Document:

Exhibit 10.12

 

EXECUTION VERSION

 

 

JPMorgan Chase Bank, National Association

London Branch
 25 Bank Street
 Canary Wharf
 London E14 5JP
 England

	
 
    	
 
    
	
 
    	
March 15, 2018
    
	
 
    	
 
    
	
To:
    	
Supernus Pharmaceuticals, Inc.
    
	
 
    	
1550 East Gude Drive
    
	
 
    	
Rockville, Maryland   20850
    
	
 
    	
Attn: Gregory S. Patrick
    
	
 
    	
Telephone: 301-838-2522
    
	
 
    	
 
    
	
From:
    	
JPMorgan Chase Bank, National Association, London Branch
    
	
 
    	
 
    
	
Re:
    	
Additional   Issuer Warrant Transaction
    

 

Ladies and Gentlemen:

 

The purpose of this communication (this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on the Trade Date specified below (the “Transaction”) between JPMorgan Chase Bank, National Association, London Branch (“Dealer”) and Supernus Pharmaceuticals, Inc. (“Issuer”).  This communication constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below.

 

1.     This Confirmation is subject to, and incorporates, the definitions and provisions of the 2006 ISDA Definitions (the “2006 Definitions”) and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions” and, together with the 2006 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc. (“ISDA”).  In the event of any inconsistency between the 2006 Definitions and the Equity Definitions, the Equity Definitions will govern.  For purposes of the Equity Definitions, each reference herein to a Warrant shall be deemed to be a reference to a Call Option or an Option, as context requires.

 

This Confirmation evidences a complete and binding agreement between Dealer and Issuer as to the terms of the Transaction to which this Confirmation relates.  This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the ISDA 2002 Master Agreement as if Dealer and Issuer had executed an agreement in such form (without any Schedule but with the elections set forth in this Confirmation and the election that the “Cross Default” provisions of Section 5(a)(vi) of the Agreement shall apply to Issuer with a “Threshold Amount” of USD 35 million and to Dealer with a “Threshold Amount” equal to 3% of the shareholders’ equity of JPMorgan Chase & Co. as of the Trade Date; provided that (i) the words “, or becoming capable at such time of being declared,” shall be deleted from such Section 5(a)(vi), (ii) the following language shall be added to the end of such Section 5(a)(vi): “Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event of Default if (1) the default was caused solely by error or omission of an administrative or operational nature; (2) funds were available to enable the party to make the payment when due; and (3) the payment is made within two Local Business Days of such party’s receipt of written notice of its failure to pay.” and (iii) the term “Specified Indebtedness” shall have the meaning specified in Section 14 of the Agreement, except that such term shall not include obligations in respect of deposits received in the ordinary course of a party’s banking business).  For the avoidance of doubt, the Transaction shall be the only transaction under the Agreement.

 

All provisions contained in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein.  In the event of any inconsistency between this Confirmation and either the

 

 

Definitions or the Agreement, this Confirmation shall govern.  For the avoidance of doubt, except to the extent of an express conflict, the application of any provision of this Confirmation, the Agreement or the Equity Definitions shall not be construed to exclude or limit the application of any other provision of this Confirmation, the Agreement or the Equity Definitions.

 

2.     The Transaction is a Warrant Transaction, which shall be considered a Share Option Transaction for purposes of the Equity Definitions.  The terms of the particular Transaction to which this Confirmation relates are as follows:

 

General Terms:

 

	
Trade Date:
    	
March 15, 2018
    
	
 
    	
 
    
	
Effective Date:
    	
March 19, 2018, or   such other date as agreed between the parties, subject to   Section 8(n) below.
    
	
 
    	
 
    
	
Components:
    	
The Transaction will be   divided into individual Components, each with the terms set forth in this   Confirmation, and, in particular, with the Number of Warrants and Expiration   Date set forth in this Confirmation. The payments and deliveries to be made   upon settlement of the Transaction will be determined separately for each   Component as if each Component were a separate Transaction under the   Agreement.
    
	
 
    	
 
    
	
Warrant Style:
    	
European
    
	
 
    	
 
    
	
Warrant Type:
    	
Call
    
	
 
    	
 
    
	
Seller:
    	
Issuer
    
	
 
    	
 
    
	
Buyer:
    	
Dealer
    
	
 
    	
 
    
	
Shares:
    	
The common stock of   Issuer, par value USD 0.001 per share (Ticker Symbol: “SUPN”).
    
	
 
    	
 
    
	
Number of Warrants:
    	
For each Component, as   provided in Annex A to this Confirmation.
    
	
 
    	
 
    
	
Warrant Entitlement:
    	
One Share per Warrant
    
	
 
    	
 
    
	
Strike Price:
    	
As provided in Annex   A to this Confirmation.   Notwithstanding anything to the contrary in the Agreement, this Confirmation   or the Equity Definitions, in no event shall the Strike Price be subject to   adjustment to the extent that, after giving effect to such adjustment, the   Strike Price would be less than USD 43.15, except for any adjustment pursuant   to the terms of this Confirmation and the Equity Definitions in connection   with stock splits or similar changes to Issuer’s capitalization.
    
	
 
    	
 
    
	
Premium:
    	
As provided in Annex   A to this Confirmation.
    
	
 
    	
 
    
	
Premium Payment Date:
    	
The Effective Date
    
	
 
    	
 
    
	
Exchange:
    	
The NASDAQ Global   Market
    
	
 
    	
 
    
	
Related Exchange:
    	
All Exchanges
    
	
 
    	
 
    

Procedures for Exercise:

 

In respect of any Component:

 

	
Expiration Time:
    	
Valuation Time
    

 

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Expiration Date:
    	
As provided in Annex   A to this Confirmation (or, if such date is not a Scheduled Trading Day,   the next following Scheduled Trading Day that is not already an Expiration   Date for another Component); provided   that if that date is a Disrupted Day, the Expiration Date for such Component   shall be the first succeeding Scheduled Trading Day that is not a Disrupted   Day and is not or is not already deemed to be an Expiration Date in respect   of any other Component of the Transaction hereunder; and provided further that if the Expiration   Date has not occurred pursuant to the preceding proviso as of the Final   Disruption Date, the Final Disruption Date shall be the Expiration Date   (irrespective of whether such date is an Expiration Date in respect of any   other Component for the Transaction), and, notwithstanding anything to the   contrary in this Confirmation or the Definitions, the VWAP Price for such   Expiration Date shall be the prevailing market value per Share determined by   the Calculation Agent in a commercially reasonable manner using, if   practicable, a volume-weighted method.   “Final Disruption Date” has the meaning provided in Annex A   to this Confirmation.  Notwithstanding   the foregoing and anything to the contrary in the Equity Definitions, if a   Market Disruption Event occurs on any Expiration Date, the Calculation Agent   may, except in the case of a Regulatory Disruption occurring solely under   clause (y) of the definition thereof solely with respect to voluntarily   adopted policies and procedures, determine that such Expiration Date is a Disrupted   Day only in part, in which case (i) the Calculation Agent shall make   adjustments to the Number of Warrants for the relevant Component for which   such day shall be the Expiration Date and shall designate the Scheduled   Trading Day determined in the manner described in the second preceding   sentence as the Expiration Date for the remaining Warrants for such   Component, and (ii) the VWAP Price for such Disrupted Day shall   be determined by the Calculation Agent, using if practicable a   volume-weighted method, based on transactions in the Shares on such Disrupted   Day taking into account the nature and duration of such Market Disruption   Event on such day.  Any Scheduled Trading Day on which, as of   the date hereof, the Exchange is scheduled to close prior to its normal close   of trading shall be deemed not to be a Scheduled Trading Day; if a closure of   the Exchange prior to its normal close of trading on any Scheduled Trading   Day is scheduled following the date hereof, but prior to the open of the   regular trading session of the Exchange on such day, then such Scheduled   Trading Day shall be deemed to be a Disrupted Day in full.  Section 6.6 of the Equity Definitions   shall not apply to any Valuation Date occurring in respect of an Expiration   Date.
    
	
 
    	
 
    
	
Market Disruption   Event:
    	
Section 6.3(a) of   the Equity Definitions is hereby amended (A) by deleting the words   “during the one hour period that ends at the relevant Valuation Time, Latest   Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case   may be,” in clause (ii) thereof and (B) by replacing the words “or   (iii) an Early Closure.” therein with “(iii) an Early Closure, or   (iv) a Regulatory Disruption.”
    

 

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Section 6.3(d) of   the Equity Definitions is hereby amended by deleting the remainder of the   provision following the term “Scheduled Closing Time” in the fourth line   thereof.
    
	
 
    	
 
    
	
Regulatory Disruption:
    	
Any event that Dealer, in its reasonable discretion,   determines, based on the advice of counsel, makes it appropriate with regard   to (x) any legal, regulatory or self-regulatory requirements or   (y) related policies and procedures (whether or not such requirements,   policies or procedures are imposed by law or have been voluntarily adopted by   Dealer), provided that such policies and procedures have been adopted by   Dealer in good faith and are generally applicable in similar situations and   applied in a non-discriminatory manner, in either case, for Dealer to refrain   from or decrease any market activity in connection with maintaining,   establishing or unwinding a commercially reasonable Hedge Position in   connection with the Transaction.  If   Dealer determines in good faith that a Market Disruption Event has occurred   on any Scheduled Trading Day solely pursuant to clause (y) above and   solely with respect to voluntarily adopted policies and procedures, such   Scheduled Trading Day will be a Disrupted Day in full.  Dealer shall notify Issuer as soon as   reasonably practicable that a Regulatory Disruption has occurred and the   Expiration Dates affected by it.
    
	
 
    	
 
    
	
Automatic Exercise:

 
    	
Applicable; and means that the Number of Warrants   for each Component will be deemed to be automatically exercised at the Expiration   Time on the Expiration Date for such Component unless Dealer notifies Seller   (by telephone or in writing) prior to the Expiration Time on the Expiration   Date that it does not wish Automatic Exercise to occur, in which case   Automatic Exercise will not apply.
    

 

Settlement Terms:

 

In respect of any Component:

	
 
    	
 
    
	
Settlement Currency:
    	
USD
    
	
 
    	
 
    
	
Settlement Method Election:
    	
Applicable; provided that:
    
	
 
    	
 
    
	
 
    	
(i)  Issuer may elect Cash Settlement only if, on or prior to the   Settlement Method Election Date, Issuer delivers written notice to Dealer   stating that Issuer has elected that Cash Settlement apply with respect to   every Component of the Transaction, and Dealer does not deliver written   notice in accordance with the last paragraph below in this “Settlement Method   Election” provision;
    
	
 
    	
 
    
	
 
    	
(ii)  on such notice delivery date, Issuer shall represent   and warrant to Dealer in writing that, as of such notice delivery date:
    
	
 
    	
 
    
	
 
    	
(A) Issuer is not aware of any material nonpublic information   regarding Issuer or the Shares;
    
	
 
    	
 
    
	
 
    	
(B) Issuer is electing Cash Settlement in good faith and not as   part of a plan or scheme to evade compliance with the federal securities   laws;
    
	
 
    	
 
    
	
 
    	
(C) the assets of Issuer at their fair valuation exceed the   liabilities of Issuer, including contingent liabilities;
    

 

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(D) the capital of Issuer is adequate to conduct the business of   Issuer;
    
	
 
    	
 
    
	
 
    	
(E) Issuer has the ability to pay its debts and obligations as   such debts mature and does not intend to, or does not believe that it will,   incur debt beyond its ability to pay as such debts mature;
    
	
 
    	
 
    
	
 
    	
(F) Issuer would be able to purchase the Number of Shares in   compliance with the laws of Issuer’s jurisdiction or organization;
    
	
 
    	
 
    
	
 
    	
(G) Issuer has the power to make such election and to execute and   deliver any documentation relating to such election that it is required by   this Confirmation to deliver and to perform its obligations under this   Confirmation and has taken all necessary action to authorize such election,   execution, delivery and performance;
    
	
 
    	
 
    
	
 
    	
(H) such election and performance of its obligations under this   Confirmation do not violate or conflict with any law applicable to it, any   provision of its constitutional documents, any order or judgment of any court   or other agency of government applicable to it or any of its assets or any   contractual restriction binding on or affecting it or any of its assets; and
    
	
 
    	
 
    
	
 
    	
(I) it acknowledges and agrees that any transaction that Dealer   makes with respect to the Shares during the period beginning at the time that   Issuer delivers notice of its Cash Settlement election and ending at the   close of business on the final day of the Settlement Period shall be made by   Dealer at Dealer’s sole discretion for Dealer’s own account and Issuer shall   not have, and shall not attempt to exercise, any influence over how, when,   whether or at what price Dealer effects such transactions, including, without   limitation, the prices paid or received by Dealer per Share pursuant to such   transactions, or whether such transactions are made on any securities   exchange or privately.
    
	
 
    	
 
    
	
 
    	
(iii) such Settlement Method Election shall apply to every   Component; and
    
	
 
    	
 
    
	
 
    	
(iv) no event of default has occurred and is continuing under any   indebtedness of the Issuer or its subsidiaries in an aggregate principal   amount of USD 35 million or more.
    
	
 
    	
 
    
	
 
    	
At any time prior to making a Settlement Method Election, Issuer   may, without the consent of Dealer, amend this Confirmation by notice to   Dealer to eliminate Issuer’s right to elect Cash Settlement.
    
	
 
    	
 
    
	
 
    	
Dealer may refuse to grant its consent with respect to Issuer’s Cash   Settlement election if (A) in the reasonable judgment of Dealer, the   election of Cash Settlement or any purchases of Shares that Dealer (or its   affiliates) might make in connection therewith, based upon the advice of   counsel and as a result of events occurring after the
    

 

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Trade Date, would raise material risks under applicable securities laws   and (B) Dealer notifies its refusal to Issuer in writing within two   Scheduled Trading Days following receipt of the election notice from Issuer.
    
	
 
    	
 
    
	
Electing Party:
    	
Issuer
    
	
 
    	
 
    
	
Settlement Method Election Date:
    	
The tenth (10th) Scheduled Trading Day immediately preceding the   scheduled Expiration Date for the Component with the earliest scheduled   Expiration Date.
    
