing Law.  This Agreement, and all claims or causes of action ‎‎(whether in contract, tort or otherwise) that may be based upon, arise out of or relate to this Agreement or the ‎negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, ‎arising out of or related to any representation or warranty made in or in connection with this Agreement or as an ‎inducement to enter into this Agreement), shall be governed by and construed in accordance with the internal ‎laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule.

 

	
10.7  

	
Dispute Resolution.  Except for the right of either party to apply to a court of competent jurisdiction for a temporary restraining order, a preliminary injunction, or other equitable relief to preserve the status quo or prevent irreparable harm, any and all claims, disputes or controversies arising under, out of, or in connection with the Agreement which the parties will be unable to resolve within sixty (60) days will be mediated in good faith. The party raising such dispute will promptly advise the other party of such claim, dispute or controversy in a writing which describes in reasonable detail the nature of such dispute. By not later than five (5) business days after the recipient has received such notice of dispute, each party will have selected for itself a representative who will have the authority to bind such party, and will additionally have advised the other party in writing of the name and title of such representative. By not later than ten (10) business days after the date of such notice of dispute, the party against whom the dispute will be raised will select a qualified mediation firm in the State of Michigan and such representatives will schedule a date with such firm for a mediation hearing. The parties will enter into good faith mediation and will share the costs equally. If the representatives of the parties have not been able to resolve the dispute within thirty (30) days after such mediation hearing, the parties will have the right to pursue any other remedies legally available to resolve such dispute in the Courts of the State of Michigan to whose jurisdiction for such purposes Seller and Purchaser each hereby irrevocably consents and submits. Notwithstanding the foregoing, nothing in this Article will be construed to waive any rights or timely performance of any obligations existing under this Agreement.

 

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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10.8  

	
Notices.  All notices given hereunder will be given in writing, will refer to this Agreement and will be: (i) personally delivered, (ii) delivered prepaid by an internationally recognized express courier service, or (iii) sent postage prepaid registered or certified U.S. mail (return receipt requested) to the address set forth below:

 

	
If to Seller

	
If to Purchaser

	
Delphi Technologies, Inc.

M/C 483-400-404

5725 Delphi Drive

Troy, MI 48098-2815 USA

Tel: 248 813 1200

Fax:  248 813 1211

Attn: Vice President, Intellectual Property

	
Loopback Technologies, Inc.

2331 Mill Road Suite 100

Alexandria, VA 22314

Tel: 703 232 1701

Fax: 703 997 7320

Attn: Doug Croxall, CEO

 

Notices are deemed given on (a) the date of receipt if delivered personally or by express courier (or if delivery refused, the date of refusal), or (b) the fifth (5th) calendar day after the date of posting if sent by US mail. Notice given in any other manner will be deemed to have been given only if and when received at the address of the Person to be notified.  Either party may from time to time change its address for notices under this Agreement by giving the other party written notice of such change in accordance with this Section.

 

	
10.9  

	
Relationship of Parties. The parties are independent contractors and not partners, joint ventures, or agents of the other. Neither party assumes any liability of or has any authority to bind, or control the activities of, the other.

 

	
10.10  

	
Severability.  If any provision of this Agreement is found to be invalid or unenforceable, then the remainder of this Agreement will have full force and effect, and the invalid provision will be modified, or partially enforced, to the maximum extent permitted to effectuate its original objective.

 

	
10.11  

	
Waiver.  Failure by either party to enforce any term of this Agreement will not be deemed a waiver of future enforcement of that or any other term in this Agreement or any other agreement that may be in place between the parties.

