Document:

Exhibit 10.25

 

OFFICE BUILDING LEASE BETWEEN

 

BF MONROVIA, LLC (LESSOR)

 

&

 

XENCOR, INC. (LESSEE)

 

111 West Lemon Ave., Monrovia, California

 

[Execution Copy]

 

 

Table of Contents

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1.
    	
Basic   Lease Terms
    	
1
    
	
 
    	
 
    	
 
    
	
 
    	
1.1
    	
Parties
    	
1
    
	
 
    	
1.2
    	
Premises
    	
1
    
	
 
    	
1.3
    	
Building
    	
2
    
	
 
    	
1.4
    	
Use
    	
2
    
	
 
    	
1.5
    	
Term
    	
2
    
	
 
    	
1.6
    	
[INTENTIONALLY   OMITTED]
    	
2
    
	
 
    	
1.7
    	
Base   Rent
    	
2
    
	
 
    	
1.8
    	
Rent   Paid Upon Execution
    	
2
    
	
 
    	
1.9
    	
Security   Deposit
    	
2
    
	
 
    	
1.10
    	
Lessee’s   Share
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
2.
    	
Premises,   Parking and Common Areas
    	
2
    
	
 
    	
 
    	
 
    
	
 
    	
2.1
    	
Premises.   Lease of Premises
    	
2
    
	
 
    	
2.2
    	
Common   Areas - Definition
    	
3
    
	
 
    	
2.3
    	
Common   Areas - Rules and Regulations
    	
3
    
	
 
    	
2.4
    	
Common   Areas - Changes
    	
4
    
	
 
    	
 
    	
 
    	
 
    
	
3.
    	
Term
    	
4
    
	
 
    	
 
    	
 
    
	
 
    	
3.1
    	
Term
    	
4
    
	
 
    	
3.2
    	
Lease   Commencement
    	
4
    
	
 
    	
3.3
    	
[INTENTIONALLY   OMITTED]
    	
4
    
	
 
    	
3.4
    	
Uncertain   Commencement
    	
4
    
	
 
    	
3.5
    	
Special   Termination Rights
    	
4
    
	
 
    	
 
    	
 
    
	
4.
    	
Rent
    	
5
    
	
 
    	
 
    	
 
    
	
 
    	
4.1
    	
Base   Rent
    	
5
    
	
 
    	
4.2
    	
Additional   Rent
    	
6
    
	
 
    	
4.3
    	
Definitions
    	
6
    
	
 
    	
4.4
    	
Calculation   and Payment of Additional Rent
    	
9
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
4.4.1
    	
Calculation   of Excess
    	
9
    
	
 
    	
 
    	
4.4.2
    	
Statement   of Actual Direct Expenses and Payment by Lessee
    	
9
    
	
 
    	
 
    	
4.4.3
    	
Statement   of Estimated Direct Expenses
    	
10
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.5
    	
Allocation   of Direct Expenses
    	
10
    
	
 
    	
4.6
    	
Taxes   and Other Charges for Which Lessee Is Directly Responsible
    	
11
    
	
 
    	
4.7
    	
Exclusions   from Operating Expenses
    	
11
    

 

i

 

Table of Contents

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
5.
    	
Security   Deposit
    	
17
    
	
 
    	
 
    	
 
    
	
6.
    	
Use
    	
19
    
	
 
    	
 
    	
 
    
	
 
    	
6.1
    	
Use
    	
19
    
	
 
    	
6.2
    	
Compliance   with Law
    	
19
    
	
 
    	
6.3
    	
Condition   of Premises
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
7.
    	
Maintenance,   Repairs, Alterations and Common Area Services
    	
22
    
	
 
    	
 
    	
 
    
	
 
    	
7.1
    	
Lessor’s   Obligations
    	
22
    
	
 
    	
7.2
    	
Lessee’s   Obligations
    	
24
    
	
 
    	
7.3
    	
Alterations   and Additions
    	
24
    
	
 
    	
7.4
    	
Utility   Additions
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
8.
    	
Insurance, Indemnity
    	
26
    
	
 
    	
 
    	
 
    
	
 
    	
8.1
    	
Liability   Insurance - Lessee
    	
26
    
	
 
    	
8.2
    	
Liability   Insurance - Lessor
    	
26
    
	
 
    	
8.3
    	
Property   Insurance - Lessee
    	
26
    
	
 
    	
8.4
    	
Property   Insurance-Lessor
    	
27
    
	
 
    	
8.5
    	
Insurance   Policies
    	
27
    
	
 
    	
8.6
    	
Waiver   of Subrogation
    	
27
    
	
 
    	
8.7
    	
Indemnity
    	
28
    
	
 
    	
8.8
    	
Exemption   of Lessor from Liability
    	
29
    
	
 
    	
8.9
    	
No   Representation of Adequate Coverage
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
9.
    	
Damage   or Destruction
    	
29
    
	
 
    	
 
    	
 
    
	
 
    	
9.1
    	
Repair   of Damage to Premises by Lessor
    	
29
    
	
 
    	
9.2
    	
Lessor’s   Option to Repair
    	
30
    
	
 
    	
9.3
    	
Waiver   of Statutory Provisions
    	
31
    
	
 
    	
9.4
    	
Damage   Near End of Term
    	
31
    
	
 
    	
 
    	
 
    	
 
    
	
10.
    	
Real   Property Taxes
    	
32
    
	
 
    	
 
    	
 
    
	
 
    	
10.1
    	
Payment   of Taxes
    	
32
    
	
 
    	
10.2
    	
Additional   Improvements
    	
33
    
	
 
    	
10.3
    	
[INTENTIONALLY   OMITTED]
    	
33
    
	
 
    	
10.4
    	
Joint   Assessment
    	
33
    
	
 
    	
10.5
    	
Personal   Property Taxes
    	
33
    

 

ii

 

Table of Contents

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
11.
    	
Utilities   and Services
    	
34
    
	
 
    	
 
    	
 
    
	
 
    	
11.1
    	
Standard   Lessee Services
    	
34
    
	
 
    	
11.2
    	
Overstandard   Lessee Use
    	
35
    
	
 
    	
11.3
    	
Interruption   of Use
    	
36
    
	
 
    	
11.4
    	
Excess   Usage by Lessee
    	
36
    
	
 
    	
 
    	
 
    	
 
    
	
12.
    	
Assignment   and Subletting
    	
36
    
	
 
    	
 
    	
 
    
	
 
    	
12.1
    	
Lessor’s   Consent Required
    	
36
    
	
 
    	
12.2
    	
Lessee   Affiliate
    	
36
    
	
 
    	
12.3
    	
Terms   and Conditions Applicable to Assignment and Subletting
    	
37
    
	
 
    	
12.4
    	
Additional   Terms and Conditions Applicable to Subletting
    	
37
    
	
 
    	
12.5
    	
Lessor’s   Expenses
    	
39
    
	
 
    	
 
    	
 
    	
 
    
	
13.
    	
Default,   Remedies
    	
39
    
	
 
    	
 
    	
 
    
	
 
    	
13.1
    	
Default
    	
39
    
	
 
    	
13.2
    	
Remedies
    	
40
    
	
 
    	
13.3
    	
Default   by Lessor
    	
40
    
	
 
    	
13.4
    	
Late   Charges
    	
40
    
	
 
    	
 
    	
 
    	
 
    
	
14.
    	
Condemnation
    	
41
    
	
 
    	
 
    	
 
    
	
15.
    	
Brokers
    	
42
    
	
 
    	
 
    	
 
    
	
16.
    	
Estoppel   Certificate
    	
42
    
	
 
    	
 
    	
 
    
	
17.
    	
Lessor’s   Liability
    	
43
    
	
 
    	
 
    	
 
    
	
18.
    	
Severability
    	
43
    
	
 
    	
 
    	
 
    
	
19.
    	
Interest   on Past-due Obligations
    	
43
    
	
 
    	
 
    	
 
    
	
20.
    	
Time   of the Essence
    	
43
    
	
 
    	
 
    	
 
    
	
21.
    	
Additional   Rent
    	
43
    
	
 
    	
 
    	
 
    
	
22.
    	
Incorporation   of Prior Agreements, Amendments
    	
43
    
	
 
    	
 
    	
 
    
	
23.
    	
Notices
    	
43
    
	
 
    	
 
    	
 
    
	
24.
    	
Waivers
    	
44
    

 

iii

 

Table of Contents

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
25.
    	
Recording
    	
44
    
	
 
    	
 
    	
 
    
	
26.
    	
Hold   Over
    	
44
    
	
 
    	
 
    	
 
    
	
27.
    	
Cumulative   Remedies
    	
44
    
	
 
    	
 
    	
 
    
	
29.
    	
Binding   Effect; Choice of Law
    	
44
    
	
 
    	
 
    	
 
    
	
30.
    	
Subordination
    	
44
    
	
 
    	
 
    	
 
    
	
31.
    	
Attorney’s   Fees
    	
46
    
	
 
    	
 
    	
 
    
	
32.
    	
Lessor’s   Access
    	
46
    
	
 
    	
 
    	
 
    
	
33.
    	
Auctions
    	
47
    
	
 
    	
 
    	
 
    
	
34.
    	
Signs
    	
47
    
	
 
    	
 
    	
 
    
	
35.
    	
Merger
    	
47
    
	
 
    	
 
    	
 
    
	
36.
    	
Consents
    	
47
    
	
 
    	
 
    	
 
    
	
37.
    	
Quiet   Possession
    	
47
    
	
 
    	
 
    	
 
    
	
38.
    	
Options
    	
48
    
	
 
    	
 
    	
 
    
	
 
    	
38.1
    	
Definition
    	
48
    
	
 
    	
38.2
    	
Options   Not Personal
    	
48
    
	
 
    	
38.3
    	
Multiple   Options
    	
48
    
	
 
    	
 
    	
 
    
	
39.
    	
Security   Measures — Lessor’s Reservations
    	
48
    
	
 
    	
 
    	
 
    
	
40.
    	
Easements
    	
49
    
	
 
    	
 
    	
 
    
	
41.
    	
Performance   Under Protest
    	
49
    
	
 
    	
 
    	
 
    
	
42.
    	
Authority
    	
49
    
	
 
    	
 
    	
 
    
	
43.
    	
[INTENTIONALLY   OMITTED]
    	
49
    
	
 
    	
 
    	
 
    
	
44.
    	
No   Offer
    	
49
    

 

iv

 

Table of Contents

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
45.
    	
Lender   Modification
    	
49
    
	
 
    	
 
    	
 
    
	
46.
    	
Multiple   Parties
    	
50
    
	
 
    	
 
    	
 
    
	
47.
    	
Options   for Additional Space
    	
50
    
	
 
    	
 
    	
 
    
	
48.
    	
Right   of First Offer
    	
50
    
	
 
    	
 
    	
 
    
	
49.
    	
Renewal   Options
    	
50
    
	
 
    	
 
    	
 
    
	
50.
    	
Determination   of Fair Market
    	
51
    
	
 
    	
 
    	
 
    
	
51.
    	
Arbitration
    	
52
    
	
 
    	
 
    	
 
    
	
52.
    	
Data   Cabling
    	
54
    
	
 
    	
 
    	
 
    
	
53.
    	
Move-In
    	
55
    
	
 
    	
 
    	
 
    
	
54.
    	
Building   Management
    	
55
    
	
 
    	
 
    	
 
    
	
55.
    	
Roof   Rights
    	
55
    
	
 
    	
 
    	
 
    
	
56.
    	
[INTENTIONALLY   OMITTED]
    	
55
    
	
 
    	
 
    	
 
    
	
57.
    	
[INTENTIONALLY   OMITTED]
    	
55
    
	
 
    	
 
    	
 
    
	
58.
    	
Right   to Sublease/Assign
    	
55
    
	
 
    	
 
    	
 
    
	
59.
    	
Parking
    	
55
    
	
 
    	
 
    	
 
    
	
60.
    	
Audit   Right
    	
56
    
	
 
    	
 
    	
 
    
	
61.
    	
Special   Provisions Regarding Certain Offsets
    	
56
    
	
 
    	
 
    	
 
    
	
62.
    	
Attachments
    	
60
    

 

v

 

STANDARD OFFICE LEASE

 

This STANDARD OFFICE LEASE (“Lease”), dated, for reference purposes only, April       , 2000 is made by and between BF MONROVIA, LLC (“Lessor”) and XENCOR, INC. (“Lessee”).

 

1.                                      Basic Lease Terms: For purposes of this Lease, the following terms have the following definitions and meanings:

 

1.1                               Parties:

Lessor:                                                      BF Monrovia, LLC, a California limited liability company

 

Lessor’s Address for Notices:
  1230 E. Huntington Drive, Suite 3, Duarte, CA 91010*

 

with a copy to:               Martin H. Blank, Jr., Esq.  
 11755 Wilshire Boulevard 
 Suite 1400
 Los Angeles, California 90025

 

*or such other place as Lessor may from time to time designate by notice to Lessee.

 

Lessee:                                                       Xencor, Inc., a California corporation

 

Lessee’s Address for Notices:
  111 West Lemon Ave.
 Suite 300
 Monrovia, California 91016 
 Attention: Rudy J. Emmelot

 

with a copy to:               LeBoeuf, Lamb, Greene & MacRae, L.L.P.
 725 South Figueroa Street
 Suite 3600
 Los Angeles, California 90017
 Attention:  Robert M. Johnson, Esq.

 

or such other or additional addresses as Lessee may designate from time to time by notice to Lessor.

 

1.2                               Premises:                                         Suite Number 300, on the third floor of the Building, consisting of 24,000 rentable square feet (“RSF”) and Suite 201, on the second floor of the Building (“Suite 201”), consisting of 5,370 RSF (for an aggregate RSF in the Premises of 29,370), subject to Section 2.1(a) of this Lease, as hatched on Exhibit “A” attached hereto and made a part hereof.

 

1

 

1.3                               Building:                                           Commonly described as 111 W. Lemon Ave., in the City of Monrovia, County of Los Angeles, State of California, subject to Section 2 of this Lease.

 

1.4                               Use:                        General office, administrative use, laboratory, manufacturing and/or related uses, including but not limited to medical and biotechnological research and development, subject to Section 6 of this Lease.  Lessor acknowledges and agrees that in connection with the permitted Use of the Premises, Lessee will be utilizing, storing and disposing of substances which are classified or regulated as “hazardous materials” or “toxic” or “hazardous substances” under applicable California and United States federal law (collectively referred to herein as “Hazardous Substances”).  In addition to Lessee’s obligations under this Lease, Lessee covenants that all Hazardous Substances shall be handled and disposed of by Lessee in accordance with Applicable Law.  ·

 

1.5                               Term:  The period commencing on the Commencement Date (as defined in the Work Letter) and expiring on the last day of the month immediately following the month in which the fifth (5th) anniversary of the Commencement Date occurred (the “Expiration Date”).

 

1.6                               [INTENTIONALLY OMITTED]

 

1.7                               Base Rent:                                    Lessee shall pay Base Rent in accordance with the following schedule:

 

	
 
    	
 
    	
Months 2 - 20
    	
 
    	
$44,592   per month
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Months 21 - 40
    	
 
    	
$46,992   per month
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Months 41 - 61
    	
 
    	
$49,392   per month
    	
 
    	
 
    	
 
    

 

1.8                               Rent Paid Upon Execution:  $44,592, as Base Rent for the second month of the Lease Term.  The first month’s Base Rent shall be abated.

 

1.9                             Security Deposit:                                             $100,000.00, subject to the provisions of Section 5 of this Lease, paid as set forth herein.

 

1.10                      Lessee’s Share:                                                       61.19%, as defined in Section 4.2 of this Lease.

 

2.                                      Premises, Parking and Common Areas:

 

2.1                               Premises.  Lease of Premises.

 

(a)                                 The Premises are a portion of the “Building” identified in Section 1.3 of the Basic Lease Provisions.  The Premises, the Building, the Common Areas (as defined in Section 2.2 below), the land upon which the same are located (the “Site”), along with all improvements thereon or thereunder, are herein collectively referred to as the “Project.”  Lessor hereby leases to Lessee and Lessee leases from Lessor for the Term, at the rental, and upon all of the conditions set forth herein, the “Premises” including rights to the Common Areas and the Parking Privileges as

 

2

 

hereinafter specified.  Lessee shall have the non-exclusive right to utilize the Common Areas and the exclusive right to utilize the Parking Privileges.

 

(b)                                 Subject to the provisions of the Rules and Regulations with respect to access, Lessee shall have access to the Building, the Premises, the Site, and Lessee’s Parking Privileges twenty-four hours a day, seven days a week, every day of the year.

 

(c)                                  Lessor agrees that no person (including but not limited to Lessor’s employees, agents, licensees or other tenants) shall enter the Premises for purposes of accessing the Building’s roof, except in the case of an emergency (and then subject to Lessee’s good faith health and safety requirements).

 

(d)                                 Lessor agrees that (A) Lessor shall at its cost and expense relocate the phone board currently located in the Premises to a Common Area on the second floor of the Building within ninety (90) days following the execution of this Lease and (B) Lessee shall have the right to utilize its Lessee’s Share of unused space in all vertical risers existing in the Building as of the date hereof.  In no event shall Lessor permit the telecommunications or security systems servicing the Building generally or any other tenant in particular to be operated out of any closet in the Premises, it being agreed by Lessor and Lessee that each such closet in the Premises shall only service the Premises.

 

2.2                               Common Areas - Definition.  The term “Common Areas” is defined as all areas and facilities outside the Premises and within the exterior boundary line of the Site that are provided and designated by Lessor from time to time for the general non-exclusive use of lessees of the Project and their respective employees, suppliers, shippers, customers and invitees, including but not limited to common entrances, lobbies, corridors, stairways and stairwells, public restrooms, passenger elevators, freight elevator, freight loading room, parking areas to the extent not otherwise prohibited by this Lease, loading and unloading areas, trash areas, sidewalks, walkways, parkways, driveways, landscaped areas and decorative walls.

 

2.3                               Common Areas - Rules and Regulations.  Lessee agrees to abide by and conform to the rules and regulations attached hereto as Exhibit “B” with respect to the Project and Common Areas (the “Rules and Regulations”), and to use commercially reasonable efforts to cause its employees, suppliers, shippers, customers, and invitees to so abide.  Lessor or such other person(s) as Lessor may appoint shall have the exclusive control and management of the Common Areas and shall have the right, from time to time, to modify, amend and enforce said rules and regulations.  Lessor agrees that the Rules and Regulations shall not be changed or revised or enforced in any unreasonable way by Lessor, nor enforced or changed by Lessor in such a way as to interfere with the purposes permitted under Lease Section 1.4, and that nothing in the use restrictions or in the Rules and Regulations shall be used to prohibit the conduct of any business from the Premises which Lessee is permitted to conduct pursuant this Lease.  In the event any other tenant or occupant of the Building fails to comply with the Rules and Regulations, and such non-compliance unreasonably interferes

 

3

 

with Lessee’s use of the Premises, Lessor shall use its commercially reasonable good faith efforts to cause such other tenants and/or occupants to comply with the Rules and Regulations.

 

2.4                               Common Areas - Changes.  Lessor shall have the right, in Lessor’s reasonable Discretion, from time to time:

 

(a)                                 Subject to the terms of this Lease, to make changes to the Building interior (other than the Premises) and exterior and Common Areas, including, without limitation, changes in the location, size, shape, number, and appearance thereof, including but not limited to the lobbies, windows, stairways, air shafts, elevators, restrooms, driveways, entrances, parking spaces (subject to Section 59), parking areas (subject to Section 59), loading and unloading areas, ingress, egress, direction of traffic, decorative walls, landscaped areas and walkways; provided, however, no such changes shall diminish the size of the Premises, materially increase Lessee’s obligations hereunder or unreasonably interfere with Lessee’s conduct of its business.

 

(b)                                 To close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Premises and Parking Facility remains available.

 

(c)                                  To use temporarily the Common Areas while engaged in making additional improvements, repairs or alterations to the Project, or any portion thereof.

 

(d)                                 To do and perform such other acts and make such other changes in, to or with respect to the Common Areas and Project as Lessor may, in the exercise of sound business judgment deem to be appropriate.

 

3.                                      Term:

 

3.1                               Term.  The Term and Commencement Date of this Lease shall be as specified in Section 1.5 of the Basic Lease Provisions.

 

3.2                               Lease Commencement.  Subject to the following sentence, Lessee’s obligations to pay Base Rent and Additional Rent shall commence on the second (2nd) full month following the Commencement Date, as defined and determined in accordance with the Section 2 of the Work Letter attached hereto as Exhibit “C.”

 

3.3                               [INTENTIONALLY OMITTED]

 

3.4                               Uncertain Commencement.  Lessee and Lessor shall execute an amendment to this Lease establishing the Commencement Date.

 

3.5                               Special Termination Rights.  The City of Monrovia, acting through the Department of Community Development, has indicated pursuant to (i) a letter dated April 10, 2000 addressed to

 

4

 

Dr. Bassil Dahiyat and (ii) a Development Review Committee Decision Letter (collectively, the “City Consent”) that the City of Monrovia will permit Lessee’s Use of the Premises provided that Lessee’s laboratory space does not exceed 35% of the useable area of the Premises.  In the event the City of Monrovia acts to prohibit a Use of the Premises by Lessee which otherwise complies with City Consent either by the City of Monrovia’s refusal to grant the Rezoning (as defined in Section 6.2(c)), if required, or otherwise (the “City Action”), Lessee shall have the ongoing right to terminate the Lease upon ninety (90) days’ notice (“Termination Notice”) to Lessor, whereupon this Lease shall terminate and Lessor and Lessee shall have no further liability one to the other hereunder, provided, however, if within such ninety (90) day period Lessor is able to rescind the City Action, such Termination Notice shall be deemed withdrawn.

 

4.                                      Rent:

 

4.1                               Base Rent.

 

(a)                                 Subject to adjustment as hereinafter provided in Section 4.3, and except as may be otherwise expressly provided in this Lease, Lessee shall pay to Lessor the Base Rent for the Premises set forth in Section 1.7 of the Basic Lease Provisions, without offset or deduction except as expressly provided herein.  Lessee shall pay Lessor upon execution hereof the advance Base Rent described in Section 1.8 of the Basic Lease Provisions.  Rent for any period during the Term hereof which is for less than one month shall be prorated based upon the actual number of days of the calendar month involved.  Rent shall be payable in lawful money of the United States to Lessor at the address stated herein or to such other persons or at such other places as Lessor may designate to Lessee in writing.

 

(b)                                 The parties have agreed that the length and duration of the Design Period and the Construction Period (as such terms are defined in the Work Letter) notwithstanding, in the event that the Commencement Date shall not have occurred by the end-of the 120th day following the commencement of the Design Period, Lessee shall, subject to Lessor Delays and Force Majeure Delays, pay as special Base Rent an amount equal to $22,291.00 per month for the fifth and sixth months following the commencement of the Design Period (subject to pro ration for any partial calendar months).

 

(c)                                  In the event that Lessee is prevented from using, and does not use, the Premises or any portion thereof for five (5) consecutive business days or ten (10) business days in any twelve (12) month period (the “Eligibility Period”) as a result of any damage or destruction to the Premises or any repair, maintenance or alteration performed by Lessor after the Commencement Date, which interferes with Lessee’s use of the Premises, or any failure to provide services or access to the Premises or because of an eminent domain proceeding or because of the presence of Hazardous Substances in, on or around the Building, the Premises or the Site which could, in Lessee’s business judgment and taking into account the standards, guidances and recommendations included in the definition of Applicable Laws above with respect to Hazardous Substances, pose a health risk to

 

5

 

occupants of the Premises, that is not, in any case, caused by or attributable to Lessee or its agents, employees, invitees or contractors, then Lessee’s rent shall be abated or reduced, as the case may be, for such time after expiration of the Eligibility Period that Lessee continues to be so prevented from using, and does not use, the Premises or a portion thereof, in the proportion that the rentable area of the portion of the Premises that Lessee is prevented from using, and does not use, bears to the total rentable area of the Premises.  However, in the event that Lessee is prevented from conducting, and does not conduct, its business in any portion of the Premises for a period of time in excess of the Eligibility Period, and the remaining portion of the Premises is not sufficient to allow Lessee to effectively conduct its business therein, and if Lessee does not conduct its business from such remaining portion, then for such time after expiration of the Eligibility Period during which Lessee is so prevented from effectively conducting its business therein, the rent for the entire Premises shall be abated; provided, however, if Lessee reoccupies and conducts its business from any portion of the Premises during such period, the rent allocable to such reoccupied portion, based on the proportion that the rentable area of such reoccupied portion of the Premises bears to the total rentable area of the Premises, shall be payable by Lessee from the date such business operations commence.  If Lessee’s right to abatement occurs during a free rent period which arises after the Commencement Date, Lessee’s free rent period shall be extended for the number of days that the abatement period overlapped the free rent period (the “Overlap Period”).  Lessor shall have the right to extend the Expiration Date for a period of time equal to the Overlap Period if Lessor sends a notice to Lessee of such election within ten (10) days following the end of the extended free rent period.  To the extent Lessee is entitled to abatement because of an event covered by Lease Sections 9 or 14, then the Eligibility Period shall not be applicable and Lessee shall be entitled to rent abatement, as of the occurrence of such event.

 

4.2                               Additional Rent.  In addition to paying the Base Rent specified in Section 4.1 of this Lease, Lessee shall pay as additional rent Lessee’s Share of the annual Direct Expenses, which are in excess of the amount of Direct Expenses applicable to the Base Year, as that term is defined in Section 4.3.1 of this Lease.  Such additional rent, together with any and all other amounts payable by Lessee to Lessor, as additional rent or otherwise, pursuant to the terms of this Lease, shall be hereinafter collectively referred to as “Additional Rent.” The Base Rent and Additional Rent are herein collectively referred to as “Rent.” All amounts due under this Section 4 as Additional Rent shall be payable for the same periods and in the same manner, time and place as the Base Rent.  Without limitation on other obligations of Lessee which arise during the Lease Term or during Lessee’s occupancy of the Premises and which shall survive the expiration of the Lease Term, the obligations of Lessee to pay the Additional Rent provided for in this Section 4 shall survive the expiration of the Lease Term.

 

4.3                               Definitions.  As used in this Section 4, the following terms shall have the meanings hereinafter set forth:

 

4.3.1                     “Base Year” shall mean with respect to Operating Expenses, the calendar year 2000 and with respect to Tax Expenses the tax year 2000-2001.

 

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4.3.2                     “Direct Expenses” shall mean “Operating Expenses” and “Tax Expenses.”

 

4.3.3                     “Expense Year” shall mean each calendar year in which any portion of the Lease Term falls, through and including the calendar year in which the Lease Term expires.  Lessee shall not pay any Operating Expenses or Tax Expenses (other than as may be included in the Base Rent) during the Base Year attributable thereto.

 

4.3.4                     “Operating Expenses” shall mean, subject to the exclusions set forth in Section 4.7 or elsewhere in this Lease, all expenses, costs and amounts of every kind and nature which Lessor shall pay or incur during any Expense Year because of or in connection with the ownership, management, maintenance, repair, replacement, restoration or operation of the Project, including, without limitation, any amounts paid or incurred for (i) the cost of supplying all utilities, the cost of operating, maintaining, repairing, replacing, renovating and managing the utility systems, mechanical systems, sanitary and storm drainage systems, and escalator and elevator systems, and the cost of supplies, tools, and equipment and maintenance and service contracts in connection therewith; (ii) the cost of licenses, certificates, permits and inspections and the cost of reasonably contesting the validity or applicability of any governmental enactments which may affect Operating Expenses, and the costs incurred in connection with the implementation and operation of a governmentally mandated transportation system management program or similar program; (iii) fees, charges and other costs, including management fees, or amounts in lieu thereof (provided such management fees are not in excess of three percent (3.00%) of Lessor’s gross rental revenues from the Building for any calendar year or portion thereof (but excluding the cost of after hours services or utilities)); consulting fees (including but not limited to any consulting fees incurred in connection with the procurement of insurance), legal fees and accounting fees, of all persons engaged by Lessor or otherwise reasonably incurred by Lessor in connection with the management, operation, maintenance and repair of the Project; (iv) the cost of parking area repair, restoration, and maintenance, including, but not limited to, resurfacing, repainting, restriping, and cleaning; (v) wages, salaries and other compensation and benefits of all persons engaged in the operation, maintenance or security of the Project, but limited to the Building Manager, Building Engineer and all employees at levels below such positions, and employer’s Social Security taxes, unemployment taxes or insurance, and any other taxes which may be levied on such wages, salaries, compensation and benefits; provided, that if any employees of Lessor provide services for more than one building of Lessor’s, then a prorated portion of such employees’ wages, benefits and taxes shall be included in Operating Expenses based on the portion of their working time devoted to the Project, and provided further, that no portion of any employees’ wages, benefits, or taxes allocable to time spent on the development or marketing of the Project shall be included in_ Operating Expenses; (vi) payments required under any easement, license, operating agreement, declaration, restrictive covenant, or instrument pertaining to the sharing of costs by the Building; and (vii) amortization of the cost of acquiring or the rental expense of personal property used in the maintenance, operation and repair of the Project.  If the Project is not fully occupied during all or a portion of any Expense Year, Lessor shall make an appropriate adjustment to the components of Operating Expenses for

 

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such Expense Year which vary with occupancy as reasonably determined by Lessor employing sound accounting and professional commercial property management principles, to determine the amount of Operating Expenses that would have been paid had the Building been ninety-five percent (95%) occupied, and the amount so determined shall be deemed to have been the amount of Operating Expenses for such Expense Year.

 

4.3.5                     “Tax Expenses” shall mean all federal, state, county, or local governmental or municipal taxes, fees, charges or other impositions of every kind and nature, whether general, special, ordinary or extraordinary (including, without limitation, real estate taxes, general and special assessments, transit taxes, leasehold taxes or taxes based upon the receipt of rent, including gross receipts or sales taxes applicable to the receipt of rent, unless required to be paid by Lessee, personal property taxes imposed upon the fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances, furniture and other personal property used in connection with the Building), which Lessor shall pay or incur during any Expense Year (without regard to any different fiscal year used by such governmental or municipal authority) because of or in connection with the ownership, leasing and operation of the Project.

