Document:

Exhibit
10.2

 

 

 

PLEDGE AND
SECURITY AGREEMENT

 

made by

 

PLATFORM
SPECIALTY PRODUCTS CORPORATION,

 

MACDERMID,
INCORPORATED,

 

and certain
Subsidiaries of PLATFORM SPECIALTY PRODUCTS CORPORATION

 

in favor
of

 

BARCLAYS
BANK PLC, as Collateral Agent

 

dated as
of January 31, 2019

 

 

 

     

     

    

 

TABLE
OF CONTENTS

 

	 	 	 	Page
	SECTION 1.	 	DEFINED TERMS	2
	 	 	 	 
	1.01	 	Definitions	2
	1.02	 	Other Definitional Provisions	9
	 	 	 	 
	SECTION 2.	 	GRANT OF SECURITY INTEREST; CONTINUING LIABILITY UNDER COLLATERAL	10
	 	 	 	 
	SECTION 3.	 	REPRESENTATIONS AND WARRANTIES	12
	 	 	 	 
	3.01	 	Title; No Other Liens	12
	3.02	 	Perfected First Priority Liens	12
	3.03	 	Name; Jurisdiction of Organization, etc	13
	3.04	 	Inventory and Equipment	13
	3.05	 	Farm Products	13
	3.06	 	Investment Property	14
	3.07	 	Receivables	15
	3.08	 	Intellectual Property	15
	3.09	 	Letters of Credit and Letter of Credit Rights	17
	3.10	 	Commercial Tort Claims	17
	3.11	 	Contracts	18
	 	 	 	 
	SECTION 4.	 	COVENANTS	18
	 	 	 	 
	4.01	 	Covenants in Credit Agreement	18
	4.02	 	Delivery and Control of Instruments, Chattel Paper, Negotiable Documents and Investment Property	18
	4.03	 	Maintenance of Insurance	19
	4.04	 	[Reserved]	20
	4.05	 	Maintenance of Perfected Security Interest; Further Documentation	20
	4.06	 	Changes in Locations, Name, Jurisdiction of Incorporation, etc.	20
	4.07	 	Notices	20
	4.08	 	Investment Property	21
	4.09	 	Receivables	22
	4.10	 	Intellectual Property	22
	4.11	 	Contracts	25
	4.12	 	Commercial Tort Claims	25
	 	 	 	 
	SECTION 5.	 	REMEDIAL PROVISIONS	25
	 	 	 	 
	5.01	 	Certain Matters Relating to Receivables	25
	5.02	 	Communications with Obligors; Grantors Remain Liable	26
	5.03	 	Pledged Securities	26
	5.04	 	Proceeds to be Turned Over To Collateral Agent	27
	5.05	 	Application of Proceeds	28
	5.06	 	Code and Other Remedies	28

 

    	i

     

    

 

	 	 	 	Page
	5.07	 	Registration Rights	30
	5.08	 	Deficiency	31
	5.09	 	Non-Judicial Enforcement	31
	 	 	 	 
	SECTION 6.	 	THE COLLATERAL AGENT	31
	 	 	 	 
	6.01	 	Collateral Agent’s Appointment as Attorney-in-Fact, etc.	31
	6.02	 	Duty of Collateral Agent	34
	6.03	 	Filing of Financing Statements	34
	6.04	 	Authority of Collateral Agent	34
	6.05	 	Appointment of Co-Collateral Agents	35
	 	 	 	 
	SECTION 7.	 	MISCELLANEOUS	35
	 	 	 	 
	7.01	 	Amendments in Writing	35
	7.02	 	Notices	35
	7.03	 	No Waiver by Course of Conduct; Cumulative Remedies	35
	7.04	 	Enforcement Expenses; Indemnification	35
	7.05	 	Successors and Assigns	36
	7.06	 	Set-Off	36
	7.07	 	Counterparts	36
	7.08	 	Severability	36
	7.09	 	Section Headings	36
	7.10	 	Integration	37
	7.11	 	APPLICABLE LAW	37
	7.12	 	Submission to Jurisdiction; Waivers	37
	7.13	 	Acknowledgments	38
	7.14	 	Additional Grantors	38
	7.15	 	Releases	38
	7.16	 	WAIVER OF JURY TRIAL	39
	7.17	 	Reinstatement	39

 

    	ii

     

    

 

	Exhibits:	 
	 	 
	Exhibit A	Form of Trademark Security Agreement
	Exhibit B	Form of Copyright Security Agreement
	Exhibit C	Form of Patent Security Agreement
	 	 
	Annex:	 
	 	 
	Annex 1	Form of Assumption Agreement
	 	 
	Schedules:	 
	 	 
	Schedule 3.02	Filings and Other Actions Required to Perfect Security Interests
	Schedule 3.03	Organizational Information
	Schedule 3.06(a)	Description of Equity Instruments
	Schedule 3.06(b)	Description of Pledged Debt Instruments
	Schedule 3.08(a)	Intellectual Property
	Schedule 3.08(b)	Subsistence; Expiration; Abandonment
	Schedule 3.08(c)	Licenses, etc.
	Schedule 3.08(d)	Validity and Enforceability
	Schedule 3.08(e)	Actions and Proceedings; Misappropriations, Infringements; Dilutions and Other Violations
	Schedule 3.08(g)	Fees and Taxes
	Schedule 3.08(i)	Filings and Recordations
	Schedule 3.09	Letter of Credit Rights
	Schedule 3.10	Commercial Tort Claims

 

    	iii

     

    

 

PLEDGE
AND SECURITY AGREEMENT, dated as of January 31, 2019, made by each of the signatories hereto (together with any other entity that
may become a party hereto as provided herein (other than the Collateral Agent (as defined below)), the “Grantors”)
in favor of BARCLAYS BANK PLC, as collateral agent (in such capacity and together with its successors, the “Collateral
Agent”) for (i) the banks and other financial institutions or entities (the “Lenders”) from time
to time parties to the Credit Agreement, dated as of January 31, 2019 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”), among PLATFORM SPECIALTY
PRODUCTS CORPORATION, a Delaware corporation (“PSP”), MACDERMID, INCORPORATED, a Connecticut corporation
“MacDermid” and, together with PSP, the “Borrowers”), the Lenders party thereto and BARCLAYS
BANK PLC, as administrative agent (in such capacity and together with its successors, the “Administrative Agent”)
and as Collateral Agent, with CREDIT SUISSE SECURITIES (USA) LLC, as syndication agent (the “Syndication Agent”),
and (ii) the other Secured Parties (as hereinafter defined).

 

WITNESSETH:

 

WHEREAS,
pursuant to the Credit Agreement, the Lenders have severally agreed to make extensions of credit to the Borrowers upon the terms
and subject to the conditions set forth therein;

 

WHEREAS,
the Borrowers are members of an affiliated group of companies that includes each other Grantor;

 

WHEREAS,
the proceeds of the extensions of credit under the Credit Agreement will be used in part to enable the Borrowers to make valuable
transfers to one or more of the other Grantors in connection with the operation of their respective businesses;

 

WHEREAS,
the Borrowers and the other Grantors are engaged in related businesses, and each Grantor will derive substantial direct and indirect
benefit from the making of the extensions of credit under the Credit Agreement; and

 

WHEREAS,
it is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the Borrowers under
the Credit Agreement that the Grantors shall have executed and delivered this Agreement to the Collateral Agent for the ratable
benefit of the Secured Parties;

 

NOW,
THEREFORE, in consideration of the premises and to induce the Administrative Agent, the Collateral Agent and the Lenders to enter
into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrowers thereunder,
each Grantor hereby agrees with the Collateral Agent, for the ratable benefit of the Secured Parties, as follows:

 

     

     

    

 

SECTION
1.         DEFINED TERMS

 

(a)       Definitions.
  (a)  Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement, and the following terms are used herein as defined in the New York UCC (and if
defined in more than one Article of the New York UCC, such terms shall have the meanings given in Article 9 thereof): Accounts,
Account Debtor, As-Extracted Collateral, Certificated Security, Chattel Paper, Commercial Tort Claim, Commodity Account, Commodity
Contract, Commodity Intermediary, Documents, Deposit Account, Electronic Chattel Paper, Equipment, Farm Products, Financial Asset,
Fixtures, Negotiable Document, Goods, Instruments, Inventory, Letter of Credit, Letter of Credit Rights, Money, Payment Intangibles,
Securities Account, Securities Intermediary, Security, Security Entitlement, Supporting Obligations, Tangible Chattel Paper, Uncertificated
Security and Vehicles.

 

(b)       The
following terms shall have the following meanings:

 

“Administrative
Agent” shall have the meaning assigned to such term in the preamble.

 

“After-Acquired
Intellectual Property” shall have the meaning assigned to such term in Section 4.10(k).

 

“Agreement”
shall mean this Pledge and Security Agreement, as the same may be amended, supplemented, replaced or otherwise modified from time
to time.

 

“Business
Day” shall mean any day other than a Saturday, Sunday or day on which commercial banks in New York City are authorized
or required by law to close.

 

“Closing
Date” shall mean the date hereof.

 

“Collateral”
shall have the meaning assigned to such term in Section 2.

 

“Collateral
Account” shall mean (i) any collateral account established by the Collateral Agent as provided in Section 5.01 or 5.04
or (ii) any cash collateral account established as provided in Section 2.03(g) of the Credit Agreement.

 

“Collateral
Account Funds” shall mean, collectively, the following: all funds (including all trust monies), investments (including
all Permitted Investments) credited to, or purchased with funds from, any Collateral Account and all certificates and instruments
from time to time representing or evidencing such investments; all notes, certificates of deposit, checks and other instruments
from time to time hereafter delivered to or otherwise possessed by the Collateral Agent for or on behalf of any Grantor in substitution
for, or in addition to, any or all of the Collateral; and all interest, dividends, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the items constituting Collateral.

 

“Collateral
Agent” shall have the meaning assigned to such term in the preamble.

 

“Contracts”
shall mean all contracts and agreements between any Grantor and any other person (in each case, whether written or oral, or third
party or intercompany) as the same may be amended, extended, restated, supplemented, replaced or otherwise modified from time to
time including (i) all rights of any Grantor to receive moneys due and to become due to it thereunder or in connection therewith,
(ii) all rights of any Grantor to receive proceeds of any insurance, indemnity, warranty or guaranty with respect thereto, (iii)
all rights of any Grantor to damages arising thereunder, and (iv) all rights of any Grantor to terminate and to perform and compel
performance of, such contracts and to exercise all remedies thereunder.

 

    	2

     

    

 

“Copyright
Licenses” shall mean all agreements, whether written or oral, providing for the grant by or to any Grantor of any right
in, to or under any Copyrights, including the grant of rights to reproduce, distribute, perform, publicly display, and make derivative
works of any work protected by copyright, including any Exclusive Copyright Licenses.

 

“Copyrights”
shall mean (i) all copyrights arising under the laws of the United States, any other country, or union of countries, or any
political subdivision of any of the foregoing, whether registered or unregistered and whether published or unpublished, all registrations
and recordings thereof, and all applications in connection therewith and rights corresponding thereto throughout the world, including
all registrations, recordings and applications in the United States Copyright Office, including the registered copyrights and applications
therefor listed in Schedule 3.08(a) (as such schedule may be amended or supplemented from time to time), (ii) the right to, and
to obtain, all extensions and renewals thereof, (iii) the right to sue or otherwise recover for past, present and future infringements
of any of the foregoing, and (iv) all Proceeds of the foregoing, including license fees, royalties, income, payments, claims, damages,
and proceeds of suit.

 

“Credit
Agreement” shall have the meaning assigned to such term in the preamble.

 

“dollars”
or “$” shall mean lawful money of the United States of America.

 

“Exclusive
Copyright Licenses” shall mean all agreements, whether written or oral, providing for the grant to any Grantor of any
exclusive right in, to or under any United States registered Copyright that is material to such Grantor’s business, including
any of the foregoing listed on Schedule 3.08(a) (as such schedule may be amended or supplemented from time to time).

 

“Excluded
Account” shall mean any Deposit Account maintained solely for payroll, pension, employee benefits or other trust purposes.

 

    	3

     

    

 

“Excluded
Assets” shall mean (i) all leasehold interests; (ii) all cars, trucks, trailers, construction, special purpose and other
Vehicles and Equipment covered by a certificate of title of any state or of the United States of America and all appurtenants to
any of the foregoing (except to the extent perfection can be obtained by filing of UCC financing statements); (iii) (1) any lease,
license or other similar agreement or any property subject to a permitted purchase money security interest or similar arrangement
only to the extent a grant of a security interest therein would violate or invalidate such lease, license or similar agreement
or purchase money arrangement or create a right of termination in favor of any other party thereto (other than in favor of any
Borrower or any other Grantor or any of their respective Subsidiaries or Affiliates); (2) any lease, license, contract, property
right or agreement to which any Grantor is a party or any of its rights or interests thereunder only to the extent that the grant
of a security interest therein shall constitute or result in a breach of a term of, termination of or default under the terms of
any such lease, license, contract, property right or agreement, and (3) those assets with respect to which the granting of security
interests in such assets would be prohibited by any contract with an unaffiliated third-party permitted under the terms of the
Loan Documents (not entered into in contemplation thereof and solely with respect to assets that are subject to such contract),
applicable law or regulation, in each case described in clauses (1), (2) and (3), (x) other than Proceeds thereof and receivables
with respect thereto and (y) only after giving effect to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision
or provisions) of any relevant jurisdiction or any other applicable law or principles of equity; provided, however,
that the Collateral shall include (and such security interest shall attach and the definition of Excluded Assets shall not then
include) immediately at such time as the contractual or legal provisions or the condition causing such violation, invalidation,
right of termination, prohibition or restriction referred to in the foregoing clauses (1), (2) and (3) shall no longer be applicable
and to the extent severable, and shall attach immediately to any portion of such lease, license, contract, property, right, agreement
or other asset not subject to the provisions specified above; (iv) any “intent-to-use” application for registration
of a Trademark filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, prior to the filing of a “Statement
of Use” pursuant to Section 1(d) of the Lanham Act or an “Amendment to Allege Use” pursuant to Section 1(c) of
the Lanham Act with respect thereto, solely to the extent, if any, that, and solely during the period, if any, in which, the grant
of a security interest therein would impair the validity or enforceability of any registration that issues from such intent-to-use
application under applicable federal law; (v) any assets if PSP and the Collateral Agent reasonably agree that the costs of creating
or perfecting such pledges or security interests in such assets (including any mortgage, stamp or other similar tax) are excessive
in relation the benefits to the Lenders; (vi) any Excluded Account and (vii) Margin Stock and (viii) any asset if the granting
of a security interest therein could reasonably be expected to result in a material adverse tax consequence to such Grantor as
determined in good faith by PSP (other than as a result of the application of Sections 951 and/or 956 of the Code (or any successor
provisions)).

 

“Excluded
Equity Interests” shall have the meaning assigned to such term in Section 2(a) hereof.

 

“General
Intangibles” shall mean all “general intangibles” as such term is defined in Article 9 of the New York UCC
and, in any event, including with respect to any Grantor, all rights of such Grantor to receive any tax refunds, all Swap Contracts
and all contracts, agreements, instruments and indentures and all licenses, permits, concessions, franchises and authorizations
issued by Governmental Authorities in any form, and portions thereof, to which such Grantor is a party or under which such Grantor
has any right, title or interest or to which such Grantor or any property of such Grantor is subject, as the same may from time
to time be amended, supplemented, replaced or otherwise modified, including (i) all rights of such Grantor to receive moneys due
and to become due to it thereunder or in connection therewith, (ii) all rights of such Grantor to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect thereto, (iii) all rights of such Grantor to damages arising thereunder and (iv) all
rights of such Grantor to terminate and to perform and compel performance and to exercise all remedies thereunder.

 

“Grantors”
shall have the meaning assigned to such term in the preamble.

 

    	4

     

    

 

“Immaterial
Intellectual Property” means Intellectual Property owned by or licensed to a Grantor which is registered, issued or applied
for and that is, to such Grantor’s knowledge, immaterial to the business of such Grantor and, together with all other Immaterial
Intellectual Property of the Grantors, does not support or relate to services or products contributing at least 3% of worldwide
sales of the Borrowers and their respective Subsidiaries.

 

“Insurance”
shall mean (i) all property and casualty insurance policies covering any or all of the Collateral (regardless of whether the Collateral
Agent is the loss payee thereof) and (ii) any key man life insurance policies.

 

“Intellectual
Property” shall mean the collective reference to all rights, priorities and privileges relating to any intellectual property,
whether arising under United States, multinational or foreign laws or otherwise, including all Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks, Trademark Licenses, Trade Secrets and Trade Secret Licenses, together with URLs, domain names,
content of websites and databases, and all rights to sue at law or in equity for any past, present and future infringement, misappropriation,
dilution or other violation of any of the foregoing, and the right to receive all Proceeds therefrom, including license fees, royalties,
income, payments, claims, damages and proceeds of suit.

 

“Intellectual
Property Collateral” shall mean that portion of the Collateral that constitutes Intellectual Property.

 

“Investment
Property” shall mean the collective reference to (i) all “investment property” as such term is defined in
Section 9-102(a)(49) of the New York UCC including all Certificated Securities and Uncertificated Securities, all Security Entitlements,
all Securities Accounts, all Commodity Contracts and all Commodity Accounts, (ii) security entitlements, in the case of any
United States Treasury book-entry securities, as defined in 31 C.F.R. section 357.2, or, in the case of any United States federal
agency book-entry securities, as defined in the corresponding United States federal regulations governing such book-entry securities,
and (iii) whether or not otherwise constituting “investment property,” all Pledged Notes, all Pledged Equity Interests,
all Pledged Security Entitlements and all Pledged Commodity Contracts.

 

“Issuers”
shall mean the collective reference to each issuer of a Pledged Security.

 

“Lenders”
shall have the meaning assigned to such term in the preamble.

 

“Licensed
Intellectual Property” shall have the meaning assigned to such term in Section 3.08(a).

 

“Majority
Holders” shall have the meaning assigned to such term in Section 6.01(a).

 

“Material
Contract” shall mean each agreement, contract or license (including any license of Intellectual Property) or other arrangement
(a) which is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) to the
Grantors and their Subsidiaries; (b) which constitutes a contract or commitment relating to indebtedness for borrowed money or
the deferred purchase price of property (in either case, whether incurred, assumed, guaranteed or secured by any asset) in excess
of $5,000,000; (c) which contains any provision that would by its terms restrict or alter the conduct of business of, or purport
to restrict or alter the conduct of business of, the Grantors or any of their Subsidiaries; and (d) which by its terms calls for
aggregate payments by the Grantors or any of their Subsidiaries of more than $5,000,000 over the remaining term of such agreement,
contract, license or other arrangement except for any such agreement contract or license or other arrangement that may be canceled,
without any material penalty or other liability to the Grantors or any of their Subsidiaries, upon notice of 90 days or less.

 

    	5

     

    

 

“New
York UCC” shall mean the Uniform Commercial Code as from time to time in effect in the State of New York.

 

“Obligations”
shall have the meaning assigned to such term in the Credit Agreement.

 

“Owned
Intellectual Property” shall have the meaning assigned to such term in Section 3.08(a).

 

“Patent
License” shall mean all agreements, whether written or oral, providing for the grant by or to any Grantor of any right
to manufacture, use, import or sell any invention or design covered by any Patents.

 

“Patents”
shall mean (i) all letters of patent of the United States, any other country, union of countries or any political subdivision
of any of the foregoing, all reissues and extensions thereof, including any of the foregoing listed in Schedule 3.08(a) (as such
schedule may be amended or supplemented from time to time), (ii) all applications for letters of patent of the United States or
any other country or union of countries or any political subdivision of any of the foregoing and all divisions, continuations and
continuations-in-part thereof, including any of the foregoing listed in Schedule 3.08(a) (as such schedule may be amended or supplemented
from time to time), (iii) the right to, and to obtain, any reissues or extensions of the foregoing, (iv) the right to sue or otherwise
recover for past, present and future infringement of any of the foregoing, and (v) all Proceeds of the foregoing, including license
fees, royalties, income, payments, claims, damages and proceeds of suit.

 

“Payment
in Full of the Obligations” shall mean the payment in full of the Obligations as determined in accordance with Section
1.02(d).

 

“person”
shall mean any natural person, institution, sole proprietorship, unincorporated organization, public benefit corporation, corporation,
trust, business trust, joint venture, joint stock company, association, company, limited liability company, partnership, Governmental
Authority or other entity.

 

“Pledged
Alternative Equity Interests” shall mean all interests of any Grantor in participation or other interests in any equity
or profits of any business entity and the certificates, if any, representing such interests and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such interests and any other warrant, right or option to acquire any
of the foregoing; provided, however, that Pledged Alternative Equity Interests shall not include any Pledged Stock,
Pledged Partnership Interests, Pledged LLC Interests or Pledged Trust Interests.

 

    	6

     

    

 

“Pledged
Collateral” shall mean the collective reference to the Pledged Commodity Contracts, the Pledged Securities and the Pledged
Security Entitlements.

 

“Pledged
Commodity Contracts” shall mean all Commodity Contracts to which any Grantor is party from time to time.

 

“Pledged
Debt Securities” shall mean all debt securities now owned or hereafter acquired by any Grantor, including the debt securities
listed on Schedule 3.06(b), (as such schedule may be amended or supplemented from time to time), together with any other certificates,
options, rights or security entitlements of any nature whatsoever in respect of the debt securities of any person that may be issued
or granted to, or held by, any Grantor while this Agreement is in effect.

 

“Pledged
Equity Interests” shall mean all Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests, Pledged Trust Interests
and Pledged Alternative Equity Interests.

 

“Pledged
LLC Interests” shall mean all interests of any Grantor now owned or hereafter acquired in any limited liability company,
including all limited liability company interests listed on Schedule 3.06(a) hereto under the heading “Pledged LLC Interests”
(as such schedule may be amended or supplemented from time to time) and the certificates, if any, representing such limited liability
company interests and any interest of such Grantor on the books and records of such limited liability company and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all of such limited liability company interests and
any other warrant, right or option to acquire any of the foregoing; provided, that Pledged LLC Interests shall not include
any Excluded Equity Interests.

 

“Pledged
Notes” shall mean all promissory notes now owned or hereafter acquired by any Grantor, including those listed on Schedule
3.06(b) (as such schedule may be amended or supplemented from time to time).

 

“Pledged
Partnership Interests” shall mean all interests of any Grantor now owned or hereafter acquired in any general partnership,
limited partnership, limited liability partnership or other partnership, including all partnership interests listed on Schedule
3.06(a) hereto under the heading “Pledged Partnership Interests” (as such schedule may be amended or supplemented from
time to time) and the certificates, if any, representing such partnership interests and any interest of such Grantor on the books
and records of such partnership and all dividends, distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any
or all of such partnership interests and any other warrant, right or option to acquire any of the foregoing; provided, that
Pledged Partnership Interests shall not include any Excluded Equity Interests.

 

“Pledged
Securities” shall mean the collective reference to the Pledged Debt Securities, the Pledged Notes and the Pledged Equity
Interests.

 

    	7

     

    

 

“Pledged
Security Entitlements” shall mean all Security Entitlements of any Grantor.

 

“Pledged
Stock” shall mean all shares of capital stock now owned or hereafter acquired by any Grantor, including all shares of
capital stock listed on Schedule 3.06(a) hereto under the heading “Pledged Stock” (as such schedule may be amended
or supplemented from time to time), and the certificates, if any, representing such shares and any interest of such Grantor in
the entries on the books of the issuer of such shares and all dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such shares and any other warrant, right or option to acquire any of the foregoing; provided, that Pledged
Stock shall not include any Excluded Equity Interests.

 

“Pledged
Trust Interests” shall mean all interests of any Grantor now owned or hereafter acquired in a Delaware business trust
or other trust, including all trust interests listed on Schedule 3.06(a) hereto under the heading “Pledged Trust Interests”
(as such schedule may be amended or supplemented from time to time) and the certificates, if any, representing such trust interests
and any interest of such Grantor on the books and records of such trust or on the books and records of any securities intermediary
pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other
property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all
of such trust interests and any other warrant, right or option to acquire any of the foregoing.

 

“Proceeds”
shall mean all “proceeds” as such term is defined in Section 9-102(a)(64) of the New York UCC and, in any event, shall
include all dividends or other income from the Investment Property, collections thereon or distributions or payments with respect
thereto.

 

“Receivable”
shall mean all Accounts and any other right to payment for goods or other property sold, leased, licensed or otherwise disposed
of or for services rendered, whether or not such right is evidenced by an Instrument or Chattel Paper or classified as a Payment
Intangible and whether or not it has been earned by performance. References herein to Receivables shall include any Supporting
Obligation or collateral securing such Receivable.

 

“Secured
Hedge Agreement” shall have the meaning assigned to such term in the Credit Agreement.

 

“Secured
Parties” shall have the meaning assigned to such term in the Credit Agreement.

 

“Secured
Treasury Management Agreement” shall have the meaning assigned to such term in the Credit Agreement.

 

“Securities
Act” shall mean the Securities Act of 1933, as amended.

 

“Subsidiary”
shall mean any subsidiary of any Borrower.

 

    	8

     

    

 

“Syndication
Agent” shall have the meaning assigned to such term in the preamble.

 

“Trademark
License” shall mean any agreement, whether written or oral, providing for the grant by or to any Grantor of any right
in, to or under any Trademark.

 

“Trademarks”
shall mean (i) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade
styles, service marks, logos, designs and other source or business identifiers, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency
of the United States, any State thereof or any other country, union of countries, or any political subdivision of any of the foregoing,
or otherwise, and all common-law rights related thereto, including any of the foregoing listed in Schedule 3.08(a) (as such schedule
may be amended or supplemented from time to time), (ii) the right to, and to obtain, all renewals thereof, (iii) the goodwill of
the business connected with the use of and symbolized by the foregoing, (iv) the right to sue or otherwise recover for past, present
and future infringements or dilution of any of the foregoing or for any injury to goodwill, and (v) all Proceeds of the foregoing,
including license fees, royalties, income, payments, claims, damages and proceeds of suit.

 

“Trade
Secret License” shall mean any agreement, whether written or oral, providing for the grant by or to any Grantor of any
right in, to or under any Trade Secret.

 

“Trade
Secrets” shall mean all trade secrets and all other confidential or proprietary information and know-how, whether
or not reduced to a writing or other tangible form, including all documents and things embodying, incorporating or describing any
of the foregoing, together with (i) the right to sue or otherwise recover for past, present and future misappropriation of
any of the foregoing and (ii) all proceeds of the foregoing, including license fees, royalties, income, payments, claims, damages
and proceeds of suit.

 

(c)       Other
Definitional Provisions. (a)  The words “hereof,” “herein,” “hereto” and “hereunder”
and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision
of this Agreement, and Section and Schedule references are to the specific provisions of this Agreement unless otherwise specified.

 

(d)       The
meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

(e)       Where
the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to
the property or assets such Grantor has granted as Collateral or the relevant part thereof.

 

(f)       The
expressions “payment in full,” “paid in full” and any other similar terms or phrases when used herein or
in any other document with respect to the Obligations shall mean the unconditional, final and irrevocable payment in full, in immediately
available funds, of all of the Obligations, unless otherwise specified, other than indemnification and other contingent obligations
not then due and payable and other than any Obligations in respect of Letters of Credit which have been backstopped or Cash Collateralized,
in each case, in amounts and pursuant to documentation in form and substance satisfactory to the Administrative Agent and the L/C
Issuer.

 

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(g)       The
words “include,” “includes” and “including,” and words of similar import, shall not be limiting
and shall be deemed to be followed by the phrase “without limitation.”

 

(h)       All
references to the Lenders herein shall, where appropriate, include any Lender, the Administrative Agent, the Collateral Agent,
the Arranger, the Bookrunner, or, in the case of any Secured Hedge Agreement or Secured Treasury Management Agreement, any Lender
Counterparty thereto.

 

SECTION
2.         GRANT OF SECURITY INTEREST; CONTINUING LIABILITY UNDER COLLATERAL

 

(a)       Each
Grantor hereby grants to the Collateral Agent, for the ratable benefit of the Secured Parties, a security interest in all of the
personal property of such Grantor, including the following property, in each case, wherever located and now owned or at any time
hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or
interest (the “Collateral”), as collateral security for the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration or otherwise) of such Grantor’s Obligations:

 

(i)       all
Accounts;

 

(ii)       all
As-Extracted Collateral;

 

(iii)      all
Chattel Paper;

 

(iv)      all
Commercial Tort Claims from time to time specifically described on Schedule 3.10;

 

(v)       all
Contracts;

 

(vi)      all
Deposit Accounts;

 

(vii)     all
Documents;

 

(viii)    all
Equipment;

 

(ix)      all
Fixtures

 

(x)       all
General Intangibles;

 

(xi)      all
Goods

 

(xii)     all
Instruments;

 

(xiii)    all
Insurance;

 

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(xiv)     all
Intellectual Property;

 

(xv)      all
Inventory;

 

(xvi)     all
Investment Property;

 

(xvii)    all
Letters of Credit and all Letter of Credit Rights;

 

(xviii)   all
Money;

 

(xix)     all
Securities Accounts;

 

(xx)      all
Collateral Accounts and all Collateral Account Funds;

 

(xxi)     all
Receivables and all Receivables records;

 

(xxii)    all
books, records, ledger cards, files, correspondence, customer lists, blueprints, technical specifications, manuals, computer software,
computer printouts, tapes, disks and other electronic storage media and related data processing software and similar items that
at any time pertain to any of the Collateral or are otherwise required in the collection thereof or realization thereupon; and

 

(xxiii)   to
the extent not otherwise included, all other property, whether tangible or intangible, of such Grantor and all Proceeds, products,
accessions, rents and profits of any and all of the foregoing and all collateral security, Supporting Obligations and guarantees
given by any person with respect to any of the foregoing;

 

provided
that, notwithstanding any other provision set forth in this Section 2, this Agreement shall not, at any time, constitute a grant
of a security interest in any property that is, at such time, (i) an Excluded Asset and (ii) (x) the outstanding capital stock,
limited liability interests, partnership interests or other equity interests of (1) a First-Tier Foreign Subsidiary or Excluded
Domestic Subsidiary in excess of 65% of the voting power of all classes of capital stock, limited liability interests, partnership
interests or other equity interests of such First-Tier Foreign Subsidiary or Excluded Domestic Subsidiary entitled to vote or (2)
any person that is not a Restricted Subsidiary or (3) any Excluded Subsidiary, or (y) any outstanding capital stock, limited liability
interests, partnership interests or other equity interests of a Foreign Subsidiary that is not a First-Tier Foreign Subsidiary
(any equity interests described in clause (ii) above, the “Excluded Equity Interests”) and provided further
that, for the avoidance of doubt, the grant of a security interest herein shall not be deemed to be an outright assignment of Intellectual
Property rights owned by the Grantors.

 

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(b)       Notwithstanding
anything herein to the contrary, (i) each Grantor shall remain liable for all obligations under and in respect of the Collateral
and nothing contained herein is intended or shall be a delegation of duties to the Collateral Agent or any other Secured Party,
(ii) each Grantor shall remain liable under each of the agreements included in the Collateral, including any Receivables, any Contracts
and any agreements relating to Pledged Partnership Interests or Pledged LLC Interests, to perform all of the obligations undertaken
by it thereunder all in accordance with and pursuant to the terms and provisions thereof and neither the Collateral Agent nor any
other Secured Party shall have any obligation or liability under any of such agreements by reason of or arising out of this Agreement
or any other document related hereto nor shall the Collateral Agent nor any other Secured Party have any obligation to make any
inquiry as to the nature or sufficiency of any payment received by it or have any obligation to take any action to collect or enforce
any rights under any agreement included in the Collateral, including any agreements relating to any Receivables, any Contracts
or any agreements relating to Pledged Partnership Interests or Pledged LLC Interests and (iii) the exercise by the Collateral Agent
of any of its rights hereunder shall not release any Grantor from any of its duties or obligations under the contracts and agreements
included in the Collateral, including any agreements relating to any Receivables, any Contracts and any agreements relating to
Pledged Partnership Interests or Pledged LLC Interests.

 

SECTION
3.       REPRESENTATIONS AND WARRANTIES

 

To
induce the Administrative Agent, the Collateral Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders
to make their respective extensions of credit to the Borrowers thereunder, each Grantor hereby represents and warrants to the Secured
Parties that:

 

Title;
No Other Liens. Such Grantor owns each item of the Collateral granted by it free and clear of any and all Liens or claims, including
Liens arising as a result of such Grantor becoming bound (as a result of merger or otherwise) as grantor under a security agreement
entered into by another person, except for Permitted Liens and other Liens expressly permitted by Section 8.01 of the Credit Agreement.
No financing statement, mortgage or other public notice with respect to all or any part of the Collateral is on file or of record
in any public office, except (a) financing statements for which duly authorized and proper termination statements have been delivered
to the Collateral Agent for filing and (b) such as have been filed in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, pursuant to this Agreement or as is expressly permitted by Section 8.01 of the Credit Agreement.

 

Perfected
First Priority Liens.   The security interests granted pursuant to this Agreement (a) upon completion of the filings
and other actions specified on Schedule 3.02 (as such schedule may be amended or supplemented from time to time with respect to
after-acquired property consistent with Section 7.12 of the Credit Agreement) (all of which, in the case of all filings and other
documents referred to on said Schedule, have been delivered to the Collateral Agent in duly completed and duly executed form, as
applicable, except as permitted by Section 7.17 of the Credit Agreement) and payment of all filing fees, will constitute valid
fully perfected security interests in all of the Collateral in which a security interest may be perfected by way of such filings
or any other actions specified thereon in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, as collateral
security for such Grantor’s Obligations enforceable in accordance with the terms hereof, except as may be required under
the laws of any jurisdiction outside of the United States in order to perfect the Collateral Agent’s Lien on the Collateral
created under the laws of such jurisdiction and (b) are prior to all other Liens on the Collateral, except for Permitted Liens
and other Liens expressly permitted by Section 8.01 of the Credit Agreement. Notwithstanding anything to the contrary herein, no
Grantor shall be required to take any action under the laws of any jurisdiction other than the United States (or any political
subdivision thereof) and its territories and possessions for the purpose of perfecting the security interest in any Intellectual
Property Collateral, unless an Event of Default has occurred and is continuing, in which case such Grantor agrees, upon the request
of the Collateral Agent, to execute and deliver any and all instruments and documents and take such other actions that are necessary
or appropriate to perfect, record or evidence the security interest granted herein to the Collateral Agent, for the ratable benefit
of the Secured Parties, in any jurisdiction outside the United States. Without limiting the foregoing but subject to any limitations
on such requirement expressly provided herein or Section 7.15 of the Credit Agreement, each Grantor has taken all actions necessary
or desirable, including those specified in Section 4.02 to (i) establish the Collateral Agent’s “control” (within
the meanings of Sections 8-106 and 9-106 of the New York UCC) over any portion of the Investment Property constituting Certificated
Securities and Uncertificated Securities, (ii) establish the Collateral Agent’s “control” (within the meaning
of Section 9-107 of the New York UCC) over all Letter of Credit Rights, (iii) establish the Collateral Agent’s control
(within the meaning of Section 9-105 of the New York UCC) over all Electronic Chattel Paper and (iv) establish the Collateral Agent’s
“control” (within the meaning of Section 16 of the Uniform Electronic Transaction Act as in effect in the applicable
jurisdiction “UETA”) over all “transferable records” (as defined in UETA).

 

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Name;
Jurisdiction of Organization, etc. On the date hereof, such Grantor’s exact legal name (as indicated on the public record
of such Grantor’s jurisdiction of formation or organization, which shows such Grantor to have been formed or organized),
jurisdiction of formation or organization, organizational identification number, if any, and the location of such Grantor’s
chief executive office are specified on Schedule 3.03 (as such schedule may be amended or supplemented from time to time). Each
Grantor is organized solely under the law of the jurisdiction so specified and has not filed any certificates of domestication,
transfer or continuance in any other jurisdiction. Except as otherwise indicated on Schedule 3.03 (as such schedule may be amended
or supplemented from time to time), the jurisdiction of each such Grantor’s organization or formation is required to maintain
a public record showing such Grantor to have been organized or formed. Except as specified on Schedule 3.03 (as such schedule may
be amended or supplemented from time to time by notice given in accordance with Section 4.06(a)), no such Grantor has changed its
name, jurisdiction of organization, chief executive office or its corporate structure in any way (e.g., by merger, consolidation,
change in corporate form or otherwise) within the past five years.

 

(a)       Inventory
and Equipment. (a)  None of the Inventory or Equipment that is included in the Collateral is in the possession of an
issuer of a negotiable document (as defined in Section 7-104 of the New York UCC) therefor or is otherwise in the possession of
any bailee or warehouseman other than (i) Inventory or Equipment in the possession of one bailee or warehouseman and having a value
not to exceed $1,000,000 in the aggregate, (ii) located at locations subject to a lien waiver or (iii) at locations where a bailee
or warehouseman would not have a lien on such assets in the jurisdiction where located.

 

(b)       Any
Inventory now or hereafter produced by any Grantor included in the Collateral has been and will be produced in compliance in all
material respects with the requirements of all applicable laws and regulations, including the Fair Labor Standards Act.

 

Farm
Products. None of the Collateral constitutes, or is the Proceeds of, Farm Products.