	
 
    	
 
    
	
Default Settlement Method:
    	
Net Share Settlement
    
	
 
    	
 
    
	
Net Share Settlement:
    	
If applicable, on each   Settlement Date, Issuer shall deliver to Dealer a number of Shares equal   to the Number of Shares to be Delivered for such Settlement Date to the   account specified by Dealer and cash in lieu of any fractional shares valued   at the VWAP Price on the Valuation Date corresponding to such Settlement   Date.
    
	
 
    	
 
    
	
Number of Shares to be   Delivered:
    	
In respect of any   Exercise Date, the product of (i) the number of Warrants exercised or   deemed exercised on such Exercise Date, (ii) the Warrant Entitlement and   (iii) (A) the excess, if any, of the VWAP Price on the Valuation   Date occurring in respect of such Exercise Date over the Strike Price divided by (B) such VWAP Price.
    
	
 
    	
 
    
	
 
    	
The Number of Shares to   be Delivered shall be delivered by Issuer to Dealer no later than noon (local   time in New York City) on the relevant Settlement Date.
    
	
 
    	
 
    
	
VWAP Price:
    	
For any Valuation Date,   the Rule 10b-18 dollar volume weighted average price per Share for such   Valuation Date based on transactions executed during such Valuation Date, as   reported on Bloomberg Page “SUPN <Equity> AQR SEC” (or any   successor thereto) or, in the event such price is not so reported on such   Valuation Date for any reason or is manifestly incorrect, as reasonably   determined by the Calculation Agent using a volume weighted method.
    
	
 
    	
 
    
	
Other Applicable   Provisions:
    	
The provisions of   Sections 1.27, 9.1(c), 9.8, 9.9, 9.11 (except that the Representation and   Agreement contained in Section 9.11 of the Equity Definitions shall be   modified by excluding any representations therein relating to restrictions,   obligations, limitations or requirements under applicable securities laws   arising as a result of the fact that Seller is the Issuer of the Shares),   9.12 and 10.5 of the Equity Definitions will be applicable as if “Physical   Settlement” applied to the Transaction.
    
	
 
    	
 
    
	
Option Cash Settlement Amount:
    	
For any Exercise Date, the product of (i) the number of Warrants   exercised or deemed exercised on such Exercise Date, (ii) the Warrant   Entitlement and (iii) the excess of the VWAP Price on the Valuation Date   occurring in respect of such Exercise Date over the Strike Price (or, if   there is no such excess, zero).
    

 

Adjustments:

 

In respect of any Component:

 

	
Method of Adjustment:
    	
Calculation Agent Adjustment
    

 

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Extraordinary Dividend:
    	
Any Dividend that has   an ex-dividend date occurring on or after the Trade Date and on or prior to   the date on which Issuer satisfies all of its delivery obligations hereunder.
    
	
 
    	
 
    
	
Dividend:
    	
Any dividend or   distribution on the Shares (other than any dividend or distribution of the   type described in Sections 11.2(e)(i), 11.2(e)(ii)(A) or   11.2(e)(ii)(B) of the Equity Definitions).
    

 

Extraordinary Events:

 

	
Merger Event:
    	
Applicable; provided   that if an event occurs that constitutes both a Merger Event under   Section 12.1(b) of the Equity Definitions and an Additional   Termination Event under Section 8(l)(iii) of this Confirmation, the   provisions of Section 8(l) of this Confirmation shall apply
    
	
 
    	
 
    
	
Consequences of Merger   Events:
    	
 
    
	
 
    	
 
    
	
(a)   Share-for-Share:
    	
Modified Calculation Agent Adjustment
    
	
 
    	
 
    
	
(b)   Share-for-Other:
    	
Cancellation and Payment (Calculation Agent   Determination)
    
	
 
    	
 
    
	
(c)   Share-for-Combined:
    	
Modified Calculation Agent Adjustment; provided that Dealer may elect Cancellation and Payment   (Calculation Agent Determination) for any portion of the Transaction in its   commercially reasonable discretion.
    
	
 
    	
 
    
	
Tender Offer:
    	
Applicable; provided that the definition of “Tender   Offer” in Section 12.1(d) of the Equity Definitions shall be   amended by replacing ‘10%” in the third line thereof with “20%”; and   provided, further, that if an event occurs that constitutes both a Tender   Offer under Section 12.1(d) of the Equity Definitions and an   Additional Termination Event under Section 8(l)(ii) of this   Confirmation, the provisions of Section 8(l) of this Confirmation   shall apply.
    
	
 
    	
 
    
	
Consequences of Tender Offers:
    	
 
    
	
 
    	
 
    
	
(a)   Share-for-Share:
    	
Modified Calculation   Agent Adjustment
    
	
 
    	
 
    
	
(b)   Share-for-Other:
    	
Modified Calculation   Agent Adjustment
    
	
 
    	
 
    
	
(c)   Share-for-Combined:
    	
Modified Calculation   Agent Adjustment; provided that   Dealer may elect Cancellation and Payment (Calculation Agent Determination)   for any portion of the Transaction in its commercially reasonable discretion.
    
	
 
    	
 
    
	
 Composition   of Combined Consideration:
    	
Not Applicable; provided that,   notwithstanding Sections 12.1(f) and 12.5(b) of the Equity   Definitions, to the extent that the composition of the consideration for the   relevant Shares pursuant to a Tender Offer or Merger Event could be elected   by a holder of the Shares, the Calculation Agent will determine such   composition.
    
	
 
    	
 
    
	
 Modified   Calculation Agent Adjustment:
    	
If, in respect of any Merger Event to which Modified   Calculation Agent Adjustment applies, the adjustments to be made in   accordance with Section 12.2(e)(i) of the Equity Definitions would   result in Issuer being different from the issuer of the Shares, then with   respect to such Merger Event, as a condition precedent to the adjustments   contemplated in Section 12.2(e)(i) of the Equity Definitions,   Dealer, the Issuer of the Affected Shares and the entity
    

 

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that will be the Issuer   of the New Shares shall, prior to the Merger Date, shall have entered into   such documentation containing representations, warranties and agreements   relating to securities law and other issues as requested by Dealer that   Dealer has determined, in its good-faith and reasonable discretion, to be   reasonably necessary or appropriate to allow Dealer to continue as a party to   the Transaction, as adjusted under Section 12.2(e)(i) of the Equity   Definitions, and to preserve its commercially reasonable hedging or hedge   unwind activities in connection with the Transaction in a manner compliant   with applicable legal, regulatory or self-regulatory requirements, or with   related policies and procedures applicable to Dealer (whether or not such requirements,   policies or procedures are imposed by law or have been voluntarily adopted by   Dealer), provided that such policies and procedures have been adopted by   Dealer in good faith and are generally applicable in similar situations and   applied in a non-discriminatory manner, and if such conditions are not met or   if the Calculation Agent determines that no adjustment that it could make   under Section 12.2(e)(i) of the Equity Definitions will produce a   commercially reasonable result, then the consequences set forth in   Section 12.2(e)(ii) of the Equity Definitions shall apply. For the   avoidance of doubt, such adjustments will be made taking into account the   requirements under “Calculation Agent” below.
    
	
 
    	
 
    
	
Consequences of Announcement Events:
    	
With respect to any Component, if an Announcement   Event occurs, the Calculation Agent will determine the economic effect of   such Announcement Event on the theoretical value of such Component   (i) on or a commercially reasonable period of time after the relevant   Announcement Event and (ii) on the earliest to occur of the date on   which the transaction described in such Announcement Event (as amended or   modified) is consummated or otherwise results in a Merger Date or a Tender   Offer Date, as applicable, or the Valuation Date or any earlier date of   termination or cancellation for such Component (in the case of clause   (i) and (ii), taking into account such variables as the Calculation   Agent may commercially reasonably determine, including, without limitation,   any actual or expected change in volatility, dividends, correlation, stock   loan rate or liquidity relevant to the Shares or to such Component whether   within a commercially reasonable period of time prior to or after the   Announcement Event or for any commercially reasonable period of time such   changes are in effect including, without limitation, if applicable, the   period from the Announcement Event to the date of the relevant adjustment),   and if, in the case of clause (i) or (ii), the Calculation Agent   determines that such economic effect is material and that making the relevant   adjustment would be commercially reasonable, the Calculation Agent will   (x) adjust the terms of such Component to reflect such economic effect   (but, for the avoidance of doubt, taking into account, and without   duplication of, any other adjustment made pursuant to this “Consequences of   Announcement Events” provision or pursuant to the provisions opposite the   captions “Method of Adjustment”, “Consequences of Merger Events” or   “Consequences of Tender Offers” above in respect of the transaction or   intention giving rise to such Announcement Event
    

 

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and taking into account   Dealer’s commercially reasonable Hedge Positions) and (y) determine the   effective date of such adjustment.
    
	
 
    	
 
    
	
Announcement Event:
    	
(i) The public announcement by Issuer or any of   its affiliates or by a party to the relevant proposed transaction or any of   its affiliates of (x) any transaction or event that, if completed, would   constitute a Merger Event or Tender Offer or (y) the intention to enter   into a Merger Event or Tender Offer, provided that, in the case of a public   announcement under clauses (x) or (y) above by any entity other   than the Issuer or its affiliates, such public announcement will constitute   an Announcement Event if, in the commercially reasonable judgment of the   Calculation Agent, such announcement is likely to lead to a Merger Event or   Tender Offer (it being understood that the Calculation Agent may make such   determination by reference to the impact of such announcement on the market   for the Shares or options relating to the Shares and such other factors as   the Calculation Agent deems relevant in its commercially reasonable   judgment), (ii) the public announcement by Issuer of an intention to   solicit or enter into, or to explore strategic alternatives or other similar   undertaking that may include, a Merger Event or Tender Offer or   (iii) any subsequent public announcement by any such entity of a withdrawal,   discontinuation, termination or other change to a transaction or intention   that is the subject of an announcement of the type described in clause   (i) or (ii) of this sentence, as determined, in each case, by the   Calculation Agent.  For purposes of   this definition of “Announcement Event,” the remainder of the definition of   “Merger Event” in Section 12.1(b) of the Equity Definitions   following the definition of “Reverse Merger” therein shall be disregarded.   For the avoidance of doubt, the occurrence of an Announcement Event with   respect to any transaction or intention shall not preclude the occurrence of   a later Announcement Event with respect to such transaction or intention.
    
	
 
    	
 
    
	
New Shares:
    	
In the definition of New Shares in   Section 12.1(i) of the Equity Definitions, (a) the text in   clause (i) thereof shall be deleted in its entirety (including the word   “and” following such clause (i)) and replaced with “publicly quoted, traded   or listed on any of the New York Stock Exchange, The NASDAQ Global Select   Market or The NASDAQ Global Market (or their respective successors),” and   (b) the phrase “and (iii) issued by a corporation organized under   the laws of the United States, any State thereof or the District of Columbia”   shall be inserted immediately prior to the period.
    
	
 
    	
 
    
	
Nationalization, Insolvency or Delisting:
    	
Cancellation and Payment (Calculation Agent   Determination); provided that,   in addition to the provisions of Section 12.6(a)(iii) of the Equity   Definitions, it shall also constitute a Delisting if the Exchange is located   in the United States and the Shares are not immediately re-listed, re-traded   or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select   Market or The NASDAQ Global Market (or their respective successors); if the   Shares are immediately re-listed, re-traded or re-quoted on any such exchange   or quotation system, such exchange or quotation system shall thereafter be   deemed to be the Exchange.
    

 

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Additional Disruption Events:
    	
 
    
	
 
    	
 
    
	
(a)   Change in   Law:
    	
Applicable; provided that   Section 12.9(a)(ii) of the Equity Definitions is hereby amended by   (x) adding the words “(including, for the avoidance of doubt and without   limitation, adoption or promulgation of new regulations authorized or   mandated by existing statute)” after the word “regulation” in the second line   thereof, (y) adding the words “or any Hedge Positions” after the word   “Shares” in the clause (X) thereof and (z) adding the words “, or   holding, acquiring or disposing of Shares or any Hedge Positions relating   to,” after the words “obligations under” in clause (Y) thereof.
    
	
 
    	
 
    
	
(b)   Failure   to Deliver:
    	
Applicable
    
	
 
    	
 
    
	
(c)   Insolvency   Filing:
    	
Applicable
    
	
 
    	
 
    
	
(d)   Hedging   Disruption:
    	
Applicable; provided that:
    
	
 
    	
 
    
	
 
    	
(i)  Section 12.9(a)(v) of the Equity   Definitions is hereby amended by (a) inserting the following words at   the end of clause (A) thereof:    “in the manner contemplated by the Hedging Party on the Trade Date”   and (b) inserting the following two phrases at the end of such Section:
    
	
 
    	
 
    
	
 
    	
“For the avoidance of doubt, the term “equity price   risk” shall be deemed to include, but shall not be limited to, stock price   and volatility risk. And, for the further avoidance of doubt, any such   transactions or assets referred to in phrases (A) or (B) above must   be available on commercially reasonable pricing terms”; and
    
	
 
    	
 
    
	
 
    	
(ii) Section 12.9(b)(iii) of the   Equity Definitions is hereby amended by inserting in the third line thereof,   after the words “to terminate the Transaction”, the words “or a portion of   the Transaction affected by such Hedging Disruption”.
    
	
 
    	
 
    
	
(e)   Increased   Cost of Hedging:
    	
Applicable
    
	
 
    	
 
    
	
(f)    Loss of   Stock Borrow:
    	
Applicable
    
	
 
    	
 
    
	
Maximum Stock Loan Rate:
    	
As provided in Annex A to this Confirmation.
    
	
 
    	
 
    
	
(g)   Increased   Cost of Stock Borrow:
    	
Applicable
    
	
 
    	
 
    
	
Initial Stock Loan Rate:
    	
As provided in Annex A to this Confirmation.
    