 

4.3.5.1                              Tax Expenses shall include, without limitation:

 

(i)                                     Any assessment, tax, fee, levy or charge in addition to, or in substitution, partially or totally, of any assessment, tax, fee, levy or charge previously included within the definition of real property tax, it being acknowledged by Lessee and Lessor that Proposition 13 (codified as California Constitution Article XIIIA) was adopted by the voters of the State of California in the June 1978 election (“Proposition 13”) and that assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such services as fire protection, street, sidewalk and road maintenance, conservation, refuse removal and for other governmental services formerly provided without charge to property owners or occupants, and, in further recognition of the decrease in the level and quality of governmental services and amenities as a result of Proposition 13, Tax Expenses shall also include any governmental or private assessments or the Building’s contribution towards a governmental or private cost-sharing agreement for the purpose of augmenting or improving the quality of services and amenities normally provided by governmental agencies.  It is the intention of Lessee and Lessor that all such new and increased assessments, taxes, fees, levies, and charges and all similar assessments, taxes, fees, levies and charges be included within the definition of Tax Expenses for purposes of this Lease;

 

(ii)                                  Any assessment, tax, fee, levy, or charge allocable to or measured by the area of the Premises or the rent payable hereunder, including, without limitation, any gross income tax with respect to the receipt of such rent, or upon or with respect to the possession, leasing, operating, management, maintenance, alteration, repair, use or occupancy by Lessee of the Premises, or any portion thereof;

 

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(iii)                               Any assessment, tax, fee, levy or charge, upon this transaction or any document to which Lessee is a party, creating or transferring an interest or an estate in the Premises; and

 

Any possessory taxes charged or levied in lieu of real estate taxes.

 

4.3.5.2                              Any expenses incurred by Lessor in reasonably attempting to protest, reduce or minimize Tax Expenses shall be included in Tax Expenses in the Expense Year such expenses are paid.  Tax refunds shall be deducted from Tax Expenses in the Expense Year they are received by Lessor.  All special assessments which may be paid in installments shall be paid by Lessor in the maximum number of installments permitted by law and not included in Operating Expenses except in the year in which the assessment is actually paid.  The amount of Tax Expenses for the Base Year attributable to the valuation of the Project, inclusive of tenant improvements, shall be known as “Base Taxes.”

 

4.3.5.3                              Notwithstanding anything to the contrary contained in this Section 4.3.5 (except as set forth in Section 4.7 or levied in whole or part in lieu of Tax Expenses), there shall be excluded from Tax Expenses (i) all excess profits taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and succession taxes, estate taxes, federal and state income taxes, and other taxes to the extent applicable to Lessor’s general or net income (as opposed to rents, receipts or income attributable to operations at the Project), (ii) any items included as Operating Expenses, and (iii) any items paid by Lessee under Section 4.6 of this Lease.

 

4.3.6                     “Lessee’s Share” shall mean the percentage set forth in Section 1.10, subject to adjustment as provided herein.  Lessee’s Share was calculated by multiplying the number of rentable square feet of the Premises by 100 and dividing the product by the total rentable square feet in the Building (stipulated herein to be 48,000 RSF).  In the event either the Premises and/or the.  Building is expanded or reduced, or the size of the Premises, Lessee’s Share shall be appropriately adjusted, and, as to.  the Expense Year in which such change occurs, Lessee’s Share for such year shall be determined on the basis of the number of days during such Expense Year that each such Lessee’s Share was in effect.

 

4.4                               Calculation and Payment of Additional Rent.

 

4.4.1                     Calculation of Excess.  If for any Expense Year ending or commencing within the Lease Term, Lessee’s Share of Direct Expenses for such Expense Year exceeds Lessee’s Share of the amount of Direct Expenses applicable to the Base Year, then Lessee shall pay to Lessor, in the manner set forth in Section 4.4.2, below, and as Additional Rent, an amount equal to the excess (the “Excess”).

 

4.4.2                     Statement of Actual Direct Expenses and Payment by Lessee.  Lessor shall endeavor to give to Lessee, on or before the first day of April following the end of each Expense Year, a

 

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statement (the “Statement”) which shall state the Direct Expenses incurred or accrued for such preceding Expense Year, and which shall indicate the amount, if any, of any Excess.  Upon receipt of the Statement for each Expense Year ending during the Lease Term, if an Excess is present, Lessee shall pay, with its next installment of Base Rent due, the full amount of the Excess for such Expense Year, less the amounts, if any, paid during such Expense Year as “Estimated Excess,” as that term is defined in Section 4.4.3 below.  The failure of Lessor to timely furnish the Statement for any Expense Year shall not prejudice Lessor from enforcing its rights under this Section 4.  Even though the Lease Term has expired and Lessee has vacated the Premises, when the final determination is made of Lessee’s Share of the Direct Expenses for the Expense Year in which this Lease terminates, taking into consideration that the Lease Expiration Date may have occurred prior to the final day of the applicable Expense Year, if an Excess is present, Lessee shall immediately pay to Lessor an amount as calculated pursuant to the provisions of Section 4.4.1 of this Lease.  If Lessee’s Share of Direct Expenses for such Expense Year is less than the “Estimated Excess,” as that term is defined in Section 4.4.3, below, paid by Lessee for such Expense Year, then Lessor shall credit the difference to the Rent next coming due under this Lease, or in the event this Lease has expired or been terminated, then Lessor shall pay the difference to Lessee within thirty (30) days following Lessor’s delivery to Lessee of the Statement for such Expense Year.  The provisions of this Section 4.4.2 shall survive the expiration or earlier termination of the Lease Term.

 

4.4.3                     Statement of Estimated Direct Expenses.  In addition, Lessor shall give Lessee a yearly expense estimate statement (the “Estimate Statement”) which shall set forth Lessor’s reasonable estimate (the “Estimate”) of what the total amount of Direct Expenses for the then-current Expense Year shall be and the estimated excess (the “Estimated Excess”) as calculated by comparing Direct Expenses, which shall be based upon the Estimate, to the amount of Direct Expenses applicable to the Base Year, which Estimate Statement may be revised and reissued by Lessor from time to time.  The failure of Lessor to timely furnish the Estimate Statement for any Expense Year shall not preclude Lessor from enforcing its rights to collect any Estimated Excess under this Section 4..  If pursuant to the Estimate Statement (or a revision thereof) an Estimated Excess is calculated for the then-current Expense Year, Lessee shall pay, with its next installment of Base Rent due, a fraction of the Estimated Excess (or the increase in the Estimated Excess if pursuant to a revised’ Estimated Statement) for the then-current Expense Year (reduced by any amounts paid pursuant to the last sentence of this Section 4.4.3).  Such fraction shall have as its numerator the number of months which have elapsed in such current Expense Year to the month of such payment, both months inclusive, and shall have twelve (12) as its denominator.  Until a new Estimate Statement is furnished, Lessee shall pay monthly, with the monthly Base Rent installments, an amount equal to one-twelfth (1/12) of the total Estimated Excess set forth in the previous Estimate Statement delivered by Lessor to Lessee.

 

4.5                               Allocation of Direct Expenses.  Notwithstanding anything to the contrary set forth in this Section 4, when calculating the Direct Expenses for the Base Year, such Direct Expenses shall not include any increase in Tax Expenses attributable to special assessments, charges, costs, or fees, or due to modifications or changes in governmental laws or regulations, including but not limited to

 

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the institution of a split tax roll, and Operating Expenses shall exclude market-wide labor-rate increases due to extraordinary circumstances, including, but not limited to, boycotts and strikes, and utility rate increases due to extraordinary circumstances including, but not limited to, conservation surcharges, boycotts, embargoes or other shortages and amortized costs relating to capital improvements.

 

4.6                               Taxes and Other Charges for Which Lessee Is Directly Responsible.  Lessee shall reimburse Lessor, as Additional Rent, upon demand for any and all taxes required to be paid by Lessor (except to the extent included in Tax Expenses by Lessor), excluding state, local and federal personal or corporate income taxes measured by the net income of Lessor from all sources and estate and inheritance taxes, whether or not now customary or within the contemplation of the parties hereto, when:

 

4.6.1                     Said taxes are measured by or reasonably attributable to the cost or value of Lessee’s equipment, furniture, fixtures and other personal property located in the Premises, or by the cost or value of any leasehold improvements made in or to the Premises by or for Lessee, to the extent the cost or value of such leasehold improvements exceeds the cost or value of a building standard build-out (stipulated herein to be $21 per RSF), regardless of whether title to such improvements shall be vested in Lessee or Lessor;

 

4.6.2                     Said taxes are assessed upon or with respect to the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Lessee of the Premises, any portion of the Project or the parking facility used by Lessee in connection with this Lease; or

 

4.6.3                     Said taxes are assessed upon this transaction or any document to which Lessee is a party creating or transferring an interest or an estate in the Premises.

 

4.7                               Exclusions from Operating Expenses.

 

(a)                                 Anything in the definition of Operating Expenses in the Lease to the contrary notwithstanding, Operating Expenses shall not include the following, except to the extent specifically permitted by a specific exception to the following:

 

(i)                                     Any payments under a ground lease or master lease relating to the Project.

 

(ii)                                  Costs of a capital nature (including amortization and interest payments and depreciation of any type), including but not limited to acquisition, construction or installation costs of capital improvements, equipment, rentals for items which if purchased, rather than rented, would constitute a capital improvement or equipment, replacements, alterations and additions of a capital nature, even if such costs were incurred in connection with matters which are reasonably intended to reduce Operating Expenses for the Building or the Project or were required by any governmental

 

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authority having jurisdiction under any governmental law or regulation, provided, however, to the extent that any capital improvement actually avoids a maintenance or repair cost, then in any applicable Expense Year, Lessor shall be entitled to pass through such capital costs to the extent such maintenance and/or repair costs are avoided, as estimated by Lessor in its good faith judgment.

 

(iii)                               [INTENTIONALLY OMITTED]

 

(iv)                              [INTENTIONALLY OMITTED]

 

(v)                                 The cost of any item reimbursable by insurance or condemnation proceeds or which would be reimbursable from insurance required to be maintained by Lessor under the Lease.

 

(vi)                              Costs, including permit, license and inspection costs, incurred with respect to the installation of tenants’ or other occupants’ improvements made for tenants or other occupants in the Project or incurred in renovating or otherwise remodeling, improving, decorating, painting or redecorating space for tenants or other occupants of the Project.

 

(vii)                           Depreciation, amortization and interest.

 

(viii)                        Marketing and promotional costs, including but not limited to leasing commissions, real estate brokerage commissions, and attorneys’ fees in connection with the negotiation and preparation of deal memos, letters of intent, leases, subleases and/or assignments, space planning costs, and other costs and expenses incurred in connection with lease, sublease and/or assignment negotiations and transactions with present or prospective tenants or other occupants of the Project.

 

(ix)                              Costs of services, utilities, or other benefits which are not offered to Lessee or for which Lessee is charged for directly but which are provided to another tenant or occupant of the Project, including, but not limited to, costs in excess of the costs of operating the Building Systems and the costs of maintaining exclusive use Common Areas for other tenants

 

(x)                                 Costs incurred by Lessor due to any violation of the terms and conditions of any lease of space in the Project or any occupancy agreement with respect to the Project.

 

(xi)                              Costs and the overhead and profit increment paid to Lessor, to affiliates or partners of Lessor, partners or affiliates of such partners, or affiliates of Lessor for goods and/or services in the Project to the extent the same exceeds the costs or the overhead and profit increment, as the case may be, of such goods and/or services rendered by unaffiliated third parties on a competitive basis in Class A Buildings in the vicinity of the Project.

 

(xii)                           Interest, principal, attorneys’ fees, costs of environmental investigations or reports, title insurance, points, fees and other lender costs and closing costs on any mortgage or

 

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mortgages or any other debt instrument encumbering the Project or any part thereof or on any unsecured debt.

 

(xiii)                        [INTENTIONALLY OMITTED]

 

(xiv)                       Salaries of officers, executives or other employees of Lessor, any affiliate of Lessor, or partners or affiliates of such partners or affiliates, other than any personnel engaged exclusively in the management, operation, maintenance and repair of the Project (but not leasing or marketing) and working in the Building management office, whose salaries are not typically included in the management fee being paid and included in Operating Expenses; and provided further such individuals whose salaries would otherwise be included in Operating Expenses hold a position which is generally considered to be higher in rank than the position of the manager of the Building or the chief engineer of the Building.

 

(xv)                          All items and services for which Lessee or any other tenant in the Project is required to reimburse Lessor (other than through Lessee’s Share or any other tenant’s share of Operating Expenses or their equivalent).

 

(xvi)                       Advertising and promotional expenditures, including but not limited to tenant newsletters or Building promotional efforts, events or parties for existing or future occupants and the costs of signs (other than the Building directory) in or on the Project identifying the owner of the Building or other tenants’ signs and any costs related to the celebration or acknowledgement of holidays (including but not limited to Christmas trees).

 

(xvii)                    Electric power or other utility costs or costs for services for which any tenant directly contracts with the local public service company (but which costs shall be included in Operating Expenses only for the purposes of “grossing up” Operating Expenses).

 

(xviii)                 For any time during which Lessor charges Lessee for parking (including validations for visitor parking), all direct and indirect costs incurred in connection with the ownership, operation, management, maintenance, repair, replacement and restoration of the parking areas of the Project, including any off-site parking areas used by tenants of the Project (the “Parking Facility”), including, but not limited to, costs of a capital nature, maintenance, cleaning, insurance, utility, janitorial, security, parking equipment, ticket supplies, signage, claims insurance, resurfacing and restriping costs, business taxes, management fees and costs, structural maintenance and the wages, salaries, employees benefits and taxes for personnel working in connection with any such Parking Facility shall be offset against current revenues derived from or attributable to the Parking Facility.

 

(xix)                       [INTENTIONALLY OMITTED]

 

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(xx)                          Costs, penalties, fines, or awards and interest incurred as a result of Lessor’s negligence in Lessor’s operation of the Project, violations of law, negligence or inability or unwillingness to make payments and/or to file any income tax, other tax or informational returns when due.

 

(xxi)                       Costs which are covered by and reimbursable under any contractor, manufacturer or supplier warranty (provided, however, any such costs which are avoided during the Base Year by virtue of any such warranty shall be included in the Base Year).

 

(xxii)                    Costs arising from the gross negligence of or willful misconduct of, Lessor or its agents, or of any other tenant, or any vendors, contractors, or providers of materials or services selected, hired or engaged by Lessor or its agents.

 

(xxiii)                 Costs arising from the presence or removal of Hazardous Materials (other than Hazardous Materials introduced into the Project by Lessee) located in the Project, including, without limitation, any costs incurred pursuant to the requirements of any governmental laws, ordinances, regulations or orders relating to health, safety or environmental conditions, including but not limited to regulations concerning asbestos, soil and ground water conditions or contamination regarding hazardous materials or substances.

 

(xxiv)                Costs arising from Lessor’s charitable or political contributions.

 

(xxv)                   [INTENTIONALLY OMITTED]

 

(xxvi)                Costs for sculpture, paintings or other objects of art or the insuring, repair or maintenance thereof

 

(xxvii)             Costs (including in connection therewith all attorneys’ fees and costs of settlement, judgments and payments in lieu thereof) arising from claims, disputes or potential disputes in connection with potential or actual claims, litigation or arbitrations pertaining to Lessor and/or the Project.

 

(xxviii)          Costs, including but not limited to attorneys’ fees associated with the operation of the business of the partnership or entity which constitutes Lessor as the same are distinguished from the costs of operation of the Building, including partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee, costs of selling, syndicating, financing, mortgaging or hypothecating any of Lessor’s interest in the Project or any part thereof, costs of any disputes between Lessor and its employees, disputes of Lessor with Project management or personnel, or outside fees paid in connection with disputes with other tenants.

 

(xxix)                Costs incurred in removing and storing the property of former tenants or occupants of the Project.

 

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(xxx)                   [INTENTIONALLY OMITTED]

 

(xxxi)                The cost of correcting defects in the design, construction or equipping of the Project or in the Project equipment.

 

(xxxii)             The cost of any work or service performed for any tenant of the Project (other than Lessee) to a materially greater extent or in a materially more favorable manner than that offered to Lessee.

 

(xxxiii)          Premiums for insurance to the extent Lessor is reimbursed therefor other than through reimbursement of Operating Expenses by lessees.

 

(xxxiv)         The cost of furnishing and installing non-Building standard replacement bulbs and ballasts in tenant spaces (determined by Lessor at the time such services are offered on a non-discriminatory basis).

 

(xxxv)            Any costs of operating, maintaining, cleaning, managing, securing or otherwise providing services to the Project or any part thereof at a quality level which materially exceeds that typically being provided by the Class A Buildings at the time, unless such higher quality level is expressly required by the terms of this Lease.

 

(xxxvi)         Reserves of any kind, including but not limited to replacement reserves, and reserves for bad debts or lost rent or any similar charge not involving the payment of money to third parties.

 

(xxxvii)      Costs incurred by Lessor in connection with rooftop communications equipment of Lessor or other persons, tenants or occupants on the Project.

 

(xxxviii)   Costs relating to any management office for the Project, including rent.

 

(xxxix)         Payment of any management fee, whether paid to Lessor or an outside managing agent, in excess of an amount equal to three percent (3.00%) of the actual amount of gross revenues for the Building.

 

(xl)                              Any costs expressly excluded from Operating Expenses or Real Property Taxes elsewhere in the Lease or included as Real Property Taxes.

 

(xli)                           Costs for services normally provided by a property manager where Operating Expenses already include a management fee.

 

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(xlii)                        Costs incurred in connection with the original construction of the Project or any addition to the Project or in connection with .any renovation, alteration or major change in the Project, including but not limited to the addition or deletion of floors.

 

(xliii)                     Any costs, fees, dues, contributions or similar expenses for industry associations or similar organizations.

 

(xliv)                    Any costs associated with the purchase, rental or installation of furniture, carpeting, fixtures or equipment for any management, security, engineering, or other offices associated with the Project and Common Areas or for Lessor’s offices or for the Common Areas of the Project.

 

(xlv)                       Any compensation paid to clerks, attendants or other persons in commercial concessions operated by Lessor in the Project.

 

(xlvi)                    Costs arising from earthquake insurance, unless the cost of such coverage is included within the Base Year.

 

(xlvii)                 The entertainment expenses and travel expenses of Lessor, its employees, agents, partners and affiliates.

 

(xlviii)              Costs incurred by Lessor due to the violation by Lessor of the terms and conditions of any contract or agreement relating to the Project or any part thereof, including any “Project Documents” as that term is defined below.

 

(xlix)                    Costs of traffic studies, environmental impact reports, transportation system management plans and reports, and traffic mitigation measures or due to studies or reports relating to obligations or the terms of the Project Documents.

 

(l)                                     All assessments and special assessments due to deed restrictions, Project Documents and/or owners associations which accrue against the Project.

 

(li)                                  Any improvement installed or work performed or any other cost or expense incurred by Lessor in order to comply with the requirements for obtaining or renewal of a certificate of occupancy for the Project or any space therein.

 

(lii)                               Any fees, bond costs or assessments levied by any governmental entity having the authority to impose such fees, bond costs or assessments (unless an appropriate amount of such fees, bond costs or assessments are also added to the Base Year with respect to an Operating Expense or Tax Expense).

 

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(liii)                            Any costs or expenses relating to any provisions of any development agreements, owner’s participation agreement, covenants, conditions, restrictions, conditional use permits, easements or other instruments encumbering the Project or any part thereof or other agreement relating to the development, entitlement, construction or financing of the Project (collectively, the “Project Documents”), including any initial payments or costs or ongoing payments or costs made in connection with any child-care facilities, traffic demand management programs, transportation impact mitigation fees, water and sewage conservation, recycling, housing replacement and linkage fees, special assessment districts, infrastructure and transportation assessments, art programs, or parking requirements and programs unless included within the definition of Tax Expenses and included within the Base year attributable to Tax Expenses.

 

(liv)                           Any costs or expenses incurred in obtaining any land use entitlements including without limitation the costs of preparing any environmental impact report or complying with the California Environmental Quality Act, as amended, or any general or specific plan governing development of the Project for the Entitlements or otherwise.

 

(lv)                              [INTENTIONALLY OMITTED]

 

(lvi)                           Any costs recovered by Lessor to the extent such cost recovery allows Lessor to recover more than 100% of Operating Expenses or Real Property Taxes for any calendar year from tenants of the Project.

 

(lvii)                        [INTENTIONALLY OMITTED]

 

(b)                                 Any costs for which Lessor has been reimbursed or receives a credit, refund or discount, provided if Lessor receives the same in connection with any costs or expenditures previously included in Operating Expenses for a calendar year, Lessor shall immediately credit against Additional Rent next due from Lessee the amount of any overpayment for such previous calendar year (provided, however, if such reimbursement or credit is received by Lessor after the expiration or earlier termination of the Term, Lessor shall pay such reimbursement or credit due to Lessee in cash within sixty (60) days following receipt thereof by Lessor).

 

(c)                                  In the event that, subsequent to the Base Year, Lessor adds services materially in excess of the services during the Base Year or incurs a new category of expense, Lessor shall increase the Operating Expenses and, as appropriate, the Real Property Tax by an amount which would have been incurred had such services been offered or such expenses incurred during the Base Year.

 

5.                                      Security Deposit:

 

Lessee shall deposit with Lessor upon Lessee’s receipt of the Initial SNDA the security deposit set forth in Section 1.9 of the Basic Lease Provisions as security for Lessee’s faithful

 

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performance of Lessee’s obligations hereunder.  If Lessee falls to pay rent or other charges due hereunder, or otherwise defaults with respect to any provision of this Lease, Lessor may use, apply or retain all or any portion of said deposit for the payment of any rent or other charge in default for the payment of any other sum to which Lessor may become obligated by reason of Lessee’s default, or to compensate Lessor for any actual loss or actual damage which Lessor may suffer thereby.  If Lessor so uses or applies all or any portion of said deposit, Lessee shall within ten (10) days after written demand therefor deposit cash with Lessor in an amount sufficient to restore said deposit to the full amount then required of Lessee.  Lessor shall not be required to keep said security deposit separate from its general accounts.  Six (6) months prior to the then scheduled Expiration Date, Lessor shall provide Lessee with evidence reasonably satisfactory to Lessee that funds in the amount of the Security Deposit have been reserved and are available for refund to Lessee, subject to Lessor’s rights under this Section 5 to deduct sums therefrom.  If Lessor fails to provide such evidence by such date, Lessee shall thereupon have the irrevocable right to offset its obligations to pay Rent up to the amount of the Security Deposit (and all interest earned thereon).  If Lessee performs all of Lessee’s obligations hereunder, said deposit, or so much thereof as has not heretofore been applied by Lessor, shall be returned, with payment of all actual interest earned thereon, to Lessee (or, at Lessor’s option, to the last assignee, if any, of Lessee’s interest hereunder) at the expiration of the Term hereof, and after Lessee has vacated the Premises.  No trust relationship is created herein between Lessor and Lessee with respect to said Security Deposit.

 

In the event that Lessee’s non-pledged cash reserves (“Available Cash”) falls below the amount reasonably estimated by Lessee’s chief financial officer necessary to fund the reasonably anticipated cost of normal business operations for the following six (6) months (“Cash Requirement”), Lessee shall provide Lessor with an irrevocable letter of credit (the “Letter of Credit”) with a term of at least one (1) year in an amount equal to the then unamortized principal amount of the Financed Cost (as defined in the Work Letter), which amount is referred to as the “Extra Deposit.” Lessee shall provide quarterly reports which shall include the budget referred to below and shall be prepared on a cash basis and shall also reasonably describe Lessee’s financial condition.  The quarterly reports shall be submitted on or before the first day of each calendar quarter and shall be certified by Lessee’s chief financial officer.  The quarterly reports must detail the level of Available Cash and current estimated costs of normal reasonably anticipated business operations for the next succeeding six (6) month period.  If after providing the Letter of Credit, Lessee demonstrates pursuant to the next subsequent quarterly financial reports prepared in accordance with the requirements of this Section reasonably prepared by Lessee’s chief financial officer that its Available Cash is equal to or in excess of the Cash Requirement for the next six (6) month period, Lessor shall, within five (5) business days thereafter surrender the Letter of Credit.  In no event shall Lessee be obligated to deliver such Letter of Credit or the quarterly reports after the initial Term.  In the event that (x) Lessee delivers any quarterly report indicating that no Letter of Credit needs to be then delivered (the “Subject Report”) and (y) Lessor does not have possession of the Letter of Credit (delivered pursuant to a previous quarterly report) then, no later than ninety (90) days after the delivery of the Subject Report and not after the next quarterly report has been delivered, during the initial Term (but not in any event during Lessee’s first fiscal quarter in any

 

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year), Lessor shall have the right to audit Lessee’s financial records relating to Lessee’s financial condition (other than those records and materials which are the subject (i) to any confidentiality agreement or non-disclosure obligation or (ii) of any attorney-client privilege or attorney work product doctrine) to confirm that Lessee is not obligated to deliver the Letter of Credit.  Such audit must be concluded within thirty (30) days after commencement and shall be conducted by an independent firm of certified public accountants with a national or regional reputation and with extensive experience in auditing companies such as Lessee.  Such auditors shall not be compensated on the basis of a contingency fee.  In the event such audit discloses that the Available Cash was less than the Cash Requirement with respect to the period covered by such quarterly report, Lessee shall in addition to providing the Letter of Credit, shall pay the reasonable and actual cost of the audit (disregarding any bonus or other incentive compensation).  In no event shall Lessor have the right to conduct an audit under this Section 5 after Lessee has completed its initial public offering.  At any time during the pendency of the audit, Lessee shall have the right to deliver the Letter of Credit and thereupon Lessor shall terminate the audit.  Lessee shall have no right to challenge its obligation to deliver the Letter of Credit unless Lessee shall have delivered the Letter of Credit to Lessor “under protest.”

 

6.                                      Use:

 

6.1                               Use.  The Premises shall be used and occupied for the purposes set forth in Section 1.4 of the Basic Lease Provisions, any other use which is reasonably comparable to that use.

 

6.2                               Compliance with Law.

 

(a)                                 Lessor’s Obligations.

 

(1)                                 Lessor hereby agrees that (A) the Building and Common Areas have been constructed in a first-class mariner and (B) Lessor shall, except as specifically set forth below in subparagraph 6.2(b), be responsible for the Building (other than the Premises) and the Common Area’s being in substantial compliance with all covenants or restrictions of record and all United States Federal laws, existing as of the date of Substantial Completion including but not limited to, the Americans with Disabilities Act of 1990 and laws pertaining to Hazardous Substances (collectively, “Laws”); and in the case of Hazardous Substances, the term “Laws” will be deemed to include any standards, guidances, or other recommendations issued by nationally recognized authoritative governmental units or other bodies (such as the United States Environmental Protection Agency, United States or California, the Occupational Safety and Health Administration, the National Institutes of Health or the American Congress of Industrial Hygienists) in order to make the Building and Project (other than the Premises) suitable for the Permitted Uses.

 

(2)                                 Lessor will be fully responsible for making all remediations, alterations and repairs at its cost, which shall not be included as Operating Expenses, resulting from or

 

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`necessitated by the failure of Lessor and/or Lessor’s contractors to comply with Laws in existence from time to time (“Applicable Laws”) relating to the matters for which Lessor is responsible under this Section 6.2 and Section 7, below, or from Lessor’s and/or Lessor’s Contractor’s utilization of Hazardous Substances as defined in the Laws, in violation of Applicable Laws.

 

(3)                                 Lessor shall maintain, repair and operate the Building and Building Systems serving the Premises (subject to Lessee’s maintenance and repair obligations set forth in the Lease, including Section 6.2(b) and Section 7.2(a) with respect to the Premises, Lessee Improvements and the Alterations, if any), in good condition and repair, shall maintain a safe environment in the Building and shall provide services to, the Building in a first-class manner comparable to other first-class institutional quality office buildings in the vicinity of the Building (“Class A Buildings”), the cost of which shall be included in Operating Expenses (subject to Section 4), or paid for directly by Lessee (for maintenance and repair of the Premises only to the extent required by the Lease) if not includable in Operating Expenses pursuant to the Lease.

 

(b)                                 Lessee’s Obligations.  Lessee shall be fully responsible, for making all remediations, alterations and repairs at its cost to the Premises to cause (as part of the initial construction of the Lessee Improvements) the Premises to be substantially in compliance with Laws.  Furthermore, Lessee shall be fully responsible, following the date the Lessee Improvements are Substantially Complete, for making all remediations, alterations and repairs at its cost to the Common Areas of the Building, Building and Project in order to cause the Common Areas of the Building, Building and Project to be in substantial compliance with Applicable Laws if:

 

(1)                                 such work is in fact required by any governmental authority after the date of Substantial Completion as a result of a specific use of the Premises by Lessee which is: (i) unique to Lessee or (ii) a use other than a general office use; or

 

(2)                                 such work is required by the City of Monrovia or other Government Agency in connection with or as a condition to its issuance of the appropriate permit or approval for an Alteration to the Premises undertaken by Lessee pursuant to Section 7.3 or other provision of this Lease;

 

provided however that, the foregoing notwithstanding, the cost of any such work which is so required with respect to a Common Area element that was not in compliance with Laws in existence as of the date the initial Lessee Improvements were Substantially Complete shall be borne exclusively by Lessor.

 

(c)                                  Lessor agrees to diligently pursue at its sole cost the rezoning of the Building from “R4” to “General Commercial” or such other classification as reasonably required by Lessee that will accommodate Lessee’s Use and which shall be appropriate for Lessee’s occupancy during the

 

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Term (as extended) (the “Rezoning”).  Subject to Lessee’s rights under Section 3.5, Lessee agrees at Lessor’s sole cost and expense to reasonably cooperate with Lessor’s efforts to effect the Rezoning and/or any appeal of any adverse City of Monrovia action.