 

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(c)       Investment
Property. (a)  Schedule 3.06(a) hereto (as such schedule may be amended or supplemented from time to time) sets forth
under the headings “Pledged Stock,” “Pledged LLC Interests,” “Pledged Partnership Interests”
and “Pledged Trust Interests,” respectively, all of the Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests
and Pledged Trust Interests owned by any Grantor in its subsidiaries and such Pledged Equity Interests constitute the percentage
of issued and outstanding shares of stock, percentage of membership interests, percentage of partnership interests or percentage
of beneficial interest of the respective issuers thereof indicated on such schedule. Schedule 3.06(b) (as such schedule may be
amended or supplemented from time to time) sets forth under the heading “Pledged Debt Securities” or “Pledged
Notes” all of the Pledged Debt Securities and Pledged Notes owned by any Grantor and, to such Grantor’s knowledge,
all of such Pledged Debt Securities and Pledged Notes have been duly authorized, authenticated or issued, and delivered and is
the legal, valid and binding obligation of the issuers thereof enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general
principals of equity, regardless of whether considered in a proceeding in equity or at law, and is not in default and constitutes
all of the issued and outstanding inter-company indebtedness evidenced by an instrument or certificated security of the respective
issuers thereof owing to such Grantor. Each Grantor is the sole entitlement holder or customer of each such account, and no Grantor
has consented to or is otherwise aware of any person having “control” (within the meanings of Sections 8-106, 9-106
and 9-104 of the New York UCC) over, or any other interest in, any such Securities Account, Commodity Account or Deposit Account,
in each case in which such Grantor has an interest, or any securities, commodities or other property credited thereto.

 

(d)       The
shares of Pledged Equity Interests pledged by such Grantor hereunder constitute all of the issued and outstanding shares of all
classes of Equity Interests in each Issuer owned by such Grantor (other than any Excluded Equity Interests).

 

(e)       All
the shares of the Pledged Equity Interests have been duly and validly issued and are fully paid and nonassessable.

 

(f)       The
terms of any uncertificated Pledged LLC Interests and Pledged Partnership Interests do not provide that they are securities governed
by Article 8 of the Uniform Commercial Code in effect from time to time in the “issuer’s jurisdiction” of each
Issuer thereof (as such term is defined in the Uniform Commercial Code in effect in such jurisdiction). There shall be no certificated
Pledged LLC Interests or Pledged Partnership Interests which provide that they are securities governed by Article 8 of the Uniform
Commercial Code in effect from time to time in the “issuer’s jurisdiction” of each Issuer thereof, unless all
certificates relating thereto have been delivered to the Collateral Agent pursuant to the terms hereof.

 

(g)       Such
Grantor is the record and beneficial owner of, and has good and defeasible title to, the Investment Property pledged by it hereunder,
free of any and all Liens or options in favor of, or claims of, any other person, except Permitted Liens and other Liens expressly
permitted by Section 8.01 of the Credit Agreement, and there are no outstanding warrants, options or other rights to purchase,
or shareholder, voting trust or similar agreements outstanding with respect to, or property that is convertible into, or that requires
the issuance or sale of, any Pledged Equity Interests.

 

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(h)       Receivables.
(a)  None of the obligors on any material Receivables that are included in the Collateral is a Governmental Authority.

 

(i)       Each
Receivable in excess of $500,000 that is included in the Collateral, to such Grantor’s knowledge (i) is and will be the legal,
valid and binding obligation of the Account Debtor in respect thereof, representing an unsatisfied obligation of such Account Debtor,
(ii) is and will be enforceable in accordance with its terms, subject to the applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law, (iii) is not and will not be subject to any setoffs, defenses, taxes, counterclaims
(except with respect to setoffs in accordance with the Credit Agreement, Permitted Liens and refunds, returns and allowances in
the ordinary course of business with respect to damaged merchandise) and (iv) is and will be in compliance with all applicable
material laws and regulations, except where the failure to have such rights in subsection (i) through (iv) above would not reasonably
be expected to have a Material Adverse Effect.

 

(j)       Intellectual
Property. (a)  Schedule 3.08(a) (as such schedule may be amended or supplemented from time to time) lists all Intellectual
Property (other than Excluded Assets) which is, as of the Closing Date, registered with or issued by a Governmental Authority or
is the subject of an application for registration or issuance, in each case which is owned by such Grantor in its own name, except
as set forth on Schedule 3.08(a) (as such schedule may be amended or supplemented from time to time), on the date hereof (collectively,
the “Owned Intellectual Property”) and all Exclusive Copyright Licenses. As of the Closing Date, except as set
forth in Schedule 3.08(a) (as such schedule may be amended or supplemented from time to time), such Grantor is the exclusive owner
of the entire and unencumbered right, title and interest in and to all such Owned Intellectual Property and is otherwise so entitled
to use, and grant to others the right to use, all such Owned Intellectual Property subject only to the license terms of the licensing
or franchise agreements referred to in paragraph (c) below, Permitted Liens and other Liens expressly permitted by Section 8.01
of the Credit Agreement, except where the failure to be entitled would not reasonably be expected to have a Material Adverse Effect.
To such Grantor’s knowledge, such Grantor has a valid and enforceable right to use all Intellectual Property which it uses
in its business, but does not own (collectively, the “Licensed Intellectual Property”), except where the failure
to have such rights would not reasonably be expected to have a Material Adverse Effect.

 

(k)       Except
as set forth in Schedule 3.08(b), to the knowledge of such Grantor as of the date hereof, all Owned Intellectual Property and all
Licensed Intellectual Property, is subsisting, unexpired and has not been abandoned, except where such subsistence, expiration
or abandonment would not have a Material Adverse Effect. To such Grantor’s knowledge, all Owned Intellectual Property and
Licensed Intellectual Property is valid and enforceable, except for any items the invalidity or unenforceability of which would
not have a Material Adverse Effect. To such Grantor’s knowledge, except as disclosed on Schedule 3.08(e), neither the operation
of such Grantor’s business as currently conducted nor the use of Owned Intellectual Property or Licensed Intellectual Property
in connection therewith infringes, misappropriates, dilutes or otherwise violates the rights in any Intellectual Property of any
other person, except where such infringement, misappropriation, dilution, or violation would not reasonably be expected to have
a Material Adverse Effect.

 

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(l)        Except
as set forth in Schedule 3.08(c) (as such schedule may be amended or supplemented from time to time), on the date hereof none of
the Intellectual Property owned by such Grantor is the subject of any licensing or franchise agreement pursuant to which such Grantor
is the licensor or franchisor, other than industry standard licensing or franchising agreements entered into in the ordinary course
of business.

 

(m)      Except
as set forth in Schedule 3.08(d) (as such schedule may be amended or supplemented from time to time), to such Grantor’s knowledge,
no holding, decision or judgment has been rendered by any Governmental Authority or arbitrator in the United States or outside
the United States which would limit or cancel the validity or enforceability of, or such Grantor’s rights in, any Owned Intellectual
Property, except where the same would not reasonably be expected to have a Material Adverse Effect. Such Grantor is not aware of
any uses of any item of Owned Intellectual Property that could reasonably be expected to lead to such item becoming invalid or
unenforceable including unauthorized uses by third parties and uses which were not supported by the goodwill of the business connected
with the use of and symbolized by any Trademarks owned by a Grantor, except where the same would not reasonably be expected to
have a Material Adverse Effect.

 

(n)       Except
as set forth in Schedule 3.08(e) (as such schedule may be amended or supplemented from time to time), no action or proceeding is
pending, or, to such Grantor’s knowledge, threatened against any Grantor, on the date hereof (i) seeking to limit or cancel
any Owned Intellectual Property or, to such Grantor’s knowledge, Licensed Intellectual Property, other than in non-final
office actions issued in the course of prosecution of applications for registration or issuance, except as would not reasonably
be expected to have a Material Adverse Effect, (ii) alleging that any services provided by, processes used by, or products
manufactured or sold by such Grantor infringe, misappropriate, dilute or otherwise violate any Intellectual Property rights of
any other person, except as would not reasonably be expected to have a Material Adverse Effect, or (iii) alleging that any Intellectual
Property owned by any Grantor is being licensed, sublicensed or used in violation of any Intellectual Property right of any other
person, except where such violation would not reasonably be expected to have a Material Adverse Effect. To such Grantor’s
knowledge, no person is engaging in any activity that infringes upon, misappropriates, dilutes or is otherwise an unauthorized
use of, any material Intellectual Property owned by such Grantor or the rights of such Grantor therein, except where such action
would not reasonably be expected to have a Material Adverse Effect. The consummation of the transactions contemplated by this Agreement
(including the enforcement of remedies in accordance with the terms hereof) will not result in the termination or impairment of
any of the Intellectual Property owned or used by such Grantor.

 

(o)       With
respect to each Copyright License, Trademark License, Trade Secret License and Patent License, the loss of which could have a Material
Adverse Effect: (i) such license is a valid and binding obligation of such Grantor and, to such Grantor’s knowledge,
the other parties thereto, and is in full force and effect; (ii) such license will not cease to be valid and binding and in
full force and effect on terms substantially similar, when taken as a whole, to those currently in effect as a result of the rights
and interests granted herein, nor will the grant of such rights and interests constitute a breach or default under such license
or otherwise give the licensor or licensee a right to terminate such license; (iii) such Grantor has not received any notice
of termination or cancellation under such license; (iv) such Grantor has not received any notice of a breach or default under
such license, which breach or default has not been cured; and (v) to such Grantor’s knowledge, such Grantor is not in
breach or default in any material respect, and no event has occurred that, with notice and/or lapse of time, would constitute such
a breach or default or permit termination, modification or acceleration under such license.

 

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(p)       Except
as set forth in Schedule 3.08(g) (as such schedule may be amended or supplemented from time to time), such Grantor has performed
all acts and has paid all required fees and taxes to maintain each and every item of Owned Intellectual Property (other than Immaterial
Intellectual Property) in full force and effect except for any such items of Owned Intellectual Property (other than Immaterial
Intellectual Property) that such Grantor in its reasonable business judgment determines have no commercial value to the business
of such Grantor or otherwise to the extent such action would not reasonably be expected to have a Material Adverse Effect.

 

(q)       To
such Grantor’s knowledge, (i) none of the Trade Secrets owned by such Grantor has been misappropriated by any other person;
(ii) no employee, independent contractor or agent of such Grantor has misappropriated any Trade Secrets of any other person in
the course of the performance of his or her duties as an employee, independent contractor or agent of such Grantor; and (iii) no
employee, independent contractor or agent of such Grantor is in default or breach of any term of any employment agreement, non-disclosure
agreement, assignment of inventions agreement or similar agreement or contract relating in any way to the protection, ownership,
development, use or transfer of such Grantor’s Intellectual Property, except, in each of clauses (i), (ii) and (iii) hereof,
to the extent not reasonably expected to have a Material Adverse Effect.

 

(r)       Except
as set forth in Schedule 3.08(i) (as such schedule may be amended or supplemented from time to time), such Grantor has made all
filings and recordations necessary to evidence its ownership interest in the Owned Intellectual Property which is the subject of
a registration or application, and with the United States Patent and Trademark Office, the United States Copyright Office and in
corresponding national and international patent, trademark and copyright offices, except where the failure to make such filings
or recordations would not reasonably be expected to have a Material Adverse Effect.

 

(s)       Such
Grantor has taken commercially reasonable steps to use consistent standards of quality in the manufacture, distribution and sale
of all products sold and provision of all services provided under or in connection with any Trademarks used in the business of
such Grantor and has taken reasonable steps to ensure that all its licensed users of its Trademarks use such consistent standards
of quality.

 

Letters
of Credit and Letter of Credit Rights. No Grantor is a beneficiary or assignee under any Letter of Credit individually or in the
aggregate in excess of $5,000,000 other than the Letters of Credit described on Schedule 3.09 (as such schedule may be amended
or supplemented from time to time).

 

Commercial
Tort Claims. No Grantor has any Commercial Tort Claims individually or in the aggregate in excess of $5,000,000, except as specifically
described on Schedule 3.10 (as such schedule may be amended or supplemented from time to time).

 

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Contracts.

 

(t)       Each
Material Contract is valid and binding on each Grantor and any of its Subsidiaries, as applicable, and in full force and effect,
except where the failure to be valid, binding and in full force and effect, either individually or in the aggregate, would not
have a Material Adverse Effect;

 

(u)       Each
Grantor and each of its Subsidiaries have in all material respects performed all obligations required to be performed by them to
date under each Material Contract, except where such noncompliance, either individually or in the aggregate, would not have a Material
Adverse Effect; and

 

(v)       No
Grantor nor any of its Subsidiaries has received written notice of, or otherwise has knowledge of, the existence of any event or
condition which constitutes, or, after notice or lapse of time or both, will constitute, a material default on the part of such
Grantor or any of its Subsidiaries under any such Material Contract, except where such default, either individually or in the aggregate,
would not have a Material Adverse Effect.

 

SECTION
4.        COVENANTS

 

Each
Grantor covenants and agrees with the Secured Parties that, from and after the date of this Agreement until the Obligations (other
than Obligations in respect of any Treasury Management Agreement or Letters of Credit (as defined in the Credit Agreement)) shall
have been paid in full, each Letter of Credit (as defined in the Credit Agreement) shall have been cancelled or expired or been
backstopped or Cash Collateralized, in each case, in amounts and pursuant to documentation in form and substance satisfactory to
the Administrative Agent and the L/C Issuer, and all commitments to extend credit under the Credit Agreement shall have expired
or been terminated:

 

Covenants
in Credit Agreement. Each Grantor shall take, or shall refrain from taking, as the case may be, each action that is necessary to
be taken or not taken, as the case may be, so that no Default or Event of Default is caused by the failure to take such action
or to refrain from taking such action by such Grantor or any of its Subsidiaries.

 

(a)       Delivery
and Control of Instruments, Chattel Paper, Negotiable Documents and Investment Property. (a)  If any of the Collateral
which fair market value is in excess of $1,000,000 individually and $1,500,000 in the aggregate is or shall become evidenced or
represented by any Instrument, Certificated Security, Negotiable Document or Tangible Chattel Paper, then such Instrument (other
than checks received in the ordinary course of business), Certificated Security, Negotiable Documents or Tangible Chattel Paper
shall be, as promptly as reasonably practicable, delivered to the Collateral Agent, duly endorsed in a manner reasonably satisfactory
to the Collateral Agent, to be held as Collateral pursuant to this Agreement, and all of such property owned by any Grantor as
of the Closing Date shall be delivered on the Closing Date, except as permitted by Section 7.17 of the Credit Agreement. Any Collateral
not otherwise required to be delivered to the Collateral Agent in accordance with this subsection (a) shall be delivered to the
Collateral Agent, at the request of the Collateral Agent, after an Event of Default has occurred and be continuing.

 

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(b)       If
any of the Collateral is or shall become “Electronic Chattel Paper,” such Grantor shall ensure that (i) a single authoritative
copy exists which is unique, identifiable, unalterable (except as provided in clauses (iii), (iv) and (v) of this paragraph), (ii)
such authoritative copy identifies the Collateral Agent as the assignee and is communicated to and maintained by the Collateral
Agent or its designee, (iii) copies or revisions that add or change the assignee of the authoritative copy can only be made with
the participation of the Collateral Agent, (iv) each copy of the authoritative copy and any copy of a copy is readily identifiable
as a copy and not the authoritative copy and (v) any revision of the authoritative copy is readily identifiable as an authorized
or unauthorized revision.

 

(c)       Reserved.

 

(d)       Reserved.

 

(e)       Reserved.

 

(f)       Reserved.

 

(g)       In
the case of any transferable Letter of Credit Rights individually or in the aggregate in excess of $5,000,000, each Grantor shall
use commercially reasonable efforts to obtain the consent of any issuer thereof to the transfer of such Letter of Credit Rights
to the Collateral Agent. In the case of any other Letter of Credit Rights individually or in the aggregate in excess of $5,000,000,
each Grantor shall use commercially reasonable efforts to obtain the consent of the issuer thereof and any nominated person thereon
to the assignment of the proceeds of the related Letter of Credit in accordance with Section 5-114(c) of the New York UCC.

 

(h)       Maintenance
of Insurance. (a)  Such Grantor will maintain, with reputable insurance companies, insurance on all its property (including
all Inventory, Equipment and Vehicles) in compliance with the covenants relating to insurance set forth in Section 7.07 of the
Credit Agreement; and furnish to the Collateral Agent with copies for each Secured Party, upon written request, full information
as to the insurance carried. All insurance shall provide that no cancellation, material reduction in amount or material change
in coverage thereof shall be effective until at least 30 days after receipt by the Collateral Agent of written notice thereof.

 

(i)       Such
Grantor will deliver to the Collateral Agent on behalf of the Secured Parties, (i) on or prior to the Closing Date (or such later
date as set forth on Schedule 7.17 of the Credit Agreement), certificates showing the amount and types of insurance coverage as
of such date (provided that the Collateral Agent shall be named as additional insured on all such liability insurance policies
of such Grantor and named as loss payee on all property and casualty insurance policies of such Grantor), (ii) promptly following
receipt of notice from any insurer, a copy of any notice of cancellation or material change in coverage from that existing on the
Closing Date, (iii) forthwith, notice of any cancellation or nonrenewal of coverage by such Grantor and (iv) promptly after such
information is available to such Grantor, full information as to any claim for an amount in excess of $3,000,000 with respect to
any property and casualty insurance policy maintained by such Grantor.

 

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(j)       Upon
the request of the Collateral Agent, PSP shall deliver to the Secured Parties a report of a reputable insurance broker with respect
to such insurance and such supplemental reports with respect thereto as the Collateral Agent may from time to time reasonably request.

 

[Reserved].

 

(k)       Maintenance
of Perfected Security Interest; Further Documentation. (a)  Such Grantor shall maintain each of the security interests
created by this Agreement as a perfected security interest having at least the priority described in Section 3.02 and shall defend
such security interest against the claims and demands of all persons whomsoever, subject to the provisions of Section 7.15 of the
Credit Agreement.

 

(l)       Such
Grantor shall furnish to the Secured Parties from time to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the assets and property of such Grantor as the Collateral Agent may reasonably
request, all in reasonable detail.

 

(m)       At
any time and from time to time, upon the written request of the Collateral Agent, and at the sole expense of such Grantor, such
Grantor shall as promptly as reasonably practicable duly authorize, execute and deliver, and have recorded, such further instruments
and documents and take such further actions as the Collateral Agent may reasonably request for the purpose of obtaining or preserving
the full benefits of this Agreement and of the rights and powers herein granted, including, the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect in any jurisdiction with respect to the security
interests created hereby and in the case of Investment Property and any other relevant Collateral for which perfection by control
is otherwise required hereunder, taking any actions necessary to enable the Collateral Agent to obtain “control” (within
the meaning of the applicable Uniform Commercial Code) with respect thereto.

 

Changes
in Locations, Name, Jurisdiction of Incorporation, etc. Except upon 60 days’ written notice after such change (or such later
time as agreed to by the Collateral Agent), in each case, to the Collateral Agent and delivery to the Collateral Agent of duly
authorized and, where required, executed copies of all additional financing statements and other documents reasonably requested
by the Collateral Agent to maintain the validity, perfection and priority of the security interests provided for herein:

 

(a)       change
its legal name or jurisdiction of organization (or, if not a registered organization, the location of its chief executive office)
from that referred to in Section 3.03;

 

(b)       change
its identity or structure to such an extent that any financing statement filed by the Collateral Agent in connection with this
Agreement would become misleading; or

 

(c)       change
its address to such an extent that any financing statement filed by the Collateral Agent in connection with this Agreement would
become incorrect.

 

Notices.
Such Grantor shall advise the Collateral Agent as promptly as reasonably practicable, in reasonable detail, of:

 

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(n)       any
Lien (other than Permitted Liens or any Lien expressly permitted by Section 8.01 of the Credit Agreement) on any of the Collateral;
and

 

(o)       the
occurrence of any other event which could reasonably be expected to have a Material Adverse Effect on the aggregate value of the
Collateral or on the security interests created hereby.

 

(p)       Investment
Property. (a)  If such Grantor shall become entitled to receive or shall receive any stock or other ownership certificate
(including any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or
reduction of capital or any certificate issued in connection with any reorganization), option or rights in respect of the Equity
Interests in any Issuer which constitutes Collateral, whether in addition to, in substitution of, as a conversion of, or in exchange
for, any shares of or other ownership interests in the Pledged Securities, or otherwise in respect thereof, such Grantor shall
accept the same as the agent of the Secured Parties, hold the same in trust for the Secured Parties and deliver the same forthwith
to the Collateral Agent in the exact form received, duly endorsed by such Grantor to the Collateral Agent, if required, together
with an undated stock power or similar instrument of transfer covering such certificate duly executed in blank by such Grantor
and with, if the Collateral Agent so requests, signature guaranteed, to be held by the Collateral Agent, subject to the terms hereof,
as additional collateral security for the Obligations. If an Event of Default has occurred and is continuing, any sums paid upon
or in respect of the Pledged Securities upon the liquidation or dissolution of any Issuer shall be paid over to the Collateral
Agent to be held by it hereunder as additional collateral security for the Obligations, and in case any distribution of capital
shall be made on or in respect of the Pledged Securities or any property shall be distributed upon or with respect to the Pledged
Securities pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization
thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Collateral
Agent, be delivered to the Collateral Agent to be held by it hereunder as additional collateral security for the Obligations. If
an Event of Default has occurred and is continuing, if any sums of money or property so paid or distributed in respect of the Pledged
Securities shall be received by such Grantor, such Grantor shall, until such money or property is paid or delivered to the Collateral
Agent, hold such money or property in trust for the Secured Parties, segregated from other funds of such Grantor, as additional
collateral security for the Obligations.

 

(q)       Without
the prior written consent of the Collateral Agent, such Grantor shall not (i) vote to enable, or take any other action to permit,
any Issuer to issue any stock, partnership interests, limited liability company interests or other equity securities of any nature
or to issue any other securities convertible into or granting the right to purchase or exchange for any stock, partnership interests,
limited liability company interests or other equity securities of any nature of any Issuer (except, in each case, pursuant to a
transaction not prohibited by the Credit Agreement), (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, any of the Investment Property or Proceeds thereof or any interest therein (except, in each case, pursuant
to a transaction not prohibited by the Credit Agreement), (iii) create, incur or permit to exist any Lien or option in favor of,
or any claim of any person with respect to, any of the Investment Property or Proceeds thereof, or any interest therein, except
for the security interests created by this Agreement, any Permitted Liens or any Lien expressly permitted thereon pursuant to Section
8.01 of the Credit Agreement, (iv) enter into any agreement or undertaking restricting the right or ability of such Grantor or
the Collateral Agent to sell, assign or transfer any of the Investment Property or Proceeds thereof or any interest therein (except,
in each case, pursuant to a transaction not prohibited by the Credit Agreement) or (v) cause or permit any Issuer of any Pledged
Partnership Interests or Pledged LLC Interests which are not securities (for purposes of the New York UCC) on the date hereof to
elect or otherwise take any action to cause such Pledged Partnership Interests or Pledged LLC Interests to be treated as securities
for purposes of the New York UCC; provided, however, notwithstanding the foregoing, if any issuer of any Pledged
Partnership Interests or Pledged LLC Interests takes any such action in violation of the provisions in this clause (v), such Grantor
shall notify the Collateral Agent as promptly as reasonably practicable in writing of any such election or action and, in such
event, shall take all steps necessary or advisable to establish the Collateral Agent’s “control” thereof.

 

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(r)       In
the case of each Grantor which is an Issuer, such Issuer agrees that (i) it shall be bound by the terms of this Agreement relating
to the Pledged Securities issued by it and shall comply with such terms insofar as such terms are applicable to it, (ii) it shall
notify the Collateral Agent as promptly as reasonably practicable in writing of the occurrence of any of the events described in
Section 4.08(a) with respect to the Pledged Securities issued by it and (iii) the terms of Sections 5.03(c) and 5.07 shall apply
to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Section 5.03(c) or 5.07 with
respect to the Pledged Securities issued by it. In addition, each Grantor which is either an Issuer or an owner of any Pledged
Security hereby consents to the grant by each other Grantor of the security interest hereunder in favor of the Collateral Agent
and to the transfer of any Pledged Security to the Collateral Agent or its nominee following an Event of Default and to the substitution
of the Collateral Agent or its nominee as a partner, member or shareholder of the Issuer of the related Pledged Security.

 

(s)       Receivables.
(a)  Other than in a manner consistent with its past practice or in the ordinary course of business, such Grantor shall
not (i) grant any extension of the time of payment of any Receivable, (ii) compromise or settle any Receivable for less than
the full amount thereof, (iii) release, wholly or partially, any person liable for the payment of any Receivable, (iv) allow
any credit or discount whatsoever on any Receivable or (v) amend, supplement or modify any Receivable in any manner that could
adversely affect the value thereof.

 

(t)       Reserved.

 

(u)       Each
Grantor shall perform and comply in all material respects with all of its obligations with respect to the Receivables.

 

(v)       Intellectual
Property. (a)   Such Grantor (either itself or through licensees) shall (i) continue to use each Trademark included in
the Owned Intellectual Property in order to maintain such Trademark in full force free from any claim of abandonment for non-use,
unless Grantor makes a good faith business decision to discontinue such line in one or more jurisdictions, change the name of such
goods or services, or such abandonment is permitted by Section 4.10(i), (ii) take commercially reasonable steps to maintain the
quality of products and services offered under any of its Trademarks and take all commercially reasonable steps to ensure that
all its licensed users of such Trademarks maintain such quality, except to the extent it abandons or is in the process of discontinuing
such product or service in the ordinary course of business; (iii) not adopt or use any mark which is confusingly similar or a colorable
imitation of a Trademark owned by such Grantor (which is not Immaterial Intellectual Property) unless the Collateral Agent, for
the ratable benefit of the Secured Parties, shall obtain a perfected security interest in such mark (if not Immaterial Intellectual
Property) pursuant to this Agreement and the Trademark Security Agreement, and (iv) take commercially reasonable actions to not
(and not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby a Trademark owned by
such Grantor may become invalidated or impaired in any way, but subject to Grantor’s rights to discontinue or abandon its
rights under Section 4.10(i).

 

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(w)      Such
Grantor (either itself or through licensees) shall not knowingly do any act, or knowingly omit to do any act, whereby any Patent
owned by such Grantor may become forfeited, abandoned or dedicated to the public, except as permitted under Section 4.10(i).

 

(x)       Such
Grantor shall not (and shall not knowingly permit any licensee or sublicensee thereof to) knowingly do any act or knowingly omit
to do any act whereby any Copyrights included in the Owned Intellectual Property may become invalidated. Such Grantor shall not
(either itself or through licensees) knowingly do any act whereby any material Copyrights owned by such Grantor may fall into the
public domain, except as permitted under Section 4.10(i).

 

(y)       Reserved].

 

(z)       Such
Grantor shall take commercially reasonable steps, and shall take commercially reasonable steps to require its licensees, to use
Intellectual Property owned by such Grantor (other than Immaterial Intellectual Property) with the applicable statutory notices
provided for under applicable law and all other notices and legends required by applicable Requirements of Law, consistent with
industry practices.

 

(aa)     Such
Grantor shall notify the Collateral Agent as promptly as reasonably practicable if it knows, that any application or registration
relating to any Owned Intellectual Property may become forfeited, abandoned or dedicated to the public, or of any adverse determination
or development in any proceeding (including the institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright Office except for non-final office actions issued in
the course of prosecution of applications for registration) regarding such Grantor’s ownership of, or the validity of, any
Owned Intellectual Property or such Grantor’s right to register the same or to own and maintain the same, except to the extent
that Grantor is abandoning such Owned Intellectual Property as permitted under Section 4.10(i) or to the extent not reasonably
expected to have a Material Adverse Effect.

 

(bb)    In
the event that such Grantor, either by itself or through any agent, employee, licensee or designee, shall file with the United
States Copyright Office or any similar office or agency in any other country or any political subdivision thereof an application
for the registration of any Copyrights (other than Immaterial Intellectual Property), such Grantor shall report such filing of
such application, to the Collateral Agent within 30 days after the end of each fiscal quarter during which such filing occurred. 
Upon request of the Collateral Agent, if such Copyright application is filed with the United States Copyright Office, such Grantor
shall execute and deliver, to the Collateral Agent, a Copyright Security Agreement in the form set forth in Exhibit B.

 

    	23

     

    

 

(cc)     In
the event that such Grantor, either by itself or through any agent, employee, licensee or designee, shall file with the United
States Patent and Trademark Office or any similar office or agency in any other country or any political subdivision thereof an
application for the registration of any Patent or any Trademark (other than Excluded Assets), such Grantor shall report such filing
of such application, to the Collateral Agent within 30 days after the end of each fiscal quarter during which such filing occurred. 
Upon request of the Collateral Agent, if such Patent or Trademark application is filed with the United States Patent and Trademark
Office, such Grantor shall execute and deliver, to the Collateral Agent, a Patent Security Agreement in the form set forth in Exhibit
C or a Trademark Security Agreement in the form set forth in Exhibit A, as applicable.

 

(dd)    Such
Grantor (either itself or through licensees) shall not, without the prior written consent of the Collateral Agent, discontinue
use of or otherwise abandon any of its Owned Intellectual Property, or abandon any application or any right to file an application
for any Patent, Trademark, or Copyright, unless in such Grantor’s reasonable business judgment such use or the pursuit or
maintenance of such Owned Intellectual Property is no longer desirable in the conduct of such Grantor’s business and that
the loss thereof could not reasonably be expected to have a Material Adverse Effect.

 

(ee)     In
the event that any Intellectual Property owned by such Grantor and material to its business is infringed, misappropriated or diluted
by a third party, such Grantor shall take such actions as such Grantor shall reasonably deem appropriate under the circumstances
to protect and enforce such Intellectual Property.

 

(ff)      Such
Grantor agrees that, should it obtain an ownership interest in any item of Intellectual Property, other than Excluded Assets,
which is not, as of the Closing Date, a part of the Intellectual Property Collateral (including any intent-to-use Trademark applications
that are no longer Excluded Assets) (the “After-Acquired Intellectual Property”), (i) the provisions of Section
2 shall automatically apply thereto; (ii) any such After-Acquired Intellectual Property, and in the case of Trademarks, the goodwill
of the business connected therewith and symbolized thereby, shall automatically become part of the Intellectual Property Collateral;
(iii) with respect to any such After-Acquired Intellectual Property consisting of U.S. registered Copyrights, Patents or Trademarks
(or applications therefor) or Exclusive Copyright Licenses, such Grantor shall report such After-Acquired Intellectual Property
to the Collateral Agent within 30 days after the end of each fiscal quarter during which such acquisition occurred or such later
time as agreed by the Collateral Agent; and (iv) upon request of the Collateral Agent, such Grantor shall execute and deliver,
to the Collateral Agent, a Copyright Security Agreement in the form set forth in Exhibit B, a Patent Security Agreement
in the form set forth in Exhibit C and/or a Trademark Security Agreement in the form set forth in Exhibit A, as
applicable; provided that, in the event of any Intellectual Property covered by such Copyright Security Agreement, Patent
Security Agreement and/or Trademark Security Agreement (i) shall be deemed invalidated or rejected by the applicable Governmental
Authority or (ii) shall have an incomplete chain of title or other title defect, then the applicable Grantor shall not be required
to take any remedial steps with respect thereto so long as such Intellectual Property is Immaterial Intellectual Property; provided
further that, the applicable Grantor shall not be required to take any perfection actions with respect to Immaterial Intellectual
Property to the extent that, in the reasonable judgment of the Administrative Agent, the costs of perfecting such Immaterial Intellectual
Property is excessive in relation to the benefit to the Secured Parties. 

 

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(gg)     Such
Grantor agrees to execute upon the Closing Date, a Trademark Security Agreement, in substantially the form of Exhibit A,
a Copyright Security Agreement, in substantially the form of Exhibit B, and a Patent Security Agreement, in substantially
the form of Exhibit C, as applicable, in order to record the security interest granted herein to the Collateral Agent for
the ratable benefit of the Secured Parties with the United States Patent and Trademark Office, the United States Copyright Office,
and any other applicable Governmental Authority.

 

(hh)     Such
Grantor shall take all steps it deems in its reasonable business judgment to be necessary to protect the secrecy of all Trade Secrets
owned by such Grantor and material to its business, including advising employees of the confidentiality of company proprietary
information and labeling and restricting access to secret information and documents, consistent with past practice.

 

(ii)       Contracts.
(a)  Such Grantor shall perform and comply in all material respects with all its obligations under the Material Contracts
if failure to do so could reasonably be expected to have a Material Adverse Effect.

 

(jj)       Such
Grantor shall not amend, modify, terminate, waive or fail to enforce any provision of any Material Contract in any manner which
could reasonably be expected to materially adversely affect the value of the Collateral or otherwise have a Material Adverse Effect.

 

Commercial
Tort Claims. Such Grantor shall advise the Collateral Agent as promptly as reasonably practicable of any Commercial Tort Claim
held by such Grantor individually or in the aggregate in excess of $5,000,000 and shall promptly execute a supplement to this Agreement
in form and substance reasonably satisfactory to the Collateral Agent to grant a security interest in such Commercial Tort Claim
to the Collateral Agent for the ratable benefit of the Secured Parties.

 

SECTION
5.         REMEDIAL PROVISIONS

 

(a)       Certain
Matters Relating to Receivables. (a)  If required by the Collateral Agent at any time after the occurrence and during
the continuance of an Event of Default, any payments of Receivables, when collected by any Grantor, (i) shall be forthwith (and,
in any event, within two Business Days) deposited by such Grantor in the exact form received, duly endorsed by such Grantor to
the Collateral Agent if required, in a Collateral Account maintained under the sole dominion and control of the Collateral Agent,
subject to withdrawal by the Collateral Agent for the account of the Secured Parties only as provided in Section 5.05, and (ii)
until so turned over, shall be held by such Grantor in trust for the Secured Parties, segregated from other funds of such Grantor.
Each such deposit of Proceeds of Receivables shall be accompanied by a report identifying in reasonable detail the nature and source
of the payments included in the deposit.

 

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(b)       If
an Event of Default has occurred and is continuing, at the Collateral Agent’s request, each Grantor shall deliver to the
Collateral Agent all original and other documents evidencing, and relating to, the agreements and transactions which gave rise
to the Receivables that are included in the Collateral, including all original orders, invoices and shipping receipts.

 

Communications
with Obligors; Grantors Remain Liable.

 

(c)       The
Collateral Agent in its own name or in the name of others may at any time after the occurrence and during the continuance of an
Event of Default communicate with obligors under the Receivables and parties to the Contracts to verify with them to the Collateral
Agent’s satisfaction the existence, amount and terms of any Receivables or Contracts.

 

(d)       The
Collateral Agent may at any time after the occurrence and continuance of an Event of Default notify, or require any Grantor to
so notify, the Account Debtor or counterparty on any Receivable or Contract of the security interest of the Collateral Agent therein.
In addition, after the occurrence and during the continuance of an Event of Default, the Collateral Agent may upon written notice
to the applicable Grantor, notify, or require any Grantor to notify, the Account Debtor or counterparty to make all payments under
the Receivables and/or Contracts directly to the Collateral Agent.

 

(e)       Anything
herein to the contrary notwithstanding, each Grantor shall remain liable under each of the Receivables and Contracts to observe
and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms
of any agreement giving rise thereto. No Secured Party shall have any obligation or liability under any Receivable (or any agreement
giving rise thereto) or Contract by reason of or arising out of this Agreement or the receipt by any Secured Party of any payment
relating thereto, nor shall any Secured Party be obligated in any manner to perform any of the obligations of any Grantor under
or pursuant to any Receivable (or any agreement giving rise thereto) or Contract, to make any payment, to make any inquiry as to
the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder,
to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may
have been assigned to it or to which it may be entitled at any time or times.

 

(f)       Pledged
Securities. (a)  Unless an Event of Default shall have occurred and be continuing and the Collateral Agent shall have
given notice to the relevant Grantor of the Collateral Agent’s intent to exercise its corresponding rights pursuant to Section
5.03(b), each Grantor shall be permitted to receive all cash dividends paid in respect of the Pledged Equity Interests and all
payments made in respect of the Pledged Notes, in each case paid in the normal course of business of the relevant Issuer and consistent
with past practice, to the extent permitted in the Credit Agreement, and to exercise all voting and corporate rights with respect
to the Pledged Securities; provided, however, that no vote shall be cast or corporate or other ownership right exercised
or other action taken which, in the Collateral Agent’s reasonable judgment, would impair the Collateral or which would be
inconsistent with or result in any violation of any provision of the Credit Agreement, this Agreement or any other Loan Document.

 

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(g)       If
an Event of Default shall occur and be continuing: (i) all rights of each Grantor to exercise or refrain from exercising the voting
and other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease and all such rights shall
thereupon become vested in the Collateral Agent who shall thereupon have the sole right, but shall be under no obligation, to exercise
or refrain from exercising such voting and other consensual rights and (ii) the Collateral Agent shall have the right, without
notice to any Grantor, to transfer all or any portion of the Investment Property to its name or the name of its nominee or agent.
In addition, the Collateral Agent shall have the right at any time, without notice to any Grantor, to exchange any certificates
or instruments representing any Investment Property for certificates or instruments of smaller or larger denominations. If an Event
of Default has occurred and is continuing, in order to permit the Collateral Agent to exercise the voting and other consensual
rights which it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions which it may be
entitled to receive hereunder each Grantor shall execute and deliver (or cause to be executed and delivered) as promptly as reasonably
practicable to the Collateral Agent all proxies, dividend payment orders and other instruments as the Collateral Agent may from
time to time reasonably request and each Grantor acknowledges that the Collateral Agent may utilize the power of attorney set forth
herein; provided that, immediately upon waiver or cure of such Event of Default, all such rights shall, automatically and
without further action by any party hereto, revert to such Grantor.