	
 
    	
 
    
	
Hedging Party:
    	
Dealer for all applicable Potential Adjustment   Events and Extraordinary Events
    
	
 
    	
 
    
	
Determining Party:
    	
Dealer for all applicable Extraordinary Events
    
	
 
    	
 
    
	
Non-Reliance:
    	
Applicable
    
	
 
    	
 
    
	
Agreements and Acknowledgments Regarding Hedging   Activities:
    	
Applicable
    
	
 
    	
 
    
	
Additional Acknowledgments:
    	
Applicable
    

 

10

 

3.     Calculation Agent:      Dealer; provided that, notwithstanding anything to the contrary, all determinations, adjustments and calculations performed by Dealer in its capacity as Calculation Agent, as well as any determinations, adjustments or calculations by Dealer in any other capacity, pursuant to this Confirmation, the Agreement and the Equity Definitions shall be made in good faith and in a commercially reasonable manner based on commercially reasonable inputs.  In the event the Calculation Agent or Dealer makes any calculation, adjustment or determination pursuant to this Confirmation, the Agreement or the Equity Definitions, the Calculation Agent or Dealer shall, upon written request from Issuer, commercially reasonably promptly provide an explanation in reasonable detail of the basis for any such determination, adjustment or calculation (including any quotations, market data or information from external sources used in making such calculation, adjustment or determination, as the case may be, but without disclosing Calculation Agent’s or Dealer’s proprietary models or other information that is subject to contractual, legal or regulatory obligations to not disclose such information); provided that following the occurrence of an event described under Section 5(a)(vii) of the Agreement with respect to which Dealer is the Defaulting Party, if the Calculation Agent fails to timely make any calculation, adjustment or determination required to be made by the Calculation Agent hereunder or to perform any obligation of the Calculation Agent hereunder and such failure continues for five (5) Exchange Business Days following notice to the Calculation Agent by Issuer of such failure, Issuer shall have the right to designate an independent, nationally recognized third-party dealer in the over-the-counter corporate equity derivatives to act as the Calculation Agent over the period during which such Event of Default has occurred and is continuing, and the parties hereto shall work in good faith to execute any appropriate documentation required by such replacement Calculation Agent.  For the avoidance of doubt, to the extent of any such adjustments or amendments to the terms of this Confirmation or the Transaction, the Confirmation and Transaction shall retain (i) contingencies to exercise that are not an observable market, other than the market for the Issuer’s stock (or the Share Termination Delivery Units, as applicable) or an observable index, other than an index calculated or measured solely by reference to the Issuer’s own operations (or the issuer of the Share Termination Delivery Units’ own operations, as applicable), (ii) the commercially reasonable nature of adjustments permitted to the Transaction (such as to consider changes in volatility, expected dividends, stock price, strike price, stock loan rate or liquidity relevant to the Shares (or the Share Termination Delivery Units, as applicable), other commercially reasonable option pricing inputs and the ability to maintain a commercially reasonable hedge position relating to the underlying shares) and (iii) settlement in Shares (or the Share Termination Delivery Units, as applicable) as the default settlement method (subject to Issuer’s ability to elect otherwise subject to certain conditions) or as a settlement method that may be elected subject to certain conditions, as applicable, pursuant to “Settlement Terms” above and Section 8(a) below.

 

	
4.              Account   Details:
    
	
 
    	
 
    
	
Dealer   Payment Instructions:
    	
Bank: 
    	
JPMorgan Chase Bank,   N.A.
    
	
 
    	
ABA#:
    	
021000021
    
	
 
    	
Acct No.:
    	
099997979
    
	
 
    	
Beneficiary:
    	
JPMorgan Chase Bank,   N.A. New York
    
	
 
    	
Ref:
    	
Derivatives
    
	
 
    	
 
    
	
Issuer   Payment Instructions:
    	
To be provided by Issuer.
    
	
 
    	
 
    
	
5.                Offices:
    
	
 
    
	
The Office of Dealer   for the Transaction is: London
    
	
 
    
	
JPMorgan   Chase Bank, National Association
    
	
London   Branch
    
	
25   Bank Street
    
	
Canary   Wharf
    
	
London   E14 5JP
    
	
England
    
	
 
    
	
The Office of Issuer   for the Transaction is: Not applicable
    
	
 
    
	
6.              Notices:   For purposes of this Confirmation:
    
	
 
    
	
Address for notices or   communications to Issuer:
    

 

11

 

	
To:
    	
Supernus Pharmaceuticals, Inc.
    
	
 
    	
1550 East Gude Drive
    
	
 
    	
Rockville, Maryland   20850
    
	
Attn:
    	
Gregory S. Patrick
    
	
Telephone: 
    	
301-838-2522
    
	
Email:
    	
gpatrick@supernus.com
    
	
 
    	
 
    
	
Address for notices or communications to Dealer:
    
	
 
    
	
JPMorgan Chase Bank,   National Association
    
	
EDG Marketing Support
    
	
Email:
    	
edg_notices@jpmorgan.com
    
	
 
    	
edg.us.flow.corporates.mo@jpmorgan.com
    
	
Facsimile No:
    	
1-866-886-4506
    

 

7.     Representations, Warranties and Agreements:

 

(a)           In addition to the representations and warranties in the Agreement and those contained elsewhere herein, Issuer represents and warrants to and for the benefit of, and agrees with, Dealer as follows:

 

(i)            On the Trade Date and any date on which Issuer makes an election hereunder, (A) Issuer is not aware of any material nonpublic information regarding Issuer or the Shares and (B) Issuer’s most recent Annual Report on Form 10-K, taken together with all reports and other documents subsequently filed by Issuer with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.

 

(ii)           Without limiting the generality of Section 13.1 of the Equity Definitions, Issuer acknowledges that Dealer is not making any representations or warranties or taking any position or expressing any view with respect to the treatment of the Transaction under any accounting standards including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging — Contracts in Entity’s Own Equity (or any successor issue statements) or under FASB’s Liabilities & Equity Project.

 

(iii)          On or prior to the Trade Date, Issuer shall deliver to Dealer a resolution of Issuer’s board of directors or a duly authorized committee thereof authorizing the Transaction.

 

(iv)          Issuer is not entering into this Confirmation nor making any election hereunder to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) or otherwise in violation of the Exchange Act.

 

(v)           Issuer is not, and after giving effect to the transactions contemplated hereby will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

 

(vi)          On the Trade Date, (A) the assets of Issuer at their fair valuation exceed the liabilities of Issuer, including contingent liabilities, (B) the capital of Issuer is adequate to conduct the business of Issuer and (C) Issuer has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur debt beyond its ability to pay as such debts mature.

 

(vii)         Issuer shall not take any action to decrease the number of Available Shares below the Capped Number (each as defined below).

 

(viii)        [RESERVED].

 

(ix)          Issuer understands no obligations of Dealer to it hereunder will be entitled to the benefit of deposit insurance and that such obligations will not be guaranteed by any Affiliate of Dealer or any governmental agency.

 

12

 

(x)           During the period starting on the first Expiration Date and ending on the last Expiration Date (the “Settlement Period”), the Shares and any securities that are convertible into, or exchangeable or exercisable for, Shares will not be subject to a “restricted period,” as such term is defined in Regulation M under the Exchange Act.

 

(xi)          On each day during the Settlement Period, neither Issuer nor any “affiliated purchaser” (as defined in Rule 10b-18 under the Exchange Act (“Rule 10b-18”)) shall directly or indirectly (including, without limitation, by means of any cash-settled or other derivative instrument) purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any Shares (or an equivalent interest, including a unit of beneficial interest in a trust or limited partnership or a depository share) or any security convertible into or exchangeable or exercisable for Shares, except through Dealer.

 

(xii)         On the Trade Date and at all times until termination or earlier expiration of the Transaction, (A) a number of Shares equal to the Capped Number have been reserved for issuance by all required corporate action of Issuer, (B) the Shares issuable upon exercise of the Warrants (the “Warrant Shares”) have been duly authorized and, when delivered against payment therefor (which may include Net Share Settlement in lieu of cash) and otherwise as contemplated by the terms of the Warrant following the exercise of the Warrant in accordance with the terms and conditions of the Warrant, will be validly issued, fully-paid and non-assessable and (C) the issuance of the Warrant Shares will not be subject to any preemptive or similar rights and shall upon issuance be accepted for listing or quotation on the Exchange.

 

(xiii)        To Issuer’s knowledge, other than general provisions of the Delaware General Corporation Law, no state or local (including non-U.S. jurisdictions) or non-U.S. federal law, rule, regulation or regulatory order applicable to the Shares would give rise to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares.

 

(b)           Each of Dealer and Issuer agrees and represents that it is an “eligible contract participant” as defined in Section 1a(18) of the U.S. Commodity Exchange Act, as amended.

 

(c)           Each of Dealer and Issuer acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(a)(2) thereof.  Accordingly, Dealer represents and warrants to Issuer that (i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account and without a view to the distribution or resale thereof and (iv) the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws.

 

(d)           Issuer agrees and acknowledges that Dealer is a “financial institution” and “financial participant” within the meaning of Sections 101(22) and 101(22A) of Title 11 of the United States Code (the “Bankruptcy Code”).  The parties hereto further agree and acknowledge that it is the intent of the parties that (A) this Confirmation is (i) a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement payment,” within the meaning of Section 546 of the Bankruptcy Code and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code and a “termination value, payment amount, or other transfer obligation” within the meaning of Sections 362 and 546 of the Bankruptcy Code, and (B) Dealer is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(27), 362(o), 546(e), 546(j), 548(d)(2), 555 and 561 of the Bankruptcy Code.

 

(e)           Issuer shall deliver to Dealer an opinion of counsel, dated as of the Effective Date and reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in Section 3(a) of the Agreement, Section 7(a)(v) and Section 7(a)(xii) of this Confirmation (replacing, solely for these purposes, the words “On the Trade Date and at all times until termination or earlier expiration of the Transaction” with the words “On the Effective Date”).

 

13

 

8.  Other Provisions:

 

(a)           Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events.  If Issuer shall owe Dealer any amount pursuant to Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions or pursuant to Section 6(d)(ii) of the Agreement (a “Payment Obligation”), Issuer shall have the right, in its sole discretion, to satisfy any such Payment Obligation by the Share Termination Alternative (as defined below) by giving irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 9:30 A.M. New York City time on the Merger Date, Tender Offer Date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of another Extraordinary Event, as applicable (“Notice of Share Termination”); provided that if Issuer does not elect to satisfy its Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to elect to require Issuer to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Issuer’s failure to elect or election to the contrary; and provided further that Issuer shall not have the right to so elect (but, for the avoidance of doubt, Dealer shall have the right to so elect) in the event (i) of an Insolvency, a Nationalization, a Tender Offer or a Merger Event, in each case, in which the consideration or proceeds to be paid to holders of Shares consists solely of cash or (ii) of an Event of Default in which Issuer is the Defaulting Party or a Termination Event in which Issuer is the Affected Party or an Extraordinary Event, which Event of Default, Termination Event or Extraordinary Event resulted from an event or events within Issuer’s control. Issuer shall be deemed to remake the representation set forth in Section 7(a)(i) as of the date of such election.  Upon such Notice of Share Termination, the following provisions shall apply on the Scheduled Trading Day immediately following the Merger Date, the Tender Offer Date, Announcement Date, Early Termination Date or date of cancellation or termination in respect of another Extraordinary Event, as applicable:

 

	
Share Termination   Alternative:
    	
If applicable, means   that Issuer shall deliver to Dealer the Share Termination Delivery Property   on the date on which the Payment Obligation would otherwise be due pursuant   to Section 12.7 or 12.9 of the Equity Definitions or   Section 6(d)(ii) of the Agreement, as applicable, or such later   date or dates as the Calculation Agent may reasonably determine (the “Share Termination Payment Date”), in satisfaction of the   Payment Obligation.
    
	
 
    	
 
    
	
Share Termination   Delivery Property:
    	
A number of Share   Termination Delivery Units, as calculated by the Calculation Agent, equal to   the Payment Obligation divided by the Share Termination Unit Price. The   Calculation Agent shall adjust the Share Termination Delivery Property by   replacing any fractional portion of the aggregate amount of a security   therein with an amount of cash equal to the value of such fractional security   based on the values used to calculate the Share Termination Unit Price.
    
	
 
    	
 
    
	
Share Termination Unit   Price:
    	
The value of property   contained in one Share Termination Delivery Unit on the date such Share   Termination Delivery Units are to be delivered as Share Termination Delivery   Property, as determined by the Calculation Agent in its discretion by   commercially reasonable means and notified by the Calculation Agent to   Issuer.
    
	
 
    	
 
    
	
Share Termination   Delivery Unit:
    	
In the case of a   Termination Event, Event of Default, Delisting, Additional Disruption Event   or Announcement Event, one Share or, in the case of an Insolvency,   Nationalization, Merger Event or Tender Offer, one Share or a unit consisting   of the number or amount of each type of property received by a holder of one   Share (without consideration of any requirement to pay cash or other   consideration in lieu of fractional amounts of any securities) in such   Insolvency, Nationalization, Merger Event or Tender Offer, as applicable. If   such Insolvency, Nationalization, Merger Event or Tender Offer involves a   choice of consideration to be received by holders, such holder shall be   deemed to have elected to receive the maximum possible amount of cash.
    
	
 
    	
 
    
	
Failure to Deliver:
    	
Applicable
    
	
 
    	
 
    
	
Other applicable provisions:
    	
If Share Termination   Alternative is applicable, the provisions of Sections 1.27, 9.8, 9.9 and 9.11   (except that the Representation and Agreement contained in Section 9.11   of the Equity Definitions shall be modified by excluding any representations   therein relating to restrictions, obligations, limitations or requirements   under applicable securities laws arising as a result of the fact that Seller   is the issuer of the Shares or any portion of the Share Termination Delivery   Units), 9.12 and 10.5 of the
    

 

14

 

	
 
    	
Equity Definitions will   be applicable as if “Physical Settlement” applied to the Transaction, except   that all references to “Shares” shall be read as references to “Share Termination   Delivery Units”.
    