 

(d)                                 Except as provided in Section 6.2(a) and in addition to Lessee’s obligations under Section 6.2(b), Lessee shall, at Lessee’s expense, promptly comply with all applicable (i) statutes, (ii) ordinances, (iii) rules, (iv) regulations, (v) orders, and (vi) requirements of any fire insurance underwriters or rating bureaus, now in effect or which may hereafter come into effect, whether or not they reflect a change in policy from that now existing, during the Term or any part of the Term hereof, relating in any manner to the Premises and the occupation and use by Lessee of the Premises to the extent, with respect to future adopted statutes, ordinances, rules, regulation, orders and regulations of any fire insurance underwriters or rating bureaus, Lessee is not unreasonably restricted in its ability to utilize the Premises for the Use.  In no event shall Lessee be obligated to make any material capital improvements to the Premises or the Project as part of its obligation under this Section.  Lessee shall not use or permit the use of the Premises or the Common Areas in any manner that will tend to create waste or a nuisance or shall tend to disturb unreasonably other occupants of the Building.

 

6.3                               Condition of Premises.

 

(a)                                 Lessor agrees with Lessee that the plumbing, lighting, fire and life safety, mechanical, electrical, ventilating, air conditioning, and heating systems in the Premises or in the Building to the extent servicing the Premises (“Building Systems”) existing in the Premises as of the date hereof shall be in good operating condition as of the Commencement Date except to the extent damaged, removed or replaced by or on behalf of Lessee.  Lessor agrees that as part of the “Base Condition” (as defined in the Work Letter), Lessor shall at its sole cost create a rooftop penetration to permit access to the Building’s roof at the top of the Building’s existing common stairwell and shall separately demise such stairwell from the Premises.  In the event that it is determined that this agreement has been violated, then it shall be the obligation of Lessor, after receipt of written notice from Lessee setting forth with specificity the nature of the violation, to promptly, at Lessor’s sole cost, rectify such violation, which shall not be included in Operating Expenses.

 

(b)                                 Except as otherwise provided in this Lease and subject to Lessor’s obligations under Sections 6.2(a), 6.3(a) and elsewhere in the Lease with respect to the services to be provided to Lessee by Lessor, Lessee hereby accepts the Premises and the Project in their “as-is” condition existing as of the date hereof; subject to all applicable zoning, municipal, county and state laws, ordinances and regulations governing and regulating the use of the Premises, and any easements, covenants or restrictions of record, and accepts this Lease subject thereto and to all matters disclosed thereby and by any exhibits attached hereto.  Lessee acknowledges that it has satisfied itself by its own independent investigation that the Premises are suitable for its intended use, and that except as expressly set forth in Section 3.5, neither Lessor nor Lessor’s agent or agents has

 

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made any representation or warranty as to the present or future suitability of the Premises, Common Areas, or Project for the conduct of Lessee’s business.

 

7.                                      Maintenance, Repairs, Alterations and Common Area Services:

 

7.1                               Lessor’s Obligations.

 

(a)                                 Except for Lessee Improvements and Alterations and except as set forth in Section 6.2(c) and (d), Lessor shall keep the Project, interior and exterior walls, roof, slab floors, foundation, Building Systems, load bearing members, Common Areas (including all restrooms), and the equipment whether used exclusively for the Premises or in common with other premises, in good condition and repair (the cost of which shall, subject to Section 4.7, be included as an Operating Expense); provided, however, Lessor shall not be obligated to paint, repair or replace wall coverings, or to repair or replace any improvements that are not ordinarily a part of the Building or are above then Building standards.  Lessor shall be responsible for all repairs on all restrooms on the third floor (the cost of which shall, to the extent not prohibited by Section 4, be included in Operating Expenses), except to the extent caused by or attributable to defects in workmanship or caused by Tenant in which case Lessee shall be responsible for the cost of such maintenance or repair of such restrooms.  Except as provided in Sections 4.1(b), 9 or 14, there shall be no abatement of Rent or liability of Lessor, on account of any injury or interference with Lessee’s business with respect to any improvements, alterations or repairs made by Lessor to the Project or any part thereof.  Lessee expressly waives the benefits of any statute now or hereafter in effect which would otherwise afford Lessee the right to make repairs at Lessor’s expense or to terminate this Lease because of Lessor’s failure to keep the Premises in good order, condition and repair.

 

(b)                                 Notwithstanding any provision set forth in Lease Section 7.2(a) to the contrary, Lessee is authorized to make repairs as set forth below.

 

(i)                                     General Action.  If Lessee provides notice (the “First Notice”) to Lessor of an event or circumstance which pursuant to the terms of this Lease requires Lessor to repair, alter, improve and/or maintain the Premises (a “Required Action”), other than an event covered by Section 9 or 14 (collectively, the “Excluded Events”) and Lessor fails to provide the Required Action within the time period required by this Lease, or a reasonable period of time, if no specific time period is specified in this Lease, after the receipt of the Repair Notice (the “Notice Date”), or, in any event, does not commence the Required Action within ten (10) days after the Notice Date and complete the Required Action within thirty (30) days after the Notice Date (provided that if the nature of the Required Action is such that the same cannot be reasonably completed within a thirty (30) day period, Lessor’s time period for completion shall not be deemed to have expired if Lessor diligently commences such cure within such period and thereafter diligently proceeds to rectify and complete the Required Action, as soon as possible), then Lessee may proceed to take the Required Action, pursuant to the terms of the Lease, and

 

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shall deliver a second notice to Lessor specifying that Lessee is taking the Required Action (the “Second Notice”).

 

(ii)                                  Emergency Action.  Notwithstanding the foregoing, if there exists an emergency such that the Premises or a portion thereof are rendered untenantable and Lessee’s personnel are forced to vacate the Premises or such portion thereof (other than with respect to the Excluded Events, for which Lessor’s and Lessee’s respective rights are set forth in Sections 9 or 14, respectively) and if Lessee gives Lessor notice (the “Emergency Notice”) of Lessee’s intent to take action with respect thereto (the “Necessary Action”) and the Necessary Action is also a Required Action, and the emergency could be cured by such Necessary Action, Lessee may take the Necessary Action if Lessor does not commence the Necessary Action within one (1) business day after the Emergency Notice (the “Emergency Cure Period”) and thereafter use its best efforts and due diligence to complete the Necessary Action as soon as possible.  To the extent Lessee is entitled to recover damages from Lessor by reason of Lessor’s failure timely to commence and/or complete the Necessary Action, Lessee’s damages may include, without limitation, the full documented, reasonable costs incurred in any relocation of Lessee’s personnel previously located in such untenantable space which shall have occurred, including by way of example only, higher rent, broker’s commissions, fees of consultants and other reasonable costs of moving to other premises.

 

(iii)                               Restrictions on Action.  If any Necessary Action will affect any of the Building Systems, the structural integrity of the Building, or the exterior appearance of the Building, Lessee shall use only those contractors used by Lessor in the Building for work on the Building Systems, or its structure, and Lessor shall provide Lessee (when available and upon Lessee’s request) with notice identifying such contractors and any changes to the list of such contractors, unless such contractors are unwilling or unable to perform such work or the cost of such work is not competitive, in which event Lessee may utilize the services of any other qualified contractors which normally and regularly performs similar work in the Comparable Buildings except for any contractors who Lessor specifically notifies Lessee in writing within five (5) business days of Lessor’s receipt of a Repair Notice or one (1) business days of Lessor’s receipt of an Emergency Notice that Lessee may not use for such work (which notice shall specify the commercially reasonable reasons for Lessor’s not allowing Lessee to use such contractor.)

 

(iv)                              Reimbursement for Action.  If any Required Action or Necessary Action is taken by Lessee pursuant to the terms of this Section then Lessor shall reimburse Lessee for its actual, reasonable and documented repair costs and expenses in taking the Required Action or Necessary Action within thirty (30) days after receipt by Lessor and Mortgagee (in the event Lessee has been provided with Mortgagee’s address for notices) of an invoice from Lessee which sets forth a reasonably particularized breakdown of its costs and expenses in connection with taking the Required Action or Necessary Action on behalf of Lessor (the “Repair Invoice”).  In the event Lessor does not reimburse Lessee for the Repair Invoice within thirty (30) days of receipt, then

 

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Lessee may, subject to Section 61(b), deduct from the next Rent payable by Lessee under this Lease, the amount of such Repair Invoice, plus interest at the Interest Rate until the Repair Invoice has been fully paid (the “Repair Offset Right”).  Notwithstanding the foregoing, if Lessor delivers to Lessee within thirty (30) days after receipt of the Repair Invoice, a written objection to the payments of such invoice, setting forth with reasonable particularity Lessor’s reason for its claim that the Required Action or Necessary Action did not have to be taken by Lessor pursuant to the terms of the Lease or that Lessee breached the terms of this Section, or that the charges are excessive (in which case Lessor shall pay the amount it contends would not have been excessive), then Lessee shall not be entitled to deduct such amount from Rent, but the shall resolve the dispute by appropriate legal action.

 

7.2                               Lessee’s Obligations.

 

(a)                                 Lessee shall, at Lessee’s own expense, pursuant to the terms of this Lease, including without limitation Section 7.3 hereof, keep the Premises, including all improvements, fixtures and furnishings therein, in good order, repair and condition at all times during the Lease Term.  Furthermore, Lessee shall be responsible for payment of the cost thereof to Lessor as Additional Rent for that portion of the cost or any maintenance and repair of the Premises undertaken by Lessor, if any.  Lessee shall be responsible for the cost of painting, repairing or replacing wall coverings, and to repair or replace any Premises improvements that are not ordinarily a part of the Building or that are above then Building standards.  Lessor may, at its option, upon reasonable notice, elect to have Lessee perform any particular such maintenance or repairs the cost of which is otherwise Lessee’s responsibility hereunder.

 

(b)                                 On the last day of the Term hereof, or on any sooner termination, Lessee shall surrender the Premises to Lessor with the Building Systems in the same condition as received, ordinary wear and tear, Alterations, casualty and eminent domain excepted, broom clean and free of debris.  All of the material Alterations made by Lessee to any Building Systems during the Term shall be in good working order as of the Expiration Date, subject to normal wear and tear, Lessor’s actions, casualty and eminent domain.  In no event shall Lessee be obligated to remove or restore any Lessee Improvements (as defined in the Work Letter) or any Lessor-approved Alterations (except as provided in Section 7.3(a)).  Lessee shall not repair any damage to the Premises occasioned by the installation or removal of Lessee’s trade fixtures, Alterations, furnishings and equipment.  Except as otherwise stated in this Lease, Lessee shall leave the air lines, power panels, electrical distribution systems, lighting fixtures, air conditioning, window coverings, wall coverings, carpets, wall paneling, ceilings and plumbing on the Premises.

 

7.3                               Alterations and Additions.

 

(a)                                 Lessee shall not, without Lessor’s prior written consent make any alterations, improvements, additions, Utility Installations or repairs costing in excess of $25,000 on a project basis (collectively, “Alterations”) in, on or about the Premises, or the Project.  As used in this Section 7.3 the term “Utility Installation” shall mean carpeting, window and wall coverings, power

 

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panels, electrical distribution systems, venting, lighting fixtures, air conditioning, plumbing, and telephone and telecommunication wiring and equipment.  Lessor shall, at the time it consents to any Alteration requiring consent, specify any Alteration then contemplated which is to be removed at Lessee’s expense at the expiration of the Term.  Otherwise, Lessee shall not be obligated to remove any Alterations.  Should Lessor permit Lessee to make its own Alterations which could adversely and materially affect any Building Systems, Lessee shall use only such contractor as has been expressly approved by Lessor.  Provided that Lessee shall not have been obligated under the Terms of Section 5 above to provide Lessor with the Extra Deposit, Lessee shall not be obligated to post any performance or payment bond in connection with any Alterations.  In the event that Lessee has provided the Extra Deposit to Lessor, Lessee shall, in connection with any Alterations for which Lessor’s approval is required hereunder, provide reasonable evidence to Lessor of the availability of cash resources adequate to pay for such Alterations (which evidence may, at Lessee’s election, take the form of cash or a cash equivalent).

 

(b)                                 Any Alterations that Lessee shall desire to make shall be presented to Lessor in written form, with proposed detailed plans to the extent plans are required therefor.  If such proposed Alterations cost in excess of $25,000, Lessor’s consent shall be required and if Lessor shall give its consent to Lessee’s making such Alteration, the consent shall be deemed conditioned upon Lessee acquiring any legally required permit to do so from the applicable governmental agencies, furnishing a copy thereof to Lessor prior to the commencement of the work, and compliance by Lessee with all conditions of said permit in a prompt and expeditious manner.

 

(c)                                  Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use in the Premises, which claims are or may be secured by any mechanic’s or materialmen’s lien against the Premises, the Building or the Project, or any interest therein.

 

(d)                                 Lessee shall give Lessor not less than ten (10) days notice prior to the commencement of any work in the Premises by Lessee, and Lessor shall have the right to post notices of non-responsibility in or on the Premises or the Building as provided by law.  If Lessee shall, in good faith, contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense defend itself and Lessor against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof against the Lessor or the Premises, the Building, upon the condition that if Lessor shall require, Lessee shall furnish to Lessor a release bond meeting the requirements if California Civil Code Section 3143.  In addition, Lessor may require Lessee to pay Lessor’s reasonable and actual fees and costs of counsel reasonably satisfactory to Lessee in participating in such action if Lessor shall decide it is in Lessor’s best interest to do so.

 

(e)                                  All Alterations (whether or not such Utility Installations constitute trade fixtures of Lessee), which may be made to the Premises by Lessee, including but not limited to, floor coverings, panelings, doors, drapes, built-ins, moldings, sound attenuation, and lighting and

 

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telephone or communication systems, conduit, wiring and outlets, shall be made and done in a good and workmanlike manner and of good and sufficient quality and materials and in material compliance with all Applicable Laws and all necessary permits.  Lessee’s personal property, trade fixtures, furniture, files, and equipment, other then that which is affixed to the Premises so that it cannot be removed without material damage to the Premises or the Building, and other than Utility Installations, shall remain the property of Lessee and may be removed by Lessee subject to the provisions of Section 7.3.

 

(f)                                   Lessee shall provide Lessor with as-built plans and specifications (or, in the event the Alterations were installed without the benefit of plans, a reasonably detailed description of such Alterations and of the specifications therefor) for any Alterations for which Lessee has prepared such plans and specifications in connection with their installation.

 

7.4                               Utility Additions.  Subject to the terms of this Lease, Lessor reserves the right (but shall not be obligated) to install new or additional utility facilities throughout the Project for the benefit of Lessor or Lessee, or any other lessee of the Project, including, but not by way of limitation, such utilities as plumbing, electrical systems, communication systems, and fire protection and detection systems, so long as such installations do not unreasonably interfere with Lessee’s use of the Premises.

 

8.                                      Insurance, Indemnity:

 

8.1                               Liability Insurance - Lessee.  Lessee shall procure and maintain during the Term of this Lease Commercial General Liability Insurance covering the insured against claims of bodily injury, personal injury and property damage arising out of Lessee’s operations, assumed liabilities or use of the Premises, including a Commercial General Liability endorsement covering the insuring provisions of this Lease and the performance by Lessee of the indemnity agreements set forth in Section 8.7 of this Lease, for limits of liability not less than: (i) Bodily Injury and Property Damage Liability - $2,000,000 each occurrence and $2,000,000 annual aggregate, and (ii) Personal Injury Liability - $2,000,000 each occurrence and $2,000,000 annual aggregate.  In addition, Lessee shall procure and maintain during the Term of this Lease worker’s compensation insurance in the statutory amounts required by the State of California.

 

8.2                               Liability Insurance - Lessor.  Lessor shall obtain and keep in force during the Term of this Lease a policy of Commercial General Liability Insurance, plus coverage against such other risks Lessor deems advisable from time to time, insuring Lessor, but not Lessee, against liability arising out of the ownership, use, occupancy or maintenance of the Project in an amount not less then $2,000,000.00 per occurrence.

 

8.3                               Property Insurance - Lessee.  Lessee shall, at Lessee’s expense, obtain and keep in force during the Term of this Lease for the benefit of Lessee, Physical Damage Insurance covering (i) all office furniture, trade fixtures, office equipment, merchandise and all other items of Lessee’s

 

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property on the Premises installed by, for, or at the expense of Lessee, and (ii) all Lessee Improvements, Alterations, fixtures and additions to the Premises.  Such insurance shall not cover any Common Areas.  Such insurance shall be written on an “all risks” of physical loss or damage or Special Form basis, for the full replacement cost value new without deduction for depreciation of the covered items and in amounts that meet any co-insurance clauses of the policies of insurance and shall include a vandalism and malicious mischief endorsement, sprinkler leakage coverage and earthquake sprinkler leakage coverage.

 

8.4                               Property Insurance-Lessor.  Lessor shall obtain and keep in force during the Term of this Lease a policy or policies of insurance covering loss or damage to the Project improvements, but not Lessee’s personal property, fixtures, equipment or Lessee Improvements or Alterations, in the amount of the full replacement cost thereof, as the same may exist from time to time, utilizing Insurance Services Office standard form, or equivalent, providing protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, plate glass, and such other perils as Lessor deems advisable or may be required by a lender having a lien on the Project.  In addition, Lessor shall obtain and keep in force, during the term of this Lease, a policy of rental value insurance covering a period of one year, with loss payable to Lessor, which Insurance shall also cover all Operating Expenses for said period.  Lessee will not be named in any such policies carried by Lessor and shall have no right to any proceeds therefrom.  The policies required by these Sections 8.2 and 8.4 shall contain such deductibles as Lessor or the aforesaid lender may determine.  In the event that the Premises shall suffer an insured loss, the deductible amounts under the applicable insurance policies shall be deemed an Operating Expense.  Lessee shall not do or permit to be done anything which shall not invalidate the insurance policies carried by Lessor.  Lessee shall pay the entirety of any increase in the property insurance premium for the Project over what it was immediately prior to the commencement of the Term of this Lease if the increase is specified by Lessor’s insurance carrier as being caused by the nature of Lessee’s occupancy or any act or omission of Lessee.

 

8.5                               Insurance Policies.  Lessee shall deliver to Lessor and Lessor’s lender evidence of insurance for the coverage required under Section 8.1 on Accord Form 27 (or its equivalent) within seven (7) days after the Commencement Date of this Lease.  No such policy shall be cancelable or subject to reduction of coverage or other modification except after thirty (30) days prior written notice to Lessor.  Lessee shall, at least thirty (30) days prior to the expiration of such policies, furnish Lessor with evidence of renewals thereof

 

8.6                               Waiver of Subrogation.  Lessee and Lessor each hereby release and relieve the other and waive their entire right of recovery against the other, for direct or consequential loss or damage arising out of or incident to the perils covered by property Insurance carried by such party, whether due to the negligence of Lessor or Lessee or their agents, employees, contractors and/or invitees.  If necessary all property insurance policies required under this Lease shall be endorsed to so provide.

 

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8.7                               Indemnity.

 

(a)                                 Lessee shall indemnify, defend, protect, and hold harmless Lessor, its partners, trustees, members, managers, ancillary trustees and their respective officers, directors, shareholders, beneficiaries, agents, servants, employees, and independent contractors (collectively, the “Lessor Parties”) from any and all loss, cost, damage, expense and liability (including without limitation court costs and reasonable attorneys’ fees) incurred in connection with or arising from any cause related to Lessee’s occupancy of the Premises and occurring in, on or about the Premises or any acts, omissions or negligence of Lessee or of any person claiming by, through or under Lessee, its partners, and their respective officers, shareholders, directors, agents, servants, employees, and independent contractors (collectively, the “Lessee Parties”), in, on or about the Project, either prior to, during, or after the expiration of the Lease Term, provided that the terms of the foregoing indemnity shall not apply to the gross negligence, active negligence or willful misconduct of Lessor or the Lessor Parties.  Lessor shall indemnify, defend, protect, and hold harmless Lessee and the Lessee Parties from any and all loss, cost, damage, expense and liability (including without limitation court costs and reasonable attorneys’ fees) incurred in connection with or arising from any cause in, on or about the Site, either prior to, during, or after the expiration of the Lease Term, except to the extent caused by the gross negligence, active negligence or willful misconduct of the Lessee or the Lessee Parties.

 

Should Lessor be named as a defendant in any suit brought against Lessee in connection with or arising out of an event covered by the foregoing indemnity, Lessee shall pay to Lessor its costs and expenses incurred in such suit, including without limitation, its actual professional fees such as appraisers’, accountants’ and attorneys’ fees.  Should Lessee be named as a defendant in any suit brought against Lessor in connection with or arising out of an event covered by the foregoing indemnity, Lessor shall pay to Lessee its costs and expenses incurred in such suit, including without limitation, its actual professional fees such as appraisers’, accountants’ and attorneys’ fees.  Further, Lessee’s agreement to indemnify Lessor and Lessor’s agreement to indemnify Lessee pursuant to this Section are not intended and shall not relieve any insurance carrier of its obligations under policies required to be carried by Lessee or Lessor pursuant to the provision of this Lease, to the extent such policies cover the matters subject to the parties’ respective indemnification obligations; nor shall they supersede any inconsistent agreement of the parties set forth in any other provision of this Lease.  The provisions of this Section shall survive the expiration or sooner termination of this Lease with respect to any claims or liability occurring prior to such expiration or termination.

 

(b)                                 To the extent that Lessor is covered by Lessee’s indemnification under this Section, Lessor agrees that, for such time as Lessor is not unreasonably prejudiced thereby, Lessee shall have the right to tender any claim to its insurance carrier, and Lessor agrees to reasonably cooperate with such tender and any underwriting or claims processing requirements of such insurer.

 

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8.8                               Exemption of Lessor from Liability.  Subject to Section 8.7 and Section 4.I(c), Lessee hereby agrees that Lessor shall not be liable for injury to Lessee’s business or any loss of income therefrom or for loss of or damage to the goods, wares, merchandise or other property of Lessee, Lessee’s employees, invitees, customers, or any other person in or about the Premises or the Project, nor shall Lessor be liable for injury to the person of Lessee, Lessee’s employees, agents or contractors, whether such damage or injury is caused by or results from theft, fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures, or from any other cause, whether said damage or injury results from conditions arising upon the Premises or upon other portions of the Project, or from other sources or places, or from new construction or the repair, alteration or improvement of any part of the Project, or of the equipment, fixtures or appurtenances applicable thereto, and regardless of whether the cause of such damage or injury or the means of repairing the same is inaccessible.  Subject to Section 8.7 and Section 4.1(c), Lessor shall not be liable for any damages arising from any act or neglect of any other lessee, occupant or user of the Project.

 

8.9                               No Representation of Adequate Coverage.  Lessor makes no representation that the limits or forms of coverage of insurance specified in this Section 8 are adequate to cover Lessee’s property or obligations under this Lease.

 

9.                                      Damage or Destruction:

 

9.1                               Repair of Damage to Premises by Lessor.  If the Premises or any Common Areas of the Project serving or providing access to the Premises shall be damaged by fire or other casualty, Lessor shall promptly and diligently, subject to reasonable delays for insurance adjustment or other matters beyond Lessor’s reasonable control, and subject to all other terms of this Section 9, restore the base, shell, and core of the Project and Premises and such Common Areas.  Such restoration shall be to substantially the same condition of the base, shell, and core of the Building and Premises and Common Areas prior to the casualty, except for modifications required by zoning and building codes and other laws.  Notwithstanding any other provision of this Lease, upon the occurrence of any damage to the Premises and the commencement of Lessor’s repairs and restoration, Lessee shall assign to Lessor (or to any party designated by Lessor) all insurance proceeds payable to Lessee under Lessee’s insurance required under this Lease, and Lessor shall repair any injury or damage to the Lessee Improvements installed in the Premises and shall return such Lessee Improvements to their original condition; provided that if the cost of such repair by Lessor exceeds the amount of insurance proceeds received by Lessor from Lessee’s insurance carrier, as assigned by Lessee, the cost of such repairs shall be paid by Lessee to Lessor prior to and as a condition of Lessor’s repair of the damage.  In connection with such repairs and replacements, Lessee shall, prior to the commencement of construction, submit to Lessor, for Lessor’s review and approval, all plans, specifications and working drawings relating thereto, and Lessor shall select the contractors to perform such improvement work.  Such submittal of plans and construction of improvements shall be performed in accordance with Lessor’s policies and practices.  If the cost of repair is reasonably anticipated to exceed the

 

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amount of insurance proceeds to be received therefor by Lessee from its insurance carrier, then Lessee shall have the right within five (5) days of Lessee’s receipt of notice to that effect to request changes to the work which will reduce the cost thereof.  Lessor shall not be liable for any inconvenience or annoyance to Lessee or its visitors, or injury to Lessee’s business resulting in any way from such damage or the repair thereof; provided however, that if such fire or other casualty shall have damaged the Premises or common areas necessary to Lessee’s occupancy, and if such damage is not the result of the negligence or willful misconduct of Lessee or Lessee’s employees, contractors, licensees, or invitees, Lessor shall allow Lessee a proportionate abatement of Rent, during the time and to the extent the Premises are unfit for occupancy for the purposes permitted under this Lease, and not occupied by Lessee as a result thereof; provided, further, if the Premises are damaged such that the remaining portion thereof is not sufficient to allow Lessee to conduct its business operations from such remaining portion and Lessee does not conduct its business operations therefrom, Lessor shall allow Lessee a total abatement of Rent during the time and to the extent the Premises are unfit for occupancy for the purposes permitted under this Lease, and not occupied by Lessee as a result of the subject damage.  Lessee’s abatement period hereunder shall continue until Lessee has been given sufficient time, and sufficient access to the Premises, to rebuild the portion of the Premises it is required to rebuild to substantially the same design concept, to install its property, furniture, fixtures, and equipment and to move in over one (1) weekend per full floor.

 

9.2                               Lessor’s Option to Repair.  Notwithstanding the terms of Section 9.1 of this Lease (but subject to the abatement provisions set forth therein), Lessor may elect not to rebuild and/or restore the Premises and/or Building and instead terminate this Lease by notifying Lessee in writing of such termination within ninety (90) days after the date of damage, such notice to include a termination date giving Lessee ninety (90) days to vacate the Premises, but Lessor may so elect only if the Building shall be damaged by fire or other casualty or cause, whether or not the Premises are affected, and one or more of the following conditions is present: (i) repairs cannot reasonably be completed within two hundred and seventy (270) days of the date of damage (when such repairs are made without the payment of overtime or other premiums) or (ii) the damage is not fully covered, except for deductible amounts (which shall not exceed or be deemed to exceed $50,000), by Lessor’s insurance policies.  If Lessor does not elect to terminate this Lease pursuant to Lessor’s termination right as provided above, Lessor shall notify Lessee within ninety (90) days after the date of damage as to whether the repairs can or cannot, in the reasonable opinion of Lessor, be completed within two hundred and seventy (270) days after being commenced.  If Lessor notifies Lessee that the repairs cannot be completed within said two hundred and seventy (270)-day period, Lessee may elect, no earlier than ninety (90) days after the date of the damage and not later than ninety (90) days after the date of such damage, to terminate this Lease by written notice to Lessor effective as of the date specified in the notice, which date shall not be less than thirty (30) days nor more than ninety (90) days after the date such notice is given by Lessee.  Furthermore, if neither Lessor nor Lessee has terminated this Lease, and the repairs are not actually completed within such two hundred and seventy (270)-day period, Lessee shall have the right to terminate this Lease during the first five (5) business days

 

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of each calendar month following the end of such period until such time as the repairs are complete, by notice to Lessor (the “Damage Termination Notice”), effective as of a date set forth in the Damage Termination Notice (the “Damage Termination Date”), which Damage Termination Date shall not be less than ten (10) business days following the end of each such month.  Notwithstanding the foregoing, if Lessee delivers a Damage Termination Notice to Lessor, then Lessor shall have the right to suspend the occurrence of the Damage Termination Date for a period ending thirty (30) days after the Damage Termination Date set forth in the Damage Termination Notice by delivering to Lessee, within five (5) business days of Lessor’s receipt of the Damage Termination Notice, a certificate of Lessor’s contractor responsible for the repair of the damage certifying that it is such contractor’s good faith judgment that the repairs shall be substantially completed within thirty (30) days after the Damage Termination Date.  If repairs shall be substantially completed prior to the expiration of such thirty (30)-day period, then the Damage Termination Notice shall be of no force or effect, but if the repairs shall not be substantially completed within such thirty (30)-day period, then this Lease shall terminate upon the expiration of such thirty (30)-day period.  At any time, from time to time, after the date occurring ninety (90) days after the date of the damage, Lessee may request that Lessor inform Lessee of Lessor’s reasonable opinion of the date of completion of the repairs and Lessor shall respond to such request within five (5) business days.

 

9.3                               Waiver of Statutory Provisions.  The provisions of this Lease, including this Section 9, constitute an express agreement between Lessor and Lessee with respect to any and all damage to, or destruction of, all or any part of the Premises, the Building or any other portion of the Site, and any statute or regulation of the State of California, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage or destruction in the absence of an express agreement between the parties, and any other statute or regulation, now or hereafter in effect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises, the Building or any other portion of the Site.

 

9.4                               Damage Near End of Term.  In the event that the Premises or the Building is destroyed or damaged to any substantial extent during the last nine (9) months of the Term, and, in the reasonable opinion of Lessor, the damage or destruction to the Premises or Building cannot be repaired by the date which is six (6) months prior to the Lease Expiration Date (giving full consideration to any Option to extend the Term which has previously been or which may thereupon be exercised by Lessee), then either Lessor or Lessee shall have the option to terminate this Lease by giving written notice to the other party of the exercise of such option within thirty (30) days after such damage or destruction, in which event this Lease shall cease and terminate as of the date of such notice, Lessee shall pay the Base Rent and Additional Rent, properly apportioned up to such date of damage, and both parties hereto shall thereafter be freed and discharged of all further obligations hereunder, except as provided for in provisions of this Lease which by their terms survive the expiration or earlier termination of the Lease Term.  The

 

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foregoing notwithstanding, in the event Lessee shall exercise its Option to extend the Term, any damage and/or destruction shall be dealt with pursuant to Sections 9.1, 9.2 and 9.3 above.

 

10.                               Real Property Taxes:

 

10.1                        Payment of Taxes.

 

(a)                                 Lessor shall pay the Tax Expenses, applicable to the Project subject to reimbursement by Lessee of Lessee’s Share of such taxes in accordance with the provisions of Section 4.2, except as otherwise provided in Sections 4.6, 10.1(b), and 10.2.