 

	
10.12  

	
Miscellaneous.  Except for the Common Interest Agreement entered into by the Parties effective October 12, 2013, this Agreement, including its exhibits, constitutes the entire agreement between the parties with respect to the subject matter hereof, and merges and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions.  Neither of the parties will be bound by any conditions, definitions, warranties, understandings, or representations with respect to the subject matter hereof other than as expressly provided herein. The section headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement. No oral explanation or oral information by either party hereto will alter the meaning or interpretation of this Agreement.  No amendments or modifications will be effective (except for the updating of Exhibit A-1 by Purchaser as contemplated in Section 3 hereof) unless in writing and signed by authorized representatives of both parties.  The following exhibits are attached hereto and incorporated herein: Exhibit A-1 (entitled “Acquisition Patents”); Exhibit A-2 (“Available Patents”); Exhibit B (entitled “Patent Assignment Agreement”, Seller to Purchaser); Exhibit C (entitled “Document Request Form”); Exhibit E (entitled “Inventor Agreement”); Exhibit F (entitled “Inventor Oath and Declaration”); Exhibit G (entitled “Preexisting Licenses).  In the event of any inconsistencies between the terms of this Patent Purchase Agreement and any of the Exhibits, the terms of this Patent Purchase Agreement shall prevail.

 

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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10.13  

	
Counterparts; Electronic Signature.  This Agreement may be executed in counterparts, each of which will be deemed an original, and all of which together constitute one and the same instrument. Each party will execute and deliver to the other parties a copy of this Agreement bearing its original signature. Prior to such execution and delivery, in order to expedite the process of entering into this Agreement, the parties acknowledge that Transmitted Copies of this Agreement will be deemed original documents.  “Transmitted Copies” means copies that are reproduced or transmitted via email of a .pdf file, photocopy, facsimile or other process of complete and accurate reproduction and transmission.

 

THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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In witness whereof, the parties have caused this Patent Purchase Agreement to be executed as of the Effective Date by their respective duly authorized representatives.

 

	
DELPHI TECHNOLOGIES, INC.

 

	
LOOPBACK TECHNOLOGIES INC.

 

	
By: /s/ John Carney

	
By: /s/ Doug Croxall

	  	  
	
Name: John Carney

	
Name: Doug Croxall

	  	  
	
Title: Vice President

	
Title: CEO

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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Exhibit A-1

ACQUISITION PATENTS

	
Docket No.

	
Appln. No.

	
Patent No.

	
Patent Title

	
DP-308892

	
10/340,053

	
6745582

	
HVAC control method for a remote start motor vehicle

	
DP-309659

	
10/700,208

	
7280662

	
Time-shifting data in digital radio system

	
G-11317

	
08/185,342

	
5394326

	
Air bag deployment control system and method

	
G-11571

	
08/157,512

	
5430649

	
SIR deployment method based on occupant displacement and crash severity

	
G-11647

	
08/133,351

	
5408448

	
Device and method for CD shuffle play

	
H-174316

	
08/205,468

	
5461567

	
Supplemental inflatable restraint system having a rear impact algorithm for seat belt pretensioner

	
H-184878

	
08/441,107

	
5712625

	
Vehicle operator verification system that prevents vehicle adapting systems from adapting

	
H-190375

	
08/558,124

	
5670962

	
Transmit power control for automotive radar system

	
H-195076

	
08/762,090

	
5714927

	
Method of improving zone of coverage response of automotive radar

	
H-195425

	
08/610,021

	
6175299

	
Analog signal processing system for determining airbag deployment

	
H-195546

	
08/566,029

	
5732375

	
Method of inhibiting or allowing airbag deployment

	
H-196686

	
08/695,814

	
5999871

	
Control method for variable level airbag inflation

	
H-198088

	
08/868,338

	
6012007

	
Occupant detection method and apparatus for air bag system

	
H-199337

	
08/927,588

	
5801619

	
Analog signal processing system and decision logic for controlling airbag deployment

	
H-203655

	
09/192,523

	
6219606

	
Restraint deployment control method having a delayed adaptable deployment threshold

	
H-204666

	
09/309,848

	
6151540

	
Dynamic occupant position detection system and method for a motor vehicle

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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Exhibit A-2

*

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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Exhibit B

ASSIGNMENT AGREEMENT

 

This Assignment Agreement (the “Agreement”) is made and entered into this ___ day of ________, 2013 (the “Effective Date”), by Delphi Technologies, Inc., a Delaware corporation, having an address at 5725 Delphi Drive, Troy, MI 48098-2815 (“Assignor”) and Loopback Technologies, Inc., a Delaware corporation having and address at  2331 Mill Road Suite 100 Alexandria, VA 22314 (“Assignee”).