 

(b)           Registration/Private Placement Procedures.  (i)  If, in the good faith and reasonable judgment of Dealer based on the advice of counsel, for any reason, any Shares or any securities of Issuer or its affiliates comprising any Share Termination Delivery Units deliverable to Dealer hereunder (any such Shares or securities, “Delivered Securities”) would not be immediately freely transferable by Dealer under Rule 144 under the Securities Act, then the provisions set forth in this Section 8(b) shall apply.  At the election of Issuer by notice to Dealer within one Scheduled Trading Day after the relevant delivery obligation arises, but in any event at least one Scheduled Trading Day prior to the date on which such delivery obligation is due, either (A) all Delivered Securities delivered by Issuer to Dealer shall be, at the time of such delivery, covered by an effective registration statement of Issuer for immediate resale by Dealer (such registration statement and the corresponding prospectus (the “Prospectus”) (including, without limitation, any sections describing the plan of distribution) in form and content commercially reasonably satisfactory to Dealer) or (B) Issuer shall deliver additional Delivered Securities so that the value of such Delivered Securities, as determined by the Calculation Agent to reflect an appropriate liquidity discount, equals the value of the number of Delivered Securities that would otherwise be deliverable if such Delivered Securities were freely tradeable (without prospectus delivery) upon receipt by Dealer (such value, the “Freely Tradeable Value”); provided that, for the avoidance of doubt, Issuer may not make the election described in this clause (B) if, as of the date of its election, it has not complied with the requirements of Section 8(b)(iv) below. (For the avoidance of doubt, as used in this paragraph (b) only, the term “Issuer” shall mean the issuer of the relevant securities, as the context shall require.)

 

(ii)  If Issuer makes the election described in clause (b)(i)(A) above:

 

(A)          Dealer (or an affiliate of Dealer designated by Dealer) shall be afforded a reasonable opportunity to conduct a due diligence investigation with respect to Issuer that is customary in scope for underwritten offerings of equity securities of similar size and that yields results that are satisfactory to Dealer or such affiliate, as the case may be, in its discretion; and

 

(B)          Dealer (or an affiliate of Dealer designated by Dealer) and Issuer shall enter into an agreement (a “Registration Agreement”) on commercially reasonable terms in connection with the public resale of such Delivered Securities by Dealer or such affiliate substantially similar to underwriting agreements customary for underwritten offerings of equity securities of similar size for similarly situated issuers, in form and substance commercially reasonably satisfactory to Dealer or such affiliate and Issuer, which Registration Agreement shall include, without limitation, provisions substantially similar to those customarily contained in such underwriting agreements relating to the indemnification of, and contribution in connection with the liability of, Dealer and its affiliates and Issuer, shall provide for the payment by Issuer of all expenses in connection with such resale, including all registration costs and all fees and expenses of counsel for Dealer and such affiliate, and shall provide for the delivery of accountants’ “comfort letters” in customary form for registered offerings of equity securities of similar size to Dealer and such affiliate with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus.

 

(iii)          If Issuer makes the election described in clause (b)(i)(B) above:

 

(A)          Dealer (or an Affiliate of Dealer designated by Dealer) and any potential institutional purchaser of any such Delivered Securities from Dealer or such Affiliate identified by Dealer shall be afforded a commercially reasonable opportunity to conduct a due diligence investigation in compliance with applicable law with respect to Issuer customary in scope for private placements of equity securities of similar size (including, without limitation, the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them);

 

(B)          Dealer (or an Affiliate of Dealer designated by Dealer) and Issuer shall enter into an agreement (a “Private Placement Agreement”) on commercially reasonable terms in connection with the private placement of such Delivered Securities by Issuer to Dealer or such Affiliate and the private resale of such Delivered Securities by Dealer or such Affiliate, substantially similar to private placement purchase agreements customary for private placements of equity securities of similar size, in form and substance commercially reasonably satisfactory to Dealer and Issuer, which Private Placement Agreement shall include, without limitation, provisions substantially similar to those contained in such private placement purchase

 

15

 

agreements for private placements of similar size relating to the indemnification of, and contribution in connection with the liability of, Dealer and its Affiliates and Issuer, shall provide for the payment by Issuer of all reasonable expenses in connection with such resale, including all reasonable fees and expenses of counsel for Dealer, shall contain representations, warranties and agreements of Issuer reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resale, and shall use best efforts to provide for the delivery of accountants’ “comfort letters” to Dealer or such Affiliate with respect to the financial statements and certain financial information contained in or incorporated by reference into the offering memorandum prepared for the resale of such Delivered Securities; and

 

(C)                               Issuer agrees that (i) any Delivered Securities so delivered to Dealer may be transferred by and among Dealer and its Affiliates, and Issuer shall effect such transfer without any further action by Dealer and (ii) after the minimum “holding period” within the meaning of Rule 144(d) under the Securities Act has elapsed with respect to such Delivered Securities, Issuer shall promptly remove, or cause the transfer agent for such Delivered Securities to remove, any legends referring to any such restrictions or requirements from any Delivered Securities, without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Dealer (or such affiliate of Dealer).

 

(iv)                              Issuer shall not take, or cause to be taken, any action that would make unavailable either the exemption pursuant to Section 4(a)(2) of the Securities Act for the sale by Issuer to Dealer (or any affiliate designated by Dealer) of the Shares or Share Termination Delivery Units, as the case may be, or the exemption pursuant to Section 4(a)(1) or Section 4(a)(3) of the Securities Act for resale of the Shares or Share Termination Delivery Units, as the case may be, by Dealer (or any such affiliate of Dealer).

 

(v)                                 If Issuer makes the election described in Section 8(b)(i)(B) above, Dealer or its affiliate may sell such Shares or Share Termination Delivery Units, as the case may be, during a period (the “Resale Period”) commencing on the Scheduled Trading Day following delivery of such Shares or Share Termination Delivery Units, as the case may be, and ending on the Scheduled Trading Day on which Dealer completes the sale of all such Shares or Share Termination Delivery Units, as the case may be, or a sufficient number of Shares or Share Termination Delivery Units, as the case may be, so that the realized net proceeds of such sales equal or exceed the Freely Tradeable Value (such amount of the Freely Tradeable Value, the “Required Proceeds”).  If any of such delivered Shares or Share Termination Delivery Units remain after such realized net proceeds equal or exceed the Required Proceeds, Dealer shall return such remaining Shares or Share Termination Delivery Units to Issuer.  If the Required Proceeds exceed the realized net proceeds from such resale, Issuer shall transfer to Dealer by the open of the regular trading session on the Exchange on the Scheduled Trading Day immediately following the last day of the Resale Period the amount of such excess (the “Additional Amount”) in cash or in a number of additional Shares or Share Termination Delivery Units, as the case may be, (“Make-whole Shares”) in an amount that, based on the Relevant Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Relevant Price), has a dollar value equal to the Additional Amount.  The Resale Period shall continue to enable the sale of the Make-whole Shares in the manner contemplated by this Section 8(b)(iii).  This provision shall be applied successively until the Additional Amount is equal to zero, subject to Section 8(d).

 

(c)                                  Beneficial Ownership. Notwithstanding anything to the contrary in the Agreement or this Confirmation, in no event shall Dealer be entitled to receive, or shall be deemed to receive, any Shares in connection with this Transaction if, immediately upon giving effect to such receipt of such Shares, (i) Dealer’s Beneficial Ownership would be equal to or greater than 8.0 % of the outstanding Shares, (ii) Dealer, or any “affiliate” or “associate” of Dealer, would be an “interested stockholder” of Issuer, as all such terms are defined in Section 203 of the Delaware General Corporation Law or (iii) Dealer, Dealer Group (as defined below) or any person whose ownership position would be aggregated with that of Dealer or Dealer Group (Dealer, Dealer Group or any such person, a “Dealer Person”) under any federal, state or local (including non-U.S.) laws, regulations, regulatory orders or organizational documents or contracts of Issuer that are, in each case, applicable to ownership of Shares (“Applicable Laws”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership in excess of a number of Shares equal to (x) the number of Shares that would give rise to reporting or registration obligations or other requirements (including obtaining prior approval by a local, state, federal or non-U.S. regulator) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under Applicable Laws, as determined by Dealer in its reasonable discretion, and with respect to which such requirements have not been met or the relevant approval has not been received or that would give rise to any consequences under the constitutive documents of Issuer or any contract

 

16

 

or agreement to which Issuer is a party, in each case minus (y) 1% of the number of Shares outstanding on the date of determination (each of clause (i), (ii) and (iii) above, an “Ownership Limitation”). If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of an Ownership Limitation, Dealer’s right to receive such delivery shall not be extinguished and Issuer shall make such delivery as promptly as practicable after, but in no event later than one Scheduled Trading Day after, Dealer gives notice to Issuer that such delivery would not result in any of such Ownership Limitations being breached.  “Dealer’s Beneficial Ownership” means the “beneficial ownership” (within the meaning of Section 13 of the Exchange Act and the rules promulgated thereunder (collectively, “Section 13”)) of Shares, without duplication, by Dealer, together with any of its affiliates or other person subject to aggregation with Dealer under Section 13 for purposes of “beneficial ownership”, or by any “group” (within the meaning of Section 13) of which Dealer is or may be deemed to be a part (Dealer and any such affiliates, persons and groups, collectively, “Dealer Group”) (or, to the extent that, as a result of a change in law, regulation or interpretation after the date hereof, the equivalent calculation under Section 16 of the Exchange Act and the rules and regulations thereunder results in a higher number, such number).  Notwithstanding anything in the Agreement or this Confirmation to the contrary, Dealer (or the affiliate designated by Dealer pursuant to Section 8(k) below) shall not become the record or beneficial owner, or otherwise have any rights as a holder, of any Shares that Dealer (or such affiliate) is not entitled to receive at any time pursuant to this Section 8(c), until such time as such Shares are delivered pursuant to this Section 8(c).

 

(d)                                 Limitations on Settlement by Issuer.  Notwithstanding anything herein or in the Agreement to the contrary, in no event shall Issuer be required to deliver Shares in connection with the Transaction in excess of the Capped Number of Shares (as provided in Annex A to this Confirmation), subject to adjustment from time to time in accordance with the provisions of this Confirmation or the Definitions; provided that no such adjustment shall cause the Capped Number to exceed the Available Shares, other than an adjustment resulting from actions of Issuer or events within Issuer’s control (the “Capped Number”).  Issuer represents and warrants to Dealer (which representation and warranty shall be deemed to be repeated on each day that the Transaction is outstanding) that the Capped Number is equal to or less than the number of authorized but unissued Shares of the Issuer that are not reserved for future issuance in connection with transactions in the Shares (other than the Transaction) on the date of the determination of the Capped Number (such Shares, the “Available Shares”).  In the event Issuer shall not have delivered the full number of Shares otherwise deliverable as a result of this Section 8(d) (the resulting deficit, the “Deficit Shares”), Issuer shall be continually obligated to deliver, from time to time until the full number of Deficit Shares have been delivered pursuant to this paragraph, Shares when, and to the extent, that (i) Shares are repurchased, acquired or otherwise received by Issuer or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (ii) authorized and unissued Shares previously reserved for issuance in respect of other transactions become no longer so reserved or (iii) Issuer additionally authorizes any unissued Shares that are not reserved for other transactions.  Issuer shall promptly  notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (i), (ii) or (iii) and the corresponding number of Shares to be delivered) and promptly deliver such Shares thereafter.

 

(e)                                  Right to Extend.  Dealer may postpone or add, in whole or, other than in the event Dealer determines in good faith that such extension or addition resulted solely pursuant to the circumstances set forth in clause (ii)(y) below and solely with respect to voluntarily adopted policies and procedures, in part, any Exercise Date or Settlement Date or any other date of valuation or delivery, with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments in a commercially reasonable manner to the Number of Shares to be Delivered with respect to one or more Components), if Dealer determines, in its good faith, reasonable discretion (based, in the case of clause (ii) below, on the advice of counsel), that such extension is reasonably necessary or appropriate (i) to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions in the cash market, the stock loan market or any other relevant market (but only if Dealer determines that there is a material decrease in liquidity relative to Dealer’s expectations as of the Trade Date) or (ii) to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in order to maintain, establish or unwind a commercially reasonable Hedge Position in connection with the Transaction, in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance (x) with applicable legal, regulatory or self-regulatory requirements, or (y) with related policies and procedures applicable to Dealer (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer) provided that such policies and procedures have been adopted by Dealer in good faith and are generally applicable in similar situations and applied in a non-discriminatory manner.

 

(f)                                   Equity Rights.  Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction that are senior to the claims of common stockholders in the event of Issuer’s

 

17

 

bankruptcy.  For the avoidance of doubt, the parties agree that the preceding sentence shall not apply at any time other than during Issuer’s bankruptcy to any claim arising as a result of a breach by Issuer of any of its obligations under this Confirmation or the Agreement.  For the avoidance of doubt, the parties acknowledge that this Confirmation is not secured by any collateral that would otherwise secure the obligations of Issuer herein under or pursuant to any other agreement.

 

(g)                                  Amendments to Equity Definitions.  The following amendments shall be made to the Equity Definitions:

 

(i)                                     Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the words “a material”; and adding the phrase “or Warrants” at the end of the sentence.

 

(ii)                                  The first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as follows: ‘(c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation of a Share Option Transaction, then following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment Event has a material effect on the theoretical value of the relevant Shares or options on the Shares and, if so, will (i) make appropriate adjustment(s), if any, to any one or more of:’ and, the portion of such sentence immediately preceding clause (ii) thereof is hereby amended by deleting the words “diluting or concentrative” and the words “(provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares)” and replacing such latter phrase with the words “(and, for the avoidance of doubt, adjustments may be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares)”;

 

(iii)                               Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “that may have a diluting or concentrative” and replacing them with “that is the result of a corporate action of the Issuer or any of its affiliates” and adding the phrase “or Warrants” at the end of the sentence;

 

(iv)                              Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the fourth line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the semi-colon at the end of subsection (B) thereof and inserting the following words therefor “or (C) at Dealer’s option, the occurrence of any of the events specified in Section 5(a)(vii) (1) through (9) of  the ISDA 2002 Master Agreement with respect to that Issuer.”;

 

(v)                                 Section 12.9(b)(iv) of the Equity Definitions is hereby amended by (A) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); (B) replacing “will lend” with “lends” in subsection (B); and (C) deleting the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence; and

 

(vi)                              Section 12.9(b)(v) of the Equity Definitions is hereby amended by (A) adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); and (B)(1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C) and (3) replacing in the penultimate sentence the words “either party” with “the Hedging Party” and (4) deleting clause (X) in the final sentence.