 

(b)                                 Notwithstanding anything to the contrary contained in this Lease, in the event that, at any time during the Lease Term (as extended), any sale, refinancing, change in ownership of the Office Building or any other transaction occurs or is consummated, and as a result thereof, and to the extent that in connection therewith, the Office Building is reassessed (the “Reassessment”) for real estate tax purposes by the appropriate governmental authority pursuant to the terms of Proposition 13, then the following provisions shall apply to such Reassessment of the Real Property.  The term “Tax Increase” shall mean that portion of the Tax Expenses, as calculated immediately following the Reassessment, which is attributable solely to the Reassessment.  Accordingly, the term Tax Increase shall not include any portion of the Tax Expenses, as calculated immediately following the Reassessment, which (i) is attributable to the initial assessment of the value of the Office Building or the Lessee Improvements located in the Building, (ii) is attributable to assessments which were pending immediately prior to the Reassessment which assessments were conducted during, and included in, such Reassessment, or which assessments were otherwise rendered unnecessary following the Reassessment, or (iii) is attributable to the annual inflationary increase of real estate taxes permitted to be assessed annually under Proposition 13.  During the Lease Term, as extended, any Tax Increase shall be excluded from Tax Expenses.  The amount of Tax Expenses which Lessee is not obligated to pay or will not be obligated to pay during the Lease Term in connection with a particular Reassessment pursuant to the terms of this Section shall be sometimes referred to hereafter as a “Proposition 13 Protection Amount.” If the occurrence of a Reassessment is reasonably foreseeable by Lessor and the Proposition 13 Protection Amount attributable to such Reassessment can be reasonably quantified or estimated for each Lease Year commencing with the Lease Year in which the Reassessment will occur, the terms of this Section shall apply to each such Reassessment.  Upon notice to Lessee, Lessor shall have the right to purchase the Proposition 13 Protection Amount relating to the applicable Reassessment (the “Applicable Reassessment”), at any time during the Lease Term, by paying to Lessee an amount equal to the Proposition 13 Purchase Price, as that term is defined below, provided that the right of any successor of Lessor to exercise its right of repurchase hereunder shall not apply to any Reassessment which results from the event pursuant to which such successor of Lessor became the Lessor under this Lease.  As used herein, “Proposition 13 Purchase Price” shall mean the present value of the Proposition 13 Protection Amount remaining during the Lease Term, as of

 

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the date of payment of the Proposition 13 Purchase Price by Lessor.  Such present value shall be calculated (i) by using the portion of the Proposition 13 Protection Amount attributable to each remaining Lease year (as though the portion of such Proposition 13 Protection Amount benefited Lessee at the beginning of each Lease Year), as the amounts to be discounted, and (ii) by using discount rates for each amount to be discounted equal to the Interest Rate as of the date of Lessor’s exercise of its right to purchase, as set forth in this Section.  Upon such payment of the Proposition 13 Purchase Price, the provisions of this Section of this Lease shall not apply to any Tax Increase attributable to the applicable Reassessment.  Since Lessor is estimating the Proposition 13 Purchase Price because a Reassessment has not yet occurred, then when such Reassessment occurs, if Lessor has underestimated the Proposition 13 Purchase Price, upon notice by Lessor to Lessee, Lessee’s Base Rent next due shall be credited with the amount of such underestimation, and if Lessor overestimates the Proposition 13 Purchase Price, then upon notice by Lessor to Lessee, Base Rent; next due shall be increased by the amount of the overestimation.

 

10.2                        Additional Improvements.  Lessee shall not be responsible for paying any increase in real property tax specified in the tax assessor’s records and work sheets as being caused by additional improvements placed upon the Project by other lessees or by Lessor for the exclusive enjoyment of any other lessee.  Subject to Section 4.6, Lessee shall, however, pay to Lessor at the time that Operating Expenses are payable under Section 4.2 the entirety of any increase in Real Property Tax if assessed against the Project solely by reason of additional improvements placed upon the Premises by Lessee or at Lessee’s request.

 

10.3                        [INTENTIONALLY OMITTED]

 

10.4                        Joint Assessment.  If the improvements or property, the taxes for which are to be paid separately by Lessee under Section 10.2 or 10.5 are not separately assessed, Lessee’s portion of that tax shall be equitably determined by Lessor from the respective valuations assigned in the assessor’s work sheets or such other information (which may include the cost of construction) as may be reasonably available.  Lessor’s reasonable determination thereof; in good faith, shall be conclusive.

 

10.5                        Personal Property Taxes.

 

(a)                                 Lessee shall pay prior to delinquency all taxes and assessments assessed against and levied upon trade fixtures, furnishings, equipment and all other personal property of Lessee contained in the Premises or elsewhere.

 

(b)                                 If any of Lessee’s said personal property shall be assessed with Lessor’s real property, Lessee shall pay to Lessor the taxes attributable to Lessee within ten (10) days after receipt of a written statement setting forth the taxes applicable to Lessee’s property.

 

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11.                               Utilities and Services:

 

11.1                        Standard Lessee Services.  Lessor shall provide the following services on all days during the Lease Term (the cost of which shall, subject to Section 4.7, be included as an Operating Expense), unless otherwise stated below.

 

(a)                                 Subject to Section 11.1 (d) and all governmental rules, regulations and guidelines applicable thereto, Lessor shall provide heating and air conditioning when necessary for normal comfort for normal office and laboratory use in the Premises, from Monday through Friday, during the period from 7:30 a.m. to 7:30 p.m., and on Saturdays during the period from 7:30 a.m. to 2:00 p.m. (“Normal Business Hours”), except for Sundays and New Year’s Day, President’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, the day after Thanksgiving Day, Christmas Day and any other nationally recognized holidays (collectively, the “Holidays”).

 

(b)                                 Lessor shall, subject to Section 11.1 (d), provide twenty-four (24) hours per day, every day of the year, adequate electrical wiring, facilities and power for normal general office use as determined by Lessor; provided, however, that electrical usage, to the extent the same exceeds eight (8) watts connected load per RSF in the Premises per year, shall be deemed excess consumption and shall be subject to the terms of Section 11.2, below.  Lessee shall bear the cost of replacement of non-Building standard lamps, starters and ballasts for lighting fixtures within the Premises.

 

(c)                                  Lessor shall provide city water from the regular Building outlets for drinking, lavatory and toilet purposes.

 

(d)                                 Lessor shall not provide janitorial services to the Premises.  All electrical service to the Premises and to any Common Areas of the Project for which Lessee has exclusive rights to may be at the election of Lessor pursuant to separately metered service and in such event shall be paid by Lessee directly to the service provider.  If Lessor elects to separately meter the Premises, all costs relating to the initial installation of any electrical system or metering system (including, without limitation, any power panels, transformers, relays or meters and all related wiring and circuits) to permit Lessee to be directly billed for electrical service by the electrical utility shall be borne by Lessor.  The foregoing notwithstanding, Lessor may, in its good faith discretion, elect to separately meter all tenants in the Building other than Lessee, and invoice Lessee for electrical service through the Building as a part of Operating Expenses.  Lessee shall pay the cost of all electrical service as follows: (i) service to the-Premises shall either be paid directly to the utility (to the extent the Premises are separately metered) or directly to the Lessor and not included as a part of Operating Expenses (if the Premises are not separately metered) and (ii) service to Common Areas shall be included as Operating Expenses (subject to Section 4.7).  Lessor shall provide janitorial service with respect to all Common Areas outside the Premises

 

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comparable to janitorial services in comparable buildings, Monday through Friday except the date of observation of the Holidays.

 

(e)                                  Lessor shall provide nonexclusive automatic elevator service at all times.

 

(f)                                   Lessor shall cause the front entrance door of the Building to be unlocked and freely accessible by Lessee’s employees, visitors and invitees during Normal Business Hours, except for Holidays.  Outside of Normal Business Hours and Holidays, the front door shall be accessible by a card key system compatible with Lessee’s security system.  Furthermore, Lessee may install, at its cost, a card key system consistent with the Building’s existing system (unless Lessee offers replacement cards to effected tenants at no cost to such tenants or the Building) in the Building’s elevator and on the floors which comprise any portion of the Premises.  Lessor shall permit Lessee to tie its security system into the Building’s security system.

 

(g)                                  Lessee shall pay for all services to Common Areas within the Building under the exclusive control of Lessee (other than the Parking Facility, the costs for which shall be included in the Operating Expenses).

 

11.2                        Overstandard Lessee Use.  Lessee shall not, without Lessor’s prior written consent, use heat-generating machines, machines other than normal fractional horsepower office machines, or equipment or lighting other than building standard lights in the Premises, which may materially affect the temperature otherwise maintained by the air-conditioning system or increase the water normally furnished for the Premises by Lessor pursuant to the terms of Section 11.1 of this Lease.  If such consent is given, Lessor shall have the right to install supplementary air-conditioning units or other facilities in the Premises, including supplementary or additional metering devices, and the cost thereof, including the cost of installation, operation and maintenance, increased wear and tear on existing equipment and other similar charges, shall be paid by Lessee to Lessor upon billing by Lessor.  If Lessee uses water, electricity, heat or air-conditioning in excess of that supplied by Lessor pursuant to Section 11.1 of this Lease, Lessee shall pay to Lessor, upon billing, the cost of such excess consumption, the cost of the installation, operation, and maintenance of equipment which is installed in order to supply such excess consumption, and the cost of the increased wear and tear on existing equipment caused by such excess consumption; and Lessor may install devices to separately meter any increased use and in such event (subject, however, to Section 11.1(d)) Lessee shall pay the increased cost directly to Lessor, on demand, including the cost of such additional metering devices.  If Lessee desires to use heat, ventilation or air-conditioning during hours other than those for which Lessor is obligated to supply such utilities pursuant to the terms of Section 11.1 of this Lease, or if Lessee shall require services in excess of those offered under Section 11.1 or elsewhere in this Lease, Lessee shall give Lessor such prior notice, as Lessor shall from time to time establish as appropriate, of Lessee’s desired use and Lessor shall supply such utilities or extra services to Lessee at the actual cost thereof (including a reasonable estimate, with the basis therefor, of the additional administrative costs with respect thereto) to Lessee.  Amounts payable by Lessee to

 

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Lessor for such use of additional utilities shall be deemed Additional Rent hereunder and shall be billed on a monthly basis.

 

11.3                        Interruption of Use.  Lessee agrees that, except as provided in this Lease, Lessor shall not be liable for damages, by abatement of Rent or otherwise, for failure to furnish or delay in furnishing any service (including telephone and telecommunication services), or for any diminution in the quality or quantity thereof, when such failure or delay or diminution is occasioned, in whole or in part, by repairs, replacements, or improvements, by any strike, lockout or other labor trouble, by inability to secure electricity, gas, water, or other fuel at the Building after reasonable effort to do so, by any accident or casualty whatsoever, by act or default of Lessee or other parties, or by any other cause beyond Lessor’s reasonable control; and such failures or delays or diminution shall never be deemed to constitute an eviction or disturbance of Lessee’s use and possession of the Premises or relieve Lessee from paying Rent or performing any of its obligations under this Lease.  Furthermore, Lessor shall not be liable under any circumstances for a loss of, or injury to, property or for injury to, or interference with, Lessee’s business, including, without limitation, loss of profits, however occurring, through or in connection with or incidental to a failure to furnish any of the services or utilities as set forth in this Section 11.  Lessor may comply with voluntary controls or guidelines promulgated by any governmental entity relating to the use or conservation of energy, water, gas, light or electricity or the reduction of automobile or other emissions without creating any liability of Lessor to Lessee under this Lease, provided that the Premises are not thereby rendered untenantable.

 

11.4                        Excess Usage by Lessee.  Lessor may, in its sole discretion, install at Lessee’s expense supplemental equipment and/or separate metering applicable to Lessee’s excess usage or loading.

 

12.                               Assignment and Subletting:

 

12.1                        Lessor’s Consent Required.  Lessee shall not voluntarily or by operation of law assign, transfer, mortgage, sublet, or otherwise transfer or encumber (a “Transfer”) all or any part of Lessee’s interest in the Lease or in the Premises, without Lessor’s prior written consent, which Lessor shall not unreasonably withhold, condition or delay.  Lessor shall respond to Lessee’s request for consent hereunder in a timely manner (but in no event longer than 21 days) and any attempted assignment, transfer, mortgage, encumbrance or subletting without such consent shall at Lessor’s option be void.  In no event shall any sale, transfer or hypothecation of any interest in Lessee (an “Excluded Transaction”) constitute a Transfer provided such transaction is not entered into as a subterfuge by Lessee to avoid the restrictions on Transfer.

 

12.2                        Lessee Affiliate.  Notwithstanding the provisions of Section 12.1 hereof; Lessee may assign or sublet the Premises, or any portion thereof; without Lessor’s consent, to any entity which controls, is controlled by or is under common control with Lessee, or to any entity resulting from the merger or consolidation with Lessee, or to any person or entity which acquires all or substantially all of the assets of Lessee as a going concern, all of whom are referred to as “Lessee

 

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Affiliate”; provided that before such assignment shall be effective, (a) said assignee shall assume, in full, the obligations of Lessee under this Lease and (b) Lessor shall be given written notice of such assignment and assumption.  Any such assignment shall not, in any way, affect or limit the liability of Lessee under the terms of this Lease even if after such assignment or subletting the terms of this Lease are materially changed or altered without the consent of Lessee, the consent of whom shall not be necessary.

 

12.3                        Terms and Conditions Applicable to Assignment and Subletting.

 

(a)                                 Regardless of Lessor’s consent, no assignment or subletting shall release Lessee of Lessee’s obligations hereunder or alter the primary liability of Lessee to pay the Rent and other sums due Lessor hereunder including Lessee’s Share of Operating Expenses, and to perform all other obligations to be performed by Lessee hereunder.

 

(b)                                 Lessor may accept rent from any person other than Lessee pending approval or disapproval of such assignment.

 

(c)                                  Neither a delay in the approval or disapproval of such assignment or subletting, nor the acceptance of rent, shall constitute a waiver or estoppel of Lessor’s right to exercise its remedies for the breach of any of the terms or conditions of this Section 12 or this Lease.

 

(d)                                 The consent by Lessor to any assignment or subletting shall not constitute consent to any subsequent assignment or subletting by Lessee or to any subsequent or successive assignment or subletting by the sublessees.  However, Lessor may consent to subsequent subletting and assignment of the sublease or any amendments or modifications thereto without notifying Lessee or anyone else liable on the Lease or sublease and without obtaining their consent and such action shall not relieve such persons from liability under this Lease or said sublease; however, such persons shall not be responsible to the extent any such amendment or modification enlarges or increases the obligations of the Lessee or sublessees under this Lease or such sublease.

 

(e)                                  In the event of any default under this Lease, Lessor may proceed directly against Lessee or any one else responsible for the performance of this Lease, including the sublessees, without first exhausting Lessor’s remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor or Lessee.

 

(f)                                   Lessor’s written consent to any assignment or subletting of the Premises by Lessee shall not constitute an acknowledgment that no default then exists under this Lease of the obligations to be performed by Lessee nor shall such consent be deemed a waiver of any then existing default, except as may be otherwise stated by Lessor at the time.

 

12.4                        Additional Terms and Conditions Applicable to Subletting.  Regardless of Lessor’s consent, the following terms and conditions shall apply to any subletting by Lessee of all or any part

 

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of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein:

 

(a)                                 Lessee hereby assigns and transfers to Lessor all of Lessee’s interest in all rentals and income arising from any sublease heretofore or hereafter made by Lessee, and Lessor may collect such rent and income and apply same toward Lessee’s obligations under this Lease; provided, however, that until a default shall occur in the performance of Lessee’s obligations under this Lease, Lessee may receive, collect and enjoy the rents accruing under such sublease.  Lessor shall not, by reason of this or any other assignment of such sublease to Lessor nor by reason of the collection of the rents from a sublease, be deemed liable to the sublessees for any failure of Lessee to perform and comply with any of Lessee’s obligations to such sublessees under such sublease.  Lessee hereby irrevocably authorizes and directs any such sublessees, upon receipt of a written notice from Lessor stating that a default exists in the performance of Lessee’s obligations under this Lease, to pay to Lessor the rents due and to become due under the sublease.  Lessee agrees that such sublessees shall have the right to rely upon any such statement and request from Lessor, and that such sublessees shall pay such rents to Lessor without any obligation or right to inquire as to whether such default exists and notwithstanding any notice from or claim from Lessee to the contrary.  Lessee shall have no right or claim against said sublessees or Lessor for rents paid by said sublessees to Lessor.

 

(b)                                 No sublease entered into by Lessee shall be effective unless and until it has been approved in writing by Lessor.  Lessor reserves the right to reasonably approve the form of the sublease document.  Any sublessee shall, by reason of entering into a sublease under this Lease, be deemed, for the benefit of Lessor, to have assumed and agreed to conform and comply with each and every obligation herein to be performed by Lessee other then such obligations as are contrary to or inconsistent with provisions contained in a sublease to which Lessor has expressly consented in writing.

 

(c)                                  In the event Lessee shall default in the performance of its obligations under this Lease, Lessor shall require any sublessee or assignee to attorn to Lessor under the terms of this Lease applicable to the sublease premises (in the case of a sublease) or the entire premises (in the case of an assignment), in which event Lessor shall undertake the obligations of Lessee under such sublease or assignment from the time of the exercise of said option to the termination of such sublease; provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to Lessee or for any other prior defaults of Lessee under such sublease or assignment.

 

(d)                                 With respect to any assignment to which Lessor has consented, Lessor agrees to deliver a copy of any notice of default by Lessee to each assignee.  Such assignee shall have the right to cure a default of Lessee within the applicable cure period after service of said notice of default upon such assignee, and each assignee shall have a right of reimbursement and offset from and against Lessee for any such defaults cured by such assignee.

 

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12.5                        Lessor’s Expenses.  In the event Lessee shall assign or sublet the Premises or request the consent of Lessor to any assignment or subletting then Lessee shall pay Lessor’s reasonable costs third party and expenses incurred in connection therewith, including attorneys; architects: engineers’ or other consultants’ fees (not to exceed $1,500 per request).

 

13.                               Default, Remedies:

 

13.1                        Default.  The occurrence of any one or more of the following events shall constitute an event of default of this Lease by Lessee (an “Event of Default”):

 

(a)                                 The failure by Lessee to make any payment of rent or any other payment required to be made by Lessee hereunder, as and when due, where such failure shall continue for a period of three (3) days after written notice thereof from Lessor to Lessee.  Such notice shall be in addition to and not in lieu of any notice required under California Code of Civil Procedure Section 1161.

 

(b)                                 The failure of Lessee to deliver the Letter of Credit under Section 5, where such failure shall continue for a period of fifteen (15) days after written notice thereof from Lessor to Lessee.  Such notice shall be in addition to and not in lieu of any notice required under California Code of Civil Procedure Section 1161.

 

(c)                                  The failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Lessee other than those referenced in subsection (a) and (b), where such failure shall continue for a period of thirty (30) days after written notice thereof from Lessor to Lessee; provided, however, that if the nature of Lessee’s noncompliance is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commenced such cure within said thirty (30) day period and thereafter diligently pursues such cure to completion.  Such notice shall be in addition to and not in lieu of any notice required under California Code of Civil Procedure Section 1161.

 

(d)                                 (i) The making by Lessee of any general arrangement or general assignment for the benefit of creditors; (ii) the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession is not restored to Lessee within thirty (30) days; or (iii) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within thirty (30) days.  In the events that any provision of this Section 13.1(d) is contrary to any applicable law, such provision shall be of no force or effect.

 

(e)                                  The discovery by Lessor that the audited financial statements given to Lessor by Lessee, dated as of April 14, 2000 with respect to the year ending December 31, 1999 or any

 

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audited financial statements delivered to Lessor pursuant to Section 5 were, as of the date thereof and with respect to the period covered thereby, materially false.

 

13.2                        Remedies.  In the event of any Event of Default under this Lease by Lessee, Lessor may at any time thereafter, upon giving the notices required under California law and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such Event of Default:

 

(a)                                 Terminate Lessee’s right to possession of the Premises by any lawful means, in which case this Lease and the term hereof shall terminate and Lessee shall immediately surrender possession of the Premises to Lessor.  In such event Lessor shall be entitled to recover from Lessee all damages incurred by Lessor by reason of Lessee’s default including, but not limited to, the cost of recovering possession of the Premises; expenses of retailing, including necessary renovation and alteration of the Premises, reasonable attorneys’ fees, and any real estate commission actually paid; the worth at the time of award by the court having jurisdiction thereof of the amount by which the unpaid rent for the balance of the term after the time of such award exceeds the amount of such rental loss for the same period that Lessee proves could be reasonably avoided;.

 

(b)                                 Maintain Lessee’s right to possession in which case this Lease shall continue in effect whether or not Lessee shall have vacated or abandoned the Premises.  In such event Lessor shall be entitled to enforce all of Lessors rights and remedies under this Lease, including the right to recover the rent as it becomes due hereunder.

 

(c)                                  Pursue any other remedy now or hereafter available to Lessor under the laws or judicial decisions of the state wherein the Premises are located.

 

13.3                        Default by Lessor.  Lessor shall not be in default unless Lessor fails to perform obligations required of Lessor within a reasonable time, but in no event later than thirty (30) days after written notice by Lessee to Lessor and to the holder of any first mortgage or deed of trust covering the Premises whose name and address shall have theretofore been furnished to Lessee in writing, specifying wherein Lessor has failed to perform such obligation; provided, however, that if the nature of Lessor’s obligation is such that more than thirty (30) days are required for performance then Lessor shall not be in default if Lessor commences performance within such 30-day period and thereafter diligently pursues the same to completion.  Lessor’s liability under this Lease shall be limited to Lessor’s from time to time equity interest in the Project.

 

13.4                        Late Charges.  Lessee hereby acknowledges that late payment by Lessee to Lessor of Base Rent, Lessee’s Share of Operating Expense Increase or other sums due hereunder will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain.  Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed on Lessor by the terms of any mortgage or trust deed covering the Project.  Accordingly, it any installment of Base Rent, Operating Expense Increase, or any other

 

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sum due from Lessee shall not be received by Lessor or Lessor’s designee when such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall pay to Lessor a late charge equal to 10% of such overdue amount.  The parties hereby agree that such late charge represents a fair and reasonable estimate of the, costs Lessor will incur by reason of late payment by Lessee.  Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee’s default with respect to such overdue amount, nor prevent Lessor from exercising any of the other rights and remedies granted hereunder.

 

14.                               Condemnation:  If the Premises or any portion thereof or the Project are taken under the power of eminent domain, or sold under the threat of the exercise of said power (all of which are herein called “condemnation”), this Lease shall terminate as to the part so taken as of the date the condemning authority takes title or possession, whichever first occurs provided that if so much of the Premises or the Project are taken by such condemnation as would substantially and adversely affect the operation and profitability of Lessee’s business conducted from the Premises, Lessee shall have the option, to be exercised only in writing within thirty (30) days after Lessor shall have given Lessee written notice of such taking (or in the absence of, such notice, within thirty (30) days after the condemning authority shall have taken possession), to terminate this Lease as of the date the condemning authority takes such possession.  If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the rent and Lessee’s Share of Operating Expense Increase shall be reduced in the proportion that the floor area of the Premises taken bears to the total floor area of the Premises.  Lessee’s abatement period hereunder shall continue until Lessee has been given sufficient time, and sufficient access to the Premises, to rebuild the portion of the Premises it is required to rebuild to substantially the same design concept, to install its property, furniture, fixtures, and equipment and to move in over one (1) weekend per full floor.  Common Areas taken shall be excluded from the Common Areas usable by Lessee and no reduction of rent shall occur with respect thereto or by reason thereof.  Lessor shall have the option in its sole discretion to terminate this Lease as of the taking of possession by the condemning authority, by giving written notice to Lessee of such election within thirty (30) days after receipt of notice of a taking by condemnation of any part of the Premises or the Project.  Any award for the taking of all or any part of the Premises or the Project under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold or for the taking of the fee, or as severance damages; provided, however, that Lessee shall be entitled to any separate award for loss of or damage to Lessee’s trade fixtures, removable personal property and unamortized Lessee improvements that have been paid for by Lessee.  For that purpose the cost of such improvements shall be amortized over the original term of this Lease excluding any options.  In the event that this Lease is not terminated by reason of such condemnation, Lessor shall to the extent of severance damages received by Lessor in connection with such condemnation, repair any damage to the Premises caused by such condemnation except to the extent that Lessee has been reimbursed therefor by the condemning authority Lessee shall pay any amount in excess of such severance damages required to complete such repair.

 

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15.                               Brokers:  Lessor agrees that it will recognize Cushman & Wakefield of California, Inc.  as the exclusive Broker for Lessee and The Bates Company as the exclusive broker for Lessor (the “Brokers”).  Lessor and Lessee hereby warrant to each other that (other than Julien J. Studley, Inc.) they have had no dealings with any real estate broker or agent in connection with the negotiation of this Lease, excepting only the Brokers, and that they know of no other real estate broker or agent other than the Brokers who is entitled to a, commission in connection with this Lease.  Lessor shall pay the brokerage commissions owing to the Brokers in connection with the transaction contemplated by this Lease pursuant to and only to the extent set forth in a separate written agreement between Lessor and the Brokers.  Each party agrees to indemnify and defend the other party against and hold the other party harmless from any and all claims, demands, losses, liabilities, lawsuits, judgments, and costs and expenses (including without limitation reasonable attorneys’ fees) with respect to any leasing commission or equivalent compensation alleged to be owing on account of the indemnifying party’s dealings with any real estate broker or agent other than the Brokers.  The terms of this Section shall survive the expiration or earlier termination of the Term.

 

16.                               Estoppel Certificate:

 

(a)                                 Each party (a “responding party”) shall at any time upon not less than ten (10) days’ prior written notice from the other party (a “requesting party”) execute, acknowledge and deliver to the requesting party a statement in writing (i) certifying that this Lease is unmodified and in full force and effect (or, if modified, sitting the nature of such modification and certifying that this Lease, as so modified, is in full force and effect) and the date to which the rent and other charges are paid in advance, if any, and (ii) acknowledging that there are not, to the responding party’s knowledge, any uncured defaults on the part of the requesting party, or specifying such defaults if any are claimed.  Any such statement may be conclusively rallied upon by any prospective purchaser or encumbrancer of the Project or of the business of Lessee.

 

(b)                                 The failure to deliver such statement within such time shall be conclusive evidence upon such party that (i) this Lease is in full force and effect, without modification except as may be represented by the requesting party, (ii) there are no uncured defaults in the requesting party’s performance, and (iii) if Lessor is the requesting party, not more than one month’s rent has been paid in advance.

 

(c)                                  If Lessor desires to finance, refinance, or sell the Project, or any part thereof, Lessee hereby agrees to deliver to any lender or purchaser designated by Lessor such publicly-released financial statements of Lessee as may be reasonably required by such lender or purchaser.  All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth.

 

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17.                               Lessor’s Liability:  The term “Lessor” as used herein shall mean only the owner or owners, at the time in question, of the fee title or a lessee’s interest in a ground lease of the Project, and except as expressly provided in Section 15, in the event of any transfer of such title or interest, Lessor herein named (and in case of any subsequent transfers then the grantor) shall be relieved from and after the date of such transfer of all liability as respects Lessor’s obligations thereafter to be performed, provided that any funds in the hands of Lessor or the then grantor at the time of such transfer, in which Lessee has an interest, shall be delivered to the grantee.  The obligations contained in this Lease to be performed by Lessor shall, subject as aforesaid, be binding on Lessor’s successors and assigns, only during their respective periods of ownership.

 

18.                               Severability:  The invalidity of any provision of this Lease as determined by a court of competent jurisdiction shall in no way affect the validity of any other provision hereof.

 

19.                               Interest on Past-due Obligations:  Except as expressly herein provided, any amount due to Lessor not paid when due shall bear interest at the rate equal to the “reference rate,” “prime rate” or other benchmark rate of interest publicly announced by Bank of America (the “Interest Rate”) from the date due.  Payment of such Interest Rate shall not excuse or cure any Event of Default by Lessee; provided, however, that interest shall not be payable on late charges incurred by Lessee nor on any amounts upon which late charges are paid by Lessee.

 

20.                               Time of the Essence:  Time is of the essence with respect to the obligations to be performed under this Lease.

 

21.                               Additional Rent:  All monetary obligations of Lessee to Lessor under the terms of this Lease, including but not limited to Lessee’s Share of Operating Expense Increase and any other expenses payable by Lessee hereunder shall be deemed to be rent.

 

22.                               Incorporation of Prior Agreements, Amendments:  This Lease contains all agreements of the parties with respect to any matter mentioned herein.  No prior or contemporaneous agreement or understanding pertaining to any such matter shall be effective.  This Lease may be modified in writing only, signed by the parties in interest at the time of the modification.  Except as otherwise stated in this Lease, Lessee hereby acknowledges that neither of the Brokers listed in Section 15 hereof nor the Lessor or any employee or agents of any of said persons has made any oral or written warranties or representations to Lessee relative to the condition or use by Lessee of the Premises or the Project.

 

23.                               Notices:  Any notice required or permitted to be given hereunder shall be in writing and may be given by personal delivery, by a nationally-recognized overnight courier, such as FedEx, or by certified or registered mail, and shall be deemed sufficiently given upon receipt.  Either party may by notice to the other specify a different address or additional addresses for notice purposes.  A copy of all notices required or permitted to be given to Lessor hereunder shall be concurrently

 

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transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate by notice to Lessee.

 

24.                               Waivers:  No waiver by Lessor or Lessee of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach by Lessee or Lessor, as the case may be, of the same or any other provision.  Lessor’s or Lessee’s consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor’s or Lessee’s consent (as the case may be) to or approval of any subsequent act.  The acceptance of rent hereunder by Lessor shall not be a waiver of any preceding breach by Lessee of any provision hereof, other than the failure of Lessee to pay the particular rent so accepted, regardless of Lessor’s knowledge of such preceding breach at the time of acceptance of such rent.