 

RECITALS

 

A.              Assignor is the owner of (select as appropriate):

 

	
o

	
the United States Patents set forth on Exhibit A hereto (the “U.S. Patents”);

 

	
o

	
the non-United States patents set forth on Exhibit B hereto (the “Foreign Patents”);

 

	
o

	
the United States patent applications set forth on Exhibit C hereto (the “U.S. Patent Applications”);

 

	
o

	
the United States provisional patent applications set forth on Exhibit D hereto (the “U.S. Provisional Patent Applications”); and/or

 

	
o

	
the foreign patent applications set forth on Exhibit E hereto (the “Foreign Patent Applications”);

 

which collectively shall be referred to herein as the “Patents”.

 

B.              Assignor and Assignee have agreed by way of a purchase agreement (the “Purchase Agreement”) dated _____, 2013, by and between Assignor and Assignee, the terms of which are incorporated herein by reference, that Assignor shall sell, transfer, and assign and set over unto Assignee and Assignee shall accept, all rights, title and interest in and to the Patents as specified in this Agreement.  In the event of any conflict between the terms of this Patent Assignment Agreement and the referenced Purchase Agreement, the terms of the Purchase Agreement shall prevail,

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing premises, and the covenants and agreements in this Assignment, Assignor and Assignee agree as follows:

 

1.               Assignor does hereby sell, transfer, convey, assign and deliver to Assignee all of Assignor's right, privilege, title and interest in, to and under the Patents and in the case of patent applications in and to any patents that may issue therefrom, including, in all instances, any counterparts of any of the foregoing applications in any jurisdiction throughout the world, and any and all divisions, continuations, reissues or reexaminations of any of the foregoing, and, further, all applications for industrial property protection, including without limitation, all applications for patents, utility models, copyright, and designs which may hereafter be filed for any inventions described in said Patents in any country or countries, together with the right to file such applications and the right to claim for the same the priority rights derived from the inventions and the Patents under the laws of the United States, the International Convention for the Protection of Industrial Property, or any other international agreement or the domestic laws of the country in which any such application is filed, as may be applicable, in each instance the same to be held by Assignee for Assignee's own use and enjoyment, and for the use and enjoyment of Assignee's successors, assigns and other legal representatives, as fully and entirely as the same would have been held and enjoyed by Assignor if this Assignment and sale had not been made; together with all claims for damages, royalties, income or other remuneration (hereinafter “Damages”) by reason of past, present and future infringements of the Patents or other rights being assigned hereunder, along with the right to sue for and collect such Damages for the use and benefit of Assignee and its successors, assigns and other legal representatives.

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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2.               Insofar as this assignment concerns European patents and patent applications, Assignor does hereby declare that it is the owner of said Patents and that Assignor has assigned same, along with all rights and duties appurtenant thereto, to Assignee and agree that the assignment will be recorded in the register with the European Patent Office; and Assignee hereby declares that Assignee has agreed to the assignment of the aforementioned Patents to it and that Assignee will simultaneously apply for recording of the assignment in the register with the European Patent Office.

3.               Assignor hereby authorizes and requests the Commissioner for Patents of the United States, and any officer of any country or countries foreign to the United States, whose duty it is to issue patents or other evidence or forms of intellectual property protection or applications as aforesaid, to issue the same to Assignee and its successors, assigns and other legal representatives in accordance with the terms of this instrument.

4. Assignor agrees that, whenever reasonably requested by Assignee, Assignor will execute all papers, take all rightful oaths, and do all acts which may be reasonably necessary for securing and maintaining the Patents in any country and for vesting title thereto in Assignee, its successors, assigns and legal representatives or nominees.

5. Assignor authorizes and empowers Assignee, its successors, assigns and legal representatives or nominees, to invoke and claim for any application for patent or other form of protection for the inventions, the benefit of the right of priority provided by the International Convention for the Protection of Industrial Property, as amended, or by any convention which may henceforth be substituted for it, or any other international agreement or the domestic laws of the country in which any such application is filed, as may be applicable, and to invoke and claim such right of priority without further written or oral authorization from Assignor.