 

(h)       Each
Grantor hereby authorizes and instructs each Issuer of any Pledged Securities pledged by such Grantor hereunder to (i) comply with
any instruction received by it from the Collateral Agent in writing that (x) states that an Event of Default has occurred and is
continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from
such Grantor and each Grantor agrees that each Issuer shall be fully protected in so complying, and (ii) upon any such instruction
following the occurrence and during the continuance of an Event of Default, pay any dividends or other payments with respect to
the Investment Property, including Pledged Securities, directly to the Collateral Agent.

 

Proceeds
to be Turned Over To Collateral Agent. In addition to the rights of the Secured Parties specified in Section 5.01 with respect
to payments of Receivables, if an Event of Default shall occur and be continuing, at the request of the Collateral Agent, all Proceeds
received by any Grantor consisting of cash, cash equivalents, checks and other near-cash items shall be held by such Grantor in
trust for the Secured Parties, segregated from other funds of such Grantor and shall, forthwith upon receipt by such Grantor be
turned over to the Collateral Agent in the exact form received by such Grantor (duly endorsed by such Grantor to the Collateral
Agent, if required). All Proceeds received by the Collateral Agent hereunder shall be held by the Collateral Agent in a Collateral
Account maintained under its sole dominion and control. All Proceeds while held by the Collateral Agent in a Collateral Account
(or by such Grantor in trust for the Secured Parties) shall continue to be held as collateral security for all the Obligations
and shall not constitute payment thereof until applied as provided in Section 5.05.

 

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Application
of Proceeds. If an Event of Default shall have occurred and be continuing, at any time at the Collateral Agent’s election,
the Collateral Agent may apply all or any part of the net Proceeds (after deducting fees and expenses as provided in Section 5.06)
constituting Collateral realized through the exercise by the Collateral Agent of its remedies hereunder, whether or not held in
any Collateral Account in payment of the Obligations in accordance with Section 9.03 of the Credit Agreement.

 

(i)       Code
and Other Remedies. (a)  If an Event of Default shall occur and be continuing, the Collateral Agent, on behalf of the
Secured Parties, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the
New York UCC (whether or not the New York UCC applies to the affected Collateral) or its rights under any other applicable law
or in equity. Without limiting the generality of the foregoing, the Collateral Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any
Grantor or any other person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith
sell, lease, license, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of any Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as
it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. Each Secured Party shall
have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right
or equity is hereby waived and released. Each purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by applicable law) all rights
of redemption, stay and/or appraisal which it now has or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Each Grantor agrees that, to the extent notice of sale shall be required by law, at least ten days’
notice to such Grantor of the time and place of any public sale or the time after which any private sale is to be made may constitute
reasonable notification. The Collateral Agent shall not be obligated to make any sale of Collateral regardless of notice of sale
having been given. The Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. The
Collateral Agent may sell the Collateral without giving any warranties as to the Collateral. The Collateral Agent may specifically
disclaim or modify any warranties of title or the like. This procedure will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral. Each Grantor agrees that it would not be commercially unreasonable for the Collateral
Agent to dispose of the Collateral or any portion thereof by using Internet sites that provide for the auction of assets of the
types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets.
Each Grantor hereby waives any claims against the Collateral Agent arising by reason of the fact that the price at which any Collateral
may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if the
Collateral Agent accepts the first offer received and does not offer such Collateral to more than one offeree. Each Grantor further
agrees, at the Collateral Agent’s reasonable request, to assemble the Collateral and make it available to the Collateral
Agent at places which the Collateral Agent shall reasonably select, whether at such Grantor’s premises or elsewhere. The
Collateral Agent shall have the right to enter onto the property where any Collateral is located and take possession thereof with
or without judicial process.

 

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(j)       The
Collateral Agent shall apply the net proceeds of any action taken by it pursuant to this Section 5.06, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral
or in any way relating to the Collateral or the rights of the Secured Parties hereunder, including reasonable attorneys’
fees and disbursements, to the payment in whole or in part of the Obligations and only after such application and after the payment
by the Collateral Agent of any other amount required by any provision of law, including Section 9-615(a) of the New York UCC, need
the Collateral Agent account for the surplus, if any, to any Grantor. If the Collateral Agent sells any of the Collateral upon
credit, the applicable Grantor will be credited only with payments actually made by the purchaser and received by the Collateral
Agent and applied to indebtedness of the purchaser. In the event the purchaser fails to pay for the Collateral, the Collateral
Agent may resell the Collateral and the applicable Grantor shall be credited with proceeds of the sale. To the extent permitted
by applicable law, each Grantor waives all claims, damages and demands it may acquire against any Secured Party arising out of
the exercise by them of any rights hereunder.

 

(k)       In
the event of any disposition of any of the material Trademarks, the goodwill of the business connected with the use of and symbolized
by any material Trademarks subject to such Disposition shall be included, and with respect to any Intellectual Property Collateral,
the applicable Grantor shall supply the Collateral Agent or its designee with such Grantor’s know-how and expertise, and
with records, documents and things embodying the same, relating to the manufacture, distribution, advertising and sale of products
or the provision of services relating to such Intellectual Property Collateral subject to such disposition, and such Grantor’s
customer lists pertaining thereto, subject to appropriate confidentiality undertakings on the part of any person receiving such
proprietary information.

 

(l)         The
Collateral Agent shall have no obligation to marshal any of the Collateral.

 

(m)       For
the purpose of enabling the Collateral Agent, after the occurrence and during the continuance of an Event of Default, to exercise
rights and remedies under Section 5 hereof at such time as the Collateral Agent shall be lawfully entitled to exercise such rights
and remedies, and for no other purpose, each Grantor hereby grants to the Collateral Agent, an irrevocable (during the continuance
of an Event of Default), non-exclusive license (exercisable without payment of royalty or other compensation to such Grantor),
subject, in the case of Trademarks, to sufficient rights to quality control and inspection in favor of such Grantor to avoid the
risk of invalidation of such Trademarks, to use, license or sublicense any of the Intellectual Property of such Grantor, wherever
the same may be located. Such license shall include access to all media in Grantor’s possession or control in which any of
the licensed items may be recorded or stored and to all computer programs used for the compilation or printout thereof.

 

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(n)       Registration
Rights. (a)  If the Collateral Agent shall determine to exercise its right to sell any or all of the Pledged Equity Interests
or the Pledged Debt Securities pursuant to Section 5.06, and if in the opinion of the Collateral Agent it is necessary or advisable
to have the Pledged Equity Interests or the Pledged Debt Securities, or that portion thereof to be sold, registered under the provisions
of the Securities Act, the relevant Grantor shall cause the Issuer thereof to (i) execute and deliver, and cause the directors
and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other
acts as may be, in the opinion of the Collateral Agent, necessary or advisable to register the Pledged Equity Interests or the
Pledged Debt Securities, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use commercially
reasonable efforts to cause the registration statement relating thereto to become effective and to remain effective for a period
of one year from the date of the first public offering of the Pledged Equity Interests or the Pledged Debt Securities or that portion
thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Collateral
Agent, are reasonably necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations
of the SEC applicable thereto. Each Grantor agrees to use commercially reasonable efforts to cause such Issuer to comply with the
provisions of the securities or “Blue Sky” laws of any and all jurisdictions which the Collateral Agent shall designate
and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which
will satisfy the provisions of Section 11(a) of the Securities Act.

 

(o)       Each
Grantor recognizes that the Collateral Agent may be unable to effect a public sale of any or all the Pledged Equity Interests or
the Pledged Debt Securities by reason of certain prohibitions contained in the Securities Act and applicable state securities laws
or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will
be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to
the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other
terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private
sale shall be deemed to have been made in a commercially reasonable manner. The Collateral Agent shall be under no obligation to
delay a sale of any of the Pledged Equity Interests or the Pledged Debt Securities for the period of time necessary to permit the
Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws,
even if such Issuer would agree to do so.

 

(p)       Each
Grantor agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may be necessary to
make such sale or sales of all or any portion of the Pledged Equity Interests or the Pledged Debt Securities pursuant to this Section
5.07 valid and binding and in compliance with any and all other applicable Law. Each Grantor further agrees that a breach of any
of the covenants contained in this Section 5.07 will cause irreparable injury to the Secured Parties, that the Secured Parties
have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this
Section 5.07 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred
and is continuing under the Credit Agreement or a defense of payment.

 

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Deficiency.
Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient
to pay its Obligations and the fees and disbursements of any attorneys employed by any Secured Party to collect such deficiency.

 

Non-Judicial
Enforcement. The Collateral Agent may enforce its right hereunder without prior judicial process or judicial hearing and, to the
extent permitted by law, each Grantor expressly waives any and all legal rights which may otherwise require the Collateral Agent
to enforce its rights by judicial process or judicial hearing.

 

SECTION
6.        THE COLLATERAL AGENT

 

(a)       Collateral
Agent’s Appointment as Attorney-in-Fact, etc. (a)  The Collateral Agent has been appointed to act as Collateral
Agent hereunder by Lenders and, by their acceptance of the benefits hereof, the other Secured Parties. The Collateral Agent shall
be obligated, and shall have the right hereunder, to make demands, to give notices, to exercise or refrain from exercising any
rights, and to take or refrain from taking any action (including, without limitation, the release or substitution of Collateral),
solely in accordance with this Agreement and the Credit Agreement; provided that the Collateral Agent shall, after payment
in full of all Obligations under the Credit Agreement (other than indemnities and other contingent Obligations not yet due and
payable hereunder), so long as the Secured Hedge Agreements or Secured Treasury Management Agreements shall remain in effect, exercise,
or refrain from exercising, any remedies provided for herein in accordance with the instructions of the holders (the “Majority
Holders”) of a majority of the aggregate termination value (exclusive of expenses and similar payments but including
any early termination payments due upon termination) under such Secured Hedge Agreements and Secured Treasury Management Agreements.
In furtherance of the foregoing provisions of this Section 6.01, each Secured Party, by its acceptance of the benefits hereof,
agrees that it shall have no right individually to realize upon any of the Collateral hereunder, it being understood and agreed
by such Secured Party that all rights and remedies hereunder may be exercised solely by the Collateral Agent for the benefit of
the Secured Parties in accordance with the terms of this Section 6.01. Subject to the appointment and acceptance of a successor
Collateral Agent as provided in this paragraph, the Collateral Agent may resign at any time in accordance with Section 10.07 of
the Credit Agreement or, after payment in full of all Obligations under the Credit Agreement, by notice to the Majority Holders
and the Grantors. Upon any such resignation, the Required Lenders (or, after payment in full of all Obligations other than indemnities
and other contingent Obligations not yet due and payable under the Credit Agreement, the Majority Holders) shall have the right,
with the consent (not to be unreasonably withheld or delayed) of PSP, to appoint a successor; provided that during the existence
and continuance of an Event of Default no such consent of PSP shall be required. If no successor shall have been so appointed by
the Required Lenders or the Majority Holders, as the case may be, and shall have accepted such appointment within 30 days
after the retiring Collateral Agent gives notice of its resignation, then the retiring Collateral Agent may, on behalf of the Lenders,
appoint a successor Collateral Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank.
Upon the acceptance of its appointment as Collateral Agent hereunder by a successor, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Collateral Agent, and the retiring Collateral Agent shall,
as promptly as reasonably practicable, (i) transfer to such successor Collateral Agent all sums, Securities and other items of
Collateral held hereunder, together with all records and other documents necessary or appropriate in connection with the performance
of the duties of the successor Collateral Agent under this Agreement, and (ii) execute and deliver to such successor Collateral
Agent or otherwise authorize the filing of such amendments to financings statements, and take such other actions, as may be necessary
or appropriate in connection with the assignment to such successor Collateral Agent of the security interests created hereunder,
whereupon such retiring Collateral Agent shall be discharged from its duties and obligations hereunder. After any Collateral Agent’s
resignation hereunder, the provisions of this Agreement shall continue in effect for the benefit of such retiring Collateral Agent
in respect of any actions taken or omitted to be taken by any of them while acting as Collateral Agent.

 

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(b)       Each
Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any officer or agent thereof, with full power of substitution,
as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in
the name of such Grantor or in its own name, such appointment being coupled with an interest, for the purpose of carrying out the
terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may
be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing,
each Grantor hereby gives the Collateral Agent the power and right, on behalf of such Grantor without notice to or assent by such
Grantor to do any or all of the following:

 

(i)       in
the name of such Grantor or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances
or other instruments for the payment of moneys due under any Receivable or Contract or with respect to any other Collateral and
file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Collateral
Agent for the purpose of collecting any and all such moneys due under any Receivable or Contract or with respect to any other Collateral
whenever payable;

 

(ii)       in
the case of any Intellectual Property constituting Collateral, execute and deliver, and have recorded, any and all agreements,
instruments, documents and papers as the Collateral Agent may request to evidence the Secured Parties’ security interest
in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;

 

(iii)       pay
or discharge taxes and Liens levied or placed on or threatened against the Collateral, effect any repairs or any insurance called
for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof;

 

(iv)       execute,
in connection with any sale provided for in Section 5.07 or 5.08, any endorsements, assignments or other instruments of conveyance
or transfer with respect to the Collateral; and

 

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(v)       (1)
direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Collateral Agent or as the Collateral Agent shall direct; (2) ask or demand for, collect, and receive
payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising
out of any Collateral; (3) sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (4) commence
and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral
or any portion thereof and to enforce any other right in respect of any Collateral; (5) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (6) settle, compromise or adjust any such suit, action or proceeding and,
in connection therewith, give such discharges or releases as the Collateral Agent may deem appropriate; (7) assign any Copyright,
Patent or Trademark (along with the goodwill of the business to which any such Trademark pertains), throughout the world for such
term or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and (8)
generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though the Collateral Agent were the absolute owner thereof for all purposes, and do, at the Collateral Agent’s
option and such Grantor’s expense, at any time, or from time to time, all acts and things which the Collateral Agent deems
necessary to protect, preserve or realize upon the Collateral and the Secured Parties’ security interests therein and to
effect the intent of this Agreement, all as fully and effectively as such Grantor might do.

 

Anything
in this Section 6.01 to the contrary notwithstanding, the Collateral Agent agrees that, except as provided in Section 6.01(b),
it will not exercise any rights under the power of attorney provided for in this Section 6.01(b) unless an Event of Default shall
have occurred and be continuing.

 

(c)       If
an Event of Default has occurred and is continuing, if any Grantor fails to perform or comply with any of its agreements contained
herein, the Collateral Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance
or compliance, with such agreement; provided, however, that the Collateral Agent shall not exercise this power without
first making demand on such Grantor and such Grantor failing to immediately comply therewith.

 

(d)       The
expenses of the Collateral Agent incurred in connection with actions undertaken as provided in this Section 6.01 shall be payable
by such Grantor to the Collateral Agent on demand.

 

(e)       Each
Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations
and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and
the security interests created hereby are released.

 

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Duty
of Collateral Agent. The Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation
of the Collateral in its possession, under Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same
manner as the Collateral Agent deals with similar property for its own account. Neither the Collateral Agent, nor any other Secured
Party nor any of their respective officers, directors, partners, employees, agents, attorneys and other advisors, attorneys-in-fact
or affiliates shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so
or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other person
or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Secured Parties
hereunder are solely to protect the Secured Parties’ interests in the Collateral and shall not impose any duty upon any Secured
Party to exercise any such powers. The Secured Parties shall be accountable only for amounts that they actually receive as a result
of the exercise of such powers, and neither they nor any of their officers, directors, partners, employees, agents, attorneys and
other advisors, attorneys-in-fact or affiliates shall be responsible to any Grantor for any act or failure to act hereunder, except
to the extent that any such act or failure to act is found by a final and nonappealable decision of a court of competent jurisdiction
to have resulted from their own gross negligence or willful misconduct in breach of a duty owed to such Grantor.

 

Filing
of Financing Statements. Each Grantor acknowledges that pursuant to Section 9-509(b) of the New York UCC and any other applicable
law, each Grantor authorizes the Collateral Agent to file or record financing or continuation statements, and amendments thereto,
and other filing or recording documents or instruments with respect to the Collateral, without the signature of such Grantor in
such form and in such offices as the Collateral Agent reasonably determines appropriate to perfect or maintain the perfection of
the security interests of the Collateral Agent under this Agreement. Each Grantor agrees that such financing statements may describe
the collateral in the same manner as described in the Collateral Documents or as “all assets” or “all personal
property,” whether now owned or hereafter existing or acquired or such other description as the Collateral Agent, in its
sole judgment, determines is necessary or advisable. A photographic or other reproduction of this Agreement shall be sufficient
as a financing statement or other filing or recording document or instrument for filing or recording in any jurisdiction.

 

Authority
of Collateral Agent. Each Grantor acknowledges that the rights and responsibilities of the Collateral Agent under this Agreement
with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall,
as between the Collateral Agent and the other Secured Parties, be governed by the Credit Agreement and by such other agreements
with respect thereto as may exist from time to time among them, but, as between the Collateral Agent and the Grantors, the Collateral
Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain
from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority.

 

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Appointment
of Co-Collateral Agents. At any time or from time to time, in order to comply with any applicable requirement of law, the Collateral
Agent may appoint another bank or trust company or one of more other persons, either to act as co-agent or agents on behalf of
the Secured Parties with such power and authority as may be necessary for the effectual operation of the provisions hereof and
which may be specified in the instrument of appointment (which may, in the discretion of the Collateral Agent, include provisions
for indemnification and similar protections of such co-agent or separate agent).

 

SECTION
7.        MISCELLANEOUS

 

Amendments
in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except
by a written instrument executed by each affected Grantor and the Collateral Agent, subject to any consents required under Section
11.01 of the Credit Agreement; provided that any provision of this Agreement imposing obligations on any Grantor may be
waived by the Collateral Agent in a written instrument executed by the Collateral Agent.

 

Notices.
All notices, requests and demands to or upon the Collateral Agent or any Grantor hereunder shall be effected in the manner provided
for in Section 11.02 of the Credit Agreement.

 

No
Waiver by Course of Conduct; Cumulative Remedies. No Secured Party shall by any act (except by a written instrument pursuant to
Section 7.01), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced
in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any
right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver
by any Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy
which such Secured Party would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

 

(a)       Enforcement
Expenses; Indemnification. (a)  The parties hereto agree that the Collateral Agent and the other Secured Parties shall
be entitled to reimbursement of their expenses incurred hereunder as provided in Section 11.04 of the Credit Agreement.

 

(b)       Each
Grantor agrees to pay, and to hold the Collateral Agent and each other Secured Party harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect
to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to
be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement,
except Other Taxes covered in Section 3.01 of the Credit Agreement.

 

(c)       Each
Grantor agrees to pay, and to hold the Collateral Agent and each other Secured Party harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this Agreement to the extent any Borrower would be required
to do so pursuant to Section 11.04 of the Credit Agreement.

 

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(d)       The
agreements in this Section 7.04 shall survive repayment of the Obligations and all other amounts payable under the Credit Agreement
and the other Loan Documents.

 

Successors
and Assigns. This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of
the Secured Parties and their successors and assigns; provided that no Grantor may assign, transfer or delegate any of its
rights or obligations under this Agreement without the prior written consent of the Collateral Agent, and any attempted assignment
without such consent shall be null and void.

 

Set-Off.
Each Grantor hereby irrevocably authorizes each Secured Party at any time and from time to time, while an Event of Default shall
have occurred and be continuing, with notice to such Grantor or any other Grantor, to set-off and appropriate and apply any and
all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held
or owing by such Secured Party to or for the credit or the account of such Grantor or any part thereof in such amounts as such
Secured Party may elect, against and on account of the obligations and liabilities of such Grantor to such Secured Party hereunder
and claims of every nature and description of such Secured Party against such Grantor, in any currency, whether arising hereunder,
under the Credit Agreement, any other Loan Document or otherwise, as such Secured Party may elect, whether or not any Secured Party
has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. Each Secured
Party shall notify such Grantor as promptly as reasonably practicable of any such set-off and the application made by such Secured
Party of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off
and application. The rights of each Secured Party under this Section 7.06 are in addition to other rights and remedies (including
other rights of set-off) which such Secured Party may have.

 

Counterparts.
This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including
by facsimile and electronic PDF delivery), and all of said counterparts taken together shall be deemed to constitute one and the
same instrument.

 

Severability.
Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section
Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.

 

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Integration.
This Agreement and the other Loan Documents represent the agreement of the Grantors, the Collateral Agent and the other Secured
Parties with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties
by any Secured Party relative to subject matter hereof and thereof not expressly set forth or referred to herein or in the other
Loan Documents.

 

APPLICABLE
LAW. THIS AGREEMENT AND ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT (WHETHER ARISING IN CONTRACT,
TORT OR OTHERWISE) SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICTS OF LAW RULES THAT WOULD RESULT IN THE APPLICATION OF A DIFFERENT GOVERNING LAW (OTHER THAN ANY MANDATORY PROVISIONS
OF THE UCC RELATING TO THE LAW GOVERNING PERFECTION AND THE EFFECT OF PERFECTION OR PRIORITY OF THE SECURITY INTERESTS).

 

Submission
to Jurisdiction; Waivers. (a) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO
THE EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN THE BOROUGH
OF MANHATTAN IN NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT. EACH PARTY HERETO IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. EACH
PARTY HERETO WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED
BY THE LAW OF SUCH STATE.

 

(b)
EACH GRANTOR HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CORPORATION SERVICE COMPANY WITH OFFICES ON THE DATE HEREOF IN
NEW YORK, NEW YORK (OR SUCH OTHER AGENT TO RECEIVE SERVICE OF PROCESS IN NEW YORK, NEW YORK AS IS REASONABLY ACCEPTABLE TO THE
COLLATERAL AGENT), AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT
OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR
PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE, AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH GRANTOR AGREES
TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO
THE COLLATERAL AGENT UNDER THIS AGREEMENT. EACH GRANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO SUCH GRANTOR AT ITS ADDRESS SET FORTH ON SCHEDULE 11.02 OF THE CREDIT AGREEMENT, SUCH SERVICE TO BECOME EFFECTIVE 10
DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT UNDER THIS AGREEMENT OR ANY SECURED PARTY
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE GRANTORS
IN ANY OTHER JURISDICTION.

 

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Acknowledgments.
Each Grantor hereby acknowledges that:

 

(e)       it
has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which
it is a party;

 

(f)       no
Secured Party has any fiduciary relationship with or duty to any Grantor arising out of or in connection with this Agreement or
any of the other Loan Documents, and the relationship between the Grantors, on the one hand, and the Secured Parties, on the other
hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(g)       no
joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Secured Parties or among the Grantors and the Secured Parties.

 

Additional
Grantors. Each Subsidiary of any Borrower that is required to become a party to this Agreement pursuant to Section 7.12 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an
Assumption Agreement in the form of Annex 1 hereto.

 

(h)       Releases.
(a)  At such time as the Loans and the other Obligations (other than Obligations in respect of any Treasury Management
Agreement or Letters of Credit) shall have been paid in full, each Letter of Credit (as defined in the Credit Agreement) shall
have been cancelled or expired or been backstopped or Cash Collateralized, in each case, in amounts and pursuant to documentation
in form and substance satisfactory to the Administrative Agent and the L/C Issuer, the commitments under the Credit Agreement have
been terminated or expired and all Secured Hedge Agreements and Secured Treasury Management Agreements shall have been terminated,
the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly
stated to survive such termination) of the Collateral Agent and each Grantor hereunder shall terminate, all without delivery of
any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. At the request
and sole expense of any Grantor following any such termination, the Collateral Agent shall deliver to such Grantor any Collateral
held by the Collateral Agent hereunder, and execute and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence such termination.

 

    	38

     

    

 

(i)       If
any of the Collateral shall be sold or otherwise disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the Collateral Agent, at the request and sole expense of such Grantor shall execute and deliver to such Grantor all releases
or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. At the request
and sole expense of the Borrowers, a Grantor (other than each Borrower) shall be released from its obligations hereunder in the
event that (x) all the Equity Interests in such Grantor shall be sold or otherwise disposed of in a transaction permitted by the
Credit Agreement or (y) such Grantor ceases to be a Restricted Subsidiary or otherwise becomes an Excluded Subsidiary as a result
of a transaction permitted by the Credit Agreement; provided that PSP shall have delivered to the Collateral Agent, at least
ten Business Days (or such shorter time as the Collateral Agent may agree) prior to the date of the proposed release, a written
request for such release identifying the relevant Grantor and the terms of the relevant sale or other disposition in reasonable
detail, including the price thereof and any expenses incurred in connection therewith, together with a certification by PSP stating
that such transaction is in compliance with the Credit Agreement and the other Loan Documents.

 

(j)       Each
Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect
to any financing statement originally filed in connection herewith without the prior written consent of the Collateral Agent, subject
to such Grantor’s rights under Section 9-509(d)(2) of the New York UCC.

 

(k)       Notwithstanding
any of the foregoing, any release of Collateral or Guarantors effected in the manner permitted by the Credit Agreement or any other
Loan Document at any time that the Credit Agreement shall be outstanding shall not require the consent of holders of obligations
under Secured Hedge Agreements or Secured Treasury Management Agreements.

 

WAIVER
OF JURY TRIAL. EACH GRANTOR AND THE COLLATERAL AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

Reinstatement.
This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any
Grantor for liquidation or reorganization, should any Grantor become insolvent or make an assignment for the benefit of any creditor
or creditors or should a receiver or trustee be appointed for all or any significant part of any Grantor’s assets, and shall
continue to be effective or be reinstated, as the case be, if at any time payments and performance of the Obligations, or any part
thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any oblige
of the Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though
such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored
or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored
or returned.

 

[Remainder
of page intentionally left blank]

 

    	39

     

    

 

IN WITNESS
WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written.

 

	 	PLATFORM SPECIALTY PRODUCTS CORPORATION
	 	 	 
	 	By:	/s/ Carey Dorman
	 	Name:	Carey Dorman
	 	Title:	Corporate Treasurer
	 	 	 
	 	MACDERMID, INCORPORATED
	 	 	 
	 	By:	/s/ Scot R. Benson
	 	Name:	Scot R. Benson
	 	Title:	President

 

Signature Page
to Pledge and Security Agreement

 

     

     

    

 

	 	CANNING GUMM, LLC
	 	Alent USA Holding, Inc.
	 	Alent Investments, Inc.
	 	Alent, Inc.
	 	AR Mexican Holdings, Inc.
	 	AUTOTYPE HOLDINGS (USA) INC.
	 	BAYPORT CHEMICAL SERVICE, INC.
	 	ECHO INTERNATIONAL, INC.
	 	EI Liquidation, Inc.
	 	MACDERMID ACUMEN, INC.
	 	MACDERMID ANION, INC.
	 	MACDERMID AUTOTYPE INCORPORATED
	 	MACDERMID BRAZIL, INC.
	 	MACDERMID Enthone Inc.
	 	MACDERMID ENTHONE AMERICA LLC
	 	MACDERMID GRAPHICS SOLUTIONS, LLC
	 	MACDERMID HOUSTON, INC.
	 	MACDERMID INTERNATIONAL INVESTMENTS, LLC
	 	MACDERMID INVESTMENT CORP.
	 	MACDERMID OFFSHORE SOLUTIONS, LLC
	 	MACDERMID OVERSEAS ASIA LIMITED
	 	MACDERMID PRINTING SOLUTIONS ACUMEN, INC.
	 	MACDERMID SOUTH AMERICA, INCORPORATED
	 	MACDERMID SOUTH ATLANTIC, INCORPORATED
	 	MACDERMID TEXAS, INC.
	 	MACDERMID US HOLDINGS, LLC
	 	MRD ACQUISITION CORP.
	 	NAPP PRINTING PLATE DISTRIBUTION, INC.
	 	NAPP SYSTEMS INC.
	 	OMI International Corporation
	 	SPECIALTY POLYMERS, INC.
	 	W. CANNING INC.
	 	W. CANNING USA, LLC

 

	 	By: 	/s/ Scot R. Benson
	 	Name:	Scot R. Benson
	 	Title:	President

 

Signature Page
to Pledge and Security Agreement

 

     

     

    

 

	 	ALPHA ASSEMBLY SOLUTIONS INC.
	 	COMPUGRAPHICS U.S.A. INC.
	 	MACDERMID GROUP, INC.
	 	MACDERMID HOLDINGS, LLC
	 	PLATFORM DELAWARE HOLDINGS, INC.

 

	 	By:	/s/ John Capps
	 	Name:	John Capps
	 	Title:	Secretary
	 	 	 
	 	DYNACIRCUITS, LLC
	 	 	 
	 	By:	Echo International, Inc., its member
	 	 	 
	 	By:	/s/ Scot R. Benson
	 	Name:	Scot R. Benson
	 	Title:	President
	 	 	 
	 	By:	MacDermid, Incorporated, its member
	 	 	 
	 	By:	/s/ Scot R. Benson
	 	Name:	Scot R. Benson
	 	Title:	President
	 	 	 
	 	MACDERMID INTERNATIONAL PARTNERS
	 	 	 
	 	By:	MacDermid, Incorporated, its partner
	 	 	 
	 	By:	/s/ Scot R. Benson
	 	Name:	Scot R. Benson
	 	Title:	President
	 	 	 
	 	By:	MacDermid Overseas Asia Limited, its partner
	 	 	 
	 	By:	/s/ Scot R. Benson
	 	Name:	Scot R. Benson
	 	Title:	President

 

Signature Page
to Pledge and Security Agreement

 

     

     

    

 

	 	W. CANNING LTD.
	 	 	 
	 	By:	MacDermid Houston, Inc., its General Partner
	 	 	 
	 	By:	/s/ Scot R. Benson
	 	Name:	Scot R. Benson
	 	Title:	President
	 	 	 
	 	By:	MacDermid Texas, Inc., its Limited Partner
	 	 	 
	 	By:	/s/ Scot R. Benson
	 	Name:	Scot R. Benson
	 	Title:	President
	 	 	 
	 	ROCKVILLE VENTURE, LLC
	 	 	 
	 	By:	MacDermid, Incorporated, its sole member
	 	 	 
	 	By:	/s/ Scot R. Benson
	 	Name:	Scot R. Benson
	 	Title:	President
	 	 	 
	 	MACDERMID AMERICAS ACQUISITIONS INC.
	 	 	 
	 	By:	/s/ Scot R. Benson
	 	Name:	Scot R. Benson
	 	Title:	President
	 	 	 
	 	VERNON-ROCKVILLE VENTURE, LLC
	 	 	 
	 	By:	Rockville Venture, LLC, its sole member
	 	 	 
	 	By:	MacDermid, Incorporated, its sole member
	 	 	 
	 	By:	/s/ Scot R. Benson
	 	Name:	Scot R. Benson
	 	Title:	President

 

Signature Page
to Pledge and Security Agreement

 

     

     

    

 

	 	BARCLAYS BANK PLC,
	 	as Collateral Agent
	 	 	 
	 	By:	/s/ Sydney Dennis
	 	Name:	 Sydney Dennis
	 	Title:	 Director

 

Signature Page
to Pledge and Security AgreementExhibit 10.1

 

DEED OF LEASE

 

between

 

ADVENT KEY WEST, LLC

 

Landlord

 

and

 

SUPERNUS PHARMACEUTICALS, INC.

 

Tenant

 

Dated January 31, 2019

 

 

DEED OF LEASE

 

This Lease (the “Lease”) is made this 31st day of January, 2019 (the “Effective Date”), between ADVENT KEY WEST, LLC, a Delaware limited liability company (“Landlord”), and SUPERNUS PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”).

 

W I T N E S S E T H :

 

For and in consideration of the covenants herein contained and upon the terms and conditions herein set forth, the parties agree as follows:

 

1.                                      Introductory Provisions.

 

(a)                                 Fundamental Lease Provisions.  Certain Fundamental Lease Provisions are presented in this Section in summary form solely to facilitate convenient reference by the parties hereto:

 

	
1.
    	
 
    	
Demised Premises
    	
 
    	
Suite No. 1000
    	
 
    	
[See Section 2(a)]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
Building
    	
 
    	
Two Buildings, one of which is located at 9715 Key   West Avenue, Rockville, Maryland 20850 (the “9715 Building”), and the other   of which is located at 9717 Key West Avenue, Rockville, Maryland 20850 (the   “9717 Building”). The Demised Premises consists of approximately: 25,832   square feet of rentable area located on the first floor of the 9715 Building;   28,101 square feet of rentable area located on the second floor of the 9715   Building; 28,325 square feet of rentable area located on the third floor of   the 9715 Building; 26,788 square feet of rentable area located on the second   floor of the 9717 Building; and 26,970 square feet of rentable area located   on the third floor of the 9717 Building.
    	
 
    	
[See Section 2(a)]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.
    	
 
    	
Rentable Area of Demised Premises
    	
 
    	
Subject to the provisions of   Section 2(a) below, approximately 136,016 Square Feet
    	
 
    	
[See Section 2(a)]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.
    	
 
    	
Proportionate Shares
    	
 
    	
With respect to the 9715 Building: 100%; with   respect to the 9717 Building: 71.56%; with respect to the Project: 47.63%   (See Exhibit G)
    	
 
    	
[See Section 2(b)]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
 
    	
Lease Term
    	
 
    	
For a term commencing on the “Commencement Date” (as   defined below) and ending on April 30, 2034
    	
 
    	
[See Section 3(a)]
    

 

 

	
6.
    	
 
    	
Commencement Date
    	
 
    	
The date that Landlord tenders possession of the   Demised Premises to Tenant, in broom clean condition, with a fully executed   lease termination agreement with the prior tenant of the Demised Premises   having been executed, which date is estimated to be on or about   February 1, 2019. The Demised Premises shall be delivered to Tenant in   unoccupied condition, provided, however, there may be some furniture in the   Demised Premises, which furniture Landlord shall cause to be removed from the   Demised Premises after the Commencement Date.
    	
 
    	
[See Section 3(a)]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
7.
    	
 
    	
Expiration Date
    	
 
    	
April 30, 2034
    	
 
    	
[See Section 3(a)]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
8.
    	
 
    	
Rental Agent
    	
 
    	
Lincoln Property Company
   9713 Key West Avenue
   Suite 110
   Rockville, MD 20850
    	
 
    	
[See Section 4]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
9.
    	
 
    	
Base Annual Rent and Base Monthly Rent
    	
 
    	
 
    	
 
    	
 
    

 

	
Period
    	
 
    	
Base Annual Rent
    	
 
    	
Base Monthly Rent
    	
 
    	
Rent Per Square Foot
    	
 
    
	
Lease Year 1
    	
 
    	
$2,346,276.00
    	
 
    	
$
    	
195,523.00
    	
 
    	
$
    	
17.25
    	
 
    
	
Lease Year 2
    	
 
    	
$2,393,881.56
    	
 
    	
$
    	
199,490.13
    	
 
    	
$
    	
17.60
    	
 
    
	
Lease Year 3
    	
 
    	
$2,441,487.24
    	
 
    	
$
    	
203,457.27
    	
 
    	
$
    	
17.95
    	
 
    
	
Lease Year 4
    	
 
    	
$2,490,453.00
    	
 
    	
$
    	
207,537.75
    	
 
    	
$
    	
18.31
    	
 
    
	
Lease Year 5
    	
 
    	
$2,540,778.84
    	
 
    	
$
    	
211,731.57
    	
 
    	
$
    	
18.67
    	
 
    
	
Lease Year 6
    	
 
    	
$2,591,104.80
    	
 
    	
$
    	
215,925.40
    	
 
    	
$
    	
19.05
    	
 
    
	
Lease Year 7
    	
 
    	
$2,642,790.84
    	
 
    	
$
    	
220,232.57
    	
 
    	
$
    	
19.43
    	
 
    
	
Lease Year 8
    	
 
    	
$2,695,837.08
    	
 
    	
$
    	
224,653.09
    	
 
    	
$
    	
19.81
    	
 
    
	
Lease Year 9
    	
 
    	
$2,750,243.52
    	
 
    	
$
    	
229,186.96
    	
 
    	
$
    	
20.21
    	
 
    
	
Lease Year 10
    	
 
    	
$2,804,649.96
    	
 
    	
$
    	
233,720.83
    	
 
    	
$
    	
20.62
    	
 
    
	
Lease Year 11
    	
 
    	
$2,860,416.48
    	
 
    	
$
    	
238,368.04
    	
 
    	
$
    	
21.03
    	
 
    
	
Lease Year 12
    	
 
    	
$2,917,543.20
    	
 
    	
$
    	
243,128.60
    	
 
    	
$
    	
21.45
    	
 
    
	
Lease Year 13
    	
 
    	
$2,975,894.06
    	
 
    	
$
    	
247,991.17
    	
 
    	
$
    	
21.88
    	
 
    
	
Lease Year 14
    	
 
    	
$3,035,411.95
    	
 
    	
$
    	
252,951.00
    	
 
    	
$
    	
22.31
    	
 
    
	
Lease Year 15
    	
 
    	
$3,096,120.18
    	
 
    	
$
    	
258,010.02
    	
 
    	
$
    	
22.76
    	
 
    
	
Partial Lease Year 16
    	
 
    	
$3,158,042.59*
    	
 
    	
$
    	
263,170.22
    	
 
    	
$
    	
23.22
    	
 
    
	
 
    	
 
    	
(*annualized amount)
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Despite the foregoing, Landlord agrees to abate the Base Monthly Rent that is payable during the period commencing on the Commencement Date and ending on April 30, 2020 (the “Rent Abatement”).  The foregoing rent chart has been prepared on the basis that the Commencement Date of the Lease is February 1, 2019.  In the event that the Commencement Date of the Lease is any date other than February 1, 2019, then the parties shall promptly enter into an amendment of the Lease to adjust the rent chart.