 

(h)                                 Transfer and Assignment.  Dealer may transfer or assign its rights and obligations hereunder and under the Agreement, in whole or in part, at any time to (x) any affiliate of Dealer or (y) any third party that is a financial institution (or affiliate thereof) in connection with its corporate equity derivatives business, in either case, without the consent of the Issuer.  At any time at which any Ownership Limitation or a Hedging Disruption exists, if Dealer, in its discretion, is unable to effect a transfer or assignment to a third party after using its commercially reasonable efforts on pricing terms and within a time period reasonably acceptable to Dealer such that an Ownership Limitation or a Hedging Disruption, as the case may be, no longer exists, Dealer may designate any Scheduled Trading Day as an Early Termination Date with respect to a portion (the “Terminated Portion”) of the Transaction, such that such Ownership Limitation or Hedging Disruption, as the case may be, no longer exists.  In the event that Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a payment or delivery shall be made pursuant to Section 6 of the Agreement and Section 8(b) of this Confirmation as if (i) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Terminated Portion of the Transaction, (ii) Issuer shall be the sole

 

18

 

Affected Party with respect to such partial termination and (iii) such portion of the Transaction shall be the only Terminated Transaction.

 

(i)                                     Adjustments.  For the avoidance of doubt, whenever the Calculation Agent is called upon to make an adjustment pursuant to the terms of this Confirmation or the Definitions to take into account the effect of an event, the Calculation Agent shall make such adjustment by reference to the effect of such event on the Hedging Party, assuming that the Hedging Party maintains a commercially reasonable hedge position, and taking into account the requirements under “Calculation Agent” above.

 

(j)                                    Disclosure.  Effective from the date of commencement of discussions concerning the Transaction, Issuer and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Issuer relating to such tax treatment and tax structure.

 

(k)                                 Designation by Dealer.  Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities to or from Issuer, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations.  Dealer shall be discharged of its obligations to Issuer solely to the extent of any such performance.

 

(l)                                     Additional Termination Events.  The occurrence of any of the following shall constitute an Additional Termination Event with respect to which the Transaction shall be the sole Affected Transaction and Issuer shall be the sole Affected Party; provided that with respect to any Additional Termination Event, Dealer may choose to treat part of the Transaction as the sole Affected Transaction, and, upon the termination of the Affected Transaction, a Transaction with terms identical to those set forth herein except with a Number of Warrants equal to the unaffected number of Warrants shall be treated for all purposes as the Transaction, which shall remain in full force and effect:

 

(i)                                      Dealer reasonably determines, based on the advice of counsel, that it is advisable to terminate a portion of the Transaction so that Dealer’s related hedging activities will comply with applicable securities laws, rules or regulations or related policies and procedures of Dealer (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer), provided that such policies and procedures have been adopted by Dealer in good faith and are generally applicable in similar situations and applied in a non-discriminatory manner, for Dealer to refrain from or decrease any market activity in connection with the Transaction;

 

(ii)                                   a “person” or “group” (within the meaning of Section 13(d)(3) of the Exchange Act), other than Issuer or its wholly owned subsidiaries, has filed a Schedule TO or any schedule, form or other report under the Exchange Act disclosing that such person or group has become the direct or indirect “beneficial owner” (as determined in accordance with Rule 13d-3 under the Exchange Act) of Issuer’s shares of its common equity representing more than 50% of the voting power of all of its then-outstanding common equity;

 

(iii)                                the consummation of: (1) any sale, lease or other transfer, in one transaction or a series of transactions, of all or substantially all of the assets of Issuer and its subsidiaries, taken as a whole, to any person (other than any subsidiary of such person all of the outstanding capital stock or other ownership interests of which (other than directors’ qualifying shares) are owned by such person (a “wholly owned subsidiary”) or one or more wholly owned subsidiaries of such person); or (2) any transaction or series of related transactions in connection with which (whether by means of merger, consolidation, share exchange, combination, reclassification, recapitalization, acquisition, liquidation or otherwise) all of Issuer’s common stock is exchanged for, converted into, acquired for, or constitutes solely the right to receive, other securities, cash or other property;

 

(iv)                               the Issuer’s stockholders approve any plan or proposal for the Issuer’s liquidation or dissolution; or

 

(v)                                  the Shares cease to be listed on any of The New York Stock Exchange, The NASDAQ Global Market or The NASDAQ Global Select Market (or any of their respective successors).

 

19

 

Notwithstanding the foregoing, a transaction set forth in clause (ii) or (iii) above will not constitute an Additional Termination Event if at least 90% of the consideration received or to be received by the holders of the Shares (excluding cash payments for fractional shares or pursuant to dissenters’ rights) in connection with such transaction or event or such other transaction otherwise constituting an Additional Termination Event under clause (iii) above consists of shares of common stock listed (or depository receipts representing shares of common stock, which depository receipts are listed) on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors), or will be so listed when issued or exchanged in connection with such transaction or event.

 

(m)                             No Netting and Set-off.  Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise.

 

(n)                                 Early Unwind.  In the event the sale by Issuer of the “Initial Securities” (as defined under the Purchase Agreement) is not consummated with the Initial Purchasers (as defined in the Purchase Agreement) pursuant to the Purchase Agreement (the “Purchase Agreement”) dated as of March 14, 2018 between Issuer and Dealer, as representative of the Initial Purchasers party thereto for any reason by the relevant “Date of Delivery” (as defined in the Purchase Agreement) (or such later date as agreed upon by the parties) (such “Date of Delivery” or such later date being the “Early Unwind Date”), the Transaction shall automatically terminate (the “Early Unwind”), on the Early Unwind Date, and the Transaction and all of the respective rights and obligations of Dealer and Issuer thereunder shall be cancelled and terminated.  Following such termination and cancellation, each party shall be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of either party arising out of and to be performed in connection with the Transaction either prior to or after the Early Unwind Date.  Dealer and Issuer represent and acknowledge to the other that upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged.

 

(o)                                 Wall Street Transparency and Accountability Act of 2010.  The parties hereby agree that none of (v) Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), (w) any similar legal certainty provision in any legislation enacted, or rule or regulation promulgated, on or after the Trade Date, (x) the enactment of WSTAA or any regulation under the WSTAA, (y) any requirement under WSTAA nor (z) an amendment made by WSTAA, shall limit or otherwise impair either party’s rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, Loss of Stock Borrow, Increased Cost of Stock Borrow, an Excess Ownership Position or Illegality (as defined in the Agreement)).

 

(p)                                 Tax Matters.

 

(i)                                     Withholding Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act.  “Tax” and “Indemnifiable Tax”, each as defined in Section 14 of the Agreement, shall not include any U.S. federal withholding tax imposed or collected pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (a “FATCA Withholding Tax”). For the avoidance of doubt, a FATCA Withholding Tax is a Tax the deduction or withholding of which is required by applicable law for the purposes of Section 2(d) of the Agreement.

 

(ii)                                  HIRE Act.  “Tax” and “Indemnifiable Tax”, each as defined in Section 14 of the Agreement, shall not include any tax imposed on payments treated as dividends from sources within the United States under Section 871(m) of the Code or any regulations issued thereunder.

 

(iii)                               Tax documentation. Issuer shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor thereto, (i) on or before the date of execution of this Confirmation and (ii) promptly upon learning that any such tax form previously provided by Issuer has become obsolete or incorrect.  Additionally, Issuer shall, promptly upon request by Dealer, provide such other tax forms and documents requested by Dealer.

 

20

 

(iv)                              Tax Representations.  Issuer is a corporation for U.S. federal income tax purposes and is organized under the laws of the State of Delaware.  Issuer is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of United States Treasury Regulations) for U.S. federal income tax purposes and an exempt recipient under Treasury Regulation Section 1.6049-4(c)(1)(ii).

 

(q)                                 Waiver of Trial by Jury.  EACH OF ISSUER AND BUYER HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE TRANSACTION OR THE ACTIONS OF BUYER OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

(r)                                    Governing Law; Jurisdiction.  THIS CONFIRMATION AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.  THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN CONNECTION WITH ALL MATTERS RELATING HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH RESPECT TO, THESE COURTS.

 

(s)                                   Notice of Certain Other Events.

 

(i)                                     Issuer covenants and agrees that promptly following the public announcement of the results of any election by the holders of Shares with respect to the consideration due upon consummation of any Merger Event, Issuer shall give Dealer written notice of (x) the weighted average of the types and amounts of consideration that holders of Shares have elected to receive upon consummation of such Merger Event or (y) if no holders of Shares affirmatively make such election, the types and amounts of consideration actually received by holders of Shares (the date of such notification, the “Consideration Notification Date”); provided that in no event shall the Consideration Notification Date be later than the date on which such Merger Event is consummated; and

 

(ii)                                  promptly following the announcement of the consummation of any Merger Event, Potential Adjustment Event or Tender Offer, Issuer shall give Dealer notice of such announcement.

 

(t)                                    Agency.  Each party agrees and acknowledges that (i) J.P. Morgan Securities LLC, an affiliate of Dealer (“JPMS”), has acted solely as agent and not as principal with respect to the Transaction and (ii) JPMS has no obligation or liability, by way of guaranty, endorsement or otherwise, in any manner in respect of the Transaction (including, if applicable, in respect of the settlement thereof). Each party agrees it will look solely to the other party (or any guarantor in respect thereof) for performance of such other party’s obligations under the Transaction. JPMS is authorized to act as agent for Dealer.

 

[Signature Page Follows]

 

21

 

Issuer hereby agrees (a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Issuer with respect to the Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Dealer at J.P. Morgan Securities LLC, 383 Madison Ave, New York, NY 10179, and by email to EDG_Notices@jpmorgan.com and edg.us.flow.corporates.mo@jpmorgan.com.

 

	
 
    	
Yours faithfully,
    
	
 
    	
 
    
	
 
    	
J.P.   MORGAN SECURITIES LLC,
    
	
 
    	
as agent for
    
	
 
    	
 
    
	
 
    	
JP MORGAN CHASE BANK,
    
	
 
    	
NATIONAL ASSOCIATION
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Santosh Sreenivasan
    
	
 
    	
 
    	
Name: Santosh   Sreenivasan
    
	
 
    	
 
    	
Title: Managing   Director
    
	
 
    	
 
    
	
Agreed and Accepted By:
    	
 
    
	
 
    	
 
    
	
SUPERNUS   PHARMACEUTICALS, INC.
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Jack A. Khattar
    	
 
    	
 
    
	
 
    	
Name: Jack A. Khattar
    	
 
    
	
 
    	
Title: President &   CEO
    	
 
    
					

 

22

 

Annex A

 

For each Component of the Transaction, the Number of Warrants and Expiration Date is set forth below.

 

	
Component Number
    	
 
    	
Number of Warrants
    	
 
    	
Expiration Date
    
	
1.
    	
 
    	
1,769
    	
 
    	
July 5, 2023
    
	
2.
    	
 
    	
1,769
    	
 
    	
July 6, 2023
    
	
3.
    	
 
    	
1,769
    	
 
    	
July 7, 2023
    
	
4.
    	
 
    	
1,769
    	
 
    	
July 10, 2023
    
	
5.
    	
 
    	
1,769
    	
 
    	
July 11, 2023
    
	
6.
    	
 
    	
1,769
    	
 
    	
July 12, 2023
    
	
7.
    	
 
    	
1,769
    	
 
    	
July 13, 2023
    
	
8.
    	
 
    	
1,769
    	
 
    	
July 14, 2023
    
	
9.
    	
 
    	
1,769
    	
 
    	
July 17, 2023
    
	
10.
    	
 
    	
1,769
    	
 
    	
July 18, 2023
    
	
11.
    	
 
    	
1,769
    	
 
    	
July 19, 2023
    
	
12.
    	
 
    	
1,769
    	
 
    	
July 20, 2023
    
	
13.
    	
 
    	
1,769
    	
 
    	
July 21, 2023
    
	
14.
    	
 
    	
1,769
    	
 
    	
July 24, 2023
    
	
15.
    	
 
    	
1,769
    	
 
    	
July 25, 2023
    
	
16.
    	
 
    	
1,769
    	
 
    	
July 26, 2023
    
	
17.
    	
 
    	
1,769
    	
 
    	
July 27, 2023
    
	
18.
    	
 
    	
1,769
    	
 
    	
July 28, 2023
    
	
19.
    	
 
    	
1,769
    	
 
    	
July 31, 2023
    
	
20.
    	
 
    	
1,769
    	
 
    	
August 1, 2023
    
	
21.
    	
 
    	
1,769
    	
 
    	
August 2, 2023
    
	
22.
    	
 
    	
1,769
    	
 
    	
August 3, 2023
    
	
23.
    	
 
    	
1,769
    	
 
    	
August 4, 2023
    
	
24.
    	
 
    	
1,769
    	
 
    	
August 7, 2023
    
	
25.
    	
 
    	
1,769
    	
 
    	
August 8, 2023
    
	
26.
    	
 
    	
1,769
    	
 
    	
August 9, 2023
    
	
27.
    	
 
    	
1,769
    	
 
    	
August 10, 2023
    
	
28.
    	
 
    	
1,770
    	
 
    	
August 11, 2023
    
	
29.
    	
 
    	
1,770
    	
 
    	
August 14, 2023
    
	
30.
    	
 
    	
1,770
    	
 
    	
August 15, 2023
    
	
31.
    	
 
    	
1,770
    	
 
    	
August 16, 2023
    
	
32.
    	
 
    	
1,770
    	
 
    	
August 17, 2023
    
	
33.
    	
 
    	
1,770
    	
 
    	
August 18, 2023
    
	
34.
    	
 
    	
1,770
    	
 
    	
August 21, 2023
    
	
35.
    	
 
    	
1,770
    	
 
    	
August 22, 2023
    
	
36.
    	
 
    	
1,770
    	
 
    	
August 23, 2023
    
	
37.
    	
 
    	
1,770
    	
 
    	
August 24, 2023
    
	
38.
    	
 
    	
1,770
    	
 
    	
August 25, 2023
    
	
39.
    	
 
    	
1,770
    	
 
    	
August 28, 2023
    
	
40.
    	