 

6. Assignor hereby acknowledges and agrees that all of the rights, title and interest in and to the Patents sold, transferred, assigned and set over to Assignee hereunder include all income, royalties, damages and payments now or hereafter due or payable with respect thereto, and all causes of action (whether in law or equity) and the right to sue, counterclaim, and recover for the past, present and future infringement of the rights assigned or to be assigned hereunder. 

 

7. Assignor hereby consents that a copy of this Agreement shall be deemed a full legal and formal equivalent of any assignment, consent to file or like document that may be required in any country for any purpose and more particularly in proof of the right of Assignee or nominee to claim the aforesaid benefit of the right of priority provided by the International Convention for the Protection of Industrial Property, as amended, or by any convention which may henceforth be substituted for it.

[Signature Page Follows]

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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IN WITNESS WHEREOF, the Parties have executed this Assignment on the Effective Date written at _________________________________.

 

Assignor: ________________________

 

By:                                                                          

 

Name:                                                                          

 

Title:                                                                          

 

Assignee:

 

By:                                                                          

 

Name:                                                                          

 

Title:                                                                          

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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EXHIBIT A

 

 

TO ASSIGNMENT AGREEMENT

 

U.S. PATENTS

	

 

Title

	

 

Patent Number

	

 

Issue Date

	  	  	  
	  	  	  
	  	  	  
	  	  	  

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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EXHIBIT B

 

 

TO ASSIGNMENT AGREEMENT

 

NON-US PATENTS

	

 

Title

	

 

Patent Number

	

 

Issue Date

	  	  	  

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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EXHIBIT C

 

 

TO ASSIGNMENT AGREEMENT

 

U.S. PATENT APPLICATIONS

	

 

Title

	

 

Application Number

	

 

Filing Date

	  	  	  

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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EXHIBIT D

 

 

TO ASSIGNMENT AGREEMENT

 

U.S. PROVISIONAL PATENT APPLICATIONS

 

	

 

Title

	

 

Application Number

	

 

Filing Date

	

 

Inventor(s)

	  	  	  	  

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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EXHIBIT E

 

 

TO ASSIGNMENT AGREEMENT

 

NON-U.S. PATENT APPLICATIONS

 

	

 

Title

	

 

Application Number

	

 

Filing Date

	  	  	  

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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Exhibit C

DOCUMENT REQUEST FORM

___________, 2013

Delphi Technologies, Inc.

5725 Delphi Drive, Troy

MI 48098-2815 USA

Attn: John Carney

Re: Documents related to the Patent Families as Listed on Exhibit A-1 to the Proposed Purchase Agreement between Loopback Technologies, Inc.and Delphi Technologies, Inc.

Dear Mr. Carney:

Reference is made to the proposed purchase agreement (“Agreement”) between Loopback Technologies, Inc. (“Buyer”) and Delphi Technologies, Inc. (“Seller”). Defined terms used in this letter are as defined in the Agreement. Buyer has requested, pursuant the Agreement that Seller deliver originals of the Documents (or to the extent such originals cannot be provided, true copies thereof) and/or confirm to Buyer that there are no other Documents in the custody or control of Seller, its agents, counsel or related parties.

“Documents” is defined in the Agreement as “all patent prosecution files and all other documents, communications and files (electronic or otherwise) regarding the  ownership, prosecution, maintenance and enforcement of the fifteen (15) Patent Families identified in Exhibit A-1 on the Effective Date to the extent the same are in the possession or control of the patent department of Seller, any affiliate of Seller or their respective counsel, agents or related parties, including, but not limited to those documents listed on the Document Request Form attached hereto as Exhibit C.”  For purposes of clarification only, and without derogating from the definition set forth in the Agreement, below is a non-exclusive list of documents that fall within this description.  Pursuant the Agreement , Buyer requests that Seller conduct a thorough and diligent search for all Documents in its custody or control, and that of its agents, counsel or related parties, including, but not limited to, such Documents which are listed below.

	
1.  

	
File histories including

	
a.  

	
Prosecution file history for the Patent Families listed in Exhibit A-1 of the Agreement (“Patents”), including:

	
i.  