 

	
10.
    	
 
    	
Intentionally Deleted
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
11.
    	
 
    	
Intentionally Deleted
    	
 
    	
 
    	
 
    	
 
    

 

2

 

	
12.
    	
 
    	
Use of Demised Premises
    	
 
    	
General office, manufacturing, storage, and   laboratory use consistent with office and lab buildings in Rockville,   Maryland and otherwise in accordance with all applicable laws.
    	
 
    	
[See Section 7]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
13.
    	
 
    	
Security Deposit
    	
 
    	
$195,523.00
    	
 
    	
[See Section 4(h)]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
14.
    	
 
    	
Intentionally Deleted
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
15.
    	
 
    	
Intentionally Deleted
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
16.
    	
 
    	
Standard Building Operating Hours:
    	
 
    	
8:00 a.m. to 6:00 p.m. Monday — Friday   9:00 a.m. to 1:00 p.m. Saturday (upon request). Tenant shall have   the right to operate its business at the Demised Premises at such other days   and hours as it determines in its sole discretion.
    	
 
    	
[See Section 10(a)]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
17.
    	
 
    	
Building Holidays
    	
 
    	
New Year’s Day, Martin Luther King Jr. Day, Memorial   Day, President’s Day, the Fourth of July, Labor Day, Columbus Day, Veterans   Day, Thanksgiving Day, Christmas Day
    	
 
    	
[See Section 10(a)]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
18.
    	
 
    	
Address for Notices to Tenant before Occupancy of   Demised Premises
    	
 
    	
Supernus Pharmaceuticals, Inc.
   1550 E. Gude Road
   Rockville, Maryland 20850
   Attn: Frank Mottola

with a copy to:

 

Saul Ewing Arnstein & Lehr LLP
   1919 Pennsylvania Avenue, NW
   Suite 550
   Washington, DC 20006
   Attn: Mark I. Gruhin, Esq.
    	
 
    	
[See Section 37]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
19.
    	
 
    	
Address for Notices to Tenant after Occupancy of   Demised Premises
    	
 
    	
At the Demised Premises
    	
 
    	
[See Section 37]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
20.
    	
 
    	
Address for Notices to Landlord
    	
 
    	
Advent Key West, LLC
   c/o One Maritime Management, LLC
   One Maritime Plaza
   Suite 2100
   San Francisco, California 94111
   Attn: David Monte

 

with a copy to:

 

Shulman, Rogers, Gandal, Pordy & Ecker,   P.A.
   12505 Park Potomac Avenue, 6th Floor
   Potomac, Maryland 20854
   Attention: Douglas K. Hirsch, Esquire
    	
 
    	
[See Section 37]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
21.
    	
 
    	
Leasing Brokers
    	
 
    	
Cushman & Wakefield of Maryland, Inc.   and Scheer Partners, Inc.
    	
 
    	
[See Section 38]
    

 

3

 

	
22.
    	
 
    	
Intentionally Deleted
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
23.
    	
 
    	
Name and Address of Tenant’s Resident Agent
    	
 
    	
CSC-Lawyers Incorporating Service Company
   7 St. Paul Street
   Suite 820
   Baltimore, MD 21202
    	
 
    	
 
    

 

(b)                                 References and Conflicts.  References appearing in Section 1(a) are intended to designate some of the other places in the Lease where additional provisions applicable to the particular Fundamental Lease Provisions appear.  These references are for convenience only and shall not be deemed all inclusive.  Each reference in this Lease to any of the Fundamental Lease Provisions contained in Section 1(a) shall be construed to incorporate all of the terms provided for under such provisions, and such provisions shall be read in conjunction with all other provisions of this Lease applicable thereto.  If there is any conflict between any of the Fundamental Lease Provisions set forth in Section 1(a) and any other provisions of the Lease, the latter shall control.

 

(c)                                  Exhibits.  The following drawings and special provisions are attached hereto as exhibits and hereby made a part of this Lease:

 

Exhibit “A”                                 Floor Plan of Demised Premises [§2(a)]

Exhibit “B”                                 Rules and Regulations [§8]

Exhibit “C”                                 Certificate of Commencement [§3(b)]

Exhibit “D”                                 Intentionally Deleted

Exhibit “E”                                  Work Agreement [§6]

Exhibit “F”                                   Permitted Equipment

Exhibit “G”                                 Proportionate Share Calculations

 

2.                                      Demised Premises.

 

(a)                                 Demised Premises.  Landlord hereby leases to Tenant, and Tenant hereby rents from Landlord, the Demised Premises as specified in Section 1(a)(1) located in the Building specified in Section 1(a)(2).  The Demised Premises shall consist of approximately the square footage of rentable floor space as specified in Section 1(a)(3) and as shown on the floor plan attached hereto as Exhibit “A”, which square footage has been measured in accordance with ANSI/BOMA Method of Measurement (BOMA Z65.1 2017) (the “BOMA Method”).

 

(b)                                 Tenant’s Proportionate Shares.  Tenant’s Proportionate Shares of certain expenses hereinafter made payable to Landlord as Additional Rent is specified in Section 1(a)(4).  Said computations are based upon the following ratios (i) with respect to the 9715 Building, the ratio of the rentable area of the Demised Premises located in the 9715 Building to the rentable area of the 9715 Building, (ii) with respect to the 9717 Building, the ratio of the rentable area of the Demised Premises located in the 9717 Building to the rentable area of the 9717 Building, and (iii) with respect to the Project, the ratio of the total rentable area of the Demised Premises to the

 

4

 

rentable area of the Project.  The Proportionate Shares shall be modified during the Lease Term in the event that the rentable area of the 9715 Building, 9717 Building, and/or the Project are modified.  Despite the foregoing, for so long as all buildings in the Project are owned by Landlord, the Proportionate Shares shall not change by more than two percent (2%) of the percentages referenced in Section 1(a)(4) above as a result of a remeasurement of the 9715 Building, 9717 Building, and/or the Project.

 

(c)                                  Project.  The 9715 Building, the 9717 Building, the Common Areas and the land upon which the same are located, along with all other buildings (including the building located at 9713 Key West Avenue (the “9713 Building”)) and improvements thereon or thereunder, including all parking facilities, are herein collectively referred to as the “Project.”

 

3.                                      Term.

 

(a)                                 Lease Term.  The term of this Lease (sometimes herein called the “Lease Term”) shall commence on the Commencement Date and, subject to sooner termination as herein provided, end on the Expiration Date.  The period commencing on the Commencement Date and ending on the last day of the twelfth (12th) full calendar month thereafter shall constitute the first “Lease Year” as such term is used herein.  Each successive full twelve (12) month period during the Lease Term shall constitute a “Lease Year,” provided the last Lease Year shall end on April 30, 2034.

 

(b)                                 Inability to Deliver Possession.  If Landlord shall be unable to tender possession of the Demised Premises on the Commencement Date set forth in Section 1(a)(6), by reason of: (i) the holding over or retention of possession of any tenant or occupant; (ii) the failure to complete repairs, improvements or decoration of the Demised Premises or of the Building; or (iii) for any other reason, Landlord shall not be subject to any liability for the failure to tender possession on said date.  In the case of holding over, Landlord shall have no responsibility for any delay in tendering possession of the Demised Premises.  Under any of the aforesaid circumstances, the Commencement Date shall not occur until possession of the Demised Premises is tendered to Tenant.  No such failure to give possession on the date set forth in Section 1(a)(6) shall in any other respect affect the validity of this Lease or the obligations of Tenant hereunder, nor shall the same be construed to modify the Lease Term, which in all events shall be the number of years and months set forth in Section 1(a)(5); provided, however, that if Landlord shall not have tendered possession of the Demised Premises to Tenant within one hundred twenty (120) days after the date set forth in Section 1(a)(6), then each of Landlord and Tenant may terminate this Lease by written notice to the other.  In such event, Landlord shall refund any security deposit and advance rental payment theretofore paid by Tenant, and the parties shall thereupon be relieved of any and all liability hereunder.  If permission is given to Tenant to enter into the possession of the Demised Premises prior to the Commencement Date in Section 1(a)(6), Tenant covenants and agrees that such possession shall be deemed to be under all the terms, covenants, conditions and provisions of this Lease and the Commencement Date will coincide with the date of occupancy.  Within fifteen (15) days after the Commencement Date, Landlord and Tenant shall execute a Certificate of Commencement in the form of Exhibit “C”.  Tenant’s failure to execute and deliver the Certificate of Commencement shall not affect the Commencement Date or the Expiration Date.

 

5

 

(c)                                  Acceptance of Demised Premises.  Except for latent defects in the Demised Premises and common areas which both existed prior to the Commencement Date and which Tenant gives Landlord written notice of within twelve (12) months after the Commencement Date, occupancy of the Demised Premises or any portion thereof by Tenant or anyone claiming through or under Tenant for the conduct of Tenant’s or such other person’s business therein shall be conclusive evidence that Tenant and all parties claiming through or under Tenant (a) have accepted the Demised Premises or such portion (i) as suitable for the purposes for which the Demised Premises are leased hereunder, and (ii) as complying with all requirements of Tenant with respect to the condition, order and repair thereof as required by the terms of this Lease, (b) have accepted the common areas as being in a good and satisfactory condition, and (c) have waived any defects in the Demised Premises (except as provided above in this Section 3(c)) and the Building.

 

4.                                      Rent.

 

(a)                                 Base Annual Rent.  The Base Annual Rent reserved hereunder shall be as specified in Section 1(a)(9) which shall be payable by Tenant to the Landlord during each Lease Year of the Lease Term in equal monthly installments of Base Monthly Rent each as specified in Section 1(a)(9).  Tenant shall pay the first monthly installment of Base Annual Rent upon execution of this Lease.  Tenant shall pay the remaining monthly installments of Base Annual Rent in advance, without notice or demand, and without set-off, deduction or abatement of any kind (other than the Rent Abatement and as specifically provided in Section 20 below), on or before the first day of each and every calendar month throughout the entire term of the Lease, at the office of the Rental Agent specified in Section 1(a)(8), or to such other person or at such other address as Landlord may designate by written notice to Tenant from time to time.

 

(b)                                 Intentionally Deleted.

 

(c)                                  Additional Rent.

 

(i)                                     General.  Whenever it is provided by the terms of this Lease that Tenant is required to make any payment to Landlord other than of Base Annual Rent, such payment shall be deemed to be additional rent (“Additional Rent”).  Unless otherwise expressly specified herein, (i) Tenant’s monthly payments toward operating expenses and Real Property Taxes shall be on or before the first day of each and every calendar month throughout the entire term of the Lease, and (ii) all other Additional Rent (i.e. other than Tenant’s payments toward operating expenses and Real Property Taxes) shall be paid by Tenant within thirty (30) days after Tenant’s receipt from Landlord of a statement showing the amount owed.  Additional Rent shall include, but not be limited to:

 

(ii)                                  Operating Expenses.  Commencing on the earlier to occur of the date that is ten (10) months after the Commencement Date or the date Tenant commences to use any portion of the Demised Premises for business purposes (the earlier to occur of such dates shall hereinafter be referred to as the “ADR Commencement Date”) and continuing throughout the Lease Term, Tenant agrees to pay to Landlord, as Additional Rent, Tenant’s Proportionate Shares of operating expenses (i.e., as applicable to the 9715 Building, the 9717 Building, and the Project), as set forth in Section 1(a)(4).  The term “operating expenses” shall mean any and all expenses incurred by Landlord in connection with owning, managing, operating, maintaining, servicing,

 

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insuring and repairing the 9715 Building, the 9717 Building, and the Project (as applicable, the “Applicable Building(s)”), including but not limited to: (1) wages and salaries of all employees at or below the level of property manager engaged in the management, operation or maintenance of the Applicable Building(s), including taxes, insurance and benefits relating hereto; (2) all supplies, materials, equipment and tools used in the operation or maintenance of the Applicable Building(s); (3) cost of all maintenance and service agreements for the Applicable Building(s) and the equipment therein, including but not limited to controlled access and energy management services, window cleaning and elevator maintenance; (4) cost of all insurance relating to the Applicable Building(s), including the cost of casualty, liability and rent loss insurance applicable to the Applicable Building(s) and Landlord’s personal property used in connection therewith; (5) general and special repairs and maintenance; (6) management fees (not to exceed 3% of the gross revenues of the Applicable Building(s)); (7) legal, accounting, auditing and other professional fees; (8) the cost of any additional services not provided to the Applicable Building(s) at the Commencement Date of the Lease Term, but thereafter provided by Landlord to all tenants of the Applicable Building(s) (unless such additional services are specifically requested by Tenant and Landlord agrees to provide them) in the prudent management of the Applicable Building(s); (9) intentionally deleted; (10) costs for char service for common areas and cleaning supplies; (11) costs for utility services such as electricity, gas, water and sewage, including the cost of heating and cooling the Applicable Building(s); (12) the cost of any capital improvements or alterations made to the Applicable Building(s) after the Commencement Date, that reduce (or reduce further increases in) other operating expenses, or which are required under any governmental law or regulation that was not applicable to the Applicable Building(s) as of the Effective Date, such cost to be amortized over the useful life of the capital improvement or capital alteration, together with interest on the unamortized balance at the rate paid by Landlord on funds borrowed for the purposes of constructing said capital improvements; (13) transportation district fees, parking district fees, and the cost of other amenities required by law; (14) cost of onsite building management office expenses and directly allocable offsite management expenses, including telephone, rent, stationery and supplies; (15) costs of all elevator and escalator (if installed in the Applicable Building(s)) maintenance and operation; (16) cost of providing security; (17) cost of providing garbage and snow removal and pest control; (18) cost of decoration of common areas; (19) cost of landscaping; (20) cost of maintenance and operation of the parking area; (21) costs and fees charged and/or assessed in connection with any business improvement district that is applicable to the Applicable Building(s); (22) the cost of operating, replacing, modifying and/or adding improvements or equipment mandated by any law, statute, regulation or directive of any governmental agency (including, but not limited to, the cost of complying with the Americans With Disabilities Act and regulations of the Occupational Safety and Health Administration) enacted after the Effective Date and any repairs or removals necessitated thereby; (23) payments made by Landlord under any easement, license, operating agreement, declaration, restrictive covenant, or instrument pertaining to the payment or sharing of costs among property owners; (24) any business property taxes or personal property taxes imposed upon the fixtures, machinery, equipment, furniture and personal property used in connection with the operation of the Building; (25) the cost of all business licenses, including Business Professional and Occupational License Taxes and Business Improvements Districts Taxes, any gross receipt taxes based on rental income or other payments received by Landlord, commercial rental taxes or any similar taxes or fees; (26) transportation taxes, fees or assessments, including but not limited to, mass transportation fees, metrorail fees, trip fees, regional and transportation district fees; (27) all costs and expenses

 

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associated with or related to the implementation by Landlord of any transportation demand management program or similar program; (28) fees assessed by any air quality management district or other governmental or quasi-governmental entity regulating pollution; (29) the cost of any other service provided by Landlord or any cost that is elsewhere stated In this Lease to be an “operating expense”; (30) operating expenses incurred in connection with the Project to the extent that they are attributable to the Applicable Building(s); (31) a reasonable rental rate and all other costs for the operation and maintenance of a fitness facility; and (32) a reasonable rental rate and all other costs for the operation and maintenance of a conference facility.  Real Property Taxes (as defined in Section 5 hereof) shall be paid in accordance with Section 5 below and shall not be included in operating expenses.  Landlord shall have the right but not the obligation, from time to time, to equitably allocate some or all of the operating expenses among different tenants of the Project or among the different buildings which comprise the Project (the “Cost Pools”).  Such Cost Pools may include, but shall not be limited to, the office space tenants of the Project and the retail space tenants of the Project.  Notwithstanding anything in this Lease to the contrary, the preceding list is for definitional purposes only and shall not impose any obligation upon Landlord to incur such expenses or provide such services.  Operating expenses shall not include any of the following: (i) costs or expenses relating to Landlord’s obligation to construct leasehold improvements, alterations and decorations or other work for tenants of the Building; (ii) costs incurred in connection with the making of repairs which are the obligation of another tenant of the Building; (iii) advertising and promotional expenditures or contributions or gifts; (iv) costs incurred in connection with Landlord’s preparation, negotiation and/or enforcement of leases, including court costs and attorneys’ fees and disbursements in connection with any summary proceeding to dispossess any tenant; (v) financing and refinancing costs in respect of any mortgage placed upon the Project, including points and commissions in connection therewith; (vi) interest or penalties (including late fees) for any late payments by Landlord; (vi) costs (including, without limitation, attorneys’ fees and disbursements) incurred in connection with any judgment, settlement or arbitration award resulting from any tort liability; (vii) wages, salaries or other compensation or benefits paid to any Building employee to the extent that the same is not allocable to the work or service provided by such employee to the Project; (viii) Real Property Taxes (as defined below); (ix) leasing and brokerage fees and commissions; (x) interest or amortization on any loan or mortgage with respect to the Project; (xi) depreciation, amortization and/or other non-cash charges; (xii) costs or repairs or replacements incurred by reason of fire or other casualty or caused by the exercise of the right of eminent domain whether or not insurance proceeds or a condemnation aware are recovered or adequate for such purposes; (xiv) costs of any heating, ventilating, air-conditioning, provided to some, but not all other tenants during other than standard operating hours for the Building; (xiv) legal and auditing fees or other professional fees, other than those reasonably incurred in connection with the maintenance and routine operation of the Project; (xv) any rent, additional rent or other charge under any lease of sublease to or assumed by Landlord; (xvi) salaries and fringe benefits of personnel above the grade of property manager; wages, salaries and other compensation paid for clerks or attendants in concession or newsstands operated by Landlord; (xvii) rent or other charges payable under any ground lease; (xviii) costs of any item or service which is reimbursable to Landlord by other tenants or third parties (other than for operating expenses or Real Property Taxes); (xix) lease payments for rented equipment, the cost of which equipment would constitute a capital expenditure if the equipment were to have been purchased; (xxi) any expenditures on account of Landlord’s acquisition of air or similar development rights; (xxii) costs for which Landlord is actually reimbursed by any insurance; (xxiii) any costs which

 

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exceed arm’s length competitive market prices for goods or services; (xxiv) costs relating to maintaining Landlord’s existence, either as a corporation, partnership, or other entity, such as trustee’s fees, annual fees, partnership organization or administration expenses, deed recordation expenses, legal and accounting fees (other than with respect to Building operations); (xxv) costs arising from the presence of hazardous materials or substances in or about or below the Project, including without limitation, hazardous substances in the groundwater or soil; (xxvi) costs directly resulting from the gross negligence or willful misconduct of Landlord, its employees, agents, contractors or employees; (xxvii) costs or fees relating to the defense of Landlord’s title or interest in the real estate containing the Building or any part thereof; (xxviii) costs incurred due to violation by Landlord of the Lease; (xxix) costs related to renovation of the Project made necessary by the exercise of eminent domain; (xxx) any reserves for repairs, maintenance, and replacements; (xxxi) costs of acquisition of sculpture, paintings, or other objects of art; (xxxii) cost of capital expenditures except as expressly permitted above; (xxxiii) bad debt losses; and (xxxiv) charitable or political contributions.  Notwithstanding any other provision herein to the contrary, it is agreed that in the event the Building is not fully occupied during any calendar year, an adjustment shall be made in computing the operating expenses which vary with occupancy for such year so that the operating expenses shall be computed for such year as though the Building had been ninety-five (95%) percent occupied during such year.  In the event that specific tenants are billed directly for certain charges normally covered under operating expenses, Tenant’s pro rata share will be appropriately adjusted.  In no event shall the provisions of this paragraph enable Landlord to collect more than 100% of the expenses incurred by Landlord in connection with owning, managing, operating, maintaining, servicing, insuring and repairing the Building.  Upon Tenant’s request, Tenant shall have the right to consult with Landlord regarding the annual operating expense budget for the Applicable Building(s); it being understood and agreed, however, that Tenant shall not have any approval rights regarding the annual operating expense budget for the Applicable Building(s).

 

(iii)                               Landlord’s Enforcement Costs.  Additional Rent shall include any and all expenses incurred by Landlord, including reasonable attorneys’ fees, for the collection of monies due from Tenant and the enforcement of Tenant’s obligations under the provisions of this Lease.  When Landlord, at Tenant’s expense, performs an obligation of Tenant pursuant to the terms of this Lease, the costs and expenses (including overhead) incurred by Landlord in performance of such obligations shall be Additional Rent.

 

(d)                                 Additional Rent Estimates and Adjustments.

 

(i)                                     In order to provide for current monthly payments of Additional Rent, Landlord shall submit to Tenant prior to January 1st of each year a written statement of Landlord’s estimate of the amount of operating expenses described in Section 4(c)(ii) above.  Commencing on the ADR Commencement Date and continuing throughout the Lease Term, Tenant shall pay each month one-twelfth (1/12th) of Tenant’s Proportionate Share of Landlord’s estimate of the operating expenses.  Landlord may revise its estimate of operating expenses at any time during a calendar year, but no more than once per calendar year, by written notice to Tenant, setting forth such revised estimate and Tenant’s Proportionate Share of the estimated operating expenses.  In such event, all monthly payments made by Tenant after such notice shall be in an amount calculated on the basis of such revised estimate.

 

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(ii)                                  If payment of Additional Rent begins on a date other than January 1st under this Lease, in order to provide for current payments of Additional Rent through December 31st of that partial calendar year, Landlord shall submit to Tenant a statement of Landlord’s estimate of Tenant’s Additional Rent for that partial year, stated in monthly increments.  Tenant shall make the monthly incremental payments of estimated Additional Rent, together with its installments of operating expenses.

 

(iii)                               After the end of each calendar year, Landlord will as soon as practicable (but not later than May 31st of the following year, unless there has been a sale or refinance of a building(s) within the Project during the prior year, in which event the May 31st date shall be extended to August 31st) submit to Tenant a statement of the actual operating expenses for the preceding calendar year.  If the amount paid by Tenant during the previous year (x) was less than Tenant’s Proportionate Share of the actual operating expenses for the year, Tenant shall pay to Landlord such underpayment within thirty (30) days after its receipt of such statement, and (y) exceeded Tenant’s Proportionate Share of actual operating expenses for the year, the excess shall be credited toward payment of the next installment of operating expenses to be paid by Tenant after Tenant receives said statement from Landlord.  If the amount paid by Tenant during the last calendar year of the Lease Term exceeds Tenant’s Proportionate Share of actual operating expenses for such year, Landlord shall pay Tenant the excess amount within thirty (30) days after Landlord’s submission to Tenant of the aforesaid operating expense statement for such calendar year.

 

(iv)                              Within ninety (90) days after receipt of Landlord’s statement showing actual figures for the year, Tenant shall have the right to request a statement of operating expenses of the Building and copies of real estate tax bills, which shall be supplied to Tenant within a reasonable time after Tenant’s written request.  No such request shall extend the time for payments as set forth in Section 4(c) or Section 4(d)(iii) above.  Unless Tenant asserts error(s) within sixty (60) days after Landlord has complied with Tenant’s request, Tenant shall waive the right to contest the statement of actual figures for the year submitted by Landlord.  If Tenant timely asserts specific error(s) and supports such errors, in writing, and it shall be determined that there is an error in Landlord’s statement, Tenant shall be entitled to a credit for any overpayment.  If it is determined that there is an error in Landlord’s statement with respect to a particular operating expense, the parties agree that in no event shall the parties adjust the operating expenses (i.e., to which such error relates) which were paid two (2) or more years prior to the date of such audit.

 

(v)                                 In addition to Tenant’s rights under Section 4(d)(iv), Landlord shall, upon Tenant’s written request which shall be made no later than ninety (90) days after receipt of Landlord’s statement of the actual increase incurred in operating expenses pursuant to Section 4, permit Tenant or its agent who will not be compensated on a contingent basis to inspect such of its records as are reasonably necessary to certify that the calculation of increases in operating expenses set forth in such statement were made in accordance with the applicable provisions of this Lease; provided, however, that Tenant shall not be entitled to delay any payment under this Lease during the pendency of any such inspection.  Despite the foregoing, if Tenant is using a certified public accountant to audit Landlord’s records, then as an express condition of Tenant’s certified public accountant conducting such inspection, Tenant and Tenant’s certified public accountant shall certify in writing to Landlord that such certified public accountant (i) is being compensated by Tenant on an hourly basis to conduct such audit, and (ii) is not being compensated,

 

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in whole or in part, on a contingency basis or a percentage of savings basis.  Tenant shall bear all costs of any such inspection.  Tenant shall keep the results of any such audit confidential, and shall require Tenant’s attorneys, accountants, and advisors to keep the results of such audit confidential, except to the extent (x) reasonably required to be revealed in any legal action between Landlord and Tenant relating to operating expenses, or (y) as may be required by law.  Despite the foregoing, in the event it is determined that Landlord has overstated the amount of operating expenses (x) that are payable by Tenant during any calendar year, Landlord shall, within thirty (30) days thereafter, refund such overpayment to Tenant, and (y) by five percent (5%) or more, then Landlord shall reimburse Tenant for the reasonable out-of-pocket costs incurred by Tenant to conduct such audit, provided in no event shall any such reimbursement for the cost of the audit exceed the sum of Ten Thousand 00/100 Dollars ($10,000.00).  Tenant shall pay Landlord, on demand and as Additional Rent, Landlord’s invoice for: (a) the photocopying of documents; (b) the retrieval of documents from Landlord’s storage archives; (c) the time spent by Landlord’s employees in supervising, coordinating, and cooperating with the inspection; and (d) any other expenses of Landlord incidental to the inspection.

 

(e)                                  Taxes on Tenant’s Property.  Tenant shall be liable for, and shall pay at least ten (10) days before delinquency, all taxes levied against any personal property or trade fixtures placed by Tenant in or about the Demised Premises.  If any such taxes on Tenant’s personal property or trade fixtures are levied against Landlord or Landlord’s property, or if the assessed value of the Demised Premises is increased by the inclusion therein of a value placed upon such personal property or trade fixtures of Tenant, and if Landlord, after written notice to Tenant, pays the taxes based upon such increased assessments (which Landlord shall have the right to do regardless of the validity thereof, but under protest if requested by Tenant), Tenant shall upon demand repay to Landlord a sum equal to the taxes levied against Landlord or the portion of such taxes resulting from such increase in the assessment; provided that, in any such event, Tenant shall have the right, at Tenant’s sole cost and expense, to bring suit to recover the amount of any such taxes so paid under protest, and any amount so recovered shall belong to Tenant.

 

(f)                                   Payment of Rent.  Any rent payable for a portion of a month shall be prorated based upon a thirty (30)-day calendar month.  Any Base Annual Rent or Additional Rent which is not paid within five (5) days after the same is due shall bear interest at fifteen percent (15%) per annum or the highest legal rate, whichever is lower (the “Default Rate”), from the due date until the date received by Landlord.  In the event the Wall Street Journal ceases to be published or no longer publishes the prime rate, then the prime rate shall be the prime rate of a bank reasonably selected by Landlord who publishes or announces a prime rate.  No payment by Tenant or receipt by Landlord of lesser amounts of rent than those herein stipulated shall be deemed to be other than on account of the earliest unpaid stipulated rent.  No endorsement or statement on any check or any letter accompanying any check or payment as rent shall be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such rent or pursue any other remedy provided in this Lease.  In addition, in the event Base Annual Rent or Additional Rent is not paid within five (5) days of its due date, Landlord, at its sole option, may assess a late charge equal to five percent (5%) of the Base Monthly Rent or Additional Rent, as applicable, as liquidated damages for the additional administrative charges incurred by Landlord as a result of such late payment.  Despite the foregoing, Landlord shall waive such interest and late charge on the first (1st) occasion during any twelve (12) month period in which Tenant does not timely pay Base Annual Rent or Additional Rent, provided that

 

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Tenant pays such installment of Base Annual Rent or Additional Rent to Landlord within five (5) days after the date Tenant receives notice that such amount is past due.  If Landlord receives from Tenant two or more returned or “bounced” checks in any twelve (12) month period, Landlord may require all future rent by cashier’s or certified check.

 

(g)                                  Survival of Rent Obligation.  The obligation of Tenant with respect to the payment of Additional Rent shall survive the termination of this Lease or assignment thereof.

 

(h)                                 Security Deposit.  Tenant has deposited with Landlord simultaneously with the execution of this Lease, the amount stipulated in Section 1(a)(13) as a deposit (the “Security Deposit”) to secure the prompt performance of Tenant’s obligations hereunder.  The Security Deposit may be commingled with Landlord’s general funds, if permitted by law.  Landlord shall have the right, but shall not be obligated, to apply all or any portion of the Security Deposit to cure any default, in which event Tenant shall be obligated to deposit with Landlord the amount necessary to restore the Security Deposit to its original amount within five (5) days after written notice from Landlord.  To the extent not forfeited or otherwise used as provided herein, and provided the Demised Premises are vacated in good condition, reasonable wear and tear excepted, as described in Section 16 of this Lease, the Security Deposit shall be returned, without interest, to Tenant within thirty (30) days after the termination of this Lease.  Landlord may deliver the Security Deposit to the purchaser or any assignee of Landlord’s interest in the Demised Premises or the Building, whereupon Landlord shall be discharged from any further liability with respect to the Security Deposit.  This provision shall apply also to any and all subsequent transferors of the Landlord’s interest in this Lease.  If the Tenant fails to take possession of the Demised Premises as required by this Lease, the Security Deposit shall not be deemed liquidated damages and Landlord’s use of the Security Deposit pursuant to this Section 4 shall not preclude Landlord from recovering from Tenant all additional damages incurred by Landlord.

 

5.                                      Real and Personal Property Taxes.

 

(a)                                 Payment of Taxes.  Commencing on the ADR Commencement Date, and continuing throughout the balance of the Lease Term, Tenant shall pay to Landlord during the Term hereof, in addition to Base Annual Rent and Tenant’s Proportionate Share of operating expenses, Tenant’s Proportionate Share of the “Real Property Taxes” (as defined in Section 5(b) below).  Tenant’s Proportionate Share of Real Property Taxes shall be payable by Tenant at the same time, in the same manner and under the same terms and conditions as Tenant pays Tenant’s Share of operating expenses as provided in Section 4 of this Lease.

 

(b)                                 Definition of “Real Property Tax.”  The term “Real Property Tax” shall mean all taxes and assessments, general and special, ordinary and extraordinary, foreseen and unforeseen, now or hereafter assessed, levied or imposed upon the Building, and the land on which it is built, including, without limitation, vault fees and charges, arena taxes, front foot benefit charges and adequate public facility costs and assessments, together with (i) any tax, assessment, or other imposition in the nature of a real estate tax, (ii) any ad valorem tax on rent or any tax on income if imposed in lieu of or in addition to real estate taxes and assessments, and (iii) any taxes and assessments which may hereafter be substituted for real estate taxes, including by way of illustration only, any tax, assessment or other imposition (whether a business rental or other tax) now or hereafter levied for Tenant’s use or occupancy of or conduct of business at the Demised

 

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Premises, on Tenant’s improvements to or furniture, fixtures or equipment in the Demised Premises, or imposed upon the rent payments.  Real Property Taxes shall not include any federal, state or local tax on income or any inheritance, estate, succession, transfer, recordation, gift, franchise or corporation tax.  In the event that Landlord elects to contest Real Property Taxes, then reasonable expenses incurred by Landlord in obtaining or attempting to obtain a reduction of any Real Property Taxes shall be added to and included in Real Property Taxes.

 

(c)                                  Reassessments.  From time to time Landlord may challenge the assessed value of the Project as determined by applicable taxing authorities and/or Landlord may attempt to cause the Real Property Taxes to be reduced on other grounds.  In the event that Tenant reasonably requests that Landlord challenge the assessed value of the Building, then Landlord shall do so.  If Landlord is successful in causing the Real Property Taxes to be reduced or in obtaining a refund, rebate, credit or similar benefit (hereinafter collectively referred to as a “reduction”), Landlord shall credit the reduction(s) to Real Property Taxes for the calendar year to which a reduction applies and to recalculate the Real Property Taxes owed by Tenant for years after the year in which the reduction applies based on the reduced Real Property Taxes.  All costs incurred by Landlord in attempting to obtain or obtaining the Real Property Tax reductions shall be considered an operating expense and Landlord shall determine, in its sole discretion to which years any reductions will be applied.  In addition, all accounting and reasonable related costs incurred by Landlord in calculating new Base Years for tenants and in making all other adjustments shall be an operating expense.

 

6.                                      As-Is.

 

(a)                                 Except as provided in this Section 6(a), Tenant is leasing the Demised Premises in its as-is condition.  Landlord at its sole cost and expense, shall deliver the Demised Premises ready for occupancy to Tenant with:

 

(i) all mechanical, electrical, backup generators and related infrastructure, sprinkler, fire alarm, HVAC and plumbing systems in good working order as of such date of delivery;

 

(ii) the Building (including restrooms) being in compliance with building codes as of the Commencement Date, including but not limited to ADA in accordance with Tenant’s preliminary plans and as a lab, research, manufacturing facility use; and

 

(iii) all existing furniture having been removed, except for select conference rooms to be determined by Tenant in writing within ninety (90) days after the Effective Date.

 

(b)                                 Vertical Chases; Generator.  Notwithstanding anything herein to the contrary, (x) Landlord shall have the right to install vertical chases to provide exhaust and fresh air for the 1st floor of the 9717 Building, the location of which chases will be mutually agreed to by Landlord and Tenant, and (y) Landlord reserves the right to relocate one of the smaller generators to the building located at 9713 Key West Avenue, Rockville, Maryland (the “9713 Building”).

 

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(c)                                  Tenant’s Work.  Tenant shall cause the Tenant’s Work to be performed in accordance with the provisions of the Work Agreement that is attached to and made a part hereof as Exhibit E of this Lease;

 

(d)                                 Permits.  Tenant shall be responsible for obtaining all permits or licenses necessary for its lawful occupancy of the Demised Premises.  This requirement shall not relieve Tenant of its liability for Base Annual Rent from the Rent Commencement Date in the event all of said permits have not been acquired prior thereto.

 

7.                                      Use of Demised Premises.

 

(a)                                 Use.  Tenant shall use and occupy the Demised Premises for the singular purpose specified in Section 1(a)(12) and for no other purpose whatsoever.  Tenant shall not use or permit the Demised Premises to be used for any other purpose or purposes without the prior written consent of Landlord, which consent may be granted or withheld in Landlord’s sole discretion. Notwithstanding anything in this Lease to the contrary, so long as Tenant does not overload the parking facilities at the Project as a result of any such use, Tenant may use or permit any portion of the Demised Premises to be used for any of the following purposes: (i) classroom; (ii) data center; (iii) call center; (iv) sales order center; and/or (v) conference facility.

 

(b)                                 Compliance.  Tenant shall, at Tenant’s sole expense, (i) comply with all laws, orders, ordinances, and regulations of federal, state, county, and municipal authorities having jurisdiction over the Demised Premises, (ii) comply with any directive, order or citation made pursuant to law by any public officer requiring abatement of any nuisance or which imposes upon Landlord or Tenant any duty or obligation arising from Tenant’s occupancy or use of the Demised Premises or from conditions which have been created by or at the request or insistence of Tenant, or required by reason of a breach of any of Tenant’s obligations hereunder or by or through other fault of Tenant; (iii) comply with all insurance requirements applicable to the Demised Premises; and (iv) cause the Demised Premises to comply with the Americans With Disabilities Act of 1990, 42 U.S.C. 12101 et seq., as amended from time to time (the “ADA”) and all rules and regulations promulgated to further the purpose of the ADA.  If Tenant receives notice of any such directive, order, citation or of any violation of any law, order, ordinance, regulation or any insurance requirement, Tenant shall promptly notify Landlord in writing of such alleged violation and furnish Landlord with a copy of such notice.  In furtherance of the foregoing, and provided Tenant shall first have obtained Landlord’s prior written consent in accordance with the provisions of Section 12 of the Lease (which Tenant agrees to promptly request), Tenant shall, at Tenant’s sole cost and expense, make such changes, alterations, renovations or modifications to the Demised Premises in accordance with the provisions of Section 12 of the Lease (except for structural repairs) which are necessitated or required by any such law, ordinance, rule, regulation, directive or insurance requirement.

 

(i)                                     Legal.  Tenant shall not use or permit the Demised Premises or any part thereof to be used in violation of any present or future applicable law, regulation or ordinance, or of the certificate of occupancy issued for the Building or the Demised Premises, and shall immediately discontinue any use of the Demised Premises which is declared by any governmental authority having jurisdiction to be in violation of law or said certificate of occupancy.  Tenant will not use or permit the Demised Premises to be used for any purposes that interfere with the use and

 

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enjoyment of the Building by Landlord or the other tenants, or which violate the requirements of any insurance company insuring the Building or its contents, or which, in Landlord’s sole discretion, impair the reputation of the Building.  Tenant shall refrain from and discontinue such use immediately upon receipt of written notice from Landlord.

