Document:

csgs-ex1039a_110.htm

EXHIBIT 10.39A

 

ADOPTION AGREEMENT

 

1.01PREAMBLE

 

By the execution of this Adoption Agreement the Plan Sponsor hereby [complete (a) or (b)]

 

		
	
(a)
	
adopts a new plan as of  

 

amends and restates its existing plan as of December 6, 2017 which is the amendment Restatement Date. Except as otherwise provided in Appendix A, all amounts deferred under the Plan prior to the Amendment Restatement Date shall be governed by the terms of the Plan as in effect on the day before the Amendment Restatement Date.

 

Original Effective Date: July 17, 1996 [month, day, year] 

 

Pre-409A Grandfathering:X  Yes     No

	
(b)

 

	
 
	
1.02
	
PLAN

 

Plan Name: CSG Systems, Inc. Wealth Accumulation Plan

 

 

Plan Year: December 31

 

	
 
	
1.03
	
PLAN SPONSOR

 

Name: CSG Systems, Inc.

Address: 6175 S. Willow Drive, Greenwood, Colorado 80111 

Phone #: 303.200.3128

EIN: 

Fiscal Yr.: 

 

Is stock of the Plan Sponsor, any Employer or any Related Employer publicly traded on an established securities market?

 

X  YesNo

 

 

 

 

	
 
	
1.04
	
EMPLOYER

 

			
	
The following entities have been authorized by the Plan Sponsor to participate in and have adopted the Plan (insert “Not Applicable” if none have been authorized):

	
Entity
	
Publicly Traded on Est. Securities Market

	
 
	
Yes
	
No

	
CSG Systems, Inc. (“Systems”)X
	
 

	
CSG Systems International, Inc. (“International)
	
X

	
Prairie Interactive Messaging, Inc.
	
X

	
Any current or future Subsidiary (defined to mean a corporation or other entity, domestic or foreign, of which not less than fifty (50%) of the voting shares or other voting interests are beneficially owned, either directly or indirectly through another corporation or entity, by CSG Systems International, Inc.
	

 

	
 
	
1.05
	
ADMINISTRATOR

 

The Plan Sponsor has designated the following party or parties to be responsible for the administration of the Plan:

 

Name: Wealth Accumulation Plan Committee

Address: 6175 S. Willow Drive, Greenwood, Colorado 80111

 

Note: The Administrator is the person or persons designated by the Plan Sponsor to be responsible for the administration of the Plan. Neither Fidelity Employer Services Company nor any other Fidelity affiliate can be the Administrator.

 

	
 
	
1.06
	
KEY EMPLOYEE DETERMINATION DATES

 

The Employer has designated as the Identification Date for purposes of determining Key Employees.

 

In the absence of a designation, the Identification Date is December 31.

 

The Employer has designated as the effective date for purposes of applying the six month delay in distributions to Key Employees.

 

In the absence of a designation, the effective date is the first day of the fourth month following the Identification Date.

 

 

 

2.01PARTICIPATION

 

		
	
(a)     X
	
Employees [complete (i), (ii) or (iii)]

	
(i)
	
Eligible Employees are selected by the Employer.

	
(ii)
	
X     Eligible Employees are those employees of the Employer who satisfy the following criteria:

	
 
	
are classified as a Vice President or equivalent title, Senior Vice President or equivalent title or more senior executive on the Employer’s human resource information management system other than an employee who is a nonresident alien with no United States sourced income.

	
(iii)
	
Employees are not eligible to participate.

	
(b)     X
	
Directors [complete (i), (ii) or (iii)]

	
(i)
	
All Directors are eligible to participate.

	
(ii)
	
Only Directors selected by the Employer are eligible to participate.

	
(iii)
	
    X  Directors are not eligible to participate.

 

 

 

	
 
	
3.01
	
COMPENSATION

 

		
	
For purposes of determining Participant contributions under Article 4 and Employer contributions under Article 5, Compensation shall be defined in the following manner [complete (a) or (b) and select (c) and/or (d), if applicable]:

	
(a)X
	
Compensation is defined as:

	
 
	
For Plan Years before 2018, all Base Salary, Commission, Bonuses and Sales Incentive Payments the Participant earns for services rendered to an  Employer with respect to a Plan Year. 

 

“Base Salary” means the Participant’s regular base salary for the Plan Year determined before: (1) any reduction pursuant to Code sections 125, 132(f)(4), or 401(k); (2) any reduction to reflect a deferral election in accordance with this Plan; (3) after-tax withholdings for insurance premium payments, including accident, death and disability, and life insurance premiums; and (4) Social Security and Medicare withholding obligations imposed on an Employer and any other withholding requirements imposed by law with respect to such amounts. 

 

“Base Salary” excludes: (i) non-cash payments, (ii) short or long-term disability benefits, (iii) vacation or floating holiday payout because of a Separation from Service, (d) military leave pay, (iv) In Lieu of Notice pay, (v) severance payments, (vi) moving expenses, (vii) car or other special allowances, (viii) other special compensation amounts, (ix) taxable reimbursements , and (x) similar amounts, whether or not taxable.

 

“Commissions” means any fee, sum or percentage earned by a Participant for transacting a piece of business or performing a service for an Employer.

 

“Bonus” means a payment of incentive remuneration other than a Sales Incentive Payment or Commission earned by a Participant and payable by an

Employer. 

 

“Sales Incentive Payment” means a payment other than a Commission earned by a Participant and payable under a sales incentive plan maintained by an Employer.

 

For Plan Years after 2017, “Compensation” has the same meaning provided above, but excludes Commissions and Sales Incentive Payments.

 

	
(b)
	
Compensation as defined in[insert name of qualified plan] without regard to the limitation in Section 401(a)(17) of the Code for such Plan Year.

 

 

 

 

		
	
(c)
	
Director Compensation is defined as:

	
 
	
 

 

 

	
 

(d)

 

(e)
	
 

Compensation shall, for all Plan purposes, be limited to $ .

 

Not Applicable

 

 

 

 

	
 
	
3.02
	
BONUSES/INCENTIVE PAYMENTS

 

Compensation, as defined in Section 3.01 of the Adoption Agreement, includes the following types of incentive payments other than Commissions:

 

 

			
	
Type
	
Will be treated as Performance Based on Compensation

	
 
	
Yes
	
No

	
Bonuses
	
 
	
X

	
Sales Incentive Payments*
	
 
	
X

	
Not Applicable
	
 
	
 

 

*The definition of Compensation excludes Sales Incentive Payments for Plan Years after 2017.

 

 

 

	
 
	
4.01
	
PARTICIPANT CONTRIBUTIONS

 

If Participant contributions are permitted, complete (a), (b), and (c). Otherwise complete (d).

 

	
 
	
(a)
	
Amount of Deferrals

 

A Participant may elect within the period specified in Section 4.3 of the Basic Plan Document and Section 4.01(b) of the Adoption Agreement to defer the following amounts of remuneration.** For each type of remuneration listed, complete “dollar amount” and / or “percentage amount”. Participants may not defer Commissions or Sales Incentive Payments for Plan Years after 2017.

 

** Notwithstanding any other provision of this Section 4.01, in the case of Eligible Executives other than the Chairman of the Board, the Chief Executive Officer, the President, an Executive Vice President, and the Chief Financial Officer of Systems or International, the maximum aggregate amount of Compensation which an Eligible Executive may defer for any Plan Year is $50,000; and if any Deferral Agreement would result in the deferral of an aggregate amount greater than $50,000 for any Plan Year, then the actual deferral for such Plan Year shall be limited to $50,000. Notwithstanding any other provision of this Section 4.01, in the case of an Eligible Executive who is the Chairman of the Board, the Chief Executive Officer, the President, an Executive Vice President, or the Chief Financial Officer of Systems or International, the maximum aggregate amount of Compensation which such Eligible Executive may defer for any Plan Year is $700,000; and if any Deferral Agreement would result in the deferral of an aggregate amount greater than $700,000 for any Plan Year, then the actual deferral for such Plan Year shall be limited to $700,000. The Compensation Committee of the Board of Directors of International, in its absolute discretion, may increase the maximum permitted deferral amount for any Plan Year for any one or more Eligible Executives. Notwithstanding the foregoing, any exercise of discretion by the Compensation Committee of the Board of Directors of International to increase the maximum permitted deferral amount for any Plan Year for any one or more Eligible Executives shall only be effective with respect to one or more future Plan Years (or such other period permitted under Section 409A of the Code).