 

25.                               Recording:  Either Lessor or Lessee shall, upon request of the other, execute, acknowledge and deliver to the other a memorandum of this Lease in form satisfactory to Lessee for recording purposes.  To the extent required by the Los Angeles County Recorder’s Office, Lessor shall provide Lessee a factually correct Preliminary Change in Ownership Report.

 

26.                               Hold Over:  If Lessee, with Lessor’s consent, remains in possession of the Premises or any part thereof after the expiration of the term hereof; such occupancy shall be a tenancy from month to month upon all the provisions of this Lease pertaining to the obligations of Lessee, except that the rent payable shall be one hundred twenty-five percent (125%) of the of the Base Rent payable immediately preceding the termination date of this Lease.

 

27.                               Cumulative Remedies:  No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

 

28.                               Covenants and Conditions:  Each provision of this Lease to be performed by Lessee shall be deemed both a covenant and a condition.

 

29.                               Binding Effect; Choice of Law:  Subject to any provisions hereof restricting assignment or subletting by Lessee and subject to the provisions of Section 17, this Lease shall bind the parties, their personal representatives, successors and assigns.  This Lease shall be governed by the laws of the State of California and any litigation concerning this Lease between the parties hereto shall be initiated in the county in which the Project is located.

 

30.                               Subordination:

 

(a)                                 This Lease, shall at Lessor’s option, shall be subordinate to any ground lease, mortgage, deed of trust, or any other hypothecation or security now or hereafter placed upon the Project and to any and all advances made on the security thereof and to all renewals, modifications, consolidations, replacements and extensions thereof Notwithstanding such subordination, Lessee’s right to quiet possession of the Premises shall not be disturbed if Lessee is not in default and so long

 

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as Lessee shall pay the rent and observe and perform all of the provisions of this Lease, unless this Lease is otherwise terminated pursuant to its terms.  If any mortgagee, trustee or ground lessor shall elect to have this Lease prior to the lien of its mortgage, deed of trust or ground lease, and shall give written notice thereof to Lessee, this Lease shall be deemed prior to such mortgage, deed of trust or ground lease, whether this Lease is dated prior or subsequent to the date of said mortgage, deed of trust or ground lease or the date of recording thereof.

 

(b)                                 Lessor agrees that, as a condition to Lessee’s obligation to deliver the Security Deposit, it will, at Lessor’s cost, provide Lessee with commercially reasonable non-disturbance agreements in favor of Lessee from any ground lessors, deed of trust beneficiaries or lien holders (each, a “Mortgagee”) then in existence, (such non-disturbance agreement is referred to as the “Initial SNDA”).  Said non-disturbance agreements shall be in recordable form and may be recorded at Lessee’s election and expense.

 

(c)                                  Lessor agrees to provide Lessee with commercially reasonable non-disturbance agreement(s) in favor of Lessee from any Mortgagee of Lessor who later come into existence at any time prior to the expiration of the Term of the Lease in consideration of, and as a condition precedent to, Lessee’s agreement to be bound by Lease Section 30(a), it being the intent of Lessor and Lessee that the subordination provision in such Section 30(a) shall only apply with respect to a particular Mortgagee in the specific event that Lessee receives such non-disturbance agreements from such persons.

 

(d)                                 As used in this Lease, the term “commercially reasonable non-disturbance agreement” shall mean that such agreement shall at a minimum shall provide that, to the extent Lessor has failed to fulfill its obligations with respect to the payment of any of the following (“Unpaid Economic Concessions”) (i) Basic Lessee Improvement Allowance and Financed Cost (and any allowances for expansions, renewals, initial construction, remodeling or refurbishing), and the cost incurred by Lessee of constructing or completing the Lessee Improvements which were required to be constructed or completed by Lessor at Lessor’s expense (pursuant to Section 6.2), (ii) unused credit of Base Rent or Operating Expenses (for example, any initial free rent period), (iii) unpaid arbitration awards or court judgments, (iv) unrefunded Security Deposit, (v) uncredited Repair Offset Right (as defined in Section 7.1 (b)), or (vii) unpaid commission payable by Lessor due and owing to Lessee’s Broker, Lessee may, subject to Section 61, deduct the amount of the obligation which Lessor has not paid, together with interest at the Interest Rate from the Base Rent next coming due and payable under the Lease (provided, however, at Mortgagee’s discretion, it may pay all such amounts directly to Lessee in lieu of Lessee’s deducting such amount from Base Rent).  Furthermore, such agreements shall provide that, notwithstanding anything to the contrary set forth in the Lease, in the event that Lessor fails to fulfil its obligations with respect to any Unpaid Economic Concessions, Mortgagee or such other successor to the interests of Lessor and/or Mortgagee shall fulfil such obligations, together with interest at the Interest Rate, as defined in the Lease.  With respect to all such payments, interests shall be computed from the date such amounts should have been paid or credited until the date such amounts are in fact paid.

 

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(e)                                  Subject to Lessee’s receipt of a commercially reasonable non-disturbance agreement in each instance, Lessee agrees to execute any documents required to effectuate an attornment, a subordination, or to make this Lease granted herein prior to the lien of any mortgage, deed of trust or ground lease, as the case may be.

 

(f)                                   Anything to the contrary herein notwithstanding, Lessee agrees that the non-disturbance agreement attached to this Lease as Exhibit “D” shall be acceptable with respect to the lender named therein.

 

31.                               Attorney’s Fees:

 

31.1                        If either party or the broker(s) named herein bring an action to enforce the terms hereof or declare rights hereunder, the prevailing party in any such action, trial or appeal thereon, shall be entitled to his reasonable attorneys’ fees to be paid by the losing party as fixed by the court in the same or a separate suit, and whether or not such action is pursued to decision or judgment.  The provisions of this Section shall inure to the benefit of the broker named herein who seeks to enforce a right hereunder.

 

31.2                        The attorneys’ fee award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys’ fees reasonably incurred in good faith.

 

32.                               Lessor’s Access:

 

32.1                        Lessor and Lessor’s agents shall have the right to enter the Premises at reasonable times for the purpose of inspecting the same, performing any services required of Lessor, showing the same to prospective purchasers, lenders, or lessees, taking such safety measures, erecting such scaffolding or other necessary structures, making such alterations, repairs, improvements or additions to the Premises or to the Project as Lessor may reasonably deem necessary or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises and/or other premises as long as there is no material adverse effect to Lessee’s use of the Premises.  Lessor may at any time place on or about the Building any ordinary “For Sale” signs.

 

32.2                        Lessee may designate certain areas of the Premises as “Secured Areas” should Lessee require such areas for the purpose of securing certain valuable property or confidential information.  Lessor may not enter such Secured Areas except in the case of emergency or in the event of a Lessor inspection, in which case Lessor shall provide Lessee with ten (10) days’ prior written notice of the specific date and time of such Lessor inspection which shall only take place in the presence of a duly authorized representative of Lessee.  Landlord’s obligation to provide services to the Secured Areas is dependent upon having the necessary timely access to such Secured Areas.

 

32.3                        Lessor shall have the right to retain keys to the Premises and to unlock all doors in or upon the Premises other than to files, vaults and safes and any Secured Areas, and in the case of emergency to enter the Premises by any reasonably appropriate means, and any such entry shall not be deemed a forcible or unlawful

 

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entry or detainer of the Premises or an eviction.  Lessee waives any charges for damages or injuries or interference with Lessee’s property or business in connection therewith.

 

33.                               Auctions:  Lessee shall not conduct, nor permit to be conducted, either voluntarily or involuntarily, any auction upon the Premises or the Common Areas without first having obtained Lessor’s prior written consent.

 

34.                               Signs:  For such time as Lessee or Lessee’s Affiliate in the aggregate occupy fifty percent (50%) or more of the initial Premises, Lessee, at Lessee’s sole cost and expense for design, fabrication, installation and maintenance, shall be entitled to exclusive Building top signage rights on at least two sides of the Building, subject to applicable city approvals.  All signage identifying Lessee (other than in the Building directory) shall utilize Lessee’s graphics program.  Lessor shall, at Lessee’s cost, assist Lessee in obtaining such approvals should it become necessary.  Further, Lessee shall have proportionate and non-exclusive rights to any monument signage based upon Lessee’s percentage of the Building occupied.  The cost of installing such signage shall be at Lessee’s sole cost and expense, but may be paid for out of the Improvement Allowance.  Lessee shall have the right to include the name of the firm and key employees on any directory board that is now or may be installed in the Building at Lessors sole cost and expense in an amount proportionate to Lessee’s pro-rata share of the Building.  Lessee shall not place any other sign upon the Premises or the Project without Lessor’s prior written consent.

 

35.                               Merger:  The voluntary or other surrender of this Lease by Lessee, or a mutual cancellation thereof, or a termination by Lessor, shall not work a merger, and shall, at the option of Lessor, terminate all or any existing subtenancies or may, at the option of Lessor operate as an assignment to Lessor of any or all of such subtenancies.

 

36.                               Consents:

 

(a)                                 Except for matters which (i) involve security for Project, or structural integrity of the Building, or the Building Systems or (ii) could affect the exterior appearance of the Building, whereupon in each such case Lessor’s duty is to act in good faith and in compliance with the Lease, any time the consent of Lessor or Lessee is required, such consent shall not be unreasonably withheld, conditioned or delayed, regardless of any reference to the words “sole” or “absolute.”

 

(b)                                 Except in the situations described in subsections (a)(i) or (ii) whenever the Lease grants Lessor or Lessee the right to take action, exercise discretion, establish rules and regulations or make allocations or other determinations, Lessor and Lessee shall act reasonably and take no action which might result in the frustration of the reasonable expectations of a sophisticated landlord and sophisticated tenant concerning the benefits to be enjoyed under the Lease.

 

37.                               Quiet Possession:  Upon Lessee paying the rent for the Premises and observing and performing all of the covenants, conditions and provisions on Lessee’s part to be observed and performed hereunder, Lessee shall have quiet possession of the Premises for the entire term hereof subject to all of the provisions of this Lease.  The individuals executing this Lease on behalf of Lessor represent and warrant to Lessee that they are fully authorized and legally capable of executing this Lease on behalf of Lessor and that such execution is binding upon all parties holding an ownership interest in the Project.

 

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38.                               Options:

 

38.1                        Definition.  As used in this Section the word “Option” has the following meaning: (1) the right or option to extend the term of this Lease or to renew this Lease or to extend or renew any lease that Lessee has on other property of Lessor; and (2) the option of right of first refusal to lease the Premises or the right of first offer to lease the Premises or the right of first refusal to lease other space within the Project or other property of Lessor or the right of first offer to lease other space within the Project or other property of Lessor.

 

38.2                        Options Not Personal.  Each Option granted to Lessee in this Lease is not personal to Lessee and may be exercised by Lessee and any assignee of Lessee’s.  The Options herein granted to Lessee are not assignable separate and apart from this Lease, nor may any Option be separated from this Lease in any manner, either by reservation or otherwise.

 

38.3                        Multiple Options.  In the event that Lessee has any multiple options to extend or renew this Lease a later option cannot be exercised unless the prior option to extend or renew this Lease has been so exercised.

 

39.                               Security Measures — Lessor’s Reservations:

 

39.1                        Lessee hereby acknowledges that Lessor shall have no obligation whatsoever to provide guard service for the benefit of the Premises or the Project.  Lessee assumes all responsibility for the protection of Lessee, its agents, and invitees and the property of Lessee and of Lessee’s agents and invitees from acts of third parties.  Nothing herein contained shall prevent Lessor, at Lessor’s sole option, from providing guard service for the Project or any part thereof; in which event the cost thereof shall be included within the definition of Operating Expenses, as set forth in Section 4.2(b).  Lessor shall on or before the Commencement Date relocate the panels servicing the Building’s security system to a Common Area off the third floor of the Building, provided, however, all card readers, door access controls and other security related improvements presently located on the floors comprising all or any part of the Premises (the “Existing Security Improvements”) shall not be removed.  Lessee shall have the right to utilize (including rewiring) the Existing Security Improvements without a separate charge from Lessor (other than with respect to a maintenance, repair or operation cost that is permitted to be included within the definition of Operating Expenses).

 

39.2                        Lessor shall have the following rights:

 

(a)                                 To change the name, address or title of the Project upon not less than 90 days prior written notice (provided, however, that Lessor shall pay to Lessee upon demand the reasonable and actual costs of Lessee’s reprinting its stationary and revising its accounts as a result thereby).

 

(b)                                 To provide, at Lessees expense, and install as directed by Lessee signage on the door of the Premises and such portions of the Common Areas on floors where any portion of the Premises then occupied by Lessee are located as Lessee shall reasonably deem appropriate which signage shall utilize Lessee’s graphics program.

 

(c)                                  To permit any lessee the exclusive right to conduct any business as long as such exclusive does not conflict with any rights expressly given herein.

 

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(d)                                 Subject to the terms of this Lease, to place such signs, notices or displays as Lessor reasonably deems necessary or advisable upon the roof, exterior of the buildings or the Project or on pole signs in the Common Areas (provided that so such installation shall interfere with Lessee’s rooftop communications equipment) or the use thereof by Lessee.  Lessee’s rooftop communication equipment shall not unreasonably interfere with the rooftop communications equipment located on the roof of the Building as of the date of Lessee’s installation thereof.

 

39.3                        Lessee shall not: use a representation (photographic or otherwise) of the Building or the Project or their name(s) in connection with Lessee’s business.

 

40.                               Easements:

 

40.1                        Lessor reserves to itself the right, from time to time, to grant such easements, rights and dedications that Lessor deems necessary or desirable, and to cause the recordation of Parcel Maps and restrictions, so long as such easements, rights, dedications, Maps and restrictions do not interfere with the use of the Premises by Lessee.  Lessee shall sign any of the aforementioned documents upon request of Lessor.

 

40.2                        The obstruction of Lessee’s view air, or light by any structure erected in the vicinity of the Building, whether by Lessor or third parties, shall in no way affect this Lease or impose any liability upon Lessor.

 

41.                               Performance Under Protest:  If at any time a dispute shall arise as to any amount or sum of money to be paid by one party to the other under the provisions hereof, the party against whom the obligation to pay the money is asserted shall have the right to make payment under protest and such payment shall not be regarded as a voluntary payment, and there shall survive the right on the part of said party to institute suit for recovery of such sum.  If it shall be adjudged that there was no legal obligation on the part of said party to pay such sum or any part thereof, said party shall be entitled to recover such sum or so much thereof as it was not legally required to pay under the provisions of this Lease.

 

42.                               Authority:  If Lessee is a corporation, trust, or general or limited partnership, Lessee, and each individual executing this Lease on behalf of such entity represent and warrant that such individual is duly authorized to execute and deliver this Lease on behalf of said entity.

 

43.                               [INTENTIONALLY OMITTED]

 

44.                               No Offer:  Preparation of this Lease by Lessor or Lessor’s agent and submission of same to Lessee shall not be deemed an offer to Lessee to lease, This Lease shall become binding upon Lessor and Lessee only when fully executed by both parties.

 

45.                               Lender Modification:  Lessee agrees to make such reasonable modifications to this Lease as may be reasonably required by an institutional lender in connection with the obtaining of normal financing or refinancing of the Project, provided however that no such modification shall operate to extend the Term, reduce any Option, reduce any offset right, increase the Base Rent or Additional Rent payable by Lessee hereunder, relocate the Premises, or in any way diminish any legal protections afforded to Lessee hereunder or increase any economic obligation of Lessee assumed hereunder.

 

49

 

46.                               Multiple Parties:  If more than one person or entity is named as either Lessor or Lessee herein, except as otherwise expressly provided herein.  The obligations of the Lessor or Lessee herein shall be the joint and several responsibility of all persons or entities named herein as such Lessor or Lessee, respectively.

 

47.                               Options for Additional Space:

 

The US Census Bureau (“Bureau”) currently occupies 8,715 RSF on the second floor of the Building (the “Bureau Space”).  The Bureau may terminate its Lease any time on or after August 31, 2000 by giving Lessor 30 days notice.  In any event the Lease with the Bureau expires on November 30, 2000.

 

Lessor agrees to notify Lessee immediately upon receipt by Lessor of any 30-day termination notice by the Bureau.  Lessee shall have 5 business days from notification by Lessor in which to exercise its right to expand into the Bureau Space.  In the event the Bureau does not terminate early, Lessee shall have the right to exercise its right to take the Bureau Space any time prior to September 30, 2000.

 

Should Lessee exercise this option, Lessor shall provide a special improvement allowance of $20.00 per usable square foot for Lessee Improvements, which may be used by Lessee for use in improving this expansion area.  Lessee shall pay (i) an initial monthly Base Rent, through the 20th month of the initial Term; equal to $1.50 per RSF in the Bureau Space leased by Lessee, (ii) monthly Base Rent equal to $1.60 per RSF in the Bureau Space leased by Lessee beginning on the 21st through the 40th  month of the initial Term and (iii) monthly Base Rent equal to $1.70 per RSF in the Bureau Space leased by Lessee beginning on the 41st month of the Term and ending on the 61st month of the Term.  Upon leasing the Bureau Space, Lessee’s Share shall be appropriately adjusted.  Otherwise, Lessee’s occupancy of the Bureau Space shall be on the same terms and conditions of the Lease.  The Lease Term for the Bureau Space shall be co-terminus with the Term for the initial Premises.  Upon exercise Lessee agrees to increase Security deposit by an amount equal to $4.00 times the amount of RSF in the Bureau Space.  Lessee shall have no right to exercise its Option with respect to the Bureau Space if Lessee shall at the time of the notice of Lessor’s notice Lessee has committed an Event of Default which shall not have been cured.

 

48.                               Right of First Offer:

 

In addition to the expansion rights detailed above, Lessee shall have the ongoing Right of First Offer for any space that may become available on the second (2nd) floor of the Building.  Lessor shall provide Lessee with notice (the “ROFO Notice”) of the availability of any such space and Lessee shall have five- (5) calendar days to respond to the ROFO Notice.  The ROFO Notice shall include the size of the available space, the rental rate (which shall be the Fair Market Rental Rate as determined below) and Lessee Improvement called for in the proposal.  Lessee shall have no right to exercise its Option hereunder if at the time of the ROFO Notice Lessee has committed an Event of Default which has not been cured.  Lessee covenants that any improvement allowance included within the calculation of the Fair Market Rental Rate shall be used exclusively for the cost of designing and constructing improvements to the Premises and not for furniture, trade fixtures, equipment or free rent.

 

49.                               Renewal Options:

 

Lessee shall have two (2) extension option(s) of five (5) years each for the Premises (“Extension Option”).  Lessee shall be required to give Lessor at least nine (9) months’ advance notice of its election

 

50

 

to exercise such Extension Option prior to the expiration of the Lease or expiration of the then renewal period, as appropriate.  The Base Rent for the Extension Option shall be the then Fair Market Rental Rate.  Lessee covenants that any improvement allowance included within the calculation of the Fair Market Rental Rate shall be used exclusively for the cost of designing and constructing improvements to the Premises and not for furniture, trade fixtures, equipment or free rent.  Lessee shall not have any extension right if then in default under the Lease (with all notices having been given and any applicable cure period having expired).  This Extension Option shall not be personal to Lessee and may be exercised by any assignee of the Lease permitted under the terms of the Lease.  The Extension Option shall be applicable to all space leased by Lessee pursuant to the Lease.

 

50.                               Determination of Fair Market:

 

For the purposes of the Lease the term “Fair Market Rental Rate” shall mean the annual amount per rentable square foot that a willing, comparable, full floor, non-renewal, non-sublease, non-expansion, non-equity tenant would pay and a willing, comparable landlord of like and comparable buildings with comparable vacancies for a comparable period of time in the vicinity of the Building would accept, at arm’s length, for comparable space (“Comparable Transactions”).  In any determination of Comparable Transactions appropriate consideration shall be given to the annual rental rates per rentable square foot, the standard of measurement by which the rentable square footage is measured, the ratio of rentable square feet to usable square feet, the type of escalation clause (e.g., whether increases in additional rent are determined on a net or gross basis, and if gross, whether such increases are determined according to an expense stop), the extent of Lessee’s liability under the Lease, abatement provisions reflecting free rent and/or no rent during the period of construction or any other period during the lease term, brokerage commissions, if any, which would be payable by Lessor in similar transactions, length of the lease term, size and location of premises being leased, building standard work letter and/or tenant improvement allowances, if any, age and location of the building, location and floor level of the premises, quality of construction, the services offered, the types, quantity, quality, costs and location (on site, adjacent, off site, underground or above ground) of parking rights and obligations, and other generally applicable conditions of tenancy for such Comparable Transactions.  The intent is that Lessee will obtain the same rent and other economic benefits that Lessor would otherwise give in a Comparable Transaction and that Lessor will make, and receive the same economic payments and concessions that Lessor would otherwise make, and receive in a Comparable Transaction.

 

Lessor shall initially determine the Fair Market Rental Rate by using its good faith judgment.  Lessor shall provide its written notice of the Fair Market Rental Rate within thirty (30) days after Lessee provides the notice to Lessor exercising Lessee’s Option rights which require a calculation of the Fair Market Rental Rate.  Lessee shall have fifteen (15) days (“Lessee’s Review Period”) after receipt of Lessor’s notice of the Fair Market Rental Rate within which to accept or reject such rental rate.  In the event Lessee fails to accept in writing such rental proposed by Lessor then such proposal shall be deemed rejected, and Lessor and Lessee shall attempt to agree upon such Fair Market Rental Rate, using their best good faith efforts.  If Lessor and Lessee fail to reach agreement within fifteen (15) days following Lessee’s Review Period (“Outside Agreement Date”), then each party shall place in a separate sealed envelope its final proposal as to the appropriate Fair Market Rental Rate and such determination shall be submitted to arbitration in accordance with subsections (a) through (e) below.

 

51

 

In the event that Lessor fails to timely generate the initial written notice of Lessor’s proposed Fair Market Rental Rate which triggers the negotiation period of this Section, then Lessee may commence such negotiations by providing the initial notice, in which event Lessor shall have fifteen (15) days (“Lessor’s Review Period”) after receipt of Lessee’s notice of the proposed rental within which to accept such rental.  In the event Lessor fails to accept in writing such rental proposed by Lessee, then such proposal shall be deemed rejected, and Lessor and Lessee shall attempt in good faith to agree upon such Fair Market Rental Rate, using their best good faith efforts.  If Lessor and Lessee fail to reach ,agreement within fifteen (15) days following Lessor’s Review Period (which shall be, in such event, the “Outside Agreement Date” in lieu of the above definition of such date), then each party shall place in a separate sealed envelope its final proposal as to Fair Market Rental Rate and such determination shall be submitted to arbitration in accordance with subsections (a) through (e) below.

 

(a)                                 Lessor and Lessee shall meet with each other within five (5) business days of the Outside Agreement Date and exchange the sealed envelopes and then open such envelopes in each other’s presence.  If Lessor and Lessee do not mutually agree upon the Fair Market Rental Rate within one (1) business day of the exchange and opening of envelopes, then, within ten (10) business days of the exchange and opening of envelopes Lessor and Lessee shall agree upon and jointly appoint a single arbitrator who shall by profession be a real estate lawyer or broker who shall have been active over the five (5) year period ending on the date of such appointment in the leasing of mid-rise properties in the vicinity of the Building.  Neither Lessor nor Lessee shall consult with such broker or lawyer as to his or her opinion as to Fair Market Rental Rate prior to the appointment.  The determination of the arbitrator shall be limited solely to the issue of whether Lessor’s or Lessee’s submitted Fair Market Rental Rate for the Premises is the closer to the actual Fair Market Rental Rate for the Premises as determined by the arbitrator, taking into account the requirements of this Section.  Such arbitrator may hold such hearings and require such briefs as the arbitrator, in his sole discretion, determines is necessary.  In addition, Lessor or Lessee may submit to the arbitrator with a copy to the other party within five (5) business days after the appointment of the arbitrator any market data and additional information that such party deems relevant to the determination of Fair Market Rental Rate (“FMRR Data”) and the other party may submit a reply in writing within five (5) business days after receipt of such FMRR Data.

 

(b)                                 The arbitrator shall, within thirty (30) days of his or her appointment, reach a decision as to whether the parties shall use Lessor’s or Lessee’s submitted Fair Market Rental Rate, and shall notify Lessor and Lessee of such determination.

 

(c)                                  The procedural laws set forth in the California General Arbitration Act (California Code of Civil Procedure (“C.C.P.”) Sections 1280 through 1294.2) shall govern such arbitration.

 

(d)                                 If Lessor and Lessee fail to agree upon and appoint an arbitrator, then the appointment of the arbitrator shall be made by the Presiding Judge of the Los Angeles County Superior Court, or, if he or she refuses to act, by any judge having jurisdiction over the parties.

 

(e)                                  The cost of arbitration shall be paid by Lessor and Lessee equally.

 

51.                               Arbitration:  With the exception of the arbitration provisions which shall specifically apply to Lease Section 50, the provisions of this Section contain the sole and exclusive method, means and procedure to resolve any and all disputes or disagreements with respect to the Commencement Date, or

 

52

 

the existence or duration of a Lessor Delay or Force Majeure Delay.  The parties hereby irrevocably waive any and all rights to the contrary and shall at all times conduct themselves in strict, full, complete and timely accordance with the provisions of this Section.  Any and all attempts to circumvent the provisions of this Section shall be absolutely null and void and of no force or effect whatsoever.  Any arbitration with respect to the issues specified above shall be conducted as follows:

 

(a)                                 Arbitration Panel.  Within ten (10) days after delivery of written notice (“Notice of Dispute”) of the existence and nature of any dispute given by any party to the other party, and unless otherwise provided herein in any specific instance, the parties shall each: (i) appoint one (1) lawyer actively engaged in the licensed and full-time practice of law, specializing in real estate, in the County of Los Angeles for a continuous period immediately preceding the date of delivery (“Dispute Date”) of the Notice of Dispute of not less than ten (10) years, but who has at no time ever represented or acted on behalf of any of the parties to the dispute (or their affiliates), and (ii) deliver written notice of the identity of such lawyer and a copy of his written acceptance of such appointment and acknowledgment of and agreement to be bound by the time constraints and other provisions of this Section (“Acceptance”) to the other parties hereto.  The party who selects the lawyer may not consult with such lawyer, directly or indirectly, to determine the lawyer’s position on the issue which is the subject of the dispute.  In the event that any party fails to so act, such arbitrator shall be appointed pursuant to the same procedure that is followed when agreement cannot be reached as to the third arbitrator.  Within ten (10) days after such appointment and notice, such lawyers shall appoint a third lawyer (together with the first two (2) lawyers, the “Arbitration Panel”) of the same qualification and background and shall deliver written notice of the identity of such lawyer and a copy of his written Acceptance of such appointment to each of the parties.  In the event that agreement cannot be reached on the appointment of a third lawyer within such period, such appointment and notification shall be made as quickly as possible by any court of competent jurisdiction, by any licensing authority, agency or organization having jurisdiction over such lawyers, by any professional association of lawyers in existence for not less than ten (10) years at the time of such dispute or disagreement and the geographical membership boundaries of which include the County of Los Angeles or by any arbitration association or organization in existence for not less than ten (10) years at the time of such dispute or disagreement and the geographical boundaries of which include the County of Los Angeles as determined by the party giving such Notice of Dispute and simultaneously confirmed in writing delivered by such party to the other party.  Any such court, authority, agency, association or organization shall be entitled either to directly select such third lawyer or to designate in writing, delivered to each of the parties, an individual who shall do so.  In the event of any subsequent vacancies or inabilities to perform among the Arbitration Panel, the lawyer or lawyers involved shall be replaced in accordance with the provisions of this Section as if such replacement was an initial appointment to be made under this Section within the time constraints set forth in this Section, measured from the date of notice of such vacancy or inability, to the person or persons required to make such appointment, with all the attendant consequences of failure to act timely if such appointed person is a party hereto.

 

(b)                                 Duty.  Consistent with the provisions of this Section, the members of the Arbitration Panel shall utilize their utmost skill and shall apply themselves diligently so as to hear and decide, by majority vote, the outcome and resolution of any dispute or disagreement submitted to the Arbitration Panel as promptly as possible, but in any event on or before the expiration of thirty (30) days after the appointment of the members of the Arbitration Panel except in the event that an arbitrator is replaced, in which case such period shall be extended for ten (10) days in connection with each such replacement.

 

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None of the members of the Arbitration Panel shall have any liability whatsoever for any acts or omissions performed or omitted in good faith pursuant to the provisions of this Section.

 

(c)                                  Authority.  The Arbitration Panel shall (i) enforce and interpret the rights and obligations set forth in the Lease to the extent not prohibited by law, (ii) subject to subsection (d), below, fix and establish any and all rules as it shall consider appropriate in its sole and absolute discretion to govern the proceedings before it, including any and all rules of discovery, procedure and/or evidence, and (iii) make and issue any and all orders, final or otherwise, and any and all awards, as a court of competent jurisdiction sitting at law or in equity could make and issue, and as it shall consider appropriate in its sole and absolute discretion, including the awarding of monetary damages (but shall not award punitive damages except in situations involving knowing fraud or egregious conduct condoned by, or performed by, the person who, in essence, occupies the position which is the equivalent of the chief executive officer of the party against whom damages are to be awarded), the awarding of reasonable attorneys’ fees and costs to the prevailing party as determined by the Arbitration Panel in its sole and absolute discretion, and the issuance of injunctive relief.  If the party against whom the award is issued complies with the award, within the time period established by the Arbitration Panel, then no Event of Default will be deemed to have occurred, unless the Event of Default pertained to the non-payment of money by Lessee or Lessor, and Lessee or Lessor failed to make such payment under protest.

 

(d)                                 Appeal.  The law of the State of California, both procedural and substantive, shall govern the arbitration and the Arbitration Panel.  The California General Arbitration Act (California Code of Civil Procedure Sections 1280 through 1294.2) shall be controlling, except that: (i) a record of the arbitration proceedings shall be maintained by the Arbitration Panel; (ii) the precise findings of fact and conclusions of law underlying any award shall be specified in writing by the Arbitration Panel; (iii) a petition may be made to the Superior Court under the authority of C.C.P. § 1285, seeking to confirm, modify or vacate an award or finding; and (iv) any such a petition may be made on any of the grounds set forth in the California General Arbitration Act and/or on the grounds that the award or finding constitutes (x) a mistake of law, (y) an abuse of discretion or (z) lacks adequate support in evidence.  Any such petition, or appeal following such a petition, shall be based on the record from the arbitration and shall not take the form of a trial de novo.