 
    	
1,770
    	
 
    	
August 29, 2023
    
	
41.
    	
 
    	
1,770
    	
 
    	
August 30, 2023
    
	
42.
    	
 
    	
1,770
    	
 
    	
August 31, 2023
    
	
43.
    	
 
    	
1,770
    	
 
    	
September 1, 2023
    
	
44.
    	
 
    	
1,770
    	
 
    	
September 5, 2023
    
	
45.
    	
 
    	
1,770
    	
 
    	
September 6, 2023
    
	
46.
    	
 
    	
1,770
    	
 
    	
September 7, 2023
    
	
47.
    	
 
    	
1,770
    	
 
    	
September 8, 2023
    
	
48.
    	
 
    	
1,770
    	
 
    	
September 11, 2023
    
	
49.
    	
 
    	
1,770
    	
 
    	
September 12, 2023
    
	
50.
    	
 
    	
1,770
    	
 
    	
September 13, 2023
    
	
51.
    	
 
    	
1,770
    	
 
    	
September 14, 2023
    

 

23

 

	
52.
    	
 
    	
1,770
    	
 
    	
September 15, 2023
    
	
53.
    	
 
    	
1,770
    	
 
    	
September 18, 2023
    
	
54.
    	
 
    	
1,770
    	
 
    	
September 19, 2023
    
	
55.
    	
 
    	
1,770
    	
 
    	
September 20, 2023
    
	
56.
    	
 
    	
1,770
    	
 
    	
September 21, 2023
    
	
57.
    	
 
    	
1,770
    	
 
    	
September 22, 2023
    
	
58.
    	
 
    	
1,770
    	
 
    	
September 25, 2023
    
	
59.
    	
 
    	
1,770
    	
 
    	
September 26, 2023
    
	
60.
    	
 
    	
1,770
    	
 
    	
September 27, 2023
    
	
61.
    	
 
    	
1,770
    	
 
    	
September 28, 2023
    
	
62.
    	
 
    	
1,770
    	
 
    	
September 29, 2023
    
	
63.
    	
 
    	
1,770
    	
 
    	
October 2, 2023
    
	
64.
    	
 
    	
1,770
    	
 
    	
October 3, 2023
    
	
65.
    	
 
    	
1,770
    	
 
    	
October 4, 2023
    
	
66.
    	
 
    	
1,770
    	
 
    	
October 5, 2023
    
	
67.
    	
 
    	
1,770
    	
 
    	
October 6, 2023
    
	
68.
    	
 
    	
1,770
    	
 
    	
October 9, 2023
    
	
69.
    	
 
    	
1,770
    	
 
    	
October 10, 2023
    
	
70.
    	
 
    	
1,770
    	
 
    	
October 11, 2023
    
	
71.
    	
 
    	
1,770
    	
 
    	
October 12, 2023
    
	
72.
    	
 
    	
1,770
    	
 
    	
October 13, 2023
    
	
73.
    	
 
    	
1,770
    	
 
    	
October 16, 2023
    
	
74.
    	
 
    	
1,770
    	
 
    	
October 17, 2023
    
	
75.
    	
 
    	
1,770
    	
 
    	
October 18, 2023
    
	
76.
    	
 
    	
1,770
    	
 
    	
October 19, 2023
    
	
77.
    	
 
    	
1,770
    	
 
    	
October 20, 2023
    
	
78.
    	
 
    	
1,770
    	
 
    	
October 23, 2023
    
	
79.
    	
 
    	
1,770
    	
 
    	
October 24, 2023
    
	
80.
    	
 
    	
1,770
    	
 
    	
October 25, 2023
    
	
81.
    	
 
    	
1,770
    	
 
    	
October 26, 2023
    
	
82.
    	
 
    	
1,770
    	
 
    	
October 27, 2023
    
	
83.
    	
 
    	
1,770
    	
 
    	
October 30, 2023
    
	
84.
    	
 
    	
1,770
    	
 
    	
October 31, 2023
    
	
85.
    	
 
    	
1,770
    	
 
    	
November 1, 2023
    
	
86.
    	
 
    	
1,770
    	
 
    	
November 2, 2023
    
	
87.
    	
 
    	
1,770
    	
 
    	
November 3, 2023
    
	
88.
    	
 
    	
1,770
    	
 
    	
November 6, 2023
    
	
89.
    	
 
    	
1,770
    	
 
    	
November 7, 2023
    
	
90.
    	
 
    	
1,770
    	
 
    	
November 8, 2023
    
	
91.
    	
 
    	
1,770
    	
 
    	
November 9, 2023
    
	
92.
    	
 
    	
1,770
    	
 
    	
November 10, 2023
    
	
93.
    	
 
    	
1,770
    	
 
    	
November 13, 2023
    
	
94.
    	
 
    	
1,770
    	
 
    	
November 14, 2023
    
	
95.
    	
 
    	
1,770
    	
 
    	
November 15, 2023
    
	
96.
    	
 
    	
1,770
    	
 
    	
November 16, 2023
    
	
97.
    	
 
    	
1,770
    	
 
    	
November 17, 2023
    
	
98.
    	
 
    	
1,770
    	
 
    	
November 20, 2023
    
	
99.
    	
 
    	
1,770
    	
 
    	
November 21, 2023
    
	
100.
    	
 
    	
1,770
    	
 
    	
November 22, 2023
    

 

	
Strike Price:
    	
USD 80.9063
    
	
 
    	
 
    
	
Premium:
    	
USD 1,713,600
    

 

24

 

	
Final Disruption Date:
    	
December 6, 2023
    
	
 
    	
 
    
	
Maximum Stock Loan   Rate:
    	
200 basis points
    
	
 
    	
 
    
	
Initial Stock Loan   Rate:
    	
Prior to April 2,   2023, zero basis points, and thereafter, 25 basis points
    
	
 
    	
 
    
	
Capped Number of   Shares:
    	
331,825
    

 

25sqft-ex107_328.htm

Exhibit 10.7

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), effective as of October 18, 2017, (“Effective Date”) and executed as of the date below, is entered into by and between Presidio Property Trust, Inc., a Maryland corporation (the “Company”), and Jack K. Heilbron (the “Executive”). 

WHEREAS, the Company desires to employ the Executive and to enter into an agreement embodying the terms of such employment; and 

WHEREAS, the Executive desires to accept employment with the Company, subject to the terms and conditions of this Agreement. 

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: 

1.Employment Period. Subject to Section 3(a), the Executive’s employment hereunder shall be for a term (the “Employment Period”) commencing on the Effective Date and ending on the Date of Termination (as defined below) of the Executive’s employment pursuant to Section 3 below. 

 

2.Terms of Employment. 

 

(a)Position and Duties. 

 

(i)During the Employment Period, the Executive shall serve as Chief Executive Officer and President of the Company and shall perform such duties as are assigned by the Company’s Board of Directors (the “Board”) and are usual and customary for such positions. In such positions, the Executive shall report to the Board. At the Company’s request, the Executive shall serve the Company and/or its subsidiaries and affiliates in other offices and capacities in addition to the foregoing. In the event that the Executive, during the Employment Period, serves in any one or more of such additional capacities, the Executive’s compensation shall not be increased beyond that specified in Section 2(b) of this Agreement. In addition, in the event the Executive’s service in one or more of such additional capacities is terminated, the Executive’s compensation, as specified in Section 2(b) of this Agreement, shall not be diminished or reduced in any manner as a result of such termination for so long as the Executive otherwise remains employed under the terms of this Agreement. 

 

(ii)Location. The Executive’s primary place of work shall be the Company’s corporate office in Escondido, California, or such other location within San Diego County as may be designated by the Board from time to time.

 

(iii)Compliance. The Executive shall be subject to and comply with the policies and procedures generally applicable to senior executives of the Company to the extent the same are not inconsistent with any term of this Agreement. 

 

(iv)Exclusive Services. During the Employment Period, and excluding any periods of paid time off to which the Executive is entitled, the Executive agrees to devote substantially all of his business time to the business and affairs of the Company. Subject to the 

 

 

provisions of Section 5, during the Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) fulfill limited teaching, speaking and writing engagements, (C) manage his personal investments, or (D) engage in such other employment which is approved in writing by the Board or its designee, in the case of clauses (A) through (D), so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee, director and officer of the Company in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by the Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Executive’s responsibilities to the Company; provided, that, notwithstanding anything to the contrary in this Agreement, (I) no such activity that violates the provisions of Section 5 shall be permitted and (II) the Executive shall notify the Board prior to engaging in any new real estate related business activities after the Effective Date that are unrelated to the performance of the Executive’s duties hereunder. 

 

(v)Board Position. In addition, during the Employment Period, the Company shall use its best efforts to cause the Executive to be nominated and elected as Chairman of the Board; provided, however, that the Company shall not be so obligated if cause exists for the removal of the Executive from the Board or for the failure to nominate or elect the Executive as Chairman to the Board. Provided that the Executive is so nominated and elected, the Executive hereby agrees to serve as Chairman of the Board. 

 

(b)Compensation. 

 

(i)Base Salary. During the Employment Period, the Executive shall receive a base salary (the “Base Salary”) of $333,900 per annum. The Base Salary shall be paid by the Company at such intervals as the Company pays executive salaries generally. The Base Salary may be reviewed annually by the Board, or the Compensation Committee thereof, and may be increased in the discretion of the Board, or the Compensation Committee thereof. The term “Base Salary” as utilized in this Agreement shall refer to Base Salary as so increased from time to time. 

 

(ii)Annual Bonus. In addition to the Base Salary, the Executive shall be eligible to earn, for each fiscal year of the Company ending during the Employment Period, an annual bonus (an “Annual Bonus”) pursuant to the Company’s bonus program applicable to senior executives. The Executive will be eligible to receive an Annual Bonus under any such plan at a target level of up to one hundred percent (100%) of the Executive’s Base Salary upon the achievement of targets and other objectives established by the Board or the Compensation Committee thereof for each fiscal year. The Executive must be employed on the date of payment of the Annual Bonus in order to be eligible to receive an Annual Bonus for such fiscal year. The Annual Bonus shall be paid to the Executive by the Company within ninety (90) days following the end of each fiscal year. 

 

(iii) Incentive, Savings and Retirement Plans. During the Employment Period, the Executive shall be entitled to participate in all other incentive plans, practices, 

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policies and programs, and all savings and retirement plans, practices, policies and programs, in each case that are applicable generally to senior executives of the Company under the terms and conditions therein as in effect from time to time. 

 

(iv)Welfare Benefit Plans. During the Employment Period, and subject to applicable law and the terms of the underlying benefit plans, the Executive and the Executive’s eligible family members shall be eligible for participation at the Company’s expense, in the welfare benefit plans, practices, policies and programs (including, if applicable, medical, dental, disability, employee life, group life and accidental death insurance plans and programs) maintained by the Company for its senior executives under the terms and conditions therein as in effect from time to time. In addition, the Company shall pay the premiums for a supplemental life insurance policy on the Executive’s life having such terms and conditions as the Executive and the Company may mutually agree from time to time. 

 

(v)Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable business expenses incurred by the Executive in accordance with the policies, practices and procedures of the Company provided to senior executives of the Company under the terms and conditions therein as in effect from time to time. Any amounts payable to the Executive under this Section 2(b)(v) shall be made in accordance with Treasury Regulation Section 1.409A-3(i)(1)(iv) and shall be paid on or before the last day of the Executive’s taxable year following the taxable year in which the Executive incurred the expenses. The amounts provided under this Section 2(b)(v) during any taxable year of the Executive’s will not affect such amounts provided in any other taxable year of the Executive’s, and the Executive’s right to reimbursement for such amounts shall not be subject to liquidation or exchange for any other benefit. 

 

(vi)Paid Time Off. During the Employment Period, the Executive shall be entitled to paid time off per year to be used and accrued in accordance with Company policy.

 

(vii)Automobile Allowance. During the Employment Period, the Company shall, at its sole expense, provide an automobile, selected by mutual agreement of the Company and the Executive, for the Executive’s exclusive use.

 

(viii)Club Dues.  During the Employment Period, the Company shall, at its sole expense, reimburse the Executive for the dues for membership at a country club of his choosing.

 

3.Termination of Employment.

 

(a)At-Will Employment. The Executive shall be considered an employee of the Company while performing his duties and services pursuant to this Agreement. The Company and the Executive acknowledge that the Executive’s employment during the Employment Period will be at-will, as defined under applicable law, and that the Executive’s employment with the Company during the Employment Period may be terminated by either party at any time, with or without Cause, and for any or no reason, with or without notice. If the Executive’s employment during the Employment Period terminates for any reason, the Executive 

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shall not be entitled to any payments, benefits, damages, awards or compensation other than as expressly provided in this Agreement. 

 

(b) Death or Disability. The Executive’s employment shall terminate automatically upon the Executive’s death or Disability during the Employment Period. For purposes of this Agreement, “Disability” shall mean the absence of the Executive from the Executive’s duties with the Company on a full-time basis for ninety (90) consecutive days or for a total of one hundred eighty (180) days in any twelve (12) month period, in either case, as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company and reasonably acceptable to the Executive or the Executive’s legal representative. 

 

(c)Cause. The Company may terminate the Executive’s employment during the Employment Period for Cause or without Cause. For purposes of this Agreement, “Cause” shall mean the occurrence of any one or more of the following events unless the Executive fully corrects the circumstances constituting Cause within thirty (30) days following the date written notice is delivered to the Executive which specifically identifies the circumstances constituting Cause (provided such circumstances are capable of correction): 

 

(i)the Executive’s willful and continued failure substantially to perform his duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed his duties; 

 

(ii)the Executive’s willful or gross misconduct resulting in economic, reputational or financial damage to the Company or any subsidiary or affiliate; 

 

(iii)the Executive’s gross negligence, insubordination or material violation of any fiduciary duty to the Company; 

 

(iv)the Executive’s conviction of, or entry by the Executive of a guilty or no contest plea to, a felony or misdemeanor or a crime involving moral turpitude; or 

 

(v)the Executive’s willful and material breach of any provision of this Agreement, including, without limitation, the Executive’s covenants set forth in Section 5 hereof. 