 

	
 
	
(i)
	
Compensation Other than Bonuses [do not complete if you complete (iii)]

 

							
	
 
	
Dollar Amount
	
% Amount
	
 

Increment

	
Type of Remuneration
	
Min
	
Max
	
Min
	
Max

	
(a)
	
Base Salary
	
 
	
 
	
5%
	
25%
	
1%

	
(b)
	
Commissions*
	
 
	
 
	
5%
	
100%
	
1%

	
(c)
	
Sales Incentive Payments*
	
 
	
 
	
5%
	
100%
	
1%

 

 

 

Note: The increment is required to determine the permissible deferral amounts. For example, a minimum of 0% and maximum of 20% with a 5% increment would allow an individual to defer 0%, 5%, 10%, 15% or 20%.

 

*Participants may not defer Commissions or Sales Incentive Payments for Plan Years after 2017.

 

	
 
	
(ii)
	
Bonuses [do not complete if you complete (iii)]

 

							
	
 
	
Dollar Amount
	
% Amount
	
 

Increment

	
Type of Bonus
	
Min
	
Max
	
Min
	
Max

	
(a)
	
Bonuses
	
 
	
 
	
5%
	
100%
	
1%

	
(b)
	
 
	
 
	
 
	
 
	
 
	
 

	
(c)
	
 
	
 
	
 
	
 
	
 
	
 

 

	
 
	
(iii)
	
Bonuses [do not complete if you complete (i) and (ii)]

 

					
	
Dollar Amount
	
% Amount
	
 

Increment

	
Min
	
Max
	
Min
	
Max

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

 

	
 
	
(iv)
	
Director of Compensation

 

						
	
 
	
Dollar Amount
	
% Amount
	
 

Increment

	
Type of Compensation
	
Min
	
Max
	
Min
	
Max

	
Annual Retainer
	
 
	
 
	
 
	
 
	
 

	
Meeting Fees
	
 
	
 
	
 
	
 
	
 

	
Other:
	
 
	
 
	
 
	
 
	
 

	
Other:
	
 
	
 
	
 
	
 
	
 

 

				
	
(b)
	
Election Period
	
 

	
 
	
(i)
	
Performance Based Compensation

	
 
	
 
	
A special election period

	
 
	
 
	
Does
	
X   Does Not

	
 
	
 
	
apply to each eligible type of performance based compensation referenced in Section 3.02 of the Adoption Agreement.

	
 
	
 
	
The special election period, if applicable, will be determined by the Employer.

 

 

 

				
	
 
	
(ii)
	
Newly Eligible Participants

	
An employee who is classified or designated as an Eligible Employee during a Plan Year

	
 
	
 
	
X     May
	
May Not

	
elect to defer Compensation (excluding Bonuses, Sales Incentive Payments, and Commissions) earned during the remainder of the Plan Year by completing a deferral agreement within the 30 day period beginning on the date he is eligible to participate in the Plan.

	
(c)
	
Revocation of Deferral Agreement

	
A Participant’s deferral agreement

	
 
	
 

X
	
Will
	
 

	
 
	

	
Will Not
	
 

	
be cancelled for the remainder of any Plan Year during which he receives a hardship distribution of elective deferrals from a qualified cash or deferred arrangement maintained by the Employer. If cancellation occurs, the Participant may resume participation in accordance with Article 4 of the Plan.

	
(d)
	
No Participant Contributions

	
 
	
 

	
Participant contributions are not permitted under the Plan.

 

 

 

	
 
	
5.01
	
EMPLOYEE CONTRIBUTIONS

 

If Employer contributions are permitted, complete (a) and/or (b). Otherwise complete (c).

 

	
 
	
(a)
	
Matching Contributions

 

	
 
	
(i)
	
Amount

 

For each Plan Year, the Employer shall make a Matching Contribution on behalf of each Participant who defers Compensation for the Plan Year and satisfies the requirements of Section 5.01(a)(ii) of the Adoption Agreement equal to [complete the ones that are applicable]:

 

	
 
	
(A)
	
 [insert percentage] of the Compensation the Participant has elected to defer for the Plan Year
	
 

 

	
 
	
(B)
	
An amount determined by the Employer in its sole discretion

 

	
 
	
(C)
	
Matching Contributions for each Participant shall be limited to

$       and/or        % of Compensation.

 

	
 
	
(D)
	
 X Other: 25% of the deferred Compensation not  to  exceed  $6,250 for any one Plan Year
	
 

 

	
 
	
(E)
	
Not Applicable [Proceed to Section 5.01(b)]

 

	
 
	
(ii)
	
Eligibility for Matching Contribution

 

A Participant who defers Compensation for the Plan Year shall receive an allocation of Matching Contributions determined in accordance with Section 5.01(a)(i) provided he satisfies the following requirements [complete the ones that are applicable]:

 

	
 
	
(A)
	
Describe requirements:

 

 

 

	
 
	
(B)
	
Is selected by the Employer in its sole discretion to receive an allocation of Matching Contributions
	
 

 

	
 
	
(C)
	
X No Requirements 
	
 

 

 

 

 

	
 
	
(iii)
	
Time of Allocation

 

Matching Contributions, if made, shall be treated as allocated [select one]:

 

	
 
	
(A)
	
As of the last day of the Plan Year

 

	
 
	
(B)
	
At such times as the Employer shall determine in its sole discretion.
	
 

 

	
 
	
(C)
	
    X   At the time the Compensation on account of which the Matching Contribution is being made would otherwise have been paid to the Participant
	
 

 

	
 
	
(D)
	
Other:

 

 

	
 
	
(b)
	
Other Contributions

 

	
 
	
(i)
	
Amount

 

The Employer shall make a contribution on behalf of each Participant who satisfies the requirements of Section 5.01(b)(ii) equal to [complete the ones that are applicable]:

 

	
 
	
(A)
	
An amount equal to [insert number] % of the Participant’s Compensation
	
 

 

	
 
	
(B)
	
   X    An amount determined by the Employer in its sole discretion
	
 

 

	
 
	
(C)
	
Contributions for each Participant shall be limited to $ 

 

	
 
	
(D)
	
Other:

 

 

 

	
 
	
(E)
	
Not Applicable [Proceed to Section 6.01]

 

	
 
	
(ii)
	
Eligibility for Other Contributions

 

A Participant shall receive an allocation of other Employer contributions determined in accordance with Section 5.01(b)(i) for the Plan Year if he satisfies the following requirements [complete the one that is applicable]:

 

 

 

	
 
	
(A)
	
Describe requirements:

 

 

	
 
	
(B)
	
    X    Is selected by the Employer in its sole discretion to receive an allocation of other Employer contributions.
	
 

 

	
 
	
(C)
	
No requirements

 

	
 
	
(iii)
	
Time of Allocation

 

Employer contributions, if made, shall be treated as allocated [select one]:

 

	
 
	
(A)
	
As of the last day of the Plan Year

 

	
 
	
(B)
	
      X    At such time or times as the Employer shall determine in its sole discretion
	
 

 

	
 
	
(C)
	
Other:

 

 

 

	
 
	
(c)
	
No Employer Contributions

 

Employer contributions are not permitted under the Plan.

 

 

 

	
 
	
6.01
	
DISTRIBUTIONS

 

The timing and form of payment of distributions made from the Participant’s vested account shall be made in accordance with the elections made in this Section 6.01 of the Adoption Agreement except when Section 9.6 of the Plan requires a six month delay for certain distributions to Key Employees of publicly traded companies.

 

	
 
	
(a)
	
Timing of Distributions

 

	
 
	
(i)
	
All distributions shall commence in accordance with the following [choose one]:
	
 

 

	
 
	
(A)        X  
	
As soon as administratively feasible following the distribution event but in no event later than the time prescribed by Treas. Reg. Sec. 1.409A-3(d).
	
 

	
 
	
(B)
	
Monthly on specified day [insert day]

	
 
	
(C)
	
Annually on specified month and day [insert month and day]

	
 
	
(D)
	
Calendar quarter on specified month and day [month of quarter (insert 1,2 or 3); day (insert day)]
	
 

 

	
 
	
(ii)
	
The timing of distributions as determined in Section 6.01(a)(i) shall be modified by the adoption of:
	
 

 

	
 
	
(A)         X
	
Event Delay – Distribution events other than those based on Specified Date, Specified Age, death or Change in Control will be treated as not having occurred for six (6) months [insert number of months].
	