 

(e)                                  Compensation.  Each member of the Arbitration Panel (i) shall be compensated for any and all services rendered under this Section at such member’s quoted hourly rate, plus reimbursement for any and all expenses incurred in connection with the rendering of such services, payable in full promptly upon conclusion of the proceedings before the Arbitration Panel.  Such compensation and reimbursement shall be borne by the nonprevailing party as determined by the Arbitration Panel in its sole and absolute discretion or, if the Arbitration Panel does not identify a “non-prevailing” party, the compensation and reimbursement shall be borne equally by Lessor and Lessee.

 

52.                               Data Cabling:  Lessee shall, at no cost, have its pro rata share of all T1/DS1 data lines that exist in the Building as of the date hereof that are presently available for use in the Building.  Lessor shall repair and maintain all such data lines, and the cost of the repair and maintenance thereof shall be included in Operating Expenses (provided, however, in the event Lessor shall offer Lessee the exclusive use of such data lines, Lessee shall be responsible for the repair and maintenance thereof at Lessee’s sole cost and expense).

 

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53.                               Move-In:  The Premises shall be thoroughly cleaned at Lessor’s sole cost and expense prior to and following Lessee’s move-in to the Premises.

 

54.                               Building Management:  Any management agreement shall provide that the management agent shall operate the Building in a first-class institutional manner and in the most cost-effective manner possible, so as to minimize operating expenses, consistent with providing quality services.

 

55.                               Roof Rights:  Lessee shall be entitled to install, at no charge, satellite and/or microwave dishes and venting equipment atop the Building, subject to Lessor’s consent, which shall not be unreasonably withheld.  Lessee shall have reasonable rights to access the roof from time to time.  Lessee shall be responsible for any damage such installation may cause, and agrees to remove any installation and make any necessary repairs at the election of Lessor upon termination of Lease.

 

56.                               [INTENTIONALLY OMITTED]

 

57.                               [INTENTIONALLY OMITTED]

 

58.                               Right to Sublease/Assign:  Notwithstanding Section 12, Lessor shall have the right to fifty percent (50%) of any profits associated with the assignment/sublease of the space to any third party non-affiliate but Lessee shall retain 100% of any profits associated with respect to any assignment or sublease to any Lessee Affiliate or with respect to any Excluded Transaction.

 

59.                               Parking:

 

(a)                                 Initial Parking Rights.  Lessee shall have the right during the term to utilize up to its pro rata share (based on Lessee’s from time to time Lessee’s Share) of the aggregate number of parking spaces existing on the Site (the “Parking Privileges”), currently 41 Parking Privileges.  Lessor shall not reduce or eliminate any parking spaces without Lessee’s prior consent.  Seven (7) of Lessee’s Parking Privileges shall be directly accessible from the easterly alley (and identified on Exhibit “F”) and shall be painted “Reserved - Xencor Visitor Parking” with appropriate tow-away notices posted and enforced by Lessor.

 

(b)                                 Additional Parking Rights.  Six (6) parking spaces in the Project are committed to non-tenants in the Project (“Non-Tenant Spaces”) pursuant to agreements described on Exhibit “E” (“Non-Tenant Parking Agreements”).  Lessor may not extend or renew any of the Non-Tenant Parking Agreements or enter into new agreements with non-tenants in the Building for parking privileges in the Project during the Term provided, however, Lessor may extend the Otero Agreement (as defined in Exhibit “F”) provided, however, in the event Lessee occupies 100% of the RSF in the Building, Lessee shall be entitled to 100% of the enclosed parking spaces in the Project and the parking privileges under the Otero Agreement shall be relocated to the uncovered spaces offered by the Project.  Lessee shall have the right to utilize, on a month-to-month basis, any parking spaces allocated to, and unused by, other tenants in the Building.

 

(c)                                  Provisions Governing Lessee’s Parking Privileges.  Lessor shall not charge Lessee for its Parking Privileges or for visitor parking during the Term of this Lease or any extension Term.  Lessee’s parking privileges shall be available to Lessee twenty-four (24) hours per day, seven (7) days per week, every day of the year, in any location where Lessee shall maintain its parking privileges.  Lessee’s parking shall be non-tandem.  All of Lessee’s Parking privileges shall be reserved, and Lessor shall

 

55

 

clearly identify Lessee’s Parking Privileges by the words “Xencor, Inc.  Reserved Parking” or other words identifying the particular Parking Privilege as being reserved for Lessee’s exclusive use.  The location of Lessee’s initial Parking Privileges is set forth on Exhibit “F.” Should Lessor provide other parking services, such as “call down” or valet to other tenants, the same shall be made available to Lessee on a pro rata basis.  Lessee shall comply with all reasonable parking rules and regulations promulgated from time to time by Lessor which are not inconsistent with the foregoing.  Lessor shell, on or before the Commencement Date, construct and install a security gate around the Parking Facility to prevent non-tenant use of the Parking Facility.  The actual cost of the gate shall be paid for by Lessee, but the card key access system and card keys shall be provided at Lessor’s cost (the “Parking Security System”).  The specifications of the Parking Security System shall be reasonably satisfactory to Lessee and shall be designed to coordinate with Lessee’s security system for its Premises so that the same card key system may be utilized by Lessee’s employees to access the Parking Facility and the Premises.

 

60.                               Audit Right:  Lessee shall have the right, after reasonable notice and at reasonable times, to inspect and photocopy Lessor’s accounting records relating to Direct Expenses and any other costs or charges passed along to Lessee at Lessor’s office.  If, after such inspection and photocopying, Lessee continues to dispute the amount of its Share of Operating Expenses, Lessee shall be entitled to retain a national, independent, certified public accountant (who may not be compensated by Lessee on a contingent fee basis) to audit and/or review Lessor’s records with respect to the immediately preceding two (2) calendar years to determine the proper amount of its Share of Operating Expenses.  In no event shall Lessee audit Lessor’s accounting records more frequently than once per calendar year.  If such audit or review reveals that Lessor has overcharged Lessee, then within five (5) days after the results of such audit are made available to Lessor, Lessor shall reimburse Lessee the amount of such overcharge plus interest at the Interest Rate.  If the audit reveals that Lessee was undercharged, then within five (5) days after the results of the audit are made available to Lessee, Lessee shall reimburse Lessor the amount of such undercharge plus interest thereon at the Interest Rate.  If Lessor desires to contest such audit results, Lessor may do so by submitting the results of the audit to arbitration pursuant to Section 51 within five (5) days of receipt of the results of the audit, and the arbitration shall be final and binding upon Lessor and Lessee.  Lessee agrees to pay the cost of such audit, provided that, if the audit reveals that Lessor’s determination of Lessee’s Percentage Share of Operating Expenses as set forth in any Statement sent to Lessee was in error in Lessor’s favor by more than two percent (2%), Lessor shall pay the cost of such audit.  Lessor shall be required to maintain records of all Operating Expenses and other Operating Expenses for the entirety of the two-year period (“Review Period”) following Lessor’s delivery to Lessee of each Statement setting forth Lessee’s Share of Operating Expenses.  The payment by Lessee of any amounts pursuant to Lease Section 4 shall not preclude Lessee from questioning the correctness of any Statement provided by Lessor at any time during the Review Period, but the failure of Lessee to object thereto prior to the expiration of the Review Period shall be conclusively deemed Lessee’s approval of the Statement.

 

61.                               Special Provisions Regarding Certain Offsets:

 

(a)                                 To the extent Lessor fails to fulfill its obligations with respect to the payment of any Unpaid Economic Concessions (as defined in Section 30) when such Unpaid Economic Concessions are due and payable and such failure continues for thirty (30) days after notice thereof to Lessor, Lessee may, subject to Section 61(b), deduct the amount of such Unpaid Economic Concession which Lessor has not paid, together with interest at the Interest Rate (which shall accrue from the date such Unpaid Economic Concession was

 

56

 

61.                               Attachments.  Attached hereto are the following documents, which constitute a part of this Lease:

 

Exhibit “A”                                 The Premises

 

Exhibit “B”                                 Rules and Regulations

 

Exhibit “C”                                 Work Letter

 

 

	
LESSOR
    	
 
    	
LESSEE
    
	
 
    	
 
    	
 
    
	
BF   MONROVIA, LLC,
    	
 
    	
XENCOR, INC.,
    
	
a   California limited liability
    	
 
    	
a   California corporation
    
	
company
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Bassil I. Dahiyat
    
	
By:
    	
/s/   Gerson Fox
    	
 
    	
 
    	
Bassil   I. Dahiyat, Ph.D.
    
	
 
    	
Name:
    	
Gerson   Fox
    	
 
    	
 
    	
President &   CEO
    
	
 
    	
Its   Manager
    	
 
    	
 
    	
 
    
						

 

57

 

due and payable by Lessor) from the Base Rent next coming due and payable under the Lease.  It is agreed by Lessor and Lessee that the provisions of this Section 61(a) are a material provision of this Lease.

 

(b)                                 With respect to any right Lessee may, from time to time, have under Section 61(a) or 7.1(b), to offset against Rent the amount of any Repair Offset Right and/or Unpaid Economic Concession, Lessee agrees that the aggregate amount (plus interest at the Interest Rate as provided in this Lease) of any such offset right(s) shall be amortized over such monthly periods remaining in the Term to the effect that the amount of offset in any month to which Lessee is entitled shall not exceed 33% of the Rent due and payable for such month.  Such offset shall first reduce any accrued and unpaid interest, then the principal amount of the Repair Offset Right and Unpaid Economic Concession.

 

58

 

THIS PAGE INTENTIONALLY LEFT BLANK

 

59

 

62.                               Attachments:  Attached hereto are the following documents, which constitute a part of this Lease:

 

Exhibit “A”                                 The Premises

Exhibit “B”                                 Rules and Regulations

Exhibit “C”                                 Work Letter

Exhibit “D”                                 Initial Non-disturbance Agreement

Exhibit “E”                                  Non-Tenant Parking Agreements

Exhibit “F                                         Location of Lessee’s Parking Privileges

 

63.                               Counterparts.  This Lease may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Any one or more counterpart signature pages may be removed from one counterpart of the Lease and annexed to another counterpart of the Lease to form a completely executed original instrument without impairing the legal effect of the signature thereon.

 

IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed and delivered as of the date first above written.

 

	
LESSOR
    	
 
    	
LESSEE
    
	
 
    	
 
    	
 
    
	
BF   MONROVIA, LLC,
    	
 
    	
XENCOR, INC.,
    
	
a   California limited liability
    	
 
    	
a   California corporation
    
	
company
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Bassil I. Dahiyat
    
	
By:
    	
/s/   Gerson Fox
    	
 
    	
 
    	
Bassil   I. Dahiyat, Ph.D.
    
	
 
    	
Name:
    	
Gerson   Fox
    	
 
    	
 
    	
President &   CEO
    
	
 
    	
Its   Manager
    	
 
    	
 
    	
 
    
						

 

60

 

SIXTH AMENDMENT TO LEASE

 

This Sixth Amendment to Lease is entered into as of the 1st day of November, 2011 (the “New Effective Date”) between BF MONROVIA, LLC, a California limited liability company (“Lessor”), and XENCOR, INC., a Delaware corporation (“Lessee”), with reference to the following facts:

 

A.                                    Lessor and Lessee are parties to that certain Standard Office Lease dated May 12, 2000 (the “Original Lease”), as amended by that certain First Amendment to Lease dated as of January, 2001, that certain Second Amendment to Lease dated as of June 15, 2001, that certain Third Amendment to Lease dated as of July 11, 2006, that certain Fourth Amendment to Lease dated as of April 2008 and that certain Fifth Amendment to Lease dated as of July 17, 2009 (the latter the “Fifth Amendment” and collectively, the “Lease Agreement”), whereby Lessor leased to Lessee certain Premises located in that certain building located at 111 West Lemon Avenue, Monrovia, California.

 

B.                                    The parties now wish to further amend the Lease Agreement by, among other things, extending the Expiration Date, all as more particularly set forth herein.

 

C.                                    Defined terms used in this Amendment shall, unless otherwise stated, have the same meanings as are contained in the Original Lease.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

1.                                      Term.  The parties hereby agree to terminate the current extension of the Term set forth in the Fifth Amendment (which contemplates an Expiration Date of January 31, 2012) effective on October 31, 2011 and to immediately further extend the Term for a period (the “Extension Period”) of three (3) years and six (6) months commencing on the New Effective Date and expiring April 30, 2015, subject to the provisions of Section 3 below.

 

2.                                      Base Rent; Abatement.  Base Rent is currently $62,000 per month, which shall remain in force through October 31, 2011. Base Rent during the Extension Period shall be as follows:

 

	
November 1,   2011 through October 31, 2012:
    	
$48,440   per month
    
	
November 1,   2012 through October 31, 2013:
    	
$49,893   per month
    
	
November 1,   2013 through January 31, 2014:
    	
$51,390   per month
    
	
November 1, 2014 through April 30, 2015:
    	
$52,932 per month
    

 

Notwithstanding the foregoing, provided that no Event of Default is then outstanding (which shall include without limitation the absence of defaults under this Amendment), Base Rent for each of the months of November 2011, May 2012, November 2012, and November 2013 shall be fully abated; provided further that if an Event of Default is then outstanding, such full month of abatement shall be given to Lessee at such time as Lessee cures all Events of Default.

 

1

 

3.                                      Option to Renew.

 

3.1                               Grant.  Provided that it is not then in default of the Lease Agreement (subject to applicable notice and cure rights), Lessee shall have one (1) option (the “Option”) to extend the term of the Lease Agreement for one (1) period of three (3) years commencing May 1, 2015 and ending April 30, 2018 (the “Option Period”).

 

3.2                               Exercise.  The Option may be exercised only by Lessee delivering to Lessor written notice of Lessee’s unconditional exercise of the Option; provided, however, that the Option may be exercised no earlier than August 1, 2014 and no later than October 31, 2014. If Lessee fails to timely exercise the Option in the manner herein specified, then the Option shall immediately and automatically terminate and be of no further force or effect on November 1, 2014, and Lessee shall have no other right or option to renew or extend the term of the Lease Agreement. Time is of the essence with respect to the exercise of the Option.

 

3.3                               Rent Determination.  The Base Rent for the Option Period shall be the then Fair Market Rental Rate. This Option shall not be personal to Lessee and may be exercised by any assignee of the Lessee permitted under the terms of the Lease. The Option shall be applicable to all space leased by the Lessee pursuant to the Lease.

 

4.                                      Lessor’s Work.  Lessee confirms that its current information technology needs are serviced by that certain IT room located on the third floor of the Building (the “Existing IT Room”) servicing both Lessee and the third floor tenant of the Building; the Existing IT Room constitutes a Common Area; and all costs associated with the maintenance, repair and operation of the Existing IT Room now constitute an Operating Expense (hereinafter, “Lessee’s IT Room Payment Obligations”). Lessee shall perform “Lessor’s Work”, which generally comprises the “splitting out” of the information technology portion of the Existing IT Room that currently services the Premises and its relocation to a new room (the “New IT Room”) to be constructed within the Premises. Lessee shall perform Lessor’s Work at Lessor’s sole cost. Lessor’s Work shall be as more particularly described in: (a) that certain Southland Industries Work Authorization Form dated August 5, 2011; (b) that certain proposal dated September 29, 2011 from Vector Resources addressed to Lessee under cover of letter dated October 3, 2011; (c) that certain letter dated July 30, 2011 from LCS Constructors Inc. to Lessee, and (d) online specifications for an OptiPlex Dell computer, all of which Lessee hereby accepts and approves. The New IT Room shall be of a size and in a location as shall be reasonable and practicable. Except for the performance of Lessor’s Work, Lessee shall accept the Premises in their then “as is” physical condition as of the New Effective Date and Lessor shall have no obligation to perform any work or to provide any allowance in lieu thereof (except for the abated Base Rent as set forth above). Lessee shall advise the Lessor of any changes to the expected cost to complete the Lessor’s Work (which is currently estimated at $33,000) and shall obtain approval for any material cost increases over the original cost projections, (all of which shall be borne by Lessor). If approved costs are paid directly by the Lessee, appropriate invoices and evidence of payment shall be submitted to the Lessor and reimbursement shall be paid to Lessee within ten (10) days of receipt by Lessor. If Lessor fails to timely reimburse Lessee and such failure continues for more than twenty (20) days following a second written request from Lessee, Lessee shall have an offset right against Base Rent to the extent of any unpaid reimbursement amounts, provided that in no event shall the rental offset in any month exceed fifty percent (50%) of such month’s Base

 

2

 

Rent. Following the completion of Lessor’s Work, Lessee shall have no further Lessee’s IT Room Payment Obligations or any other obligations relating to the Existing IT Room.

 

Based on the terms hereof, Lessee shall (i) continue to have access to the phone room located on the third floor (as reasonably needed): (ii) such phone room shall be considered to be part of the Common Areas; and (iii) following the completion of the Lessor’s Work, no longer have access to the Existing IT Room.

 

5.                                      Base Year.  Section 4.3.1 of the Original Lease is hereby deleted in its entirety and the following is hereby inserted in lieu thereof:  “‘Base Year’ shall mean with respect to Operating Expenses and Tax Expenses, the calendar year 2012”.

 

6.                                      Special Rent Credit.  The parties confirm that since November 1, 2009, Lessee has been paying for certain electricity costs relating to the third floor of the Building and for fifty percent (50%) of the Common Areas. In full and final satisfaction of all claims relating to Lessee’s payment of all electricity charges for which it was not responsible up through the period ended August 11, 2011 under the terms of the Lease Agreement, Lessee shall receive a credit against Base Rent in the aggregate amount of $39,236, to be applied in four (4) equal installments of $9,809 to be deducted from Base Rent due in December 2011 and January, February and March 2012. Lessor will remain obligated to pay the electricity costs for the third floor of the Building and for 50% of the electricity for the Common Areas and reimburse the Lessee for all electricity costs incurred by Lessee with respect to the period beyond August 11, 2011 until the utility is properly split and invoiced to the appropriate parties. Lessee will provide Lessor with monthly invoices and documentation evidencing Lessor’s share of the electricity costs and Lessor shall reimburse the Lessee within ten (10) days of receipt. If Lessor fails to timely reimburse Lessee and such failure continues for more than twenty (20) days following a second written request from Lessee, Lessee shall have an offset right against Base Rent to the extent of any unpaid reimbursement amounts, provided that in no event shall the rental offset in any month exceed fifty percent (50%) of such month’s Base Rent. Following the completion of Lessor’s Work, Lessee shall have no further Lessee’s IT Room Payment Obligations or any other obligations relating to the Existing IT Room.

 

7.                                      Brokers.  In connection with this Amendment, Lessor and Lessee warrant and represent to each other that they have had dealings only with Jones Lang LaSalle (Shaun Stiles) (“Broker”) and they know of no other persons or entities who might be entitled to a commission, finders’ fee, or other like payment in connection herewith (other than Lessor’s representative, The Merrill Group of Companies (David Frank)), and do hereby indemnify and agree to hold each other harmless from and against any and all loss, liability, and expense that either of them may incur should the other party’s warranty and representation prove to be incorrect. Lessor shall pay Broker the aggregate sum of two percent (2%) of the total Base Rent (less any free rental abatements) during the Extension Period. as full and final consideration of all services rendered in connection with this Amendment, payable on or before February 1, 2012. Lessee shall have no obligations or liabilities to Broker or the above Lessor’s representative arising out of this Amendment and Lessor shall indemnify, defend and hold Lessee harmless from any liabilities or obligations to Broker or the above Lessor’s representative arising out of this Amendment. If Lessor fails to timely pay Broker, Lessee shall have the right to do so and, in such event, Lessee shall have an offset right against Base Rent to the extent of any such unpaid

 

3

 

brokerage fee paid by Lessee on Lessor’s behalf, provided that in no event shall the rental offset in any month exceed fifty percent (50%) of such month’s Base Rent

 

8.                                      Security Deposit.  Lessor hereby agrees to apply $15,000 of the security deposit currently being held by Lessor against Lessee’s Base Rent obligations for December, 2011. Upon said application, the security deposit under the Lease shall be reduced to $50,000.

 

9.                                      Roof Access.  Notwithstanding anything to the contrary set forth in the Lease, Lessee shall have unrestricted access to the Building’s roof for purposes of installing, repairing, maintaining and/or operating any of its HVAC related equipment located thereon.

 

10.                               Parking.  Lessee’s shall have the right to thirty-one (31) parking spaces in the Building.

 

11.                               Ratification.  Except as otherwise provided in this Amendment, all provisions of the Lease Agreement are hereby ratified and confirmed and remain in full force and effect. In the event of any conflict between the Lease Agreement and this Amendment, this Amendment shall control. The Lease Agreement and this Amendment constitute the entire agreement of the parties with respect to Lessee’s rental of the Premises from Lessor, superseding that certain Proposal to Lease Space dated October 3, 2011 issued by Jones Lang LaSalle.

 

IN WITNESS WHEREOF, this Addendum is made as of the date first written above.

 

	
LESSOR:
    	
 
    	
LESSEE:
    
	
 
    	
 
    	
 
    
	
BF MONROVIA, LLC,
    	
 
    	
XENCOR, INC.,
    
	
a California limited liability company
    	
 
    	
a   Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Gerson I. Fox
    	
 
    	
By:
    	
/s/   Bassil Dahiyat
    
	
 
    	
Gerson   I. Fox, Member
    	
 
    	
Name:
    	
Bassil   Dahiyat
    
	
 
    	
 
    	
 
    	
Its:
    	
Chief   Executive Officer
    

 

4MTSN 2013.10.10 S3-EX4.5

Exhibit 4.5

MATTSON TECHNOLOGY, INC.
TO
___________________
AS TRUSTEE
INDENTURE
DATED AS OF ___________, 20__

SENIOR DEBT SECURITIES

-i-

Table of Contents
(Continued)

	
				
	 
	 
	TABLE OF CONTENTS
	 

	 
	 
	 
	Page

	 
	 
	 
	 

	ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
	1

	 
	 
	 
	 

	Section 1.1
	 
	Definitions
	1

	Section 1.2
	 
	Compliance Certificates and Opinions
	7

	Section 1.3
	 
	Form of Documents Delivered to Trustee
	8

	Section 1.4
	 
	Acts of Holders; Record Dates
	8

	Section 1.5
	 
	Notices, etc., to Trustee and Company
	10

	Section 1.6
	 
	Notice to Holders; Waiver
	10

	Section 1.7
	 
	Conflict with Trust Indenture Act
	10

	Section 1.8
	 
	Effect of Headings and Table of Contents
	10

	Section 1.9
	 
	Successors and Assigns
	10

	Section 1.10
	 
	Separability Clause
	11

	Section 1.11
	 
	Benefits of Indenture
	11

	Section 1.12
	 
	Governing Law
	11

	Section 1.13
	 
	Legal Holidays
	11

	Section 1.14
	 
	Indenture and Securities Solely Corporate Obligations
	11

	Section 1.15
	 
	Indenture May be Executed in Counterparts
	11

	 
	 
	 
	 

	ARTICLE 2 SECURITY FORMS
	12

	 
	 
	 
	 

	Section 2.1
	 
	Forms Generally
	12

	Section 2.2
	 
	Form of Legend for Global Securities
	12

	Section 2.3
	 
	Form of Trustee’s Certificate of Authentication
	12

	 
	 
	 
	 

	ARTICLE 3 THE SECURITIES
	13

	 
	 
	 
	 

	Section 3.1
	 
	Amount Unlimited; Issuable in Series
	13

	Section 3.2
	 
	Denominations
	15

	Section 3.3
	 
	Execution, Authentication, Delivery and Dating
	15

	Section 3.4
	 
	Temporary Securities
	16

	Section 3.5
	 
	Registration; Registration of Transfer and Exchange
	17

	Section 3.6
	 
	Mutilated, Destroyed, Lost and Stolen Securities
	19

	Section 3.7
	 
	Payment of Interest; Interest Rights Preserved
	19

	Section 3.8
	 
	Persons Deemed Owners
	20

	Section 3.9
	 
	Cancellation
	20

	Section 3.10
	 
	Computation of Interest
	20

	 
	 
	 
	 

	ARTICLE4 SATISFACTION AND DISCHARGE
	21

	 
	 
	 
	 

	Section 4.1
	 
	Satisfaction and Discharge of Indenture
	21

	Section 4.2
	 
	Application of Trust Money
	22

	 
	 
	 
	 

	ARTICLE 5 REMEDIES
	22

-i-

Table of Contents
(Continued)

	
				
	Section 5.1
	 
	Events of Default
	22

	Section 5.2
	 
	Acceleration of Maturity; Rescission and Annulment
	23

	Section 5.3
	 
	Collection of Indebtedness and Suits for Enforcement by Trustee
	24

	Section 5.4
	 
	Trustee May File Proofs of Claim
	25

	Section 5.5
	 
	Trustee May Enforce Claims Without Possession of Securities
	25

	Section 5.6
	 
	Application of Money Collected
	25

	Section 5.7
	 
	Limitation on Suits
	26

	Section 5.8
	 
	Unconditional Right of Holders to Receive Principal, Premium and Interest and to Convert
	26

	Section 5.9
	 
	Restoration of Rights and Remedies
	27

	Section 5.10
	 
	Rights and Remedies Cumulative
	27

	Section 5.11
	 
	Delay or Omission Not Waiver
	27

	Section 5.12
	 
	Control by Holders
	27

	Section 5.13
	 
	Waiver of Past Defaults
	27

	Section 5.14
	 
	Undertaking for Costs
	28

	Section 5.15
	 
	Waiver of Usury, Stay or Extension Laws
	28

	 
	 
	 
	 

	ARTICLE 6 THE TRUSTEE
	28

	 
	 
	 
	 

	Section 6.1
	 
	Certain Duties and Responsibilities
	28

	Section 6.2
	 
	Notice of Defaults
	29

	Section 6.3
	 
	Certain Rights of Trustee
	29

	Section 6.4
	 
	Not Responsible for Recitals or Issuance of Securities
	30

	Section 6.5
	 
	May Hold Securities and Act as Trustee under Other Indentures
	30

	Section 6.6
	 
	Money Held in Trust
	30

	Section 6.7
	 
	Compensation and Reimbursement
	30

	Section 6.8
	 
	Conflicting Interests
	31

	Section 6.9
	 
	Corporate Trustee Required; Eligibility
	31

	Section 6.10
	 
	Resignation and Removal; Appointment of Successor
	31

	Section 6.11
	 
	Acceptance of Appointment by Successor
	32

	Section 6.12
	 
	Merger, Conversion, Consolidation or Succession to Business
	33

	Section 6.13
	 
	Preferential Collection of Claims Against Company
	34

	Section 6.14
	 
	Appointment of Authenticating Agent
	34

	 
	 
	 
	 

	ARTICLE 7 HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY
	36

	 
	 
	 
	 

	Section 7.1
	 
	Company to Furnish Trustee Names and Addresses of Holders
	36

	Section 7.2
	 
	Preservation of Information; Communications to Holders
	36

	Section 7.3
	 
	Reports by Trustee
	36

	Section 7.4
	 
	Reports by Company
	37

	 
	 
	 
	 

	ARTICLE 8 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
	37

	 
	 
	 
	 

	Section 8.1
	 
	Company May Consolidate, etc., Only on Certain Terms
	37

	Section 8.2
	 
	Successor Substituted
	37

	 
	 
	 
	 

-ii-

Table of Contents
(Continued)

	
				
	ARTICLE 9 SUPPLEMENTAL INDENTURES
	38

	 
	 
	 
	 

	Section 9.1
	 
	Supplemental Indentures Without Consent of Holders
	38

	Section 9.2
	 
	Supplemental Indentures with Consent of Holders
	39

	Section 9.3
	 
	Execution of Supplemental Indentures
	40

	Section 9.4
	 
	Effect of Supplemental Indentures
	40

	Section 9.5
	 
	Conformity with Trust Indenture Act
	40

	Section 9.6
	 
	Reference in Securities to Supplemental Indentures
	40

	 
	 
	 
	 

	ARTICLE 10 COVENANTS
	41

	 
	 
	 
	 

	Section 10.1
	 
	Payment of Principal, Premium and Interest
	41

	Section 10.2
	 
	Maintenance of Office or Agency
	41

	Section 10.3
	 
	Money for Securities Payments To Be Held in Trust
	41

	Section 10.4
	 
	Statement by Officers as to Default
	42

	Section 10.5
	 
	Existence
	42

	Section 10.6
	 
	Waiver of Certain Covenants
	42

	 
	 
	 
	 

	ARTICLE 11 REDEMPTION OF SECURITIES
	43

	 
	 
	 
	 

	Section 11.1
	 
	Applicability of Article
	43

	Section 11.2
	 
	Election to Redeem; Notice to Trustee
	43

	Section 11.3
	 
	Selection by Trustee of Securities to Be Redeemed
	43

	Section 11.4
	 
	Notice of Redemption
	44

	Section 11.5
	 
	Deposit of Redemption Price
	45

	Section 11.6
	 
	Securities Payable on Redemption Date
	45

	Section 11.7
	 
	Securities Redeemed in Part
	45

	 
	 
	 
	 

	ARTICLE 12 SINKING FUNDS
	46

	 
	 
	 
	 

	Section 12.1
	 
	Applicability of Article
	46

	Section 12.2
	 
	Satisfaction of Sinking Fund Payments with Securities
	46

	Section 12.3
	 
	Redemption of Securities for Sinking Fund
	46

	 
	 
	 
	 

	ARTICLE 13 DEFEASANCE AND COVENANT DEFEASANCE
	46

	 
	 
	 
	 

	Section 13.1
	 
	Company’s Option to Effect Defeasance or Covenant Defeasance
	46

	Section 13.2
	 
	Defeasance and Discharge
	47

	Section 13.3
	 
	Covenant Defeasance
	47

	Section 13.4
	 
	Conditions to Defeasance or Covenant Defeasance
	48

	Section 13.5
	 
	Deposited Money, U.S. Government Obligations and Foreign Government Obligations to be Held in Trust; Miscellaneous Provisions
	49

	Section 13.6
	 
	Reinstatement
	50

	 
	 
	 
	 

	ARTICLE 14 CONVERSION OF SECURITIES
	50

	 
	 
	 
	 

	Section 14.1
	 
	Conversion
	50

-iii-

Mattson Technology, Inc.
Certain Sections of this Indenture relating to Sections 310 through 318, inclusive, of the Trust Indenture Act of 1939:
	
			
	Section 310(a)(1)
	6.9
	

	(a)(2)
	6.9
	

	(a)(3)
	Not Applicable
	

	(a)(4)
	Not Applicable
	

	(b)
	6.8, 6.10
	

	Section 311(a)
	6.13
	

	(b)
	6.13
	

	Section 312(a)
	7.1, 7.2
	

	(b)
	7.2
	

	(c)
	7.2
	

	Section 313(a)
	7.3
	

	(b)
	7.3
	

	(c)
	7.3
	

	(d)
	7.3
	

	Section 314(a)
	7.4
	

	(a)(4)
	10.1, 10.4
	

	(b)
	Not Applicable
	

	(c)(1)
	1.2
	

	(c)(2)
	1.2
	

	(c)(3)
	Not Applicable
	

	(d)
	Not Applicable
	

	(e)
	1.2
	

	Section 315(a)
	6.1
	

	(b)
	6.2
	

	(c)
	6.1
	

	(d)
	6.1
	

	(e)
	5.14
	

	Section 316(a)
	1.1
	

	(a)(1)(A)
	5.2, 5.12
	

	(a)(1)(B)
	5.13
	

	(a)(2)
	Not Applicable
	

	(b)
	5.8
	

	(c)
	1.4
	

	Section 317(a)(1)
	5.3
	

	(a)(2)
	5.4
	

	(b)
	10.3
	

	Section 318(a)
	1.7
	

		
	NOTE:
	This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.