	
File histories of any Patent

	
ii.  

	
File histories of any parent, child or other related patents/applications (i.e. those that claim priority to any  Patent or that any  Patent either claims priority to and/or incorporates by reference) – regardless of whether they are listed in  the Exhibits to the Agreement and regardless of whether the related patents are abandoned or alive

	
iii.  

	
 All communications retained in the files with, by and to prosecution counsel or agent with respect to the Patents

	
iv.  

	
File-stamped copies of all assignment records for all Patents (including copies of all supporting documentation) to the extent retained in the files

	
b.  

	
Any prior art references that have been retained in the files

	
c.  

	
Pre-filing documents retained in the files such as:

	
i.  

	
Invention disclosure records

	
ii.  

	
Inventor notebooks

	
iii.  

	
Memos, notes, letters, emails etc. requesting that a patent application be prepared

	
iv.  

	
Memos, notes, letters, emails etc. discussing the decision of whether to file a patent application

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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v.  

	
Memos, notes, letters, emails etc. discussing or describing any products that the proposed invention relates to

	
vi.  

	
Documents, including without limitation any memos, notes, letters, emails, presentations, etc. related to or arising from any efforts to create products based on the proposed inventions, relating to the design, development, marketing, sale, offers for sale, public disclosure, or ownership of the products, the proposed inventions and/or patents, including any agreements with third parties (e.g. joint development (or similar) agreements or non-disclosure agreements).

	
vii.  

	
All documents related to the conception, reduction to practice, or development of the invention.

	
d.  

	
Post-issuance documents such as:

	
i.  

	
Ribbon copies of the Patents

	
ii.  

	
Certificates of correction and related documents (notes, memos etc related to requests for correction)

	
iii.  

	
Re-examinations; reissues; post grant review/challenges

	
iv.  

	
Memos regarding payment of maintenance fees and/or annuities (including recommendations of whether or not to pay maintenance fees)

	
2.  

	
Any agreements granting any rights under the Patents (including without limitation any licenses, releases, covenants not to sue or any other grant or right) related to or arising from the Patents and applications (including the related patents and applications described in 1.a.i.).  Without limiting the foregoing, Seller is requested to provide an example, sample or representative agreement reflecting the terms and conditions contained in the  “Pre-existing Licenses” including but not limited to those Pre-existing Licenses identified on Exhibit G of the Agreement.

	
3.  

	
Any documents discussing enforcement, threatened enforcement, investigation of infringement, licensing (including all offers to license), liens or charges, valuation, granting any rights under any of the claims of the acquired patents (including releases, covenants not to sue or any other grant or right) or other monetization related to or arising from the Patents (regardless of whether they are listed in Exhibit I as described in 1.a.ii. above) including:

	
a.  

	
Documents that relate in any way to an evaluation of the Patents including without limitation documents that relate to strengths, weaknesses etc of the enforceability and/or validity of the patents, infringement and/or non-infringement of any specific entity or by industries in general

	
b.  

	
Documents that relate to the enforceability of the Patents

	
c.  

	
Documents that relate to the validity of the Patents

	
d.  

	
Documents that either are, or discuss a damages analysis regarding any of the Patents

	
4.  

	
Any documents related to marking of patented articles including articles made by Seller that were or should have been marked, and marking requirements (including steps taken to enforce marking requirements) in any agreements identified pursuant to request 2 above  

	
5.  

	
Assignments of the Patents (regardless of whether they are listed in Exhibit I as described in 1.a.ii. above)

	
6.  

	
Any documents relating to governmental incentives or other programs relating to the technology underlying the Patents.

	
7.  

	
Names of law firms and/or individual lawyers involved in any of the Patents so that the privileged nature of any produced documents can be determined

	
8.  

	
Documents related to each named inventor of the Patents (redacted as necessary to preserve information of a personal nature not essential to the evaluation of the Patents) including:

	
a.  

	
Employment agreements with each inventor

	
b.  

	
Patent Assignments signed by each inventor

	
c.  

	
Invention Assignments signed by each inventor

	
d.  

	
Employment/HR records of each inventor –

	
e.  

	
Separation agreements signed by any inventor

	
9.  