 

 

	
 
	
(B)
	
Hold Until Next Year – Distribution events other than those based on Specified Date or Specified Age will be treated as not having occurred for twelve months from the date of the event if payment pursuant to Section 6.01(a)(i) will thereby occur in the next calendar year or on the first payment date in the next calendar year in all other cases.
	
 

 

	
 
	
(C)
	
Immediate Processing – The timing method selected by the Plan Sponsor under Section 6.01(a)(i) shall be overridden for the following distribution events [insert events]:
	
 

 

 

 

	
 
	
(D)
	
Not applicable.

 

 

 

		
		
	
(b)
	
Distribution Events

 

Participants may elect the following payment events and the associated form or forms of payment. If multiple events are selected, the earliest to occur will trigger payment to the extent the form or payment event are provided by the Plan Sponsor as options in the deferral agreement for the Plan Year. For installments, insert the range of available periods (e.g., 5-15) or insert the periods available (e.g., 5,7,9).

 

				
	
 
	
 
	
Lump Sum
	
Installments

	
X
	
Specified Date
	
 
	
0 – 15 years

	
 
	
Specified Age
	
 
	
 

	
X
	
Separation from Service
	
 
	
0 – 15 years

	
 
	
Separation from Service plus 6 months
	
 
	
 

	
 
	
Separation from Serviceplus    months [not   to exceed months
	
 
	
 

	
 
	
Retirement
	
 
	
 

	
 
	
Retirement plus 6 months
	
 
	
 

	
 
	
Retirement plus    months [not to exceed   months]
	
 
	
 

	
 
	
Later of Separation from Service or Specified Age
	
 
	
 

	
 
	
Later of Separation from Service or Specified Date
	
 
	
 

	
 
	
Disability
	
 
	
 

	
X
	
Death
	
X
	
 

	
 
	
Change in Control
	
 
	
 

 

The minimum deferral period for Specified Date or Specified Age event shall be three (3) years.

 

Installments may be paid [select each that applies]

		
	
X
	
Monthly

	
 
	
Quarterly

	
 
	
Annually

 

      

  

 

 

 

 

 

 

 

 

 

		
	
(c)
	
Specified Date and Specified Age elections may not extend beyond age Not Applicable [insert age or “Not Applicable” if no maximum age applies].

 

	
(d)
	
Payment Election Override 

 

Payment of the remaining vested balance of the Participant’s Account will automatically occur at the time specified in Section 6.01(a) of the Adoption Agreement in the form indicated upon the earliest to occur of the following events [check each event that applies and for each event include only a single form of payment]:

 

				
	
 
	
EVENTS
	
FORM OF PAYMENT

	
 
	
 
	
LUMP SUM
	
INSTALLMENT

	
 
	
Separation from Service
	
 
	
 

	
 
	
Separation from Service before Retirement
	
 
	
 

	
X
	
Death
	
X
	
 

	
 
	
Disability
	
 
	
 

	
 
	
Not Applicable
	
 
	
 

 

The following paragraph applies to deferrals on and after January 1, 2018. If a Participant experiences a Separation from Service before the occurrence of a Specified Date elected by the Participant, all amounts subject to such Specified Date election shall be paid in a lump sum at the time that the Participant would be entitled to receive his/her first distribution due to a Separation from Service pursuant to Sections 6.01(a)(i) and (ii) of the Adoption Agreement, without regard to the Participant’s Specified Date distribution elections or whether the Participant would have been entitled to receive his/her Specified Date distribution on an earlier date, but for this provision. For the avoidance of doubt, if a Participant experiences a Separation from Service before the occurrence of a Specified Date shall be subject to the mandatory six-month delay for Separation of Service distributions set forth in Section 6.01(a)(ii) of the Adoption Agreement. Notwithstanding the foregoing, in the event a Participant experiences a Separation from Service after a Specified Date but prior to the complete payment of amounts subject to such Specified Date election, all remaining amounts subject to such Specified Date election shall continue to be paid at the same time and in the same form elected by the Participant until paid in full (unless Participant dies prior to complete payment, in which case the payment election override in this Section 6.01(d) for death shall apply).

 

		
	
(e)
	
Involuntary Cashouts

 

 

 

	
	
   If the Participant’s vested Account at the time of his Separation from   

   Service does not exceed $distribution of the vested Account shall 

   automatically be made in the form of a single lump sum in accordance with 

   Section 9.5 of the Plan.

	
X  There are no involuntary cashouts.

	
 

 

		
	
(f)
	
Retirement

	
 
	
X      Retirement shall be defined as a Separation from Serviced that occurs on or after the Participant attains age 65

	
 
	
No special definition of Retirement applies.

 

		
	
(g)
	
Distribution Election Change

	
 
	
A Participant

	
 
	
X      Shall

	
 
	
Shall Not

	
 
	
be permitted to modify a scheduled distribution date and/or payment option in accordance with Section 9.2 of the Plan.

	
 
	
A Participant shall generally be permitted to elect such modification one number of times.

	
 
	
Administratively, allowable distribution events will be modified to reflect all options necessary to fulfill the distribution change election provision.

 

		
	
(h)
	
Frequency of Elections

	
 
	
The Plan Sponsor

	
 
	
X      Has

	
 
	
Has Not

	
 
	
Elected to permit annual elections of a time and form of payment for amounts deferred under the Plan.

 

 

 

	
 
	
7.01
	
VESTING

(a) Matching Contributions

 

The Participant’s vested interest in the amount credited to his Account attributable to Matching Contributions shall be based on the following schedule:

 

			
	
X
	
Years of Service
	
Vesting %

	
 
	
0
	
(insert ‘100’ if there is immediate vesting)

	
 
	
1
	
 

	
 
	
2
	
 

	
 
	
3
	
100%

	
 
	
4
	
 

	
 
	
5
	
 

	
 
	
6
	
 

	
 
	
7
	
 

	
 
	
8
	
 

	
 
	
9
	
 

	
 
	
 
	
 

	
 
	
Other:
	
 

	
 
	
Class year vesting applies
	
 

	
 
	
Not Applicable
	
 

 

(b)  Other Employee Contributions

 

The Participant’s vested interest in the amount credited to his Account attributable to Employer contributions other than Matching Contributions shall be based on the following schedule:

 

			
	
X
	
Years of Service
	
Vesting %

	
 
	
0
	
(insert ‘100’ if there is immediate vesting)

	
 
	
1
	
 

	
 
	
2
	
 

	
 
	
3
	
100%

	
 
	
4
	
 

	
 
	
5
	
 

	
 
	
6
	
 

	
 
	
7
	
 

	
 
	
8
	
 

	
 
	
9
	
 

	
 
	
 
	
 

	
 
	
Other:
	
 

	
 
	
Class year vesting applies
	
 

	

	
Not Applicable
	
 

 

 

 

 

 

 

 

			
			
	
(c)
	
Acceleration of Vesting

	
 
	
A Participant’s vested interest in his Account will automatically be 100% upon the occurrence of the following events: [select the ones that are applicable]:

	
 
	
(i)X
	
Death

	
 
	
(ii)X
	
Disability

	
 
	
(iii)X
	
Change in Control

	
 
	
(iv)X
	
Eligibility for Retirement

	
 
	
(v)X
	
Other: Plan Termination

	
 
	
(vi)
	
Not applicable.

 

			
	
(d)
	
Years of Service

	
 
	
(i)
	
A Participant’s Years of Service shall include all service performed for the Employer and

	
 
	
 
	
X         Shall

	
 
	
 
	
Shall Not

	
 
	
 
	
include service performed for the Related Employer.

 

 

 

	
 
	
(ii)
	
Years of Service shall also include service performed for the following entities:
	
 

 

 

 

 

	
 
	
(iii)
	
Years of Service shall be determined in accordance with (select one)

 

	
 
	
(A)
	
The elapsed time method in Treas. Reg. Sec. 1.410(a)-7

 

	
 
	
(B)
	
The general method in DOL Reg. Sec. 2530.200b-1 through b- 4
	
 

 

	
 
	
(C)
	
The Participant’s Years of Service credited under [insert name of plan]  
	
 

	
 
	
(D)
	
       X      Other: Continuous based on elapsed time method in Treas. Reg. Sec. 1.410(a)-7

 

 

	
 
	
(iv)
	
Not applicable.