For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. The cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of a majority of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is 

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given an opportunity, together with counsel for the Executive, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive is guilty of any of the conduct described in Section 3(c), and specifying the particulars thereof in detail; provided, that if the Executive is a member of the Board, the Executive shall not vote on such resolution nor shall the Executive be counted in determining the “entire membership” of the Company’s Board of Directors. 

(d)Good Reason. The Executive’s employment may be terminated by the Executive for Good Reason or by the Executive without Good Reason. For purposes of this Agreement, “Good Reason” shall mean the occurrence of any one or more of the following events without the Executive’s prior written consent, unless the Company fully corrects the circumstances constituting Good Reason within thirty (30) days following the date written notice is delivered to the Board by the Executive which specifically identifies the circumstances constituting Good Reason (provided such circumstances are capable of correction): 

 

(i)a material diminution in the Executive’s base compensation; 

 

(ii)a material diminution in the Executive’s authority, duties or responsibilities, including a requirement that the Executive report to a corporate officer or employee instead of reporting directly to the Board; 

 

(iii)a material change in the geographic location at which the Executive must perform his duties; or 

 

(iv)any other action or inaction that constitutes a material breach by the Company of its obligations to the Executive under this Agreement. 

 

Notwithstanding the foregoing, “Good Reason” shall only exist if the Executive shall have provided the Board with written notice within ninety (90) days of the initial occurrence of any of the foregoing events or conditions which specifically identifies the circumstances constituting Good Reason (provided such circumstances are capable of correction). The Executive’s resignation from employment with the Company for Good Reason must occur within six (6) months following the initial existence of the event or condition constituting Good Reason. 

 

(e)Notice of Termination. Any termination by the Company, or by the Executive, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 10(c) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than sixty (60) days after the giving of such notice). The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, 

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respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder. 

 

(f)Date of Termination. “Date of Termination” means (i) if the Executive’s employment is terminated by the Company without Cause or by reason of the Executive’s Disability, or by the Executive for Good Reason, the date specified in the Notice of Termination (which date shall not be prior to the expiration of the applicable correction period and shall not be more than sixty (60) days after the giving of such notice), as the case may be, (ii) if the Executive’s employment is terminated by the Company for Cause, the Date of Termination shall be the date on which the Company notifies the Executive of such termination (or such other date specified by the Company, which date shall not be more than sixty (60) days after the giving of such notice), (iii) if the Executive’s employment is terminated by the Executive without Good Reason, the Date of Termination shall be the thirtieth (30th) day after the date on which the Executive notifies the Company of such termination, unless otherwise agreed by the Company and the Executive, and (iv) if the Executive’s employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive. 

 

4.Obligations of the Company upon Termination.

 

(a)Without Cause or For Good Reason. If, during the Employment Period, the Company shall terminate the Executive’s employment without Cause or the Executive shall terminate his employment for Good Reason: 

 

(i)The Executive shall be paid an amount equal to the sum of: 

 

(A)the Executive’s earned but unpaid Base Salary and accrued but unpaid paid time off through the Date of Termination (the “Accrued Obligations”), which Accrued Obligations shall be paid to the Executive on the Date of Termination, plus 

(B)the Company shall pay the Executive a cash payment equal to the average Annual Bonuses received by the Executive during the immediately preceding two (2) years, payable no later than ten (10) days after the Release Effective Date; and

(ii)For the period beginning on the Date of Termination and ending on the date which is twelve (12) full months following the Date of Termination (or, if earlier, the date on which the Executive accepts employment with another employer that provides comparable benefits in terms of cost and scope of coverage or the date on which the applicable continuation period under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) expires), the Company shall provide the Executive and his eligible dependents who were covered under the Company’s health plans as of the date of the Executive’s termination with healthcare benefits which are substantially the same as the benefits provided to currently active employees at such cost to the Executive; provided, however, that (A) if any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the period of continuation coverage to be, exempt from the application of Section 409A (as defined below) under Treasury Regulation Section 1.409A-1(a)(5), or (B) the Company is 

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otherwise unable to continue to cover the Executive under its group health plans without incurring penalties (including without limitation, pursuant to Section 2716 of the Public Health Service Act or the Patient Protection and Affordable Care Act), then, in either case, an amount equal to each remaining Company subsidy shall thereafter be paid to the Executive in substantially equal taxable monthly installments over the continuation coverage period (or the remaining portion thereof). The Executive shall be solely responsible for all matters relating to his continuation of coverage pursuant to COBRA, including, without limitation, his election of such coverage and his timely payment of premiums; 

 

(iii)To the extent not theretofore paid or provided, the Company shall timely pay or provide to the Executive any vested benefits and other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company (such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”); and 

 

(iv)Effective as of the Date of Termination, but subject to the occurrence of the Release Effective Date, 100% of any outstanding unvested stock options, restricted stock and other equity awards granted to the Executive under any of the Company’s equity incentive plans other than performance-based vesting awards shall become immediately vested and exercisable in full. 

Notwithstanding the foregoing, it shall be a condition to the Executive’s right to receive the amounts provided for in Sections 4(a)(i)(B), 4(a)(ii) and 4(a)(iv) above that the Executive execute, deliver to the Company and not revoke a release of claims in substantially the form attached hereto as Exhibit A (the “Release”). The Executive shall have fifty (50) days following the Date of Termination to execute such Release. It is understood that, in the event that the Executive is at least forty (40) years old on the Date of Termination, the Executive has a certain period to consider whether to execute such Release, and the Executive may revoke such Release within seven (7) business days after execution. In the event the Executive does not execute such Release within the fifty (50) days following the Date of Termination, or if the Executive revokes such Release within the subsequent seven (7) business day period, the Executive shall not be entitled to the amounts provided for in Sections 4(a)(i)(2), 4(a)(ii) and 4(a)(iv) above. The date on which the Executive’s Release becomes effective and the applicable revocation period lapses shall be the “Release Effective Date.”

 

(b)For Cause or Without Good Reason. If the Executive’s employment shall be terminated by the Company for Cause or by the Executive without Good Reason during the Employment Period, the Company shall have no further obligations to the Executive under this Agreement other than the obligation to pay to the Executive the Accrued Obligations in cash on the Date of Termination and to provide the Other Benefits.

 

(c)Death or Disability. If the Executive dies or if the Executive’s employment is terminated by reason of the Executive’s Disability during the Employment Period, the Executive (or the Executive’s estate or beneficiaries in the case of the death of the Executive) shall have no right to receive any compensation or benefit hereunder on and after the Date of Termination other than payment of the Accrued Obligations in cash on the Date of Termination and the provision of the Other Benefits.

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(d)Exclusive Remedy. Except as otherwise expressly required by law or as specifically provided herein, all of the Executive’s rights to salary, severance, benefits, bonuses and other amounts hereunder (if any) accruing after the termination of the Executive’s employment shall cease upon such termination. In the event of a termination of the Executive’s employment with the Company, the Executive’s sole remedy shall be to receive the payments and benefits described in this Section 4. In addition, the Executive acknowledges and agrees that he is not entitled to any reimbursement by the Company for any taxes payable by the Executive as a result of the payments and benefits received by the Executive pursuant to this Section 4, including, without limitation, any excise tax imposed by Section 409A and Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”). 

 

(e)No Mitigation. The Executive shall not be required to mitigate the amount of any payment provided for in this Section 4 by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Section 4 be reduced by any compensation earned by the Executive as the result of employment by another employer or self-employment or by retirement benefits; provided, however, that loans, advances (other than salary advances) or other amounts owed by the Executive to the Company under a written agreement may be offset by the Company against amounts payable to the Executive under this Section 4; provided, further, that no such offset shall operate to accelerate the payment of any non-qualified deferred compensation. 

 

5.Restrictive Covenants. 

 

(a)Confidentiality. The Executive shall hold in a fiduciary capacity for the benefit of the Company all trade secrets and confidential information, knowledge or data relating to the Company and its subsidiaries and affiliates (collectively, the “Company Group”) and their businesses and investments, which shall have been obtained by the Executive during the Executive’s employment by the Company and which is not generally available public knowledge (other than by acts by the Executive in violation of this Agreement). Except as may be required or appropriate in connection with his carrying out his duties under this Agreement, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or any legal process, or as is necessary in connection with any adversarial proceeding against the Company (in which case the Executive shall use his reasonable best efforts in cooperating with the Company in obtaining a protective order against disclosure by a court of competent jurisdiction), communicate or divulge any such trade secrets, information, knowledge or data to anyone other than the Company and those designated by the Company or on behalf of the Company in the furtherance of its business or to perform duties hereunder. Notwithstanding the foregoing, nothing in this Agreement is intended or shall be interpreted as prohibiting the Executive from filing a charge or complaint with any administrative or law enforcement office or agency, exercising any whistleblower rights, providing testimony or information to, or participating in or cooperating with any administrative agency (including the NLRB, EEOC and SEC), governmental investigation or inquiry, or testifying in any administrative or judicial proceeding.

 

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(b)Non-Competition. During the Employment Period, the Executive will not (i) engage, anywhere within the geographical areas in which the Company Group is conducting its business operations or providing services, in any commercial real estate project which is being engaged in by the Company Group or pursue or attempt to develop any retail project known to the Executive and which the Company Group is pursuing, developing or attempting to develop (a “Project”), directly or indirectly, alone, in association with or as a shareholder, principal, agent, partner, officer, director, employee or consultant of any other organization, or (ii) divert to any entity which is engaged in any business conducted by the Company Group in the same geographic area as the Company Group, any Project or any customer of any of the Company Group. Notwithstanding the preceding sentence, the Executive shall not be prohibited from owning less than three (3%) percent of any publicly traded corporation, whether or not such corporation is in competition with the Company. If, at any time, the provisions of this Section 5(b) shall be determined to be invalid or unenforceable, by reason of being vague or unreasonable as to area, duration or scope of activity, this Section 5(b) shall be considered divisible and shall become and be immediately amended to only such area, duration and scope of activity as shall be determined to be reasonable and enforceable by the court or other body having jurisdiction over the matter; and the Executive agrees that this Section 5(b) as so amended shall be valid and binding as though any invalid or unenforceable provision had not been included herein. 

 

(c)Company Property. All records, files, drawings, documents, models, equipment, and the like relating to the Company’s business, which the Executive has control over shall not be removed from the Company’s premises without its written consent, unless such removal is in the furtherance of the Company’s business or is in connection with the Executive’s carrying out his duties under this Agreement and, if so removed, shall be returned to the Company promptly after termination of the Executive’s employment hereunder, or otherwise promptly after removal if such removal occurs following termination of employment. The Executive shall assign to the Company all rights to trade secrets and other products relating to the Company’s business developed by him alone or in conjunction with others at any time while employed by the Company.

 

(d)Injunctive Relief. In recognition of the fact that irreparable injury will result to the Company in the event of a breach by the Executive of his obligations under Sections 5(a) through (c) of this Agreement, that monetary damages for such breach would not be readily calculable, and that the Company would not have an adequate remedy at law therefor, the Executive acknowledges, consents and agrees that in the event of such breach, or the threat thereof, the Company shall be entitled, in addition to any other legal remedies and damages available under law or in equity, to specific performance thereof and to temporary and permanent injunctive relief (without the necessity of posting a bond) to restrain the violation or threatened violation of such obligations by the Executive.

 

(e)Survival. This Section 5 shall survive any termination of the Employment Period and any expiration or termination of this Agreement. 

 

6.Insurance. The Company shall have the right to take out life, health, accident, “key-man” or other insurance covering the Executive, in the name of the Company and at the 

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Company’s expense in any amount deemed appropriate by the Company. The Executive shall assist the Company in obtaining such insurance, including, without limitation, submitting to any required examinations and providing information and data required by insurance companies. The Executive shall have no interest in any such policies obtained by the Company. 

 

7.Successors.

 

(a)This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive other than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives. 

 

(b)This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. 

 

(c)The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise. 

 

8.Payment of Financial Obligations. The payment or provision to the Executive by the Company of any remuneration, benefits or other financial obligations pursuant to this Agreement shall be allocated to the Company and, if applicable, any subsidiary and/or affiliate thereof in accordance with any agreements to such effect by the Company, as in effect from time to time. 

 

9.Indemnification. 

 

(a)During the Employment Term and thereafter, the Company agrees to indemnify and hold the Executive and the Executive’s heirs and representatives harmless, to the maximum extent permitted by law, against any and all damages, costs, liabilities, losses and expenses (including reasonable attorneys’ fees) as a result of any claim or proceeding (whether civil, criminal, administrative or investigative), or any threatened claim or proceeding (whether civil, criminal, administrative or investigative), against the Executive that arises out of or relates to the Executive’s service as an officer, director or employee, as the case may be, of the Company, or the Executive’s service, act or inaction for the benefit of the Company, including but not limited to, the delivery of any personal guarantee or collateral for the benefit of the Company, in any such capacity or similar capacity with an affiliate of the Company or other entity at the request of the Company, both prior to and after the Effective Date, and promptly to advance to the Executive or the Executive’s heirs or representatives any and all such expenses upon written request with appropriate documentation of such expense and upon receipt of an undertaking by the Executive or on the Executive’s behalf to repay such amount if it shall ultimately be determined that the Executive is not entitled to be indemnified by the Company. 

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(b)During the Employment Term and thereafter, the Company also shall provide the Executive with coverage under its current directors’ and officers’ liability policy to the same extent that it provides such coverage to its other executive officers. If the Executive has any knowledge of any actual or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative, as to which the Executive may request indemnity under this provision, the Executive will give the Company prompt written notice thereof; provided, that the failure to give such notice shall not affect the Executive’s right to indemnification. The Company shall be entitled to assume the defense of any such proceeding and the Executive will use reasonable efforts to cooperate with such defense. To the extent that the Executive in good faith determines that there is an actual or potential conflict of interest between the Company and the Executive in connection with the defense of a proceeding, the Executive shall so notify the Company and shall be entitled to separate representation at the Company’s expense by counsel selected by the Executive (provided that the Company may reasonably object to the selection of counsel within ten (10) business days after notification thereof) which counsel shall cooperate, and coordinate the defense, with the Company’s counsel and minimize the expense of such separate representation to the extent consistent with the Executive’s separate defense and to the extent possible and consistent with all applicable rules of legal ethics. This Section 9 shall continue in effect after the termination of the Executive’s employment or the termination of this Agreement. 