	
A list of any proceedings or actions before any governmental entity (including the United States Patent and Trademark Office or equivalent authority anywhere in the world) in which claims are being or were raised relating to the validity, enforceability, scope, ownership or infringement of any of the Patents

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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10.  

	
Confirmation in writing that with respect to each Patent, it is currently in compliance with the legal requirements (including payment of filing, examination and maintenance fees and filing of any necessary oaths, proofs of use or other documents) for maintaining, registering, filing, certifying or otherwise perfecting or recording the same with or by such governmental entity, and, if not, the steps required to bring such item into compliance with same.

Seller is further requested to execute the applicable affidavit (either Attachment 1 or 2 hereto) and return the executed copy to Buyer.

	
Regards,

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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Attachment 1

AFFIDAVIT

Delphi Technologies, Inc.  has conducted a thorough and diligent search for all Documents in its custody or control and the custody and control of its agents, counsel and related parties, and hereby delivers those Documents to Buyer. Delphi Technologies, Inc. asserts that to its knowledge, there are no Documents that remain in its custody or control, or in the custody or control of its agents, counsel and/or related parties.

	  
	
Delphi Technologies, Inc.

A Delaware company

By:  _____________________

Name: John Carney

Title: Vice President

Date:  ___________________

Address:

Delphi Technologies, Inc.

5725 Delphi Drive, Troy

MI 48098-2815 USA

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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AFFIDAVIT

Delphi Technologies, Inc. has conducted a thorough and diligent search for all Documents in its custody or control as well as the custody or control of its agents, counsel or related parties, and to its knowledge, confirms no such Documents exist.

	  
	
Delphi Technologies, Inc.

A Delaware company

By:  _____________________

Name: John Carney

Title: Vice President

Date:  ___________________

Address:

Delphi Technologies, Inc.

5725 Delphi Drive, Troy

MI 48098-2815 USA

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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 Exhibit E

INVENTOR AGREEMENT

	
 Name: ___________

Address: _____________

________________, 2013

Lillian Safran Shaked, Adv.

Shaked & Co. Law Offices

Electra Building

98 Yigal Alon St., 15th Fl.

Tel Aviv 67891, Israel

Tel: +972-3-372-1114

Fax: +972-3-372-1115

Email: lillian@shaked-law.com

Re:  Consulting Services for Patents

Dear Sir/Madam:

I am pleased to confirm my engagement by Shaked & Co. Law Offices (the “Firm”) in its capacity for one or more of its clients (the “Company”) to provide certain consulting services (“the Matter”) related to the patents listed on Exhibit A attached hereto (“the Patent(s)”). I understand the identity of the Company, and its interest in the Patent(s), are both highly confidential.

My  Services

I understand that you may intend my work, opinions, conclusions and communications to be covered by the attorney-client and work product privileges to the extent provided by law, and I will comply with any requests you make of me that are designed to preserve these privileges.  Even in the absence of a specific request, I will take reasonable measures to maintain information relating to the Matter (including this letter) in confidence.  Further, if I am contacted by anyone other than the Firm seeking release of such information, I will immediately notify you and cooperate with your instructions.  In addition, I understand that you will provide me with instructions regarding any document retention or document production procedures you expect me to follow.  I also understand that this agreement will transfer to subsequent counsel in the event that the Firm’s relationship with the Company terminates. I will execute any necessary agreement required to affect such transfer.

 

I will perform those services or tasks you request which are within my scope or practice relating to the Patent(s), in accordance with this letter agreement.

Fees and Expenses

My billing rate is $100.00 per hour. Prior to commencing any work hereunder, I will prepare a budget for such work, which will be subject to your prior approval. Subject to our agreement on the budget, I will bill on an hourly basis based on the actual hours worked.  I will bill you on a monthly basis.  My invoices will contain detailed descriptions of the work completed. In addition and subject to your prior approval, out of pocket expenses (including transportation, lodging, meals, communications, supplies, copying, etc.) will be billed at the actual amounts incurred by me and as against presentation of valid receipts therefor.