 

(ii)                                  Fire and Safety.  Tenant shall not do, or permit anything to be done in the Demised Premises, or bring or keep anything therein, which will in any way increase the rate of fire insurance on the Building, or invalidate or conflict with fire insurance policies on the Building, fixtures or on property kept therein.  Tenant agrees that any increases of fire insurance premiums on the Building or contents caused by the occupancy of Tenant and any expense or cost incurred in consequence of negligence or the willful action of Tenant, Tenant’s employees, agents, servants, invitees, or licensees shall be deemed Additional Rent and paid as accrued.

 

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(c)                                  Environmental Protection.

 

(i)                                     Subject to Section 7(c)(ii) below, Tenant and Tenant’s employees, contractors and agents shall not dispose of or generate, manufacture, store, treat or use any oil, petroleum or chemical liquids or solids, liquid or gaseous products or any hazardous waste or hazardous substance including, without limitation, asbestos (hereinafter collectively referred to as “hazardous waste”), as those terms are used in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (as amended by the Superfund Amendments and Reauthorization Act (“SARA”) (42 U.S.C. 9601 et seq.) (“CERCLA”), or in any other federal, state or local law governing hazardous waste (e.g., the Resource Conservation and Recovery Act of 1976, as amended (“RCRA”) (42 U.S.C. 6901 et seq.), and state law equivalents to CERCLA, SARA and RCRA, as well as their implementing regulations) (hereinafter collectively referred to as the “Act”), as the Act may be amended from time to time at, upon, under or within the Demised Premises or the Project or the land on which it is built (the “Land”), or into the plumbing or sewer or water system servicing the Demised Premises or the Project, nor shall Tenant, its employees, contractors or agents cause or permit the discharge, spillage, uncontrolled loss, seepage or filtration of any hazardous waste at, upon, under or within the Demised Premises or the Project or the Land or into the plumbing or sewer or water system servicing the same.  Despite the foregoing, Tenant shall be permitted to use and store usual and customary office and cleaning supplies in the Demised Premises in accordance with the Act (if applicable).  Tenant shall comply in all respects with the requirements of the Act and related regulations, and shall notify Landlord immediately in the event of its discovery of any discharge or release of hazardous waste at, upon, under or within the Demised Premises or the Project or the Land, in violation of the Act, or of Tenant’s receipt of any notice by a governmental authority or private party alleging that a disposal of hazardous waste on or near the Demised Premises or the Project may have occurred.  Landlord shall notify Tenant immediately in the event of its discovery of any discharge or release of hazardous waste at, upon, under Demised Premises or the Project or the Land, in violation of the Act, or of Landlord’s receipt of any notice by a governmental authority or private party alleging that a disposal of hazardous waste on or near the Demised Premises or the Project may have occurred.  Tenant further agrees to provide Landlord full and complete access to any documents or information in Tenant’s possession or control relevant to the question of Tenant’s generation, treatment, storage or disposal of hazardous waste on or near the Demised Premises.  In the event that any hazardous waste is located in the Demised Premises or Project or the Land, and Tenant is not responsible for such hazardous waste, then Landlord, at no cost to Tenant, shall remove or remediate such hazardous waste in accordance with the Act.  To the best of Landlord’s knowledge, without investigation or inquiry, neither the Project (including the Demised Premises) nor the Land contains any hazardous waste in violation of the Act.  In addition:

 

(1)                                 Landlord represents that Landlord has not received any written notice of any violations of the Act from any governmental agency concerning any intentional or unintentional action or omission resulting in the releasing, spilling, leaking, pumping, pouring, emitting, emptying, dumping or disposal of hazardous waste at the Project or the Land (including soil, groundwater and surface water), which remains outstanding and unresolved as of the Effective Date;

 

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(2)                                 to the best of Landlord’s knowledge, without investigation or inquiry, no lien has been threatened or has been attached to the Demised Premises by any governmental agency for expending funds to pay for damages, including clean-up, remediation, removal or response costs for hazardous wastes;

 

(3)                                 to the best of Landlord’s knowledge, without investigation or inquiry, there are no legal actions, suits, or other legal or administrative proceedings pending or threatened against the Demised Premises which have been asserted to enforce the Act;

 

(4)                                 neither Landlord nor, to the best of Landlord’s knowledge, without investigation or inquiry, any current or previous tenant, occupant, operator, or user at the Demised Property or the Project is conducting any cleanup, remediation, remedial or other response action relating to any release, disposal or discharge of hazardous waste on or underneath the Demised Premises or the Land; and

 

(5)                                 neither Landlord nor, to the best of Landlord’s knowledge, without investigation or inquiry, any current or previous tenant, occupant, operator, or user of the Demised Premises or the Project has entered into or agreed to any consent decree, order, contract or other agreement relating to the remediation of hazardous waste at the Project or with respect to the Land.

 

(ii)                                  Landlord acknowledges that it is not the intent of this Section 7(c) to prohibit Tenant from using the Demised Premises for the use set forth in Section 1(a)12 above. Accordingly, Tenant may operate its business according to prudent industry practices so long as the use or presence of hazardous waste is strictly and properly monitored in accordance with the Act (as applicable).  As a material inducement to Landlord to allow Tenant to use hazardous waste in connection with its business, Tenant agrees to deliver to Landlord prior to the Rent Commencement Date a list identifying each type of hazardous waste (excluding usual and customary office and cleaning supplies) to be brought upon, kept, used, stored, handled, treated, generated on, or released or disposed of from, the Demised Premises and setting forth any and all governmental approvals or permits required in connection with the presence, use, storage, handling, treatment, generation, release or disposal of such hazardous waste on or from the Demised Premises (“Hazardous Waste List”). Tenant shall deliver to Landlord an updated Hazardous Waste List at least once a year, upon Landlord’s request, and shall also deliver an updated list before any new hazardous waste (excluding usual and customary office and cleaning supplies) is brought onto, kept, used, stored, handled, treated, generated on, or released or disposed of from, the Demised Premises. Tenant shall deliver to Landlord true and correct copies of the following documents (the “Haz Mat Documents”) relating to the use, storage, handling, treatment, generation, release or disposal of hazardous waste prior to the Rent Commencement Date, or if unavailable at that time, concurrent with the receipt from or submission to a governmental authority: permits; approvals; reports and correspondence; storage and management plans, notice of violations of the Act; plans relating to the installation of any storage tanks to be installed in or under the Project (provided, said installation of tanks shall only be permitted after Landlord has given Tenant its written consent to do so, which consent may be withheld in Landlord’s sole and absolute discretion); all closure plans or any other documents required by any and all federal, state and local governmental authorities for any storage tanks installed by Tenant in, on or under the Project for the closure of any such tanks.

 

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(iii)                               Tenant hereby represents and warrants to Landlord that (i) Tenant has not been required by any prior landlord, lender or governmental authority at any time to take remedial action in connection with hazardous waste contaminating a property which contamination was permitted by Tenant of such predecessor or resulted from Tenant’s or such predecessor’s action or use of the property in question, and (ii) Tenant is not subject to any enforcement order issued by any governmental authority in connection with the use, storage, handling, treatment, generation, release or disposal of hazardous waste (including, without limitation, any order related to the failure to make a required reporting to any governmental authority).

 

(iv)                              Landlord shall have the right to perform the following tests and inspections:

 

(1)                                 Subject to Section 17(b) below, Landlord, at Landlord’s cost, shall have the right to conduct annual tests of the Demised Premises to determine whether Tenant has released or disposed of hazardous wastes at the Demised Premises which have resulted in contamination of the soil, groundwater, or surface water below the Land.  Despite the foregoing, if Tenant has caused a release of hazardous waste to the soil, groundwater or surface water at the Demised Premises for which Tenant is liable under this Section 7(c), Tenant shall be required to pay the cost of such analytical test of the Demised Premises; provided, however, that if Tenant conducts its own tests of the Demised Premises using third party contractors and test procedures acceptable to Landlord which tests are certified to Landlord, Landlord shall accept such tests in lieu of any tests conducted by Landlord under this subsection. In connection with such testing, upon the request of Landlord, Tenant shall deliver to Landlord or its consultant such information concerning the use of hazardous waste in or about the Demised Premises by Tenant or any agent, employee, contractor or invitee of Tenant. Landlord shall provide Tenant with a copy of all third party, non-confidential reports and tests of the Demised Premises made by or on behalf of Landlord during the Term without representation or warranty and subject to a confidentiality agreement. Tenant shall, at its sole cost and expense, promptly remediate, if required by the Act, any releases of hazardous waste caused by Tenant at the Demised Premises (i.e., in the soil, groundwater or surface water) identified by such testing in accordance with the Act.

 

(2)                                 Subject to Section 17(b) below, Landlord, at Landlord’s cost, shall have the right, from time to time, to conduct visual inspections of the Demised Premises to determine whether Tenant has violated the Act. Despite the foregoing, if as a result of the inspection Landlord determines that Tenant’s operations at the Premises have violated the Act, and Tenant reasonably agrees that it so violated the Act, Tenant shall be required to pay Landlord’s reasonable out-of-pocket costs of such inspection (if any, but excluding legal fees).  In addition, at any time, and from time to time, Landlord, at Landlord’s cost, shall have the right to conduct appropriate tests of the Project (exclusive of the Demised Premises) and the Land to determine whether Tenant has violated the Act.  Despite the foregoing, if as a result of the testing Landlord determines that Tenant’s operations at the Premises have violated the Act, and Tenant reasonably agrees that it so violated the Act, Tenant shall be required to pay the cost of such tests.  In connection with such testing, upon the request of Landlord, Tenant shall deliver to Landlord or its consultant such information concerning the use of hazardous waste in or about the Demised Premises by Tenant or any agent, employee, contractor or invitee of Tenant. Landlord shall provide Tenant with a copy of all third party, non-confidential reports and tests of the Demised Premises made by or on behalf of Landlord during the Term without representation or warranty and subject

 

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to a confidentiality agreement. As pertaining to this subsection 5(iv)(2), Tenant shall, at its sole cost and expense, promptly and satisfactorily remediate any hazardous waste (which is in violation of the Act) which is identified by such testing in accordance with the Act, to the extent such hazardous waste was caused by Tenant or any agent, employee, contractor or invitee of Tenant. Landlord’s receipt of or satisfaction with any environmental assessment in no way waives any rights which Landlord may have against Tenant.

 

(d)                                 Indemnification.  Tenant shall indemnify Landlord against all costs, expenses, liabilities, losses, damages, injunctions, suits, fines, penalties, claims, and demands, including, without limitation, remediation and clean-up costs, reasonable attorneys’ fees, arising out of any violation of or default in the covenants of this Section 7 by Tenant.  The provisions of Sections 7(b) and (c) and this Section 7(d) shall survive the expiration of the Lease Term for a period of three (3) years.

 

(e)                                  Moving and Deliveries.  Tenant may receive deliveries at the Demised Premises without prior coordination with Landlord.  Tenant shall promptly remove from the public areas within or adjacent to the Building any of Tenant’s property delivered or deposited there, and shall be responsible for any damage to the Building or the Demised Premises caused by its moving and deliveries.  Subject to availability and prior coordination, Tenant acknowledges that other tenants at the Project may, from time to time, use the loading dock which serves the Demised Premises.

 

(f)                                   Excessive Floor Load.  Landlord shall have the right to prescribe the weight and method of installation and position of safes or other heavy fixtures or equipment.  Tenant will not, without Landlord’s prior written approval, install in the Demised Premises any fixtures, equipment or machinery that will place a load upon the floor exceeding the designed floor load capacity.  Tenant shall be liable for all damage done to the Building by installing or removing a safe or any other article of Tenant’s office equipment, or machinery or fixtures or other personal property or due to its being in the Demised Premises.  Landlord shall repair any such damage at Tenant’s expense, and Tenant shall pay the cost therefor to Landlord upon demand, as Additional Rent.

 

(g)                                  Medical Uses.  Tenant shall be responsible, at its sole cost and expense, for the safe and complete disposal of all “Medical Waste” (hereinafter defined).  As used herein, the term “Medical Waste” shall mean all items, instruments or things which are utilized by Tenant, its agents or employees, in connection with the use permitted under this Lease, including, but not limited to the following items (if applicable): needles, syringes, bandages, medical instruments (including scalpel blades), blood or blood products, body parts and tissues, discarded cultures, specimens, vaccines, containers and receptacles that are soiled with bodily tissues or fluids and swabs, etc., as well as any and all potentially, possibly or actually contaminated, hazardous, diseased, infected or infectious material, substance or thing utilized or brought upon the Demised Premises by Tenant or its employees, agents, customers, subtenants, assignees, contractors or subcontractors.  All such disposal shall comply fully with all applicable laws, including without limitation, 42 U.S.C. 6992 (1988) and any regulations promulgated thereunder as the same may be amended from time to time (collectively, “Medical Waste Laws”).  Tenant shall be solely responsible for disposing of all Medical Waste so as to protect waste handlers and the public from exposure.  Under no condition shall Tenant store Medical Waste in the corridors or other common

 

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areas of the Building or deposit any Medical Waste in trash receptacles serviced by any char service provided by Landlord or in any dumpster servicing the Building.  Tenant shall store such items, whether for pick up, delivery or disposal, in a location designated by Landlord.  Tenant agrees not to commercially dispense for sale drugs, prescriptions or pharmaceutical items in the Demised Premises without obtaining the written consent of Landlord.  Tenant hereby agrees to indemnify, defend and save Landlord and its agents harmless from and against all liability, loss, damage, cost or expense, including reasonable attorneys’ fees, incurred in connection with any claims of any nature whatsoever as the result of any injury to any individual or entity occasioned by contact with or exposure to any infectious, infected, hazardous or contaminated material, substance or thing utilized, applied, removed or received by Tenant, its agents or employees.  Tenant for itself and for each individual conducting research within the Demised Premises agrees not to allow the Demised Premises to be used for the performance of abortions, euthanasia, direct surgical sterilizations, or research requiring the use of animals.

 

8.                                      Rules and Regulations.  Tenant covenants on behalf of itself, its employees, agents, contractors, licensees and invitees to comply with the rules and regulations set forth in Exhibit “B”, which is attached hereto and made a part hereof (the “Rules and Regulations”).  Landlord shall have the right to make reasonable additions and amendments to the Rules and Regulations from time to time and Tenant covenants that Tenant, its employees, agents, contractors, licensees and invitees will comply with additions and amendments to the Rules and Regulations upon Landlord’s provision to Tenant of a written copy of the same.  Any default by Tenant, or any other party set forth above, of any of the provisions of the Rules and Regulations as set forth on Exhibit “B” or as amended, from time to time, shall be considered to be a default under the terms of this Lease.  Nothing contained in this Lease shall be construed to impose upon Landlord any duty or obligation to enforce the Rules and Regulations, or any amendments or additions thereto, against any other tenant, and Landlord shall have no liability to Tenant or any other party for violations of the Rules and Regulations by any party whatsoever.  If there is any inconsistency between this Lease and the Rules and Regulations, the Lease shall govern.  Landlord agrees to use reasonable efforts to not enforce the Rules and Regulations against Tenant in a manner which unreasonably discriminates against Tenant.

 

9.                                      Subletting and Assignment.

 

(a)                                 Consent.  Tenant will not sublet the Demised Premises or any part thereof or transfer possession or occupancy thereof to any person, firm or corporation, or transfer or assign this Lease, without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed, provided, however, that it shall not be unreasonable for Landlord to withhold its consent on the basis that (i) the proposed assignee or subtenant does not have the financial capacity to perform its obligations under the Lease or the sublease, as applicable, or (ii) the proposed assignee or subtenant is a party by whom any suit or action could be defended on the ground of sovereign immunity, or (iii) the proposed assignee’s or subtenant’s proposed use of the Demised Premises is not in keeping with an office or lab building, or (iv) the proposed assignee or subtenant is at tenant or occupant of the Project, or (v) the proposed assignee or subtenant does not have a good reputation in the business community.  Tenant shall not encumber the Lease or any interest therein nor grant any franchise, concession, license or permit arrangement with respect to the Demised Premises or any portion thereof.  No subletting or assignment hereof shall be affected by operation of law or in any other manner unless with the prior written consent of

 

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Landlord, which consent shall be granted or withheld by Landlord in the exercise of its sole and absolute discretion.  A sale, transfer, assignment or other conveyance of a general partnership interest in Tenant, if Tenant is a partnership or joint venture, or a transfer of more than a twenty percent (20%) stock interest, if Tenant is a corporation, or a transfer of any ownership interest in Tenant (whether membership interest or otherwise) shall be an assignment for purposes hereof.  Despite the foregoing, trading of publicly-held stock on a nationally recognized stock exchange in the ordinary course shall not be limited by the immediately preceding sentence.  Tenant shall not modify, extend or amend a sublease previously consented to by Landlord without obtaining Landlord’s consent thereto.  Notwithstanding anything to the contrary, Tenant shall not exercise any of its rights under this Section 9 in a manner intended to circumvent restrictions otherwise contained in this Section 9 (e.g., a step transaction in which this Lease is assigned to a wholly owned subsidiary whose only asset is this Lease, followed by a sale of such subsidiary’s stock to a third party).

 

(b)                                 Assignment.  In the event Tenant desires to assign this Lease, Tenant shall give to Landlord written notice of Tenant’s desire to do so, which notice shall be accompanied by the “Required Information (as hereinafter defined).  Within sixty (60) days of receipt of said notice and the Required Information, Landlord shall have the right to terminate this Lease on a date to be agreed upon by Landlord and Tenant.  If Landlord exercises its right to terminate this Lease, Tenant agrees that Landlord shall have access to the Demised Premises thirty (30) days prior to the effective termination date for planning purposes, or to show the Demised Premises to prospective tenants.

 

(c)                                  Subletting.  In the event Tenant desires to sublet all or any part of the Demised Premises, Tenant shall give to Landlord written notice of Tenant’s desire to do so, which notice shall be accompanied by the Required Information.  Within sixty (60) days of receipt of said notice and Required Information, Landlord shall have the right (i) to terminate this Lease on a date to be agreed upon by Landlord and Tenant; or (ii) with Tenant’s consent, to terminate this Lease and to enter into a new lease with Tenant for that portion of the Demised Premises Tenant desires to retain, upon the same terms and conditions herein (i.e., as applicable to that portion of the Demised Premises retained by Tenant); or (iii) to sublease from Tenant at the same rental rate then being paid by Tenant and subsequently to relet that portion of the Demised Premises that Tenant desires to relinquish.  If Landlord exercises its right to terminate this Lease or to sublet a portion of the Demised Premises, Tenant agrees that Landlord shall have access to all or such portion of the Demised Premises thirty (30) days prior to the effective termination or sublease commencement date for planning purposes, or to show the same to prospective tenants.  Notwithstanding anything to the contrary, if Tenant desires to sublease one (1) full floor (or more) of a building for the remainder of the Lease Term and (x) Landlord approves of such sublease in accordance with the terms of this Lease, and (y) Tenant elects to pay Landlord one hundred percent (100%) of the Profit (as defined below) in connection with such sublease, then Landlord shall not have the right to terminate this Lease or sublet a portion of the Demised Premises as provided in this Section 9(c).  Notwithstanding anything to the contrary, if Tenant desires to sublet a portion of the Demised Premises to its clients and/or business partners (each a “Minor Subtenant”), provided that (a) such Minor Subtenant subleases less than one (1) full floor of a building, and (b) the Minor Subtenants do not occupy, in the aggregate, more than 20% of the rentable area in the Demised Premises, then Landlord shall not have the right, as a result of such request to sublet to a

 

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Minor Subtenant, to terminate this Lease or sublet such proposed portion of the Demised Premises as provided in this Section 9(c).

 

(d)                                 Required Information.  If Tenant should desire to assign this Lease or sublet the Demised Premises (or any part thereof), Tenant shall give Landlord written notice no later than sixty (60) days in advance of the proposed effective date of such proposed assignment or sublease, which notice shall specify the following information (such information shall be collectively referred to as the “Required Information”): (i) the name, current address and business of the proposed assignee or sublessee, (ii) the amount and location of the space within the Demised Premises proposed to be so subleased, (iii) the proposed effective date and duration of the assignment or subletting, and (iv) the proposed rent and other consideration to be paid to Tenant by such assignee or sublessee.  Tenant also shall promptly supply Landlord with financial statements and other information as Landlord may request to evaluate the proposed assignment or sublease.

 

(e)                                  Fees; Documents.  Tenant agrees to reimburse Landlord for legal fees (not to exceed $3,500.00 on any one occasion) and any other reasonable expenses and costs incurred by Landlord in connection with any proposed assignment or subletting.  Tenant shall deliver to Landlord copies of all documents executed in connection with any proposed assignment or subletting, which documents shall be in form and substance reasonably satisfactory to Landlord and which documents, (i) in the case of a permitted assignment, shall require such assignee to assume performance of all terms of this Lease on Tenant’s part to be performed, and (ii) in the case of permitted subletting, shall require such sublessee to comply with all terms of this Lease on Tenant’s part to be performed.  No acceptance by Landlord of any Base Monthly Rent or any other sum of money from any assignee, sublessee or other category of transferee shall be deemed to constitute Landlord’s consent to any assignment, sublease, or transfer.

 

(f)                                   No Release.  Any attempted assignment or sublease by Tenant in violation of the terms and provisions of this Section 9 shall be void and shall constitute a material breach of this Lease.  In the event Landlord consents to any assignment or sublease on one occasion, such consent shall not affect Tenant’s obligation to comply with the provisions of Section 9 of this Lease with respect to any future assignment or sublease.

 

(g)                                  Tenant Liability.  In the event of any subletting of all or any portion of the Demised Premises or assignment of this Lease by Tenant, with or without Landlord’s consent, Tenant shall remain primarily liable to Landlord for the payment of the rent stipulated herein and for the performance of all other covenants and conditions contained herein.

 

(h)                                 Profit.  If any sublease or assignment (whether by operation of law or otherwise, including without limitation an assignment pursuant to the provisions of the Bankruptcy Code or any other Insolvency Law) provides that the subtenant or assignee thereunder is to pay any amount in excess of the rental and other charges due under this Lease, then whether such excess be in the form of an increased monthly or annual rental, a lump sum payment, payment for the sale, transfer or lease of Tenant’s fixtures or leasehold improvements which were paid for using funds reimbursed by or paid from the Construction Allowance (as defined below), or any other form (but excluding the sale of Tenant’s furniture, personal property, or other leasehold improvements paid for by Tenant without using funds from the Construction Allowance) (and if

 

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the subleased or assigned space does not constitute the entire Demised Premises, the existence of such excess shall be determined on a pro-rata basis), Tenant shall pay to Landlord fifty percent (50%) of any “Profit” (as defined below) applicable to the sublease or assignment, which amount shall be paid by Tenant to Landlord as additional rent upon such terms as shall be specified by Landlord and in no event later than ten (10) days after any receipt thereof by Tenant.  “Profit” shall be defined as the difference between (i) any and all consideration received by Tenant in the aggregate from any assignment of the Lease and/or subletting of the Demised Premises, and (ii) the sum of (A) the rent and charges due to Landlord from Tenant under the terms of this Lease (and if the subleased or assigned space does not constitute the entire Demised Premises, the rent and charges payable by Tenant shall be determined on a pro-rata basis), (B) Tenant’s reasonable attorneys’ fees and brokerage costs in connection with such assignment or subletting that are paid to a third party that is not related to or affiliated with Tenant, (C) Tenant’s actual out-of-pocket cost of performing alterations to the Demised Premises in connection with such assignment or subletting, (D) the actual amount of any rent abatement that is granted in connection with such assignment or subletting, and (E) the actual amount of improvement allowance that is paid in connection with such assignment or subletting.  Notwithstanding anything to the contrary, if Tenant subleases one (1) full floor (or more) of a building for the remainder of the Lease Term in accordance with this Lease, then Tenant shall pay to Landlord one hundred percent (100%) of any Profit applicable to such sublease, which amount shall be paid by Tenant to Landlord as additional rent upon such terms as shall be specified by Landlord and in no event later than ten (10) days after any receipt thereof by Tenant.  Acceptance by Landlord of any payments due under this Section shall not be deemed to constitute approval by Landlord of any sublease or assignment, nor shall such acceptance waive any rights of Landlord hereunder.  Landlord shall have the right to inspect and audit Tenant’s books and records relating to any sublease or assignment.

 

(i)                                     Corporate Transfer.  Notwithstanding anything to the contrary contained herein, Tenant may assign its entire interest under this Lease to a wholly owned corporation or entity or controlled subsidiary or parent of the Tenant or to any successor to Tenant by purchase, merger, consolidation or reorganization (hereinafter collectively referred to as “Corporate Transfer”) without the consent of Landlord, provided (i) Tenant is not in default under this Lease; (ii) if such proposed transferee is a successor to Tenant by purchase, said proposed transferee shall acquire all or substantially all of the stock or assets of Tenant’s business or, if such proposed transferee is a successor to Tenant by merger, consolidation or reorganization, the continuing or surviving corporation shall own all or substantially all of the assets of Tenant; (iii) such proposed transferee shall have a net worth which is equal to or greater than Tenant’s net worth at the date of this Lease (or if such transferee does not have such net worth, the amount of the Security Deposit shall be increased to an amount equal to one year of Base Annual Rent as an express condition of such transfer); and (iv) such proposed transferee assumes all of the obligations of Tenant hereunder.  Tenant shall give Landlord written notice at least thirty (30) days prior to the effective date of such Corporate Transfer.  As used herein, the term “controlled subsidiary” shall mean a corporate entity wholly owned by Tenant or at least fifty-one percent (51%) of whose voting stock is owned by Tenant.  Notwithstanding anything in this Lease to the contrary, (x) any assignment or subletting shall (i) be on a form reasonably acceptable to Landlord and (ii) shall be subject to the terms of this Lease, and (y) Tenant shall pay to Landlord a reasonable fee for processing any sublease or assignment, which fee shall not exceed the sum of Three Thousand Five Hundred and 00/100 Dollars ($3,500.00) on any one occasion.

 

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10.                               Services and Utilities.

 

(a)                                 Building Standard Services and Utilities.  From and after the Commencement Date and continuing throughout the entire Lease Term (including any extension thereof), Tenant shall be solely responsible for and shall promptly pay to the applicable utility companies (or directly to Landlord, if such utilities are submetered) any and all charges for janitorial services, electricity, gas, water, sewer or any other utility used, consumed or supplied to the Demised Premises.  Unless such utilities are submetered to the Demised Premises, Tenant shall immediately cause all of the applicable utility companies to put the utility service in Tenant’s name.

 

(b)                                 Intentionally Deleted.

 

(c)                                  Interruption of Service.  In no event shall Landlord be liable to Tenant for any interruption or failure in the supply of any utilities to the Demised Premises.  Landlord reserves the right to interrupt service of the heat, elevator, plumbing, air conditioning, cooling, electric, and sewer and water systems, when necessary, by reason of accident, or of repairs, alterations or improvements which in the judgment of Landlord are desirable or necessary to be made, until such repairs, alterations or improvements shall have been completed; and Landlord shall have no responsibility or liability for failure to supply heat, plumbing, air conditioning, cooling, electric, and sewer and water service, or other service or act for the benefit of Tenant, when prevented from so doing by strikes, accidents or by any other causes beyond Landlord’s reasonable control, or by orders or regulations of any federal, state, county, or municipal authority, or by any failure to receive suitable fuel supply, or inability despite exercise of reasonable diligence to obtain the regularly-used fuel or other suitable substitute; and Tenant agrees that Tenant shall have no claim for damages nor shall there be any abatement of Base Annual Rent in the event that any of said systems or service shall be discontinued or shall fail to function for any reason.  Except in the event of an emergency, Landlord shall coordinate with Tenant in connection with any planned interruptions of services at the 9715 Building and/or 9717 Building.  Despite the foregoing, in the event that as a result of Landlord’s negligence or intentional misconduct (i) the services to be provided by Landlord under this Lease shall not be furnished for more than three (3) consecutive days, and (ii) Tenant, in its reasonable business judgment, determines that it is unable to use and occupy the Demised Premises (or any part thereof) as a result thereof, then the Base Annual Rent shall abate with respect to that part of the Demised Premises which Tenant does not use and occupy, commencing on the fourth (4th) such day until the date on which such services and utilities are restored.

 

(d)                                 Excessive Electrical Usage.

 

(i)                                     Except for the equipment listed on Exhibit F attached hereto and incorporated herein, Tenant will not install or operate in the Demised Premises any heavy duty electrical equipment or machinery without obtaining the prior written consent of Landlord.  Landlord may require, as a condition of its consent to the installation of such equipment or machinery, payment by Tenant, as Additional Rent, for such excess consumption of electricity as may be occasioned by the operation of said equipment or machinery.  Landlord may make periodic inspections of the Demised Premises at reasonable times to determine that Tenant’s electrically operated equipment and machinery complies with the provisions of this Section and Section 10(e).

 

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(ii)                                  Landlord, at its sole expense, will install one or more submeters to record the consumption or use of (x) electricity within the Demised Premises, and (y) gas and water within the Demised Premises, to the extent such metering or submetering can be performed at a commercially reasonable cost.

 

(iii)                               Landlord will submit monthly submeter readings to Tenant and Tenant will pay, as Additional Rent, for all consumption of electricity in the Demised Premises based on such readings.  Such payment shall be based on the same charges paid by Landlord for other electricity consumed in the Building (i.e., at the rates charged for such service by the local public utility company).

 

(e)                                  Excessive Heat Generation.  Landlord shall not be liable for its failure to maintain comfortable atmospheric conditions in all or any portion of the Demised Premises, due to heat generated by any equipment or machinery installed by Tenant (with or without Landlord’s consent) that exceeds generally-accepted engineering design practices for normal office purposes.  If Tenant desires additional cooling to offset excessive heat generated by such equipment or machinery, Tenant shall pay for auxiliary cooling equipment and its operating costs, including without limitation electricity, gas, oil and water, or for excess electrical consumption by the existing cooling system, as appropriate.

 

(f)                                   Security.  In the event that Landlord, in the exercise of its sole and absolute discretion, elects to provide any security measures, such security measures: (i) shall be for protection of the Building only; and (ii) shall not be relied upon by Tenant to protect Tenant, its property, its employees or their property.

 

(g)                                  Occupant Density.  Tenant acknowledges that the Building is currently equipped to accommodate a ratio of not more than one occupant for each two hundred fifty (250) square feet of rentable area in the Demised Premises.  For purposes of this Section, “Occupants” shall include employees, visitors, contractors and other people that visit the Demised Premises but shall not include people not employed by Tenant that deliver or pick up mail or other packages at the Demised Premises, employees of Landlord or employees of Landlord’s agents or contractors.  In the event Tenant exceeds such density ratio in connection with its use of the Demised Premises, however, Tenant understands and acknowledges that Tenant, and not Landlord, shall be solely responsible for any discomfort or inconvenience experienced by Tenant and its Occupants in connection with such use or for any additional wear and tear on the Demised Premises and the common areas, or any additional use of electricity, water and other utilities, and additional demand by Tenant for other Building services resulting from exceeding such density ratio.  To the extent that Tenant’s use of the Demised Premises exceeds such density ratio, the cost to (i) supply additional services and utilities to the Demised Premises, (ii) install additional systems and equipment to the Premises, and (iii) repair wear and tear to the Demised Premises and the common areas occasioned by such usage shall be borne by Tenant solely.

 

11.                               Maintenance and Repairs.

 

(a)                                 Landlord’s Obligations.  Landlord shall make structural repairs to the Demised Premises necessary for safety and tenantability, and shall maintain and repair all Building equipment serving the Demised Premises, and the cost of all such repairs or maintenance shall be

 

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included in Building operating expenses to the extent permitted in Section 4 above.  Tenant agrees to report immediately in writing to Landlord any defective condition in or about the Demised Premises known to Tenant which Landlord is required to repair, and a failure to so report shall make Tenant liable to Landlord for any expense, damage or liability resulting from such defects.  If Landlord sells a portion, but not all, of the Project, then Landlord and the successor landlord will enter into an agreement which allocates which party is responsible for the landlord’s maintenance obligations under this Lease with respect to each building in the Project.

 

(b)                                 Tenant’s Obligations.  Tenant will keep the Demised Premises and the fixtures and equipment therein in good order and in a safe, neat and clean condition, will take good care thereof and will suffer no waste or damage thereto.  Tenant shall cause the Demised Premises to be cleaned (by Tenant’s employees or a cleaning contractor) at least five (5) days per week.  All repairs and maintenance required to be performed by Tenant shall be made or performed immediately upon the occurrence of the necessity therefor, and shall be made or performed in a first class manner, using first class materials, by a contractor reasonably approved by Landlord and bondable unless waived by Landlord, and shall be made or performed in accordance with (i) all laws and all applicable governmental codes and requirements, and (ii) insurance requirements.  Maintenance and repair of equipment such as kitchen fixtures, auxiliary air-conditioning equipment, private bathroom fixtures and any other type of special equipment, together with related plumbing or electrical services, whether installed by Tenant or by Landlord on behalf of Tenant, shall be the sole responsibility of Tenant, and Landlord shall have no obligation in connection therewith.  Tenant shall be responsible for the replacement of all light bulbs and tubes in the Demised Premises.  If Tenant refuses or neglects to promptly commence and complete repairs or maintenance necessary to satisfy the provisions of this Section, the Landlord may, but shall not be required to, make and complete said repairs or maintenance and Tenant shall pay the cost therefor (including overhead) to Landlord upon demand, as Additional Rent.

 

(c)                                  ADA Notification.  Within ten (10) days after receipt, Tenant shall advise Landlord in writing, and provide copies of (as applicable) any notices alleging violation of the ADA relating to any portion of the Building or of the Demised Premises, any claims made or threatened in writing regarding noncompliance with the ADA and relating to any portion of the Building or of the Demised Premises, or any governmental or regulatory actions or investigations instituted or threatened regarding noncompliance with the ADA and relating to any portion of the Building or of the Demised Premises.

 

12.                               Alterations.

 

(a)                                 Landlord’s Consent.  Tenant will not make any alterations, installations, changes, replacements, additions or improvements, structural or otherwise (collectively, “Alterations”) in or to the Demised Premises or any part thereof, without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed.  Notwithstanding the foregoing, Tenant shall have the right, after providing at least ten (10) days prior written notice to Landlord, but without the necessity of obtaining Landlord’s consent, to make non-structural Alterations in and to the Demised Premises which (1) do not exceed the capacity of, hinder the effectiveness of, interfere with the electrical, mechanical, heating, ventilating, air conditioning, or plumbing systems of the Demised Premises or the Building or which will be connected to any of such systems, (2) are not visible from outside of the Demised

 

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Premises, (3) do not require the issuance of a building permit, and (4) do not cost (when aggregated with all other Alterations made during the previous twelve (12) months) more than One Hundred Thousand Dollars ($100,000).  All Alterations made to, or installed by or for Tenant in, the Demised Premises shall be and remain Landlord’s property (excluding Tenant’s furniture, personal property and moveable trade fixtures) and shall not be removed without Landlord’s written consent.  Any construction up-gradings required by any governmental authority as a result of said Alterations, either in the Demised Premises or in any other part of the Building, will be paid for by Tenant.  Tenant shall not install any equipment of any nature whatsoever which may affect the insurance rating of the Building, the structure of the Building, or which may necessitate any changes, replacements or additions to the water system, plumbing system, heating system, air-conditioning system or the electrical system of the Demised Premises, without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed.  In the event that Landlord grants its consent thereto, Tenant shall pay all costs to make such changes, replacements or additions.  Any approved Alterations shall be made by licensed and bonded contractors and mechanics approved by Landlord, in accordance with (i) the applicable laws and ordinances of any public authority having jurisdiction over the Building, (ii) the building code and zoning regulations of any such authority, (iii) plans and specifications that have been approved by Landlord in writing, and (iv) any rules and regulations established from time to time by the Underwriters Association of the local area.  All plans and drawings (and changes thereto) with respect to Alterations shall be subject to Landlord’s written approval.  Such approval shall not constitute either (a) approval of any delay caused by Tenant or a waiver of any right or remedy that may arise as a result of such delay, or (b) Landlord’s representation that such approved plans, drawings or changes comply with all Laws.  Except for any plans or drawings which Landlord engages a third party to review, Landlord shall approve or provide Tenant with written comments within ten (10) business days after Landlord’s receipt of the same.  In the event that Landlord fails to respond to Tenant’s request for approval by the expiration of the ten (10) business day period (or such reasonably longer period of time in the event Landlord engages a third party to review such plans and drawings), Tenant shall have the right to submit a second (2nd) written notice to Landlord which notice shall indicate in bold and conspicuous print as follows, that “LANDLORD’S FAILURE TO RESPOND TO TENANT’S REQUEST FOR LANDLORD’S APPROVAL OF THE PLANS AND DRAWINGS WITHIN TEN (10) BUSINESS DAYS AFTER LANDLORD’S RECEIPT OF THIS SECOND (2ND) NOTICE, SHALL RESULT IN LANDLORD’S DEEMED APPROVAL OF THE PLANS AND DRAWINGS.”  If Landlord fails to respond to such second (2nd) written notice within such ten (10) business day period, then Landlord’s approval of the plans and drawings shall be deemed granted.  Any deficiency in design or construction, although same had prior approval of Landlord, shall be solely the responsibility of Tenant.  All materials and equipment furnished by Tenant shall be new or like new and all work shall be done in a first class workmanlike manner.  Prior to commencing construction of any approved Alterations, Tenant shall obtain any necessary building permits and shall deliver copies of such permits to Landlord.  Tenant shall pay to Landlord, upon ten (10) business days’ notice, as Additional Rent, (i) a fee to cover Landlord’s administrative and out-of-pocket costs of reviewing the proposed Alterations, and (ii) a fee to cover Landlord’s administrative and out-of-pocket costs of supervising the performance of any Alterations (the “Alteration Supervisory Fee”) equal to one percent (1%) of the total cost of such Alterations.  Notwithstanding anything to the contrary, Landlord shall not charge an Alteration Supervisory Fee in connection with the first $1,000,000 worth of Alterations made by Tenant during the Lease Term.