 

 

 

8.01UNFORESEEABLE EMERGENCY

 

		
	
(a)
	
A withdrawal due to an Unforeseeable Emergency as defined in Section 2.24:

	
 
	
X        Will

	
 
	
Will Not [if Unforeseeable Emergency withdrawals are not permitted, proceed to Section 9.01]

	
 
	
be allowed.

	
(b)
	
Upon a withdrawal due to an Unforeseeable Emergency, a Participant’s deferral election for the remainder of the Plan Year:

	
 
	
X        Will

	
 
	
Will Not

	
 
	
be cancelled. If cancellation occurs, the Participant may resume participation in accordance with Article 4 of the Plan.

 

 

 

9.01INVESTMENT DECISIONS

 

		
	
Investment decisions regarding the hypothetical amounts credited to a Participant’s Account shall be made by [select one]:

	
(a)
	
X        The Participant or his Beneficiary

	
(b)
	
The Employer

 

 

 

10.01 GRANTOR TRUST

 

	
	
The Employer [select one]:

	
Does

	
X          Does Not

	
intend to establish a grantor trust in connection with the Plan.

 

 

 

	
 
	
11.01
	
TERMINATION UPON CHANGE IN CONTROL

 

	
	
The Plan Sponsor

	
X           Reserves

	
Does Not Reserve

	
the right to terminate the Plan and distribute all vested amounts credited to Participant Accounts upon a Change in Control as described in Section 9.7.

 

 

	
 
	
11.02
	
AUTOMATIC DISTRIBUTION UPON CHANGE IN CONTROL

 

	
	
Distribution of the remaining vested balance of each Participant’s Account

	
Shall

	
X            Shall Not

	
automatically be paid as a lump sum payment upon the occurrence of a Change in Control as provided in Section 9.7.

 

	
 
	
11.03
	
CHANGE IN CONTROL

 

		
	
A Change in Control for Plan purposes includes the following [select each definition that applies]:

	
(a)
	
X        A change in the ownership of the Employer as described in Section 9.7(c) of the Plan.

	
(b)
	
X        A change in the effective control of the Employer as described in Section 9.7(d) of the Plan.

	
(c)
	
X        A change in the ownership of a substantial portion of the assets of the Employer as described in Section 9.7(e) of the Plan.

	
(d)
	
Not Applicable.

 

 

 

12.01 GOVERNING STATE LAW

 

The laws of Nebraska shall apply in the administration of the Plan to the extent not preempted by ERISA.

 

 

 

EXECUTION PAGE

 

 

The Plan Sponsor has caused this Adoption Agreement to be executed this 13th day of

 September, 2018.

 

 

 

			
	
PLAN SPONSOR:
	
 
	
Gregory L. Cannon

	
By:
	
 
	
/s/ Gregory L. Cannon

	
Title:
	
 
	
SVP, General Counsel & Secretary

	
 
	
 
	
 

 

 

 

 

 

APPENDIX A

SPECIAL EFFECTIVE DATES

 

Not ApplicableExhibit 10.1

    

    

    SUBLEASE AGREEMENT

    

    

    THIS SUBLEASE AGREEMENT (together with any and
        all future amendments or modifications thereto, the “Sublease”) is
        entered into as of September 27, 2018 (the “Effective Date”), by and between NOVO
        NORDISK RESEARCH CENTER SEATTLE, INC., a          Delaware corporation (“NNRCSI”) and ASTERIAS BIOTHERAPEUTICS, INC., a Delaware corporation (“Asterias”).

    

    

    THE PARTIES ENTER this Sublease on the basis of the following facts, understandings and intentions:

    

    

    A.          NNRCSI is the tenant of the Premises (as defined
        below) pursuant to that certain Lease effective as of September 27, 2018 (the “Master
          Lease”) by and between BMR - 6300 DUMBARTON CIRCLE LP, a Delaware limited partnership (“BMR”), as landlord, and NNRCSI, as tenant. A copy of the
        Master Lease with all exhibits and addenda thereto is attached hereto as Exhibit C.

    

    

    B.          NNRCSI desires to sublease the Sublet Space (defined
        below) to Asterias and Asterias desires to sublease the Sublet Space from NNRCSI on all of the terms, covenants and conditions hereinafter set forth.

    

    

    C.          All of the terms and definitions in the Defined Terms
        section are incorporated herein by this reference. Any capitalized terms used and not defined herein shall have the meanings ascribed to them in the Master Lease.

    

    

    NOW, THEREFORE, IN CONSIDERATION of the mutual
        covenants and promises of the parties, and incorporating this Sublease’s recitals and exhibits as part of their agreement as if fully stated herein, the parties hereto agree as follows:

    

    

    
      
        	I.	
                DEFINED TERMS

              

      

    

    

    

    	
            Rent:

          	
            (i) From the Commencement Date until the Strategic Space Expiration Date (defined below) (which may be accelerated pursuant to Section 16 below or
                extended pursuant to Section 1.3 below): the Monthly Base Rent paid by Asterias will be (this table does not change the below defined Expiration Dates):

          
	 	 
	 	
            Mos. 1-12

          	
            $67,814.00

          
	 	
            Mos. 13-24

          	
            $69,731.00

          
	 	
            Mos. 25-36*

          	
            $71,888.00

          
	 	
            Mos. 37-48**

          	
            $74,045.00

          
	 	
            *Strategic Space Expiration Date is 10/31/2020

            **First Floor Space Expiration Date is 12/31/2021

          

    
      
        

    

    
    

    

    	 	
            (ii) If the Strategic Space Expiration Date occurs prior to the First Floor Space Expiration Date, then the Monthly Base for the remainder of the
                Term (i.e. until the subsequently occurring First Floor Space Expiration Date (which may be accelerated pursuant to Section 16 below or extended pursuant to
                Section 1.3 below) will be (this table does not change the before defined First Floor Space Expiration Date):

          
	 	 
	 	
            Mos. 1-12

          	
            $53,146.00

          
	 	
            Mos. 13-24

          	
            $54,648.00

          
	 	
            Mos. 25-36

          	
            $56,339.00

          
	 	
            Mos. 37-48*

          	
            $58,029.00

          
	 	
            *First Floor Space Expiration Date is 12/31/2021

          
	 	 
	
            Rent:

          	
            “Rent” refers to Base Rent, Additional Rent and all other
                amounts due from Asterias to NNRCSI under this Sublease (including without limitation the Asterias OpEx Share of the NNRCSI Direct Operating Expenses – all defined below).

          
	 	 
	
            Building:

          	
            Means the “Building” as defined in the Master Lease, which is
                located at 16300 Dumbarton Circle, Fremont, California.

          
	 	 
	
            Commencement Date:

          	
            September 27, 2018

          
	 	 
	
            Strategic Space Expiration Date:

          	
            October 31, 2020

          
	 	 
	
            First Floor Space Expiration Date:

          	
            December 31, 2021

          
	 	 
	
            Permitted Use:

          	
            The Permitted Use as defined in the Master Lease.

          
	 	 
	
            Premises:

          	
            44,000 RSF (as more particularly defined in the Master Lease).

          
	 	 
	
            Security Deposit:

          	
            $150,000.00

          
	 	 
	
            Asterias’ Notice Address:

          	
            Asterias Biotherapeutics, Inc.

            6300 Dumbarton Circle

            Fremont, California 94555

          
	 	 
	
            NNRCSI’ s Address:

          	
            530 Fairview Avenue North

            Seattle, Washington 98109

            Attn: Jan Beck

            With a mandatory copy to:

            Novo Nordisk, Inc.

            800 Scudders Mill Road

            Plainsboro, NJ 08536

            Attn: Legal Department

          

    
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            Sublet Space:

          	
            ·     This Sublease grants
                Asterias the exclusive use of a portion of the Sublet Space and non-exclusive use, in common with NNRCSI, its affiliates, employees, agents, contractors, lenders, and invitees (collectively, with NNRCSI the “NNRCSI Users”) for other portions of the Sublet Space. The measurements used in this Sublease are not subject to remeasurement unless BMR elects to remeasure the
                Premises pursuant to the Master Lease, in which case any new measurement figures applied to the Master Lease will be used to proportionately adjust the both the measurements of the Sublet Space and the Rent.

          
	 	 
	 	
            ·     The “Sublet Space” consists of the “Strategic Space” and the “First Floor Space.”