10.Miscellaneous. 

 

(a)Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. 

 

(b)Arbitration. Except as set forth in Section 5(d) above, any disagreement, dispute, controversy or claim arising out of or relating to this Agreement or the interpretation of this Agreement or any arrangements relating to this Agreement or contemplated in this Agreement or the breach, termination or invalidity thereof shall be settled by final and binding arbitration before a single, neutral arbitrator in San Diego, California in accordance with the then existing JAMS Employment Arbitration Rules and Procedures then in effect (the “Rules”). The Rules may be found online at www.jamsadr.org. In the event of such an arbitration proceeding, the Executive and the Company shall select a mutually acceptable neutral arbitrator from among the JAMS panel of arbitrators. If the parties are unable to agree upon an arbitrator, one shall be appointed by JAMS in accordance with its Rules. Neither the Executive nor the Company nor the arbitrator shall disclose the existence, content, or results of any arbitration hereunder without the prior written consent of all parties. Arbitration may be compelled pursuant to the California Arbitration Act (Code of Civil Procedure §§ 1280 et seq.). The arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the state of California, or federal law, or both, as applicable, and the arbitrator is without jurisdiction to apply any different substantive law. The arbitrator shall render an award and a written, reasoned opinion in support thereof. Judgment upon the award may be entered in any court having jurisdiction thereof. Each party shall pay the fees of its own attorneys, the expenses of its witnesses and all other expenses 

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connected with presenting its case; provided, however, the Executive and the Company agree that, except as may be prohibited by law, the arbitrator may, in his or her discretion, award reasonable attorneys’ fees to the prevailing party. Other costs of the arbitration, including the cost of any record or transcripts of the arbitration, the JAMS administrative fees, the fee of the arbitrator, and all other fees and costs, shall be borne by the Company. This Section 10(b) is intended to be the exclusive method for resolving any and all claims by the parties against each other for payment of damages under this Agreement or relating to the Executive’s employment; provided, however, that the Executive shall retain the right to file administrative charges with or seek relief through any government agency of competent jurisdiction, and to participate in any government investigation, including but not limited to (i) claims for workers’ compensation, state disability insurance or unemployment insurance; (ii) claims for unpaid wages or waiting time penalties brought before the California Division of Labor Standards Enforcement; provided, however, that any appeal from an award or from denial of an award of wages and/or waiting time penalties shall be arbitrated pursuant to the terms of this Agreement; and (iii) claims for administrative relief from the United States Equal Employment Opportunity Commission and/or the California Department of Fair Employment and Housing (or any similar agency in any applicable jurisdiction other than California); provided, further, that the Executive shall not be entitled to obtain any monetary relief through such agencies other than workers’ compensation benefits or unemployment insurance benefits. Nothing in this Section 10(b) shall prohibit or limit the Company or the Executive from seeking provisional relief, including, without limitation, injunctive relief, in a court of competent jurisdiction pursuant to California Code of Civil Procedure Section 1281.8. Both the Executive and the Company expressly waive their right to a jury trial. 

 

(c)Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: 

 

If to the Executive: at the Executive’s most recent address on the records of the Company

 

If to the Company: 

Presidio Property Trust, Inc. 

1282 Pacific Oaks Place 

Escondido, California 92029-2900

Attention:  General Counsel

 

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee. 

 

(d)Sarbanes-Oxley Act of 2002. Notwithstanding anything herein to the contrary, if the Company determines, in its good faith judgment, that any transfer or deemed transfer of funds hereunder is likely to be construed as a personal loan prohibited by Section 13(k) of the Exchange Act and the rules and regulations promulgated thereunder, then such transfer or deemed transfer shall not be made to the extent necessary or appropriate so as not to violate the Exchange Act and the rules and regulations promulgated thereunder. 

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(e)Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. 

 

(f)Withholding. The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation. 

 

(g)No Waiver. The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 3(d) of this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. 

 

(h)Survival. Provisions of this Agreement shall survive any termination of the Employment Period if so provided herein or if necessary or desirable to fully accomplish the purposes of such provision, including, without limitation, the Executive’s obligations under Section 5 hereof. The obligation of the Company to make payments to or on behalf of the Executive under Section 4 hereof is expressly conditioned upon the Executive’s continued full performance of his obligations under Section 5 hereof. The Executive recognizes that, except as expressly provided in Section 4, no compensation is earned after termination of the Employment Period. 

 

(i)Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, written or oral, with the Company or its subsidiaries (or any predecessor of either). 

 

(j)Counterparts. This Agreement may be executed simultaneously in two counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.

 

(k)Right to Advice of Counsel. The Executive acknowledges that he has the right to, and has been advised to, consult with an attorney regarding the execution of this Agreement and any release hereunder; by his signature below, the Executive acknowledges that he understands this right and has either consulted with an attorney regarding the execution of this Agreement or determined not to do so. 

 

(l)Section 409A of the Code.

 

(i)To the extent applicable, this Agreement shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder (together, “Section 409A”). Notwithstanding any provision of this Agreement to the contrary, if the Company determines that any compensation or benefits payable under this Agreement may be subject to Section 409A, the Company shall 

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work in good faith with the Executive to adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Company determines are necessary or appropriate to avoid the imposition of taxes under Section 409A, including without limitation, actions intended to (A) exempt the compensation and benefits payable under this Agreement from Section 409A, and/or (B) comply with the requirements of Section 409A; provided, however, that this Section 10(l) shall not create an obligation on the part of the Company to adopt any such amendment, policy or procedure or take any such other action, nor shall the Company have any liability for failing to do so.

 

(ii)Any right to a series of installment payments pursuant to this Agreement is to be treated as a right to a series of separate payments. To the extent permitted under Section 409A, any separate payment or benefit under this Agreement or otherwise shall not be deemed “nonqualified deferred compensation” subject to Section 409A to the extent provided in the exceptions in Treasury Regulation Section 1.409A-1(b)(4), Section 1.409A-1(b)(9) or any other applicable exception or provision of Section 409A.

 

(iii)Notwithstanding anything herein to the contrary, to the extent any payments to the Executive pursuant to Sections 4(a)(i)(B), 4(a)(ii) and 4(a)(iv) are treated as “nonqualified deferred compensation” subject to Section 409A, then (A) no amount shall be payable pursuant to such section unless the Executive’s termination of employment constitutes a “separation from service” with the Company (as such term is defined in Treasury Regulation Section 1.409A-1(h) and any successor provision thereto) (a “Separation from Service”), and (B) if the Executive, at the time of his Separation from Service, is determined by the Company to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code and the Company determines that delayed commencement of any portion of the termination benefits payable to the Executive pursuant to this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code (any such delayed commencement, a “Payment Delay”), then such portion of the Executive’s termination benefits described in Sections 4(a)(i)(B), 4(a)(ii) and 4(a)(iv) shall not be provided to the Executive prior to the earlier of (A) the expiration of the six-month period measured from the date of the Executive’s Separation from Service, (B) the date of the Executive’s death or (C) such earlier date as is permitted under Section 409A. Upon the expiration of the applicable Code Section 409A(a)(2)(B)(i) deferral period, all payments deferred pursuant to a Payment Delay shall be paid in a lump sum to the Executive within ten (10) days following such expiration, and any remaining payments due under the Agreement shall be paid as otherwise provided herein. The determination of whether the Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation from Service shall made by the Company in accordance with the terms of Section 409A of the Code and applicable guidance thereunder (including without limitation Treasury Regulation Section 1.409A-1(i) and any successor provision thereto).

 

(iv)To the extent that any payments or reimbursements provided to the Executive under this Agreement are deemed to constitute compensation to the Executive to which Treasury Regulation Section 1.409A-3(i)(1)(iv) would apply, such amounts shall be paid or reimbursed reasonably promptly, but not later than December 31 of the year following the 

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year in which the expense was incurred. The amount of any such payments eligible for reimbursement in one year shall not affect the payments or expenses that are eligible for payment or reimbursement in any other taxable year, and the Executive’s right to such payments or reimbursement of any such expenses shall not be subject to liquidation or exchange for any other benefit.

 

(v)In the event that the amounts payable under Sections 4(a)(i)(B), 4(a)(ii) and 4(a)(iv) are subject to Section 409A and the timing of the delivery of the Executive’s Release could cause such amounts to be paid in one or another taxable year, then notwithstanding the payment timing set forth in such sections, such amounts shall not be payable until the later of (A) the payment date specified in such section or (B) the first business day of the taxable year following the Executive’s Separation from Service.

 

(m)Third‐Party Beneficiaries. This Agreement does not create, and shall not be construed as creating, any rights enforceable by any person not a party to this Agreement.

 

 

[Signatures Appear on Following Page]

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IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the authorization from the Board, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year written below. 

 

	
 
	
 
	
 
	
 
	
 

	
PRESIDIO PROPERTY TRUST, INC.

 

	
 
	
 

	
By:
	
 
	
/s/ Shirley Bullard

	
 
	
 
	
Shirley Bullard

	
Title:
	
 
	
Chair, Compensation Committee of the Board of Directors

 

	
Date:
	
 
	
October 18, 2017

	
 

	
 

	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 

	
EXECUTIVE

 

	
 

	
/s/ Jack K. Heilbron

	
Jack K. Heilbron

President, Chief Executive Officer

 

	
Date:_October 18, 2017___________

 

[Signature Page]

 

US-DOCS\93731500.3

 

EXHIBIT A

GENERAL RELEASE

[The language in this Release may change based on legal developments and evolving best

practices; this form is provided as an example of what will be included in the final Release document.] 

This release is being executed pursuant to the Employment Agreement, effective as of October 18, 2017, between Presidio Property Trust, Inc. (the “Company”) and Jack K. Heilbron (the “Agreement”). 

For a valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned does hereby release and forever discharge the “Releasees” hereunder, consisting of the Company and each of its partners, subsidiaries, associates, affiliates, successors, heirs, assigns, agents, directors, officers, employees, representatives, lawyers, insurers, and all persons acting by, through, under or in concert with them, or any of them, of and from any and all manner of action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, losses, costs, attorneys’ fees or expenses, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called “Claims”), which the undersigned now has or may hereafter have against the Releasees, or any of them, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof. The Claims released herein include, without limiting the generality of the foregoing, any Claims in any way arising out of, based upon, or related to the employment or termination of employment of the undersigned by the Releasees, or any of them; any alleged breach of any express or implied contract of employment; any alleged torts or other alleged legal restrictions on Releasee’s right to terminate the employment of the undersigned; and any alleged violation of any federal, state or local statute or ordinance including, without limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination In Employment Act, the Americans With Disabilities Act, and the California Fair Employment and Housing Act. Notwithstanding the foregoing, this release shall not operate to release the following Claims: (i) Claims based on any right the undersigned may have to enforce the Company’s executory obligations under the Agreement; (ii) Claims the undersigned may have to accrued or vested benefits the undersigned may have, if any, as of the date hereof under any applicable plan, policy, practice, program, contract or agreement with the Company; (iii) any Claims, including claims for indemnification and/or advancement of expenses arising under any indemnification agreement between the undersigned and the Company or under the bylaws, certificate of incorporation or other similar governing document of the Company; (iv) any Claims which cannot be waived under applicable law; (v) Claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law; (vi) Claims for workers’ compensation insurance benefits under the terms of any worker’s compensation insurance policy or fund of the Company; (vii) the undersigned’s right to bring to the attention of the Equal Employment Opportunity Commission or the California Department of Fair Employment and Housing or any other federal, state or local government agency claims of discrimination, or from participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission or any other federal, state or local government agency; provided, however, that the undersigned does release his or her right to secure any damages for alleged discriminatory treatment; or (viii) with respect to the undersigned’s right to communicate 

Exhibit A

 

US-DOCS\93731500.3

 

directly with, cooperate with, or provide information to, any federal, state or local government regulator.

THE UNDERSIGNED ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY LEGAL COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS: 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.” 

THE UNDERSIGNED, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS HE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT. 

IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS: 

(A) HE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE; 

(B) HE HAS [TWENTY-ONE (21)][FORTY-FIVE (45)] DAYS TO CONSIDER THIS RELEASE BEFORE SIGNING IT; AND 

(C) HE HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE THIS RELEASE, AND THIS RELEASE WILL BECOME EFFECTIVE UPON THE EXPIRATION OF THAT REVOCATION PERIOD. 

The undersigned represents and warrants that there has been no assignment or other transfer of any interest in any Claim which he may have against Releasees, or any of them, and the undersigned agrees to indemnify and hold Releasees, and each of them, harmless from any liability, Claims, demands, damages, costs, expenses and attorneys’ fees incurred by Releasees, or any of them, as the result of any such assignment or transfer or any rights or Claims under any such assignment or transfer. It is the intention of the parties that this indemnity does not require payment as a condition precedent to recovery by the Releasees against the undersigned under this indemnity. 

Notwithstanding the foregoing, nothing in this release or the Agreement is intended or shall be interpreted as prohibiting the undersigned from filing a charge or complaint with any administrative or law enforcement office or agency, exercising any whistleblower rights, providing testimony or information to, or participating in or cooperating with any administrative agency (including the NLRB, EEOC and SEC), governmental investigation or inquiry, or testifying in any administrative or judicial proceeding.

The undersigned agrees that if he hereafter commences any suit arising out of, based upon, or relating to any of the Claims released hereunder or in any manner asserts against Releasees, or any of them, any of the Claims released hereunder, then the undersigned agrees to pay to Releasees, and each of them, in addition to any other damages caused to Releasees 

Exhibit A

 

US-DOCS\93731500.3

 

thereby, all attorneys’ fees incurred by Releasees in defending or otherwise responding to said suit or Claim. 

The undersigned further understands and agrees that neither the payment of any sum of money nor the execution of this Release shall constitute or be construed as an admission of any liability whatsoever by the Releasees, or any of them, who have consistently taken the position that they have no liability whatsoever to the undersigned. 

IN WITNESS WHEREOF, the undersigned has executed this Release this      day of             ,         . 

 

	
 

	
 

	
Jack K. Heilbron

 

 

Exhibit A

 

US-DOCS\93731500.3

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