 

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(b)                                 Liens.  In making any approved Alterations, Tenant shall promptly pay all contractors, materialmen and laborers, so as to minimize the possibility of a lien attaching to the Building, or attaching to any portion of the real property on which said Building is located.  Should any such lien be filed, Tenant shall bond against or discharge the same within ten (10) days after the said filing.  If Tenant shall fail to bond against or discharge any such lien within such ten (10)-day period, then Landlord may, at its option, discharge such lien at Tenant’s expense in which event Tenant shall reimburse Landlord for all costs (including legal expenses) of discharging such lien upon demand, as Additional Rent.

 

(c)                                  Indemnification.  Tenant will defend, indemnify and hold Landlord harmless from and against any and all expenses, liens, claims or damages, including attorneys’ fees, for injury to person or property which may or might arise, directly or indirectly, by reason of the making of any Alterations.  If any Alteration is effected without the prior written consent of Landlord, Landlord may remove or correct the same and Tenant shall be liable for any and all expenses of this work.  All rights given to Landlord herein shall be in addition to any other right or remedy of Landlord contained in this Lease.

 

13.                               Signs and Advertisements.

 

(a)                                 Signage.  No sign, advertisement or notice shall be inscribed, painted, affixed or displayed on any part of the outside or the inside of the Building, or inside of the Demised Premises where it may be visible from outside or from the public areas of the Building, except with Landlord’s prior written consent and then only in such location, number, size, color and style (i.e., Building standard lettering) as is authorized by Landlord.  If any such sign, advertisement or notice is exhibited without first obtaining Landlord’s written consent, Landlord shall have the right to remove same, and Tenant shall be liable for any and all expenses incurred by Landlord in connection with said removal.

 

(b)                                 9717 Building.  Landlord, at its expense, shall provide Tenant with (i) one listing on the 9717 Building’s directory, and (ii) a building standard suite entry sign on each of the exterior entrance doors to the Demised Premises at the 9717 Building.  In addition, Tenant, at Tenant’s expense, subject to Landlord’s prior written approval and all applicable “Governmental Laws” (hereinafter defined), shall be entitled to signage at the 9717 Building which is commensurate with the signage rights granted to similar tenants who occupy two of three floors in a single building in the vicinity of the 9717 Building, which shall include the non-exclusive right to erect and maintain its company name on a sign to be located on the exterior of the 9717 Building (the “9717 Exterior Sign”).  Notwithstanding anything to the contrary, the parties understand and agree that any first floor tenant of the 9717 Building shall be entitled to exterior signage on the 9717 Building (but not on the top of the 9717 Building).

 

(c)                                  9715 Building.  Subject to Landlord’s prior written approval and all applicable Governmental Laws, Tenant, at Tenant’s sole cost and expense, shall be entitled to signage at the 9715 Building which is commensurate with the signage rights granted to similar tenants who occupy an entire building in the vicinity of the 9715 Building, which shall include the non-exclusive right to erect and maintain its company name on a sign to be located on the exterior of the 9715 Building (the “9715 Exterior Sign”).

 

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(d)    Exterior Signage.  The 9717 Exterior Sign and the 9715 Exterior Sign are hereinafter referred to collectively as the “Exterior Sign”.  Tenant, at its sole cost and expense, shall obtain all governmental approvals, licenses and waivers that are needed in connection with the Exterior Sign.  The size, location, color, design, method of installation, and method of illumination (if applicable) of the Exterior Sign shall be subject to:  (i) Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed, and (ii) all applicable governmental rules, codes, orders, laws, and statutes (collectively, the “Governmental Laws”).  The sign contractor who installs the Exterior Sign shall be subject to Landlord’s prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed.  Tenant, at Tenant’s sole cost and expense, shall maintain the Exterior Sign in a first-class manner in accordance with the Governmental Laws.  Upon the expiration of the Lease Term or the sooner termination thereof, Tenant, at its sole cost and expense, shall remove the Exterior Sign and shall restore the affected areas of the 9717 Building and the 9715 Building (as applicable) to the condition that existed prior to the erection of the Exterior Sign.  Notwithstanding anything herein to the contrary (x) except for a Corporate Transfer, the right to erect and maintain the Exterior Sign shall be personal to Supernus Pharmaceuticals, Inc., (y) except for a Corporate Transfer, Supernus Pharmaceuticals, Inc., shall have no right to permit any other party to put its name on the Exterior Sign, and (z) no sublessee, assignee or other transferee of Supernus Pharmaceuticals, Inc. shall have the right to erect the Exterior Sign, unless such party either subleases the entire Demised Premises, or the entire Lease is assigned to such party.

 

14.                               Common Areas.

 

(a)                                 Common Areas Defined.  In this Lease, “common areas” means all areas, facilities and improvements provided, from time to time, in the Building for the mutual convenience and use of tenants or other occupants of the Building, their respective agents, employees, and invitees and shall include, if provided, but shall not be limited to, the lobbies and hallways, the public restrooms, the parking areas and facilities, access roads, driveways, retaining walls, sidewalks, walkways, landscaped areas, and exterior lighting facilities.

 

(b)                                 Landlord’s Control.  Landlord shall, as between Landlord and Tenant, at all times during the term of the Lease have the sole and exclusive control, management and direction of the common areas, and may at any time and from time to time during the term exclude and restrain any person from use or occupancy thereof, excepting, however, Tenant and other tenants of Landlord and bona fide invitees of either who make use of said areas in accordance with the rules and regulations established by Landlord from time to time with respect thereto.  If Landlord elects to modify the common areas, Landlord will notify Tenant in advance and the parties shall meet to discuss such modifications, and Landlord shall not make such modifications without the prior approval of Tenant, which approval shall not be unreasonably withheld, conditioned, or delayed by Tenant (it being acknowledged and agreed that if Landlord’s proposed modifications are consistent with modifications then being made in comparable office, research, and/or lab buildings in the vicinity of the Project, then such modifications shall be deemed reasonable and Tenant shall not object to same).  The rights of Tenant in and to the common areas shall at all times be subject to the rights of others to use the same in common with Tenant, and it shall be the duty of Tenant to keep all of said areas free and clear of any obstructions created or permitted by Tenant or resulting from Tenant’s operation.  Landlord may at any time and from time to time close all or any portion of the common areas to make repairs or changes or to such extent as may, in the

 

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opinion of Landlord, be necessary to prevent a dedication thereof or the accrual of any rights to any person or to the public therein, to close temporarily any or all portions of the said areas to discourage non-customer parking, and to do and perform such other acts in and to said areas as, in the exercise of good business judgment, Landlord shall determine to be advisable with a view to the improvement of the convenience and use thereof by tenants, their employees, agents, and invitees.

 

(c)                                  Changes and Additions.  Landlord reserves the right at any time and from time to time, as often as Landlord deems desirable, without the same constituting an actual or constructive eviction and without incurring any liability to Tenant or otherwise affecting Tenant’s obligations under this Lease, to make changes, alterations, additions, improvements, repairs, relocations or replacements in or to the Building and the fixtures and equipment thereof, as well as in or to the street entrances, halls, passages, stairways and other common facilities thereof, and to change the name by which the Building is commonly known and/or the Building’s address.  Landlord reserves the right from time to time to install, use, maintain, repair and replace pipes, ducts, conduits, wires and appurtenant meters and equipment for service to other parts of the Building, above the ceiling surfaces, below the floor surfaces, within the walls and in the central core areas, and to relocate any pipes, ducts, conduits, wires and appurtenant meters and equipment included in the Demised Premises which are located in the Demised Premises or located elsewhere outside the Demised Premises, and to expand and/or build additional stories on the Building.  Landlord further reserves the right at any time to alter, expand or reduce the parking facilities (provided Landlord will not substantially reduce the parking facilities) and to change the means of ingress thereto and egress therefrom.  Nothing contained herein shall be deemed to relieve Tenant of any duty, obligation or liability with respect to making any repair, replacement or improvement or complying with any law, order or requirement of any government or other authority and nothing contained herein shall be deemed or construed to impose upon Landlord any obligation, responsibility or liability whatsoever, for the care, supervision or repair of the Building, or any part thereof, other than as expressly provided in this Lease.

 

15.                               Parking.

 

(a)                                 Parking Rights.  Landlord shall provide, or shall cause any garage operator to provide, during the term of this Lease, to Tenant a non-exclusive license for the use of up to 4.2 parking contracts for every one thousand (1,000) square feet of rentable area of the Demised Premises (the “Parking Rights”) in the surface parking lot and/or parking structure serving the Building (the “Parking Facilities”).  Except for the “Reserved Spaces” (as defined below), Parking Rights shall (i) be unassigned, and (ii) be on a self-park or attendant parking basis (or a combination thereof), as determined by Landlord.  Landlord reserves the right to institute a valet parking system, a parking access control system (e.g., utilizing barrier gates), a parking permit system (e.g., which requires the use and display of parking permits), or to otherwise change the parking system.  If Landlord elects to modify the parking system, Landlord will notify Tenant in advance and the parties shall meet to discuss such modifications, and Landlord shall not make such modifications without the prior approval of Tenant, which approval shall not be unreasonably withheld, conditioned, or delayed by Tenant (it being acknowledged and agreed that if Landlord’s proposed modifications are consistent with modifications then being made in comparable office, research, and/or lab buildings in the vicinity of the Project, then such modifications shall be deemed reasonable and Tenant shall not object to same).  Despite the foregoing, twenty (20) of

 

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Tenant’s Parking Rights shall be for reserved parking spaces located in the garage (i.e., the reserved parking permits are part of Tenant’s allocation of Parking Rights, and not in addition thereto), the location of which shall be mutually acceptable to Tenant and Landlord.  In addition, Landlord reserves the right to designate reserved parking areas at the Building which may be used exclusively by Tenant or other tenants of the Building.  Tenant shall at all times abide by all rules and regulations governing the use of the Parking Facilities.   The Parking Rights shall be free of charge to Tenant throughout the Lease Term and any renewal thereof.

 

16.                               Surrender and Inspection.

 

(a)                                 Surrender.  Upon the Expiration Date or other termination of the term of this Lease, Tenant shall quit and surrender the Demised Premises to the Landlord in as good order and condition as when received, ordinary wear and tear excepted, and Tenant shall remove all of its property from the Demised Premises by the Expiration Date or other termination of this Lease.  Tenant’s obligation to observe or perform this covenant shall survive for six (6) months after the expiration or other termination of this Lease.

 

(b)                                 Inspection.  Tenant shall have the right to be present at time of final inspection of the Demised Premises to determine if any damages were done thereto, if Tenant notifies Landlord by certified mail of its intention to move, date of moving and new address.  The notice of Tenant’s desire to be present at the final inspection of the Demised Premises shall be given at least fifteen (15) days prior to the date of moving.  Upon receipt of such notice, Landlord shall notify Tenant of time and date when the Demised Premises are to be inspected.  The inspection shall occur within five (5) days before or five (5) days after Tenant’s date of moving, said inspection date to be designated by Landlord.  Tenant shall be deemed to have been advised of its rights under this Section by execution of this Lease.

 

(c)                                  Alterations.  Tenant shall have the right to remove all trade fixtures, case work, and built in freezers, and refrigerators, provided that Tenant restores the affected areas of the Demised Premises to the condition that existed before such removal.  All Alterations, including without limitation wall-to-wall carpet, blinds, draperies and drapery accessories, to or within the Demised Premises (whether made with or without Landlord’s consent), shall remain upon the Demised Premises and be surrendered with the Demised Premises at the expiration of the Lease Term without disturbance, molestation or injury, unless otherwise specified by Landlord.  Should Landlord elect that any Alterations made by Tenant upon the Demised Premises be removed upon the expiration of the Lease Term, Tenant agrees that Landlord shall have the right to cause same to be removed at Tenant’s sole cost and expense.  Tenant agrees to reimburse Landlord for the cost of (i) such removal, (ii) repairing any damage resulting therefrom or from the installation or use of such Alterations, and (iii) restoring the Demised Premises to its condition at the commencement of the Lease Term as initially improved by Landlord, ordinary wear and tear excepted.

 

(d)                                 Fixtures and Personal Property Remaining.  If Tenant does not remove Tenant’s furniture, equipment, machinery, trade fixtures, floor coverings and all other items of personal property of every kind and description from the Demised Premises prior to the Expiration Date, then Tenant shall be conclusively presumed to have conveyed the same to Landlord under this Lease as a bill of sale without further payment or credit by Landlord to Tenant.

 

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(e)                                  Removal of Alterations.  In the event that Tenant desires to know whether Landlord will require Tenant to remove any Alterations from the Demised Premises at the expiration of the Lease Term, then, at the time Tenant delivers a written request to Landlord which requests Landlord’s approval of such Alterations, Tenant shall have the right to deliver to Landlord a notice which specifically requests that Landlord advise Tenant whether Landlord will require Tenant to remove such proposed Alterations at the expiration of the Lease Term.  In the event that Landlord receives such a written request, and in the event that Landlord is willing to grant its consent to such Alterations, Landlord shall advise Tenant, in writing, at the time the Alterations are approved, whether or not Tenant will be required to remove the same at the expiration of the Lease Term.

 

17.                               Access.

 

(a)                                 Access to Building.  Tenant shall have access to the Building twenty-four (24) hours per day, seven (7) days per week, by means of a key or an electronic controlled access system for the perimeter of the Building provided by Landlord.  Landlord shall provide three hundred (300) fobs/access cards for Tenant’s initial occupancy.  Additional keys or controlled access cards required by Tenant for any reason will be provided upon Tenant’s payment of a fee as determined by Landlord.

 

(b)                                 Landlord’s Access to Demised Premises.  Landlord, its agents, employees and contractors shall have the right to enter the Demised Premises at all reasonable times upon at least twenty-four (24) hours’ prior notice (except no notice shall be required in the event of an emergency) (a) to make inspections or to make repairs to the Demised Premises or other premises as Landlord may deem necessary; (b) to exhibit the Demised Premises to prospective tenants during the last twelve (12) months of the Lease Term; and (c) for any purpose whatsoever relating to the safety, protection or preservation of the Building.  Landlord shall use reasonable efforts to minimize interference to Tenant’s business when making repairs, but Landlord shall not be required to perform the repairs at any time other than during normal working hours.  In connection with any such entry, Landlord and its agents shall be accompanied by a representative of Tenant (except in cases of emergency or in cases where Tenant fails to identify and make available such representative on the date of such entry).  Except in cases of emergency, any entry by Landlord into the Demised Premises shall be subject to Tenant’s reasonable security regulations.

 

(c)                                  Restricted Access.  The parties acknowledge that there is a mechanical room located within a portion of the Demised Premises in the 9715 Building which serves the Project (the “Mechanical Room”).  Landlord’s engineer must have access to the Mechanical Room at all times.  Accordingly, no additional locks, other devices or systems, including without limitation alarm systems, shall be placed upon any door to the Mechanical Room.

 

18.                               Liability.

 

(a)                                 Personal Property.  All personal property of Tenant in the Demised Premises or in the Building shall be at the sole risk of Tenant.  Landlord and its agents shall not be liable for any damage thereto.  Landlord and its agents shall not be liable for any accident or damage to property of Tenant resulting from the use or operation of elevators or of the heating, cooling, electrical or plumbing apparatus.  Landlord shall not, in any event, be liable for damages

 

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to property resulting from water, steam or other causes.  Tenant hereby expressly releases Landlord and its agents from any liability incurred or claimed by reason of damage to Tenant’s property.  Landlord and its agents shall not be liable in damages, nor shall this Lease be affected, for conditions arising or resulting, and which affect the Building, due to construction on contiguous premises.

 

(b)                                 Tenant’s Liability.  Subject to Section 19(f) below, any and all injury, breakage or damage of any type whatsoever to the Demised Premises shall be repaired by Tenant.  Tenant shall reimburse Landlord for all expenses, damages or fines, incurred or suffered by Landlord by reason of any breach, violation or nonperformance by Tenant, or its agents, servants, or employees, of any covenant or provision of this Lease or the Rules and Regulations promulgated by Landlord hereunder from time to time, or by reason of damage to persons or property caused by moving property of or for Tenant in or out of the Building, or by the installation or removal of furniture or other property of or for Tenant, or by reason of or arising out of the carelessness, negligence or improper conduct of Tenant, or its agents, servants, employees, invitees or licensees.

 

(c)                                  Criminal Acts of Third Parties.  Landlord shall not be liable in any manner to Tenant, its agents, employees, licensees or invitees for any injury or damage to Tenant, Tenant’s agents, employees, licensees or invitees or their property caused by the criminal or intentional misconduct of third parties.  All claims against Landlord for any such damage or injury are hereby expressly waived by Tenant, and Tenant hereby agrees to hold harmless and indemnify Landlord from all such damages and the expense of defending all claims made by Tenant’s agents, contractors, employees, licensees or invitees arising out of such acts.

 

(d)                                 Indemnity.

 

(i)                                     Subject to Section 19(f) below, and excluding any negligence or willful misconduct by Landlord, or its agents and employees, Tenant shall indemnify Landlord, Landlord’s Rental Agent, and their respective agents and employees and save them harmless from and against any and all claims, actions, damages, liabilities and expense in connection with loss of life, personal injury and/or damage to property arising from or out of any occurrence in, upon or at the Demised Premises, or the occupancy or use by Tenant of the Demised Premises or any part thereof, or occasioned wholly or in part by any act or omission of the Tenant, its agents, contractors, employees, invitees or licensees.  In the event that Landlord, Landlord’s Rental Agent, or their respective agents or employees shall, without fault on its or their part, be made a party to any litigation commenced by or against Tenant, then Tenant shall protect and hold the same harmless and shall pay all costs, expenses and reasonable attorneys’ fees incurred or paid in connection with such litigation.

 

(ii)                                  Subject to Section 19(f) below, and excluding any negligence or willful misconduct by Tenant, or its agents and employees, Landlord shall indemnify Tenant, its agents and employees and save them harmless from and against all claims, actions, damages, liabilities and expenses in connection with loss of life and/or personal injury occasioned wholly or in part by any negligence or willful misconduct of Landlord, its agents, employees, contractors, invitees or licensees.  In the event that Tenant, its agents or employees shall, without fault on its or their part, be made a party to any litigation commenced by or against Landlord, then Landlord

 

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shall protect and hold the same harmless and shall pay all costs, expenses, and reasonable attorneys’ fees incurred or paid in connection with such litigation.

 

(e)                                  Survival.  The provisions of Section 18 shall survive the expiration or sooner termination of this Lease for a period of three (3) years.

 

19.                               Insurance.

 

(a)                                 Insurance Rating.  Tenant will not conduct or permit to be conducted any activity, or place any equipment or property in or around the Demised Premises, that will increase in any way the rate of fire insurance or other insurance on the Building, unless consented to by Landlord in writing.  Landlord’s consent may be conditioned upon Tenant’s payment of any costs arising directly or indirectly from such increase.  If any increase in the rate of fire insurance or other insurance on the Building is stated by any insurance company or by the applicable Insurance Rating Bureau to be due to Tenant’s activity, equipment or property in or around the Demised Premises, said statement shall be conclusive evidence that the increase in such rate is due to such activity, equipment or property, and Tenant shall be liable for such increase.  Any such rate increase and related costs incurred by Landlord shall be deemed Additional Rent, due and payable by Tenant to Landlord upon receipt by Tenant of a written statement of the rate increase and costs.

 

(b)                                 Coverages.  Tenant shall have issued, pay the premiums therefor, and maintain in full force and effect during the Lease Term:

 

(i)                                     Commercial General Liability.  A commercial general liability insurance policy or policies protecting the Landlord and Tenant in the amount of (x) Three Million and No/100 Dollars ($3,000,000.00) combined, single limit coverage for bodily injury, personal injury and property damage, which amount may be increased from time to time by the Landlord in its reasonable determination, (y) Five Hundred Thousand and 00/100 Dollars ($500,000.00) fire legal liability coverage, which amount may be increased from time to time by Landlord in its reasonable discretion, and (z) a Ten Million and 00/100 Dollars ($10,000,000.00) umbrella liability policy;

 

(ii)                                  Special Form Property.  Special form property insurance, including theft, vandalism and malicious mischief, written at replacement cost value and with replacement cost endorsement, covering all leasehold improvements installed in the Demised Premises by Tenant or at Tenant’s request and all of Tenant’s personal property in the Demised Premises (including, without limitation, inventory, trade fixtures, floor coverings, furniture and other property removable by Tenant under the provisions of this Lease) and business interruption insurance for a minimum of twelve (12) months’ worth of Base Monthly Rent and Additional Rent;

 

(iii)                               Workers’ Compensation.  Workers’ compensation in the amount of state statutory limits and employer’s liability in the amount of One Million and No/100 Dollars;

 

(iv)                              Automobile.  A commercial automobile liability insurance policy in the amount of Three Million and No/100 Dollars combined single limit coverage for bodily injury or property damage (such limit of insurance may be satisfied through the evidence of Umbrella/Excess Liability in support); and

 

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(v)                                 Additional Insurance.  Such additional insurance as any mortgagee of the Building may require.

 

(c)                                  Policy Requirements.  All insurance required of Tenant under this Lease shall be issued by insurance companies authorized to do business in the jurisdiction where the Building is located.  Such companies shall have a policyholder rating of at least “A” and be assigned a financial size category of at least “Class XIV” as rated in most recent edition of “Best’s Key Rating Guide” for insurance companies.  The insurance required of Tenant under Section 19(a)(i) hereof shall insure performance by Tenant of the indemnity provisions of Section 18 hereof and shall contain an assumed contractual liability endorsement that refers expressly to this Lease.  All insurance required of Tenant under this Lease shall:  (i) be written as primary policy coverage and non-contributing with respect to any coverage which Landlord may carry (it being understood and agreed that any insurance that Landlord may carry shall be excess insurance); (ii) name Landlord, Landlord’s Rental Agent and any mortgagee of the Building as additional insureds, as their respective interests may appear (except with respect to workers’ compensation insurance), and (iii) contain an endorsement for severability of interests.  If available, each policy shall contain an endorsement requiring thirty (30) days’ written notice from the insurance company to Landlord before cancellation or any change in the coverage, scope or amount of any policy, if such endorsement is not available, then Tenant shall notify Landlord immediately upon becoming aware of any cancellation or any change in the coverage, scope or amount of any policy.  Each policy, or a certificate showing it is in effect, together with evidence of payment of premiums, shall be deposited with Landlord at the commencement of the Lease Term, and renewal certificates shall be delivered to Landlord at least ten (10) days prior to the expiration date of any policy.

 

(d)                                 No Limitation of Liability.  Neither the issuance of any insurance policy required under this Lease nor the minimum limits specified herein shall be deemed to limit or restrict in any way Tenant’s liability arising under or out of this Lease.

 

(e)                                  Notice of Fire and Accident.  Tenant shall give Landlord immediate notice in case of fire, theft, or accidents in the Demised Premises, and in case of fire, theft or accidents in the Building if involving Tenant, its agents, employees or invitees.

 

(f)                                   Waiver of Subrogation.  Landlord and Tenant mutually covenant and agree that each party, in connection with any all-risk property insurance policies required to be furnished in accordance with the terms and conditions of this Lease, or in connection with any all-risk property insurance policies which they obtain insuring such insurable interest as Landlord or Tenant may have in its own properties, whether personal or real, shall expressly waive any right of subrogation on the part of the insurer against the Landlord (and any mortgagee requested by Landlord) or Tenant as the same may be applicable, which right to the extent not prohibited or violative of any such policy is hereby expressly waived, and Landlord and Tenant each mutually waive all right of recovery against each other, their agents, or employees for any loss, damage or injury of any nature whatsoever to property for which either party is required by this Lease to carry insurance.

 

(g)                                  Landlord’s Insurance.  Landlord agrees that it will keep the 9715 Building and the 9717 Building insured against loss due to fire and other property risks included in standard

 

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special causes of loss form insurance policies in the amount of the full replacement cost thereof (excluding foundations and footers).

 

20.                               Damage by Casualty.

 

(a)                                 Damage to Demised Premises.  If the Demised Premises shall be damaged by fire or other casualty, then, except as otherwise provided in subparagraphs (b) and (c) hereof, Landlord, at Landlord’s expense, shall promptly restore the Demised Premises, and Tenant, at Tenant’s sole expense, shall promptly restore all leasehold improvements installed in the Demised Premises by Tenant or at Tenant’s request and its own furniture, furnishings, trade fixtures and equipment.  No penalty shall accrue for reasonable delay which may arise by reason of adjustment of insurance on the part of Landlord, or on account of labor problems, or any other cause beyond Landlord’s reasonable control.  If the damage or destruction is such as to make the Demised Premises or any substantial part thereof untenantable (in Landlord’s judgment), and provided that such damage or destruction is not due in whole or part to the act or omission of Tenant or Tenant’s agents, employees or invitees, the Base Annual Rent shall abate proportionately (based on proportion of the number of square feet rendered untenantable to the total number of square feet of the Demised Premises), from the date of the damage or destruction until the date the Demised Premises has been restored by Landlord.

 

(b)                                 Substantial Damage.  If the Demised Premises are substantially damaged or are rendered substantially untenantable by fire or other casualty, or if Landlord’s architect certifies that the Demised Premises cannot be repaired within one hundred eighty (180) working days of normal working hours, said period commencing with the start of the repair work, or if Landlord shall decide not to restore or repair the same, or if more than fifty percent (50%) of the gross leasable area of the Building is rendered untenantable (even if the Demised Premises is undamaged) or if Landlord shall decide to demolish the Building or not to rebuild it, then Landlord may, within ninety (90) days after such fire or other casualty, terminate this Lease by giving Tenant a notice in writing of such decision, and thereupon the term of this Lease shall expire by lapse of time upon the third day after such notice is given, and Tenant shall vacate the Demised Premises and surrender the same to Landlord.  Upon the termination of this Lease under the conditions hereinbefore provided, Tenant’s liability for Base Annual Rent and Additional Rent shall cease as of the day following the casualty.

 

(c)                                  Insurance Proceeds.  The proceeds payable under all casualty insurance policies maintained by Landlord on the Demised Premises shall belong to and be the property of Landlord, and Tenant shall not have any interest in such proceeds.  Tenant agrees to look to Tenant’s casualty insurance policies for the restoration and replacement of all of the improvements installed in the Demised Premises by Tenant or at Tenant’s request and Tenant’s fixtures, equipment and furnishings in the Demised Premises, and in the event of termination of this Lease, for any reason, following any such damage or destruction, Tenant shall promptly assign to Landlord or otherwise pay to Landlord, upon Landlord’s request, the proceeds of said insurance and such other additional funds so that the total amount assigned and/or paid by Tenant to Landlord shall be sufficient to restore (whether or not any such restoration is actually to occur) all improvements, fixtures, equipment and furnishings (excepting only Tenant’s trade fixtures and equipment) existing therein immediately prior to such damage or destruction.  Notwithstanding anything to the contrary in this Section 20 or in any other provision of this Lease, any obligation

 

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(under this Lease or otherwise) of Landlord to restore all or any portion of the Demised Premises shall be subject to Landlord’s receipt of approval of the same by the mortgagee(s) of Landlord (and any other approvals required by applicable laws), as well as receipt from any such mortgagee(s) of such fire and other hazard insurance policy proceeds as may have been assigned to any such mortgagee; it being agreed that if Landlord has not received such approval(s) and proceeds within one hundred and eighty (180) days after any such casualty, then Landlord shall have the option to terminate this Lease, at any time thereafter, upon notice to Tenant.

 

(d)                                 Tenant Termination Right.  In the event the Demised Premises is damaged by fire or other casualty, such damage is not caused by Tenant or by its employees, contractors or agents and such damage is not repaired within two hundred seventy (270) days after the date of the damage, then Tenant shall have the right, exercisable upon written notice to Landlord within ten (10) days after the expiration of such two hundred seventy (270) day period, to terminate this Lease.  In the event that Tenant timely delivers such notice of termination to Landlord, then, unless Landlord, within thirty (30) days after its receipt of such termination notice, delivers the Demised Premises to Tenant in substantially the same condition (excluding Tenant’s fixtures, equipment and furnishings) that existed immediately prior to such damage, then this Lease shall terminate and the parties shall be relieved of all further liability hereunder.  In the event Tenant fails to timely exercise such termination right, Tenant shall be deemed to have irrevocably waived its right to terminate this Lease on account of such damage.

 

21.                               Condemnation.  In the event the whole or a substantial part of the Demised Premises or the Building shall be taken for any public or quasi-public purpose by any lawful power or authority by exercise of the right of appropriation, condemnation or eminent domain, or sold to said authority to prevent such taking (collectively referred to herein as a “taking”), Landlord shall have the right to terminate this Lease effective as of the date possession is required to be surrendered to said authority, and rent shall be apportioned as of that date.  For purposes of this Section, a substantial part of the Demised Premises or the Building shall be considered to have been taken if, in Landlord’s sole opinion, the taking shall render it commercially undesirable for Landlord to permit this Lease to continue or to continue operating the Building.  Tenant shall not assert any claim against Landlord or the taking authority for any compensation arising out of or related to such taking.  In the event of any taking, Landlord shall be entitled to receive the entire amount of any award without deduction for any estate or interest of Tenant and Tenant hereby assigns to Landlord all of Tenant’s rights, title and interest in and to any such award.  If Landlord does not elect to terminate this Lease, the Base Annual Rent and Additional Rent payable by Tenant pursuant to Section 4 shall be adjusted (based on the ratio that the number of square feet of rentable area taken from the Demised Premises bears to the number of rentable square feet in the Demised Premises immediately prior to such taking) as of the date possession is required to be surrendered to said authority.  Nothing contained in this Section shall be deemed to give Landlord any interest in any award made to Tenant for the taking of personal property and fixtures belonging to Tenant, as long as such award is made in addition to and separately stated from any award made to Landlord for the Demised Premises and the Building.  Landlord shall have no obligation to contest any taking.

 

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22.                               Defaults and Remedies.

 

(a)                                 Default.  Each of the following shall be deemed a default by Tenant and a breach of this Lease:

 

(i)                                     A failure by Tenant to pay when due Base Annual Rent or Additional Rent herein reserved, which failure continues for a period of five (5) days after written notice to Tenant;

 

(ii)                                  An assignment of this Lease or subletting of the Demised Premises in violation of Section 9;

 

(iii)                               A failure by Tenant in the performance of any other term, covenant, agreement or condition of this Lease on the part of Tenant to be performed which continues for thirty (30) days after written notice from Landlord, provided, however, if such failure cannot reasonably be cured prior to the expiration of such thirty (30) day period, Tenant shall not be deemed in default if it commences to cure such failure prior to the expiration of such thirty (30) day period and diligently prosecutes such cure to completion.

 

(iv)                              A failure by Tenant in the performance of any obligation under Section 19 hereof;

 

(v)                                 An Event of Bankruptcy as defined in Section 23; or

 

(vi)                              An abandonment of the Demised Premises.

 

Notwithstanding anything to the contrary in Section 22(a)(i) hereof, (x) Landlord shall not be required to give Tenant more than one (1) such notice during any twelve (12) month period, and (y) upon the occurrence of the second (2nd) such failure by Tenant during any such twelve (12) month period, Tenant shall automatically be deemed in default of this Lease.

 

(b)                                 Remedies.  Upon default by Tenant of any of the terms or covenants of this Lease, Landlord shall be entitled to remedy such default as follows:

 

(i)                                     Landlord shall have the right, immediately or at any time thereafter, in accordance with all applicable laws, without further notice to Tenant, to enter the Demised Premises, without terminating this Lease or being guilty of trespass, and do any and all acts as Landlord may deem necessary, proper or convenient to cure such default, for the account and at the expense of Tenant, and Tenant agrees to pay to Landlord as Additional Rent all damage and/or expense incurred by Landlord in so doing.

 

(ii)                                  Landlord shall have the right to enter upon and take possession of the Demised Premises without terminating this Lease, with legal process, and remove Tenant, any occupant and any property therefrom, using such force as may be necessary, without being guilty of trespass and without relinquishing any right of Landlord against Tenant, and, if Landlord elects, relet the Demised Premises on such terms as Landlord deems advisable.

 

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(iii)                               Landlord shall have the right to terminate this Lease and Tenant’s right to possession of the Demised Premises and, with legal process, take possession of the Demised Premises and remove Tenant, any occupant and any property therefrom, using such force as may be necessary, without being guilty of trespass and without relinquishing any right of Landlord against Tenant.

 

(iv)                              Landlord shall be entitled to recover damages from Tenant in an amount equal to the Base Annual Rent and Additional Rent which is due and payable hereunder as of the date of such default, together with the amount herein covenanted to be paid as Base Annual Rent and Additional Rent during the remainder of the term, together with (A) all expenses of any proceedings (including, but not limited to, legal expenses and attorneys’ fees) which may be necessary in order for Landlord to recover possession of the Demised Premises, and (B) the expenses of re-renting of the Demised Premises (including, but not limited to, any commissions paid to any real estate agent, advertising expense and the costs of such alterations, repairs, replacements and decoration or re-decoration as Landlord, in its sole judgment, considers advisable and necessary for the purpose of re-renting the Demised Premises).  Landlord shall in no event be liable in any way whatsoever for failure to re-rent the Demised Premises or, in the event that the Demised Premises are re-rented, for failure to collect the rent thereof under such re-renting.  No act or thing done by Landlord shall be deemed to be an acceptance of a surrender of the Demised Premises, unless Landlord shall execute a written agreement of surrender with Tenant.  Tenant’s liability hereunder shall not be terminated by the execution of a new lease of the Demised Premises by Landlord.  Tenant agrees to pay to Landlord, upon demand, the amount of damages herein provided after the amount of such damages for any month shall have been ascertained; provided, however, that any expenses incurred by Landlord shall be deemed to be a part of the damages for the month in which they were incurred.  Separate actions may be maintained each month or at other times by Landlord against Tenant to recover the damages then due, without waiting until the end of the Lease Term to determine the aggregate amount of such damages.  Tenant hereby expressly waives any and all notices (other than those notices specially outlined in this Lease) to cure or vacate or to quit the Demised Premises provided by current or future law.  TENANT HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS OF REDEMPTION GRANTED BY OR UNDER ANY PRESENT OR FUTURE LAWS IN THE EVENT OF TENANT BEING EVICTED OR BEING DISPOSSESSED FOR ANY CAUSE, OR IN THE EVENT OF LANDLORD OBTAINING POSSESSION OF THE DEMISED PREMISES BY REASON OF THE DEFAULT BY TENANT OF ANY OF THE COVENANTS AND CONDITIONS OF THIS LEASE.  If, under the provisions hereof, applicable summary process shall be served, and a compromise or settlement therefor shall be made, such action shall not be constituted as a waiver by Landlord of any breach of any covenant, condition or agreement herein contained.

 

(c)                                  Right of Landlord to Cure Tenant’s Default.  If Tenant defaults in the making of any payment to any third party, or doing any act required to be made or done by Tenant relating to the Demised Premises, then Landlord may, but shall not be required to, make such payment or do such act.  The amount of any resulting expense or cost to Landlord, including attorneys’ fees, with interest thereon at the Default Rate, accruing from the date paid by Landlord, shall be paid by Tenant to Landlord and shall constitute Additional Rent hereunder, due and payable by Tenant upon receipt of a written statement of costs from Landlord.  The making of such

 

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payment or the doing of such act by Landlord shall not operate to cure Tenant’s default, nor shall it prevent Landlord from the pursuit of any remedy to which Landlord would otherwise be entitled.

 

(d)                                 Intentionally Deleted.

 

(e)                                  Intentionally Deleted.

 

(f)                                   Landlord’s Remedies Cumulative.  All rights and remedies of Landlord herein enumerated shall be cumulative.  In the event of any breach by Tenant of any of the covenants or provisions of this Lease, then, regardless of whether the Lease Term has commenced, this Lease has been terminated, or Landlord has recovered possession of the Demised Premises, Landlord shall have the right of injunction and the right to invoke any remedy allowed at law or in equity, and mention in this Lease of any particular remedy shall not preclude Landlord from any other remedy at law or in equity.

 

(g)                                  Attorneys’ Fees.  Notwithstanding anything to the contrary, in the event of any litigation between Landlord and Tenant in connection with this Lease, each party shall be responsible for its own attorneys’ fees and litigation costs, regardless of the outcome of any such litigation.

 

(h)                                 Mitigation of Damages.