          
	 	 
	 	
            ·     The Strategic Space is the portion of the Premises located on the second floor of the Building. As depicted on Exhibit A  (the “Floor Plan”),
                approximately 2,001 RSF of the Strategic Space will be exclusively sublet to Asterias (identified on the Floor Plan as the Dedicated
                Space/Functionally Asterias, referred to herein as the “Exclusive Strategic Space”), while approximately 6,264 RSF of the Strategic Space will be used in common with the NNRCSI Users (identified on the Floor Plan as Shared Space/Functionality, referred to herein as the “Shared Strategic Space”).

          
	 	 
	 	
            ·     The First Floor Space is approximately the portion of the Premises located on the first floor of the Building as depicted on the Floor Plan, approximately 14,451 RSF of the First Floor Space will be exclusively sublet to Asterias (identified on the Floor Plan as the Dedicated Space/Functionally Asterias, referred to as the “Exclusive First Floor Space”), while approximately 8,657 RSF of
                the First Floor Space used in common with the NNRCSI Users (identified on the Floor Plan as Shared Space/Functionality, referred to as the “Shared First Floor
                  Space”).

          
	 	 
	 	
            ·     Collectively the Exclusive
                Strategic Space and Exclusive First Floor Space is referred to as the “Exclusive Sublet Space” and the Shared Strategic Space and Shared First Floor
                Space is referred to as the “Shared Sublet Space”

          

    
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            ·     For purposes of reimbursing NNRCSI
                for expenses NNRCSI pays directly relating to the Sublet Space, for the entire Sublet Space, the parties will use 54.46% as the “Asterias OpEx Share”,
                and for that portion of time when Asterias is only subletting the First Floor Space the “Asterias OpEx Share” will be reduced to 42.68%. The parties agree to these percentages, regardless of the actual size of the Sublet Space and agree it
                roughly translates to 100% of the Sublet Space exclusively sublet to Asterias, and 50% of the Sublet Space shared with others.

          
	 	 
	
            Term:

          	
            ·     As to the Strategic Space: Commencing on the Commencement Date and expiring on the Strategic Space Expiration Date.

          
	 	 
	 	
            ·     As to the First Floor Space: Commencing on the Commencement Date and expiring on the First Floor Space Expiration Date.

          
	 	 
	
            Other Defined Terms

          	
            ·     “Indemnity” (and variations thereof) means to “indemnify, defend (with counsel reasonably acceptable to indemnitee), save and hold harmless the indemnitee.

          
	 	 
	 	
            ·   “Claims” means, collectively: demands, claims, liabilities, losses, costs, expenses, actions, causes of action, damages, suits or judgments, and all reasonable expenses
                (including reasonable attorneys’ fees, charges and disbursements, regardless of whether the applicable demand, claim, action, cause of action or suit is voluntarily withdrawn or dismissed) incurred in investigating or resisting the same.

          
	 	 
	
            Exhibits and Schedule:

          	
            Exhibit A – Floor Plan

            Exhibit B – Initial NNRCSI Work

            Exhibit C – Master Lease

            Exhibit D – Shared Equipment

          

    

    

    

    

    
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        	II.	
                SUBLEASE

              

      

    

    

    

    1.          Sublease. NNRCSI hereby subleases the Sublet Space to Asterias, and Asterias hereby
        subleases the Sublet Space from NNRCSI, for the Term hereof, subject to all of the terms and conditions of this Sublease. As to those portions of the Sublet Space identified as the Exclusive Strategic Space and the Exclusive First Floor Space
        (collectively the “Exclusive Portion of Sublet Space”), during the Term applicable to each of those spaces, Asterias will have exclusive use of such space,
        subject to NNRCSI’s rights under this Sublease and BMR’s rights under the Master Lease. As to those portions of the Sublet Space identified as the Shared Strategic Space and the Shared First Floor Space (collectively the “Shared Portion of Sublet Space”), during the Term applicable to each of those Spaces, Asterias will share access to the Shared Portion of Sublet Space with NNRCSI Users, and subject
        to NNRCSI’s rights under this Sublease and BMR’s rights under the Master Lease. NNRCSI shall deliver the Sublet Space to Asterias not later than the Commencement Date, provided that NNRCSI will thereafter complete certain Alterations to the
        Premises to demise the Exclusive Portion of Sublet Space to reflect the Floor Plan shown on Exhibit A, at NNRCSI’s sole expense, as soon as reasonably
        practicable following the Commencement Date (the “Demising Alterations”), although Asterias’ obligation to pay Rent will commence on the Commencement Date,
        even though the Demising Alterations are not completed. If the Term commences on a date other than the Commencement Date, NNRCSI and Asterias shall execute a memorandum setting forth the actual date of commencement of the Term. Although NNRCSI
        agrees to construct the Demising Alterations and all other NNRCSI Work at NNRCSI’s sole cost and expense, Asterias shall cause all Asterias’ personal property to be secured and then moved into the Sublet Space from the other portions of the
        Premises, at Asterias’ sole expense, and with Asterias assuming all risks relating thereto.

    

    

    1.1          Condition of Sublet Space. Prior to the Commencement Date, Asterias was the tenant of the entire Premises under a direct lease with BMR, which terminated on the same date as this
        Sublease’s Commencement Date (the “BMR-Asterias Lease”). NNRCSI shall deliver the Sublet Premises to Asterias in its “AS IS” condition. Asterias further
        acknowledges that NNRCSI has made no representations of any kind in connection with improvements or physical conditions of, or bearing on, the use of the Sublet Space. Asterias shall rely solely on Asterias’s own inspection and examination of the
        Sublet Space, and not on any representations of NNRCSI, express or implied. Except for the Demising Alterations, Asterias has no right to require, and NNRCSI is not required to perform, any alterations to the Sublet Space, however NNRCSI reserves
        such rights under Section 1.3 below.

    

    

    1.2          Limitation of NNRCSI’s Obligations.  Asterias expressly acknowledges and agrees that no affirmative obligations are imposed upon NNRCSI under this Sublease to perform BMR’s
        obligations under the Master Lease; and confirms that NNRCSI’s only obligations under this Sublease are to (a) pay its Rent and otherwise perform its duties as a tenant under the Master Lease (except as to the Sublet Space which is addressed as
        Asterias’ obligations in Section 2.1 below); (b) construct the Demising Alterations; and (c) except as otherwise agreed upon in Section 1.3 below, not unreasonably interfere with Asterias’ business operations from the Exclusive Portion of Sublet
        Space during the construction of NNRCSI Work. Asterias further recognizes and agrees that except for the Demising Alterations, neither NNRCSI nor BMR shall be required to perform any construction, alteration or maintenance of or to the Sublet
        Space. Notwithstanding the foregoing, NNRCSI agrees to act as a conduit only (with no other performance obligations) to relay to BMR any requests Asterias may have for BMR to perform or provide services. To be clear, if there are any obligations,
        whether payment of money, performance, other obligations or Indemnities (defined in Master Lease) imposed on NNRCSI under the Master Lease to perform an act or provide a service, then as to the Exclusive Portion of Sublet Space, such obligations
        are assumed by Asterias and not NNRCSI, and for the Shared Portion of Sublet Space, both NNRCSI and Asterias are obligated to perform such obligations and provide such Indemnities to the extent applicable to each of their Tenant Parties (as defined
        in the Master Lease).

    

    