-iv-

INDENTURE, dated as of ____________, 20__, between Mattson Technology, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”), having its principal executive office at 47131 Bayside Parkway, Fremont, California  94538, and __________, as Trustee (herein called the “Trustee”).
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness (herein called the “Securities”), to be issued in one or more series as provided in this Indenture.
All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.
The Indenture is subject to, and will be governed by, the provisions of the Trust Indenture Act that are required to be a part of and govern indentures qualified under the Trust Indenture Act.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof appertaining, as follows:
ARTICLE 1 

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1    Definitions.  
For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:
(1)    the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;
(2)    all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;
(3)    all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States of America, and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles in the United States of America as are generally accepted at the date of such computation;
(4)    all references to “$” refer to the lawful currency of the United States of America;
(5)    unless the context otherwise requires, any reference to an “Article” or a “Section” refers to an Article or a Section, as the case may be, of this Indenture; and

-1-

(6)    the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.
“Act,” when used with respect to any Holder, has the meaning specified in Section 1.4.
“Additional Interest” has the meaning specified in Section 5.2(b).
“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. 
“Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 6.14 to act on behalf of the Trustee to authenticate Securities of one or more series.
“Board of Directors” means either the board of directors of the Company or any duly authorized committee of that board empowered to act for it with respect to this Indenture.
“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.
“Business Day,” when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.
“Commission” means the Securities and Exchange Commission, from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.
“Common Stock” includes any stock of any class of the Company which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which is not subject to redemption by the Company; provided, however, subject to the provisions of Article 14 and any indenture supplemental hereto, shares issuable upon conversion of Securities shall include only shares of the class designated as Common Stock of the Company at the date of this Indenture or shares of any class or classes resulting from any reclassification or reclassifications thereof and which have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company and which are not subject to redemption by the Company; provided, further, that if at any time there shall be more than one such resulting class, the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications.
“Company” means the corporation named as the “Company” in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.
“Company Request” or “Company Order” means a written request or order signed by any two of the following in the name of the Company: the Chairman of the Board, the Vice Chairman of the Board, the Chief Executive Officer, the President or any Vice President, the principal financial officer, the principal accounting officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and delivered to the Trustee.

-2-

“control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Corporate Trust Office” means the corporate trust office of the Trustee at __________, Attention:  Corporate Trust Department, or such other office, designated by the Trustee by written notice to the Company, at which at any particular time its corporate trust business shall be administered.
“corporation” means a corporation, association, company, joint-stock company or business trust.
“Covenant Defeasance” has the meaning specified in Section 13.3.
“Defaulted Interest” has the meaning specified in Section 3.7.
“Defeasance” has the meaning specified in Section 13.2.
“Depositary” means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as Depositary for such Securities as contemplated by Section 3.1.
“euro” or “euros” means the currency adopted by those nations participating in the third stage of the economic and monetary union provisions of the Treaty on European Union, signed at Maastricht on February 7, 1992.
“European Economic Area” means the member nations of the European Economic Area pursuant to the Oporto Agreement on the European Economic Area dated May 2, 1992, as amended.
“European Union” means the member nations of the European Union established by the Treaty of European Union, signed at Maastricht on February 7, 1992, which amended the Treaty of Rome establishing the European Community.
“Event of Default” has the meaning specified in Section 5.1.
“Exchange Act” means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time.
“Expiration Date” has the meaning specified in Section 1.4.
“Foreign Government Obligation” means with respect to Securities of any series which are not denominated in the currency of the United States of America (x) any security which is (i) a direct obligation of the government which issued or caused to be issued the currency in which such security is denominated and for the payment of which obligations its full faith and credit is pledged or, with respect to Securities of any series which are denominated in euros, a direct obligation of any member nation of the European Union for the payment of which obligation the full faith and credit of the respective nation is pledged so long as such nation has a credit rating at least equal to that of the highest rated member nation of the European Economic Area, or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of a government specified in clause (i) above the payment of which is unconditionally guaranteed as a full faith and credit obligation by the such government, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any Foreign Government Obligation which is specified in clause (x) above and held by such bank for the account of the holder 

-3-

of such depositary receipt, or with respect to any specific payment of principal of or interest on any Foreign Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Foreign Government Obligation or the specific payment of principal or interest evidenced by such depositary receipt. 
“Global Security” means, with respect to any series of Securities, a Security executed by the Company and delivered by the Trustee to the Depositary or held by the Trustee as custodian for the Depositary pursuant to a safekeeping agreement with the Depositary, all in accordance with the Indenture, which shall be registered in global form without interest coupons in the name of the Depositary or its nominee.
“Holder” means a Person in whose name a Security is registered in the Security Register.
“Indenture” means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively.  The term “Indenture” shall also include the terms of particular series of Securities established as contemplated by Section 3.1; provided, however, that if at any time more than one Person is acting as Trustee under this Indenture due to the appointment of one or more separate Trustees for any one or more separate series of Securities, “Indenture” shall mean, with respect to such series of Securities for which any such Person is Trustee, this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Securities for which such Person is Trustee established as contemplated by Section 3.1, exclusive, however, of any provisions or terms which relate solely to other series of Securities for which such Person is not Trustee, regardless of when such terms or provisions were adopted, and exclusive of any provisions or terms adopted by means of one or more indentures supplemental hereto executed and delivered after such Person had become such Trustee, but to which such person, as such Trustee, was not a party; provided, further that in the event that this Indenture is supplemented or amended by one or more indentures supplemental hereto which are only applicable to certain series of Securities, the term “Indenture” for a particular series of Securities shall only include the supplemental indentures applicable thereto.
“interest,” when used with respect to an Original Issue Discount Security, which by its terms bears interest only at Maturity, means interest payable at Maturity.
“Interest Payment Date,” when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security.
“Investment Company Act” means the Investment Company Act of 1940 and any statute successor thereto, in each case as amended from time to time.
“Maturity,” when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, repurchase at the option of the Holder, upon redemption or otherwise.
“Notice of Default” means a written notice of the kind specified in Section 5.1(4).
“Officers’ Certificate” means a certificate signed by any two of the following in the name of the Company: the Chairman of the Board, a Vice Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the principal financial officer, the principal accounting officer, the Treasurer, an Assistant Treasurer, the 

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Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee.  One of the officers signing an Officers’ Certificate given pursuant to Section 10.4 shall be the principal executive, principal financial or principal accounting officer of the Company.
“Opinion of Counsel” means a written opinion of counsel, who may be counsel for, or an employee of, the Company.
“Original Issue Discount Security” means any Security that provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2.
“Outstanding,” when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except
(1)Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation;
(2)Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; 
(3)Securities as to which Defeasance has been effected pursuant to Section 13.2; and 
(4)Securities which have been paid pursuant to Section 3.6 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; 
provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder as of any date, (A) the principal amount of an Original Issue Discount Security which shall be deemed to be Outstanding shall be the amount of the principal thereof which would be due and payable as of such date upon acceleration of the Maturity thereof to such date pursuant to Section 5.2, (B) if, as of such date, the principal amount payable at the Stated Maturity of a Security is not determinable, the principal amount of such Security which shall be deemed to be Outstanding shall be the amount as specified or determined as contemplated by Section 3.1, (C) the principal amount of a Security denominated in one or more non-U.S. dollar currencies or currency units which shall be deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of such date in the manner provided as contemplated by Section 3.1, of the principal amount of such Security (or, in the case of a Security described in clause (A) or (B) above, of the amount determined as provided in such clause), and (D) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

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“Paying Agent” means any Person authorized by the Company to pay the principal of or any premium or interest on any Securities on behalf of the Company.
“Person” means any individual, corporation, limited liability company, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.
“Place of Payment,” when used with respect to the Securities of any series, means the place or places where the principal of and any premium and interest on the Securities of that series are payable as specified as contemplated by Section 3.1.
“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.6 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.
“Prospectus” means the prospectus (including any prospectus supplement) used with respect to the offer and sale of the Securities of any series.
“Record Date” means any Regular Record Date or Special Record Date.
“Redemption Date,” when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture.
“Redemption Price,” when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.
“Regular Record Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 3.1.
“Reporting Default” has the meaning specified in Section 5.2(b).
“Responsible Officer” means, when used with respect to the Trustee, an officer of the Trustee in the Corporate Trust Office assigned and duly authorized by the Trustee to administer its corporate trust matters.
“Securities” has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.
“Securities Act” means the Securities Act of 1933 and any statute successor thereto, in each case as amended from time to time.
“Security Register” and “Security Registrar” have the respective meanings specified in Section 3.5.
“Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.7.
“Stated Maturity,” when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.

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“Subsidiary” means a Person of which at least a majority of the outstanding voting stock having the power to elect a majority of the board of directors of such Person (in the case of a corporation) is, or of which at least a majority of the equity interests (in the case of a Person which is not a corporation) are, at the time owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries.  For the purposes of this definition, “voting stock” means stock or similar interests to the Company which ordinarily has or have voting power for the election of directors, or persons performing similar functions, whether at all times or only so long as no senior class of stock or other interests has or have such voting power by reason of any contingency.
“Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.
“Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.
“U.S. Government Obligation” means (x) any security which is (i) a direct obligation of the United States of America for the payment of which the full faith and credit of the United States of America is pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation which is specified in clause (x) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal of or interest on any U.S. Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest evidenced by such depositary receipt.
“Vice President,” when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title “vice president.”
Section 1.2    Compliance Certificates and Opinions.  
Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act.  Each such certificate or opinion shall be given in the form of an Officers’ Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include,
(1)    a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

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(2)    a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(3)    a statement that, in the opinion of each such individual, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(4)    a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.
Section 1.3    Form of Documents Delivered to Trustee.  
In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his or her certificate or opinion is based are erroneous.  Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.
Any such certificate or opinion of an officer of the Company or of counsel may be based, insofar as it relates to accounting matters, upon a certificate or opinion of, or representations by, an accountant or firm of accountants in the employ of the Company, unless such officer or counsel, as the case may be, knows, that the certificate or opinion or representations with respect to the accounting matters upon which his or her certificate or opinion are based are erroneous.
Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
Section 1.4    Acts of Holders; Record Dates.  
Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. The Trustee shall promptly deliver to the Company copies of any such instrument or instruments delivered to the Trustee.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

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The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him or her the execution thereof.  Where such execution is by a signer acting in a capacity other than his or her individual capacity, such certificate or affidavit shall also constitute sufficient proof of his or her authority.  The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.
The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to give, make or take any request, demand, authorization, direction, vote, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities of such series. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date.  Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be canceled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the Company may designate any day as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the Trustee in writing, and to each Holder of Securities of the relevant series in the manner set forth in Section 1.6, on or prior to the existing Expiration Date.  If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the Company shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph.  Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount.

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Section 1.5    Notices, etc., to Trustee and Company.  
Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,
(1)    the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (or by facsimile transmissions, provided that oral confirmation of receipt shall have been received) to or with the Trustee at its Corporate Trust Office, Attention: Corporate Trust Department, or
(2)    the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, personally delivered or sent via overnight courier to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company, Attention: Chief Financial Officer.
Section 1.6    Notice to Holders; Waiver.  
Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed by first-class postage prepaid, or delivered by hand or overnight courier to each Holder affected by such event, at its address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice.  Neither the failure to mail or deliver by hand or overnight courier any notice, nor any defect in any notice so mailed or delivered by hand or overnight courier, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders.  Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.
Section 1.7    Conflict with Trust Indenture Act.  
If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under the Trust Indenture Act to be a part of and govern this Indenture, the latter provision shall control.  If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act, that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.
Section 1.8    Effect of Headings and Table of Contents.  
The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.
Section 1.9    Successors and Assigns.  
All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

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Section 1.10    Separability Clause.  
In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 1.11    Benefits of Indenture.  
Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 1.12    Governing Law.  
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 1.13    Legal Holidays.  
In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security or the last date on which a Holder has the right to convert a Security at a particular conversion price or conversion rate, as the case may be, shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities (other than a provision of any Security which specifically states that such provision shall apply in lieu of this Section)) payment of interest or principal (and premium, if any) or, if applicable to a particular series of Securities, conversion need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, at the Stated Maturity or on such last day for conversion, as the case may be.
Section 1.14    Indenture and Securities Solely Corporate Obligations.  
No recourse for the payment of the principal of or premium, if any, or interest on any Security, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Security, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, officer, or director or subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Securities.
Section 1.15    Indenture May be Executed in Counterparts.  
This instrument may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.
 

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ARTICLE 2
 
SECURITY FORMS
Section 2.1    Forms Generally  
The Securities of each series shall be in substantially the form set forth in Exhibit A hereto, or in such other form as shall be established by or pursuant to a Board Resolution and as set forth in such Board Resolution (including such terms as set forth in any form of Securities for each series approved by such Board Resolution) or, to the extent established pursuant to terms other than those set forth in a Board Resolution, in an Officers’ Certificate detailing such establishment (including any exhibit attached thereto), or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary therefor or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution thereof. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 3.3 for the authentication and delivery of such Securities.  Any such Board Resolution or record of such action shall have attached thereto a true and correct copy of the form of Security referred to therein approved by or pursuant to such Board Resolution.
The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.
Section 2.2    Form of Legend for Global Securities.  
Unless otherwise specified as contemplated by Section 3.1 for the Securities evidenced thereby, every Global Security authenticated and delivered hereunder shall bear a legend in substantially the following form: 
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
Section 2.3    Form of Trustee’s Certificate of Authentication.  
The Trustee’s certificates of authentication shall be in substantially the following form:
This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture.
	
		
	 

	As Trustee

	By:________________________________________________

	Authorized Officer

 

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ARTICLE 3
 
THE SECURITIES
Section 3.1    Amount Unlimited; Issuable in Series.  
The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series up to the aggregate principal amount of Securities of that series from time to time authorized by or pursuant to a Board Resolution of the Company, pursuant to one or more indentures supplemental hereto or pursuant to an Officers’ Certificate pursuant to authority granted under a Board Resolution.  Prior to the initial issuance of Securities of any series, there shall be established in or pursuant to a Board Resolution of the Company and set forth in an Officers’ Certificate of the Company, established in one or more indentures supplemental hereto, or established in an Officers’ Certificate pursuant to authority granted under a Board Resolution with respect to the Securities of the series:
(1)    the title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series);
(2)    any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.7 and except for any Securities which, pursuant to Section 3.3, are deemed never to have been authenticated and delivered hereunder);
(3)    the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest;
(4)    the date or dates on which the principal of any Securities of the series is payable;
(5)    the rate or rates (which may be fixed or variable) at which any Securities of the series shall bear interest, if any, the date or dates from which any such interest shall accrue, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any such interest payable on any Interest Payment Date (or the method for determining the dates and rates);
(6)    the place or places where the principal of and any premium and interest on any Securities of the series shall be payable;
(7)    the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series may be redeemed, in whole or in part, at the option of the Company and, if other than by a Board Resolution, the manner in which any election by the Company to redeem the Securities shall be evidenced;
(8)    the obligation, if any, of the Company to redeem or purchase any Securities of the series pursuant to any sinking fund or analogous provisions or any redemption or purchase at the option of the Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions 

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upon which any Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;
(9)    if other than denominations of $1,000 and any integral multiple thereof, the denominations in which any Securities of the series shall be issuable;
(10)    if the amount of principal of or any premium or interest on any Securities of the series may be determined with reference to an index or pursuant to a formula, the manner in which such amounts shall be determined;
(11)    if other than the currency of the United States of America, the currency, currencies or currency units in which the principal of or any premium or interest on any Securities of the series shall be payable and the manner of determining the equivalent thereof in the currency of the United States of America for any purpose, including for purposes of the definition of “Outstanding” in Section 1.1;
(12)    if the principal of or any premium or interest on any Securities of the series is to be payable, at the election of the Company or the Holder thereof, in one or more currencies or currency units other than that or those in which such Securities are stated to be payable, the currency, currencies or currency units in which the principal of or any premium or interest on such Securities as to which such election is made shall be payable, the periods within which and the terms and conditions upon which such election is to be made and the amount so payable (or the manner in which such amount shall be determined);
(13)    the percentage of the principal amount at which the Securities will be issued, and, if other than the entire principal amount thereof, the portion of the principal amount of any Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 5.2;
(14)    if the principal amount payable at the Stated Maturity of any Securities of the series will not be determinable as of any one or more dates prior to the Stated Maturity, the amount which shall be deemed to be the principal amount of such Securities as of any such date for any purpose thereunder or hereunder, including the principal amount thereof which shall be due and payable upon any Maturity other than the Stated Maturity or which shall be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined);
(15)    if applicable, that the Securities of the series, in whole or any specified part, shall be defeasible pursuant to Section 13.2 or Section 13.3 or both such Sections, or any other defeasance provisions applicable to any Securities of the series, and, if other than by a Board Resolution, the manner in which any election by the Company to defease such Securities shall be evidenced;
(16)    if applicable, the terms of any right to convert or exchange Securities of the series;
(17)    if applicable, that any Securities of the series shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the respective Depositaries for such Global Securities, the form of any legend or legends which shall be borne by any such Global Security in addition to or in lieu of that set forth in Section 2.2 and any circumstances in addition to or in lieu of those set forth in clause (2) of the last paragraph of Section 3.5 in which any such Global Security may be exchanged in whole or in part for Securities registered, and any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the Depositary for such Global Security or a nominee thereof;

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(18)    any deletion of or addition to or change in the Events of Default which applies to any Securities of the series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 5.2;
(19)    any deletion of or addition to or change in the covenants set forth in Article 10 which applies to Securities of the series; 
(20)    any Authenticating Agents, Paying Agents, Security Registrars or such other agents necessary in connection with the issuance of the Securities of such series, including, without limitation, exchange rate agents and calculation agents;
(21)    if applicable, the terms of any security that will be provided for a series of Securities, including any provisions regarding the circumstances under which collateral may be released or substituted;
(22)    if applicable, the terms of any guaranties for the Securities and any circumstances under which there may be additional obligors on the Securities; 
(23)    any provisions granting special rights to holders when a specified event occurs;
(24)    any provisions with respect to any special interest premium or other premium;
(25)    any special tax provisions that apply to any series of Securities;
(26)    with respect to any series of Securities that do not bear interest, the date for certain required reports to the Trustee;
(27)    any and all additional, eliminated or changed terms that will apply to such series of Securities; and
(28)    any other terms of the series of Securities (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 9.1(5)).
All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 3.3) set forth, or determined in the manner provided, in the Officers’ Certificate (including any exhibit attached thereto) referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate setting forth the terms of the series.
Section 3.2    Denominations.  
The Securities of each series shall be issuable only in registered form without coupons and only in such denominations as shall be specified as contemplated by Section 3.1.  In the absence of any such specified denomination with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any integral multiple thereof.

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Section 3.3    Execution, Authentication, Delivery and Dating.  
The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its Chief Executive Officer, its principal financial officer, its principal accounting officer, its President or one of its Vice Presidents, and attested by its Treasurer, its Secretary or one of its Assistant Treasurers or Assistant Secretaries.  The signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities.  If the form or terms of the Securities of the series have been established by or pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 6.1) shall be fully protected in relying upon, a certified copy of such Board Resolution, an Officers’ Certificate or supplemental indenture hereto setting forth the terms of the series and an Opinion of Counsel (which Opinion of Counsel may contain customary qualifications and exceptions), with such Opinion of Counsel stating,
(3)    if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 2.1, that such form has been established in conformity with the provisions of this Indenture;
(4)    if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 3.1, that such terms have been established in conformity with the provisions of this Indenture; and
(5)    that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.
If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner that is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of this Section 3.3, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver an Officers’ Certificate or supplemental indenture hereto otherwise required pursuant to Section 3.1 or the Company Order and Opinion of Counsel otherwise required pursuant to this Section 3.3 at or prior to the authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued.
Each Security shall be dated the date of its authentication.

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No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder.  Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 3.9, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.
Neither the Company nor the Trustee shall have any responsibility for any defect in the CUSIP number that appears on any Security, check, advice of payment or redemption notice, and any such document may contain a statement to the effect that CUSIP numbers have been assigned by an independent service for convenience of reference and that neither the Company nor the Trustee shall be liable for any inaccuracy in such numbers.
Section 3.4    Temporary Securities.  
Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay.  After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder.  Upon surrender for cancellation of any one or more temporary Securities of any series, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount.  Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series and tenor.
Section 3.5    Registration; Registration of Transfer and Exchange.  
The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities.  The Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of a series at the office or agency of the Company in a Place of Payment for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount.
At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency.  Whenever any Securities are so surrendered for exchange, 

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the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.
If the Securities of any series (or of any series and specified tenor) are to be redeemed in part, the Company shall not be required (A) to issue, register the transfer of or exchange any Securities of that series (or of that series and specified tenor, as the case may be) during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of any such Securities selected for redemption under Section 11.3 and ending at the close of business on the day of such mailing, or (B) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.
The provisions of clauses (1), (2), (3) and (4) below shall apply only to Global Securities:
(1)    Each Global Security authenticated under this Indenture shall be registered in the name of the Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Security for all purposes of this Indenture.
(2)    Notwithstanding any other provision in this Indenture, no Global Security may be exchanged in whole or in part for Securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless (A) such Depositary (i) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Security or (ii) has ceased to be a clearing agency registered under the Exchange Act, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Security or (C) there shall exist such circumstances, if any, in addition to or in lieu of the foregoing as have been specified for this purpose as contemplated by Section 3.1.
(3)    Subject to clause (2) above, any exchange of a Global Security for other Securities may be made in whole or in part, and all Securities issued in exchange for a Global Security or any portion thereof shall be registered in such names as the Depositary for such Global Security shall direct.
(4)    Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Section, Section 3.4, 3.6, 9.6 or 11.7 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof.

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Section 3.6    Mutilated, Destroyed, Lost and Stolen Securities.  
If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 3.7    Payment of Interest; Interest Rights Preserved.  
Except as otherwise provided as contemplated by Section 3.1 with respect to any series of Securities, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.
Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (1) or (2) below:
(1)    The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner.  The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more 

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than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.  The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be given to each Holder of Securities of such series in the manner set forth in Section 1.6, not less than 10 days prior to such Special Record Date.  Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so given, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (2).
(2)    The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.
Section 3.8    Persons Deemed Owners.  
Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium and (subject to Section 3.7) any interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.
Section 3.9    Cancellation.  
All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled by it.  The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly canceled by the Trustee.  No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section, except as expressly permitted by this Indenture.  All canceled Securities held by the Trustee shall be disposed of in accordance with its customary procedures.
Section 3.10    Computation of Interest.  
Except as otherwise specified as contemplated by Section 3.1 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.

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ARTICLE 4
SATISFACTION AND DISCHARGE
Section 4.1    Satisfaction and Discharge of Indenture.  
This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when 
(1)    either
(A)    all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.6 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Trustee or the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.3) have been delivered to the Trustee for cancellation; or
(B)    all such Securities not theretofore delivered to the Trustee for cancellation
(i)    have become due and payable, or
(ii)    will become due and payable at their Stated Maturity within one year, or 
(iii)    are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, 
and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose money in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be;
(2)    the Company has paid or caused to be paid all other sums payable hereunder by the Company; and
(3)    the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 6.7, the obligations of the Trustee to any Authenticating Agent under Section 6.14 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section, the obligations of the Trustee under Section 4.2 and the last paragraph of Section 10.3 shall survive.

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Section 4.2    Application of Trust Money.  
Subject to the provisions of the last paragraph of Section 10.3, all money deposited with the Trustee pursuant to Section 4.1 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and any premium and interest for whose payment such money has been deposited with the Trustee.
 
    
ARTICLE 5
REMEDIES
Section 5.1    Events of Default.  
“Event of Default,” wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body), unless in the Board Resolution (or an Officers’ Certificate detailing such establishment pursuant to such Board Resolution) or supplemental indenture establishing such series, it is provided that such series shall not have the benefit of said Event of Default:
(6)    default in the payment of the principal or the Redemption Price of or any premium on any Security of that series at its Maturity; or
(7)    default in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance of such default for a period of 30 days; or
(8)    default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series; or
(9)    default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of series of Securities other than that series), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or
(10)    the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; or

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(11)    the commencement by the Company of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action; or
(12)    any other Event of Default provided with respect to Securities of that series in the Board Resolution (or in an Officers’ Certificate detailing such establishment pursuant to such Board Resolution) or supplemental indenture establishing that series.
Section 5.2    Acceleration of Maturity; Rescission and Annulment.  
(a)    Unless the Board Resolution (or Officers’ Certificate detailing such establishment pursuant to such Board Resolution) or supplemental indenture establishing such series provides otherwise, if an Event of Default (other than an Event of Default specified in Section 5.1(5) or 5.1(6)) with respect to Securities of any series at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof), and premium, if any, together with accrued and unpaid interest, if any, thereon, to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holders), and upon any such declaration such principal amount (or specified amount), and premium, if any, together with accrued and unpaid interest, if any, thereon, shall become immediately due and payable. If an Event of Default specified in Section 5.1(5) or 5.1(6) with respect to Securities of any series at the time Outstanding occurs, the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof), and premium, if any, together with accrued and unpaid interest, if any, thereon, shall automatically, and without any declaration or other action on the part of the Trustee or any Holder, become immediately due and payable.
(b)    Notwithstanding the foregoing, at the election of the Company, the sole remedy with respect to an Event of Default for the failure by the Company to comply with its obligations under Section 314(a)(1) of the Trust Indenture Act relating to the Company’s failure to file any documents or reports that the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act or of its covenants set forth in Section 7.4 (any such Event of Default, a “Reporting Default”), shall for the first 180 calendar days after the occurrence of such Reporting Default consist exclusively of the right to receive additional interest (the “Additional Interest”) on the Securities at an annual rate equal to (i) 0.25% of the principal amount of the Securities for the first 90 calendar days after the occurrence of such Reporting Default and (ii) 0.50% of the principal amount of the Securities from the 91st day to, and including, the 180th day after the occurrence of such Reporting Default.  If the Company so elects, the Additional Interest shall accrue on all Outstanding Securities from and including the date on which such Reporting Default first occurs until such violation is cured or waived and shall be payable as provided in Section 3.7.  On the 181st day after such Reporting Default (if such violation is not cured or waived prior to such 181st calendar day), then the Trustee or the Holders of not less than 25% in principal amount of the Outstanding 

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securities may declare the principal of, and premium, if any, together with accrued and unpaid interest, if any, on all such Securities to be due and payable immediately.
If the Company elects to pay the Additional Interest as the sole remedy for the Reporting Default, the Company shall notify in writing, by a certificate, the Holders, the Paying Agent and the Trustee of such election at any time on or before the close of business on the first Business Day following the date on which such Event of Default first occurs.  Unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that Additional Interest is not payable.  The Company shall pay the Additional Interest semi-annually in arrears, with the first semi-annual payment due on the first Interest Payment Date following the date of such Reporting Default, in the same manner as described on the face of the Security.
(c)    At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if
(1)    the Company has paid or deposited with the Trustee a sum sufficient to pay
(A)    all overdue interest on all Securities of that series,
(B)    the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities,
(C)    to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and
(D)    all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and
(2)    all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 5.13. 
No such rescission shall affect any subsequent default or impair any right consequent thereon.
Section 5.3    Collection of Indebtedness and Suits for Enforcement by Trustee.  
The Company covenants that if
(5)    default is made in the payment of the principal or the Redemption Price of (or premium, if any, on) any Security at the Maturity thereof, or
(6)    default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days.
(7)    the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and any premium and 

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interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and premium and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.
Section 5.4    Trustee May File Proofs of Claim.  
In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding.  In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.7.
No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other similar committee.
Section 5.5    Trustee May Enforce Claims Without Possession of Securities.  
All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.
Section 5.6    Application of Money Collected.  
Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or any premium or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST:  To the payment of all amounts due the Trustee under Section 6.7;

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SECOND:  To the payment of the amounts then due and unpaid for principal of and any premium, if any, and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and any premium, if any, and interest, respectively; and
THIRD:  The balance, if any, to the Company or any other Person or Persons entitled thereto.
Section 5.7    Limitation on Suits.  
No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1)    such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series;
(2)    the Holders of at least 25% in aggregate principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;
(3)    such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request;
(4)    the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and
(5)    no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series; 
it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders.
Section 5.8    Unconditional Right of Holders to Receive Principal, Premium and Interest and to Convert.  
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Section 3.7) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date), to convert such Securities in accordance with Article 14 to the extent that such right to convert is applicable to such Security, and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.