 

(i)                                     Both Landlord and Tenant shall each use commercially reasonable efforts to mitigate any damages resulting from a default of the other party under this Lease.

 

(ii)                                  Landlord’s obligation to mitigate damages after a default by Tenant under this Lease shall be satisfied in full if Landlord undertakes to lease the Demised Premises to another tenant (a “Substitute Tenant”) in accordance with the following criteria:  (a) Landlord shall have no obligation to solicit or entertain negotiations with any other prospective tenants for the Demised Premises until Landlord obtains full and complete possession of the Demised Premises including, without limitation, the final and unappealable legal right to relet the Demised Premises free of any claim of Tenant; (b) Landlord shall not be obligated to lease the Demised Premises to a prospective tenant ahead of other similar available space when there is other similar premises in the Project suitable for that prospective tenant’s use (or soon will be) available (but Landlord will list the Demised Premises and show it, if available, upon request); (c) Landlord shall not be obligated to lease the Demised Premises to a Substitute Tenant for a rental less than the current fair market rental then prevailing for similar office uses in comparable buildings in the same market area as the Building, nor shall Landlord be obligated to enter into a new lease under other terms and conditions that are unacceptable to Landlord under Landlord’s then current leasing policies for comparable space in the Building; (d) Landlord shall not be obligated to enter into a lease with any proposed tenant whose use would:  (1) violate any restriction, covenant or requirement contained in the lease of another tenant of the Building; (2) adversely affect the reputation of the Building; or (3) be incompatible with the operation of the Building as a first class building; (e) Landlord shall not be obligated to enter into a lease with any proposed Substitute Tenant which does not have, in Landlord’s reasonable opinion, sufficient financial resources or operating experience to operate the Demised Premises in a first class manner; (f) Landlord shall not be required to expend any amount of money to alter, remodel or otherwise make the Demised

 

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Premises suitable for use by a proposed Substitute Tenant unless:  (1) Tenant pays any such sum to Landlord in advance of Landlord’s execution of a substitute lease with such tenant (which payment shall not be in lieu of any damages or other sums to which Landlord may be entitled as a result of Tenant’s default under this Lease); or (2) Landlord, in Landlord’s sole discretion, determines that any such expenditure is financially justified in connection with entering into any such substitute lease.

 

(iii)                               Upon compliance with the above criteria regarding the releasing of the Demised Premises after a default by Tenant, Landlord shall be deemed to have fully satisfied Landlord’s obligation to mitigate damages under this Lease and under any law or judicial ruling in effect on the date of this Lease or at the time of Tenant’s default, and Tenant waives and releases, to the fullest extent legally permissible, any right to assert in any action by Landlord to enforce the terms of this Lease, any defense, counterclaim, or rights of setoff or recoupment respecting the mitigation of damages by Landlord, unless and to the extent Landlord maliciously or in bad faith fails to act in accordance with the requirements of this Section 22(h).

 

(iv)                              Tenant’s right to seek damages from Landlord as a result of a default by Landlord under the Lease shall be conditioned on Tenant taking all actions reasonably required, under the circumstances, to minimize any loss or damage to Tenant’s property or business, or to any of Tenant’s officers, employees, agents, invitees, or other third parties that may be caused by any such default of Landlord.

 

23.                               Bankruptcy.

 

(a)                                 The following shall be Events of Bankruptcy under this Lease:  (i) Tenant’s or any guarantor of Tenant’s obligations under this Lease (“Tenant’s Guarantor”) becoming insolvent, as that term is defined in Title 11 of the United States Code (the “Bankruptcy Code”), or under the insolvency laws of any state, district, commonwealth or territory of the United States (the “Insolvency Laws”); (ii) The appointment of a receiver or custodian for any or all of Tenant’s or Tenant’s Guarantor’s property or assets, or the institution of a foreclosure action upon any of Tenant’s or Tenant’s Guarantor’s real or personal property; (iii) The filing of a voluntary petition under the provisions of the Bankruptcy Code or Insolvency Laws; (iv) The filing of an involuntary petition against Tenant or Tenant’s Guarantor as the subject debtor under the Bankruptcy Code or Insolvency Laws, which either (A) is not dismissed within thirty (30) days of filing, or (B) results in the issuance of an order for relief against the debtor; or (v) Tenant’s or Tenant’s Guarantor’s making or consenting to an assignment for the benefit of creditors or a common law composition of creditors.

 

(b)                                 Upon occurrence of an Event of Bankruptcy, Landlord shall have all rights and remedies available to Landlord pursuant to Section 22 and pursuant to the Bankruptcy Code and the Insolvency Laws; provided, however, that while a case in which Tenant is the subject debtor under the Bankruptcy Code is pending, Landlord shall not exercise its rights and remedies pursuant to Section 22 so long as (i) the Bankruptcy Code prohibits the exercise of such rights and remedies, and (ii) Tenant or its Trustee in Bankruptcy (hereinafter referred to as “Trustee”) (A) cures all defaults under this Lease, (B) compensates Landlord for monetary damages incurred as a result of such defaults, including reasonable attorneys’ fees, (C) provides adequate assurance

 

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of future performance on the part of Tenant as debtor in possession or on the part of the assignee tenant; and (D) complies with all other requirements of the Bankruptcy Code.

 

24.                               Lender Requirements.

 

(a)                                 Subordination.  Subject to the provisions of Section 24(f) below, this Lease is subject and subordinate to any first mortgage or first deed of trust (each such mortgage or deed of trust shall hereinafter be referred to as the “First Trust”) which may now or hereafter affect such leases or the real property of which the Demised Premises form a part, and to all renewals, modifications, consolidations, replacements and extensions thereof.  Provided that the beneficiary of the First Trust grants its written consent to any additional subordination of this Lease, this Lease shall be subject and subordinate to all ground or underlying leases and to all other mortgages and/or other deeds of trust which may now or hereafter affect such leases or the real property of which the Demised Premises form a part, and to all renewals, modifications, consolidations, replacements and extensions thereof.  Subject to obtaining the written consent of the beneficiary of the First Trust with respect to subordinating this Lease to the lien of any mortgage, deed of trust or ground lease other than the First Trust, the foregoing subordination provisions shall be self-operative and no further instrument of subordination shall be required.  Tenant agrees to execute and deliver, within five (5) days after Landlord’s written request, such further instrument or instruments confirming this subordination as shall be desired by Landlord or by any ground lessor, mortgagee or proposed mortgagee.  Tenant further agrees that, at the option of the holder of any mortgage or of the trustee under any deed of trust, this Lease may be made superior to said mortgage or first deed of trust by the insertion therein of a declaration that this Lease is superior thereto.

 

(b)                                 Attornment.  Subject to the provisions of Section 24(f) below, in the event any proceedings are brought for the foreclosure of, or in the event of exercise of the power of sale under, any deed of trust to secure debt given by Landlord and covering the Demised Premises, the party secured by any such deed of trust shall have the right to recognize this Lease and, in the event of any foreclosure sale under such deed of trust, this Lease shall continue in full force and effect at the option of the party secured by such deed of trust or the purchaser under any such foreclosure sale.  If such party elects to recognize this Lease, then (x) Tenant shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the owner and landlord under this Lease, and (y) such party, as landlord: (i) shall recognize Tenant’s rights to continue to occupy the Demised Premises and exercise and enjoy all of its rights hereunder, and so long as Tenant complies with the terms and provisions of this Lease; (ii) shall not be bound by payments of Base Annual Rent or Additional Rent more than one (1) month in advance of their due date; (iii) shall have no obligation for the return of any security deposit not actually received by such party; (iv) shall not be bound by any amendment or modification to the Lease to which such party has not consented in writing (excluding amendments specifically contemplated by the terms of this Lease); (v) shall not be subject to any claim, defense or setoff which could be asserted against any predecessor Landlord; and (vi) shall have no liability for any default by any predecessor Landlord.

 

(c)                                  Notice of Default.  Tenant agrees to give any mortgagee(s) and/or trust deed holder(s), by certified or registered mail, postage prepaid, return receipt requested, a copy of any notice of any failure by Landlord to fulfill any of its obligations under this Lease, provided that prior to such notice Tenant has been notified in writing (by way of notice of assignment of rents and leases, or otherwise) of the addresses of such mortgagee(s) and/or trust deed holder(s).  Tenant

 

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further agrees that the mortgagee(s) and/or trust deed holder(s) shall have such time as may be necessary to cure such failure as long as any mortgagee(s) and/or trust deed holder(s) has commenced and is diligently pursuing the remedies necessary to cure such failure (including, but not limited to, time to take possession and/or commence foreclosure proceedings, if necessary, to effect such cure).  Notwithstanding anything herein to the contrary, so long as any mortgagee(s) and/or trust deed holder(s) has commenced and is diligently pursuing the remedies necessary to cure such failure (including, but not limited to, taking possession and/or commencing foreclosure proceedings, if necessary, to effect such cure), Tenant shall have no right to terminate this Lease as a result of any such failure by Landlord.

 

(d)                                 New Financing.  In the event that any trust or mortgage lender providing financing in connection with the Building requires, as a condition of such financing, that modifications to this Lease be obtained, and provided that such modifications (i) are reasonable, (ii) do not adversely affect Tenant’s use of the Demised Premises as herein permitted, (iii) do not materially alter the approved Space Plan for the Demised Premises, and (iv) do not increase the rent and other sums required to be paid by Tenant hereunder, then Landlord may submit to Tenant a written amendment to this Lease incorporating such required modifications, and, Tenant shall execute and return to Landlord such written amendment within seven (7) business days after the same has been submitted to Tenant.

 

(e)                                  Financial Statements.  From time to time at Landlord’s request (not more frequently than once per year, unless required in connection with a sale or refinance), Tenant shall cause the following financial information to be delivered to Landlord, at Tenant’s sole cost and expense, upon not less than ten (10) days’ advance written notice from Landlord:  (a) a current financial statement for Tenant and Tenant’s financial statements for the previous two accounting years, (b) a current financial statement for any guarantor(s) of this Lease and the guarantor’s financial statements for the previous two accounting years and (c) such other financial information pertaining to Tenant or any guarantor as Landlord or any lender or purchaser of Landlord may reasonably request.  All financial statements shall be prepared in the ordinary course of Tenant’s business.  Notwithstanding anything herein to the contrary, for so long as the common stock of Tenant is publicly traded on a nationally recognized stock exchange and Tenant has timely filed its then most recent quarterly statement, Tenant shall not be required to provide Landlord with annual financial statements.

 

(f)                                   Non-Disturbance.  During the term of the Lease, Landlord shall obtain for Tenant a non-disturbance agreement from the holder of any mortgage which currently or in the future encumbers the Building, which non-disturbance agreement shall be on the holder’s then standard form.  In the event that the holder charges Landlord any costs or fees in connection with reviewing the Lease or in preparing or negotiating such non-disturbance agreement, Tenant shall pay to Landlord, upon demand, such costs or fees as Additional Rent.

 

25.                               Estoppel Certificates.  Tenant agrees, at any time and from time to time, upon ten (10) days prior written notice by Landlord, to execute, acknowledge and deliver to Landlord a written estoppel certificate (a) certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, stating the nature of same), (b) stating the Commencement Date and expiration date of the Lease Term, (c) stating the amounts of Base Annual Rent and Additional Rent and the dates to which the Base Annual Rent and Additional Rent have been paid

 

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by Tenant, (d) stating the amount of any Security Deposit, (e) stating whether or not to the best knowledge of Tenant, Landlord is in default in the performance of any covenant, agreement or condition contained in this Lease, and, if so, specifying each such default of which Tenant may have knowledge, (f) stating that Tenant has no right to setoff and no defense against payment of the Base Annual Rent or Additional Rent, (g) stating the address to which notices to Tenant should be sent, and (h) certifying such other matters as may be requested by Landlord.  Landlord agrees to reimburse Tenant for legal fees (not to exceed $3,500.00 on any one occasion) in connection with Tenant’s execution of any required estoppel certificate.  Any such certificate delivered pursuant hereto may be relied upon by an owner of the Building, any prospective purchaser of the Building, any mortgagee or prospective mortgagee of the Building or of Landlord’s interest therein, or any prospective assignee of any such mortgage.  Failure to deliver the aforesaid certificate within the ten (10) days shall be conclusive upon Tenant for the benefit of Landlord and any successor to Landlord that this Lease is in full force and effect and has not been modified except as may be represented by the party requesting the certificate.  Tenant shall be liable for any loss incurred by Landlord resulting from Tenant’s failure to timely execute and deliver any estoppel certificate requested by Landlord, and shall reimburse Landlord for the amount of any such loss upon demand, as Additional Rent.

 

26.                               Tenant Holdover.  In the event that Tenant, without the consent of Landlord, shall hold over the expiration of the term hereby created, then Tenant shall become a tenant of sufferance only, at a monthly rent which for each of the first four (4) months of the holdover shall equal 125% of the Base Monthly Rent applicable to the last month of the Lease Term, which for the fifth (5th) through eighth (8th) months of any such holdover shall equal 150% of the Base Monthly Rent applicable to the last month of the Lease Term, and which for each month of holdover thereafter shall equal 200% of the Base Monthly Rent applicable to the last month of the Lease Term, as well as 100% of Additional Rent due hereunder during each month of holdover, and otherwise subject to the terms, covenants and conditions herein specified.  Tenant expressly agrees to hold Landlord harmless from all loss and damages, direct and consequential, which Landlord may suffer in defense of claims by other parties against Landlord arising out of the holding over by Tenant, including, without limitation, attorneys’ fees which may be incurred by Landlord in defense of such claims.  Acceptance of rent by Landlord subsequent to the expiration of the Lease Term shall not constitute consent to any holding over.  Landlord shall have the right to apply all payment received after the expiration date of this Lease toward payment for use and occupancy of the Demised Premises subsequent to the expiration of the Lease Term and toward any other sums owed by Tenant to Landlord.  Landlord, at its option, may forthwith re-enter and take possession of the Demised Premises without process, or by any legal process in force.

 

27.                               Roof Top Equipment.

 

(a)                                 Subject to the satisfaction of all the conditions in this Section, Tenant shall have the right to install in an area designated by Landlord on the roof of the 9715 Building a satellite dish antenna, together with the cables extending from such antenna to the Premises and/or a supplemental heating, ventilation and air conditioning unit and/or mechanical equipment (collectively, the “Roof Top Equipment”).  Tenant shall not be entitled to install such Roof Top Equipment (i) if such installation would adversely affect (or in a manner that would adversely affect) any warranty with respect to the roof, (ii) (A) if such installation would adversely affect (or in a manner that would adversely affect) the structure or any of the building systems of the

 

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Building, or (B) without Landlord’s prior written consent, if such installation would require (or in a manner that would require) any structural alteration to the Building, (iii) if such installation would violate (or in a manner that would violate) any applicable federal, state or local law, rule or regulation, (iv) unless sufficient room therefor exists at the time of the proposed installation, (v) unless Tenant has obtained at Tenant’s expense, and has submitted to Landlord copies of, all permits and approvals relating to such Roof Top Equipment and such installation, (vi) unless such Roof Top Equipment is white or of a beige or lighter color and is appropriately screened, (vii) unless such Roof Top Equipment is installed, at Tenant’s sole cost and expense, by a qualified contractor chosen by Tenant and approved in advance by Landlord, which approvals shall not be unreasonably withheld, conditioned or delayed, (viii) to the extent that the installation and/or use of said Roof Top Equipment and related equipment would interfere with any existing tenant of the Building’s use of its telecommunication equipment, and (ix) unless Tenant obtains Landlord’s prior consent to the manner in which such installation work is to be done.  All plans and specifications concerning such installation shall be subject to Landlord’s prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed.  All Roof Top Equipment must be mounted clear of the roof (such as to the penthouse walls, concrete columns or steel dunnage) with sufficient structural support for the weight of the equipment and wind loading.  All cables will be neatly run in conduit mounted clear of the roof and all penetrations of the building envelope appropriately weatherproofed with high quality caulking and an escutcheon ring.

 

(b)                                 Tenant shall not have access to any such Roof Top Equipment without Landlord’s prior written consent, which consent shall be granted to the extent necessary for Tenant to perform its maintenance obligations hereunder and only if Tenant is accompanied by Landlord’s representative (if Landlord so requests).

 

(c)                                  At all times during the Lease Term, Tenant shall maintain said Roof Top Equipment in good condition and in a manner that avoids interference with or disruption to Landlord and other tenants of the Building. At the expiration or earlier termination of the Lease Term (or if Tenant discontinues use of such Roof Top Equipment), Tenant, if requested by Landlord, or if Tenant elects to do so, shall remove such Roof Top Equipment and related equipment from the Building, and shall restore all affected areas of the Building to the condition that existed before such Roof Top Equipment was installed.

 

(d)                                 In granting Tenant the right hereunder, Landlord makes no representation as to the legality of such Roof Top Equipment or its installation. If any federal, state, county, regulatory or other authority requires the removal or relocation of such Roof Top Equipment, Tenant shall remove or relocate such Roof Top Equipment at Tenant’s sole cost and expense, and Landlord shall under no circumstances be liable to Tenant therefor.

 

(e)                                  Tenant shall indemnify and hold Landlord harmless from and against all costs, damages, claims, liabilities and expenses (including reasonable attorneys’ fees) suffered by or claimed against Landlord, directly or indirectly, based on, arising out of or resulting from any act or omission with respect to the installation, use, operation, maintenance, repair or disassembly of such Rooftop Equipment.

 

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28.                               Quiet Enjoyment.  Subject to the terms of this Lease, so long as Tenant shall observe and perform all the covenants and agreements binding on it hereunder Tenant shall at all times during the term herein granted, peacefully and quietly have and enjoy possession of the Demised Premises without any encumbrance or hindrance or molestation by Landlord, except as provided for elsewhere under this Lease.

 

29.                               Mechanics Liens.  Tenant will not permit to be created or to remain undischarged any lien, encumbrance or charge (arising out of any work done or materials or supplies furnished, or claimed to have been done or furnished, by any contractor, mechanic, laborer or materialman or any mortgage, conditional sale, security agreement or chattel mortgage, or otherwise by or for Tenant) which might be or become a lien or encumbrance or charge upon the Building or any part thereof or the income therefrom.  Tenant will not suffer any other matter or thing whereby the estate, rights and interests of Landlord in the Building or any part thereof might be impaired.  If any lien, or notice of lien on account of an alleged debt of Tenant or any notice of contract by a party engaged by Tenant or Tenant’s contractor to work on the Demised Premises shall be filed against the Building or any part thereof, Tenant, within ten (10) days after notice of the filing thereof, will cause the same to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or otherwise.  If Tenant shall fail to cause such lien or notice of lien to be discharged within the period aforesaid, then, in addition to any other right or remedy, Landlord may, but shall not be obligated to, discharge the same either by paying the amounts claimed to be due or by procuring the discharge of such lien by deposit or by bonding proceedings and in any such event Landlord shall be entitled, if Landlord so elects, to compel the prosecution of an action for the foreclosure of such lien by the lienor and to pay the amount of the judgment in favor of the lienor with interest, costs and allowances.  Any amount so paid by Landlord and all costs and expenses, including attorneys’ fees, incurred by Landlord in connection therewith, shall constitute Additional Rent payable by Tenant under this Lease and shall be paid by Tenant to Landlord on demand.  Nothing herein contained shall obligate Tenant to pay or discharge any lien created by Landlord.

 

30.                               Time.  Landlord and Tenant acknowledges that time is of the essence in the performance of any and all obligations, terms, and provisions of this Lease.

 

31.                               Postponement of Performance.  In the event that either party hereto shall be delayed or hindered in or prevented from the performance of any act required hereunder by reason of strikes, labor troubles, inability to procure labor or materials, failure of power, restrictive governmental laws or regulations, failure to obtain any permit from any governmental agency in a timely fashion, riots, insurrection, war, acts of God, fire or other casualty or other reason of a similar or dissimilar nature beyond the reasonable control of the party delayed in performing work or doing acts required under the terms of this Lease, then performance of such act shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay.  The provisions of this Section shall not operate to excuse Tenant from the prompt payment of Base Annual Rent or Additional Rent or from surrendering the Demised Premises, and shall not operate to extend the term of this Lease.  Delays or failures to perform resulting from lack of funds shall not be deemed delays beyond the reasonable control of a party.

 

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32.                               Landlord’s Reserved Rights.  The Landlord reserves the following rights:

 

(a)                                 To decorate, remodel, repair, alter or otherwise prepare the Demised Premises for re-occupancy during the last ninety (90) days of the Lease Term, if during or prior to that time Tenant vacates the Demised Premises; and

 

(b)                                 To show the Demised Premises to prospective tenants or brokers during the last three hundred sixty five (365) days of the term of this Lease; and to show the Demised Premises to prospective purchasers at all reasonable times provided that prior notice is given to Tenant in each case and that Tenant’s use and occupancy of the Demised Premises shall not be materially inconvenienced by any such action of Landlord.

 

33.                               No Waiver.  No provision of this Lease shall be deemed to have been waived by Landlord, unless such waiver be in writing signed by Landlord.  No waiver by Landlord of any breach by Tenant of any of the terms, covenants, agreements, or conditions of this Lease shall be deemed to constitute a waiver of any succeeding breach thereof, or a waiver of any breach of any of the other terms, covenants, agreements, and conditions herein contained.  No custom or practice which may occur or develop between the parties in connection with the terms of this Lease shall be construed to waive or lessen Landlord’s right to insist upon strict performance of the terms of this Lease, without a written notice thereof from Landlord to Tenant.  No employee of Landlord or of Landlord’s agents shall have any authority to accept the keys of the Demised Premises prior to termination of the Lease, and the delivery of keys to any employee of Landlord or Landlord’s agents shall not operate as a termination of the Lease or a surrender of the Demised Premises.  The receipt by Landlord of any payment of Base Annual Rent or Additional Rent with knowledge of the breach of any covenant of this Lease shall not be deemed a waiver of such breach.  The failure of Landlord to enforce any of the Rules and Regulations made a part of this Lease, or hereafter adopted, against Tenant or any other tenant in the Building shall not be deemed a waiver of any such Rules and Regulations.

 

34.                               Limitation of Landlord’s Liability.  In consideration of the benefits accruing hereunder, Tenant and all successors and assigns of Tenant covenant and agree that in the event of any actual or alleged failure, breach or default hereunder by Landlord:  (a) the sole and exclusive remedy shall be against the interest of Landlord in the Building; (b) neither Landlord nor (if Landlord is a limited liability company) any member or (if Landlord is a partnership) any partner of Landlord nor (if Landlord is a corporation) any shareholder of Landlord, nor Rental Agent specified in Section 1(a)8 hereof nor (if Rental Agent is a partnership) any member, partner of Rental Agent nor (if Rental Agent is a corporation) any shareholder of Rental Agent shall be personally liable with respect to any claim arising out of or related to this Lease; (c) no partner or shareholder of Landlord nor any member, partner or shareholder of Rental Agent shall be sued or named as a party in any suit or action (except as may be necessary to secure jurisdiction of Landlord); (d) no service of process shall be made against any member, partner or shareholder of Landlord nor against any member, partner or shareholder of Rental Agent (except as may be necessary to secure jurisdiction of Landlord); (e) any judgment granted against any member, partner or shareholder of Landlord or against any member, partner or shareholder of Rental Agent may be vacated and set aside at any time as if such judgment had never been granted; and (f) these covenants and agreements in this Section 34 are enforceable both by Landlord and also by any

 

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member, partner or shareholder of Landlord and by any member, partner or shareholder of Rental Agent.

 

35.                               Transfer of the Building.  In the event of the sale or other transfer of Landlord’s right, title and interest in the Demised Premises or the Building (except in the case of a sale-leaseback financing transaction in which Landlord is the lessee), Landlord shall transfer and assign to such purchaser or transferee all amounts of pre-paid Base Annual Rent.  Tenant shall have no right to terminate this Lease nor to abate Base Annual Rent nor to deduct from, nor set-off, nor counterclaim against Base Annual Rent because of any sale or transfer (including, without limitation, any sale-leaseback) by Landlord or its successors or assigns.  In the event of the transfer and assignment by Landlord of its interest in this Lease, Landlord shall thereby be released from any further responsibility hereunder, and Tenant agrees to look solely to such successor in interest of the Landlord for performance of such obligations.  The term “Landlord” as used in this Lease shall mean the owner of the Building, at the time in question.  In the event of a transfer (whether voluntary or involuntary) by such owner of its interest in the Building, such owner shall thereupon be released and discharged from all covenants and obligations of the Lease thereafter accruing, but such covenants and obligations shall be binding during the Lease Term upon each new owner for the duration of such owner’s ownership.  Upon any sale or other transfer as above provided (other than a sale-leaseback), or upon any assignment of Landlord’s interest herein, it shall be deemed and construed conclusively, without further agreement between the parties, that the purchaser or other transferee or assignee has assumed and agreed to perform the obligations of Landlord thereafter accruing.

 

36.                               Waiver of Counterclaim and Trial by Jury.  LANDLORD AND TENANT WAIVE THEIR RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT’S USE OF OR OCCUPANCY OF THE DEMISED PREMISES, AND ANY EMERGENCY STATUTORY OR ANY OTHER STATUTORY REMEDY.  EXCEPT FOR ANY MANDATORY COUNTERCLAIMS THAT WOULD BE WAIVED IF NOT INTERPOSED BY TENANT, TENANT SHALL NOT INTERPOSE ANY COUNTERCLAIM OR COUNTERCLAIMS OR CLAIMS FOR SET-OFF, RECOUPMENT OR DEDUCTION OF BASE ANNUAL RENT OR ADDITIONAL RENT IN A SUMMARY PROCEEDING FOR NONPAYMENT OF BASE ANNUAL RENT OR ADDITIONAL RENT OR OTHER ACTION OR SUMMARY PROCEEDING BASED ON TERMINATION, HOLDOVER OR OTHER DEFAULT IN WHICH LANDLORD SEEKS REPOSSESSION OF THE DEMISED PREMISES FROM TENANT.

 

37.                               Notices.

 

(a)                                 Addresses for Notices.  All notices required or desired to be given hereunder by either party to the other shall be in writing and be given in person, by reputable overnight carrier which provides receipt of delivery, or by certified or registered mail and addressed as specified in Section 1(a).  Either party may, by like written notice, designate a new address to which such notices shall be directed.

 

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(b)                                 Effective Date of Notice.  Notice shall be deemed to be effective when delivered in person or by Federal Express, or when delivery is refused, or three (3) days after mailing, unless otherwise stipulated herein.

 

38.                               Brokers.  Landlord and Tenant each represents and warrants to the other that it has not employed any broker in connection with this Lease transaction, except the broker named in Section 1(a)(21).  Said broker shall be paid a brokerage commission pursuant to a separate agreement between Landlord and said broker, and Landlord and Tenant each shall indemnify and hold harmless the other from and against any claims for brokerage or other commission arising by reason of a breach by the indemnifying party of the aforesaid representation and warranty.

 

39.                               Intentionally Deleted.

 

40.                               Miscellaneous Provisions.

 

(a)                                 Governing Law.  The laws of the jurisdiction in which the Building is located shall govern the validity, performance and enforcement of this Lease.

 

(b)                                 Successors.  All rights, remedies and liabilities herein given to or imposed upon either of the parties hereto, shall extend to their respective heirs, executors, administrators, successors and assigns.  This provision shall not be deemed to grant Tenant any right to assign this Lease or to sublet the Demised Premises.

 

(c)                                  No Partnership.  Nothing contained in this Lease shall be deemed or construed to create a partnership or joint venture of or between Landlord and Tenant, or to create any other relationship between the parties other than that of Landlord and Tenant.

 

(d)                                 No Representations by Landlord.  Neither Landlord nor any employee or agent of Landlord has made any representations or promises with respect to the Demised Premises or the Building except as herein expressly set forth, and no rights, privileges, easements or licenses are granted to Tenant except as herein expressly set forth.

 

(e)                                  Exhibits.  It is agreed and understood that any Exhibits referred to herein, and attached hereto, form an integral part of this Lease and are hereby incorporated by reference.

 

(f)                                   Pronouns.  Feminine or neuter pronouns shall be substituted for those of the masculine form, and the plural shall be substituted for the singular number, in any place or places herein in which the content may require such substitution or substitutions.  Landlord and Tenant herein for convenience have been referred to in neuter form.

 

(g)                                  Captions.  All section and paragraph captions herein are for the convenience of the parties only, and neither limit nor amplify the provisions of this Lease.

 

(h)                                 Landlord’s Approval.  Whenever Landlord’s consent or approval is required under the terms of this Lease, Landlord may grant or deny such consent or approval in its sole discretion unless otherwise specified herein.

 

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(i)                                     Invalidity of Particular Provisions.  If any term or provision of this Lease or applications thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remaining terms and provisions of this Lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and enforced to the fullest extent permitted by law.

 

(j)                                    Counterparts.  This Lease may be executed in several counterparts, but all counterparts shall constitute one and the same legal document.

 

(k)                                 Entire Agreement; Modification.  This Lease and all Exhibits hereto contain all the agreements and conditions made between the parties and may not be modified orally or in any other manner than by an agreement in writing, signed by the parties hereto.

 

(l)                                     Authority.  Landlord and Tenant hereby covenant each for itself, that it has full right, power and authority to enter into this Lease upon the terms and conditions herein set forth.  If Tenant signs as a corporation, each of the persons executing this Lease on behalf of Tenant does hereby covenant and warrant that Tenant is a duly authorized and existing corporation, qualified to do business in the jurisdiction in which the Demised Premises is located, that the corporation has full right and authority to enter into this Lease, and that each and both of the persons signing on behalf of the corporation were authorized to do so, and that each of the persons signing on behalf of the partnership were authorized to do so.

 

(m)                             Examination of Lease.  Submission of this Lease for examination or signature by Tenant shall not constitute reservation of or option for Lease, and the same shall not be effective as a Lease or otherwise until execution and delivery by both Landlord and Tenant.

 

(n)                                 Lender’s Approval.  This Lease is contingent upon the lender who currently holds the first lien which encumbers the Building approving the Lease.  In the event that such lender does not approve the Lease, Landlord shall have the right to terminate this Lease.  Landlord shall endeavor to obtain such lender’s approval within fifteen (15) business days after the date this Lease is fully executed and delivered.

 

(o)                                 Covenants.  The parties hereto agree that all the provisions of this Lease are to be construed as covenants and agreements as though the words importing such covenants and agreements were used in each separate provision hereof.

 

(p)                                 Interpretation.  Although the printed provisions of this Lease were drawn by Landlord, this Lease shall not be construed for or against Landlord or Tenant, but this Lease shall be interpreted in accordance with the general tenor of the language in an effort to reach the intended result.

 

(q)                                 Confidentiality.  Tenant acknowledges and agrees that the terms of this Lease are confidential and constitute proprietary information of Landlord.  Disclosure of the terms hereof could adversely affect the ability of Landlord to negotiate other leases with respect to the Project and may impair Landlord’s relationship with other tenants of the Project.  Except as required by law, including in connection with any SEC requirements concerning Tenant’s publicly traded status, Tenant agrees that it and its partners, officers, directors, employees, professionals,

 

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brokers, and attorneys, if any, shall not disclose the terms and conditions of this Lease to any other person or entity without the prior written consent of Landlord which may be given or withheld by Landlord, in Landlord’s sole discretion.  It is understood and agreed that damages alone would be an inadequate remedy for the breach of this provision by Tenant, and Landlord shall also have the right to seek specific performance of this provision and to seek injunctive relief to prevent its breach or continued breach.

 

(r)                                    OFAC Certification.  Tenant represents and warrants that it is (i) not currently identified on the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Assets Control, Department of the Treasury (“OFAC”) and/or on any other similar list maintained by OFAC pursuant to any authorizing statute, executive order or regulation (collectively, the “List”), and (ii) not a person or entity with whom a citizen of the United States is prohibited to engage in transactions by any trade embargo, economic sanction, or other prohibition of United States law, regulation or Executive Order of the President of the United States.  Tenant hereby agrees to defend, indemnify, and hold harmless Landlord from and against any and all claims, damages, losses, risks, liabilities, and expenses (including reasonable attorney’s fees and costs) arising from or related to any breach of the foregoing certification.

 

41.                               Renewal Options.

 

(a)                                 Provided that Tenant is still occupying at least fifty percent (50%) of the rentable area of the Demised Premises and not in default of the Lease after notice to Tenant and the expiration of the applicable notice and cure period, either at the time of exercise of the this option of upon the commencement of the Extended Term (as hereinafter defined), Tenant shall have the option to renew (herein the “Option to Renew”) the Lease for up to two (2) additional five (5) year terms (each such term being an “Extended Term” and collectively referred to as the “Extended Terms”) on the same terms, covenants and conditions of this Lease except that the triple net Base Annual Rent payable by Tenant during each such Extended Term shall either be:

 

(b)                                 If at the time of Tenant’s exercise of its Option to Renew, the initial Landlord, Advent Key West, LLC, shall not have previously transferred its interest in the Building to a third party, then the triple net Base Annual Rent shall be the lower of i) the prevailing market rate for comparable leases for life science lab office space in Rockville, Maryland (the “Fair Market Rental”) expressly taking into consideration the size of the Demised Premises, the length of the extended term, the creditworthiness of the Tenant, any concessions available in the market and the absence of additional Tenant Improvements or ii) 1.02 times the then escalated Base Annual Rent for the last year of the then Term; or

 

(c)                                  in all other instances, the triple net Base Annual Rent shall be equal to 90% of the Fair Market Rental expressly taking into consideration the size of the Demised Premises, the length of the extended term, the creditworthiness of the Tenant, any concessions available in the market and the absence of additional Tenant improvements.

 

(d)                                 If the Fair Market Rental calculation is used and determined as described in either Section 41(b) or Section 41(c), it shall apply to the first Lease Year of the respective Extended Term only. The Base Annual Rent (as same shall be determined and escalated from time to time as set forth herein) shall be escalated annually by 2% during each such Extended Term.

 

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(e)                                  Provided that the aforesaid conditions are met, Tenant may exercise its Option to Renew by giving Landlord irrevocable written notice at least fifteen (15) months prior but not more than twenty-four (24) months prior to the expiration of the then applicable term of the Lease.  Once Tenant exercises its Option to Renew as set forth above, Tenant may not revoke said notice and shall be deemed to have renewed the lease for the entire particular exercised Extended Term. If Tenant shall fail to timely exercise the aforesaid Option to Renew for the first Extended Term, then and in such event, all right of Tenant to both Extended Terms hereof shall be of no further force or effect, time being of the essence. If Tenant shall have exercised its Option to Renew for the first Extended Term, but fail to timely exercise the aforesaid Option to Renew for the second Extended Term, then and in such event, all right of Tenant to the second Extended Term hereof shall be of no further force or effect, time being of the essence. Notwithstanding the forgoing, Tenant shall not be entitled to any construction allowance during either Extended Term, nor shall Tenant be entitled to any renewal term beyond the second Extended Term.

 

(f)                                   In the event the parties are unable to agree upon the Fair Market Rental for either of the Extended Terms, within thirty (30) days following Tenant’s written notice to Landlord exercising its option, the Fair Market Rental shall be determined by a board of three (3) licensed real estate brokers, once of whom shall be named by Landlord, one by Tenant, and the third selected by the two (2) brokers selected by the Landlord and the Tenant. All of said brokers shall be licensed real estate brokers in the State of Maryland, shall specialize in commercial leasing having not less than ten (10) years’ experience in the specific submarket and space product type in which the Building is located and shall be recognizes as ethical and reputable within their industry.

 

(g)                                  Within fifteen (15) days after the third broker is selected, each broker shall submit his or her determination of said Fair Market Rental.  The Fair Market Rental for the Extension Term shall be the average of the three (3) determinations; provided, however, that if two of the brokers are within five percent (5%) of each other and the third broker is not within five percent (5%) of either of the other two appraisals, then the average of the two appraisals which are within five percent (5%) of each other shall be used.

 

42.                               Right of First Offer.  The parties acknowledge that Landlord is currently negotiating with a prospective tenant (the “Prospective 9713 Tenant”) to lease a portion of the 1st floor of the 9713 Building and/or the entire 5th floor of the 9713 Building (if Landlord enters into a lease with the Prospective 9713 Tenant, such lease is hereinafter referred to as the “9713 Tenant Lease”).  Provided that (i) the existing occupant (and its successors and assigns) of the “Additional Space” (as defined below) does not extend or renew the term of its lease, (ii) the Prospective 9713 Tenant does not exercise any option that is contained in the 9713 Tenant Lease to lease the Additional Space on the first floor of the 9713 Building, and (iii) no other tenant of the 9713 Building or the 9717 Building, as applicable, exercises any option that is contained in its lease to lease the Additional Space, (iii) Tenant is not in default under this Lease, and (iv) there are at least three (3) years remaining in the term of this Lease,  Landlord shall deliver a written notice (the “Right of First Offer Notice”) to Tenant which advises Tenant that Landlord desires to lease the Additional Space.  As used herein, “Additional Space” shall mean any space in either the 9713 Building or the 9717 Building that becomes available for lease.  Notwithstanding anything herein

 

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to the contrary, to the extent there is Additional Space available in both the 9713 Building and the 9717 Building, Tenant shall first lease all of the available space in the 9717 Building before leasing space in the 9713 Building.  In the event that Landlord and Tenant enter into a written agreement within thirty (30) days after the date that Landlord delivers the Right of First Offer Notice to Tenant, which written agreement sets forth the terms and conditions under which Tenant will lease from Landlord the Additional Space, then Landlord shall lease to Tenant, and Tenant shall lease from Landlord, the Additional Space in accordance with such written agreement.  In the event that Landlord and Tenant do not, within thirty (30) days after the date that Landlord delivers the Right of First Offer Notice to Tenant, enter into a written agreement which specifies the terms and conditions under which Tenant will lease the Additional Space from Landlord, then Landlord shall have the right to lease all or any portion of the Additional Space to any party.