    
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    1.3          NNRCSI Work Obligations. Neither the Demising Alterations nor any other initial Tenant Improvements (defined in the Master Lease) are required to be performed prior to the
        Commencement Date (the Demising Alterations and the initial Tenant Improvements are hereinafter referred to collectively as “NNRCSI Work”). The only NNRCSI
        Work which NNRCSI is required to perform is the Demising Alterations as set forth in Section 1 above. Asterias agrees that NNRCSI has the right, but not the obligation, to cause other Alterations (defined in the Master Lease), including any initial
        Tenant Improvements to be performed to the Sublet Premises during the Term, in NNRCSI’s sole, good faith discretion and without causing a constructive eviction, or affording Asterias any Claim, deduction or offset to the amounts due to NNRCSI under
        this Sublease; provided that (a) NNRCSI agrees to use commercially reasonable efforts to complete the initial Tenant Improvements it intends to perform and the Demising Alterations prior to December 31, 2018, and (b) except in the event of an
        emergency, NNRCSI agrees to use commercially reasonable, good faith efforts not to unreasonably interfere with Asterias’ use of the Sublet Space during construction of NNRCSI Work during the Term. Except for in the event of an emergency, if NNRCSI
        elects to alter the Sublet Space during the Term, but such alterations would unreasonably interfere with Asterias’ use of the Sublet Space (as reasonably and in good faith determined by Asterias) the alterations will not proceed; however, within 48
        hours of a request by either party the parties shall have designated representatives meet to discuss in good faith how to work together to allow NNRCSI to proceed with performing the Alterations in a reasonable manner and timeframe that will not
        unreasonably interfere with Asterias’ use of the Sublet Space. The designated representatives for NNRCSI shall be JOHN  FRANDSEN and the designated
        representatives for Asterias shall be CRAIG  HALBERSTADT. If, notwithstanding such good faith attempt to minimize disturbance caused by NNRCSI Work in
        the Sublet Space, NNRCSI elects to proceed with the NNRCSI Work in the Sublet Space, and such work has caused a delay in Asterias performing operating its business from the Sublet Space for the Permitted Use (an “NNRCSI Delay”), then the Term (as to both the Strategic Space and the First Floor Space) will, at Asterias’ option, be extended by one day, for each day of delay caused by the NNRCSI
        Delay. If Asterias elects to exercise this option to extend the Term, Asterias shall deliver notice to the above noted NNRCSI designated representative within five (5) business days from the start of the alleged NNRCSI Delay, informing NNRCSI that
        Asterias is claiming an NNRCSI Delay, and again within ten (10) business days from the cessation of the NNRCSI Delay, informing NNRCSI of the scope of the delay caused by the NNRCSI Work (with reasonable documentation thereof), and Asterias’
        proposed changes to the Strategic Space Expiration Date and the First Floor Space Expiration Date. NNRCSI will have ten (10) business days from receipt of the second notice to confirm its agreement with such new dates, request additional
        information, or inform Asterias that it contests its claim of an NNRCSI Delay or the proposed dates, with NNRCSI’s silence deemed approval of the new dates. Notwithstanding any NNRCSI Delay, under no circumstances will the Term continue beyond the
        expiration or earlier termination of the Master Lease.

    

    

    
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    1.4          Shared Equipment License. During the Term only, NNRCSI shall grant Asterias a non-exclusive, non-cancellable license, at no additional cost to Asterias, to use certain items of
        NNRCSI’s personal property located within the Sublet Space and listed on attached Exhibit D (the “Shared Equipment”); this license is subject to the following conditions: (a) Asterias accepts the Shared Equipment in as-is, where-is condition; (b) Asterias assumes all risk and waives all Claims arising from
        or relating to the Shared Equipment, except to the extent caused by the negligence or willful misconduct of NNRCSI Indemnitees; (c) Asterias covenants to properly use, maintain and repair any of the Shared Equipment when Asterias uses and completes
        the use of such equipment; (d) Asterias is prohibited from exercising its rights to use the Shared Equipment during any time when there is an uncured Asterias default under this Sublease; and (e) if both Asterias and NNRCSI wish to use a certain
        item of Shared Equipment at the same time, NNRCSI shall have the senior right to use such item(s), and Asterias agrees it has no Claim against NNRCSI for the failure of such item(s) to be readily available as and when Asterias request. NNRCSI shall
        retain ownership of the Shared Equipment, except as otherwise agreed upon in the Master Lease.

    

    

    2.          Sublease Subject
        to Master Lease.

    

    

    2.1          Inclusions. It is expressly understood, acknowledged and agreed by Asterias that all of
        the other terms, conditions and covenants of this Sublease shall be those stated in the Master Lease except as excluded in Section 2.2 below, modified as appropriate in the circumstances so as to make the provisions of the Master Lease applicable
        only to the subleasing hereunder by NNRCSI of the particular Sublet Space covered hereby. Whenever the word “Premises” is used in the Master Lease, for purposes of this Sublease, the word Sublet Space shall be substituted. Asterias shall be subject
        to, bound by and comply with all of said Articles and Sections of the Master Lease with respect to the Sublet Space and shall satisfy all applicable terms and conditions of the Master Lease relating to the Sublet Space for the benefit of both
        NNRCSI and BMR, it being understood and agreed that wherever in the Master Lease the word “Tenant” appears, for the purposes of this Sublease, the word “Asterias” shall be substituted, wherever the word “Landlord” appears, for the purposes of this
        Sublease, the word “NNRCSI” shall be substituted; and that upon the breach of any of said terms, conditions or covenants of the Master Lease by Asterias or upon the failure of Asterias to pay Rent or comply with any of the provisions of this
        Sublease, NNRCSI may exercise any and all rights and remedies granted to BMR as the Landlord under the Master Lease. If there is a conflict between the terms of this Sublease and the Master Lease, the terms of this Sublease shall control. It is
        further understood and agreed that NNRCSI has no duty or obligation to Asterias under the aforesaid Articles and Sections of the Master Lease other than to perform the obligations of NNRCSI as tenant under the Master Lease during the Term of this
        Sublease. Whenever the provisions of the Master Lease incorporated as provisions of this Sublease require the written consent of the Landlord, said provisions shall be construed to require the written consent of both BMR and NNRCSI. Asterias hereby
        acknowledges that it has read and is familiar with all of the terms of the Master Lease and agrees that this Sublease is subordinate and subject to the Master Lease and that any termination thereof not due to a default by NNRCSI thereunder shall
        likewise terminate this Sublease. For the avoidance of doubt, if NNRCSI terminates the Master Lease pursuant to any right to terminate the Master Lease provided therein, this Sublease shall terminate as of the termination of the Master Lease and
        NNRCSI shall not have any liability to Asterias as a result of such termination; provided that if such early termination is voluntary (and specifically not arising from a
        termination by BMR or its Lender, or relating to a casualty or a condemnation), then NNRCSI will deliver at least 12 months advanced written notice of such termination to Asterias, which will include the Term’s accelerated expiration date.

    

    

    
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    2.2          Exclusions. The terms and provisions of the following Sections and portions of the Master
        Lease are not incorporated into this Sublease and shall not be binding upon either Asterias or Asterias under this Sublease: Recitals A, B, Sections 1, 2.1-2.6, 2.8-2.11, 2.12 (references to Exhibits A, B-1, C, G), 3, 4, 7.1-7.3 (except to the
        extent needed in connection with Section 3 of this Sublease), 13.3, 16.4 (as to Shared Sublet Space only), 17.1 and 18.1 (both modified to eliminate floor dollar amounts for obtaining NNRCSI consents but otherwise applicable), 24.1-24.8 (as to
        providing Asterias any right to terminate this Sublease based on a casualty, but otherwise applicable), 27.1, 27.2, 40, 42, Exhibits A, C, G. For purposes of this Sublease, all notices shall be delivered to the parties at the addresses set forth
        above.

    

    

    2.3          Time for Notice. The time limits provided for in the provisions of the Master Lease for
        the giving of notice, making of demands, performance of any act, condition or covenant, or the exercise of any right, remedy or option, are amended for the purposes of this Sublease by lengthening or shortening the same in each instance by three
        (3) days, as appropriate, so that notices may be given, demands made, or any act, condition or covenant performed, or any right, remedy or option hereunder exercised, by NNRCSI or Asterias, as the case may be, within the time limit relating thereto
        contained in the Master Lease. If the Master Lease allows only three (3) days or less for NNRCSI to perform any act, or to undertake to perform such act, or to correct any failure relating to the Sublet Space or this Sublease, then Asterias shall
        nevertheless be allowed two (2) days to perform such act, undertake such act and/or correct such failure.

    

    

    
      8

      
        

    

    

    

    3.          Rent.

    

    

    3.1          Base Rent. Upon execution hereof, Asterias shall deliver the first months’ Base Rent to
        NNRCSI and the first months’ estimated Additional Rent, to be applied against Asterias’s first obligation to pay Rent hereunder. Asterias shall pay to NNRCSI the Rent in advance on the first day of each month of the Term, commencing on the
        Commencement Date without being invoiced by NNRCSI. In the event the first day of the Term shall not be the first day of a calendar month or the last day of the Term is not the last day of the calendar month, the Rent shall be appropriately
        prorated based on the actual number of days in such month. All installments of Rent shall be delivered to NNRCSI’s Address, or at such other place as may be designated in writing from time to time by NNRCSI, in lawful money of the United States and
        without deduction or offset for any cause whatsoever.

    

    

    3.2          Additional Rent. Asterias shall pay NNRCSI, as additional rent, the Asterias OpEx Share of
        all Additional Rent charged by BMR to NNRCSI under the Master Lease, in monthly installments and the same shall be due and payable in advance on the first day of each calendar month.