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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General Business Terms

All right, title and interest in any work papers, reports or other documents I prepared in the course of this engagement, will become your sole and exclusive property.  I will retain sole and exclusive ownership of all right, title and interest in my work papers, proprietary information, processes, methodologies, know-how and software, provided the same existed prior to the commencement of my engagement hereunder and to anything which I may discover, create or develop during my provision of services that is unrelated to this engagement. To the extent my reports or other documents delivered to you contain my property, I grant you a non-exclusive, royalty-free license to use it in connection with the subject of the engagement. I will fully cooperate with you in order to sign, execute, make and do all such deeds, documents, acts and things as may be required to vest any such ownership rights in your name.

With respect to any information supplied in connection with this engagement and designated by either of us as confidential, or which the other should reasonably believe is confidential based on the subject matter or the circumstances of its disclosure, the other party agrees to protect the confidential information in a reasonable and appropriate manner, and use confidential information only to perform its obligations under this engagement and for no other purpose.

Within 30 days after the conclusion of this engagement, you may request that I (a) return to you all documents or copies of documents that you provided to me as well as work papers, reports or other documents I prepared in the course of this engagement or (b) destroy such materials, as certified to you.  If you do not timely request one of these options for disposition of materials, I may elect either option.  I will have the right to retain a copy of my reports or work papers for internal use, subject to the confidentiality and non-use provisions set forth above.

This engagement letter constitutes the entire understanding and agreement between us with respect to the services described above, supersedes all prior oral and written communications between us, and may be amended, modified or changed only in writing when signed by both parties.

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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*    *    *    *    *    *

Please indicate your agreement to these terms by signing and returning to me the enclosed copy of this letter.  I appreciate the opportunity to be of service to you and look forward to working with you on this project.

Sincerely,

_________________________

[Name]

[Address]

Acknowledged & Accepted:

_________________________

By:           Lillian Safran Shaked, Adv. for Shaked & Co. Law Offices

Date:           ____________________________________

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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EXHIBIT A

THE PATENT(S)

 

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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Exhibit F

INVENTOR OATH AND DECLARATION

  Declaration for Utility and Design Patent Applications

 

As a below named inventor, I hereby declare that:

Each inventor’s residence, mailing address, and citizenship are as stated below next to his or her name.

I believe the inventors named below to be the original and first inventor(s) or original, first, and joint inventor(s) of the subject matter which is claimed and for which a patent is sought on the invention entitled

Insert Title: ___________________________________________________________

the application of which is attached hereto unless the following is checked

 was filed on          as United States Application Number          and was filed on          as PCT International Application Number          and was amended on          (if applicable).

The above-identified application was made or authorized to be made by me.

I hereby state that I have reviewed and understand the contents of the above-identified application, including the claim(s), as amended by any amendment specifically referred to above.

I acknowledge the duty to disclose information which is material to patentability as defined in 37 CFR 1.56, including for continuation-in-part applications, material information which became available between the filing date of the prior application and the national or PCT international filing date of the continuation-in-part application.

I hereby acknowledge that any willful false statement made in this declaration is punishable under section 1001 of title 18 by fine or imprisonment of not more than 5 years, or both.

Hereby executed by the undersigned on the date opposite the undersigned name:

Full Name of Sole/First Inventor

Inventor's Signature                                                                                     Date

Residence                                                                            Citizenship

(City, State, Country)                                                                             (Country)

Mailing Address

Full Name of Second/Joint Inventor

Inventor's Signature                                                                                     Date

Residence                                                                            Citizenship

(City, State, Country)                                                                             (Country)

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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Mailing Address

Full Name of Third/Joint Inventor

Inventor's Signature                                                                                     Date

Residence                                                                            Citizenship

(City, State, Country)                                                                             (Country)

Mailing Address

 

Full Name of Fourth/Joint Inventor

Inventor's Signature                                                                                     Date

Residence                                                                            Citizenship

(City, State, Country)                                                                             (Country)

Mailing Address

 

Full Name of Fifth/Joint Inventor

Inventor's Signature                                                                                     Date

Residence                                                                            Citizenship

(City, State, Country)                                                                             (Country)

Mailing Address

 

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

  

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Exhibit G

PREEXISTING LICENSES

*

 

* Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

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