 

43.                               Right of First Opportunity.

 

(a)                                 Until December 31, 2023, Tenant shall have the continuous and recurring right of first opportunity (the “Right of First Opportunity”) to lease any unleased portion of the first (1st) floor of 9717 Key West Avenue (“Expansion Space”) in accordance with the terms of this Section 43.  If Landlord has received a written proposal, term sheet or letter of intent (collectively, the “Offer Sheet”) from or on behalf of a prospective tenant (the “Active Prospect”) to lease any portion of the Expansion Space, Landlord shall deliver a written notice (the “Right of First Opportunity Notice”) to Tenant which advises Tenant that Landlord desires to lease the Expansion Space that is set forth in the Right of First Opportunity Notice, which notice shall be accompanied by a copy of the Offer Sheet.  If Tenant exercises its right to lease the applicable portion of the Expansion Space in accordance with the following provisions of this Section 43, the terms for said Expansion Space shall be at Tenant’s then-current escalated rent, the term shall be coterminous with the term with respect to the Demised Premises and shall include a pro-rated concession allowance equal to Tenant’s initial total concession package (including but not limited to tenant improvement allowance and rental abatement).  In the event Tenant does not, within ten (10) business days after receiving the Right of First Opportunity Notice, deliver a written notice to Landlord which states that it is exercising its right to lease such Expansion Space, Landlord shall have up to one hundred eighty (180) days after the expiration of said ten (10) business day period to lease all or any portion of the first (1st) floor of the 9717 Building to such Active Prospect.  If a lease is not consummated within such one hundred eighty (180) day period, then Tenant’s Right of First Opportunity shall again become continuous and recurring.  Notwithstanding anything herein to the contrary, if Tenant timely exercises its right to lease the Expansion Space, but does not enter into a lease amendment to lease such space within forty-five (45) days after the date it exercises its right to lease such Expansion Space, then Tenant shall have no right to lease such Expansion Space, and Landlord shall have the right to lease such Expansion Space to any other party.

 

(b)                                 In the case that Tenant does not exercise the Right of First Opportunity and the Expansion Space is leased to another tenant, Landlord, at Landlord’s sole cost and expense shall fully demise the Expansion Space from the balance of the 9717 Building.  Demising will include, but not be limited to: finished and painted sheetrock on all demising walls, elevators locked to Expansion Space, etc.

 

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(c)                                  In the event Landlord enters into a lease with an Active Prospect, and the space again becomes available for lease, then subject to the provisions of Section 43(d), the provisions of Section 43 shall again be applicable.

 

(d)                                 Notwithstanding anything herein to the contrary, from and after January 1, 2024, the provisions of this Section 43 shall be null and void and of no further force or effect.

 

44.                               Self-Help Right.  If Landlord fails to complete any repairs or maintenance to or in the Demised Premises that Landlord is obligated to complete under the terms of this Lease, and such failure materially and adversely interferes with Tenant’s access to, or use and enjoyment of the Demised Premises for regular conduct of its business operations therein, Tenant may deliver written notice thereof to Landlord (“Initial Notice”).  The Initial Notice must specifically describe the action that is required of Landlord to satisfy the requirements of this Lease with respect to the Demised Premises.  If within ten (10) business days of receiving Tenant’s Initial Notice, Landlord fails to cure or commence to cure the items specified in the Initial Notice or fails to provide written notice to Tenant that Landlord reasonably and in good faith believes that Landlord completed the applicable repair or maintenance obligation or that Landlord is not obligated to complete such repair or maintenance obligation, then Tenant may deliver to Landlord a second notice (“Reminder Notice”).  The Reminder Notice must specify that Tenant will have the rights granted under this Section 44 if Landlord fails to cure or commence to cure the specified items within five (5) business days of receipt of the Reminder Notice.  Such Reminder Notice shall also state in bold text “FAILURE TO CURE OR COMMENCE TO CURE THE ITEMS SPECIFIED HEREIN WITHIN FIVE (5) BUSINESS DAYS SHALL RESULT IN TENANT’S RIGHT TO CURE SUCH ITEMS IN ACCORDANCE WITH SECTION 44 OF THE LEASE.”  If (i) Landlord fails to take or commence to take (and diligently pursue to completion) the required action within five (5) business days of receiving the Reminder Notice or fails to provide written notice to Tenant that Landlord reasonably and in good faith believes that Landlord completed the applicable repair and maintenance obligation or that Landlord is not obligated to complete such repair or maintenance obligation; and (ii) Tenant in good faith believes that it can complete such repairs or maintenance, then Tenant may, subject to the terms of this Section 44, proceed to take the required action with respect to the Demised Premises (but solely on its own behalf, and not as the agent of Landlord).  Landlord shall reimburse Tenant for Tenant’s reasonable, third-party, out-of-pocket costs and expenses in taking such action within thirty (30) days after receiving an invoice from Tenant setting forth a reasonably particularized breakdown of such costs and expenses.  If Tenant seeks to cure or remedy any event or condition that gives rise to Tenant’s remedies set forth in this Section 44, then Tenant shall (1) proceed in accordance with all applicable governmental law; (2) use only such contractors as are duly licensed in the State of Maryland and who perform such work in comparable buildings in the normal course of their business; (3) upon commencing such work, complete the same within a reasonable period of time; and (4) effect such work in a first-class, good and workmanlike manner.  Notwithstanding the foregoing, the provisions of this section shall not apply in the event the Demised Premises are damaged by fire, casualty or other event covered by Section 20.  If Landlord fails to pay to Tenant when due any sum which Tenant is entitled to recover from Landlord pursuant to this Section 44, and such failure continues for thirty (30) days after notice from Tenant to Landlord of such failure, then Tenant may credit the amount Landlord failed to pay against Base Monthly Rent due under this Lease, provided that the amount that shall be credited against the Base Monthly Rent each month shall not exceed twenty percent (20%) of

 

54

 

the Base Monthly Rent until such unpaid amount is reimbursed in full (or such higher percentage as necessary for Tenant to be reimbursed in full prior to the expiration of the Lease Term through such monthly credits).  If Tenant exercises its cure rights under this Section 44, and any work performed by Tenant affects the base Building systems or the structural elements of the Building, then Tenant shall use only those contractors used by Landlord in the Building for work on such Building systems or structure, unless such contractors are unwilling or unable to perform, or timely perform, such work, in which event Tenant may utilize the services of any other qualified contractor which normally and regularly performs similar work in comparable buildings.

 

IN WITNESS WHEREOF, the parties have executed this Lease the day and year first above written.

 

	
WITNESS/ATTEST:
    	
 
    	
LANDLORD:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
ADVENT   KEY WEST, LLC, a Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
/s/ Peter Rosan
    	
 
    	
By:
    	
/s/   Neal Gumbin
    	
(SEAL)
    
	
 
    	
 
    	
Name:   
    	
Neal   Gumbin
    	
 
    
	
 
    	
 
    	
Title:   
    	
Authorized   Signatory
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
WITNESS/ATTEST:
    	
 
    	
TENANT:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
SUPERNUS   PHARMACEUTICALS, INC., a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
/s/   Frank Mottola
    	
 
    	
By:
    	
/s/   Jack Khattar
    	
(SEAL)
    
	
 
    	
 
    	
Name:   
    	
Jack   Khattar
    	
 
    
	
 
    	
 
    	
Title:   
    	
President &   CEO
    	
 
    

 

55

 

EXHIBIT A

 

Floor Plan of Demised Premises
 [§2(a)]

 

 

56

 

 

57

 

 

 

58

 

EXHIBIT B

 

RULES AND REGULATIONS

[§8]

 

1.                                      No part of the whole of any sidewalks, plaza areas, entrances, loading docks, passages, courts, elevators, vestibules, stairways, corridors, balconies or halls of the Building shall be obstructed or encumbered by any tenant or used for any purpose other than that expressly provided for in the Lease.

 

2.                                      No awnings or other projections shall be attached to the outside walls, balconies or windows of the Building.  No curtains, blinds, shades, or screens other than Building Standard window coverings, shall be attached to or hung in, or used in connection with, any window or door of the space demised to any tenant.

 

3.                                      No showcases or other articles, including furniture, shall be put on the balcony, in front of or affixed to any part of the exterior of the Demised Premises, or placed in the halls, corridors, vestibules, balconies or other appurtenant or public parts of the Building.

 

4.                                      Any water and wash closets and other plumbing fixtures in any Demised Premises or the Building shall not be used for any purposes other than those for which they were constructed, and no sweepings, rubbish, rags, or other substances (including, without limitation, coffee grounds) shall be thrown therein.

 

5.                                      Except as provided in the Lease, no tenant shall bring or keep, or permit to be brought or kept, any inflammable, combustible, or explosive fluid, material, chemical, or substance in or about the space demised to such tenant.

 

6.                                      Except as permitted in the Lease and except for the hanging of artwork on interior walls, no tenant shall make, paint, drill into, or in any way deface, any part of the interior or exterior of the Building or the space demised to such tenant.  No boring, cutting, or stringing of wires shall be permitted.

 

7.                                      No tenant shall cause or permit any odors to emanate from the space demised to such tenant.

 

8.                                      Tenant shall promptly report to the Landlord any cracked or broken glass on the Demised Premises.

 

9.                                      No tenant shall make, or permit to be made, any noises which may be heard outside of such tenant’s Demised Premises or disturb or interfere with other tenants or occupants of the Building or neighboring buildings or premises whether by the use of any musical instrument, radio, television set, or other audio device, unmusical noise, whistling, singing, or in any other way.  Nothing shall be thrown out, or off, of any doors, windows, balconies or skylights or down any passageways.

 

10.                               Each tenant must, upon the termination of his tenancy, return to Landlord all keys to offices and toilet rooms, either furnished to, or otherwise procured by, such tenant, and in the

 

59

 

event of the loss of any such keys, such tenant shall pay Landlord the reasonable cost of replacement keys or locks (at Landlord’s option).

 

11.                               Intentionally Deleted.

 

12.                               No tenant shall engage or pay any employees in the Building, except those actually working for such tenant in the Building, nor advertise for laborers giving an address at the Building.

 

13.                               Landlord shall have the right to prohibit any advertising by any tenant which names the Building by its address or name, and which, in Landlord’s opinion, tends to impair the reputation of the Building or its desirability as a building for offices, and upon notice from Landlord, such tenant shall refrain from or discontinue such advertising.

 

14.                               Each tenant, before closing and leaving the space demised to such tenant at any time, shall see that all entrance doors are locked.

 

15.                               No space demised to any tenant shall be used, or permitted to be used, for lodging or sleeping.

 

16.                               The requests of tenants will be attended to only upon verbal or written request to Landlord or Landlord’s designated Rental Agent.  Building employees shall not be required to perform, and shall not be requested by any tenant to perform, any work outside of their regular duties, unless under specific instructions from Landlord.

 

17.                               Canvassing, soliciting, and peddling in the Building are prohibited, and each tenant shall cooperate in seeking their prevention.

 

18.                               There shall not be used in the Building, either by any tenant or by any of tenant’s employees, agents, or invitees, in the delivery or receipt of merchandise, freight, or other matter, any hand trucks or other means of conveyance except those equipped with rubber tires, rubber side guards, and such other safeguards as Landlord may require.

 

19.                               No animals of any kind shall be brought into or kept about the Building by any tenant, excluding “Assistance Dogs”.

 

20.                               Intentionally Deleted.

 

21.                               All equipment and machinery belonging to any tenant which causes noise, vibration or electrical interference that may be transmitted to the structure of the Building or to any space therein to such degree to be objectionable to Landlord and any tenant in the Building shall be installed and maintained by each such tenant, at such tenant’s expense, on vibration eliminators or other devices sufficient to eliminate such noise or vibration.

 

22.                               No bicycles are permitted in the Building or to be attached or stored on any part of the Building’s rails, doors, balconies or other parts, provided, however, upon Tenant’s request, Landlord shall endeavor to install a bicycle rack for the Building.

 

60

 

23.                               No Building or suite doors shall be propped open at any time.

 

24.                               Each tenant shall cooperate with any efforts of Landlord to conserve energy.

 

25.                               Each tenant shall light any windows of the Demised Premises and exterior signs and turn the same off to the extent required by Landlord.

 

26.                               There shall be no smoking of any kind, including, without limitation, electronic cigarettes, e-cigs, vapor pens, etc. in the Building or within twenty-five (25) feet of any entrance to the Building.

 

61

 

EXHIBIT C

 

CERTIFICATE OF COMMENCEMENT
 [§3(b)]

 

THIS CERTIFICATE OF COMMENCEMENT (“Certificate”) is made this 1st day of February, 2019, by and between ADVENT KEY WEST, LLC, a Delaware limited liability company (“Landlord”), and SUPERNUS PHARMACEUTICALS, INC., a               corporation (“Tenant”).

 

WHEREAS, Landlord and Tenant have entered into a Deed of Lease dated January 31, 2019 (“Lease”);

 

WHEREAS, the Commencement Date of the Lease, as described in Section 1 thereof, is dependent upon the occurrence of certain events; and

 

WHEREAS, those certain events have occurred and Landlord and Tenant now desire to specify the Commencement Date of the Lease Term for purposes of establishing the term of the Lease and the schedule for payment of rent during said period.

 

NOW, THEREFORE, in consideration of the premises, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Landlord and Tenant warrant and represent each to the other as follows:

 

1.                                      The Commencement Date of the Lease Term is February 1, 2019.

 

2.                                      The Expiration Date of the Lease Term is April 30, 2034.

 

IN WITNESS WHEREOF, Landlord and Tenant do hereby execute this Certificate under seal on the day and year first above written.

 

	
WITNESS/ATTEST:
    	
 
    	
LANDLORD:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
ADVENT   KEY WEST, LLC, a Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Neal   Gumbin
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
/s/   Peter Rosan
    	
 
    	
By:
    	
/s/   Neal Gumbin
    	
(SEAL)
    
	
 
    	
 
    	
Name:
    	
Neal   Gumbin
    	
 
    
	
 
    	
 
    	
Title:
    	
Authorized   Signatory
    	
 
    

 

62

 

	
WITNESS/ATTEST:
    	
 
    	
TENANT:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
SUPERNUS   PHARMACEUTICALS, INC., a Delaware corporation
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
/s/Frank   Mottola
    	
 
    	
By:
    	
/s/   Jack Khattar
    	
(SEAL)
    
	
 
    	
 
    	
Title:
    	
President &   CEO
    	
 
    
	
 
    	
 
    	
Date:
    	
January 31,   2019
    	
 
    

 

63

 

EXHIBIT D

 

INTENTIONALLY DELETED

 

64

 

EXHIBIT E

 

WORK AGREEMENT 
 [§6]

 

This Exhibit is attached to and made a part of that certain Lease dated as of January 31, 2019 (the “Lease”), by and between ADVENT KEY WEST, LLC (“Landlord”) and SUPERNUS PHARMACEUTICALS, INC. (“Tenant”).  Terms used but not defined in this Exhibit shall have the meaning ascribed to them in the Lease.

 

1.                                      Tenant’s Authorized Representative.  Tenant designates Frank Mottola and Jim Gorsk (each of which shall be a “Tenant’s Authorized Representative”) as the person authorized to initial all plans, drawings, change orders and approvals pursuant to this Exhibit.  Landlord shall not be obligated to respond to or act upon any such item until such item has been initialed by Tenant’s Authorized Representative.

 

2.                                      As-Is.  Landlord is leasing the Demised Premises to Tenant in its as-is condition.  All of the work to be performed in initially finishing and completing the Demised Premises shall be performed by Tenant pursuant to this Exhibit E and pursuant to all other applicable provisions of the Lease including, without limitation, insurance, damage and indemnification provisions, and such work shall be deemed to be alterations for all purposes of the Lease.  Tenant’s taking of possession of the Demised Premises shall constitute Tenant’s acknowledgment that the Demised Premises are in good condition and that all obligations of Landlord have been fully satisfied.

 

3.                                      Costs.

 

(a)                                 Tenant shall pay all expenses incurred in connection with Tenant’s Work over and above the “Construction Allowance” (as defined below) as follows.

 

(b)                                 Landlord shall pay to Tenant (or upon Tenant’s written request to Tenant’s general contractor, architect and engineer) the product of Seventy Five and 00/100 Dollars ($75.00) multiplied by the number of square feet of rentable area contained within the Demised Premises (such product shall hereinafter be referred to as the “Construction Allowance”) as a reimbursement to Tenant for the costs of performing alterations and improvements to the Demised Premises, including architectural costs, preparing space plans, and preparing mechanical, electrical and plumbing working drawings (the “Tenant’s Work”).  The Construction Allowance shall be paid by Landlord to Tenant in accordance with the provisions of Sections 3(c) and 3(d) below.  Landlord shall have the right to deduct from the Construction Allowance a construction oversight fee in the amount of Fifty Thousand and 00/100 Dollars ($50,000.00).  Despite the foregoing, Tenant shall pay all costs of performing the Tenant’s Work that are in excess of the Construction Allowance.

 

(c)                                  Periodically (but not more often than once per calendar month), Tenant shall deliver to Landlord an invoice from contractors or materialmen who have supplied labor or materials for Tenant’s Work.  Such invoice shall contain (or be accompanied by) a certification by Tenant and Tenant’s architect in the form of A.I.A. Document G702 “Application and Certificate for Payment” that the labor or materials for which Tenant is seeking reimbursement has been satisfactorily performed or delivered to the Demised Premises in accordance with the terms of the

 

65

 

Lease.  Within thirty (30) days after receiving any such invoice (and certifications), Landlord shall pay to Tenant (or upon Tenant’s written request, to Tenant’s general contractor, architect or engineer) the amount that is set forth in such invoice; provided:  (A) such request is accompanied by a copy of the invoice for such expenses marked “paid”; (B) copies of all contracts, bills, vouchers, change orders and other information relating to the expenses for which reimbursement is being sought as may be requested by Landlord shall be made available to Landlord by Tenant; (C) the work and materials for which payment is requested are performed in accordance with the working drawings approved by Landlord; (D) the work for which payment is requested has been performed both by a contractor and in accordance with a construction contract (including retainage provisions) approved by Landlord; (E) the work and materials for which payment is requested have been physically incorporated into the Demised Premises, free of any security interest, lien or encumbrance; and (F) Tenant delivers to Landlord lien waivers from all contractors and materialmen for the work or materials for which such draw payment is being made.  Each payment made by Landlord hereunder with respect to payments to Tenant’s general contractor and subcontractors shall be subject to retainage of ten percent (10%).  Upon completion of the Tenant’s Work, Tenant shall provide to Landlord (i) a valid certificate of occupancy for the Demised Premises, and (ii) a certificate of completion from Tenant’s architect with respect to the Tenant’s Work.

 

(d)                                 Landlord shall pay the retainage to Tenant (or upon Tenant’s written request, to Tenant’s general contractor, architect or engineer) within thirty (30) days after the last to occur of the following: (A) final completion of all of the Tenant’s Work in accordance with the terms of this Lease, (B) evidence of the satisfaction of the requirements of governmental authorities with respect thereto, (C) receipt of releases of lien from all contractors and materialmen who supplied labor or materials for the Tenant’s Work, (D) Landlord’s receipt of paid invoices evidencing that Tenant has actually paid to materialmen and contractors who have supplied materials or labor for the Tenant’s Work an amount equal to or in excess of the Construction Allowance, and (E) Tenant having commenced to use the Demised Premises for office use in accordance with the terms of this Lease.  If the Construction Allowance is not fully utilized by the date which occurs one (1) year after the date of this Lease, the unused portion of the Construction Allowance shall be retained by Landlord.

 

(e)                                  Prior to Lease execution, Landlord shall have paid to Tenant’s architect Eight Thousand and 00/100 Dollars ($8,000.00) (the “Test Fit Allowance”) to perform a test fit of the Demised Premises.  To the extent Landlord pays any money to Tenant’s architect in excess of the Test Fit Allowance, such excess amounts shall be deducted from the Construction Allowance.

 

4.                                      Schedule.

 

(a)                                 Tenant shall submit to Landlord a final space plan and all specifications, details, finishes (including, without limitation, paint and carpet selections), elevations and sections, all as approved by Tenant, on or before April 1, 2019.  Such space plan shall indicate partition and space layout and proposed fixturing, door location, special equipment types, materials and colors, reflected ceiling plan (including lighting, materials and sprinkler heads), floor load requirements exceeding fifty (50) pounds per square foot live load, telephone and electrical outlet locations.

 

66

 

(b)                                 Tenant shall submit to Landlord final architectural and engineering working drawings approved by Tenant on or before June 1, 2019.  Such architectural working drawings shall include: master legend, construction and floor plan, reflected ceiling plan, telephone and electrical outlet layout and usage system, finish plan, sign, window and storefront details (if any), and all architectural details, elevations, specifications and finishes necessary to construct the Demised Premises.  Said drawings, when approved by Landlord, are referred to herein as the “Final Construction Drawings.”

 

5.                                      Approval.  All plans and drawings (and changes thereto) shall be subject to Landlord’s written approval.  Landlord shall not unreasonably withhold or delay its consent to such plans and drawings.  Notwithstanding anything herein to the contrary, any alterations or improvements which connect into the Building’s systems, or which are made to the exterior of the Demised Premise or the Building, or which are visible from the exterior of the Demised Premises or the Building shall be subject to Landlord’s prior written approval, in its sole and absolute discretion.

 

6.                                      Change Orders.  All additional expenses attributable to any change order requested by Tenant and approved by Landlord, shall to the extent that it would cause the total construction costs to exceed the Construction Allowance, be payable by Tenant prior to the performance of the work contemplated by such change order.

 

7.                                      General Requirements.

 

(a)                                 Tenant construction shall proceed only on the basis of approved drawings.  Changes that occur during actual construction that differ from the approved drawings will require alterations at Tenant’s expense to restore compliance with approved drawings.  No drawings are considered “approved” unless they bear Landlord’s signature of approval.

 

(b)                                 Landlord shall have no obligation or responsibility to Tenant in respect of minor deviations in the actual dimensions of the Demised Premises.  Tenant shall have the affirmative obligation to conduct an on-site verification of all measurements and dimensions prior to letting any contracts for the performance of Tenant’s Work and prior to ordering the fabrication of any trade fixtures.

 

(c)                                  Upon Landlord’s approval of the Final Construction Drawings, Tenant shall submit the following:

 

1.                                      Names of all contractors and subcontractors (all of which shall be subject to Landlord’s approval);

 

2.                                      Tenant insurance coverage;

 

3.                                      Copy of building permit(s);

 

4.                                      Completion schedule from Tenant’s contractor; and

 

5.                                      Proof of utility application/deposit to Landlord.

 

67

 

8.                                      Performance of Tenant’s Work.  Tenant will perform and complete Tenant’s Work in compliance with such reasonable rules and regulations as Landlord and its architect and contractor, or contractors, may make.

 

9.                                      Completion of Tenant’s Work.  At such time as Tenant’s Work shall be completed, Tenant, at its sole cost and expense and without cost to Landlord shall:

 

(a)                                 Furnish evidence satisfactory to Landlord that all of Tenant’s Work has been completed and paid for in full (and such work has been accepted by Landlord), that any and all liens therefor that have been or might be filed have been discharged of record (by payment, bond, order of a court of competent jurisdiction or otherwise) or waived, and that no security interests relating thereto are outstanding;

 

(b)                                 Furnish to Landlord all certifications and approvals with respect to Tenant’s Work that may be required from any governmental authority and any board of fire underwriters or similar body for the use and occupancy of the Demised Premises;

 

(c)                                  Furnish Landlord with a CD-ROM which contains reproducible “as built” drawings of the Demised Premises; and

 

(d)                                 Furnish an affidavit from Tenant’s architect certifying that all work performed in the Demised Premises is in accordance with the working drawings and specifications approved by Landlord.

 

10.                               Work Standards.  All of Tenant’s Work shall be done and installed in compliance with all applicable laws.

 

11.                               Permits.  As expeditiously as possible, Tenant shall file all applications, plans and specifications, pay all fees and obtain all permits, certificates and other approvals required by the jurisdiction in which the Building is located and any other authorities having jurisdiction in connection with the commencement and completion of Tenant’s Work, and diligently and in good faith pursue same so that all permits and approvals are issued as soon as practicable.  If minor modifications are at any time required by government authorities to any such plans or specifications, then Tenant shall make such modifications.  Tenant shall permit Landlord to assist Tenant in obtaining all such permits and other items.  Tenant shall obtain a Certificate of Occupancy and all other approvals required for Tenant to use and occupy the Demised Premises and to open for business to the public.  Copies of all building permits/occupancy permits are to be forwarded to Landlord.

 

12.                               Contractor Insurance.  Tenant’s contractors and subcontractors shall be required to provide, in addition to the insurance required of Tenant pursuant to the Lease, the following types of insurance:

 

(a)                                 Builder’s Risk Insurance.  At all times during the period between the commencement of construction of Tenant’s Work and the date on which Tenant opens the Demised Premises for business with a valid certificate of occupancy in place, Tenant shall maintain, or cause to be maintained, casualty insurance in Builder’s Risk Form covering Landlord, Landlord’s architects, Landlord’s contractor or subcontractors, Tenant and Tenant’s contractors,

 

68

 

as their interest may appear, against loss or damage by fire, vandalism, and malicious mischief and other such risks as are customarily covered by the so-called “broad form extended coverage endorsement” upon all Tenant’s Work in place and all materials stored at the site of Tenant’s Work, and all materials, equipment, supplies and temporary structures of all kinds incident to Tenant’s Work and builder’s machinery, tools and equipment, all while forming a part of, or on the Demised Premises, or when adjacent thereto, while on drives, sidewalks, streets or alleys, all on a completed value basis for the full insurable value at all times.  Said Builder’s Risk Insurance shall contain an express waiver of any right of subrogation by the insurer against Landlord, its agents, employees and contractors.

 

(b)                                 Worker’s Compensation.  At all times during the period of construction of Tenant’s Work, Tenant’s contractors and subcontractors shall maintain in effect statutory worker’s compensation as required by the jurisdiction in which the Building is located.

 

13.                               Contractor Liability.  Tenant assumes the responsibility and liability for any and all injuries or death of any or all persons, including Tenant’s contractors and subcontractors, and their respective employees, and for any and all damages to property caused by, or resulting from or arising out of any act or omission on the part of Tenant.  Excluding Landlord’s gross negligence and willful misconduct, Tenant’s contractors or subcontractors or their respective employees, in the prosecution of Tenant’s Work, and with respect to such work, agree to indemnify and save free and harmless Landlord from and against all losses and/or expenses, including reasonable legal fees and expenses which they may suffer or pay as the result of claims or lawsuits due to, because of, or arising out of any and all such injuries or death and/or damage, whether real or alleged; and Tenant and Tenant’s contractors and/or subcontractors or their respective insurance companies shall assume and defend at their own expense all such claims or lawsuits.  Tenant agrees to insure this assumed liability in its policy of Broad Form Commercial General Liability insurance and the certificate of insurance or copy of the policy that Tenant will present to Landlord shall so indicate such contractual coverage.

 

14.                               Coordination.  Tenant’s Work shall be coordinated with any other work being performed by Landlord and other tenants in the Building so that Tenant’s Work will not interfere with or delay the completion of any other construction work in the Building.

 

15.                               Loads.  No item shall be mounted on or hung from the interior or exterior of the Building by Tenant without Landlord’s prior written approval.  If Tenant desires to mount or hang anything, Tenant shall notify Landlord of the loads involved and shall pay all costs involved.

 

16.                               Ducts.  Tenant shall permit Landlord or its agent to install, maintain, repair and replace in the ceiling space and/or under the concrete slab, adjacent to demising partitions and free standing columns, electrical, water or other lines and/or ducts that may be required to serve the common areas or others in the Building.

 

17.                               Contractor Responsibilities.  It shall be Tenant’s responsibility to cause each of Tenant’s contractors and subcontractors to:

 

(a)                                 Maintain continuous protection of any premises adjacent to the Demised Premises in such a manner (including the use of lights, guardrails, barricades and dust-proof

 

69

 

partitions where required) as to prevent any damage to the Building or any adjacent premises by reason of the performance of Tenant’s Work.

 

(b)                                 Secure all parts of Tenant’s Work against accident, storm, and any other hazard.  However, no barricades or other protective device shall extend more than two (2) feet beyond the Demised Premises.  In addition to the foregoing, Tenant’s barricade or other protective device shall be attractive in appearance, shall extend across the frontage and full height of the Demised Premises and shall be of materials approved by Landlord.

 

(c)                                  Comply strictly with the Rules and Regulations and Procedures set forth in Exhibit E, Schedule I, and Tenant agrees to be responsible for any violations thereof.  Remove and dispose of, at Tenant’s sole cost and expense, at least daily and more frequently as Landlord may direct, all debris and rubbish caused by or resulting from Tenant’s Work, and upon completion, to remove all temporary structures, surplus materials, debris and rubbish of whatever kind remaining on any part of the Building or in proximity thereto which was brought in or created in the performance of Tenant’s Work (including stocking refuse).  If at any time Tenant’s contractors and subcontractors shall neglect, refuse or fail to remove any debris, rubbish, surplus materials, or temporary structures, Landlord at its sole option may remove the same at Tenant’s expense without prior notice.

 

(d)                                 Use only the Demised Premises for the performance of Tenant’s Work.  Entry into areas unrelated to the performance of Tenant’s Work is prohibited.

 

(e)                                  Guarantee that the work done by it will be free from any defects in workmanship and materials for a period of not less than one (1) year from the date of completion thereof.  Tenant shall also require that any such contractors and subcontractors shall be responsible for the replacement or repair without charge for any and all work done or furnished by or through such contractors or subcontractors which becomes defective within one (1) year after completion.  Replacement or repair of such work shall include, without charge, all expenses and damages in connection with such removal, replacement, or repair of all or any part of such work, or any part of the Building which may have been damaged or disturbed thereby.  All warranties or guarantees as to materials or workmanship or with respect to Tenant’s Work shall be contained in the contract or subcontract, which shall provide that said guarantees or warranties shall inure to the benefit of both Landlord and Tenant and be directly enforceable by either of them.  Tenant covenants to give to Landlord any assignment or other assurance necessary to effect such right of direct enforcement.

 

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EXHIBIT E

 

SCHEDULE I

 

The following are rules and procedures to be followed by contractors when working in or around the Demised Premises or Building:

 

1.                                      Provide a trash can with a lid to dispose of lunches and food.  Trash must not be allowed to accrue in the open lease spaces.  This is to avoid fire and rodent hazards.

 

2.                                      Access into spaces under construction must be limited to one door.  If an unfinished lease space has two doors, one must be locked.  Passage can occur through the door most convenient to the freight elevator and should have a temporary foot mat.

 

3.                                      No access to the Building’s interior lobby or corridors will be permitted at any time.

 

4.                                      All unused entry doors to vacant areas must be closed at all times and locked.

 

5.                                      Construction employees must conduct themselves as mature gentlemen and ladies when working in tenant occupied spaces and all public spaces.

 

6.                                      Loud radios are prohibited in all work areas.

 

7.                                      Noisy operations such as chopping, etc. are to be done after hours, unless prior consent is given.

 

8.                                      All work performed outside of normal working hours must be coordinated with the Building manager for security reasons.  No one will be allowed access without prior permission.

 

9.                                      Every effort must be made to avoid disturbance of any other tenant’s normal business operations.  Punch list corrections must be performed only with the tenant’s permission, in advance.  If an operation underway proves disturbing to a tenant it must be discontinued immediately and performed outside of normal business hours

 

71

 

EXHIBIT F

 

PERMITTED EQUIPMENT

 

	
Item
    	
 
    	
Make
    	
 
    	
Required Utilities
    	
 
    	
Dimensions (LxWxH)
    
	
Blend Master Laboratory   Blender (BL-02)
    	
 
    	
Patterson-Kelley
    	
 
    	
120V
    	
 
    	
4’ x 2’-4” x 5’-3”
    
	
Blend Master Laboratory   Blender (RDBL-03)
    	
 
    	
Patterson-Kelley
    	
 
    	
120V
    	
 
    	
4’ x 2’-4” x 5’-3”
    
	
Blister Pkg. Machine   (BP-01)
    	
 
    	
IMA
    	
 
    	
480V-3 Phase;   Compressed Air
    	
 
    	
16’-6” x 3’ x 5’-6”
    
	
O’Hara Labcoat II-X   Tablet Coater (CT-01)
    	
 
    	
O’Hara
    	
 
    	
480V-3 Phase-30Amp;   Compressed Air
    	
 
    	
4’-6” x 5’ x 6’-6”
    
	
Qualicaps CWI-40   Capsule Weight Inspection Machine (CW-02)
    	
 
    	
Qualicaps
    	
 
    	
20A-480V-3 Phase;   Compressed Air
    	
 
    	
3’ x 3’ x 7’
    
	
Yamato Drying Oven   (DO-03)
    	
 
    	
Yamato
    	
 
    	
120V
    	
 
    	
3’ x 2’-8” x 5’
    
	
Yamato Drying Oven   (DO-04)
    	
 
    	
Yamato
    	
 
    	
120V
    	
 
    	
3’ x 2’-8” x 5’
    
	
Fuji-Paudal QJ-400G   Dome Spheronizer (DS-01)
    	
 
    	
Fuji-Paudal
    	
 
    	
220V-3 Phase-30Amp
    	
 
    	
Base: 4’-1” x 2’ x 4’-5” Cont: 2’-2” x 1’-8” x 3’-6”
    
	
Fuji-Paudal DG-L2 Dome   Granulator (GR-02)
    	
 
    	
Fuji-Paudal
    	
 
    	
250V-3 Phase-30Amp
    	
 
    	
Base: 3’-6” x 2’ x 3’-8” Cont: 2’-2” x 1’-8” x 3’-6”
    
	
MG2 Futura Encapsulator   (EN-01)
    	
 
    	
IMA America
    	
 
    	
480V-3 Phase
    	
 
    	
Base: 4’ x 4’ x 6’-6” Cont: 3’ x 3’-3” x 7’-6” Vacu:   4’-8” x 2’ x 4’-8”
    
	
Floor Scale (FS-01)
    	
 
    	
Pennsylvannia Scale
    	
 
    	
120V
    	
 
    	
 
    
	
Glatt GPCG-1, Fluid Bed   Processor (GP-01)
    	
 
    	
Glatt
    	
 
    	
220V-3 Phase-30Amp;   Compressed Air
    	
 
    	
5’-6” x 2’-6” x 7’-4”
    
	
Glatt VG-65M, Vertical   Granulator (GR-01)
    	
 
    	
Glatt
    	
 
    	
250V-3 Phase-60Amp;   Compressed Air
    	
 
    	
5’ x 3’ x 6’-5”
    
	
Lumonics Laser   System & Resonetics Tablet Drilling Equipment (LD-01)
    	
 
    	
Lumonics/Resonetics
    	
 
    	
208V-3 Phase-60Amp;   Compressed Air; Chiller: 208V-3 Phase-9Amp
    	
 
    	
8’ x 10’ x 7’
    
	
Quadro Comil (ML-02)
    	
 
    	
Allen-Bradley
    	
 
    	
208-230/480V-3   Phase-2-5Amp
    	
 
    	
5’ x 3’ x 5’
    
	
Refrigerator (RF-01)
    	
 
    	
Puffer-Hubbard
    	
 
    	
120V
    	
 
    	
7’-1” x 3’ x 6’-8”
    
	
Piccola Tablet Press   (TP-03)
    	
 
    	
Piccola
    	
 
    	
220V-3 Phase
    	
 
    	
Base: 2’-6” x 2’-6” x 5’-10” Comp: 2’ x 2’-2” x 5’
    
	
1 Cu. Ft Blender   (BL-03)
    	
 
    	
Patterson-Kelley
    	
 
    	
250V-3Phase
    	
 
    	
3’-9” x 4’-2” x 5’-9”
    
	
Fitz Mill Communitor   (ML-01)
    	
 
    	
Fitz Mill
    	
 
    	
480V-3 Phase
    	
 
    	
2’-4” x 2’-6” x 4’-6”
    
	
Vector LDCS (RDCS-01)
    	
 
    	
Vector
    	
 
    	
230V-3 Phase-30Amp;   Compressed Air
    	
 
    	
3’-5” x 3’ x 5’
    

 

72

 

	
Item
    	
 
    	
Make
    	
 
    	
Required Utilities
    	
 
    	
Dimensions (LxWxH)
    
	
Glatt TMG 1/6   (RDTMG-01)
    	
 
    	
Glatt
    	
 
    	
220V-3 Phase
    	
 
    	
3’-7” x 2’-1” x 5’-4”
    
	
Glatt GPCG-10, Fluid   Bed Processor
    	
 
    	
Glatt
    	
 
    	
480V-3 Phase;   Compressed Air
    	
 
    	
 
    

 

73

 

EXHIBIT G

 

PROPORTIONATE SHARE CALCULATIONS

 

 

74

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