    

    

    3.3          Reimbursement for Direct Expenses. Under the Master Lease, NNRCSI is obligated to perform certain maintenance, repair and replacement obligations for the entirety of the Premises
        (the “NNRCSI Direct Expenses”). To the extent there are NNRCSI Direct Expenses which relate to the Sublet Space and are payable by Asterias under Section 2.1
        above, Asterias will pay the Asterias OpEx Share of such NNRCSI Direct Expenses as additional rent. Asterias shall have the right to review the Annual Statement with respect to the Asterias OpEx Share of such NNRCSI Direct Expenses and timely
        contest any item of additional rent pursuant to Section 16.3 of the Master Lease.

    

    

    4.          Security Deposit. Upon execution hereof, and as a condition concurrent to the
        effectiveness of this Sublease, Asterias shall deposit the Security Deposit with NNRCSI. The Security Deposit shall secure Asterias’s obligations under this Sublease to pay Rent and other monetary amounts, to maintain the Sublet Space and repair
        damages thereto, to surrender the Sublet Space to NNRCSI in clean condition and repair upon termination of this Sublease and to discharge Asterias’s other obligations hereunder. NNRCSI may use and commingle the Security Deposit with other funds of
        NNRCSI. If Asterias is in default hereunder, NNRCSI may, but without any obligation to do so, apply all or any portion of the Security Deposit towards fulfillment of Asterias’s unperformed obligations. If NNRCSI does so apply any portion of the
        Security Deposit, Asterias’s failure to remit to NNRCSI a sufficient amount in cash to restore the Security Deposit to the original amount within ten (10) days after receipt of NNRCSI’s written demand to do so shall constitute an event of default.
        Upon the termination of this Sublease and provided that there are not any uncured events of default hereunder, NNRCSI shall return the balance of the Security Deposit after NNRCSI has applied all or a portion of the Security Deposit against
        Asterias’s obligations hereunder, to Asterias without payment of interest.  Asterias hereby waives any and all rights under the provisions of Section 1950.7 of the California Civil Code or other laws regarding security deposits.

    

    

    
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    5.          Use. The Sublet Space is to be used for the Permitted Use, and for no other purpose or
        business without the prior written consent of both NNRCSI and BMR.  In no event shall the Sublet Space be used for a purpose or use prohibited by the Master Lease.

    

    

    6.          Holdover. This Sublease shall terminate without further notice at the expiration of the
        Term. If after expiration of the Term, Asterias remains in possession of the Sublet Space, Asterias shall become a tenant from month to month only, upon all the provisions of this Sublease (except as to Term and Base Rent), but the installments of
        monthly Base Rent payable by Asterias during such holdover shall be equal to one hundred fifty percent (150%) of the installments of monthly Base Rent in effect during the last thirty (30) days of the Term as a result of such holdover. Such Base
        Rent shall be payable in advance on or before the first day of each month. If either party desires to terminate such month to month tenancy, it shall give the other party not less than thirty (30) days advance written notice of the date of
        termination.

    

    

    7.          Damage and Destruction. If BMR or NNRCSI exercises any option either may have to terminate
        the Master Lease as a result of damage or destruction of the Premises, this Sublease shall terminate as of the date of the termination of the Master Lease.

    

    

    8.          Eminent Domain.

    

    

    8.1          Total Condemnation. If all of the Sublet Space is condemned by eminent domain, inversely
        condemned or sold in lieu of condemnation, for any public or a quasi-public use or purpose (“Condemned” or “Condemnation”), this Sublease shall terminate as of the date of title vesting in such proceeding, and Asterias shall not have any obligation hereunder, including the payment of Rent, subsequent to such date
        of termination.

    

    

    8.2          Partial Condemnation. If the Master Lease is terminated due to a partial condemnation of
        the Premises, this Sublease shall automatically terminate as of the date of the termination of the Master Lease. If this Sublease is not terminated following any such partial condemnation, this Sublease shall remain in full force and effect.

    

    

    9.          Insurance. Asterias shall obtain and keep in full force and effect, at Asterias’ sole cost
        and expense, during the Term the insurance required to be carried by the “Tenant” under the Master Lease. Asterias shall include NNRCSI and BMR as additional insureds in any policy of liability insurance carried by Asterias in connection with this
        Sublease.

    

    

    10.          No Brokers. Asterias warrants and represents to NNRCSI that it has not dealt with any real estate broker or agent in connection with this Sublease or its negotiation. NNRCSI
        warrants and represents to Asterias that it has not dealt with any real estate broker or agent in connection with this Sublease or its negotiation. Asterias shall Indemnify NNRCSI from and against any Claims resulting from any claim for a fee or
        commission by any broker or finder making a claim through Asterias in connection with the Sublet Space and this Sublease. NNRCSI shall Indemnify Asterias from and against any Claims resulting from any claim for a fee or commission by any broker or
        finder making a claim through NNRCSI in connection with the Sublet Space and this Sublease.

    

    

    
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    11.          Right to Cure Defaults.

    

    

    11.1          Asterias’s Defaults. If Asterias shall at any time fail to make any payment or perform any
        other obligation of Asterias hereunder, then NNRCSI shall have the right, but not the obligation, after the lesser of five (5) days' notice to Asterias or the time within which BMR may act on NNRCSI’s behalf under the Master Lease, or without
        notice to Asterias in the case of any emergency, without causing an NNRCSI Delay, and without waiving or releasing Asterias from any obligations of Asterias hereunder, to make such payment or perform such other obligation of Asterias in such manner
        and to such extent as NNRCSI shall deem necessary, and in exercising any such right, to pay any reasonable, incidental costs and expenses, employ attorneys and other professionals, and incur and pay reasonable attorneys’ fees and other costs
        reasonably required in connection therewith. Asterias shall pay to NNRCSI within ten (10) days after written demand, all sums so paid by NNRCSI and all incidental costs and expenses of NNRCSI in connection therewith, together with interest thereon,
        at the Default Rate, accruing from the date which is the eleventh (11th) day following Asterias’ receipt of such written demand.

    

    

    11.2          NNRCSI’s Defaults. If NNRCSI receives any notice from BMR regarding a default of NNRCSI
        under the Master Lease, NNRCSI shall immediately provide Asterias written notice of the same, including a copy of the notice from BMR. Asterias shall have the right, but not the obligation, upon written notice to NNRCSI, and without waiving or
        releasing NNRCSI from any obligations of NNRCSI hereunder, to, after the expiration of any applicable notice and cure period afforded NNRCSI under the Master Lease, (i) make such payment directly to BMR if NNRCSI does not pay the same within five
        (5) days after NNRCSI receives written demand therefor from BMR, or (ii) perform such act of NNRCSI. NNRCSI shall pay to Asterias within (10) days after written demand, all sums so paid by Asterias and all reasonable costs and expenses of
        performing any such act, as applicable. Asterias shall have the right to apply any amounts owing to Asterias pursuant to the foregoing against Asterias’s obligation to pay Rent hereunder.

    

    

    12.          Parking. Asterias will have the right, on an unreserved basis, to use up to seventy-five
        (75) parking stalls at the Premises during the Term through the First Floor Space Expiration Date.

    

    

    13.          Assignment and Subletting. The application of Master Lease Section 29 is limited to only
        allow assignment and subletting as agreed upon in this Section 13. Asterias shall not Transfer its interest in this Sublease or further sublet or assign all or any part of the Sublet Space without the prior written consent of NNRCSI and BMR,
        provided, however, that NNRCSI’s consent shall not be unreasonably withheld, except in connection with a Transfer to a competitor of NNRCSI or its affiliates (as determined in NNRCSI’s sole discretion), or a transfer which includes access or use of
        any of the Shared Sublet Space, in which cases NNRCSI may withhold consent in its sole discretion. To be clear, the term Transfer is defined by reference to the Master Lease, however there are no “Exempt Transfers” under this Sublease.
        Notwithstanding the foregoing, Asterias shall have the right to assign this Sublease or sublet the Premises, without NNRCSI’s prior consent, (i) in connection with an assignment to a transferee of all or substantially all of the assets or stock of
        Asterias, and (ii) in connection with an assignment or subletting of all or a portion of the Premises to an affiliate of Asterias (an entity which is controlled by, controls, or is under common control with, Asterias). Notwithstanding anything to
        the contrary in this Sublease, if Asterias or any proposed transferee claims that NNRCSI and BMR have unreasonably withheld or delayed their consent under this Section or otherwise has breached or acted unreasonably under this Section, their sole
        remedies shall be a declaratory judgment and an injunction for the relief sought, and Asterias hereby waives the provisions of Section 1995.310 of the California Civil Code, or any successor statute, and all other remedies, including, without
        limitation, any right at law or equity to terminate this Sublease, on its own behalf and, to the extent permitted under all applicable laws, on behalf of the proposed transferee.