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Section 5.9    Restoration of Rights and Remedies.  
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.
Section 5.10    Rights and Remedies Cumulative.  
Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 3.6, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 5.11    Delay or Omission Not Waiver.  
No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein.  Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee (subject to the limitations contained in this Indenture) or by the Holders, as the case may be.
Section 5.12    Control by Holders.  
The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series, provided that
(1)    such direction shall not be in conflict with any rule of law or with this Indenture and the Trustee shall not have determined that the action so directed would be unjustly prejudicial to Holders of Securities of that series, or any other series, not taking part in such direction; and
(2)    the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction or this Indenture.
Section 5.13    Waiver of Past Defaults.  
The Holders of not less than a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, except
(1)    a default in the payment of the principal of or any premium or interest on any Security of such series as and when the same shall become due and payable by the terms thereof, otherwise than by 

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acceleration (unless such default has been cured and a sum sufficient to pay all matured installments of interest, principal and premium, if any, has been deposited with the Trustee), or
(2)    to the extent such right is applicable to such Security, a failure by the Company on request to convert any Security into Common Stock; or
(3)    in respect of a covenant or provision hereof which under Article 9 cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.
Section 5.14    Undertaking for Costs.  
In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; provided that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company.
The Section does not apply to a suit by a Holder to enforce payment of principal of or interest on any Security on the respective due dates, a suit by a Holder to enforce the right to convert in any suit for the enforcement of the right to convert any Security in accordance with Article 14 to the extent such right to convert is applicable to such Security, or a suit by Holders of more than 10% in principal amount of the Outstanding Securities.
Section 5.15    Waiver of Usury, Stay or Extension Laws.  
The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
 
  ARTICLE 6 

THE TRUSTEE
Section 6.1    Certain Duties and Responsibilities.  
The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act and as set forth herein.  Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.  Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. 

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Section 6.2    Notice of Defaults.  
If a default occurs hereunder with respect to Securities of any series, the Trustee shall give the Holders of Securities of such series notice of such default as and to the extent provided by the Trust Indenture Act; provided, however, that except in the case of a default in the payment of principal or Redemption Price of (or premium, if any) or interest on any Securities of such series or in the payment of any sinking fund installment or any conversion right applicable to Securities of such series, the Trustee shall be protected in withholding such notice if and so long as a trust committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interests of the holders of Securities of such series; provided, further, however, that in the case of any default of the character specified in Section 5.1(4) with respect to Securities of such series, no such notice to Holders shall be given until at least 60 days after the occurrence thereof. For the purpose of this Section, the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series.
Except with respect to Section 10.1, the Trustee shall have no duty to inquire as to the performance of the Company with respect to the covenants contained in Article 10.  In addition, the Trustee shall not be deemed to have knowledge of an Event of Default except (i) any Default or Event of Default occurring pursuant to Sections 5.1(1), 5.1(2) and 5.1(3) (defaults in payments on the Securities) or (ii) any Default or Event of Default of which a Responsible Officer the Trustee shall have received written notification or obtained actual knowledge.
Delivery of reports, information and documents to the Trustee under Section 7.4 is for informational purposes only and the Trustee’s receipt of the foregoing shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of their covenants hereunder (as to which the Trustee is entitled to rely conclusively on Officers’ Certificates).
Section 6.3    Certain Rights of Trustee.  
Subject to the provisions of Section 6.1:
(1)    in the absence of bad faith on the part of the Trustee, the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;
(2)    any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, and any resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution;
(3)    whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) is entitled to and may, in the absence of bad faith on its part, rely upon an Officers’ Certificate;
(4)    the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
(5)    the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders 

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shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;
(6)    the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; and
(7)    the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.
Section 6.4    Not Responsible for Recitals or Issuance of Securities.  
The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness.  The Trustee makes no representations as to the validity, sufficiency or priority of this Indenture or of the Securities.  Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Securities or the proceeds thereof.
Section 6.5    May Hold Securities and Act as Trustee under Other Indentures.  
The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 6.8 and 6.13, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.
Subject to the limitations imposed by the Trust Indenture Act, nothing in this Indenture shall prohibit the Trustee from becoming and acting as trustee under other indentures under which other securities, or certificates of interest of participation in other securities, of the Company are outstanding in the same manner as if it were not Trustee hereunder.
Section 6.6    Money Held in Trust.  
Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law.  The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.
Section 6.7    Compensation and Reimbursement.  
The Company agrees:
(1)    to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);
(2)    except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any 

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provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and
(3)    to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders services after an Event of Default specified in Section 5.1(5) or Section 5.1(6) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any applicable bankruptcy, insolvency, reorganization or similar law.
Section 6.8    Conflicting Interests.  
If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act and there is an Event of Default under the Securities of that series, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.  To the extent permitted by the Trust Indenture Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture with respect to Securities of more than one series.
Section 6.9    Corporate Trustee Required; Eligibility.  
There shall at all times be one (and only one) Trustee hereunder with respect to the Securities of each series, which may be Trustee hereunder for Securities of one or more other series.  Each Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has (or if the Trustee is a member of a bank holding company system, its bank holding company has) a combined capital and surplus of at least $50,000,000.  If any such Person or bank holding company publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such Person or bank holding company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  If at any time the Trustee with respect to the Securities of any series shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.
Section 6.10    Resignation and Removal; Appointment of Successor.  
No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.11.
The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company.  If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

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The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company.
If at any time:
(1)    the Trustee shall fail to comply with Section 6.8 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or
(2)    the Trustee shall cease to be eligible under Section 6.9 and shall fail to resign after written request therefor by the Company or by any such Holder, or
(3)    the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, 
then, in any such case, (A) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (B) subject to Section 5.14, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 6.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.11, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 6.11, the retiring Trustee may petition, or any Holder who has been a bona fide Holder of a Security of such series for at least six months may petition, on behalf of himself and all others similarly situated, any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 1.6.  Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.
Section 6.11    Acceptance of Appointment by Successor.  
In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested 

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with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.
In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.
Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.
Section 6.12    Merger, Conversion, Consolidation or Succession to Business.  
Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee (including the administration of the trust created by this Indenture), shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.  In the event that any Securities shall not have been authenticated by such predecessor Trustee, any such successor Trustee may authenticate and deliver such Securities in either its own name or that of such predecessor Trustee, with the full force and effect which this Indenture provides for the certificate of authentication of the Trustee.

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Section 6.13    Preferential Collection of Claims Against Company.  
If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).
Section 6.14    Appointment of Authenticating Agent.  
The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issue and upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 3.6, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent.  Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having (or if the Authenticating Agent is a member of a bank holding company system, its bank holding company has) a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company.  The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company.  Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice of such appointment in the manner provided in Section 1.6 to all Holders of Securities of the series with respect to which such Authenticating Agent will serve.  Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent.  No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 6.7.

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If an appointment with respect to one or more series is made pursuant to this Section 6.14, the Securities of such series may have endorsed thereon, in lieu of the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
	
		
	 

	As Trustee

	By:________________________________________________

	As Authorized Agent

	 
	 

	By:________________________________________________

	Authorized Officer

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ARTICLE 7
 
HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1    Company to Furnish Trustee Names and Addresses of Holders.  
The Company will furnish or cause to be furnished to the Trustee
(8)    semi-annually, not later than 15 days after the Regular Record Date for each respective series of Securities, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities of each series as of such Regular Record Date, as the case may be, or if there is no Regular Record Date for such series of Securities, semi-annually, and
(9)    at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; 
provided that no such list need be furnished by the Company to the Trustee so long as the Trustee is acting as Security Registrar.
Section 7.2    Preservation of Information; Communications to Holders.  
The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 7.1 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar.  The Trustee may destroy any list furnished to it as provided in Section 7.1 upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.
Section 7.3    Reports by Trustee.  
The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto.
Reports so required to be transmitted at stated intervals of not more than 12 months shall be transmitted no later than July 15 in each calendar year, commencing with the first July 15 after the first issuance of Securities pursuant to this Indenture.
A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company.  The Company will notify the Trustee when any Securities are listed on any stock exchange.

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Section 7.4    Reports by Company.  
Any information, documents or other reports that the Company shall file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is filed with the Commission; provided that any such information, documents or reports filed or furnished with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval (or EDGAR) system shall be deemed to be filed with the Trustee as of the time such information, documents or reports are filed or furnished via EDGAR.
    
ARTICLE 8 
 
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 8.1    Company May Consolidate, etc., Only on Certain Terms.  
The Company shall not consolidate with or merge into any other Person (other than a Subsidiary of the Company) (in a transaction in which the Company is not the surviving corporation) or convey, transfer or lease its properties and assets substantially as an entirety to any Person (other than a Subsidiary of the Company), unless:
(8)    in case the Company shall consolidate with or merge into another Person (in a transaction in which the Company is not the surviving corporation) or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a corporation, limited liability company, partnership, trust or other business entity, shall be organized and validly existing under the laws of the United States of America, any state thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed and the conversion rights shall be provided for in accordance with Article 14, if applicable, or as otherwise specified pursuant to Section 3.1, by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the Trustee, by the Person (if other than the Company) formed by such consolidation or into which the Company shall have been merged or by the Person which shall have acquired the Company’s assets;
(9)    immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and
(10)    the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.
Section 8.2    Successor Substituted.  
Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance 

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with Section 8.1, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.
 
ARTICLE 9
 
SUPPLEMENTAL INDENTURES
Section 9.1    Supplemental Indentures Without Consent of Holders.  
Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1)    to evidence the succession of another Person to the Company, or successive successions, and the assumption by any such successor of the covenants of the Company herein and in the Securities in compliance with Article 8; or
(2)    to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company; or
(3)    to add any additional Events of Default for the benefit of the Holders of all or any series of Securities (and if such additional Events of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly being included solely for the benefit of such series); or
(4)    to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons, or to permit or facilitate the issuance of Securities in uncertificated form; or
(5)    to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (A) shall neither (i) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (ii) modify the rights of the Holder of any such Security with respect to such provision or (B) shall become effective only when there is no such Security Outstanding; or
(6)    to secure the Securities, including provisions regarding the circumstances under which collateral may be released or substituted; or
(7)    to add or provide for a guaranty of the Securities or additional obligors on the Securities; or
(8)    to establish the form or terms of Securities of any series as permitted by Sections 2.1 and 3.1; or

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(9)    to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.11; or
(10)  to conform this Indenture to the description of the Securities set forth in the Prospectus for such series of Securities; or
(11) to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant to this clause (11) shall not adversely affect the interests of the Holders of Securities of any series in any material respect; or
(12)  to supplement any of the provisions of the Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of any series of Securities pursuant to Articles 4 and 13, provided that any such action shall not adversely affect the interests of the Holders of Securities of such series or any other series of Securities in any material respect; or
(13)  make such other provisions in regards to matters or questions arising under the Indenture or any supplemental Indenture hereto as the Board of Directors may deem necessary or desirable, and which does not in each case adversely affect the interest of the Holders of Securities or any series; or
(14)  comply with requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust indenture Act.
Section 9.2    Supplemental Indentures with Consent of Holders.  
With the consent of the Holders of a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby,
(1)    change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption or repurchase thereof, whether at the option of the Company or at the option of the Holder, or reduce the amount of any sinking fund payments, or reduce the amount of the principal of an Original Issue Discount Security or any other Security which would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2 of the Indenture, or change the Place of Payment or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or
(2)    in the case of Securities of any series that are convertible into Common Stock or other securities of the Company pursuant to Article 14 and any supplemental Indenture hereto, adversely affect the rights of the Holders to convert any of the Securities of such series other than as provided in or pursuant to this Indenture or any supplemental indenture, or

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(3)    reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or
(4)    modify any of the provisions of this Section or Section 5.13, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section, or the deletion of this proviso, in accordance with the requirements of Sections 6.11 and 9.1(9).
A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.
Section 9.3    Execution of Supplemental Indentures.  
In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Sections 6.1 and 6.3) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture.  The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.
Section 9.4    Effect of Supplemental Indentures.  
Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.
Section 9.5    Conformity with Trust Indenture Act.  
The Indenture shall incorporate and be governed by the provisions of the Trust Indenture Act that are required to be part of and to govern indentures qualified under the Trust Indenture Act.
Section 9.6    Reference in Securities to Supplemental Indentures.  
Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture.  If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series.

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ARTICLE 10
 
COVENANTS
Section 10.1    Payment of Principal, Premium and Interest.  
The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of and any premium and interest on the Securities of that series in accordance with the terms of the Securities and this Indenture.
Section 10.2    Maintenance of Office or Agency.  
The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange, where Securities of that series may be surrendered for conversion to the extent that such right to convert is applicable to such Security and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served.  The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.  If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.  Unless otherwise provided in a supplemental indenture or pursuant to Section 3.1 hereof, the Place of Payment for any series of Securities shall be the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes.  The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
Section 10.3    Money for Securities Payments To Be Held in Trust.  
If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of or any premium or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, on or prior to each due date of the principal of or any premium or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the 

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provisions of this Section, that such Paying Agent will (1) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2) during the continuance of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment in respect of the Securities of that series, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.
Any amounts deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or any premium or interest on any Security of any series and remaining unclaimed for a period ending on the earlier of the date that is ten Business Days prior to the date such money would escheat to the State or two years after such principal, premium or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in each Place of Payment, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.
Section 10.4    Statement by Officers as to Default.  
The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers’ Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. The fiscal year of the Company currently ends on December 31; and the Company will give the Trustee prompt written notice of any change of its fiscal year.
Section 10.5    Existence.  
Subject to Article 8, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence.
Section 10.6    Waiver of Certain Covenants.  
Except as otherwise specified as contemplated by Section 3.1 for Securities of such series, the Company may, with respect to the Securities of any series, omit in any particular instance to comply with any term, provision or condition set forth in any covenant provided pursuant to Section 3.1(19) or 9.1(2), for the benefit of the Holders of such series if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect 

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such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect.     

ARTICLE 11 
REDEMPTION OF SECURITIES
Section 11.1    Applicability of Article.  
Securities of any series that are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 3.1 for such Securities) in accordance with this Article.
Section 11.2    Election to Redeem; Notice to Trustee.  
The election of the Company to redeem any Securities shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 3.1 for such Securities.  In case of any redemption at the election of the Company of less than all the Securities of any series (including any such redemption affecting only a single Security), the Company shall, at least 45 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee or is specified in the Board Resolution (or in an Officers’ Certificate pursuant to such Board Resolution detailing such establishment) or supplemental indenture establishing such series), notify the Trustee of such Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed.
Section 11.3    Selection by Trustee of Securities to Be Redeemed.  
If less than all the Securities of any series are to be redeemed (unless all the Securities of such series and of a specified tenor are to be redeemed or unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 45 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by lot, or in the Trustee’s discretion, on a pro-rata basis, provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security. If less than all the Securities of such series and of a specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 45 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence.
If any Security selected for partial redemption is converted in part before termination of the conversion right with respect to the portion of the Security so selected, the converted portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption.  Securities that have been converted during a selection of Securities to be redeemed shall be treated by the Trustee as Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company in writing of the Securities selected for redemption as aforesaid and, in case of any Securities selected for partial redemption as aforesaid, the principal amount thereof to be redeemed.
The provisions of the three preceding paragraphs shall not apply with respect to any redemption affecting only a single Security, whether such Security is to be redeemed in whole or in part.  In the case of any such 

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redemption in part, the unredeemed portion of the principal amount of the Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.
Section 11.4    Notice of Redemption.  
Notice of redemption shall be given in the manner provided in Section 1.6, not fewer than 30 nor more than 60 days prior to the Redemption Date, unless a shorter period is specified in the Securities to be redeemed, to each Holder of Securities to be redeemed, at its address appearing in the Security Register or, if the Securities are held in book-entry form, sent by electronic transmission.
All notices of redemption shall state:
(1)    the Redemption Date,
(2)    the Redemption Price (including accrued interest, if any),
(3)    if less than all the Outstanding Securities of any series consisting of more than a single Security are to be redeemed, the identification (and, in the case of partial redemption of any such Securities, the principal amounts) of the particular Securities to be redeemed and, if less than all the Outstanding Securities of any series consisting of a single Security are to be redeemed, the principal amount of the particular Security to be redeemed,
(4)    in case any Security is to be redeemed in part only, that on and after the Redemption Date, upon surrender of the Security, the Holder of such Security will receive, without charge, a new Security or Securities of authorized denominations for the principal amount thereof remaining unredeemed;
(5)    that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date,
(6)    the place or places where each such Security is to be surrendered for payment of the Redemption Price,
(7)    if applicable, the conversion price or the conversion rate, as the case may be, the date on which the right to convert the principal of the Securities or the portions thereof to be redeemed will terminate, and the place or places where such Securities may be surrendered for conversion,
(8)    that the redemption is for a sinking fund, if such is the case, and
(9)    the CUSIP number or numbers and/or common code(s) of the Security being redeemed.
Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company and shall be irrevocable.

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Section 11.5    Deposit of Redemption Price.  
On or prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 10.3) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest, if any, on, all the Securities which are to be redeemed on that date.
To the extent such Security of a series is convertible pursuant to Article 14, upon conversion of any such Security called for redemption, any money deposited with the Trustee or with a Paying Agent or so segregated and held in trust for the redemption of such Security shall (subject to the right of any Holder of such Security to receive interest as provided in the last paragraph of Section 3.7) be paid to the Company on Company Request, or if then held by the Company, shall be discharged from such trust.
Section 11.6    Securities Payable on Redemption Date.  
Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest, if any) such Securities shall cease to bear interest.  Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest, if any, to the Redemption Date; provided, however, that, unless otherwise specified as contemplated by Section 3.1, installments of interest whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.
Section 11.7    Securities Redeemed in Part.  
Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or its attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.
 

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ARTICLE 12
SINKING FUNDS
Section 12.1    Applicability of Article.  
The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of any series except as otherwise specified as contemplated by Section 3.1 for such Securities.
The minimum amount of any sinking fund payment provided for by the terms of any Securities is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of such Securities is herein referred to as an “optional sinking fund payment.”  If provided for by the terms of any Securities, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 12.2.  Each sinking fund payment shall be applied to the redemption of Securities as provided for by the terms of such Securities.
Section 12.2    Satisfaction of Sinking Fund Payments with Securities.  
The Company (1) may deliver Outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to any Securities of such series required to be made pursuant to the terms of such Securities as and to the extent provided for by the terms of such Securities; provided that the Securities to be so credited have not been previously so credited. The Securities to be so credited shall be received and credited for such purpose by the Trustee at the Redemption Price, as specified in the Securities so to be redeemed, for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
Section 12.3    Redemption of Securities for Sinking Fund.  
Not fewer than 60 days prior to each sinking fund payment date for any Securities, the Company will deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing sinking fund payment for such Securities pursuant to the terms of such Securities, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities pursuant to Section 12.2 and will also deliver to the Trustee any Securities to be so delivered. Not fewer than 30 days prior to each such sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 11.3 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 11.4.  Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 11.6 and 11.7.
 
ARTICLE 13
DEFEASANCE AND COVENANT DEFEASANCE
Section 13.1    Company’s Option to Effect Defeasance or Covenant Defeasance.  
The Company may elect, at its option at any time, to have Section 13.2 or Section 13.3 applied to any Securities or any series of Securities, as the case may be, designated pursuant to Section 3.1 as being defeasible pursuant to such Section 13.2 or 13.3, in accordance with any applicable requirements provided pursuant to Section 3.1 and upon compliance with the conditions set forth below in this Article.  Any such election shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 3.1 for such Securities.

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Section 13.2    Defeasance and Discharge.  
Upon the Company’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, the Company shall be deemed to have been discharged from its obligations with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 13.4 are satisfied (hereinafter called “Defeasance”).  For this purpose, such Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by such Securities and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), subject to the following which shall survive until otherwise terminated or discharged hereunder:
(1)    the rights of Holders of such Securities to receive, solely from the trust fund described in Section 13.4 and as more fully set forth in such Section, payments in respect of the principal of and any premium and interest on such Securities when payments are due, 
(2)    the Company’s obligations with respect to such Securities under Sections 3.4, 3.5, 3.6, 10.2 and 10.3, and, if applicable, Article 14, 
(3)    the rights, powers, trusts, duties and immunities of the Trustee hereunder, and 
(4)    this Article.  
Subject to compliance with this Article, the Company may exercise its option (if any) to have this Section applied to any Securities notwithstanding the prior exercise of its option (if any) to have Section 13.3 applied to such Securities.
Section 13.3    Covenant Defeasance.  
Upon the Company’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, 
(1)    the Company shall be released from any covenants provided pursuant to Sections 3.1(19) or 9.1(2) for the benefit of the Holders of such Securities and
(2)    the occurrence of any event specified in Section 5.1(4) (with respect to any such covenants provided pursuant to Section 3.1(19) or 9.1(2)) and the occurrence of any other Event of Default specified pursuant to Section 3.1 shall be deemed not to be or result in an Event of Default, 
in each case with respect to such Securities or any series of Securities as provided in this Section on and after the date the conditions set forth in Section 13.4 are satisfied (hereinafter called “Covenant Defeasance”).  For this purpose, such Covenant Defeasance means that, with respect to such Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified Section (to the extent so specified in the case of Section 5.1(4) and the occurrence of any other Event of Default specified pursuant to Section 3.1), whether directly or indirectly by reason of any reference elsewhere herein to any such Section or by reason of any reference in any such Section to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby.

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Section 13.4    Conditions to Defeasance or Covenant Defeasance.  
The following shall be the conditions to the application of Section 13.2 or Section 13.3 to any Securities or any series of Securities, as the case may be:
(1)    The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee which satisfies the requirements contemplated by Section 6.9 and agrees to comply with the provisions of this Article applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefits of the Holders of such Securities, 
(A)    in the case of Securities of a series denominated in currency of the United States of America, 
(i)    cash in currency of the United States of America in an amount, or 
(ii)    U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, an amount in cash, or 
(iii)    a combination thereof, or 
(B)    in the case of Securities of a series denominated in currency other than that of the United States of America, 
(i)    cash in the currency in which such series of Securities is denominated in an amount, or 
(ii)    Foreign Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, an amount in cash, or 
(iii)    a combination thereof, 
in each case sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge, the principal of and any premium and interest on such Securities on the respective Stated Maturities, in accordance with the terms of this Indenture and such Securities. 
(2)    In the event of an election to have Section 13.2 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this instrument, there has been a change in the applicable Federal income tax law, in either case (A) or (B) to the effect that, and based thereon such opinion shall confirm that, the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit, Defeasance and discharge to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit, Defeasance and discharge were not to occur.

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(3)    In the event of an election to have Section 13.3 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit and Covenant Defeasance to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance were not to occur.
(4)    The Company shall have delivered to the Trustee an Officers’ Certificate to the effect that neither such Securities nor any other Securities of the same series, if then listed on any securities exchange, will be delisted as a result of such deposit.
(5)    No event which is, or after notice or lapse of time or both would become, an Event of Default with respect to such Securities or any other Securities shall have occurred and be continuing at the time of such deposit or, with regard to any such event specified in Sections 5.1(5) and (6), at any time on or prior to the 90th day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such 90th day).
(6)    Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest within the meaning of the Trust Indenture Act (assuming all Securities are in default within the meaning of such Act).
(7)    Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound.
(8)    Such Defeasance or Covenant Defeasance shall not result in the trust arising from such deposit constituting an investment company within the meaning of the Investment Company Act unless such trust shall be registered under such Act or exempt from registration thereunder.
(9)    The Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent with respect to such Defeasance or Covenant Defeasance have been complied with
Section 13.5    Deposited Money, U.S. Government Obligations and Foreign Government Obligations to be Held in Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 10.3, all money, U.S. Government Obligations and Foreign Government Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying trustee (solely for purposes of this Section and Section 13.6, the Trustee and any such other trustee are referred to collectively as the “Trustee”) pursuant to Section 13.4 in respect of any Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any such Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal and any premium and interest, but money so held in trust need not be segregated from other funds except to the extent required by law. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations or Foreign Government Obligations deposited pursuant to Section 13.4 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of Outstanding Securities.  Anything in this Article to the contrary 

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notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money, U.S. Government Obligations or Foreign Government Obligations held by it as provided in Section 13.4 with respect to any Securities which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect the Defeasance or Covenant Defeasance, as the case may be, with respect to such Securities.
Section 13.6    Reinstatement.  
If the Trustee or the Paying Agent is unable to apply any money in accordance with this Article with respect to any Securities by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations under this Indenture and such Securities from which the Company has been discharged or released pursuant to Section 13.2 or 13.3 shall be revived and reinstated as though no deposit had occurred pursuant to this Article with respect to such Securities, until such time as the Trustee or Paying Agent is permitted to apply all money held in trust pursuant to Section 13.5 with respect to such Securities in accordance with this Article; provided, however, that if the Company makes any payment of principal of or any premium or interest on any such Security following such reinstatement of its obligations, the Company shall be subrogated to the rights (if any) of the Holders of such Securities to receive such payment from the money so held in trust.
 
ARTICLE 14
 
CONVERSION OF SECURITIES
Section 14.1    Conversion.  
The terms of any conversion provision that shall be applicable to the Securities of any series shall be set forth in one or more indentures supplemental hereto for the Securities of such series.
[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.
	
		
	MATTSON TECHNOLOGY, INC.

	 
	 

	By:________________________________________________

	Title:____________________________________________

	
		
	 

	As Trustee

	 
	 

	By:________________________________________________

	Title:____________________________________________

EXHIBIT A
(a)Form of Face of Security.
[INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER.]
MATTSON TECHNOLOGY, INC.
NO. __________    $__________
CUSIP:____________
_____________________________________
Mattson Technology, Inc., a corporation duly organized and existing under the laws of Delaware (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to ____________, or registered assigns, the principal sum of _____________ dollars on _____________________________ [if the Security is to bear interest prior to Maturity, insert -- , and to pay interest thereon from __________ or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on ___________ and __________ in each year, commencing _________, at the rate of ___% per annum, until the principal hereof is paid or made available for payment [if applicable, insert -- , provided that any principal and premium, and any such installment of interest, which is overdue shall bear interest at the rate of ___% per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand].  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the ______ or ______ (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date.  Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture].
[If the Security is not to bear interest prior to Maturity, insert -- The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal and any overdue premium shall bear interest at the rate of ___% per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment.  Interest on any overdue principal or premium shall be payable on demand.  [Any such interest on overdue principal or premium which is not paid on demand shall bear interest at the rate of ___% per annum (to the extent that the payment of such interest on interest shall be legally enforceable), from the date of such demand until the amount so demanded is paid or made available for payment.  Interest on any overdue interest shall be payable on demand.]]
Payment of the principal of (and premium, if any) and [if applicable, insert -- any such] interest on this Security will be made at the office or agency of the Company maintained for that purpose in _______, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public 

and private debts [if applicable, insert -- ; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register].
Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
	
					
	Date as of:______________________________
	 
	MATTSON TECHNOLOGY, INC.

	 
	 
	 
	 
	 

	 
	 
	 
	By:________________________________________________

	 
	 
	 
	Title:____________________________________________

	ATTEST:
	 
	 
	 
	 

	________________________________________________
	 
	 
	 

(a)    Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of __________ (herein called the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and __________, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture and all indentures supplemental thereto for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof [if applicable, insert -- , limited in aggregate principal amount to $________].
[If applicable, insert -- The Securities of this series are subject to redemption upon not less than [if applicable, insert -- 30] days’ notice by mail, [if applicable, insert-- (1) on __________ in any year commencing with the year ________ and ending with the year ________ through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2)] at any time [if applicable, insert-- on or after __________, 20__], as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [if applicable, insert-- on or before __________, ___%, and if redeemed] during the 12-month period beginning ____________ of the years indicated,

	
				
	Year
	Redemption Price
	Year
	Redemption Price

	 
	 
	 
	 

	 
	 
	 
	 

and thereafter at a Redemption Price equal to ___% of the principal amount, together in the case of any such redemption [if applicable, insert-- (whether through operation of the sinking fund or otherwise)] with accrued 

A-1

interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert-- The Securities of this series are subject to redemption upon not less than [if applicable, insert - 30] days’ notice by mail, (1) on __________ in any year commencing with the year _____ and ending with the year _____ through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [if applicable, insert-- on or after __________], as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below: If redeemed during the 12-month period beginning __________ of the years indicated,

	
			
	Year
	Redemption Price For Redemption Through Operation of the  
Sinking Fund
	Redemption Price For Redemption Otherwise Than Through Operation of the Sinking Fund

	 
	 
	 

	 
	 
	 

and thereafter at a Redemption Price equal to ____% of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert -- Notwithstanding the foregoing, the Company may not, prior to __________, redeem any Securities of this series as contemplated by [if applicable, insert-- clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than ___% per annum.]
[If applicable, insert-- The sinking fund for this series provides for the redemption on __________ in each year beginning with the year ______ and ending with the year ______ of [if applicable, insert-- not less than $_______ (“mandatory sinking fund”) and not more than] $_______ aggregate principal amount of Securities of this series.  Securities of this series acquired or redeemed by the Company otherwise than through [if applicable, insert -- mandatory] sinking fund payments may be credited against subsequent [if applicable, insert -- mandatory] sinking fund payments otherwise required to be made [if applicable, insert -- , in the inverse order in which they become due].]
[If the Security is subject to redemption of any kind, insert -- In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.]
[If applicable, insert-- The Indenture contains provisions for defeasance at any time of [the entire indebtedness of this Security] [or] [certain restrictive covenants and Events of Default with respect to this Security] [, in each case] upon compliance with certain conditions set forth in the Indenture.]
[If the Security is convertible into other securities of the Company, specify the conversion features.]

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[If the Security is not an Original Issue Discount Security, insert -- If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert -- If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.  Such amount shall be equal to -- insert formula for determining the amount.  Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company’s obligations in respect of the payment of the principal of and premium and interest, if any, on the Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of more than 50% in principal amount of the Securities at the time Outstanding of each series to be affected.  The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than a majority in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity.  The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or its attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

A-3

The Securities of this series are issuable only in registered form without coupons in denominations of $______ and any integral multiple thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

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