    

    

    
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    14.          Signage. Asterias shall not place or display in any manner any sign, graphic, or other
        advertising matter or material anywhere in or about the Sublet Space or the Building or elsewhere about the Premises, unless approved by both BMR and NNRCSI, with NNRCSI’s approval not unreasonably withheld. Any such signage of Asterias shall be
        constructed and installed at the sole cost and expense of Asterias, is subject to all conditions regarding Signage in the Master Lease, shall be removed by Asterias upon the expiration or earlier termination of this Sublease and any damage caused
        by such removal shall be repaired, all by Asterias at Asterias’ sole risk, cost, and expense.

    

    

    15.          Environmental Indemnity. Without limiting the incorporation of the various Indemnity
        agreements in the Master Lease, including without limitation in the Master Lease’s Articles 20 and 27, Asterias hereby directly agrees to Indemnify NNRCSI and its affiliates, employees, agents, contractors, Lenders, and invitees (collectively, the
        “NNRCSI Indemnitees”) from all Claims arising from or relating to Hazardous Materials (a) Asterias, its employees, agents, contractors or invitees
        (collectively “Asterias Parties”) causing or knowingly permitting Hazardous Materials to be brought upon, kept or used in or about the Premises in violation of
        Applicable Laws, or (b) contamination of the Premises occurs as a result of Hazardous Materials that are placed on or under or are released into the Premises by any Asterias Party, then Asterias shall Indemnify the NNRCSI Indemnitees from and
        against any and all Claims of any kind or nature, including (w) diminution in value of the Premises or any portion thereof, (x) damages for the loss or restriction on use of rentable or usable space or of any amenity of the Premises, (y) without
        duplicating damages under (w) and (x), damages arising from any adverse impact on marketing of space in the Premises or any portion thereof and (z) sums paid in settlement of Claims that arise before, during or after the Term as a result of such
        breach or contamination. This Indemnification does not apply to any contamination to the extent arising from or relating to the actions, negligence or breach of this Lease by any of the NNRCSI Indemnitees.

    

    

    
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    16.          Early Termination by Asterias. NNRCSI hereby grant Asterias the right to accelerate either
        or both of the Strategic Space Expiration Date or the First Floor Space Expiration Date at any time (as to each, a “Termination Option”), provided that: (a)
        the acceleration of an expiration date applies to the entirety of either or both of the Strategic Space or the First Floor Space; (b) Asterias can exercise its Termination Option as to the Strategic Space separately from the exercise of its
        termination Option for the First Floor Space, and the exercise of one Termination Option will not void Asterias’ right to subsequently exercise its Termination Option as to the other; (c) for Asterias’ exercise of a Termination Option to be
        effective, the accelerated expiration date must be the first day of the month following delivery of at least 90 days advance, irrevocable notice delivered to NNRCSI (a “Termination Notice”); and (d) Asterias is not then currently in default beyond any applicable cure period under this Sublease at the time Asterias delivers the Termination Notice.

    

    

    17.          Miscellaneous.

    

    

    17.1          Entire Agreement; Counterparts; Digital Versions. This Sublease and the Master Lease, as
        incorporated herein, contain all of the covenants, conditions and agreements between the parties concerning the Sublet Space, and shall supersede all prior correspondence, agreements and understandings concerning the Sublet Space, both oral and
        written. No addition or modification of any term or provision of this Sublease shall be effective unless set forth in writing and signed by both NNRCSI and Asterias. This Sublease may be executed in counterparts which, when assembled, will comprise
        a single Sublease. Executed counterparts of this Sublease can be delivered electronically (e.g. fax, email PDF) and are binding as originals upon receipt.

    

    

    17.2          Captions. All captions and headings in this Sublease are for the purposes of reference and
        convenience and shall not limit or expand the provisions of this Sublease.

    

    

    17.3          BMR’s Consent; Amendment of BMR-Asterias Lease. This Sublease is conditioned upon (i)
        BMR’s concurrent, written approval of this Sublease and concurrent execution of an amendment to the BMR-Asterias Lease, accelerating the BMR-Asterias Lease’s expiration date to match the Commencement Date under the Master Lease and this Sublease,
        and (ii) Asterias’ concurrent (or prior) written approval of the Master Lease. If BMR refuses to consent to this Sublease or amend the BMR-Asterias Lease as required hereunder, this Sublease shall terminate and neither party shall have any
        continuing obligation to the other with respect to the Sublet Space; provided NNRCSI shall return the Security Deposit and Base Rent, if previously delivered to NNRCSI, to Asterias.

    

    

    
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    17.4          Authority. Each person executing this Sublease on behalf of a party hereto represents and
        warrants that he or she is authorized and empowered to do so and to thereby bind the party on whose behalf he or she is signing.

    

    

    17.5          Attorneys’ Fees. In the event either party shall bring any action or proceeding for
        damages or for an alleged breach of any provision of this Sublease to recover rents, or to enforce, protect or establish any right or remedy hereunder, the prevailing party shall be entitled to recover reasonable attorneys’ fees and court costs as
        part of such action or proceeding.

    

    

    17.6          Notices. The notice provisions of the Master Lease control, provided  that NNRCSI’s Address or the Asterias’s Address given in the Defined Terms above or to such other address as the party to receive the notice or request so designates by written notice to
        the other parties.

    

    

    17.7          Consents. If, under the Master Lease, Asterias is required to obtain the consent of any Landlord Parties (as defined in the Master Lease) to any matter as to which BMR’s or other
        Landlord Parties’ consent is required pursuant to the terms of this Sublease or the Master Lease, NNRCSI shall promptly, upon Asterias’ request, make commercially reasonable efforts to obtain such consent from the applicable Landlord Parties;
        provided that NNRCSI is not required to make any payment, incur any expense or liability, or initiate any legal proceedings. Without limiting the foregoing, Asterias hereby agrees to pay any costs and expenses (including reasonable attorney’s fees)
        either incurred by NNRCSI relating to Asterias’ request for such consent, or charged by any Landlord Party in accordance with the Master Lease, in connection with the request for such consent.

    

    

    17.8          Time. Time is of the essence of every provision of this Sublease.

    

    

    
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    17.9          Certified Access Specialist. NNRCSI discloses that to NNRCSI’s knowledge, neither the Building, the Premises nor the Sublet Space have undergone inspection by a Certified Access
        Specialist. Furthermore, pursuant to Section 1938 of the California Civil Code, NNRCSI notifies Asterias of the following: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with
        all of the applicable construction-related accessibility standards under state law. Although California state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or
        tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of
        any such CASp inspection, the payment of the costs and fees for the CASp inspection and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the Sublet Space.” Asterias agrees that
        (a) Asterias may, at its option and at its sole cost, cause a CASp to inspect the Sublet Space and determine whether the Sublet Space complies with all of the applicable construction-related accessibility standards under California law, (b) the
        parties shall mutually coordinate and reasonably approve of the timing of any such CASp inspection so that NNRCSI and BMR may, at its option, have a representative present during such inspection, and (c) Asterias shall be solely responsible for the
        cost of any repairs necessary to correct violations of construction-related accessibility standards within the Sublet Space and Building identified by any such CASp inspection, any and all such alterations and repairs within the Sublet Space to be
        performed by Asterias shall be subject to BMR’s consent and in accordance with the Master Lease.

    

    

    
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    [Signatures appear on the following page]

     

      

    
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    IN WITNESS WHEREOF, the parties hereto have
        executed this Sublease, dated as of the Effective Date.

     

      

    	 	
            “NNRCSI”

             

            NOVO NORDISK RESEARCH CENTER SEATTLE, INC., a Delaware corporation

             

            By:  /s/Jan Beck

             

            Print Name: Jan Beck

             

            Its: Site Head

          
	 	 
	 	
            “Asterias”

             

            ASTERIAS BIOTHERAPEUTICS, INC., a Delaware corporation

             

            By: /s/Ryan D. Chavez

             

            Print Name: Ryan D. Chavez

             

            Its: CFO & General Counsel

          

    

    

  

  

  

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